[Senate Report 116-28]
[From the U.S. Government Publishing Office]
Calendar No. 63
116th Congress} { Report
SENATE
1st Session } { 116-28
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TO AMEND THE NATIVE AMERICAN BUSINESS DEVELOPMENT, TRADE PROMOTION, AND
TOURISM ACT OF 2000, THE BUY INDIAN ACT, AND THE NATIVE AMERICAN
PROGRAMS ACT OF 1974 TO PROVIDE INDUSTRY AND ECONOMIC DEVELOPMENT
OPPORTUNITIES TO INDIAN COMMUNITIES
_______
April 8, 2019.--Ordered to be printed
_______
Mr. Hoeven, from the Committee on Indian Affairs, submitted the
following
R E P O R T
[To accompany S. 212]
[Including cost estimate of the Congressional Budget Office]
The Committee on Indian Affairs, to which was referred the
bill (S. 212) to amend the Native American Business
Development, Trade Promotion, and Tourism Act of 2000, the Buy
Indian Act, and the Native American Programs Act of 1974 to
provide industry and economic development opportunities to
Indian communities, having considered the same, reports
favorably thereon without amendment and recommends that the
bill do pass.
PURPOSE
The purpose of S. 212 is to amend three Federal laws
relating to business, economic, and trade development in Indian
communities. These amendments are intended to increase access
to capital for Indian tribes and businesses, increase
opportunities for Indian business promotion, and create
mechanisms and tools to attract investments in Indian
communities.
NEED FOR LEGISLATION
The Committee has held numerous hearings and listening
sessions at which Indian tribal leaders, business owners, and
entrepreneurs testified regarding significant challenges to
economic development in Indian communities. The most prevalent
problem has been accessing capital to start, build, and grow
businesses. Long-range planning and coordination for tribal
community development to facilitate business growth has also
been an issue for many Indian tribes. Moreover, Federal
programs which assist economic development have not been
adequately supportive of Indian communities' economic growth.
Despite these problems, the Committee is confident that the
potential for long-term sustainable and stable economies exists
and can be fulfilled through both legislative and
administrative improvements.
The bill, S. 212, is an important first step toward these
goals and addressing these problems. Moreover, this bill can
help create jobs at the local level and assist small business
growth and development and assist Indian tribes to engage in
more cohesive community development. In addition, S. 212
reduces the costs of engaging in economic development projects
in Indian communities by rolling back Federal bureaucratic
oversight.
BACKGROUND
The prospect of prosperity often falls short in many Indian
communities across the nation. Too many of these communities
across the nation face unique and daunting challenges. High
rates of unemployment, crime, and poverty and other problems
are compounded by the lack of adequate infrastructure, rugged
terrain, and geographic isolation of these communities.
In fact, many of these problems have persisted for years.
The Committee noted that:
The unemployment rate for American Indian and Alaskan
Native populations continues to hover at 50%, with some
Native communities suffering unemployment rates of 80-
90%. In addition, American Indians and Alaskan Natives
have the highest poverty rate in the country at 30%.
These statistics reflect a variety of factors including
poor physical infrastructure, lack of human capital,
lack of access to financial capital, a long-standing
dependence on [F]ederal transfer payments, and an
almost non-existent private sector economy in Native
communities.\1\
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\1\S.Rpt 106-149, 106th Cong., 1st Sess., Sept. 8, 1999, at 2.
The Federal government continues its efforts to address
this troubling reality, but Tribes feel more efforts are
needed. In her testimony before this Committee on behalf of the
Department of the Interior, Ms. Cheryl Andrews-Maltais stated
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that:
Native communities have experienced disproportional
barriers to economic development. Economic development
is critical for building capacity in Indian Country in
other areas such as law enforcement, health, education,
natural resource management, and infrastructure. Even
in good economic times, the unemployment rate in these
communities and villages is double the national
average.\2\
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\2\Legislative Hearing on S.2285, S.3234, S.3261, and H.R.4685
Before the S.Comm. Indian Affairs, 114 Cong. 2 (2016) (Statement of
Cheryl Andrews-Maltais, Sr. Policy Adv., A. Sec. on Indian Affairs,
U.S. Dep't of the Interior, at 11).
Ms. Alejandra Castillo, on behalf of the Department of
Commerce, reiterated that ``by any socioeconomic indicator,
Native Americans are the most underserved population in the
Country.''\3\
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\3\Accessing Capital in Indian Country, Hearing Before the S. Comm.
Indian Affairs, 114 Cong. 1 (2015) (Statement of Alejandra Castillo, at
3).
Mr. Michael R. Smith, also on behalf of the Department of
the Interior, has further elaborated on the economic inhibitors
Indian communities face in trying to build stable and
sustainable economies which ultimately will reduce unemployment
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and help reduce a host of other social problems:
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.\4\
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\4\Strengthening Self-Sufficiency: Overcoming Barriers to Economic
Development In Native Communities, Field Hearing Before the S. Comm.
