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73–111 PDF 2012

S. HRG. 112–388

STRENGTHENING SELF–SUFFICIENCY: OVERCOMING

BARRIERS TO ECONOMIC DEVELOPMENT IN

NATIVE COMMUNITIES

FIELD HEARING

BEFORE THE

COMMITTEE ON INDIAN AFFAIRS 

UNITED STATES SENATE

ONE HUNDRED TWELFTH CONGRESS

FIRST SESSION

AUGUST 17, 2011

Printed for the use of the Committee on Indian Affairs

(

(II)

COMMITTEE ON INDIAN AFFAIRS 

DANIEL K. AKAKA, Hawaii, Chairman 

JOHN BARRASSO, Wyoming, Vice Chairman 

DANIEL K. INOUYE, Hawaii 

KENT CONRAD, North Dakota 

TIM JOHNSON, South Dakota 

MARIA CANTWELL, Washington 

JON TESTER, Montana 

TOM UDALL, New Mexico 

AL FRANKEN, Minnesota 

JOHN MCCAIN, Arizona 

LISA MURKOWSKI, Alaska 

JOHN HOEVEN, North Dakota 

MIKE CRAPO, Idaho 

MIKE JOHANNS, Nebraska 

LORETTA A. TUELL, Majority Staff Director and Chief Counsel 

DAVID A. MULLON JR., Minority Staff Director and Chief Counsel 

(III)

C O N T E N T S 

Page 

Field hearing held on August 17, 2011 .................................................................. 1

Statement of Senator Akaka ................................................................................... 1 

WITNESSES

Allen, Hon. W. Ron, Tribal Chairman/CEO, Jamestown S’klallam Tribe; 

Treasurer, National Congress of American Indians .......................................... 48

Prepared statement with attachment ............................................................. 50

Danner, Robin Puanani, President/CEO, Council for Native Hawaiian Advancement ............................................................................................................. 24

Prepared statement .......................................................................................... 26

Kauhane, Michelle, Deputy Director, Department of Hawaiian Home Lands, 

State of Hawaii ..................................................................................................... 9

Prepared statement .......................................................................................... 11

Patterson, Brian, President, United South and Eastern Tribes .......................... 17

Prepared statement .......................................................................................... 21

Small, Hon. Nathan, Chairman, Fort Hall Business Council, Shoshone-Bannock Tribes ........................................................................................................... 38

Prepared statement .......................................................................................... 40

Smith, Michael R., Deputy Bureau Director, Field Operations, BIA, U.S. 

Department of the Interior .................................................................................. 3

Prepared statement .......................................................................................... 7

APPENDIX

Kimmel, James D., Hawaiian National, prepared statement .............................. 103

(1)

STRENGTHENING SELF–SUFFICIENCY:

OVERCOMING BARRIERS TO ECONOMIC

DEVELOPMENT IN NATIVE COMMUNITIES 

WEDNESDAY, AUGUST 17, 2011

U.S. SENATE, 

COMMITTEE ON INDIAN AFFAIRS, 

Kahului, Maui, HI 

The Committee met, pursuant to notice, at 9:25 a.m. at the Maui 

Beach Hotel, Kahului, Maui, Hawaii, Hon. Daniel K. Akaka,

Chairman of the Committee, presiding. 

OPENING STATEMENT OF HON. DANIEL K. AKAKA,

U.S. SENATOR FROM HAWAII 

The CHAIRMAN. I call this hearing of the Committee on Indian 

Affairs to order. Aloha mai kakou. 

AUDIENCE. Aloha. 

The CHAIRMAN. Thank you so much for being here with us today. 

Today’s hearing on Strengthening Self-Sufficiency: Overcoming 

Barriers to Economic Development in Native Communities is a 

very important topic for Native communities here in Hawaii and 

across our country. I want to, with much aloha pumehana, warm 

love, to welcome you to Hawaii, to my island home. Many of the 

barriers to economic development Alaska Native and American Indian communities struggle with such as remoteness, limited infrastructure, access to capital and trust land status are challenges Native Hawaiian communities must also overcome in order to 

strengthen community self-sufficiency. 

Critical to any self-sufficient community is a healthy economy. 

For many Native communities, developing and sustaining strong 

economies has been a challenge complicated by a number of factors. 

These factors include the unique challenges associated with 

leveraging lands held in trust and ensuring that their people have 

the skills necessary to compete in a global economy. Economic development goes well beyond simply being able to open businesses 

and create jobs. Smart economic development builds for the 

strengths of the community. It contemplates the needs of the markets of today and tomorrow. It often requires community visioning 

and strong leadership to help foster its growth. It takes individual 

initiative and collective goal setting. The Federal Government has 

a trust responsibility to help stimulate strong economies in Native 

communities to advance the well-being of their people. Our goal is 

2

to set policies to help them be sustainable and maximize the assets 

of their communities. 

I want to extend a special mahalo or thank you to all of those 

who have traveled far to join us today. We have important work 

to do, and we need and appreciate your input. Your expertise and 

experience is invaluable to helping us craft the right policies. As 

Chairman, it is my goal to ensure that we hear from all of you who 

want to contribute to the discussion. And for that, let me say that 

the hearing record is open for two weeks from today, and I encourage everyone to submit your comments through written testimony. 

I want to remind the witnesses to limit your oral testimony to five 

minutes today. 

And let me just add we are in Hawaii. We are on Hawaiian time, 

and so, we want to hear from you. Serving on our first panel are 

two members of our communities, and that’s Michael R. Smith, 

Deputy Director of Field Operations with the Bureau of Indian Affairs and the Department of the Interior in Washington, D.C. Also 

Ms. Michelle Kauhane, Deputy Director for the State of Hawaii’s 

Department of Hawaiian Home Lands based in Kapolei, Hawaii. I 

want to welcome Mr. Smith and Ms. Kauhane. Will you please 

come and take your seats at the table. 

In the meantime, I have so much gratitude here and want to say 

mahalo nui loa to so many people, and I know it’s not really a time 

to begin to mention names, because I don’t have all of your names 

here. But let me say mahalo to my staff, who has worked really 

hard, the staff in Honolulu and Washington, D.C. And I want to 

say mahalo to Loretta Tuell, who is seated back here, who is the 

Staff Director, and also Rhonda Harjo, Minority Deputy Counsel, 

who is here with us. 

And also, I should mention we did invite Senators to come, and 

of course, they’re busy. And I also invited them to, if they cannot 

come themselves, to send a staffer from their office. And so, we 

have two staff members here, Jeanette Lyman from Senator Udall, 

and also Kenneth Martin from Senator Johnson as part of the staff 

from Washington, D.C. And there are others here who have come 

to help us with this hearing. So, mahalo nui to all of them. And 

so, let me read some of the names that are here. And I know I’m 

not naming them all, but Annelle Amaral, who is Vice-President of 

the Association of Hawaiian Civic Clubs. Leimomi Kahn, who is the 

past President of the Association of the Hawaiian Civic Clubs. 

Trustee Boyd Mossman of the Island of Maui from OHA. And 

Tasha Kama from SCHHA and Tony Lee from Hawaii Maoli. And 

these are folks who are really helping with the cause in Hawaii. 

Rosemary Morillo, who is a council member of the Soboba Tribe, 

who is here, too. There are others who I will introduce who are witnesses here, so I want to again welcome Mr. Smith and Ms. 

Kauhane. 

And Mr. Smith, would you please proceed with your testimony.

3

STATEMENT OF MICHAEL R. SMITH, DEPUTY BUREAU

DIRECTOR, FIELD OPERATIONS, BIA, U.S. DEPARTMENT OF 

THE INTERIOR 

Mr. Smith. Thank you, Mr. Chairman. 

Good morning. It is a pleasure to be here. It’s my pleasure to be 

here today to present the Department of Interior’s statement on 

the Strengthening Self Sufficiency, Overcoming Barriers to Economic Development in Native Communities. My name is Michael 

Smith, and I’m an enrolled member of the Laguno Pueblo Tribe in 

New Mexico, and I was born on the reservation of Fort Hall Idaho, 

Shoshone-Bannock, which was my mother’s Tribe. 

I am the Deputy Director of Bureau of Indian Affairs for Field 

Operations within the Department of the Interior. The Bureau of 

Indian Affairs provides services directly or through contracts, 

grants or compacts to a service population of about 1.7 million 

American Indians and Alaska Natives, who are enrolled members 

of 565 federally recognized Tribes living on or near Indian reservations in the 48 contiguous states and the State of Alaska. In addition, the BIA is responsible for the administration and management of approximately 56 million acres of land held in trust by the 

United States for American Indians. These are Tribes and Alaska 

Natives. Building strong, prosperous Native American economies is 

a priority for this administration. 

Earlier this month, the White House’s Domestic Policy Council 

and the National Economic Council convened a meeting with Native American economic development experts for a White House 

Native American business leaders round table. This round table is 

part of the White House rural council’s ongoing engagement with 

leaders across rural America and gave administration officials an 

opportunity to hear from Native American business leaders and 

policy experts about how we can work together to improve economic conditions and create jobs in Tribal communities. 

While each Tribal community and their economy is unique, there 

are a number of common factors that have inhibited economic development in Indian country. Primary road blocks include, one, 

lack of collateral in which Tribes and reservation businesses can 

obtain capital; number two, lack of a business development environment; number three, lack of physical and legal infrastructure; 

number four, difficulty in developing natural resources due to multiple governments having regulatory and taxing jurisdiction over 

development; number five, lack of educational and training opportunities to develop a skilled work force; and number six, lack of access to modern technology. 

Many of these road blocks are products of the history of Federal, 

State, Tribal relations and have Tribe-specific nuances that must 

be addressed on a Tribe-by-Tribe basis. Therefore, Indian Tribes 

must be the driving force behind Federal policies targeted toward 

job creation and economic development in Indian Country, which is 

consistent with the policy of Indian self determination. Nonetheless, the Department does support a couple of pieces of legislation 

that will assist with spurring economic development in Indian 

Country. 

In addition, the Department has also recently identified the following strategies and actions that could be implemented to enVerDate 0ct 09 2002 11:06 May 16, 2012 Jkt 073111 PO 00000 Frm 00007 Fmt 6633 Sfmt 6633 S:\DOCS\73111.TXT JACK
4

hance business and infrastructure development in Indian Country. 

Recently, the United States Accountability Office, GAO, stated that 

the uncertainty in accruing land in trust for Tribes as a result of 

the United States Supreme Court decision in Carcieri versus 

Salazar in 2009 is the primary barrier to economic development in 

Indian Country. 

Taking land into trust is one of the most important functions 

that the Department undertakes on behalf of Indian Tribes. Home 

lands are essential to the health, safety and welfare of the Tribal 

Nations. The Department strongly supports Congress’ effort to address the Carcieri decision. In addition, President Obama’s fiscal 

year 2012 budget proposal included Carcieri fix and language signaling his strong support for a legislative solution to resolve this 

issue. Since the Carcieri decision, the Department must examine 

whether each Tribe seeking to have land acquired in trust under 

the Indian Reorganization Act, IRA, was under Federal jurisdiction 

in 1934. 

This analysis is done on a Tribe-by-Tribe basis. It is time-consuming and costly for Tribes, even for those Tribes whose jurisdictional status is unquestioned. It requires extensive legal and historical research and analysis and has engendered new litigation 

about Tribal status and secretarial authority. Overall, it has made 

the Department’s consideration of deeded trust applications more 

complex. The Department believes that legislation is the best 

means to address the issues arising from the Carcieri decision and 

to reaffirm the Secretary’s authority to secure Tribal home lands 

for all federally-recognized Tribes under the Indian Reorganization 

Act. 

A clear congressional reaffirmation will prevent costly litigation 

and lengthy delays for both the Department and the Tribes to 

which the United States owes a trust responsibility. The Department also recently testified before this Committee in strong support of Senate Bill 703, the Helping Expedite and Advance 

Responsibile Tribal Home Ownership Act of 2011, which would restore Tribal authority to govern leasing of Tribal lands for those 

Tribes who wish to exercise that authority. 

Under this legislation, Tribes would submit their own leasing 

regulations to the Secretary for approval and then process leases 

under Tribal law without prior express approval from the Secretary. This bill has the potential to significantly reduce the time 

it takes to approve leases for homes, small businesses and renewal 

energy. The Department is also working internally on ways to spur 

economic development in Indian Country. First, the Department 

recognizes that Indian Tribes must be able to determine how their 

home lands would be used. Thus, the Department is revising 25 

CFR Part 162, the regulations governing leasing on Indian lands. 

Once completed, this effort will mark the most significant reform 

in Indian land leasing in 50 years. The Department’s revisions will 

streamline the process by which leases of Indian lands are approved; thereby, promoting home ownership, economic development 

and renewable energy development on Indian Tribal lands. The Department conducted three Tribal consultation sessions on this initiative in April and has reviewed and considered all Tribal comments on the draft leasing regulations. The Department expects to 

5

proceed to a formal notice of proposed rule-making in the near future. We intend to conduct further consultation at that time in addition to receiving public comments on the proposed regulations. As 

it stands, our plan is to complete the rule-making for these regulations in early 2012. 

Second, for the United States to adequately identify and focus on 

unemployment in Indian Country, we must first collect reliable 

data that will allow us to track progress over time. The Assistant 

Secretary for Indian Affairs is charged and specifically in its office 

of the Indian Energy and Economic Development, IEED, is stimulating economics, fostering job creation and improving the quality 

of life in Native American and Alaska Native communities. 

I will be referring to that office quite often as IEED, Indian Energy and Economic Development. The Department of the Interior, 

the departments, Interior, Commerce, Agriculture and Labor, all 

have programs that target economic development in Indian Country. Several agencies estimate conditions in Indian Country, but no 

department has specifically targeted Indian Country to produce reliable and accurate economic data. Therefore, Indian Affairs has recently hired an economist, who has begun to work with IEED on 

collecting better economic data to support various programs. 

In addition, in July of this year, Larry EchoHawk, the Secretary 

for Indian Affairs, signed a memorandum of understanding with 

Harvard University’s Project on American Indian Economics. 

Whereby, the Department and Harvard will collaborate on promoting Tribal economic development to research, outreach and 

leadership education. The Department and the Harvard project 

have identified areas of possible collaboration. One, and these are 

in bullet form, research efforts that focus on improving economic 

opportunities in Tribal communities that facilitate Tribal development in the legal and political infrastructure that will promote economic development in Tribal communities. And that addresses disparities in economic indicators. 

Two, the identification and development of outreach efforts having high potential impact on economic development initiatives in 

Tribal communities. The capacity for those communities to promote 

economic development, opportunities for productive research and 

curriculum programs on economic development and Tribal Government management. And three, expanded outreach and recruitment 

opportunities for graduate education in Harvard University and its 

allied organizations and leadership management in the professional 

fields relevant to Indian Country economic development policy as 

well as the orientation and training of the Department’s Indian Affairs managers to foster a climate of economic growth in Tribal 

communities. 

The Department has been engaging in Tribal Governments in 

our national energy priorities, including renewable energy development on Tribal lands. We know that Tribal lands hold a great capacity for solar, wind and geothermal projects. And we are committed to helping Indian Tribes unlock that potential. IEED has 

identified reservations with renewable energy potential. The IEED 

addresses energy, conventional and renewable, and mineral potential in Indian Country is part of its mission. IEED is currently 

working with one of 50 projects on approximately 35 reservations 

6

with 29 additional projects recommended for over 4.1 million in energy and renewable program development funding for fiscal year 

2012. 

This, however, is barely tapping the potential that exists in Indian Country for energy development. IEED has identified 267 reservations with renewable energy potential, but the resources on 

these reservations has not yet been adequately determined. The potential on these reservations is as follows: Wind energy, 535 million 

kilowatts; solar energy, 17,600 million kilowatts; woody biomass 3 

billion kilowatts; geothermal, 21 million kilowatts; and hydroelectric, 5.7 million kilowatts. 

A tremendous need exists to quantify these potentials on individual reservations to gain a better understanding of how best to 

develop these resources. On June 21, 2011, the Department published the Department of the Interior’s Economic Contributions. 

This report shows that energy and mineral development play a 

very substantial role in Tribal economies. Highlights of the report 

are as follows. BIA/BIE, which is the Bureau of Indian Education, 

and IEED have an estimated economic impact of $14.45 billion. 85 

percent or $12.3 billion of this impact is derived from energy and 

mineral development on Tribal lands. 

The economic impact reiterated by BIA/BIE and IEED create an 

estimated 136,761 jobs. 88 percent or 120,934 of these jobs are directly associated with energy and mineral development on Tribal 

lands. I will be submitting a graph as part of my testimony. Royalty income in 2010 from energy development is projected to be 

greater than $650 million. Our new focus on resource development 

versus resource assessment is far more proactive and useful to 

Tribes as they can make informed decisions in resource development, thus providing a springboard to the development and realization of economic benefits from their energy and renewable resources. 

The IEED is concentrating on developing these capabilities in accordance with the Indian Mineral Development Act. The Federal 

Government responsibilities under the Indian Mineral Development Act of 1982 include providing economic evaluations of energy 

and mineral resources, providing expert technical advice on engineering, geology, geophysics and economics to Indian mineral owners and providing expert technical advice to Indian mineral owners 

in negotiating IMDA agreements with respective developers. 

Since 1982, the IEED has spent over $85 million on developing 

energy and mineral resource information. As a direct result of 

these expenditures, over $1.13 trillion of in-the-ground potential 

energy resources have been identified. These results have provided 

the foundational information necessary for a future economic development of these resources. I know I’ve taken quite a long time to 

read this testimony, Mr. Chairman, and I appreciate your forbearance. 

I would like to add one thing as part of my testimony. This Administration sincerely supports the efforts of Hawaiian communities or Native Hawaiian recognition. And as indigenous people, 

they should be joined in the Bureau of Indian Affairs as one of our 

components to deliver services to. I thank you, Mr. Chairman, and 

I’m available for any questions. 

7

1See, Testimony of Anu K. Mittal, Director, Natural Resources and Environment, Observations on Some Unique Factors that May Affect Economic Activity on Tribal Lands, Subcommittee 

on Technology, Information Policy, Intergovernmental Relations and Procurement Reform, Committee on Oversight and Government Reform, U.S. House of Representatives (April 7, 2011). 

[The prepared statement of Mr. Smith follows:]

PREPARED STATEMENT OF MICHAEL R. SMITH, DEPUTY BUREAU DIRECTOR, FIELD

OPERATIONS, BIA, U.S. DEPARTMENT OF THE INTERIOR

Good morning, Mr. Chairman and Members of the Committee. It is a pleasure to 

be here today to present the Department of the Interior’s statement on ‘‘Strengthening Self-Sufficiency: Overcoming Barriers to Economic Development in Native 

Communities.’’ My name is Michael Smith and I am the Deputy Bureau Director 

for Field Operations in the Bureau of Indian Affairs (BIA) within the Department 

of the Interior (Department). 

The Bureau of Indian Affairs (BIA) provides services directly or through contracts, 

grants, or compacts to a service population of about 1.7 million American Indians 

and Alaska Natives who are enrolled members of 565 Federally recognized Tribes 

living on or near Indian reservations in the 48 contiguous United States and Alaska. 

In addition, the BIA is responsible for the administration and management of approximately 56 million acres of land held in trust by the United States for American 

Indians, Indian Tribes, and Alaska Natives. Building strong, prosperous Native 

American economies is a priority for this Administration. 

Earlier this month, the White House’s Domestic Policy Council and the National 

Economic Council convened a meeting with Native American economic development 

experts for a White House Native American Business Leaders Roundtable. This 

Roundtable is part of the White House Rural Council’s ongoing engagement with 

leaders from across Rural America, and gave Administration officials an opportunity 

to hear from Native American business leaders and policy experts about ways we 

can work together to improve economic conditions and create jobs in Tribal communities. 

While each Tribal economy is unique, there are a number of common factors that 

have inhibited economic development in Indian Country. Primary roadblocks include: (1) lack of collateral with which Tribes and reservation businesses can obtain 

capital; (2) lack of a business development environment; (3) lack of physical and 

legal infrastructure; (4) difficulty in developing natural resources due to multiple 

governments having regulatory and taxing jurisdiction over development; (5) lack of 

educational and training opportunities to develop a skilled work force; and (6) lack 

of access to modern technology. Many of these roadblocks are products of the history 

of federal-state-Tribal relations, and have Tribe-specific nuances that must be addressed on a Tribe-by-Tribe basis. Therefore, Indian Tribes must be the driving force 

behind federal policies targeted toward job creation and economic development in 

Indian Country, which is consistent with the policy of Indian self-determination. 

Nonetheless, the Department does support a couple of pieces of legislation that 

would assist with spurring economic development Indian Country. In addition, the 

Department has also recently identified the following strategies and actions that 

could be implemented to enhance business and infrastructure development in Indian 

Country. 

Recently, the United States Government Accountability Office (GAO) stated that 

the uncertainty in accruing land in trust for Tribes, as a result of the United States 

Supreme Court decision in Carcieri v. Salazar, 129 S. Ct. 1058 (2009), is the primary barrier to economic development in Indian Country. 1 Taking land into trust 

is one of the most important functions that the Department undertakes on behalf 

of Indian Tribes. Homelands are essential to the health, safety and welfare of the 

Tribal Nations. The Department strongly supports Congress’s effort to address the 

Carcieri decision. In addition, President Obama’s FY 2012 budget proposal included 

Carcieri fix language signaling his strong support for a legislative solution to resolve 

this issue. 

Since the Carcieri decision, the Department must examine whether each Tribe 

seeking to have land acquired in trust under the Indian Reorganization Act was 

‘‘under federal jurisdiction’’ in 1934. This analysis is done on a Tribe-by-Tribe basis; 

it is time-consuming and costly for Tribes, even for those Tribes whose jurisdictional 

status is unquestioned. It requires extensive legal and historical research and analysis and has engendered new litigation about Tribal status and Secretarial authority. Overall, it has made the Department’s consideration of fee-to-trust applications 

more complex. 

8

The Department believes that legislation is the best means to address the issues 

arising from the Carcieri decision, and to reaffirm the Secretary’s authority to secure Tribal homelands for all federally recognized Tribes under the Indian Reorganization Act. A clear congressional reaffirmation will prevent costly litigation and 

lengthy delays for both the Department and the Tribes to which the United States 

owes a trust responsibility. 

The Department also recently testified before this Committee in strong support 

of S. 703, the Helping Expedite and Advance Responsible Tribal Homeownership Act 

of 2011, which would restore Tribal authority to govern leasing on Tribal lands, for 

those Tribes that wish to exercise that authority. Under this legislation, Tribes 

would submit their own leasing regulations to the Secretary for approval, and then 

process leases under Tribal law without prior express approval from the Secretary 

of the Interior. This bill has the potential to significantly reduce the time it takes 

to approve leases for homes, small businesses, and renewable energy. 

The Department is also working internally on ways to spur economic development 

in Indian Country. First, the Department recognizes that Indian Tribes must be 

able to determine how their homelands will be used. Thus, the Department is revising 25 C.F.R. Part 162, the regulations governing leasing on Indian lands. Once 

completed, this effort will mark the most significant reform to Indian land leasing 

in 50 years. The Department’s revisions will streamline the process by which leases 

of Indian lands are approved, thereby promoting homeownership, economic development, and renewable energy development on Tribal lands. The Department conducted three Tribal consultation sessions on this initiative in April, and has reviewed and considered all Tribal comments on the draft leasing regulations. The Department expects to proceed to a formal Notice of Proposed Rulemaking in the near 

future. We intend to conduct further consultation at that time, in addition to receiving public comments on the proposed regulations. As it stands, our plan is to complete the rulemaking for these regulations in early 2012. 

