Remarks by Dr. Elaine Buckberg, Treasury Point of Contact for Tribal Consultation and 

Deputy Assistant Secretary for Policy Coordination in the Office of Economic Policy, on 

“Federal Loan Programs and Tax-Exempt Bond Options for Indian Country” 

9/10/2013 

Seattle, WA 

As Prepared for Delivery 

Good morning. My name is Elaine Buckberg, and I recently became the Treasury’s Point of 

Contact for Tribal Consultation. I also serve as Deputy Assistant Secretary for Policy 

Coordination in the Office of Economic Policy. 

I want to thank NAFOA and Executive Director Dante Desiderio for inviting me to speak to the 

2013 Fall Finance and Tribal Economies Conference. It is a pleasure to be here. 

Dante and VaRene Martin also generously spent the day with me on Saturday, and we visited the 

Puyallup, Squaxin Island, and Jamestown S’Kallam Tribes. It was a fascinating day. I want to 

thank Dante and VaRene, Puyallap Councilman David Bean, Squaxin Island Councilman Ray 

Peters, Jamestown S’Kallam Chairman Ron Allen and their colleagues for taking time from their 

Saturdays to talk with me about their tribes’ economies, financing needs, benefits to tribal 

members, and policy concerns. 

I want to emphasize, at the outset, how much Treasury respects and values the sovereign-tosovereign relationship between your Tribal governments and the Federal Government. 

Treasury is committed to tribal consultation as part of the Nation to Nation dialogue between the 

Federal Government and tribes, as domestic sovereign nations. The tribal consultation process 

allows us to better understand your concerns, your needs, and your circumstances—and to better 

address them. 

We recognize the many challenges facing tribal nations today. We thank you for your 

willingness to work with us to find ways to make our governments more responsive and 

effective. 

We know sequestration has caused new frustration and disappointment. Fiscal year 2014 begins 

on October 1, and we continue to hope that Congress acts to replace the across-the-board cuts 

with a sensible, balanced plan similar to President Obama’s budget. 

Today I will discuss: 

 Recent Treasury initiatives in the areas of sovereignty, economic development, and 

access to credit, and 

 Federal lending and bond programs that can bring capital and credit to Indian Country for 

purposes ranging from tribal economic development and infrastructure to small 

businesses and veterans seeking to buy a home for their family. 
Let me begin with Treasury’s recent and current work affecting tribes. 

The CDFI Native Initiatives Program is launching a new study of Native Communities Access to 

Capital and Credit this fall. The project will provide detailed analysis and quantitative research 

that can lead to actionable recommendations for improving access to capital and credit in Native 

Communities. The CDFI Fund is conducting a focus group to discuss these themes in depth 

right here in Seattle tomorrow and Thursday. I hope many of you will stay to participate. 

On the General Welfare Exclusion, in December of last year, the IRS issued preliminary 

guidance on Indian Tribal government benefits covered by the exclusion. We received a number 

of thoughtful comments from tribes and are currently considering those comments in preparing 

to issue final guidance. 

We have received a number of requests to consider extending the guidance on per capita 

distribution of settlements to per capita distributions more broadly. We are actively considering 

that request. 

We have consulted and intend to issue guidance in the coming months on a number of other 

issues tribes have raised. Tribes in this region have asked that tax-exempt fishing-rights related 

income be eligible to be treated as compensation under Section 415, so that the income may be 

contributed to a qualified retirement plan. We are approaching completion of guidance on this 

issue. 

An Alaska Native Corporation wanted to withhold taxes from dividend payments on the request 

of tribal members—which is convenient for those tribal members and facilitates tax compliance. 

This summer we began consultation on this issue, to understand the potential impact on other 

ANCs. 

We thank Jackie Pata of NCAI for proposing that the IRS’s Indian Tribal Governments program 

have regular dialogue with tribal representatives about how to sensitively and effectively work 

with tribes. Jackie and Christie Jacobs are working together on developing such a program, 

which would supplement the Indian Tribal Government group’s existing Advisory Board. 