Indian Affairs, 112 Cong. 1 (2011) (Statement of Michael R. Smith, Dep.
Bureau Dir., Field Operations, Bureau of Indian Affaris, U.S. Dep't of
the Interior, at 3).
The Committee has long focused on and prioritized helping
``Indian communities to prosper and to enjoy healthier
lives.''\5\ In a 2015 hearing, then-Chairman of the Committee,
Senator John Barrasso stated that ``fundamental to these goals
is the need to build sustainable tribal economies and create
jobs in Indian communities. Economic development and the
capital necessary for that development are significant needs in
Indian communities.''\6\ These Indian communities ``are located
in remote areas, far away from transportation, distribution, or
communication systems suitable for sustainable commerce.''\7\
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\5\Accessing Capital in Indian Country, Hearing Before the S. Comm.
Indian Affiars 114 Cong. 1 (2015) (Statement of John Barrasso,
Chairman, S. Comm. Indian Affairs, at 1).
\6\Id.
\7\Id.
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OVERVIEW
This legislation, S. 212, would amend three Federal laws
relating to economic development in Indian communities: the
Native American Business Development, Trade Promotion, and
Tourism Act of 2000, the Native American Programs Act, and the
Buy Indian Act.
Native American Business Development, Trade Promotion, and
Tourism Act of 2000. S. 212 would amend the Native American
Business Development, Trade Promotion, and Tourism Act of 2000
to:
Require coordination between the Secretaries
of Commerce, Interior, and Treasury to develop
initiatives encouraging investment in Indian
communities;
Elevate the Director of Indian Programs in
the Department of Commerce and authorize the funding
for operations; and
Make permanent the waiver of the requirement
for Native CDFIs to provide a matching cost share for
assistance received by the Treasury CDFI.
The Committee noted long ago that ``better coordination of
[F]ederal Indian economic development programs and resources
will promote greater efficiency as tribes, tribal members,
private sector representatives, and individuals engage in
business development on Indian lands.''\8\ To that end, during
the 106th Congress, the Committee favorably reported S. 401,
which proposed the establishment of an Office of Native
American Business Development in the Department of Commerce.
The Committee included the establishment of that Office in the
legislation ``to promote both intra-agency and inter-agency
coordination of [F]ederal programs that affect Indian economic
development.''\9\ This provision became a part of S. 2719,
which passed both the Senate and the House of Representatives
and was signed into law by the President as P.L. 106-464.
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\8\S.Rpt.106-149, 106th Cong., 1st Sess., Sept. 8, 1999, at 2.
\9\Id.
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The Committee, however, is concerned that implementation of
P.L. 106-464 has not aligned with Congressional intent and has
been ineffective at promoting economic development and reducing
poverty and unemployment in Indian communities. This
legislation, S. 212, would advance these goals in a more
effective manner by elevating the Office and ensuring proper
Secretarial attention to the economic development needs of
Indian Country.
The legislation would further increase the coordination
among and accountability of the Federal agencies as well. The
Secretaries of Commerce, Interior, and Treasury would be
required to collaborate to promote investment in Indian
communities, identify barriers to such investments, and ensure
consultation with Indian tribes. Not less than every three
years, these Secretaries would be required to report to
Congress on the results of the initiatives developed.
This coordination is necessary, not only for developing
initiatives, but also for collecting information and data
needed to identify and reduce barriers to investments. Mr.
Black, testifying on behalf of the Department of the Interior,
explained that ``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.''\10\
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\10\Strengthening Self-Sufficiency: Overcoming Barriers to Economic
Development In Native Communities'' Field Hearing before the S.Comm.
Ind. Aff. August 17, 2011. 112th Cong., at 5.
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The Department of Commerce, particularly through the Office
of Native American Business Development, has already developed
a variety of cooperative programs. Ms. Castillo testified
before this Committee that the Minority Business Development
Agency of the Department of Commerce ``work[s] closely with
other Federal agencies outside the Department of Commerce such
as the Small Business Administration and Treasury to leverage
existing programs that increase capital opportunities for MBEs
through micro lending, community development, financial
institutions, and other loan guarantee programs.''\11\
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\11\Accessing Capital in Indian Country. Hearing before the S.Comm.
Ind.Aff., June 17, 2015. Statement of Alejandra Castillo, at 4.
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This cooperation has led to relatively significant results.
For example, this ``network center has served 1,100 American
Indian and Alaskan Native firms. Further, over the past six
fiscal years, FY 2009 through FY 2014, the MBDA has assisted
Native American clients in accessing over $1.8 billion in
capital.'' The Committee strongly believes that additional
cooperation, collaboration, and consultation with Indian
Country could lead to even more remarkable results.