Second, for the United States to adequately identify and focus on unemployment 

in Indian country, we must first collect reliable data that will allow us to track 

progress over time. The Assistant Secretary, Indian Affairs, and specifically its Office of Indian Energy and Economic Development (IEED) is charged with stimulating economies, fostering job creation, and improving the quality of life in Native 

American and Alaska Native communities. Adequately gauging the impact of 

IEED’s economic development strategies, programs, and initiatives is difficult as 

there is no reliable baseline index of unemployment and productivity in Indian 

Country. The Departments of the Interior, Commerce, Agriculture and Labor all 

have programs that target economic development in Indian Country. Several agencies estimate conditions in Indian Country, but no Department has specifically targeted Indian Country to produce reliable and accurate economic data. Therefore, Indian Affairs has recently hired an economist who has begun to work with IEED on 

collecting better economic data to support various programs. 

In addition, in July of this year, Larry Echo Hawk, the Assistant Secretary—Indian Affairs, signed a Memorandum of Understanding (MOU) with Harvard University’s Project on American Indian Economic Development whereby the Department 

and Harvard will collaborate on promoting Tribal economic development through research, outreach and leadership education. The Department and the Harvard 

Project have identified areas of possible collaboration:

• Research efforts that focus on improving economic opportunities in Tribal communities, that facilitate Tribal development of the legal and political infrastructure that will promote economic development in Tribal communities, and that 

address disparities in economic indicators.

• The identification and development of outreach efforts having high potential impact on economic development initiatives in Tribal communities, the capacity of 

those communities to promote economic development, opportunities for productive research and curriculum programs on economic development and Tribal 

government management.

• Expanded outreach and recruitment opportunities for graduate education at 

Harvard University and its allied organizations in leadership, management and 

other professional fields relevant to Indian Country economic development policy, as well as the orientation and training of the Department and Indian Affairs managers to foster a climate of economic growth in Tribal communities.

Third, the Department has been engaging Tribal governments in our national energy priorities, including renewable energy development on Tribal lands. We know 

that Tribal lands hold a great capacity for solar, wind and geothermal projects, and 

9

we are committed to helping Indian Tribes unlock that potential. IEED has identified reservations with renewable energy potential. 

The IEED addresses energy (conventional and renewable) and mineral potential 

in Indian Country as part of its mission to fulfill the Administration’s New Energy 

Frontier Initiative. IEED is currently working on more than 50 projects on approximately 35 reservations. This, however, is barely tapping the potential that exists in 

Indian Country for energy development. A tremendous need exists to quantify these 

potentials on individual reservations to gain a better understanding of how to best 

develop these resources in accordance with Indian Tribes. 

This concludes my statement. I am happy to answer any questions the Committee 

may have.

The CHAIRMAN. Thank you very much for your testimony, Mr. 

Smith. We thank you for what you’re doing. You’ve mentioned 

many programs that we need to utilize to help our economy. And 

we’ll ask you specific questions about some of the programs. 

Ms. Kauhane, would you please proceed with your statement. 

STATEMENT OF MICHELLE KAUHANE, DEPUTY DIRECTOR, 

DEPARTMENT OF HAWAIIAN HOME LANDS, STATE OF HAWAII 

Ms. KAUHANE. Thank you. Aloha, Chairman Akaka and Members 

of the Senate Committee on Indian Affairs. Mahalo for the invitation and the opportunity to provide testimony on behalf of the 

State Department of Hawaiian Home Lands regarding the barriers 

to economic development in Native communities. My name is 

Michelle Kauhane, Deputy Director of the Department of Hawaiian 

Home Lands. I’m also a Native Hawaiian homesteader residing in 

Kapolei, Oahu in Honolulu. 

DHHL is responsible for the administration, compliance and 

meeting the mission of the Hawaiian Homes Commission Act. We 

are a State agency managing a federally-created land trust to reconnect Native Hawaiians to their ancestral lands in Hawaii. It is 

well understood that the progress made to implement the primary 

purpose of returning Native Hawaiians to their lands under the 

Hawaiian Homes Commission Act is and has been inadequate. The 

homesteading program to issue lands to Native Hawaiians, although the cornerstone of the Act with the potential to create economic opportunities, has been challenged by the location of our 

trust lands, lack of infrastructure investment by the Federal Government and also a lack of operational funding to support the administration of our trust. 

The Hawaiian Home Lands trust is one of the best hopes to advance the economic self-sufficiency of our Native people. Moreover, 

the economic development potential for Native Hawaiians, if realized, can and will advance the economic prosperity of the entire 

State of Hawaii. My testimony today will focus on four topical 

areas to overcoming some of the barriers to economic development 

that we face on homesteads. First, reauthorization of NAHASDA. 

In 2000, the Congress enacted Title VIII of NAHASDA creating for 

the first time a modest allocation of Federal funding to support the 

development of affordable housing for low and moderate income 

beneficiaries. 

We recommend the Committee work to update and reauthorize 

the Native Hawaiian Housing Block Grant, as has been done for 

Indian Country. Second, infrastructure investments. Approximately 

75 percent of the open lands of the Hawaiian Home Lands trust reVerDate 0ct 09 2002 11:06 May 16, 2012 Jkt 073111 PO 00000 Frm 00013 Fmt 6633 Sfmt 6601 S:\DOCS\73111.TXT JACK
10

main undeveloped. One of the largest barriers to issuing land to 

the 20,000-plus individuals on our wait list is investment into the 

infrastructure for roads, utilities, water/wastewater facilities, 

broadband and renewable energy sources. 

We recommend the inclusion of all Native lands in the Substantially Underserved Trust Areas, the SUTA definition of trust lands 

as enacted in the 2008 Farm Bill. Access to capital for infrastructure development on the unique trust lands of the America’s indigenous peoples need only be included in the capital strategies of the 

Congress that have built and will continue to build the country. 

Third, access to consumer capital. One of the most common 

sources of consumer capital for business startups, enterprise investments and fueling economic development in any community is 

home equity. There is a significant disparity between the loan 

products available to homesteaders in comparison to loans available in the fee simple marketplace in Hawaii. Likewise, there are 

similar disparities in product availability on trust lands in Hawaii 

in comparison to the lands held in trust on the continent. Specifically, while the rest of the nation is allowed to refinance existing 

FHA mortgages to reduce interest rates and access equity up to 85 

percent of the loan to value, our FHA 247 loan product on Hawaiian Home Lands limits refinancing transactions and access to equity at 75 percent. 

On the only other federally-backed consumer mortgage product 

available on Hawaiian Home Lands, the HUD 184(a) loan program, 

the authorizing language was inadvertently silent on the eligibility 

to refinance at all. Unlike its Indian Country counterpart, the HUD 

184 program here in Hawaii stifles refinancing as a standard practice for our people. 

The result of the deficiencies in the FHA 247 and the HUD 

184(a) products creates an even greater economic divide by closing 

off a lifeline of capital that is a requirement for any healthy community. We recommend that the Committee work with the Administration to assess and implement action necessary to bring parity 

to the FHA 247 and 184(a) programs available to Native Hawaiians on their trust lands. 

Finally, improved administration of the trust. The Department of 

Hawaiian Home Lands understands there’s an incredible opportunity to tap into the experiences and best practices the Federal 

Government has in Indian Nations. We recognize that the Federal 

trust land management practices have taken a journey that include 

missed opportunities and pitfalls, but also includes evolved policies 

that have resulted in substantial improvements. 

An example of a substantial improvement that DHHL has embraced is the adoption of our policy of Beneficiary Consultation, 

recommended by beneficiary advocacy groups and based on the 

Federal Tribal Consultation process in place under Presidential Executive Order. Though the policy of Beneficiary Consultation is relatively new to our department and to our homestead communities, 

we are finding it to be a best practice that will yield positive results, including the advancement of the self determination policy 

inherent in the Hawaiian Homes Commission Act. 

Simply said, consultation strengthens our connection to the people our agency was created to serve through the provision of our 

11

land, and also engages the incredible ingenuity and knowledge of 

the people themselves, to implement solutions that matter the 

most. We recommend the Committee encourage more active engagement and interaction by the Department of the Interior, the 

Federal agency with oversight responsibility of the Hawaiian 

Homes Commission Act and the State of Hawaii with the Department of Hawaiian Home Lands and the homestead communities. 

We further recommend the enactment of the Native Hawaiian 

Government Reorganization Act by the Congress, which would extend the Federal policy of self government to the Native Hawaiian 

people. Native Hawaiians need Federal recognition. 

I thank you for the opportunity to present our testimony and to 

identify areas that we can work together to overcome barriers of 

economic development. 

[The prepared statement of Ms. Kauhane follows:]

PREPARED STATEMENT OF MICHELLE KAUHANE, DEPUTY DIRECTOR, DEPARTMENT OF

HAWAIIAN HOME LANDS, STATE OF HAWAII

Aloha Chairman Akaka and Members of the Senate Committee on Indian Affairs. 

Mahalo for the invitation and opportunity to provide testimony on behalf of the 

State of Hawaii, Department of Hawaiian Home Lands (DHHL) regarding the barriers to economic development in Native communities. 

My name is Michelle Kauhane, Deputy Director at the Department of Hawaiian 

Home Lands, appointed by Governor Neil Abercrombie. Prior to my appointment, 

I spent 10 years in the Native non-profit sector, as the Executive Director of one 

of Hawaii’s most active financial literacy and foreclosure prevention agencies, Hawaiian Community Assets (HCA). HCA is also the first non-profit mortgage broker 

in Hawaii, established to promote homeownership on the trust lands of the Native 

Hawaiian people by providing specialized expertise necessary to navigate financing 

unique to Hawaiian Home Land communities. 

Hawaiian Homes Commission Act 

Since Hawaii’s overthrow as an independent nation and the subsequent annexation to the United States, one of the most significant federal policy achievements 

for Native Hawaiians was the enactment by the U.S. Congress of the Hawaiian 

Homes Commission Act of 1920 (HHCA). The HHCA began as a resolution in the 

territorial government in Hawaii, and advocated by the territory’s congressional representative, Prince Jonah Kuhio Kalanianaole. Similar to other land allotment acts 

of that era for Alaska Natives and American Indians, the HHCA established a land 

trust of approximately 200,000 acres of land, to provide for the rehabilitation of Native Hawaiians through the provision of land for residential, agricultural and pastoral homesteading. In addition, the HHCA encourages economic development on 

trust lands through land licenses for commerce and public purpose development. 

The Admissions Act of 1959 required the HHCA to be administered by the state 

of Hawaii with federal oversight by the Department of Interior and the Congress. 

DHHL became the state agency responsible for the administration of the HHCA 

since 1961, governed by a 9-member Hawaiian Homes Commission appointed by the 

Governor of the state of Hawaii. Its Director, a member of the Governor’s cabinet, 

also serves as the Chairman of the Commission. In short, DHHL is responsible for 

administration, compliance and meeting the mission of the HHCA. We are a state 

agency managing a federally created land trust to reconnect Native Hawaiians to 

their ancestral lands in Hawaii. 

The most commonly used terms in our communities to describe Native Hawaiians 

eligible for the HHCA land trust, are ‘‘lessee’’, ‘‘beneficiary’’ or ‘‘homesteader’’. For 

the purpose of my testimony, these terms will be used to describe Native Hawaiians 

defined as eligible to receive land under the HHCA. Equally important to the committee topic, is to share the existence of beneficiary organizations governed by beneficiaries or homesteaders themselves. These organizations, called homestead associations, have existed for decades, and are important partners to state government in 

reaching the full potential of the HHCA. 

12

Homesteading Progress 

After 91 years since the enactment of the HHCA, just over 8,000 land leases have 

been issued to beneficiaries for homesteading purposes. In the last 10 years, approximately 2,500 leases were issued. An estimated 35,000 lessees and family members reside on homestead lands throughout Hawaii. Approximately 48 percent are 

located on Oahu, 23 percent on the island of Hawaii, 22 percent in Maui County, 

and 7 percent on Kauai. Among the lessees, the majority of leases are residential 

(89 percent), followed by 8 percent agricultural and the remaining 3 percent in pastoral. 

According to a 2008 lessee survey conducted by SMS Research, DHHL lessee 

households consist of 3 to 7 people with a mean of 4.2 household members. The median household income among lessees was $48,731 in 2008, lower than the median 

household income for the State at $63,746. In addition, the survey estimated 51 percent of DHHL lessee households had incomes below 80 percent of the HUD median. 

In addition to the beneficiaries on the land, the waiting list of beneficiaries to receive a land award under the HHCA exceeds 20,000, with waiting times ranging 

from 5 years to 50 years. It is well understood, that the progress made to implement 

the primary purpose of returning Native Hawaiians to their lands under the HHCA, 

is and has been inadequate. The primary barriers to improved and increased 

progress by DHHL can be described as follows:

1. Location of Trust Lands—As was common with other Native peoples in the 

country, the lands allocated to the Hawaiian Home Land trust consist of 

some of the most difficult to access, with terrains that make development 

challenging and expensive.

2. Infrastructure Funding to Develop Trust Lands—Since the enactment of the 

HHCA and Hawaii Admissions Act which required the state of Hawaii to administer the land trust, the Federal Government has not appropriated funding to DHHL to administer the trust, nor made any significant investment 

to infrastructure that would render the lands inventory adequate for homesteading use. Only within the last decade, in 2000, with the enactment of the 

Native Hawaiian Housing Block Grant, an amendment to the federal Native 

American Housing Assistance and Self Determination Act (NAHASDA), 

DHHL began receiving a modest allocation for the development of low to 

moderate income housing. Due to land conditions described in item 1 above, 

much of these funds have been directed toward subdivision development to 

build roads, utilities and residential lots.

3. Operating Funding to Administer Trust Lands—The administration of the 

Hawaiian Home Land trust requires an operating budget and staffing resources to implement the purposes of the HHCA. Since administration began 

by the state of Hawaii in 1959, a fraction of the annual operating costs of 

DHHL have been appropriated by state government. This reality, together 

with the modest annual federal support under NAHASDA only beginning in 

2000 described in item 2 above, DHHL is operated almost entirely through 

revenues generated by trust lands leased or licensed for nonhomesteading 

purposes. As a result, the ability to further the homesteading program for 

Native Hawaiians through the provision of land is hindered.

In summary, the homesteading program to issue lands to Native Hawaiians for 

residential, agricultural or pastoral homesteads, which is the cornerstone of the 

HHCA and which would create economic opportunities for the beneficiaries of the 

Hawaiian Home Land trust, has been challenged by the location of trust lands, lack 

of infrastructure investment by the Federal Government, and a lack of operational 

funding to support the administration of the trust. 

Overcoming Barriers to Economic Development in Homesteads 

The Hawaiian Home Land trust is one of the best hopes to advance the economic 

selfsufficiency of Native Hawaiians. Moreover, the economic development potential 

for Native Hawaiians if realized, can and will advance the economic prosperity of 

the entire state. When a dollar is invested in infrastructure on Hawaiian home 

lands, a Hawaii business is building a road, or installing utility lines. When a dollar 

is spent in the administration of the trust, a vital job necessary to administer the 

trust is created, and becomes a part of the spending power of the people of Hawaii. 

The significance of the hearing topic of ‘‘Overcoming Barriers to Economic Development in Native Communities’’ could not be more relevant and beneficial as the nation maintains its attention on a national economic recovery. 

My testimony will focus on four topical areas to overcoming barriers to economic 

development on homesteads, as follows:

13

1. Reauthorization of NAHASDA—In 2000, the congress enacted Title VIII of 

NAHASDA, creating for the first time, a modest allocation of federal funding 

to support the development of affordable housing for low and moderate income beneficiaries. We recommend the committee work to update and reauthorize the Native Hawaiian Housing Block Grant, as has been done for Indian Country.

2. Infrastructure Investments—Approximately seventy-five percent of the open 

lands of the Hawaiian Homes land trust remain undeveloped. One of the 

largest barriers to issuing land to the 20,000∂ individuals on the wait list 

is investment in infrastructure for roads, utilities, water/waste water facilities, broadband and renewable energy sources. 

As the congress moves infrastructure investments for the country through 

various federal agencies and programs, we recommend that the trust lands 

of all Native peoples, including Native Hawaiians through the inclusion of the 

Substantially Underserved Trust Areas (SUTA) definition of trust lands as 

enacted in the 2008 Farm Bill (P.L.110). Access to capital for infrastructure 

development on the unique trust lands of America’s indigenous peoples need 

only be included in the capital strategies of the congress that have built and 

will continue to build the country.

3. Access to Consumer Capital—One of the most common sources of consumer 

capital for business start ups, enterprise investments and fueling economic 

development in any community, is home equity financing. There is a significant disparity between the loan products available to homesteaders in comparison to loans available in the fee simple marketplace in Hawaii. Likewise, 

there are similar disparities in product availability on trust lands in Hawaii 

in comparison to trust lands on the continent. 

Specifically, while the rest of the nation is allowed to refinance existing FHA 

mortgages to reduce interest rates and access equity up to 85 percent of loan 

to value, the FHA 247 loan product for Hawaiian Home Lands limits refinancing transactions and equity financing to 75 percent loan to value. Further, the product prohibits business purposes, educational tuition and other 

meaningful financing purposes that advance economic security and economic 

opportunities for Native Hawaiians. The rest of the nation, including the 

counterpart FHA 248 program for Indian lands, does not have these prohibitions, creating a significant disparity in accessing consumer capital. 

On the only other federally backed consumer mortgage product available on 

Hawaiian trust lands, the HUD 184a program, the authorizing language inadvertently was silent on the eligibility to refinance at all. Unlike its Indian 

Country counterpart, the HUD 184 program, refinancing is a standard and 

normal transaction that enables Indian borrowers to refinance and capture 

interest rate savings as the market re-prices. Perhaps more important, is the 

eligibility of Indian borrowers to utilize the HUD 184 program on homes located on or off their trust lands. This is a powerful tool in anti-poverty strategies of asset-building through homeownership and equity assets. 

The result of the deficiencies in the FHA 247 and HUD 184a products creates 

an even greater economic divide by closing off the lifeline of capital that is 

a requirement of any healthy community. We recommend that the committee 

work with the Administration to assess and implement actions necessary to 

bring parity to the FHA 247 and HUD 184a program available to Native Hawaiians and their trust land assets.

4. Improved Administration of the Trust—Given the history of the last 91 years 

since enactment of the HHCA of which the state of Hawaii has administered 

since 1959, and the federal oversight of the Hawaiian Homes land trust, 

there is an incredible opportunity to tap into the experiences and best practices of the Federal Government and Indian nations. We recognize that federal trust land management practices have taken a journey that includes 

missed opportunities and pitfalls, but also includes evolved policies that have 

resulted in substantial improvements. 

An example of a substantial improvement DHHL has embraced is the adoption of our policy of Beneficiary Consultation, recommended by beneficiary advocacy organizations and based on the federal Tribal Consultation process in 

place under Presidential Executive Order. By examining the historical context 

of Tribal Consultation, its implementation approach, and the purpose of this 

policy in every federal agency, DHHL drew similarities to our status as a 

state government agency, and our need to consult with beneficiaries of the 

Hawaiian Home Land trust, and the organizations most comparable to Tribes 

14

in the federal consultation policy, homestead associations organized by and 

governed by Native Hawaiian beneficiaries of the trust. 

Though the policy of Beneficiary Consultation is relatively new to DHHL and 

to our homestead communities, we are finding it to be a best practice that 

will yield positive results, including the advancement of the self determination policy inherent in the HHCA. Simply said, consultation strengthens our 

connection to the people our agency was created to serve through the provision of land, and also engages the incredible ingenuity and knowledge of the 

people themselves, to implement solutions that matter most. 

There are other examples of improved administration by DHHL where we 

have sought information and examined the trust land management strategies 

of the Federal Government, and Indian organizations on the continent. These 

include facilitating the flow of Community Development Financial Institution 

(CDFI) services by partnering with Native community organizations, and involving homestead associations in economic strategy development. 

We recommend the Committee encourage more active engagement and interaction by the Department of Interior, the federal agency with oversight responsibility of the HHCA and the state of Hawaii, with DHHL and the homestead communities. Sharing experiences is one of the most powerful sources 

of good policy-making. As DHHL defines its role more clearly in the administration of the HHCA and implements stronger relationships with the beneficiary organizations that represent the beneficiaries of the land trust, every 

stakeholder can benefit from greater engagement with the federal Government and the counterpart Indian organizations on the continent and Alaska. 

We further recommend the enactment of the Native Hawaiian Government 

Reorganization Act by the congress, which would extend the federal policy of 

self government to the Native Hawaiian people, regardless of eligibility under 

the HHCA. As the state of Hawaii has done in recent months, through the 

passage of a state recognition bill, we know that the well-being of our state 

is tied directly to the wellbeing of Hawaiian communities in every area, including economic, education, and health, which can only be achieved through 

the strength of Hawaiian ways of life and culture.

Thank you for the opportunity to present testimony and to identify areas we can 

work together to overcome barriers to economic development.

The CHAIRMAN. Thank you very much, Michelle, for your testimony. I would like now to proceed to questions. 

Mr. Smith, in your testimony, you mentioned two Committee 

bills that are intended to streamline the land in trust and leasing 

processes on Indian lands. If these bills are passed, do you think 

they will significantly improve economic development opportunities 

for Tribal Governments? 

Mr. Smith. Yes, Mr. Chairman. I sincerely believe that and we 

have been working toward that effort with the idea that this will 

take a Tribal Governance from each Tribe and the proper codes, 

the proper ordinances or business codes in order for them to move 

forward with their leasing regulations. So we believe this. We know 

that we have at least a half dozen or more model Tribes that are 

ready to go. 

And the minute that we are able to, you know, act upon any congressional intent, then we will be able to offer this to Tribes, and 

they will have very little interference, if any at all, from the Federal Government. We may still be available for technical assistance 

and guidance, but they will be in charge of those leasing activities. 

The CHAIRMAN. Thank you. Ms. Kauhane, you identified the need 

to address the disparity in the FHA 247, the HUD 184 mortgage 

products as a key solution to creating economic development. What 

are additional access to capital examples that promote economic development in Native communities, and what is needed so they can 

be utilized on Hawaiian Home Lands? 

15

Ms. KAUHANE. The FHA 247 and 184, Senator Akaka, as I mentioned, limit access to capital. And in any community, we need access to our home equity when we want to send our kids to college, 

start up new businesses, for all sorts of reasons to have an infusion 

of cash into communities anywhere. An easy and quick fix for us 

to do is to negotiate with the current Administration at the Department of HUD to correct the MOU that is currently in place with 

the State Department of Hawaiian Home Lands that are limiting 

these loan to value limits and bring parity to our loan products 

equivalent to that of our Indian counterparts. 

The CHAIRMAN. Mr. Smith, you mentioned that the Department 

of Interior has hired an economist to collect more reliable economic 

date in Native communities so Federal programs can be better to 

help those communities. When did you expect the report to be completed, and what will the Department do with that data to specifically improve economic conditions in Native communities? 

Mr. Smith. Mr. Chairman, it’s been almost 37 years since we had 

an economist at the Department of Interior Bureau of Indian Affairs, and I’m not sure exactly why that has happened. But we did 

hire earlier this year an economist who has a proven track record 

of being able to gather data and analyze that data and put it in 

a format that would be usable by Tribes. 

We’re also depending on the Tribal side of things. The Tribal 

Data Task Force has been able to provide information in almost 

every format you can think of, so that together, we can provide 

something that will be usable early on in 2012. And I believe the 

efforts are being recognized by the Assistant Secretary through the 

Office of Self Governance. I believe at least one of the members of 

the data management team is in the audience, Chairman Ron 

Allen from the Jamestown S’Klallam Tribe, and that information 

will be so valuable, because it will be offered to Tribes in a format 

that will be best utilized whenever they develop their plans to 

move forward. 