The President’s FY 2014 budget contains a number of new tax and bond initiatives that will 

benefit tribes. In particular, Treasury has proposed making permanent the Indian Employment 

Credit and the Returning Heroes and Wounded Warriors Work Opportunity Tax Credits. Both 

credits have been extended numerous times, but often either retroactively or near the expiration 

date, and only for a few years each time. This irregular renewal pattern has led to uncertainty for 

employers regarding the availability of the credits and may limit their effectiveness. We think 

both credits should be made permanent. 

I understand some tribes were interested in and issued Build America Bonds. The Administration 

proposes to create a new and permanent option for municipal direct pay bonds, called America 

Fast Forward bonds; as with Build America Bonds, tribes could be made eligible. 
America Fast Forward bonds would supplement traditional tax-exempt issuance and enable 

issuing governments to fund more infrastructure or services via the bond markets by reducing 

their net interest costs. 

One key benefit to municipal issuers of taxable bonds is the opportunity to attract capital from a 

broader base of investors, including pension funds and foreign investors that do not receive a tax 

benefit from traditional tax-exempt debt. The federal government would then pay direct 

subsidies to issuers, generally 28% of the coupon interest. We know this works. 

By broadening the investor base, Build America Bonds brought down interest costs by about 80 

basis points on 30-year debt. That means issuing governments can raise more, invest more, and 

create more jobs. Let me add that America Fast Forward bonds would be approximately revenue 

neutral for the federal budget, relative to traditional tax-exempt municipal bonds. 

At a recent meeting on the subject of access to capital for Indian Country, someone said to me, 

“What we need is to be able to borrow directly from the Treasury.” The Federal Government 

currently has 30 programs that tribes, non-profits serving tribal members, small businesses, and 

individual tribal members can access for a wide range of purposes. 

A few of these fall directly under the Treasury, notably the CDFI Fund, but more fall under sister 

agencies including the USDA, Small Business Administration, HUD, the Interior Department 

and Department of Veteran’s Affairs. Many of these programs offer below market interest rates 

and long loan maturities; some offer loans of up to $25 million. 

It’s not enough to create credit programs that can benefit tribes, however. They are only 

valuable if used, and they can only be used if the tribes, businesses and individuals who should 

benefit from them know that they exist and how to access them. That’s why, last year, Federal 

Government staff working with tribes across lending agencies got together and compiled all the 

information into a single document, which is now available on the Department of Interior’s 

Indian Affairs website. 

Today I want to talk about those programs and make sure that you, the financial leaders of your 

tribes, know about all the facilities that are available, so you and the members of your tribes can 

access them to promote economic development. I will also address the bond programs available 

to tribes with larger credit needs and the assistance Treasury and the IRS can provide in guiding 

tribes to the right bond program. 

I have heard a number of questions about financing infrastructure investment, which happens to 

be another major focus of my work at Treasury. Two programs, both offered by the USDA, 

support infrastructure investment in energy and water. 

USDA’s Water and Waste Disposal program provides grants, loans and loan guarantees for 

construction, land acquisition, equipment and other costs and fees involved in building new 

water and waste disposal infrastructure. Terms may be up to 40 years and there is no fixed 

maximum amount, although grants may not exceed 75% of project cost. 
Under the Rural Energy for America, or REAP program, loan guarantees to small businesses and 

agricultural producers support investment in renewable energy systems and energy efficiency 

improvements to non-residential buildings and facilities. The loans can be as large as $25 

million, support up to 75% of project costs, and be for terms as long as 30 years. 

Seven programs lend for economic and community development, with loans up to $2 million and 

loan guarantees of up to $10 million. For example, under the USDA Business and Industry 

Guaranteed Loan Program, tribes, cooperatives, businesses and individuals can obtain loan 

guarantees on loans up to $10 million, with exceptions up to $25 million (and above). 

Loan guarantee programs can be similarly valuable to tribes as loans. I know tribes face 

different challenges than state or local governments in accessing capital in that their land is held 

in trust and many lack a steady stream of tax revenues, which makes it difficult for many tribes 

to pledge collateral against a loan. 