The CHAIRMAN. Thank you very much. 

Ms. Kauhane, according to your testimony, there is a serious disparity in the loan to value ratios for Native Hawaiians and for everyone else. Native Hawaiians living on homesteads cannot take 

out a second mortgage or refinance to take out home equity to start 

a business. How does this create a barrier to economic development 

in homestead communities, and what can be done to remove the 

barrier to creating parity? 

Ms. KAUHANE. Again, I will say out loud for the record that access to capital in our communities is paramount, that in order for 

us to continue development that we need to have access to capital. 

The homesteaders, again, the easy fix is to correct the MOU with 

HUD and to change the existing language—with the department’s 

agreement, so that we can remove the barrier or remove the loan 

to value ratio to bring parity to the loan products. 

The CHAIRMAN. Since you mentioned starting businesses, what is 

the DHHL doing to encourage economic development on home 

lands? 

Ms. KAUHANE. Currently the department is focused in community development on regional plans where we consult with our 

beneficiaries and the various homestead areas to talk about ecoVerDate 0ct 09 2002 11:06 May 16, 2012 Jkt 073111 PO 00000 Frm 00019 Fmt 6633 Sfmt 6601 S:\DOCS\73111.TXT JACK
16

nomic development ideas that the community may have, whether 

that be for early childhood education, community centers. And we 

are facilitating processes where our homestead associations then 

are allowed the leases holding the licenses to the lands in their 

homestead regions so that they can practice self determination and 

start businesses and do economic development activities, they desire within their homestead communities and within the Department’s regional plans. 

The CHAIRMAN. Mr. Smith, the Department’s Indian Loan Guaranteed Program has been a successful tool for allowing Tribes to 

gain access to capital. But funding is expected to decrease. What 

type of outreach has the Department done with Tribes and other 

Federal agencies to make sure that Tribes still have access to similar programs? 

Mr. Smith. Well, initially the 1972 Indian Financing Act that established the Guaranteed Loan Program was highly successful. Because along with the oversight and guidance, there was a pot of 

money that was called, I believe, the Indian business development 

grant. Those funds were offered to Tribes and individuals over a 

period of time, probably about 20 years. And now those funds are 

no longer available. 

So, the outreach that has resulted in recent times has been 

through other Federal agencies, the USDA, the SBA and others. 

And more importantly, we have relied on the ceiling, in other 

words, about $7 million of the ceiling that has a multiplying factor 

or a multiplier factor where we go to a lender such as a bank, and 

the Tribe is the client but we are the guarantor of that loan, so 

that no matter what the loan amount is, we are sitting at the table 

with the Tribe and the lender to assure the success of that project. 

The CHAIRMAN. Now that you are talking about business, has the 

Department issued loan guarantees for developing ADA companies 

as part of its efforts to spur economic development in Indian Country? 

Mr. Smith. I believe we have, and we’ve also reached out to the 

military in that regard because the military controls quite a lot of 

the capital that’s being used to develop infrastructure throughout 

the United States, including Indian reservations. In that regard 

also, I mentioned earlier the Harvard project that we have entered 

into a memorandum of understanding that will assist us in developing a strategy that’s going to be used in Indian Country. 

The CHAIRMAN. Yes. Well, I also wondered about how that MOU 

has been helpful. And I’m glad to hear that it has been. 

Well, I thank you both so much for your testimony as well as 

your answers here. This without question will be helpful to us. 

Thank you so much for being here at this hearing. 

Ms. KAUHANE. Thank you, Senator. 

Mr. Smith. Thank you, Mr. Chair. 

The CHAIRMAN. I would like to invite the second panel to the witness table. Also, I want to extend my thank you to my staff in Hawaii; Joan Ohashi, who is Chief of Staff, and also Jesse Broder Van 

Dyke, who is my communications man here. 

And I also have two staff, Daphne Tong and Lopaka Baptiste 

from Honolulu, who is helping us with these kinds of issues and 

17

the Native Hawaiian Government Reorganization Act. So, it’s good 

to have them here, too. 

I would like to ask the second panel to please come forward to 

the table, Mr. Brian Patterson, President of the United South and 

Eastern Tribes of Nashville, Tennessee. And Robin Danner, who is 

the President/CEO of the Council for Native Hawaiian Advancement in Honolulu, Hawaii. Welcome to both of you. 

Mr. Patterson, will you please proceed with your statement. 

BRIAN PATTERSON, PRESIDENT, UNITED SOUTH AND 

EASTERN TRIBES 

Mr. PATTERSON. Good morning, Senator. Aloha as it is in the 

home land of the Hawaiian people. It’s good to be in this land to 

embrace the people, to hear the language, hear the songs. The 

USET family of 26 Federally-recognized Tribes has long been a 

supporter and an advocate for the Hawaiian recognition of the Hawaiian protection of the landscape, cultural landscape, the bones of 

our people, the cultural and sacred sites. USET, the United South 

and Eastern Tribes, has been a long supporter and advocate for the 

Hawaiian rights platform. And we look to continue to develop and 

leverage that relationship between our peoples. 

So, thank you for the opportunity to come here and present 

today. I’m grateful that you have and other Senators on the Committee have a strong staff to support the much needed work that 

needs to be done, but ultimately, it is Indian Country that needs 

to drive its agenda. It is Indian Country that must define itself, but 

we can only do so through collaboration and partnership and using 

resources and opportunities available such as yourself to advance. 

So, we look to work in collaboration. 

We’re grateful for all the hard work that’s coming out of the 

Committee, the many roundtables, and as Loretta had many discussions with Tribal leaders throughout the country, Rhonda has 

had great communication with our Tribal leaders. We’re most appreciative of their efforts. And so today, I bring to you perhaps a 

unique perspective to this discussion. As a representative on my 

Nation’s Governing Council, the Oneida Indian Nation of New 

York, which I served on Council for 20 years, I can tell you how 

my people and our neighbors have benefitted from the success of 

our businesses and operations, how our Turning Stone Casino Resort has formed the foundation for our economic rebirth, how we 

have created jobs for 4,500 people in a region beset by chronic economic problems, how we have invested the proceeds from our resort 

in broadening our business enterprises and in providing health, 

housing, education and cultural programs for our people, how we 

have witnessed, our current generation have witnessed a complete 

rebirth of our nation through this effort. 

But on the other hand, the perspective I bring in is as President 

of the United South and Eastern Tribes, a coalition, a family of 26 

Federally recognized Tribal Governments located all across the 

eastern half of the United States, I can tell you more than half of 

my USET Tribes do not have the same resources or opportunities 

to develop their own economies. We are limited in our ability to 

draw businesses to Tribal lands due to our limitations on being 

able to offer incentives and the trust status of the land. 

18

Although Tribal gaming has done many wonderful things for 

many Tribes, it is in no sense a panacea. And in some cases, Tribal 

home lands are often too remote to make gaming a viable economic 

development option. In other cases, Tribes have chosen not to pursue gaming for reasons of their own. And in still other cases, some 

Tribes cannot pursue gaming because they don’t have their own 

land on which to build gaming facilities or because the status of 

that land is in dispute. 

Let me be absolutely clear on this point. Tribal Governments 

cannot fulfill their land, their responsibilities to their citizens if 

they don’t have a stable land base from which to operate and grow. 

Without that basic, essential asset—undisputed control over their 

own land—nothing the Tribes or Congress or anyone else can do 

will succeed in eradicating the many ills that has plagued much of 

Indian Country. You cannot build business without land. You cannot build health clinics, housing, schools, community centers without land. 

You cannot rebuild a community without land. And you cannot 

ensure that what you build today will be there for our next generation if you do not have clear ownership and control and title of your 

land. Unfortunately, the United States Supreme Court has brought 

the ownership and control of vast amounts of Tribal lands into 

question. In Carcieri versus Salazar, the Court held that the Secretary of Interior has the authority to take land into trust under 

the Indian Reorganization Act of 1934 only for those Tribes that 

were under Federal jurisdiction in 1934. 

The Court did not define the term under Federal jurisdiction, 

and as a result, Tribes that have been under active Federal supervision for 200 years or more are now facing the Carcieri-based challenges to trust acquisitions. The Federal Government long ago recognized that individual States must be treated the same under law, 

regardless of when they were admitted into the union. Imagine the 

public outcry if Alaska and Hawaii were denied the full rights to 

statehood simply because they did not become states until after 

1934. Yet, under Carcieri, Tribal Governments are divided into two 

classes with two different rights—those that were under Federal 

jurisdiction in 1934, and therefore, have the full rights of Tribal 

sovereignty, and those that were not under Federal jurisdiction in 

1934, and therefore, have fewer governmental rights. 

By creating these two classes of Tribal Governments, Carcieri

opens the door to considerable confusion and potential inconsistencies concerning the status of all Tribal lands within Indian Country. Congressional action is needed to ensure permanent resolution 

of this issue. Although DOI may continue to acquire land the trust 

for Tribes, any decisions to do so remain under the threat of the 

Carcieri-based administrative and court challenges. Until Congress 

takes action to clarify that the Secretary has the authority to take 

land into trust for all Federally recognized Indian Tribes, Carcieri

will undoubtedly be a great source of controversy. 

While Carcieri has the potential to affect all Tribes, I would like 

to draw your attention to land issues that affect a great number 

of my USET-member Tribes. Like Carcieri, the unintended consequences of the Land Claim Settlement Acts affecting at least 

19

eight of my USET Tribes are essentially prohibiting these Tribes 

from exercising their full sovereignty as self-determining peoples. 

The Settlement Acts were always intended to be living, dynamic 

agreements that necessarily must be able to change over time as 

circumstances and the needs of the Tribes and States also change. 

Unfortunately, in practice, the Tribes affected by the Settlement 

Acts have been unable to engage in good faith negotiations with 

the States to make meaningful, positive changes in those agreements—simply because State Governments have no reason to engage in change or in negotiations. 

In addition, language in several of these Settlement Acts bars 

Tribes from fully enjoying the benefits of Federal law intended to 

help Tribes rebuild their community and exercise their governmental rights. For example, the Maine Indian Claims Settlement 

Act provides that Federal laws applicable to Indian Tribes generally shall be applicable, unless they affect the civil, criminal, or 

regulatory jurisdiction of the State of Maine. 

The Settlement Acts for all the Tribes I mentioned either expressly make the Indian Gaming Regulatory Act inapplicable, or 

have been interpreted to make the IGRA inapplicable. States clearly have no genuine interest in correcting this inequity. The Federal 

Government therefore must get involved to ensure that all Tribes 

can participate in the benefits that Federal laws are intended to 

bring to Indian Country. Ongoing study and analysis of the Settlement Acts must be mandatory, especially if it has potential that 

Federal laws passed for the benefit of Tribes will be made inapplicable by Settlement Acts language, via State implementing legislation. 

A Tribal State task force at the Federal level directed to address 

Settlement Act language, and empowered to make recommendations to State legislatures via Federal and Tribal representatives 

must and should become a reality. The Department of the Interior 

must ensure that recommendations to change the Settlement Act 

language are not ignored, but are instead given serious consideration by the States as is the intent of the Settlement Act language. 

As I said earlier, until and unless these issues are put to rest, 

no other efforts to improve or encourage economic development in 

Indian Country will have a lasting impact. Both Tribal Governments and their neighboring communities need—and deserve to 

have—responsible expectations that the investments they make 

today will still be here to generate benefits for the future generations yet to come. This is not to stay that we cannot or should not 

make those investments today. 

On the contrary, individual Tribes and Indian Country as a 

whole are investing every day in the future of their communities. 

Unfortunately, resources are scarce, and even with the resources 

that are available, complex and confusing Federal rules and regulations often hamper efficient and effective partnerships between 

Tribal Governments and private sector entities. Tribes and Federal 

elected and civil service officials must work together to find creative ways to streamline processes so that whole Tribal communities and their partners may reap the benefits of cooperative ventures. 

20

Within USET, we have a number of discussions about how to 

promote economic development. It is clear to us that all too often 

the barriers to economic development are artificial in nature. For 

example, there’s too much Federal and sometimes State control 

over economic development decisions on Tribal lands, as alluded to 

in the earlier presentation. Because of the need for excessive studies and reviews and often complex process requirements, many 

projects fail before they are given the chance to succeed. Excessive 

regulatory and bureaucratic requirements create long delays and 

add to project costs. 

The good news is that such barriers can be changed. The path 

forward should include freeing up Tribes to make their own decisions; for example, it would be worth exploring on a demonstration 

basis allowing some Tribes to move trust lands into restricted fee 

status. These lands will be subject to a restriction against alienation and should be tax free zones, but as restricted fee lands, the 

Tribe should be freed of Federal influence over the Tribal development and leasing decisions. 

Your Committee’s recent passage of the HEARTH Act is much 

appreciated and a great step in this direction. 

There is a lot of work that can be done, and there is a lot of work 

that remains to be done in the area of taxation. Tribes are governments. Just as any other government depends upon tax receipts, so 

should Tribes be able to do so. However, Tribes have to deal with 

both Federal and State intrusion. The often unclear tax rules in Indian Country jeopardizes the interest by outsiders wanting to do 

business; for example, because States are allowed to tax non-Indian 

activity on Tribal lands, Tribes effectively cannot exercise their 

own taxation rates. 

If they do so, the effect of double taxation is to drive out these 

potential investment partners. In general, Tribal lands should be 

Federal and State tax free zones. There should also be investment 

tax credits for entities that choose to invest in Indian Country. It 

would also be beneficial to clarify that the National Labor Relations Act allows Tribes to manage and regulate labor issues on 

their own land. Finally, it would be helpful to amend Federal law 

to allow Tribes subject to state jurisdiction under Public Law 280 

and similar acts, to elect to have that jurisdiction rescinded and return to the normal Tribal jurisdictional status under Federal law. 

Tribes are consumed with fighting to maintain their existing resources. If the Federal Government would honor and fulfill its trust 

obligations, Tribes could spend greater time on growth and 

progress. It is the time for systemic changes that free us from the 

change of dependency and offer the opportunity for empowerment. 

In my opinion and both in the personal experience and the experience of many of my Oneida people, one of the most urgent and 

critical needs for such partnership is in the area of education. My 

ancestors understood this, and taught our children how to hunt 

and fish and build shelter and farm the land. We must teach our 

children today the skills they need to thrive in the 21st century. 

We must establish mentoring programs so that our youth can exercise talents in law, medicine, engineering, research and information 

technology. Above all, we must create a system in which no Indian 

child is held back from fulfilling his or her potential because of lack 

21

of opportunity. The Federal Government may be able to provide 

significant help in meeting these objectives for Indian Country. 

Many Tribes may benefit from technical assistance in setting up 

mentoring programs, for example, or from grants to build libraries 

and study centers on Tribal lands, or to provide transportation to 

and from these facilities for students. If we work together to identify specific needs, we can then come up with creative solutions to 

address those needs. 

Indian people are not looking for a handout. Even though our 

treatise defines such, we don’t want the Federal Government to be 

taking care of us. We want the Federal Government to fulfill its responsibilities in helping us take care of ourselves. Sometimes that 

means providing technical or financial assistance. Sometimes it 

means getting out of the way so that we can exercise our rights as 

self-governing self-determining people. And sometimes, as in 

Carcieri and Settlement Act fixes, it means correcting mistakes and 

ensuring that all Tribal Governments are on equal footing under 

the laws of this land. 

Always, however, fulfilling those responsibilities means understanding the issues that hinder Tribal Governments in their efforts 

to ensure the health and well being of our citizens. I applaud your 

efforts and the Committee’s efforts for this important work in matters affecting Indian Country and for its willingness to learn from 

the Tribes themselves. The tradition of my people and the tradition 

of my ancestors, I wish you the power of the good mind and as you 

continue your work with a good heart and a good mind. 

I wish to close by saying mahalo, thank you, and stay with me 

on this one. Kupuna, my elder, a hui hou, until we meet again, 

until we meet again. And I will mauka, head towards the mountain, makai, be by the sea if you come to look for me. 

[The prepared statement of Mr. Patterson follows:]

PREPARED STATEMENT OF BRIAN PATTERSON, PRESIDENT, UNITED SOUTH AND

EASTERN TRIBES

Chairman Akaka, Vice Chairman Barrasso, members of the Committee, thank 

you for the opportunity to address you on overcoming barriers to economic development in Indian Country. 

I bring, perhaps, a unique perspective to this discussion. As a representative on 

the governing Council of the Oneida Indian Nation of New York, I can tell you how 

my people and our neighbors have benefited from the success of our business operations—how our Turning Stone Resort Casino has formed the foundation for our 

economic rebirth, how we have created jobs for 4,500 people in a region beset by 

chronic economic problems, how we have invested the proceeds from this Resort in 

broadening our business enterprises and in providing health, housing, education and 

cultural programs for our Members. 

On the other hand, as president of United South and Eastern Tribes, a coalition 

of 26 Tribal governments located all across the eastern half of the United States, 

I can tell you that more than half of our USET member Tribes do not have the same 

resources or opportunities to develop their own economies. We are limited in our 

ability to draw business to Tribal lands due to our limitations on being able to offer 

incentives and the trust status of the land. Although Tribal gaming has done many 

wonderful things for many Tribes, it is in no sense a panacea. In some cases, Tribal 

homelands are too remote to make gaming a viable economic development option. 

In other cases, Tribes have chosen not to pursue gaming for reasons of their own. 

And, in still other cases, some Tribes cannot pursue gaming because they don’t have 

their own land on which to build gaming facilities—or because the status of that 

land is in dispute. 

Let me be absolutely clear on this point. Tribal governments cannot fulfill their 

responsibilities to their citizens if they don’t have a stable land base from which to 

22

operate and grow. Without that basic, essential asset—undisputed control over their 

own land—nothing the Tribes or Congress or anyone else can do will succeed in 

eradicating the many ills that plague so much of Indian Country. 

You cannot build businesses without land. 

You cannot build health clinics or housing or schools or community centers without land. 

You cannot rebuild a community without land. 

And you cannot ensure that what you build today will be here for the next generation if you don’t have clear ownership and control of your land. 

Unfortunately, the United States Supreme Court has brought the ownership and 

control of vast amounts of Tribal lands into question. In Carcieri v. Salazar, the 

Court held that the Secretary of the Interior has authority to take land into trust 

under the Indian Reorganization Act of 1934 (IRA) only for those Tribes that were 

‘‘under federal jurisdiction’’ in 1934. The Court did not define the term ‘‘under federal jurisdiction,’’ and, as a result, Tribes that have been under active federal supervision for 200 years or more are now facing Carcieri-based challenges to trust acquisitions. 

The Federal Government long ago recognized that individual states must be treated the same under the law, regardless of when they were admitted to the Union. 

Imagine the public outcry if Alaska and Hawaii were denied the full rights of statehood simply because they didn’t become states until after 1934. Yet, under Carcieri, Tribal governments are divided into two classes with different rights—those that 

were ‘‘under federal jurisdiction’’ in 1934 and therefore have the full rights of Tribal 

sovereignty, and those that were not ‘‘under federal jurisdiction’’ in 1934 and therefore have fewer governmental rights. By creating these two classes of Tribal governments, Carcieri opens the door to considerable confusion and potential inconsistencies concerning the status of all Tribal lands, Tribal businesses, and important 

civil and criminal jurisdictional issues. 

Congressional action is needed to ensure permanent resolution of this issue. Although DOI may continue to acquire land in trust for Tribes, any decisions to do 

so remain under the threat of Carcieri-based administrative and court challenges. 

Until Congress takes action to clarify that the Secretary’s authority to take land 

into trust applies to all federally recognized Tribes, Carcieri will undoubtedly be a 

source of controversy. 

While Carcieri has the potential to affect all Tribes, I want to draw your attention 

to land issues that affect several USET member Tribes. Like Carcieri, the unintended consequences of Settlement Acts affecting at least eight USET Tribes means 

that these Tribes are essentially prohibited from exercising their full sovereignty as 

self-determining peoples. 

The Settlement Acts were always intended to be living, dynamic agreements that 

necessarily must be able to change over time as circumstances and the needs of the 

Tribes and states also change. Unfortunately, in practice, the Tribes affected by the 

Settlement Acts have been unable to engage in good-faith negotiations with states 

to make meaningful, positive changes in those agreements—simply because state 

governments have no reason to engage in such negotiations. 

In addition, language in several of these Settlement Acts bars Tribes from fully 

enjoying the benefits of federal laws intended to help Tribes rebuild their communities and exercise their governmental rights. For example, the Maine Indian 

Claims Settlement provides that federal laws applicable to Indian Tribes generally 

shall be applicable unless they affect the civil, criminal, or regulatory jurisdiction 

of Maine. The Settlement Acts for all of the Tribes I mentioned either expressly 

make the Indian Gaming Regulatory Act inapplicable, or have been interpreted to 

make the IGRA inapplicable. 

States clearly have no genuine interest in correcting this inequality. The Federal 

Government, therefore, must get involved to ensure that all Tribes can participate 

in the benefits that federal laws are intended to bring to Indian Country. 

Ongoing study and analysis of the Settlement Acts must be mandatory, especially 

if there is the potential that federal laws passed for the benefit of Tribes will be 

made inapplicable by Settlement Act language, via state implementing legislation. 

A fully funded Tribal-state taskforce at the federal level directed to address Settlement Act language, and empowered to take recommendations to State legislatures 

via federal and Tribal representatives, must become a reality. And the Department 

of the Interior must ensure that recommendations to change Settlement Act language are not ignored, but are instead are given serious consideration by states as 

is the intent of Settlement Act language. 

As I said earlier, until and unless these issues are put to rest, no other efforts 

to improve or encourage economic development in Indian Country will have any 

lasting impact. Both Tribal governments and their neighboring communities need—

23

and deserve to have—reasonable expectations that the investments they make today 

will still be here to generate benefits for the generations yet to come. 

That is not to say that we cannot or should not make those investments today. 

On the contrary, individual Tribes and Indian Country as a whole are investing 

every day in the future of their communities. Unfortunately, resources are scarce, 

and even when resources are available, complex and confusing federal rules and regulations often hamper efficient and effective partnerships between Tribal governments and private-sector entities. Tribes and federal elected and civil service officials must work together to find creative ways to streamline processes so that both 

Tribal communities and their partners may reap the benefits of cooperative ventures. 

Within USET we have had a number of discussions about how to promote economic development. It is clear to us that all too often the barriers to development 

are artificial in nature. For example, there is too much Federal and sometimes state 

control over economic development decisions on Tribal lands. Because of the need 

for excessive studies and reviews, and often complex process requirements, many 

projects fail before they are given a chance to succeed. Excessive regulatory and bureaucratic requirements create long time delays and add to project costs. The good 

news is that such barriers can be changed. 

The path forward should include freeing up Tribes to make their own decisions. 

For example, it would be worth exploring on a demonstration basis allowing some 

Tribes to move trust lands into restricted fee status. These lands would still be subject to a restriction against alienation and should be tax free zones, but as restricted 

fee lands the Tribe should be freed of federal influence over Tribal development and 

leasing decisions. This Committee’s recent passage of the HEARTH Act is a great 

step in this direction. 

There is a lot of work that can be done in the area of taxation. Tribes are governments. Just as any other government depends on tax receipts so should Tribes be 

able to do so. However, Tribes have to deal with both federal and state intrusion. 

The often unclear tax rules in Indian Country jeopardizes interest by outsiders 

wanting to do business. For example, because states are allowed to tax non-Indian 

activity on Tribal lands, Tribes effectively cannot exercise their own taxation rights. 

If they do so, the effect of double taxation is to drive out these potential investment 

partners. In general, Tribal lands should be Federal and state tax free zones. There 

should also be investment tax credits for entities that choose to invest in Indian 

country. 