To a private lender, a federal guarantee offers better security than collateral: there are no assets 

to be sold, with uncertain timing or value, nor potential delays in collecting pledged revenue. A 

federal guarantee should greatly improve private lenders’ willingness to lend, by resolving the 

collateral issue, and bring down interest rates to reflect the reduced risk. Federal guarantees are 

not free, but I would expect the interest rate reduction to be more than the guarantee fee. 

I also know that quality housing is a chronic issue in Indian Country. HUD, USDA and the 

Department of Veterans’ Affairs together offer 10 housing loan and loan guarantee programs that 

can help finance housing construction and home purchases. Tribes can access three different 

housing finance programs; nine programs serve tribal members. 

Another nine programs provide financing to small businesses with loans of up to $5.5 million; 

seven loan directly to businesses; tribes and tribal non-profits can access another three programs, 

and then use those funds to provide financing to small businesses. 

Let me focus on a Treasury program, run by the Community Development Financial Institutions 

Fund, or CDFI Fund. Amber Kuchar of the Native CDFI program will be moderating a session 

on CDFIs later this afternoon, and I visited a native CDFI, the Chehalis Tribal Loan Fund, with 

her yesterday. I want to also thank them for the time they spent with us yesterday. 

The new CDFI Bond Guarantee Program can be a valuable source of credit and capital to Indian 

Country, as it provides long-term capital, up to 30 years, at below-market rates to eligible CDFIs. 

Tribes can partner with CDFIs that participate in the program to obtain federally guaranteed 

financing for projects. 

These could be native CDFIs or other CDFIs active in Indian Country. If a tribe or related entity 

has strong community and economic development projects, the CDFI can frame their application 

around them—and strengthen their application and the probability of winning financing. The 

FY2013 round is complete, but the Administration is advocating for continued funding of the 

program by Congress in FY2014. 
Last, let me discuss bond issuance options for tribes. Tribes can issue bonds under three 

programs: tax-exempt bonds, Tribal Economic Development Bonds, and so-called New Clean 

Renewable Energy Bonds (New CREBs) to finance renewable energy projects. 

Tribes have long been able to issue tax-exempt bonds for essential government functions. That 

remains true today. As I mentioned, the Administration also wants to offer America Fast 

Forward bonds as a permanent taxable alternative with a subsidy directly paid by the Federal 

Government to the issuer. 

Tribal Economic Development Bonds are another way to increase investments in Indian Country 

and enable Tribal governments to issue bonds without the essential government function 

requirement. There remains over $1.5 billion in Tribal Economic Development Bond authority. 

The maximum allocation available to any one tribe is currently just under $300 million. This 

per-tribe ceiling will decline as the total authority is used. 

A number of tribes have energy resources; others have land suitable for renewable energy 

development such as wind farms. Tribes are eligible to issue New Clean Renewable Energy 

Bonds or New CREBs. Some of the $2.4 billion in initial allocations made by Treasury and the 

IRS in 2009 were not used and have and reverted back to the IRS. 

That unused volume will soon be available for re-allocation, and Treasury and the IRS currently 

are working on guidance for that re-allocation process. New CREBs can be issued as either 

qualified tax credit bonds or issuers may choose to issue New CREBs as direct pay bonds. 

Staff at Treasury and the IRS are happy to consult with tribes to discuss whether a particular 

bond option is suitable for your needs. Consulting with us is absolutely free, and there is no 

reason not to take advantage of it if you are considering a bond issue. It can help point you in the 

right direction early in your planning process. There is also a wealth of information available on 

the IRS website. 

I am heartened when I hear success stories of tribes overcoming the special challenges they face 

in bond issuance and obtaining bank loans. Some have involved creative approaches. One 

leader told me that his tribe closed the deal on loans by agreeing to be subject to state law in the 

event of default, addressing concerns about sovereign immunity. 

I urge tribes to share your successes and gather and document best practices. Making such best 

practices available to other tribes, bond counsel, banks and underwriters will help facilitate 

future borrowing and bond issuance. 

I will be here all day, and tomorrow morning at the CDFI Fund’s Tribal Focus Group on 

Accessing Capital and Credit in Native Communities. I hope to talk with many of you about 

your views and concerns, especially on economic development and access to credit and capital. 

If you see me, please stop and introduce yourself. 

Thank you. I would be happy to take a few questions.