It would also be beneficial to clarify that the National Labor Relations Act allows 

Tribes to manage and regulate labor issues on their lands. Finally, it would be helpful to amend Federal law to allow Tribes subject to state jurisdiction under Public 

Law 280 and similar acts, to elect to have that jurisdiction rescinded and return 

to the normal Tribal jurisdictional status under Federal law. 

Tribes are consumed with fighting to maintain existing resources. If the Federal 

Government would honor and fulfill its trust obligations, Tribes could spend greater 

time on growth and progress. It is time for systemic changes that free us from the 

chains of dependency and offer the opportunity for empowerment. 

In my opinion—and in both my personal experience and the experience of many 

of my Oneida people—the most urgent and critical need for such partnerships is in 

education. Bringing business ventures onto Tribal lands is important, but it doesn’t 

really help the Tribal community if our young people aren’t qualified and prepared 

to hold the jobs those businesses offer. Just as our ancestors taught their children 

how to hunt and fish and build shelter and farm the land, we must teach our children the skills they need to thrive in the 21st century. We must establish mentoring 

programs so that our youth can exercise their talents in law, medicine, engineering, 

research, and information technology. We must provide tutors to help students overcome learning difficulties and master the material they need to succeed. We must 

make it as easy as possible for our children to get a good basic education, and we 

must provide the tools that can help them take their education as far as they wish 

to go. Above all, we must create a system in which no Indian child is held back from 

fulfilling his or her potential because of lack of opportunity. 

The Federal Government may be able to provide significant help in meeting these 

objectives for Indian Country. Many Tribes may benefit from technical assistance 

in setting up mentoring programs, for example, or from grants to build libraries and 

study centers on Tribal lands, or to provide transportation to and from these facilities for students. If we work together to identify specific needs, we can then come 

up with creative solutions to address those needs. 

Indian people are not looking for a handout. We don’t want the Federal Government to take care of us; we want the Federal Government to fulfill its responsibilities in helping us take care of ourselves. Sometimes that means providing technical 

24

or financial assistance. Sometimes it means getting out of the way so that we can 

exercise our rights as self-governing people. And sometimes, as in the Carcieri and 

Settlement Act fixes, it means correcting mistakes and ensuring that all Tribal governments are on an equal footing under the laws of this land. 

Always, however, fulfilling those responsibilities means understanding the issues 

that hinder Tribal governments in their efforts to ensure the health and well-being 

of their citizens. I applaud this committee for its important work in matters affecting Indian Country and for its willingness to learn from the Tribes themselves. In 

the tradition of my ancestors, I wish all of you the power of a good mind as you 

continue your work. 

Skana.

The CHAIRMAN. Thank you very much, Mr. Patterson, for your 

testimony and your heartfelt feelings as well. So, Ms. Danner, will 

you please proceed with your testimony? 

ROBIN PUANANI DANNER, PRESIDENT/CEO, COUNCIL FOR 

NATIVE HAWAIIAN ADVANCEMENT 

Ms. DANNER. Aloha, Chairman Akaka. Welcome home. 

The CHAIRMAN. It’s good to be home. 

Ms. DANNER. I would like to welcome Committee staff, from your 

staff and also Senator Barrasso and Senator Johnson and Senator 

Udall. It’s awesome to have the staff here. I would like to welcome 

the esteemed Tribal leader, President Patterson, my colleague here, 

coming to our homeland. 

For the record, my name is Robin Puanani Danner. I’m the 

President of the Council for Native Hawaiian Advancement, which 

is most comparable to other advocacy organizations like USET or 

NCAI or the Alaska Federation of Natives. We are governed by a 

21-member board of directors consisting of Native Hawaiian leaders from across the state. I’m also a 13-year homesteader on the 

Hawaiian Home Lands Federal land trust enacted by Congress in 

1920, just 14 years after the enactment of the 1906 Indian Allotment Act. 

Before I summarize my testimony, Chairman, I would like to 

take a moment to especially thank you as Chairman of the Committee and Vice Chairman Barrasso for authorizing this field hearing here in the State of Hawaii. From a citizen view, one of the biggest challenges to advancing successful solutions in our communities is the unacceptable view that Hawaii is a junket, a paradise 

of prosperous and lighthearted islanders and a place where Federal 

officials do not belong. 

We have record high homelessness, foreclosures that are climbing every day, teen suicides that are above the national average 

and frightening dependency on offshore energy and food. So, I want 

to thank you, Chairman Akaka, for rejecting those ill-informed notions by holding this hearing right here at home and firmly acknowledging, sir, that our children, our elders, our well-being in 

Hawaii is no more important and no less important than the families of any other State or communities. So, I thank you. 

CNHA’s full testimony submitted to the record takes really a 

twofold approach to the Committee’s topic. We separated our comments by economic development solutions for general business expansion and economic development solutions necessary for trust 

land areas. Together we identified five major categories and 14 specific recommendations. Of significance, Mr. Chairman, 11 of our 14 

25

recommendations require no new funding and have no budgetary 

impact to the Federal Government; yet, these recommendations 

truly have the potential to crush barriers impeding economic 

growth in our communities. 

For example, we recommend that the trust lands of Indian 

Tribes, Alaska Native villages and Hawaiian Home Lands be automatically included in the investment areas of Federal programs 

like the U.S. Treasury new market tax credits or the new $1 billion 

program the CDFI bond guarantee program that will be rolling out 

next year, or the USDA facilities and infrastructure programming, 

regardless of Census data or rural definition. 

Historically, the capital markets have really just ignored the 

trust land areas. We have an opportunity, however, Chairman, to 

change that reality by including our trust lands located in 35 states 

across the country, including Hawaii automatically as eligible for 

successful Federal programs that incentivize the private sector investments in geographic areas around the country. As a more specific example, the new market tax credit enjoys strong bipartisan 

support, funded at $3 billion annually for the last ten years. 

The inclusion of trust lands in the investment area definition 

does not require any additional funding. It merely creates expanded opportunities for capital investors to consider expanding locations. So, trust land communities must be automatically included 

and not left behind. 

Another no-budget impact recommendation under the stabilizing 

homesteading rules category that we talk about in our testimony, 

we recommend the Federal Government begin the Federal rulemaking process that has never been accomplished in the 90 years 

since the Hawaiian Homes Commission Act was enacted or in the 

16 years since the Hawaiian Home Land Recovery Act was enacted 

in 1995. 

Business and economic development needs certainty, certainty of 

process and rules in order to make capital investment decisions. 

And our Native people need the same to fully engage the opportunities under their land trust. And I think that all would agree the 

Department of Hawaiian Home Lands, our State of Hawaii partner, would greatly benefit from more definitive Federal rules under 

which to administer its responsibility to issue land to their Hawaiian people. 

And yet another example of a no budgetary impact recommendation contained in our testimony is a legislative or administrative fix 

to enable our borrowers under the HUD 184(a) and FHA 247 mortgage loans programs to refinance for lower interest rates or to invest home equity or small business enterprises, purchase farm 

equipment, et cetera. Without this fix, we estimate upwards of 

$187.5 million in equity remains trapped and out of reach by our 

trust land residents to invest in college tuition, home expansions 

and business startups. 

We would also like to see, Chairman, these products have parity 

with our Indian counterparts that allow these mortgage products 

to be utilized on trust lands or off trust lands in the fee simple 

market. It was inadvertent. It was not included in ours. President 

Patterson was able to use his HUD 184 anywhere in the country, 

whether it’s in his reservation or not. 

26

Unlike Hawaiians, we are limited only to small four percent land 

base that is the Hawaiian Home Commission Act. And my final example of a no-budget impact recommendation, Senator, is for Congress to reaffirm the Federal trust relationship under the Native 

8(a) business firms under the Small Business Administration program; thereby, eliminating graduation requirements for Tribal 

8(a)’s, Native Hawaiian 8(a)’s or Alaska Native corporation 8(a)’s, 

which will strengthen truly one of the most successful economic development programs ever created. 

In closing, overall, Chairman, the most effective solution to overcoming economic development barriers is the extension of the Federal self-governance policy to our Native people in Hawaii through 

enactment of the Native Hawaii Government Reorganization Act. 

Thank you for the opportunity to be with you here today. 

[The prepared statement of Ms. Danner follows:]

PREPARED STATEMENT OF ROBIN PUANANI DANNER, PRESIDENT/CEO, COUNCIL FOR

NATIVE HAWAIIAN ADVANCEMENT

Aloha Chairman Akaka and Members of the Senate Committee on Indian Affairs, 

My name is Robin Puanani Danner. I am the President and Chief Executive Officer of the Council for Native Hawaiian Advancement (CNHA), founded in 2001 to 

enhance the cultural, economic and community development of Native Hawaiians. 

CNHA, with a membership of over 150 Native Hawaiian Organizations, dedicated 

to addressing the challenges in our communities from education to business, affordable housing to cultural preservation, is a statewide advocate most comparable to 

the National Congress of American Indians (NCAI), and the Alaska Federation of 

Natives (AFN). 

I am Native Hawaiian, born on the island of Kauai, raised in the fishing village 

of Niumalu, the Indian reservations of the Apache, Navajo and Hopi, and spent 

many years among the Alaska Native peoples. For the last 13 years, I have lived 

on my Native homestead issued under the Hawaiian Homes Commission Act, with 

my children and husband. My background includes former positions in finance as 

a bank executive, a Tribal Housing Authority executive director, and county housing 

director serving Native populations. Currently, I am the chair of the board of the 

Homestead Community Development Corporation that in addition to my position 

with CNHA, is highly relevant to the field hearing topic of Overcoming Barriers to 

Economic Development in Native Communities.

Field Hearing 

First and foremost, mahalo for holding an oversight field hearing in our homeland 

of Hawaii, the 50th state of the United States. It is a constant challenge to ensure 

that decision makers, policy makers and federal officials come to Hawaii, to see 

firsthand, to walk the issues as we do every day, just as these officials do in other 

states of the union. Many who are uninformed, assume incorrectly, that Hawaii is 

a ‘‘junket’’ and a paradise without needs. We have an epidemic of homelessness, fast 

rising in the ranking of states with the most foreclosures, and as an island state, 

we are almost entirely dependent on imports of fossil fuel and food. 

The significance of the committee, embracing the reality that data feeds good policy, that there is no substitute to raising awareness and seeing first hand, and that 

no matter the distance or the logistical difficulty, Hawaii is as important as Montana or Wyoming, or Nebraska or Arizona or South Dakota. Our children, our elders, and the solutions that are possible to work on with the Committee are as important as any other. This field hearing is a powerful re-enforcement of the Committee’s jurisdiction on our issues, and that we are not invisible to our Federal Government. 

Native Hawaiians and the Federal Trust Relationship 

As the Committee knows, Native Hawaiians are among the families of Native peoples of the United States, and although not as well known, are included in the federal Indian policy and trust relationship. In 1920, the U.S. Congress enacted the 

Hawaiian Homes Commission Act (HHCA), establishing a federal land trust that 

nearly mirrors the content of the 1906 Indian Allotment Act. In 1959, the U.S. Congress enacted the Hawaii Admissions Act, which includes language to further recogVerDate 0ct 09 2002 11:06 May 16, 2012 Jkt 073111 PO 00000 Frm 00030 Fmt 6633 Sfmt 6621 S:\DOCS\73111.TXT JACK
27

nize the trust relationship with Native Hawaiians. Over the last 90 years, the U.S. 

Congress has enacted over 150 statutes recognizing my people as Native, like American Indians and Alaska Natives, using the plenary power authorized under the 

U.S. Constitution to address a myriad of issues. 

Similar to the Office of Insular Affairs for the territorial peoples of the U.S. and 

the Bureau of Indian Affairs for American Indians and Alaska Natives in the Department of the Interior, Congress created the Office of Native Hawaiian Relations 

to continue the process of reconciliation in accordance with P.L. 103–150, the Apology Resolution, and to oversee the trust responsibilities of the United States to Native Hawaiians, with a particular emphasis on the HHCA and the 1995 Hawaiian 

Home Land Recovery Act. 

Native Hawaiians and the State Trust Relationship 

One of the conditions of statehood enacted by the United States was a compact 

between the federal and state governments, to administer the HHCA referenced 

above through the establishment in 1961 of the state of Hawaii Department of Hawaiian Home Lands (DHHL). The Hawaii state constitution incorporates and embraces the United States’ trust relationship to Native Hawaiians, which was further 

strengthened by the 1978 Constitutional Convention which established a second 

state agency, the Office of Hawaiian Affairs (OHA). Each of these state agencies are 

public trusts of the people of Hawaii, not representing Native Hawaiians, but rather 

representing all of the people of our state to deliver on the trust mandates established under federal law and state law. There are similar ‘‘Offices of Indian Affairs’’ 

in other state governments, including Utah and Arizona. 

In 2011, the state of Hawaii enacted Act 195, to recognize a Native Hawaiian government, as have been done more than 60 times in other states of the union. In 

2011, this honorable committee, the Senate Committee on Indian Affairs, voted to 

approve the Native Hawaiian Government Reorganization Act, to similarly recognize the self-governance of Native Hawaiians, creating parity with the more than 

560 Native governments in approximately 35 states of the country. 

In summary, the relationship of Native Hawaiians to state and federal governments, is very similar and mirrors the policies and agencies of our counterpart Native peoples in the other 49 states. The Department of Hawaiian Home Lands 

(DHHL) and the Office of Hawaiian Affairs (OHA), are Hawaii state agencies with 

trust responsibilities to Native Hawaiians. Similarly, the United States government 

has acknowledged its federal trust responsibility to Native Hawaiians and administers it through agencies such as the Departments of the Interior, Health and 

Human Services, and Housing and Urban Development. 

Native Hawaiians and Their Trust Land Representative Organizations 

Similar to Indian Country and the organization of Native governments around 

trust land areas, eligible Native Hawaiians have long held and established governing organizations organized around the trust lands established under the HHCA. 

These organizations are commonly referred to as homestead associations, or homestead beneficiary organizations. Over 30 such homestead associations exist across 

the state, tied directly to homestead trust lands of the HHCA. Each has enrolled 

homestead members and residents, and each democratically elects its leadership. 

In many ways, these homestead associations mirror the mission and representation that pueblos, Tribes, or villages do in other areas where federally created trust 

land areas exist. Participation is voluntary in nature by eligible members, and the 

actions of these homestead associations are governed by the participating eligible 

members. 

There exist many other significant types of Hawaiian organizations, including social justice private nonprofits, member nonprofits like CNHA or the civic clubs and 

Royal Hawaiian Societies. These organizations are similar to the service focused, 

cultural and advocacy organizations of many Native organizations around the country. The homestead associations are significant in the context of the hearing topic 

of Overcoming Barriers to Economic Development in Native Communities, as the solutions discussed require an understanding of the distinction between Native Hawaiian communities that are on trust lands similar to Indian reservations and Native Allotments which are unique and distinct from Native Hawaiian communities 

that are not on trust lands. 

Overcoming Barriers to Economic Development 

Our testimony is organized into two distinct areas of discussion and recommendations—General Economic Development and Trust Land Economic Development. 

28

I. General Economic Development 

This discussion content focuses on information and recommendations relevant to 

advancing Economic Development regardless of geographic location. Although Native Hawaiians represent roughly 23 percent of the population in the state of Hawaii, we represent fewer than 9 percent of the total small business firms. The two 

top barriers to economic development we will focus on are business development and 

access to capital. 

A. Business Growth: The SBA 8(a) Program 

The SBA 8(a) Business Development program was born in the 1960s to address 

the economic disparity of minority populations, including veterans, women, and racial minorities. The program sought to connect under-represented Americans in the 

commerce of the country—doing business with and serving one of the best customers 

on the planet, the Federal Government. A brilliant and successful program that not 

only increased the number of vendors available to our government, but it also created opportunities to establish and grow healthy American-owned, American-run 

companies that added to the nation’s economic growth and health. 

In the decades that followed, the Congress recognized the success of the SBA 8(a) 

program for individual American-owned firms, and connected it to the federal trust 

responsibility to its Native peoples by amending the program to include Native community owned enterprises for Tribal governments, congressionally mandated Alaska 

Native Corporations and Native Hawaiian nonprofits. With a historical view of over 

200 years of Indian policy to address the impact of building a great nation with the 

lands of Native peoples, it is absolutely clear that the amendments to the SBA 8(a) 

program to include Native 8(a) firms is one of the single most successful policies to 

be made. 

Native 8(a) firms are not owned by individuals like their counterpart Minority 

firms, but rather by organizations that are accountable to millions of Native members and not to private investors. These organizations exist to lift up entire Native 

populations, to invest any and all resources available to this mission, whether an 

American Indian Tribe, an Alaska Native Corporation or a Native Hawaiian Organization. Every business success under the Minority 8(a) is one more individual with 

economic hope and the chance for prosperity. Every business success under the Native 8(a) brings economic hope to millions, and provides a tool that is so well suited 

under the federal trust policy—the tool of commerce with our own Federal Government, to advance and lift up our communities for which the government has a solemn trust responsibility. 

Moreover, every Native 8(a) is an American company. We don’t move overseas 

when the economy gets difficult. We are American firms, with roots deeper than the 

country itself. We are engines for economic recovery for our communities, for the 

counties and the states where we are located, and we hire our fellow Americans. 

There is no question that the Congress was exactly right, to amend the SBA 8(a) 

Business Development program that has and continues to be a successful program 

for individually-owned American firms, to extend it to be a successful program for 

community-owned Native firms with a unique federal relationship as long as the 

country is old.

SBA 8(a) Recommendations

As the most successful program to advance the economic self determination under 

the federal trust policy, the Native 8(a) program should be expanded and strengthened! There are six areas of recommendation presented:

1. No Funding Required: Establish Federal Contracting Goals for Native 8(a) 

Firms. Minority 8(a) firm categories have established contracting goals. We 

recommend that the Congress establish minimum contracting goals for Native 8(a) firms separate and in addition to the existing goals for Minority 

firms.

2. Minimal Funding Required: Adequately Fund SBA Oversight, Training and 

Technical Assistance. Native 8(a) firms are unique given their unique ownership, and unique business mission. We recommend that the Congress appropriate $10 million a year to the SBA dedicated to oversight of the entire SBA 

8(a) program, including Native 8(a) firms, and to implement consistent and 

qualitative training, technical assistance and compliance monitoring for Native 8(a) firms and Federal Government contracting officers.

3. No Funding Required: Reaffirm the Federal Trust Relationship. Native 8(a) 

firms are defined as firms owned by a very specific group of Native organizations, specifically, Tribal governments, Alaska Native corporations mandated 

by Congress and Native Hawaiian controlled nonprofits with a social mission. 

29

We recommend that Congress enact legislation to reaffirm the participation 

of these organizations in the 8(a) program as part and parcel of the federal 

trust responsibility to advance economic self determination.

4. No Funding Required: Remove Barriers to Facilitate Growth of Native 8(a) 

Firms. As Native organizations that are uniquely dedicated to and mandated 

to exist to address the social and economic well-being of Native peoples over 

any dedication to investors or individual wealth, these organizations should 

be exempted from graduating out of the SBA 8(a) program, should be exempted from size standards or economic disadvantaged criteria applied to individuals, and should have an SBA 8(a) application form that is relevant to 

these organizations, so long as the federal trust responsibility exists.

5. Minimal Funding Required: Build Capacity of Native 8(a) Firms. Establish 

and fund a mentor prote ́ge ́ program to encourage mature Native 8(a) firms 

to mentor emerging Native 8(a) firms. There are no better mentors than 

those that understand the mentee’s history, challenges, structural composition and business goals to advance community solutions. We are seeing some 

success by pockets of Native organizations around the country. Leveraging 

this success to share it along with best practices is a powerful tool of capacity 

building.

6. No Funding Required: Congressional Oversight and Reporting. Native organizations are unique and have a very different business goal and model. They 

are very much an important stakeholder in achieving the purposes of the federal trust policy. As such, the participation and progress of these organizations in the SBA 8(a) program should be monitored by the Congress. We recommend that every 5 years, the SBA Office of Native American Affairs 

produce a Congressional Report to measure the progress, success and impact 

of these organizations in the business of government contracting. 

B. Access to Capital: The Native CDFI Assistance Program 

In the 1990s, the U.S. Treasury Department established one of the most successful ‘‘access to capital’’ programs in the country, serving under-served and rural populations and communities in every state, the Community Development Financial Institutions Fund (CDFI Fund). Essentially, the CDFI Fund creates opportunities for 

capital to flow to communities through nonprofit loan funds certified by Treasury, 

and receives seed funding that attracts private capital. The program has facilitated 

access to billions of dollars of capital to areas unable to be served by conventional 

financial institutions. In 1999 and 2000, the Treasury Department engaged in analysis and consultation with Native leaders to ascertain why there was low participation by Native communities in the CDFI Fund and to bring this successful program 

to bear. 

Sol Kahoohalahala, Blossom Feiteira, myself and many others participated in 

roundtable discussions with Tribal leaders from Alaska and around the country. The 

result of the national dialogue established the Native American CDFI Assistance 

program (NACA), part and parcel of the larger CDFI Fund for the country. Having 

a subset product on Native areas, has proven to be an outstanding strategy, and 

resulted in 60 Native CDFIs being certified across the country, now deploying capital on the ground in their communities. It is a great beginning, and will result in 

a highly effective tool to overcoming the access to capital barrier that has prevailed 

for centuries in our Native areas.

Native CDFI Recommendations

There are two areas of recommendation presented:

1. No Funding Required: NACA Permanence. Make Permanent the subset 

NACA program with established formula based funding.

2. No Funding Required: Matching Funds. Allow funding from other federal 

agencies to be eligible as matching funds to the NACA program, to increase 

overall impact in Native communities and trust land areas which will reduce 

duplicate lending related functions delivered by multiple sources of funding.

II. Trust Land Economic Development 

This discussion content focuses on information and recommendations relevant to 

advancing Economic Development on and in trust land areas. Access to trust lands, 

access to capital, and stability in the homesteading program rules are the top barriers to economic development for trust land areas and Hawaiians. 

30

A. Access to Land for Economic Development 

The trust lands established under the Hawaiian Homes Commission Act of 1920, 

fourteen years after the 1906 Indian Allotment Act, essentially calls for the issuance 

of homestead allotments to eligible Native Hawaiians for residential, agricultural 

and pastoral purposes, otherwise referred to as ‘‘homesteading’’. The HHCA also allows for trust lands to be issued for ‘‘nonhomesteading’’ purposes, with specific language and sections established to promote the self determination and self-sufficiency 

of Native Hawaiians through land instruments for commerce and other purposes. 

Over the 90 year history of the administration of the trust by the federal, territorial and state governments, the non-homesteading aspect of land use, has almost 

entirely been used to benefit state government operating budgets, or businesses and 

organizations not controlled by Native Hawaiians, even though section 204 and section 207 of the HHCA clearly sets out a priority for Native Hawaiians. 

In the limited instances where access to land has been made available for commerce under the HHCA to Native Hawaiians and/or their economic development organizations, extraordinary work and economic impact has resulted. For example, on 

Hawaii Island, the homestead association, Makuu Farmers Association, was licensed 

a small parcel of trust lands under section 207 of the HHCA. They run a very successful Farmers Market serving the entire community of vendors and consumers, 

while utilizing net revenues to self sustain the operation of the marketplace. 

On the island of Kauai, yet another homestead association, the Anahola Hawaiian 

Homes Association, was licensed two parcels of trust lands under section 207 of the 

HHCA as well. Today, an outdoor marketplace is in full operation with vendors from 

across Kauai, and consumers from the visitor industry engaging in commerce in this 

homestead community. The second parcel is under way to be developed as a Cultural Camp & Academy which will be sustained through revenues and occupancy 

fees year round. 

On the island of Oahu, the Nanakuli Homestead Association is working to develop 

a commercial center to bring business and consumer goods to their homestead community, as well as a cultural center and affordable housing project. Also on the island of Oahu, the Waimanalo Hawaiian Homestead Association has successfully developed a community center, certified kitchen and other self-sustaining projects 

serving the entire community. 

These examples represent hundreds of jobs collectively. These examples are also 

far too few, but have the potential to be greatly increased, if access to land by Native Hawaiians is implemented as the Congress intended with the enactment of the 

HHCA in 1920.

Access to Land Recommendations

There are two areas of recommendation on Access to Land presented:

1. No Funding Required: Active Federal Oversight on Land Instruments. Engage 

an oversight hearing scheduled every 4 years by the SCIA to require the 

state of Hawaii, DHHL to report to the Congress, on the land disposition of 

Hawaiian Home Lands to Native Hawaiians and/or organizations controlled 

by them for homesteading, economic development and commerce.

2. Minimal Funding Required: Tribal & Native Land Development Capacity. Establish a Trust Land Development Capacity pilot program within the Department of Commerce for Tribes and Homestead Associations with trust lands 

to pursue development projects that promote jobs, economic impact and 

wealth in the states where trust lands are located. Funded at a pilot level 

of $5 million for 5 years each, is an extremely small investment to achieve 

results that align trust lands with the economic recovery of the country, in 

education, in energy and business districts.

B. Access to Capital on Trust Lands for Economic Development 

The trust land nature of Hawaiian Home Lands is both a blessing and a curse 

for economic development. It is a blessing for many of the same reasons it is for 

Indian Country, which is a preserved land base held in trust that cannot be alienated, for our people to nurture Native Hawaiian language and culture, and continue 

our life ways as the original peoples of the Hawaiian Islands, regardless of homesteading eligibility by any individual Native Hawaiian. However, access to capital 

is made more difficult due to the trust nature of our lands. 

It need not be a curse, with strategic approaches that ensure capital intended for 

all of America, is also considered for trust land areas like Hawaiian Home Lands, 

Indian Reservations and Alaska Native villages.

Access to Capital on Trust Land Recommendations

31

There are two recommendations to systematically improve access to capital on 

trust lands.

1. No Funding Required: Eligibility of Trust Lands for Federal Programs. Make 

trust lands in the 35 states where they exist, automatically eligible as investment areas under all federal programs, including U.S. Treasury, USDA, 

HUD, regardless of census tract income data or rural definitions. This no cost 

action and policy making by the Federal Government will advance the incentives and awareness of economic development opportunities by the capital 

markets in a greater way. Access to capital is the lifeline to any healthy community, and its ability to produce economic impact. The particular areas 

where this recommendation will increase the flow of capital includes but is 

not limited to:

• New Market Tax Credits (Treasury)—wherein private sector, financial institutional dollars are incentivized to be deployed in certain census tracts 

around the country. Inclusion of trust land areas will broaden the spectrum 

for these investors to consider projects in trust land areas, whether for energy, business, school facilities or marketplaces.

• USDA Funding—wherein agricultural, rural business, water/waste water 

infrastructure and telecommunication programs are incentivized to grow 

the nation’s agri-business, healthy foods, broadband and development infrastructure in rural defined areas. Inclusion of trust land areas will ensure 

access for trust land areas, that are woefully underserved, but have tremendous potential for some of the greatest job creation and economic recovery 

strategies for Native peoples and the local and state economies where they 

are located.

• CDFI Bond Guarantee Program (Treasury)—a program enacted by Congress in 2010 to increase capital through bond guarantees to eligible census 

tracks in the country. Inclusion of trust land areas in the eligible definition, 

provides yet another platform for the barrier of accessing capital to be addressed. This program is framed to deliver $100 million dollar blocks of 

bond guarantees to projects and infrastructure nationwide.

2. No Funding Required: Mortgage Product Parity on Hawaiian Home Lands.

One of the primary sources of capital for economic development and small 

business start up, is home equity. We recommend that the HUD 184a and 

FHA 247 mortgage loan products developed based on Indian Country’s products, be updated to bring parity to the ability to refinance and invest home 

equity in business ventures.

C. Stability in Trust Land Rules 

Trust land allotments to Native Hawaiians consist of long term leases of land for 

residential, agricultural and pastoral homesteading. Particularly in the case of 

farms and ranches, the success of these activities can greatly depend on generations 

of family farmers and ranchers. Original lessees may designate successors to these 

allotments, however are limited to certain familial designations, which can be a barrier to the long term investment and success of farming and ranching under the 

homestead program of the HHCA. 

Moreover, the Federal Government has never promulgated administrative rules 

under which its delegated authority to the state of Hawaii is to be implemented, 

resulting in disputes that can be avoided through the federal rule making process. 

Economic development and business, like anywhere in America, requires certainty 

in the rules and processes—trust land areas are no different.

Stability in Homesteading Program Rules Recommendations

Federal consultation policies have a proven record of being a best practice in addressing challenges of Native communities. As such, we have two recommendations 

to engage this successful practice:

1. No Funding Required: Consultation by State of Hawaii and DOI. Under the 

committee’s jurisdiction on Native issues, encourage the state of Hawaii, 

DHHL, or the federal Department of Interior, to engage in consultation to 

dialogue with Homestead Associations, to identify priorities for the HHCA 

which would provide stability for homesteading for generations of families, 

creating a stable environment for economic investment, economic development and economic self-sufficiency. 

2. No Funding Required: Implement Federal Rulemaking on HHCA and 

HHLRA. Request the federal Secretary of Interior to begin the process of 

federal rulemaking for the Hawaiian Homes Commission Act, and the HaVerDate 0ct 09 2002 11:06 May 16, 2012 Jkt 073111 PO 00000 Frm 00035 Fmt 6633 Sfmt 6621 S:\DOCS\73111.TXT JACK
32

waiian Home Land Recovery Act, to adequately provide guidance to the 

state of Hawaii, on the implementation of these laws.

Conclusion and Summary 

In conclusion, eleven of the fourteen recommendations contained in this submission represent action items that have no federal budget impact. Funding is an everneeded resource however there are huge steps that can be taken to advance economic development in Native communities that require no funding at all. We hope 

the committee will consider our recommendations for Native Hawaiians, but also for 

all Native peoples in the country. 

In addition, Chairman Akaka and Members of the Committee, we extend our 

thanks for the committee’s work on the Native Hawaiian Government Reorganization Act of 2011. The real root barrier to economic development for any Native peoples, whether on trust lands or anywhere in our homelands, is the ability to take 

responsibility and control of our assets and resources under the federal policy of 

self-governance. 

History is a great teacher. Over the last 2 centuries, the country has struggled 

to balance the building of a great democracy and the impact on its indigenous peoples. Our Federal Government tried extermination, wardship, assimilation, termination, and under an evolving policy under the Kennedy and Johnson Administrations, and then with decisiveness under the Nixon Administration, the Federal Government firmly embraced the policy of self-determination and self-governance toward Native peoples. 

Study after study, including those completed by Harvard University in the last 

decade, validates this policy as the most successful. The Congress has the plenary 

power to enact legislation on behalf of Native peoples. While we have made advances in the areas of housing, healthcare, and education where Congress has taken 

action—the real game changer for our socio-economic condition, lies in our self-governance and responsibility for our collective assets and resources to advance the solutions that connect us to our homelands. 

If the trust relationship has meaning, if we are to honor those that have gone before us, if we are to build upon a difficult past to create the future we can all be 

proud of, then we must embrace and lift up the solutions that take down the barriers to economic self-determination. CNHA is firmly in support of the passage of 

the Native Hawaiian Government Reorganization Act. 

Mahalo for the opportunity to submit comments to the Committee.

The CHAIRMAN. Thank you very much for your testimony. 

Mr. Patterson, USET represents approximately 25 Tribes who 

have very diverse economic development needs and opportunities. 

Some Tribes are well established. Of course, others are in the beginning stages. Given the diversity of USET Tribes, what are your 

recommendations for how Congress and the administration can 

help Tribes achieve economic self-sufficiency? 

Mr. PATTERSON. Absolutely great comment. Thank you, Chairman. It is, you know, it is a very difficult landscape to manage. 

Even Tribes with great success, which I have Tribes that have the 

largest resort casinos in the world. You know, it takes time to manage and overcome the 200 years of poverty, deprivation and multigenerations of trauma that people have endured. But it’s very difficult to manage and advance the priorities with Tribes that have 

little or no economic development, which are many in USET. And 

we’re going to begin to focus on that. 

And I believe there exists a great opportunity for our Tribes 

across Indian Country to really work in collaboration and through 

leadership to identify the restrictions in recommendations that affect economic development, to identify the challenges in overcoming 

those restrictions that are faced by Indian Country. Some of those 

include access to capital, job skills and training, need for interagency collaboration. And in doing so, I think it provides great opportunities to Tribes to identify the Federal resources and technical 

33

experience, the programs that are there that exist within the Federal Government. That we have that opportunity to identify all the 

Federal programs available to Tribes, and by addressing —by becoming aware of these cases, I think we have the opportunity to 

remove the regulatory barriers such that exist in energy development. 

And by doing so, it also goes along the lines, as Mr. Smith has 

identified, I think by advancing in this direction, we bring real 

leadership to the Indian Country, real opportunity to Indian Country. And we go to promote a better future for our youth across Indian Country. You know, I’m a lifelong member of ASES, American 

Science and Engineering Society, and I just so admire the work 

they do with Indian Country. And if you go to one of their conferences and you look, there’s NASA. There’s Chrysler, IBM, all 

these prominent, prominent opportunities recruiting the brightest 

and greatest minds of Indian Country. 

But you know what, I’ve never heard of an American Indian/Native Hawaiian youth saying, you know what, I want to grow up and 

go to work for one of these leading companies. It is always I want 

to go to work and come back and make a difference for my people. 

I need to make an impact for my future generations. And I think, 

you know, the results of this collaborative process would allow for 

our young people to turn inward back to their home communities 

to address the many issues and trauma, multigenerations of trauma that we’ve endured. So, I really think the key is we can get 

issue specific such as access to capital and the tax issues, but I 

really think if we could work in a collaborative fashion, we can 

really lead our leaders in an effort that identifies the opportunity 

that currently exists and brings strategies to advance those. Thank 

you. 

The CHAIRMAN. Thank you very much for that response. 

Ms. Danner, I found your written testimony to be thoughtful, 

providing 14 recommendations to improve economic development 

for all Native peoples. If the Committee could advance just one or 

two of your recommendations, which ones do you think have the 

highest priority for economic development? 

Ms. DANNER. Senator, Native 8(a) absolutely would be number 

one on my list. It touches American Indians, Alaska Natives and 

Native Hawaiians. It is the most successful economic development 

program for Indian business, for Hawaiian business. Indian Country has been in it for a couple of decades. The Alaska Natives have 

been in it for a couple of decades. Native Hawaiians have just 

started just in the last ten years. 

But it has enabled our community-owned companies, American 

companies, to engage in having the best customer there ever is to 

ever be on the planet, which is the Federal Government itself. Native 8(a) contracting is powerfully important. When economic times 

get tough, Indian companies, Native Hawaiian companies, we don’t 

leave town. We stay in our communities. Our companies stay, and 

we continue to hire people. That would be my number one if this 

Committee could move legislation. 

My second top priority for economic development across the 

board would be to move an initiative that establishes trust lands 

wherever they are located in the 35 states that I’m aware of to be 

34

automatically included as eligible for successful Federal programs. 

We keep becoming the afterthought of the afterthought. For example, when Congress or the Administration establishes a program, 

they’ll say, okay, we want to make sure we take care of rural. We 

want to make sure we take care to low to moderate income. Those 

are mandatory standards. 

I would like to add a third standard, Senator, that says we’ve got 

take care of the more difficult places, the deserts of capital, which 

is trust land areas where the capital markets continue to ignore us. 

So, we need to be third leg of that double stool. So, that the preferences are for rural. That takes care of rural America. The preferences are for low to moderate Americans no matter where they 

live, and trust land areas, which scare the markets or because 

they’re uncertain. 

But what it does is it creates an incentive and an invitation to 

come check it out, come to talk to President Patterson, come talk 

to Chairman Allen about trust land. And if we could do that, Senator, that would not be a short-term fix. That would be one of the 

long term legacy policies that would make sure that Native business people, Native government leaders are at the table when the 

capital markets are moving. We’re right there with them. We’re on 

their minds, and they’re on our minds. 

So, those would be my top two recommendations, Senator, to 

move a strong legislative agenda on Native 8(a) and to move a 

strong legislative agenda to influence and get trust lands, SUTA, 

Substantially Underserved Trust Land Areas, as a standard just 

like a low to moderate income is, just like rural is. 

The CHAIRMAN. Thank you. Thank you for your answer there and 

your response. 

Mr. Patterson, the Committee recently held a Tribal taxation 

roundtable where issues were discussed such as taxation of Tribal 

Government programs, lack of access to tax exempt bonds and tobacco taxation. Can you tell the Committee what recommendations 

you have for dealing with these various tax issues? 

Mr. PATTERSON. Absolutely. Great platform. I think the first 

thing that needs to be a fundamental, systematic, systemic kind of 

issue is that whenever we’re talking of these issues, we recognize 

that Indian Country and Tribal Governments have standing in the 

unique relationship with this country. I would also, whenever 

States are interjected into language, that Tribal Governments are 

also included in that same breath. I think that that is a great disparity, and the States feel that they have a greater right than the 

Tribes, because there’s not this basic awareness. 

When we talk of the issues affecting taxations, we can get specific on issues such as tax exempt bonds, Tribal economic development bonds, security bonding, et cetera, which I am by no means 

an expert. But what I am concerned with is that these continued 

direct frontal attacks that are infringing on our Tribal abilities and 

Tribal sovereignty, that Tribal leaders from across the country become engaged and discuss platforms to advance their issues. 

To date, the United South and East Tribes along with the Affiliated Tribes with Northwest Indians, ATNI, held a meeting. And we 

invited NCAI along for the ride. And we met down at the 

Miccosukee Indian Reservation. And it was a Tribal leader effort 

35

to advance the issues which are many that we are facing in taxing. 

And from that initial meeting, we’re going to have a second meeting in California. It was supposed to be this month. It needs to be 

rescheduled. 

We have identified four priority areas in which we feel we can 

move forward. I will mostly certainly advance them to Loretta and 

the staff, so you can see specifically what the Tribal leaders are 

talking about. My intent, my interest is first and foremost in ensuring that the Tribal leaders have a vision to ensure that the 

Tribal leaders have a goal and to strategize the priorities to meet 

those objectives. But I think the greatest need is when we’re talking on taxation in Indian Country, that whenever States are mentioned that Indian Country, Tribal Governments are mentioned 

right along with States. Thank you. 

The CHAIRMAN. Thank you for your response. 

Ms. Danner, following up on what you had mentioned, what does 

the SBA 8(a) program help to advance economic development in 

Native communities, and how can we maximize this program’s potential? 

Ms. DANNER. The SBA program advances business. It is responsible, probably one of the single-most impressive Federal programs 

to advance business ownership control by Native peoples across the 

nation creating jobs, not just for our own communities and our own 

members of our communities, but also for the economies in our 

counties and in our States. Where we are located, we are creating 

waves of economic development. And I think that the recommendations included in my testimony around the SBA is I think that we 

have to take a frontal approach of what the critics of the program 

are, which is they confuse the Native 8(a) program with the minority individual 8(a) program; whereas, our Native 8(a) program, 

these are business firms owned not by individuals. They are owned 

by entire communities. 

They are owned by Tribal Governments. They are owned by Congressionally created Alaska Native Corporations. They are owned 

by Native Hawaiian non-profits. All three of them are accountable, 

not to any shareholder or investor, these business enterprises, social enterprises are accountable to millions in communities. And so, 

I think we need to just embrace that reality, and we’re not trying 

to do a Native 8(a) inside a minority program. I think if we have 

a legislative approach, Senator, that reaffirmed the Federal trust 

relationship and that that is the source of the Native 8(a) program 

from the very beginning, I think if we eliminate the graduation requirements of our Native 8(a) firms out of that program every nine 

years having to reapply—the trust relationship is the trust relationship. 

It is forever. And so, that relationship of economic development, 

and hand on our shoulder is forever. It doesn’t end in nine years 

and restart every nine years. I think that if we could be bold and 

courageous about that Federal trust relationship and put forward 

legislation that acknowledged it and provided technical assistance 

for emerging 8(a)’s. For example, the SBA has a mentor prote ́ge ́

program for big companies to mentor little companies. The reality 

in our company is we are better mentors for one another. So, I 

would love to see a section of the Native 8(a) program for those 

36

who are successful in the 8(a) programs, that are Tribal 8(a), 

there’s a mentor prote ́ge ́ program for them to incentivize to mentor 

the smaller Tribes or Native Hawaiian organization 8(a)’s. 

We have a lot we can share with one another. We don’t necessarily need to go through the barriers to convince the big corporate dynamo why it is we have a corporation that gives up all 

our revenues cultural development and language preservation. So, 

I think as part of the economic recovery of the nation, it is a bright 

spot. It is hugely a great opportunity for Native American companies to show that we can do business. We’ve been training for thousands of years. If, as President Patterson said, the Federal Government can just get out of the way. But before you do, embrace and 

strengthen the fact that Native 8(a) is not an affirmative action 

program. It is a trust relationship program, that we’re in this marriage forever together. 

The CHAIRMAN. Ms. Danner, based on your experience and your 

expertise, I was interested in the need for more certainty for capital investments through Federal rule-making for the Hawaiian 

Homes Commission Act and the Hawaiian Home Land Recovery 

Act, which I sponsored in 1995. 

Can you share how the Federal rule-making process will 

strengthen the purposes of those important land acts for Native 

Hawaiians, how it will help to remove barriers to economic development in these communities? 

Ms. DANNER. Chairman, Federal administrative rules to some, 

and even to me sometimes, can be bureaucratic. Sometimes we run 

away from them, and sometimes we should run toward them. This 

is an area that I think after 90 years of not having Federal Administrative Rules for the Hawaiian Homes Commission Act, not having Federal administrative rules for 16 years after the Hawaiian 

Homes Recovery Act was passed, this is a time for us to take, to 

start the ball, to create a beginning and start to develop those administrative rules for the next generation and the generation after 

that. 

Because first and foremost, the development of rules creates a 

certainty, a process and land use goals for partnerships and land 

users. And for 50 years, the State of Hawaii has been the trust 

agent for the Federal Government and the administration of the 

Hawaiian Homes Commission Act. They’ve pretty much been absent. There has been no oversight or capacity building of their state 

agency partner, their state government partner. 

And so, I think that the Federal rules process, if we start it, 

what it will do is begin to build capacity at our state government 

level interacting with people like Mr. Smith, and we don’t have to 

take so long to learn the power of consultation. It will happen 

much faster if the Federal Government will step forward and take 

its oversight role over state government, start those engaging conversations that we would advance the empowerment and self-determination successes that I hear through President Patterson and 

others when they speak. 

I also want to say that if we do this Federal administrative—promulgate Federal administrative rules, I think we will begin to see 

a mitigation of lawsuits. Right now, the State of Hawaii and its attorney generals are not meeting with other attorney generals that 

37

have people like your staff director Loretta Tuell. These are people 

who invest their lives in Indian law, in Federal management. We’re 

way out here, and so our attorney generals and our lawyers here 

look at everything through the affirmative action lens, where we 

should be looking through the trust administration. 

So what happens is we have a state agency, the Department of 

Hawaiian Home Lands. It means well, does not have the experiences of other Native peoples and doesn’t have the guidance and 

oversight of the Federal Government. There are no clear administrative rules, so interpretations change four years to four years, 

every time there is a new governor, every time there’s a new administration. So, the Hawaiian people, we’re left to figure out those 

disputes by either battling it out politically or in the courts. 

And so, I think that if the Federal oversight Department of Interior did its job and began to have oversight over the Department 

of Hawaiian Home Lands, which will create capacity building by 

having that interaction, then I think we will see less lawsuits. Because the State of Hawaii will have a more clear path of administrative rules on how to implement, and they’ll have the benefit of 

Indian Country and how the Department of Interior impalements 

certain aspects of the law. 

So, while, you know, no one wants to see papers and papers and 

papers of the Federal Register, it’s just true that without that Federal administrative rule guidance for us as beneficiaries, as Hawaiians, for the state government, there’s more disputes. 

So, I just think it would be a capacity building issue, and it 

would help us to stop spending our valuable resources on legal fees 

and start collaborating together and start implementing some of 

the great lessons that Indian Country has spent 200 years teaching 

the Federal Government. 

The CHAIRMAN. Thank you for your response. 

Finally, let me ask Mr. Patterson whether you have any comments to make on that particular question? 

Mr. PATTERSON. You know, I really like the thoughts. She reminds me, back home, the matrilineal culture, led by our grandmothers represent the heart and soul of our communities. They are 

the true leaders of our nation. Us men, we certainly just operate 

within the scope of authority, but it’s the women who hold the 

heart and soul of our people in our country and our nation. And 

I like to see Ms. Robin Danner’s strength and courage to stand up 

there. And when she said we’ve got to fight, I almost wanted to 

duck away. 

[Laughter.] 

It reminded me of back home, we say, we have to fight that 

issue. We have to stand up for our rights. Let’s send our women 

up there. 

[Laughter.] 

And that’s true. That’s a true story. Our women have sustained 

us. I thank her for her astuteness, strength and courage to advance 

those issues. But I think these are some of the regulations and restrictions that I talked about, and I think it warrants further discussions to identify, so we can begin to make specific recommendations that would remove some of these barriers. As Mr. Smith was 

talking and we were talking about —he was talking about the 

38

economists and the loan program and USDA. Well, you know, in 

USDA, Indian Country is included as a socially disadvantaged minority. We are not a minority. We have a unique specific relationship defined by treaty through Constitution that states our relationship. 

And so, I think that if we were to sit down and begin to formulate strategies and move forward to identify this relationship—you 

know, it took me going to Harvard to talk to Harvard earlier to realize that relationships are paramount, and everything else is derivative. Something my second grader understands in the sand box. 

If she doesn’t play with others in the sand box, she’s not playing 

in the sand box. It took me quite a few years to come to that realization. So, my children are ahead of me in many ways, which is 

a good thing. But I think the more we can work to reexamine the 

restrictions, we could come to some specific recommendations that 

won’t cost anybody anything. 

The CHAIRMAN. Well, I thank you both for your responses. It will 

be helpful for the Committee. And again, I thank you for being our 

witnesses on Panel 2. So mahalo. Thank you very much. 

I would like to invite the final panel to the witness table. Serving 

on our third panel is Honorable Nathan Small, Chairman of the 

Shoshone-Bannock Tribes in Fort Hall, Idaho. Also, the Honorable 

Ron Allen, Tribal Chair of the Jamestown S’Klallam Tribe in 

Sequim, Washington. 

And so, it’s good to have both of you here with us this morning. 

And I would like to say to Mr. Smith, please send our aloha to Assistant Secretary Echo Hawk when you get back. And I want to 

wish all of you folks well in the Administration and what you’re 

doing for the indigenous people of our country. And also, I just 

want to mention today we’ve had our friend here who has been 

rather prominent, and I just want to mention him and his family, 

Branscombe Richmond and his lovely wife Lei and his son were 

here. And I just want you to know he has an interest in what’s 

happening here. Thank you very much for being here. And we will 

proceed with your testimony, Mr. Small. 

STATEMENT OF HON. NATHAN SMALL, CHAIRMAN, FORT HALL 

BUSINESS COUNCIL, SHOSHONE–BANNOCK TRIBES 

Mr. SMALL. Thank for this opportunity to testify. My name is Nathan Small. I’m the Chairman of the Fort Hall Business Council, 

which is the governing body of the Shoshone-Bannock Tribes of 

Idaho. We don’t like to say Idaho. It’s of Idaho, because we’ve been 

there long before Idaho became Idaho. But I guess for geographical 

purposes, we mention Idaho. 

I’m honored to discuss the Tribes’ economic development initiatives and the challenges we face to improve our economy. Before 

discussing our specific initiative, I would like to first raise our concern with the Budget Control Act. While the act was critical to 

avoid a governmental default, we urge that many programs be protected from cuts. In treaties with Indian Tribes like the ShoshoneBannock Tribes, there were ceded millions of acres of our homelands to build this great nation. In return, the U.S. promised to 

provide for our health care, education, public safety and general 

welfare. 

39

Our treaty was a peace treaty between us and the United States. 

And to uphold these obligations, Indian programs must be held 

harmless from spending cuts. We urge the Committee to work with 

the Super Committee and the rest of the Congress to make sure 

they understand the government’s obligations to the Tribes. 

That brings me now to some of the Tribes’ economic initiative 

and the Federal barriers that we face in moving this project along. 

One of our biggest projects is our wind farm initiative. We have 

partnered with another Tribe to develop a $400 million wind farm 

on the reservation. This project is major step for us, but we’ve run 

into many obstacles. 

Because the project is on trust land, it is subject to NEPA, which 

is costly and time-consuming. The EIS alone will cost us $1.9 million and two years of study. In addition, the EIS approval process 

has taken an excessive amount of time with many delays. A nearby 

wind farm near the reservation is already up and running, even 

though we started our project first. This non-Tribal wind farm did 

not have to navigate all the bureaucratic red tape that we do. We 

urge Congress to consider reforms to NEPA that would provide extensions for our economic development projects and for an expedient and cost efficient review. 

The Federal Tax Code also presents a major obstacle for renewable energy development on Indian lands. Approximately 25 percent of the revenue generated from these projects comes in the 

form of tax credits; however, Tribes aren’t taxable entities and 

can’t use the credits. There are contractual ways to organize the 

transactions so that Tribes can obtain the credits, but the process 

is cumbersome and complex. We encourage the Committee to work 

with the finance committee to amend the code to enable Tribes to 

trade tax credits or sell them on an open market. 

Another significant barrier to our economic development is access 

to capital. The Treasury Department reports that inequity investment gap in Indian Country is $44 billion. The Indian Guaranteed 

Loan Program has been somewhat of a bright spot for us. This program assisted in financing our $20 million state-of-the-art justice 

center, which opened last year. This program is also helping us secure a $33 million loan for a new hotel and convention center that’s 

currently under construction. 

As you can see, we have regularly benefitted from this program. 

We urge the Congress to fully fund these critical programs to spur 

economic development in Indian Country. It has been sorely underfunded for decades. No other agency provides the same kind of financing support for Tribes as this program. 

Another opportunity for our people is farming. Approximately 

110,000 acres of our lands are used for farming. With an annual 

production value of more than $80 million. A sizeable percentage 

of Idaho’s famous potatoes are grown on our land. However, we 

lack capital to fund operations, equipment, infrastructure for farming on a large scale. Banks typically will not loan money to us to 

farm our land because the land cannot be used as collateral. 

Having prime farm land, cheap water, low lease rates and lack 

of competitive bidding on our lands have made non-Indian farmers 

on the Reservation very wealthy. 

40

We seek your assistance so that we can farm our own lands. If 

we can do this, we can make great strides in revitalizing and diversifying our economy. While there’s an urgent need to create new 

economic opportunities in Indian Country, we won’t succeed without a strong Tribal work force. To help improve Indian Country’s 

work force, we urge the Committee to make necessary amendments 

to the 477 program. 

The program saves us thousands of dollars in administrative 

costs each year. However, despite this success, agencies are engaged in forcing Tribes to separately account for certain programs. 

These actions directly conflict with the purpose of the program and 

are a great cost to the Tribes. Legislation to reverse this change 

has been included in the FY 2012 House Senate Appropriations 

Bill. We urge the Senate to pass that and to make other necessary 

changes. 

Lastly, we cannot successfully improve our economy without 

basic infrastructure such as adequate roads and affordable telecommunication systems. We are working hard to make progress in 

these two areas, which is described in our written testimony. 

Chairman, we thank you for your efforts to improve the economy 

conditions in Indian Country. The Tribes are very proud of what 

we’ve been able to accomplish, but we still have a long ways to go. 

And with your permission, I would like to submit some other documents. Mainly, that is our economic impact statement that the 

five Tribes of Idaho have put together for the purposes of I guess 

you could say getting some respect from the State of Idaho and its 

legislature. 

[The prepared statement of Mr. Small follows:]

PREPARED STATEMENT OF HON. NATHAN SMALL, CHAIRMAN, FORT HALL BUSINESS

COUNCIL, SHOSHONE-BANNOCK TRIBES

Good morning, Chairman Akaka and Members of the Committee. My name is Nathan Small and I am the Chairman of the Fort Hall Business Council, which is the 

governing body of the Shoshone-Bannock Tribes (Tribes) located on the Fort Hall 

Indian Reservation (Reservation) in southeast Idaho. I am honored to be here today 

to discuss the Tribes’ economic development initiatives, our success stories, and the 

challenges we face to bring economic vitality to our people, our community, and the 

surrounding area. 

Background on the History of the Shoshone-Bannock Tribes 

The Tribes are a federally recognized Indian Tribe organized under the Indian Reorganization Act of 1934. The Shoshone and Bannock people are comprised of several related bands whose aboriginal territories include land in what are now the 

states of Idaho, Wyoming, Utah, Nevada, Colorado, Oregon, and parts of Montana 

and California. In 1867, President Andrew Johnson by Executive Order designated 

the Fort Hall Indian Reservation for various Shoshone and Bannock bands that occupied the area since time immemorial. On July 3, 1868, the Shoshone and Bannock 

Tribes concluded the Second Treaty of Fort Bridger, which was ratified by the 

United States Senate on February 24, 1869. Article 4 of the Fort Bridger treaty 

promises that the Reservation would be a ‘‘permanent home’’ to the signatory 

Tribes. Although the Fort Bridger Treaty called for the Reservation to be approximately 1.8 million acres, various ‘‘surveying errors’’ in 1873 reduced its actual size 

to approximately 1.2 million acres. 

One of the United States’ purposes in setting aside the Reservation was to protect 

the Tribes’ rights and to preserve for them a home where their Tribal relations 

might be enjoyed under shelter of authority of the United States. Subsequent cession agreements with the United States reduced the Reservation to the present day 

size of 544,000 acres. Of the 544,000 acres, 97 percent of the land is Tribal land 

or held by the United States in trust for the benefit of the Tribes or its individual 

members. The Reservation is the largest reservation in Idaho. Our Reservation proVerDate 0ct 09 2002 11:06 May 16, 2012 Jkt 073111 PO 00000 Frm 00044 Fmt 6633 Sfmt 6621 S:\DOCS\73111.TXT JACK
41

* A full copy of the report has been retained in Committee files.

vides an irreplaceable homeland for economic activity and cultural practices based 

on strong religious traditions premised on the sacredness of our land. Our current 

Tribal membership is approximately 5,300 members. 

Our Reservation is blessed with an extensive biodiversity including rangelands, 

croplands, forests, streams, three major rivers (the Snake, Blackfoot, and Portneuf), 

reservoirs, springs, and wetland areas, an abundance of medicinal and edible plants, 

wildlife (elk, deer, moose, bison, big horn sheep, etc.), various species of fish, birds, 

and other animal life. The Reservation lands are mountainous and semi-desert, and 

overlay the Snake River aquifer, a large groundwater resource. The culture and continued existence of the Shoshone and Bannock peoples depend on these resources. 

Our Current Economic Situation 

The Ft. Hall Indian Reservation is named after a trading post that was an important stop in the 1800s along the Oregon Trail and California Trail. The Reservation 

is situated in the counties of Bannock, Bingham, Power, and Caribou in southeastern Idaho with the city of Pocatello on its southern border and the city of Blackfoot on its northern border. 

The Shoshone-Bannock Tribes commissioned a report titled 2009 Economic Impacts of the Shoshone-Bannock Tribes on the Regional Economy. The report was 

completed in October 2010. * Below are highlights from the report to help paint a 

picture of the current economic conditions on the Reservation: 

• The Shoshone-Bannock Tribes have increased total regional employment by 

4,097 jobs including the multiplier effects (i.e., the direct, indirect, and induced 

impacts).

• Total sales from Tribal economic activity was $330.6 million in 2009 including 

the mutliplier effects.

• The Shoshone-Bannock Tribes have raised gross regional product (value-added) 

by $183.0 million, of which approximately 29 percent is from agriculture.

• New tourist traffic to the Tribes’ casinos is estimated at 200,000 people per 

year; over 40 percent are from out of state, representing new dollars to the state 

economy.

• In terms of employment rankings, the Shoshone-Bannock Tribes would rank 1st 

place in Bingham County if all 920 direct employees were situated in Bingham 

County. The Tribes would rank 4th place in Bannock County if all direct employees were situated in Bannock County. Statewide the Tribes rank in the top 

66 Idaho employers (public and private) and would rank 40th place against private employers alone.

• In the four-county regional economy, the Tribes constitute 5.7 percent of all 

jobs, 3.6 percent of all sales, and 4 percent of all wage and salary earnings (including the multiplier effects).

• In comparison to Bannock County (alone), the Tribes would constitute 9.6 percent of all jobs, 7.3 percent of all sales, and 7.6 percent of all wage and salary 

earnings (including the multiplier effects) if all Tribal activities were situated 

in Bannock County.

The Tribes are very proud of what we’ve accomplished in revitalizing our economy 

despite the barriers described below but we still have a long way to go in improving 

the quality of life of our people. Below, I set forth specific areas where the Tribes 

seek assistance to address obstacles and concerns in order to create opportunities 

for economic development. 

Grave Concerns Over the Budget Control Act of 2011

The need for this hearing and the need to develop economic solutions in Indian 

country are heightened by the debt limit crisis and the faltering U.S. economy. We 

commend Senator Crapo, our Senator, for his tremendous efforts as part of the 

‘‘Gang of Six’’ to work across party lines to avert a government default. We know 

that he spent a great deal of time working on this problem, and we thank him for 

his service. America needs more leaders like Senator Crapo who truly puts the country and its economic future first instead of getting mired in unyielding partisan and 

ideological bickering. After all, you can’t cut up principles on a plate. 

Congress passed and the President signed the Budget Control Act of 2011 (Public 

Law 112–25) on August 2, 2011, which ultimately raised the debt ceiling through 

2013 and put in place a number of austerity measures to cut government spending. 

The Act cuts government projected spending by $2.3 trillion over the next decade, 

42

starting with $841 billion in spending caps and $44 billion in projected cuts for 

FY12. A Joint Select Committee on Deficit Reduction (also known as the ‘‘Super 

Committee’’) created under the Act would then issue recommendations for another 

$1.5 trillion in cuts over the next decade. The Congress must pass and the President 

must sign legislation containing the Super Committee’s recommendations by January 15, 2012; otherwise, agency budgets will automatically be cut across the board 

by $1.2 trillion. While we acknowledge that this agreement was vital to avoid a government default, we are very concerned about this agreement. 

The Federal Government must learn to live within its means; but, at the same 

time, it must honor its treaty and trust obligations with Indian Tribes. The status 

of Indian Tribes as governments is specifically acknowledged in the U.S. Constitution, and our treaties are affirmed in it to be the ‘‘supreme Law of the Land.’’ 

Through hundreds of treaties with the United States, Indian Tribes, like the Shoshone-Bannock Tribes, ceded hundreds of millions of acres of our homelands to build 

this great nation. In return, the United States promised to provide for the health 

care, education, public safety, and general welfare of Indian citizens. 

To uphold the Federal Government’s solemn treaty and trust obligations, Indian 

programs must be held harmless in the face of projected cuts. In other words, these 

programs should not be viewed as ‘‘discretionary’’ spending or as ‘‘pork’’ that can be 

cut. For these reasons, we urge Congress to use a scalpel as it makes reductions 

to federal spending instead of a cleaver. We urge the Senate Committee on Indian 

Affairs to dialogue and educate the Super Committee and its colleagues in the Congress about the government’s obligations to Indian Tribes as these bodies work to 

meet the requirements of the Budget Control Act. 

Federal Barriers to Tribal Economic Development 

Past and current federal laws and policies have wreaked havoc on Tribal economies, ignored Tribal infrastructure needs, and suppressed Indian economic development. While the current federal policy supporting Indian self-determination has enabled some Tribes to make headway towards reaching the ultimate goal of economic 

self-sufficiency, many barriers remain. 

The barriers range from the most basic needs to spur reservation businesses and 

investment, such as infrastructure (it is estimated that unmet Tribal infrastructure 

needs exceed $50 billion), to the more complex, such as a general lack of understanding of Tribal court systems and jurisdiction in Indian country. In addition, 

Tribal governments and individual Indian entrepreneurs have long lacked the access to capital that many non-Indian small businesses have. The Treasury Department reports that the equity investment gap in Indian country is $44 billion. Both 

Indian businesses and non-Indian businesses seeking to initiate or continue commercial activity in Indian country also face difficulty in staffing their operations because generational poverty and unemployment have resulted in an untrained workforce on a number of reservations. In addition, the status of Indian lands, which are 

held in trust by the United States, creates barriers to investment and business. The 

trust status of Indian lands—and federal laws that attach to that status—force Tribal governments to obtain federal agency approval for even the most minute decisions 

and require Tribal governments to comply with costly and time-consuming environmental requirements set forth in the National Environmental Policy Act (NEPA). 

These same federal burdens are not present outside of Indian country. 

The remainder of my testimony discusses proposals to address many of the barriers identified above. 

Need for Access to Capital 

The Ft. Hall Indian Reservation has historically faced many barriers to economic 

development that continue to this day. Due to the historic downgrade of the U.S. 

credit rating and the potential downgrade in the municipal bond market, we are 

concerned that the economic barriers we face will multiply as a result of a decrease 

in liquidity and possible rising interest rates in the future. This will negatively impact our economic development, housing, and infrastructure projects. It is already 

difficult for us to find capital for major projects, and now we fear that it will only 

get more difficult and more expensive to the point of being cost prohibitive. 

For example, the Tribes expect to open its new $47 million 164,000 square feet 

Hotel and Event Center by May 2012. The event center will seat up to 1,400 people 

and accommodate meetings, conferences, banquets, and entertainment venues. The 

five-story hotel will include 156 rooms, laundry facilities, a guest pool, a spa and 

fitness center, and a sports grill and deli. This facility has been years in the making, 

and the groundbreaking was on April 27, 2011. This project will be an economic 

boon for the Reservation and for southeastern Idaho, bringing in hundreds of millions of dollars. However, we are concerned how the economic downturn and the 

43

drying up of financing may impact our new facility and are, therefore, closely monitoring the situation. The Bank of Albuquerque approved a $33 million loan secured 

with a guarantee under the Indian Guaranteed Loan Program for the project. We 

went through a long, difficult journey to secure the financing despite the fact that 

the Tribes have stellar credit, so we can only imagine how much harder it will be 

to move on future projects with the stagnating economy. Moreover, this saga continues to this day as we must jump through hurdles to keep the financing in place. 

Even with a sizeable guarantee on the loan, it seems the lender keeps coming back 

for a double guarantee to the point that we feel like we are practically signing our 

lives away. 

The Indian Guaranteed Loan Program, which was established by the Indian Financing Act of 1974 (P.L. 93–262), has been a bright spot for us in accessing capital. 

The program helps Indian businesses obtain loans from private lenders that would 

otherwise be unwilling to make such loans on commercially reasonable terms. In addition to our Hotel and Event Center, the Indian Guaranteed Loan Program has assisted us with our new state-of-the-art Justice Center, which opened last year on 

February 16, 2010. It houses our police department, juvenile and adult detention, 

and Tribal courts under one roof. Over a decade ago, the BIA informed the Tribes 

that it must vacate its justice facilities due to their poor condition. After years of 

unsuccessful efforts to find federal funding for construction of a new justice facility, 

we committed $4 million of our own funds and took out a $15.9 million loan to construct the new facility, which was also secured with the help of the Indian Guaranteed Loan Program. 

It would have been very difficult to construct the Justice Center in the current 

economic climate, especially given the proposed cuts to the program by the Administration that would put the program on life support. We urge the Congress to fully 

fund this critical program in order to spur economic development in Indian country. 

Despite the success of this program, it has been sorely underfunded for decades. No 

other agency provides the same kind of financing support for Tribes as this program. As you can see, we have truly benefitted from it. 

Changing the Tax Code to Spur Reservation Economies 

We believe that Congress needs to amend the Internal Revenue Code (IRC) to provide incentives to invest in renewable energy, infrastructure, and other economic development projects on Indian reservations. Without changes, we will continue to be 

at a disadvantage. Tax credits would assist on renewable energy projects for Tribes 

because we would have a better opportunity at ownership at earlier stages. We support provisions in H.R. 1599, introduced by Rep. Tom Cole, which would, among 

other things, provide for tax credits for tech companies in Indian country (Title VI) 

as well as expanding the ability of Tribal governments to issue taxexempt bonds 

(Title V) and the streamlining of the Tribal leasing process (Title VII). In particular, 

the provision to expand Tribal governments’ ability to issue tax-exempt bonds for 

on-reservation projects would provide much needed access to outside investment 

capital to Tribes nationwide. We urge enactment of these provisions. 

Also, in 2005–2006, the accelerated depreciation provision for businesses located 

on reservations lapsed. This provision was very helpful in attracting high-tech, capital-intensive employers to reservations. Since the lapse, the provision has been sporadically extended for usually no longer than one year. The short duration of the 

extensions has not provided enough certainty to incentivize businesses to invest in 

Indian country. 

The accelerated depreciation credit and similar tax credits should be permanently 

reinstated. S. 1008, introduced by Senator Jim Inhofe, would amend the IRC to permanently extend the depreciation rules for property used predominantly within an 

Indian reservation. H.R. 1039, introduced by Rep. John Sullivan, would amend the 

IRC to permanently extend the Indian employment credit and depreciation rules for 

property used predominantly within an Indian reservation. However, while we support permanent accelerated depreciation in Indian country, we cannot support S. 

1008 or H.R. 1039 as written. Provisions should be added to these bills requiring 

Tribal consent for the accelerated depreciation on property located on a reservation. 

Otherwise, like on the Ft. Hall Indian Reservation where there are some non-Tribal 

entities located there due to historical circumstances and over our objections, some 

may seek undue tax advantages not intended for them. 

The Tribes also urge the creation of incentives to help start-up businesses of Tribal members on the Reservation. The Tribes spend $315 million a year on goods and 

services but very little of its stays here. If we could keep even $4–5 million here 

in our own small businesses, then it would make a tremendous dent in our poverty 

and unemployment rates. There is a small business association on the Reservation 

that has been providing some services and support but it is all volunteer-based. 

44

Opening Opportunities for Tribes to Engage in Trade 

Like other Indian Tribes, we have interstate highways, railroad lines, and even 

shipping channels and airports crossing our Reservation, adjacent to it, or even located on it. Our Reservation actually has an airport capable of handling air cargo 

jets. We—and other Tribes with similar advantages—could be participating in the 

world economy if our reservation were designated as a Foreign Trade Zone (FTZ). 

Unfortunately, most Indian reservations are in somewhat remote locations and cannot operate Foreign Trade Zones because of the ‘‘60 mile/90 minute rule,’’ which requires that an FTZ be within 60 miles or 90 minutes driving time of a U.S. Customs 

office. The closest one to us is in Salt Lake City, which is a 21⁄2 hour drive or 150 

miles away. The next closest are in Boise, Idaho, and Butte, Montana—both about 

250 miles away. These distances were much greater barriers to customs oversight 

when the Foreign Trade Zone Act was passed in 1934 than they are today. The Act 

should be updated to reflect modern advancements and the United States’ unique 

obligations to Indian Tribes so that Tribes can more readily engage in commerce 

with the world.§

To that end, we propose legislation that would provide the Secretary of Commerce, acting through the Foreign Trade Zone Board, with discretionary authority 

to waive the ‘‘60 mile/90 minute’’ rule found at 15 CFR § 400.21(b)(2)(i) for Tribal 

FTZ grantees and operators. This would give Indian Tribes something to ‘‘bring to 

the table’’ in partnerships for regional development. 

We also laud Rep. Cole for introducing H.R. 2362, the Indian Tribal Trade and 

Investment Demonstration Project Act of 2011, because of its innovative approach 

to developing commerce between Indian Tribes and foreign countries. 

Challenges in Developing Energy Resources on the Reservation 

Tribal communities tend to have some of the highest energy costs in the nation 

due to the rural/remote nature of many reservations, the lack of energy infrastructure, and the lack of high density population centers. As a result, energy efficiency 

and conservation upgrades have very high success rates in Indian country. We support funding directed toward energy efficiency and conservation programs as these 

programs have been very successful on our Reservation thus far. For example, we 

are currently replacing diesel fuel water pumps for solar-powered pump systems to 

use for watering troughs for cattle, performing energy audits and efficiency upgrades on some of our major facilities, and installing solar panels on some of our 

Tribal buildings. 

Indian reservations have some of the highest concentrations of clean renewable 

energy resources in the country. In 2004, the Department of Energy estimated that 

14 percent of the wind energy potential in the nation is located on reservations and 

that reservations will be a key factor in energy security and independence in the 

future. The Tribes seek to harness its wind and other renewable energy resources 

to promote energy production on the Reservation. Specifically, the Tribes have 

partnered with another Tribe to develop a $350-$400 million wind farm on the Reservation. This project is a major step in economic development for the Tribes, but 

we have run into many obstacles that threaten the success of the project. 

Because the wind project is on trust land, it is subject to NEPA. Therefore, the 

BIA requires an Environmental Impact Statement (EIS) in order to approve the 

lease. The EIS is estimated to cost $1.9 million, and we are the ones that must pay 

this cost. We have hired a third party consultant to perform the majority of the 

work. However, the approval processes have taken an excessive amount of time with 

the turn-around time from the BIA for even minor paperwork taking months. For 

example, a 6-page document took 4 months for the BIA and the Solicitor’s Office 

to review due to insufficient staff handling NEPA matters. Further, the BIA staff 

tasked to this project consistently miss important calls and meetings that cause severe delays and add unnecessary risk to the financial viability of the project. 

Moreover, given that the project is a very large undertaking, it requires constant 

risk mitigation to be successful. Unfortunately, one of the major impediments to the 

success of this project is the lack of BIA involvement in the process due to limited 

BIA staff resources. We believe that, if a NEPA analysis is required on Tribal lands 

and if we must pay the costs to comply with NEPA, then the BIA should, at a minimum, have sufficient staff resources on the national, regional, and local levels to 

move these projects forward on a timely basis. In stark comparison, a nearby wind 

farm on fee land is already up and running even though we started our project first. 

This non-Tribal wind farm did not have to navigate all the bureaucratic red tape 

that we do. 

We urge increased funding for the environmental review process so that BIA, instead of Tribes, will cover the costs for compliance with NEPA and hire staff who 

have the time to assist in advancing these projects. AlterNatively, Congress should 

45

consider reforming NEPA to provide exceptions or an expedited review for Indian 

country economic development projects. The Tribes have always been strong environmental stewards since time immemorial, and we agree with many of the goals 

of NEPA. However, the government promised to make our lands a permanent home, 

and federal laws should reflect and support this promise. 

Another major obstacle for renewable energy development on Tribal lands is that 

tax credits for renewable energy, like wind, are only useful for tax-based entities. 

Tribes, counties, and municipalities are at a disadvantage when they pursue energy 

projects. The Tribes strive to own a wind farm on the Reservation but approximately 20–25 percent of the revenue generated from these projects is in the form 

of tax credits that cannot be utilized by Tribes. This puts Tribes at a direct disadvantage and promotes non-Tribal ownership of projects on Tribal lands. We request that there be equal opportunities for Tribal ownership of renewable energy 

projects and that the Congress amend the laws so that tax credits generated can 

be traded to a taxable partner or sold on an open market. To that end, we support 

H.R. 1992, introduced Rep. Raul Grijalva, which would allow Tribes to assign renewable electricity production to their partners for tax credits. AlterNatively, we 

recommend that the Federal Government create a grant program for Tribes or Tribally-owned businesses so that we can compete with non-Tribal entities on energy 

projects on Tribal lands. 

Challenges to Secure Adequate Telecommunications Infrastructure 

The Tribes lack reliable, affordable high-speed communications and Internet services, including in emergency situations, for homes and businesses on the Reservation, restricting educational opportunities and greatly hindering economic development. The Tribes have been a long-time consumer of communications services from 

the big telecommunications companies. Like many other Indian Tribes, we have always been underserved or not served at all by the big companies. Mountain Bell 

became U.S. West, then Qwest, now CenturyLink. But the service remains slow and 

expensive, and the local distribution and service lines consist of old and deteriorating copper. The Reservation does not have high-speed Internet service except 

where there are purchasers of dedicated T–1ines, which are very expensive. Currently there is no incentive for the carriers serving the Reservation to improve service. The current incumbent service provider has opted out of state regulation and 

its rates are soaring. Moreover, the provider has a history of trespass on our Reservation, cannot document its rights of way, and is out of compliance with Tribal 

ordinances. Even though the provider is profiting in the range of $1 million each 

year for ‘‘service’’ on the Reservation, it has yet to employ Tribal members or even 

get a Tribal business license. 

Over the last ten years many entrepreneurs have approached the Tribes with proposals to ‘‘partner’’ with us to develop cell phones, wireless Internet, or other wireless services. The deals have always been the same. They always want a commitment of Tribal money or Tribal resources for a system that someone else would own. 

In 2007, the Tribes conducted a feasibility study to determine the best course to 

follow in addressing our communications needs. This study recommended that the 

Tribes develop our own telecommunications enterprise. It further recommended that 

the Tribal telecom enterprise be the ‘‘incumbent local exchange carrier’’ as defined 

in the Telecommunications Act of 1996. Doing this would mark a new expression 

of sovereignty—Tribal ownership of the means of communication. It would have the 

economic benefit of plugging a million-dollar annual leak in the Tribal economy, 

keeping Tribal dollars in circulation on the Reservation. 

The greatest obstacle the Tribes face on this endeavor is the same obstacle faced 

by many rural-state telecoms: a widely dispersed and less affluent customer base 

spread out over many miles of line. The Federal Government has addressed this 

issue through FCC Universal Service Fund (USF) payments. These payments, or absence of them, can make or break a Tribal telecom. The highest level of USF payments typically go to the incumbent carrier, which is usually the non-Indian firm 

that established a prior presence on the Reservation. 

We applaud the FCC’s June 21, 2011, order designating the Standing Rock Telecommunications, Inc., a Tribally-owned wireless carrier, as a competitive eligible 

telecommunications carrier (ETC) that can receive USF support in providing wireless service to reservation residents regardless of the presence of non-Tribal incumbent carriers and regardless of wire center boundaries or partial wire centers. The 

order expressed support for increasing critical communications infrastructure in underserved areas, such as Indian reservations, and promoting economic development 

in these areas as well as educational opportunities through distance learning programs. This order will pave the way for other Tribally-owned carriers to receive 

USF support so that finally Tribes can address the problem of unreliable and costly 

46

telecommunications service options on reservations to connect to the rest of the 

world. 

To realize our goal of our own Tribal telecom, the Tribes have secured a $116,000 

grant for technical services and planning from the Rural Utility Service (RUS), 

USDA, and have selected a Native telecom firm to provide these services. Signature 

of the contract is pending the arrival of funds. There will be approximately one year 

to complete technical studies and set up an operating telecom carrier. The Tribal 

telecom carrier will apply for certification and then apply for RUS or ‘‘Farm Bill’’ 

loans as appropriate. Our hope is to designate the Reservation as our service area 

and to train Tribal members to run the telecom. 

We encourage legislation and/or policies that would expedite the transfer of reservation service areas from non-Tribal incumbents to Tribally-owned ETCs as well 

as compensate current incumbent carriers on a per-service line basis for these transfers. Further, we support the continuation of the USF for the benefit of not only 

Indian country but also for the rest of rural America to ensure that there are opportunities for affordable telecommunications services. To this end, we request that the 

Committee determine if legislation would assist in promoting telecommunications 

opportunities in Indian country. 

The Need for Adequate Transportation Infrastructure 

The Ft. Hall Indian Reservation, as stated above, is 544,000 acres and our communities are located far apart. Our Reservation is located within four counties in 

Idaho. Without adequate roads, we will not be able to improve our Reservation economy. It is the lifeline for everything. Currently, the Tribes receive $700–800 per 

road mile under the BIA’s Indian Reservation Roads (IRR) Program compared with 

the amount of federal dollars that states and county governments receive, which is 

approximately $2400 per road mile. As you can see, we are behind before we start. 

Idaho is a PL 280 state; and, in 1963, the state passed laws providing, among 

other things, for concurrent civil and criminal jurisdiction with the Tribes and the 

Federal Government over any of our roads that are maintained by the county or 

state (Idaho Code § § 67–5101 and 5102). Starting in the 1940’s through the 1990s, 

because the BIA did not have the funds or equipment to keep up with the road 

maintenance on all our IRR roads, it entered into road maintenance agreements 

with the counties in which the Reservation is located. Under these agreements, 

upon construction of certain roads by the BIA, the counties were to maintain them. 

As a result, the counties and the state assumed concurrent jurisdiction over these 

roads. 

While the Tribes receives its IRR funds from the BIA, the state and the counties 

are able to count our IRR roads in their inventories under the maintenance agreements and, thus, gain road funds for these miles. However, the state and the county 

provide very little maintenance for roads over which they have responsibilities. 

In January 2009, the Tribes entered into a Memorandum of Agreement (MOA) 

with Bingham County (County), one of the four counties in which the Reservation 

is located, so that the Tribes exercise regulatory authority over land use and zoning 

matters on the Reservation and the County defers to the Tribes on these matters. 

This MOA reflects the parties’ cooperative approach to land use regulation for lands 

located within the boundaries of the Reservation and the County. In 2010, the 

County relinquished all the maintenance agreements they held on about 20 miles 

of IRR roads on the Reservation. As a result, the Tribes can begin to receive IRR 

road maintenance dollars for these miles. 

The Tribes plan to reach out to Bannock County, which has concurrent jurisdiction and maintenance agreements over approximately 33 miles of our IRR roads, 

and to Power County, which has concurrent jurisdiction and maintenance agreements over approximately 20 miles of our IRR roads, to see if similar agreements 

can be executed with them as with Bingham County. Currently, the Tribes have approximately 450 miles of roadway under the IRR road system we maintain. If the 

Tribes gain back the remainder of the roadways that were placed in maintenance 

agreements with the counties, then our road miles under IRR maintenance would 

be approximately 520 miles, allowing us to receive IRR road maintenance funds for 

them. 

As for the national controversy amongst Tribes over the allocation of funds under 

the IRR Program, we believe that state and county roads should not be counted in 

the IRR inventory given the limited pot of money. IRR funds should lawfully only 

be used for IRR roads. Counties and states have responsibilities to maintain their 

roadways and receive funding to do so. Basically, allowing non-IRR roads into the 

system changes the amounts all Tribes receive for road maintenance of IRR roads—

for the worse. Large land-based Tribes like the Tribes with large amounts of IRR 

road miles suffer as a result. For instance, we used to receive about $1.2 million 

47

per year for our contract dollars but now we receive about $930,000 per year under 

our 638 contract at least partially due to some of the smaller or roadless Tribes supplanting some of our dollars by including state/county roads in their IRR system. 

Our funding for road maintenance is now $393,000, down from $470,000 in recent 

years, due to the inclusion of state and county roads in the IRR system. 

Challenges to Agricultural Economic Development 

Historically, as explained above, the working capital needed to fund operations, 

equipment, and infrastructure for farming on a large scale has not been accessible 

to Tribes and individual Indian landowners on reservations. Banks typically will not 

loan money to Tribes or individual Indian landowners to farm on trust land because 

the land cannot be used as collateral. We applaud the class action settlement in 

Keepseagle v. Vilsack, where the Federal Government acknowledged USDA’s credit 

discrimination against Indians. Hopefully, justice will be served and one of the results of this case will be the creation of a federal process where we are treated 

equally and fairly on our agricultural economic development endeavors on our own 

lands. 

Approximately 83,000 acres of the Reservation’s trust lands are used for farming 

spuds, wheat, barley and beets, with an annual production value of more than $80 

million. A sizable percentage of Idaho’s acclaimed ‘‘Famous Potatoes’’ are grown in 

the fertile sandy soil of the Reservation and watered by an extensive series of canals 

and ditches created by the BIA in the early 1900s. The Fort Hall Irrigation Project 

was built with the intention of turning the oncenomadic Shoshone and Bannock people into farmers, but lack of capital has historically prevented the Tribes from farming our own lands. Prime farmland, cheap water, low lease rates and lack of competitive bidding on Reservation lands have made non-Indian farmers on the Reservation some of the richest individuals in the state. 

In recent years, the Tribes and individual landowners at Fort Hall have taken a 

more active role in agricultural production on the reservation. Local Indian landowners formed the Fort Hall Landowners Alliance to provide education on the BIA 

leasing process, to promote sound farming practices, to encourage landowners to 

draw up wills to prevent further fractionation of reservation lands, and to assist 

landowners in negotiating higher lease rates. At the same time, the Tribes are now 

an active participant in the BIA’s bidding process when farm leases—which are 

typically a mix of Tribal and individual Indian owned land—come up for renewal 

on the Reservation. We are partnering with a couple of the larger farmers with extensive irrigation systems already in place to share in the costs of production and 

the profits—and the losses—from farming reservation land. What we have learned 

is that our land competitively leases from between $150–$350 per acre depending 

on soil conditions and can yield a profit of up to $800 per acre, depending on market 

conditions. The Tribes currently farm some 550 acres on the Reservation in partnership with other farmers. Our goal is to use revenue from this partnership as capital 

to purchase the equipment needed (irrigation pivots, pumps, etc.) to eventually farm 

our own land for ourselves. As you can see, if we could farm our own lands, then 

we could make great strides in revitalizing and diversifying the economy on the Reservation. Further, we own our own fresh pack and rail spur and seek ways to develop our agricultural economy from ‘‘the ground to the market’’ and would appreciate assistance in this endeavor. 

Training a Strong Tribal Workforce 

While there is an urgent need to create new economic opportunities in Indian 

country, it will not be truly successful unless individual Indians are prepared to step 

in when these opportunities arise. To help improve Indian country’s workforce, we 

urge the Committee to make necessary amendments to the Indian Employment 

Training and Related Services Act, also known as the 102–477 Program. The 477 

Program permits Tribal governments to consolidate federal employment training 

programs, cut Tribal administrative costs, and lessen the burden of federal bureaucracy—all at no cost to the U.S. taxpayer. The 477 Program scored the highest rating 

for BIA’s programs assessed by the Office of Management and Budget. The 477 Program has saved the Tribes thousands of dollars in Tribal administrative costs and 

enables us to stretch precious federal dollars for employment training and workforce 

development to maximize our efforts to help our Tribal members gain employment. 

Since 1992, Tribes nationwide have utilized the 477 Program to consolidate funding from various federal job-training programs, including the Temporary Assistance 

for Needy Families program (TANF), while streamlining accounting and reporting 

mechanisms. However, in spite of this documented success, officials at the Department of Health and Human Services (DHHS) have recently ceased the transfer of 

TANF funds to the Department of the Interior for inclusion in Tribal self-governVerDate 0ct 09 2002 11:06 May 16, 2012 Jkt 073111 PO 00000 Frm 00051 Fmt 6633 Sfmt 6621 S:\DOCS\73111.TXT JACK
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ance compact and self-determination contracts. This action severely undermines the 

efficiency of the 477 Program. 

Some of these changes are included in the FY 2012 House Interior Environment 

and Related Agencies Appropriations bill, H.R. 2584 at Section 430. We urge the 

Senate to pass similar language to reverse the decision made by DHHS and make 

other necessary changes to this successful program. 

Conclusion 

We thank you for your efforts to improve the economic conditions in Indian country. We hope you find this information helpful as you continue to develop ways to 

improve the quality of life on reservations.

The CHAIRMAN. Thank you very much for your testimony, Chairman Small. 

Chairman Allen, please proceed with your statement. 

STATEMENT OF HON. W. RON ALLEN, TRIBAL CHAIRMAN/CEO, 

JAMESTOWN S’KLALLAM TRIBE; TREASURER, NATIONAL 

CONGRESS OF AMERICAN INDIANS 

Mr. ALLEN. Thank you, Mr. Chairman. I begin by saying aloha. 

AUDIENCE. Aloha. 

Mr. ALLEN. I have to admit I have had the honor of testifying 

before your Committee many times over my 34-year career with my 

Tribe, and I have to say that testifying before you in Hawaii is 

much more pleasing. I can dress accordingly. The humid heat in 

Washington, D.C. is not something I aspire to when I have to come 

in and talk to you and your colleagues about Indian affairs and our 

interests. 

I also am a board member, I’m the Treasurer for NCAI. I’ve been 

on that board for 20 years and have been a strong champion of Native Hawaiian pursuit of sovereignty. Sovereignty is something that 

is precious to all of Indian Country from Alaska to Florida and to 

the outreach of the Hawaiian islands. Our indigenous brothers and 

sisters out here are lacking the same legal and political status of 

the rest of their colleagues on the mainland. And I want to thank 

you personally as the Chair of my Tribe and as members of the 

NCAI, who have been strong supporters of the Native Hawaiian 

Sovereignty Bill. And we have high hopes before this session concludes, that we will get what we need to get that bill passed and 

restore the rightful sovereignty of Native Hawaiian peoples. 

Economic development is, of course, important to all of us, and 

I was very appreciative of hearing the testimony of Robin and 

Michelle regarding the Native Hawaiian issues, which is common 

issues for all of the Indian Country and all of our indigenous people. I think that the comments and observations and recommendations of the two panels before Chairman Small and myself are all 

very strong and very good. I’m delighted that you’ll be entering my 

testimony into the record, and we’ve also asked that there is a 

paper, a briefing paper before the White House, you know, and it 

was referred to as the White House Native American Business 

Leaders Round Table Discussion Paper. 

And I would ask that it also be put in the record, because they 

from all the national Indian organizations and Indian Country, we 

made a number of similar recommendations that you witnessed 

this morning. 

The CHAIRMAN. It will be included in the record. 

Mr. ALLEN. Thank you, Mr. Chairman. 

49

The needs of Indian Country with regard to achieving our selfsufficiency and self-reliance, as our California brothers and sisters 

like to use that phrase, is an important agenda without a doubt. 

Self-determination and empowerment of our Tribal communities to 

be able to take control of our destinies, to be able to create jobs and 

create revenues aside from the Federal Government is going to be 

essential that we have the tools, we have the access to the resources, the capital necessary to generate employment opportunities for our Tribal businesses as well as businesses for our citizens 

of our communities that they can develop their own business opportunities. 

The BIA has an important role. The Department of Commerce 

and the SBA have important roles. The Department of Agriculture 

and Rural Development has an important role. HHS and the ANA 

programs over in that department has an important role. The Department of Labor has an important role. They all come together, 

and they all become a part of the solution. So, it’s not just one. It’s 

many. 

You heard this morning about the importance of infrastructure. 

You’ve heard the importance of protecting our land base. You’ve 

witnessed through this hearing and other hearings the challenges 

that we have in terms of accessing capital onto reservations where 

legal standing and legal protections for those trust lands, whether 

it’s here in Hawaii or in our reservations or up in Alaska, that it 

causes us some peculiar challenges, that the financial industry has 

a difficult time penetrating and we access. They don’t treat us the 

same. 

It is not an equitable relationship between that industry and our 

communities so that we can become more self-sufficient and selfreliant. So, those kinds of issues are going to be critical to us. I always have noticed that it seems like in America, when we advance 

the interest of America in our economy, which is a big deal to us 

and to Congress today, it’s always kind of out of sight, out of mind. 

And it’s an afterthought policy. Oh, yes, what about the indigenous 

people of this nation? What about those reservations, whether 

they’re in Idaho or Washington or Hawaii or Alaska and so forth? 

How do we reach them? 

The new market of today is the broadband industry. It is the 

Internet, okay, so do we have the infrastructure? Do we have mobile communications out in our communities? The answer is predominantly no. And our adequate resources would be an advantage 

to the opportunity for us to move that agenda. You have heard this 

morning discussions of the energy needs so that we can create alterNative energy. Well, how much energy is the Department of Energy actually providing to access energy or pursue alterNative energies, whatever those energy opportunities are, whether it’s wind 

or hydro or geothermal, et cetera? 

Are they out there, and are they really aggressively, are they 

meaningfully putting resources out there for the Tribes to be able 

to develop those kinds of opportunities to enhance our economies 

and our communities? And often, not all of our Tribes are in rural 

communities where there’s strong markets. Most of our Tribes are 

in rural communities where there’s weak markets, and we need to 

be able to access those markets, and it takes capital and infrastrucVerDate 0ct 09 2002 11:06 May 16, 2012 Jkt 073111 PO 00000 Frm 00053 Fmt 6633 Sfmt 6601 S:\DOCS\73111.TXT JACK
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ture to make that happen. In my testimony, we show how the 

Jamestown Tribe has leveraged different opportunities. 

The SBA 8(a) program is really a good program. It does have 

some flaws in it, and it does have some unintended restrictions. 

But it does do a good job. The current conditions of the Section 8 

of the Department of Defense helps provide the adequate resources. 

I have colleagues in the Senate who actually are looking at some 

of our sister Tribes and Alaska Native Corporations in a jaundiced 

way, which misrepresents how we move our agenda. So, moving 

economic agenda on certain rules is okay for corporate America, 

but it’s not okay for Native America. There’s something wrong with 

that story, something wrong with that picture. And we need to correct that message. 

Because, quite frankly, they should not be afraid of us. They 

should not be fearful of us becoming independent and becoming 

stronger. As governments and as business entities to be able to provide the kinds of resources to deal with the unemployment problems that we have in our respective communities and throughout 

the indigenous communities, that’s the big deal to us. We want to 

be our own—we want to stand on our own two feet, to be able to 

take care of our own community needs. Washington, D.C. can’t do 

it. The State capitals can’t do it. But we can if you would provide 

us the right tools, the right legislation that gives us the authority, 

that instructs the IRS in terms of what is taxable and what’s not 

taxable. The revenues of our businesses is our tax base. Where 

other governments have a tax base, we don’t. That is our tax base, 

and that is an important agenda. So, we’ve shown where we’ve 

been successful. The loan guarantee program works. We need a 

surety bonding guarantee so that we have companies that go out 

there and become effective, so you have to have those kinds of resources. Where other industries will leverage assets that they have, 

we can’t leverage our trust resources. You can’t leverage it, because 

if something goes awry, they can’t capitalize on it. So, it doesn’t 

work. 

The loan guarantee programs work. BIA works. SBA works, but 

it needs to be stronger. And the surety bonding program can work. 

It’s an irony of it’s an insurance industry, but it’s not an insurance 

industry. They don’t want risk. They just want the money, and we 

need them to go get the contracts. So, those are programs that get 

our businesses on their two feet, and so we can become successful. 

I’ll close, Mr. Chairman, by saying that we want to leverage. We 

want to become independent. We want to be self-reliant. But we 

need the tools to do it, and we need the authority to do it. And 

that’s what we need from Congress. Thank you, sir. 

[The prepared statement of Mr. Allen follows:]

PREPARED STATEMENT OF HON. W. RON ALLEN, TRIBAL CHAIRMAN/CEO, JAMESTOWN

S’KLALLAM TRIBE; TREASURER, NATIONAL CONGRESS OF AMERICAN INDIANS

On behalf of the Jamestown S’Klallam Tribe, I want to thank you Mr. Chairman 

and the Senators of this Committee for the opportunity to provide testimony on this 

very important topic of Overcoming Barriers to Economic Development in Native 

Communities. 

General observations regarding Economic Development in Indian Country 

Economic Development in Indian Country trails significantly behind the rest of 

the nation and the acute economic conditions experienced by our Tribal citizens are 

51

even more pronounced than those of the current economic crisis. Tribal citizens are 

more vulnerable to the impacts of the current economic conditions because Tribal 

governmental revenues depend entirely on effective economic development to support nearly every aspect of reservation life and Tribal governance. However, chronic 

underfunding by the U.S. Government and the severe lack of private investment has 

left the economic potential of Indian Country unrealized. Tribes are forced to rely 

on our own economic ventures to generate revenue to support citizen programs and 

maintain government services for our people. Yet, Tribes are expected to meet these 

economic challenges with fewer resources and greater restrictions placed on vital 

economic financing tools and incentives. It stands to reason that Tribes should be 

given all of the tools and incentives available to other governments to raise and attract capital. 

When given the right tools to exercise our inherent right of self-government, 

Tribes can effectively lift our communities out of poverty and fully participate in the 

American economy. It is not just our Tribal citizens who benefit from federal investment in our communities, surrounding communities, and at times, entire regions, 

are also beneficiaries of Tribal success. The severe critical barriers to development 

that exist in Indian Country are the result of many factors, including, past federal 

policies that were imposed on Tribes. Congress has an opportunity to reverse these 

trends that are impeding the success of Tribal economies by providing appropriate 

financing tools and tax incentives and dismantling existing barriers for Tribes to 

fully utilize programs and services. These efforts will ultimately benefit Tribal communities and stimulate economic growth that, in turn, builds a stronger America 

and creates jobs. 

Tribal Self-Determination and Self-Governance works, but more investments 

would achieve even greater successes. Economic Development has been highly uneven, with many reservations remaining in great poverty. Regulations and legislation devised to address the needs of state and local government programs often neglect to include Tribes or promote ambiguous interpretation regarding Tribal participation. While this was not the intention of the legislation or regulations, resolving 

the uncertainty or unintended exclusion is an unfortunate means of promoting Tribal economies. Economic development is essential to our independence but we cannot 

achieve this without a strong revenue source. 

The Jamestown S’Klallam Tribal accomplishments are a result of vision, a progressive attitude, hard work and a respectful relationship with the Federal government. Economic self-sufficiency will enable us to continue to diversify into alterNative business opportunities, build stronger economic resources and diminish our 

dependence on the federal component of resources for the Tribe. We would like address and make recommendations of the following areas: 

Small Business Association 8(a) Business Development Program 

One of the most effective economic development programs for Tribes, especially 

rural Tribes, has been the Small Business Administration’s (SBA) 8(a) program. 

Tribe’s use the 8(a) program to sustain the economic well-being of entire communities. The program has demonstrated its effectiveness as a viable economic tool for 

all Tribal governments because it has proven successful regardless of a Tribe’s location or size. 

Despite the positive economic gains realized by Tribes and the demonstrated success of the program, the Native 8(a) program has been subject to more regulatory 

oversight than most other government contracting programs. Certain program provisions that were designed to promote Tribal participation are currently under scrutiny and are liable to be scaled back. For example, the newly imposed justification 

requirement for contracts exceeding $20 million is arbitrary and perplexing at best, 

given the fact that this is a far lower threshold than that applied to other non-Tribal sole source awards. This program should be commended for job creation and improving the dire economic conditions of Native communities. It is unfathomable that 

there are efforts to debilitate the program when it is beginning to make a difference 

for so many economically distressed Tribal communities and is an affront to the federal-Tribal relationship. 

The Native 8(a) program confirmed Congress’ commitment to advance Tribal selfdetermination and self-sufficiency. Congress had the foresight to recognize that providing incentive tools for business development would be much more beneficial to 

Native communities than simply appropriating funds for economic development assistance. 

Jamestown S’Klallam Tribe Native 8(a) Success 

The SBA 8(a) program has opened up a whole new business sector for our Tribe 

creating new employment opportunities for our Tribal citizens and revenue sources 

52

for our Tribal programs including health care, education and community support 

services. The 8(a) program enables our Tribe to enter into federal markets previously precluded from Tribal operations. For example, the program has paved the 

way for JKT Construction (JKTC) to seek Federal Government construction projects 

and to form a Mentor Prote ́ge ́ relationship that has provided training and joint ventures, which has allowed our business to work on projects that we would not otherwise have had the funding resources to handle. The ability to contract over a term 

of years is critical to our Tribe’s overall economic success and will greatly enhance 

our ability to provide critical government, social and cultural services to our citizens 

and build a solid infrastructure in our community. This is economic development 

that will assist the Tribe in moving toward its goal of economic self-sufficiency. 

We strongly urge the 8(a) program be left intact and subject to existing effective 

federal oversight mechanisms that are already in place. Participation of Native enterprises in the SBA’s 8(a) Business Development Program has proven its importance to building strong Native economies and job opportunities, as well as employment for the surrounding communities. 

Surety Bonding 

There has been a long standing need for a Surety Bonding program for Indian 

Country. Bonding companies, uncomfortable and unfamiliar with sovereign Tribes, 

have been simply unwilling to provide bonding for Tribal construction projects. The 

perceived risk associated with sovereign immunity has precluded and even obstructed Tribally-owned construction companies from accessing surety bonds even 

when such immunity is waived for certain contracts. This industry impediment 

clearly suppresses our business opportunities because small business contractors are 

being required to show that they can obtain surety bonds to perform subcontract 

work. 

There is an obvious need for a surety bonding program that would allow Tribal 

businesses to effectively compete without having to rely on an additional partner for 

the sole purpose of bonding. In order for Tribes to compete for and secure contracting opportunities, we need Congressional support of programs that ensure access to surety bonding for eligible Indian-owned construction companies. 

Although, construction is an area with a much higher probability of providing direct employment for Tribal citizens, surety bonding is one of the largest barriers for 

Tribes seeking entry and growth in this highly competitive and capital intensive sector. 

Tribes therefore, urge Congress to authorize waivers for Tribes to facilitate entry 

and expansion into federal construction and explore options that will benefit contractors as opposed to sureties, such as loan guarantees for operating capital. Expansion of the Bureau of Indian Affairs (BIA) guaranteed loan program to include 

Surety Bonding guarantees will reduce the perceived risk associated with Tribal 

sovereign immunity that is assumed by insurance companies. It will also increase 

access to infrastructure and other construction related projects, and generate job opportunities and business growth during difficult economic times at no, or very limited, cost to the Federal Government. 

Tribal Government Tax Status Act 

We strongly urge that the Tribal Government Tax Status Act be amended so that 

Tribes have better access to secure bonding for economic development. 

Although the intent of the Tribal Government Tax Status Act was to implement 

measures that would afford Tribes equal parity with their state and local governmental counterparts for purposes of issuing tax exempt debt, the law, as interpreted 

by the Internal Revenue Service (IRS), substantially limits the ability of Tribes to 

raise revenue for economic development activities that would generate new revenue 

for community-service purposes. The IRS) has unduly and narrowly defined how it 

can be used to access financing to address community, governmental and economic 

development goals. 

As a result of this limited and narrow interpretation of ‘‘essential governmental 

functions’’, Tribes are precluded from utilizing the same revenue raising authority 

and tax advantages that other governmental entities enjoy. Under the Internal Revenue Code, income accruing to state and local governments is not taxable. Tribal 

tax free bonds, however, can only be used for essential governmental functions, a 

restriction not imposed upon states and local governmental entities. In essence, 

Tribes are treated as political entity anomalies, enjoying some of the tax benefits 

of states and localities and suffering many of the burdens of ordinary tax payers. 

Congress has a trust obligation to ensure that Tribal governments are afforded an 

equal federal tax status. 

53

As the federal budget becomes more restrictive, Tribal governments, like state 

and local governments will have to find new revenue sources to support the delivery 

of essential government services. If Tribes are not granted a tax and bonding status 

similar to states and local governments, Indian governments will not be able to 

stimulate development nor sustain governmental services for our Tribal citizens. 

States and local governments are able to levy property and income taxes upon their 

constituents in order to raise revenue for financing economic development ventures. 

Tribes, however, have virtually no corresponding tax-advantaged financing tools to 

promote economic development. The goal of the Tribal Government Tax Status Act 

of 1984 was to provide a mechanism that would address this financial void and provide Tribes with the types of financial tools that further the development of an environment necessary for economic and social self-sufficiency. 

In 2009, the American Recovery and Reinvestment Act (‘‘ARRA’’) authorized Tribal governments for the first time, to issue tax exempt bonds for private development 

activities in the same manner as state and local governments. Prior to the passage 

of ARRA, tax exempt bonds issued by Tribal governments could only be used (with 

limited exceptions) for essential government purposes. ARRA lifted this restriction 

on a temporary, limited basis allowing Tribal economic development bonds to be 

issued subject to a $2 billion cap. 

We strongly urge this Committee to advance measures that would permanently 

authorize Indian Tribal governments to use qualified tax-exempt private activity 

bonds for similar types of projects and activities as those allowed for State and local 

governments. 

Urgent Need to Enhance Access to Capital 

Indian Country has been ignored by investors as a result of many factors, including, geographic isolation, lack of resources, and perceived political risk. The trust 

status of Tribal land precludes its use as collateral for financing economic development incentives. Furthermore, businesses that prefer fee ownership of a business 

site for tax-incentive purposes are discouraged from seeking business development 

opportunities in Indian Country. As a result, Tribes encounter countless barriers to 

acquiring developmental capital and conventional sources of credit to finance economic initiatives. Federal policies that ignore these barriers, or underestimate their 

significance, hold little potential for success. 

Sustaining growth beyond the federal investment means having access to capital 

and incentives to achieve such goals. Access to capital is fundamentally an issue of 

equal opportunity for Tribal citizens. Congress can help support the development of 

Tribal financial institutions serving Indian Country and shape the services provided 

by outside financial institutions currently situated to aid Tribal governments and 

their citizens. It is urgent for Congress to correct the unfair and unequal treatment 

of access to capital as the private sector has available to them, particularly the corporate sector. 

Loan Guarantee Programs 

Guaranteed financing is needed for Tribal economic development projects. For 

over a decade, one of the Bureau of Indian Affairs (BIA)’s most successful programs 

is the Guaranteed Loan Program for businesses. This program provides an attractive incentives and assurances for banks to expand and underwrite loans in Indian 

country, assisting Tribes and their members in accessing capital and encouraging 

lending to Indian-owned businesses. Loan guarantees are also an attractive financial measure because they result in the leveraging of federal dollars. Federal program funding and guarantees have been critically important in support of developing an economic foundation. 

This program, however, was targeted for deep cuts despite its positive returns because not all of the funds were allocated in a timely manner to Tribal entities. 

Tribes should not be forced to bear the brunt of the agencies failure to properly 

manage the program and dispense financing in a timely manner. The BIA Loan 

Guarantee Program is a very important tool for raising the level of Tribal Self-Sufficiency. If not for the BIA Guarantee Loan Program, many Tribes would not, in most 

cases, be able to get loans from the standard sources available to other entities and 

businesses.

The BIA Loan Guarantee Program has been very instrumental to the Jamestown 

S’Klallam Tribe.

The BIA loan guarantees allowed Jamestown Properties, Inc. to construct needed 

facilities and create economic opportunities and jobs. The first BIA loan was used 

to guarantee a loan to construct two buildings on the Tribal campus. These buildings consist of the Community Center/Dental Clinic and the Social and Communities Services Building. The Community Center is the focal point of our Tribal camVerDate 0ct 09 2002 11:06 May 16, 2012 Jkt 073111 PO 00000 Frm 00057 Fmt 6633 Sfmt 6621 S:\DOCS\73111.TXT JACK
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pus and is used for Tribal events, as well as available for use by Tribal citizens. 

It is a business facility that brings great pride to the Tribe. 

The Dental clinic which is located in the lower level of this building has created 

economic opportunities not only for the Tribe, but for the Tribal citizens employed 

there. The dental clinic sees both Tribal citizens, as well as members of the larger 

regional community. It creates resources to help fund the Tribal citizen dental program. The clinic is also one of the few clinics in the area that provides services to 

Medicaid dental patients. The Social and Community Services building houses Tribal programs which have a great impact on the Tribal citizens. These programs include youth, education, elders, and Indian Child Welfare. 

Jamestown Properties also received loan guarantees to build the Longhouse Market and Deli. This building, which is leased to JKT Gaming, Inc., houses a unique 

and culturally stunning gas station and market. The Longhouse Market has proven 

to be highly successful not only in operating profits for the Tribe, but also increases 

the Tribe’s tax base. Proceeds from the cigarette tax compact with the State of 

Washington helps provide funds for government services, which are severely underfunded by the Federal government. Fuel tax compact funds are used for needed 

transportation infrastructure projects. The Market has helped the Tribe diversify its 

economic base by providing non-gaming revenues. 

Our Tribe urges the need for an enhanced loan guarantees for Tribal governments 

that will, at the very least, open the door to credit, reasonable rates, and the ability 

to repay tax-exempt debt. Part of the Congressional and Federal rationale to cut 

back this program is that the program could be duplicating other services, such as 

the SBA loan programs. This assumption is wrong and will undermine the Tribes 

economic development efforts. This important program has very positive benefits 

and successes for Indian country. The default rate is low and key in assisting Tribes 

with economic development and providing additional jobs to Indian country. We respectfully urge this Committee to preserve and even enhance this successful program. 

Conclusion 

Investing in our Jamestown Tribal community and business operations and Tribes 

across Indian Country is worthwhile. The Tribe’s progressive approach has proven 

that a small Tribe can be a major force for good in the community—not only for 

Tribal citizens, but for the entire region. This success has led to a decreased dependence on federal funding, and the return of the independent, self-reliant nature that 

has always characterized the S’Klallam people. We effectively and efficiently combine federal and Tribal resources to support economic development projects. 

When Congress invests in Indian Country, we prove to be good investments to 

strengthen our local, state and national economies. We can put our labor force to 

work right away, build our infrastructure for future growth, benefit surrounding 

communities, and most important, improve the health and well-being of our citizens, 

the goal of every government. 

In conclusion, the Jamestown S’Klallam Tribe endorses and promotes the positions and recommendations of our National Inter-Tribal organizations, including the 

National Congress of American Indians (NCAI), the Native American Finance Officers Association (NAFOA) and the Native American Contractors Association 

(NACA). In particular, we respectfully request to include in the Congressional 

Record the briefing materials prepared by NCAI titled, ‘‘White House Native American Business Leaders Roundtable’’ and ask the Committee to support this proposal 

and the recommendations contained therein. 

Thank you again for the opportunity to present these views. We look forward to 

continuing our work with the Committee in advancing these goals. 

Attachment

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The CHAIRMAN. Thank you very much, Chairman Allen. 

Chairman Small, how do you plan to use the impact report to 

further economic development on the reservation and in the region? 

Mr. SMALL. The impact statement was put together by the five 

Tribes of Idaho. The five Tribes are the Fort Hall Tribe, ShoshoneBannock; and the Coeur d’Alene Tribe up in Northern Idaho; the 

Kootenai Tribe clear up further north near the Native border; as 

well as the Nez Perce Tribe and the Shoshone-Paiute Tribes. The 

Shoshone-Bannocks and the Shoshone-Paiutes are on the southern 

part of Idaho. We’re on the southeastern side, and the ShoshonePaiute is on the southwestern side of the state. 

The reason that we put this together was to try to have some 

type of commitment from the State of Idaho in fostering business 

creations, expansion and job roles. The Tribes had had a long history of working with the respective regional communities and other 

governments. The common interest and goals shared by the local, 

Tribal, State and Federal governments can be best served through 

cooperation and communication by working together, which can ensure the agreements made between our forefathers are honored. 

This whole impact statement was specifically, like I indicated a 

little bit, was to try and get some respect from the State of Idaho 

and from the governor. We wanted the governor to at least have 

an Indian seat in the governor’s office like a lot of other states 

have. But our current governor basically refuses to do that. He 

hasn’t even visited our reservations. He travels through there bite 

a bit, but he doesn’t stop there. He doesn’t visit our government. 

Sometimes when we’ve talked with him, he has no idea who we 

are, what we are, why we are and where we came from. He doesn’t 

even understand what treaties are with us. So, we have a huge 

problem with our current governor, and he needs to understand as 

well as some of the State legislators need to understand that we 


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are an economic force when it comes to our reservation. Particularly, the Shoshone-Bannock. 

We’re the largest reservation. We have over 544,000 acres of 

land. 97 percent of that is still in trust, still in trust. It’s either 

owned by Tribes, by the Tribe or by the individual Indians out 

there. And that’s uncommon for these days. A lot of Tribes are 

checkerboard to the point of are they even considered, you know, 

where are they at right now. So, we’ve been able to very jealously 

guard what we have had. We’re purchasing land when we can to 

make it 100 percent soon. But again, when you look at all of the 

farming activity of farming on our reservation, how does any and 

all other economic opportunities that the Tribe could get into? 

We have gaming. It’s not one of our top money-makers on the 

reservation. The top money-maker would be our agricultural land 

base. However, as I indicated in my testimony, that we cannot, for 

some reasons cannot get the capital to do our own farming. We’ve 

entered into some agreements with some of the major potato processing plants in our part of state. And we’ve seen—we’ve seen what 

can be done with our land. We’ve made millionaires out of some of 

the corporate farmers on the reservation, but we’re not. 

The CHAIRMAN. Thank you for your response on that. 

Chairman Allen, in your testimony, you described the success 

your Tribe has had with the 8(a) program. Your concern with that 

program is that additional barriers will be placed on participating 

Tribes as you mentioned. What do you think will happen to Tribes 

if that program is made more restrictive? 

Mr. ALLEN. Well, personally, Mr. Chairman, I think that it’s 

going to suppress and squeeze out the potential for the existing and 

the potential Tribal and individual businesses that want to become 

independent and want to become competitive in that environment. 

What the SBA 8(a) does is it narrows down the competition and allows us to create mentorships with companies that are larger than 

ours. And then we can develop a relationship and skills, the talents 

and the capacity to become successful in a competitive world. 

That’s what its intent is. 

If they continue to restrict, if they continue to narrow it down, 

what it does is it takes us out of the competitive arena for those 

Federal contracts. So, it’s not just Department of Defense. There 

are contracts over in HHS, contracts in the other departments and 

agencies that we should and could access. And 8(a) opens up those 

opportunities. Now, but what would happen if they make it more 

—what actually Section 811 does, it narrows it down. So, those 

companies that are competing for those contracts don’t have that 

same restriction. It’s only for Native 8(a)’s. It’s not for the other 

8(a)’s, so we’re treated differently again. So, if they narrow it down 

some more, then, quite frankly, it just diminishes the potential success of both Tribal and individual 8(a) opportunities. 

The CHAIRMAN. Thank you. 

Chairman Small, in your testimony, you noted that had the Shoshone-Bannock Tribes have increased regional employment by 

4,097 jobs. How many of the jobs went to Tribal members, and how 

many went to local community members? What impact have these 

jobs had on the reservation and on surrounding communities? 

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Mr. SMALL. We have about 1,000 of our people that are working 

for the Tribes itself, the Tribal Government. We have others of our 

people that are working for the local BIA agency offices. We have 

Indian Health Services. That is also, we have a lot of our Tribal 

members that are working there, and we also have some enterprises that are Tribal enterprises. So, we’ve probably got, of all of 

those jobs, about 1,000 of our people are actually working. The rest 

of the work force is made up of other Indians and other non-Indians. 

Most of the jobs that we looked at that are there comes through 

or farming activities. These corporate farmers that are out there, 

they’ve provided the bulk of the jobs on the reservation through the 

farming activity that is there. So again, enough about our agricultural process. 

The CHAIRMAN. Thank you. Chairman Allen, in prior committee 

hearings, you predicted that Tribal economic development opportunities would be impacted if the Carcieri fix did not pass Congress. 

Has your prediction come true? 

Mr. ALLEN. It’s going in the direction of my prediction, Mr. 

Chairman. The problem with the Carcieri, as testified by Brian 

Patterson, is that it creates a very precarious legal standing for 

many of the Tribes. It did create two sets of Tribes, those that were 

recognized by the Federal Government before 1934 and those after, 

without a doubt. And a lot of land has come into trust since then, 

which includes reservations that have gaming operations, of which 

we have a great deal of financial investment in the financial industry. 

And so, it’s much harder for us to access that Federal financing, 

simply because of ‘‘can you engage in this activity’’ or ‘‘what is the 

status of this property with regard to the businesses that you want 

to engage in’’ and its status on that property after 1934 if you are 

recognized as such. So, it’s moving in that direction. And the problem is—there’s many problems it’s creating, but among those problems, it’s creating a lot of legal problems. And Robin Danner was 

talking about legal costs. When you’re fighting for your rights, 

you’re fighting for your opportunity as opposed to using the legal 

profession to put together packages and deals and the legal details 

of a successful business. So, that’s what unfortunate. Now we find 

ourselves in court defending our legal standing. Is the activity taxable, because is it on trust land or not? And so, it’s always about 

jurisdiction between the Tribes and the local government and State 

government. 

And they’re always looking for revenues, and they would just 

love to be able to come in and tax our businesses or our citizens 

that are conducting business on our reservation. So, yes, it’s moving in a very negative direction and creating a fuel to this anti-Indian sentiment that always was prevailing throughout America. 

And now, it’s resurfacing in a different way. And it’s very unfortunate, because we were hoping that we were healing those wounds 

that are generations old. 

The CHAIRMAN. Well, thank you very much. Finally, let me ask 

this both of you what impact do you think these recent financial 

issues could have on Tribes, and what are your concerns when the 

Congressional Debt Committee begins its work? 

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Mr. SMALL. I’m very worried about our ability to secure future 

financing for our projects with the downgrade of the U.S. credit rating. One example is our ongoing $33 million hotel and event center 

project. We are seeing the impacts of the last few weeks from the 

debt ceiling negotiations on this project. We are experiencing financing complications in our efforts to move forward on it. We do 

have a BIA guarantee. But they’re not giving that guarantee much 

respect, because of the downturn. 

And that’s just the bank that we’re currently negotiating with. 

They don’t feel the BIA guarantee is a total guarantee for this 

project because of the recent stuff that’s been going on. And it’s always been difficult for us to access capital for our projects, and the 

economic downturn is going to make things tough. We are worried 

that the banks will freeze lending to us in the future, especially if 

the government doesn’t provide loan guarantees or other incentives 

to lenders. 

We’re also worried that the Congressional Debt Committee is 

going to make massive cuts to basic services to our Tribal members 

such as education, health care and public safety. For Tribes in the 

U.S. like ours, we have—we feel that the U.S. has some treaty responsibilities, which are recognized and in the Constitution. So, we 

feel that we know there’s going to be some massive cuts. We’ve all 

heard about them. But we would like to make sure that we are not 

or we will be immune from those cuts because of the obligations 

under the treaties that we made with the United States Government. 

The CHAIRMAN. Thank you for your response. Chairman Allen. 

Mr. ALLEN. Mr. Chairman, I share Chairman Small’s concerns 

and even fears about the current condition of the financial climate 

and environment. You see very large Tribal packages being renegotiated and establishing new kinds of conditions and even encroachment on Tribal sovereignty in the protection of our trust resources 

and assets. That has to be alarming for Indian Country as those 

developments unfold. The rules, as I had stated earlier, when we 

deal with the financial industry, it’s not the same. We’re not treated the same. If we have a casino, the amortization schedules and 

the balloon requirements, the payment requirements that are imposed on our financing is not the same as a private sector. 

If you were going to build a hotel, it’s not the same as the private 

sector. If we are going to build a hotel, that’s one issue. If Best 

Western builds a hotel, it’s a different standard in terms of the 

kinds of criteria and conditions of leveraging those finances, it’s 

much more restrictive. The cost of money is higher. And now with 

the current financial climate, it’s even more expensive. Many of the 

Tribes want to develop businesses and enterprises or it doesn’t 

matter whether it’s hospitality industry or some other venture. It’s 

difficult to access, and it’s very expensive money to pursue. 

The Stimulus Bill that you passed a couple of years ago required 

the Department of Treasury and the IRS to provide you a report. 

Over a year ago, it was due, and that report was supposed to say, 

supposed to describe what’s wrong with the 1984 Tribal Government Tax Status Act that allowed Tribal Governments to have the 

same status as other governmental entities to go out and secure 

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nomic development and governmental infrastructure. It is very 

problematic. 

The rules, the interpretation of the IRS is much more restrictive 

for Tribes than it is for local and State governments. And that report was supposed to come back to you with recommendations. I 

haven’t seen it yet I’ve heard it was done, and I think that the Senate should ask where is that report and demand it and hold hearings on its recommendations in terms of what I believe is appropriate amendments to that Act that would enhance that kind of opportunity for us to be able to move in that direction. 

I think that there are other financial incentive opportunities for 

the Tribes, because it targets really large projects. We’re talking 

50, 100 million or more. It doesn’t do any good for a Tribe that just 

needs 10 million, which it doesn’t pencil out in terms of going and 

getting that kind of money, you know, for a project with a small 

Tribe, like the Hoh Tribe out in the West Coast with 100 people 

and they just want something small. So, we need to review the financial industry and even discuss with the financial industry why 

are the rules different when you’re lending to the Indian Tribes 

and the Indians citizens than elsewhere, and what you can do 

about it. 

The CHAIRMAN. Well, I want to thank you very much for participating in today’s hearing. This has been very valuable. You have 

helped to define the barriers to economic development, but more 

importantly, you have helped to identify concrete things we can do 

to help clear the barriers an encourage Native communities towards self-sufficiency. When Native economies strive, the benefits 

are far-reaching. Job creation and economic benefits reach county, 

regional and State economies as well. 

So, I look upon what we’re doing as building on a basis here and 

continue to expand it as we go along. And to do it in what Hawaiians call a pono way, meaning correct justification, and to do it 

right. And so, I look forward to continuing this school in the pono 

way to help the indigenous people of our country. And that’s my 

reason for being here, and I tell you I feel so proud and privileged 

to be Chairman of the Indian Affairs Committee, only the second 

indigenous person. Of course, the first was Ben Nighthorse Campbell, Senator, who was the first. 

And so for me, this has been a pleasure. And I intend to continue 

to work on those issues that have in a sense been pushed aside, 

but we need to take care of these in the time that we have. So 

mahalo nui loa. Thank you so much for your help in all of this. And 

again, I just want to remind you, because I want to hear from everybody, though you’ve not been a witness, if you want to write, 

please, you know, let us know what you think. And remember that 

the hearing record is open for written testimony for two more 

weeks. 

So, if you can do that within that, we would certainly appreciate 

it. Again, mahalo nui loa. Aloha, safe trim home to all of you here. 

And I thank God for you, our indigenous people, our country, and 

thank God for what we’re able to do for our people. Mahalo nui loa. 

This hearing is adjourned. 

[Whereupon, at 11:30 a.m., the hearing was adjourned.] 

(103)

APPENDIX

PREPARED STATEMENT OF JAMES D. KIMMEL, HAWAIIAN NATIONAL


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