In increasing access to capital, the Native Community
Development Financial Institutions (CDFIs) have been relatively
successful in delivering capital to underserved Indian
communities. Mr. Dennis Nolan, on behalf of the Department of
the Treasury, acknowledged that ``[t]he CDFI Fund's work in
Indian Country is born of an awareness that Native communities
all across the Nation face extraordinary economic challenges
and limited access to capital.''\12\
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\12\Economic Development: Encouraging Investment in Indian Country,
Hearing Before the S. Comm. Indian Affairs, 113 Cong. 2 (2014)
(Statement of Dennis Nolan, Acting Dir., Community Dev. Financial
Institutions, U.S. Dep't of the Treasury, at 2).
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Mr. Nolan testified, ``In 2001, the CDFI published the
landmark Native American Lending Study . . . [which] identified
17 major barriers that limit access to capital in Native
communities and offered a variety of recommendations to address
them.''\13\ Within ten years, the number of Native CDFIs grew
from just a few to 68 in 21 states.\14\
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\13\Id.
\14\Id.
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These Native CDFIs typically provide microloans up to
$250,000 for Indian businesses and entrepreneurs, with an
average loan of approximately $24,000.\15\ From 2004 to 2014,
``Native CDFIs that received NACA program awards [from the
Department of the Treasury's Native American CDFI Assistance
Program] made over 15,000 loans totaling $365 million in Native
communities.''\16\ Additionally, ``[c]ertified CDFIs made
almost 7,000 loans and investments totaling $184 million in
Native communities. Native CDFIs reported that their loans and
investments created or retained more than 2,000 jobs.''\17\
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\15\The University of Arizona Native Nations Institute, ``Access to
Capital and Credit in Native Communities,'' (May 2016), at 14.
\16\Id.
\17\Economic Development: Encouraging Investment in Indian Country,
Hearing Before the S. Comm. Indian Affairs, 113 Cong. 2 (2014)
(Statement of Dennis Nolan, Acting Dir., Community Dev. Financial
Institutions, U.S. Dep't of the Treasury, at 3.
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Native CDFIs receive some Federal funding to make these
loans. In its annual Appropriation Acts, Congress waives the
cost share requirement for the respective fiscal year for
Native CDFI awardees. This legislation, S. 212, would make that
waiver permanent. With a permanent waiver, Native CDFIs can
more efficiently provide access to capital to underserved
Indian communities.
The Committee reiterates Mr. Nolan's statement that ``[the
Treasury CDFI Fund's] work and the work of every Native CDFI is
about changing lives and building stronger, more resilient
communities.''\18\ This serious mission mandates that every
effort be taken to strengthen and support this important tool
for Indian community economies.
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\18\Id.
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Native American Programs Act. The bill would amend the
Native American Programs Act to:
Reauthorize the economic development
programs;
Prioritize grant applications for building
tribal court systems and code development for economic
development; supporting CDFIs; and developing master
plans for community and economic development; and
Prioritize groups engaged in the above
mentioned activity when providing technical advice.
In 2001, then-Vice Chairman of the Committee, Senator Ben
Nighthorse Campbell, stated that ``it is increasingly apparent
that the kind of governing environment that a tribe has in
place will determine whether or not businesses will prosper and
jobs and income will flow.''\19\ He further elaborated that
``[b]y `good governance' I mean stable institutions with
administrative capacity, fair and effective dispute resolutions
with an appeals process, a separation of politics from business
management and transparency in government, to name a few.''\20\
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\19\Indian Tribal Good Governance Practices as they Relate to
Economic Development, Hearing Before the S. Comm. Indian Affairs, 107
Cong. 1 (2001) (Statement of Sen. Ben Nighthorse Campbell, V. Chairman,
S. Comm. Indian Affairs, at 1).
\20\Id.
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Mr. Andrew Lee, testifying before the Committee, noted that
``[g]overnance goes a long way toward explaining why some
tribes are able to break poverty, dependency and their related
social ills while others languish.''\21\ He further explained
that based on research from the Harvard Project, ``[t]ribal
enterprises that are formally insulated from political
interference are four times as likely to be profitable from
those that are not.''\22\
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\21\Indian Tribal Good Governance Practices as they Relate to
Economic Development, Hearing Before the S. Comm. Indian Affairs, 107
Cong. 1 (2001) (Statement of Andrew Lee, Ex. Dir., Harvard Proj. on
American Indian Econ. Dev., John F Kennedy Sch. Of Gov., Harvard Uni.,
at 28).
\22\Id. at 29.
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The November 2001 Report of the Native American Lending
Study noted that ``one major barrier to capital access related
to legal infrastructure'' was the ``uncertain tribal commercial
laws and regulations and the absence of an independent
judiciary.''\23\ In testimony before the Committee, Mr. Derrick
Watchman, Chairman of the Board of the National Center for
American Indian Enterprise Development (NCAIED), underscored
that finding.
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\23\The Report of the Native American Lending Study. Community
Development Financial Institutions Fund. U.S. Dept. of the Treasury.
November, 2001, at 4.
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A banker by trade, Mr. Watchman testified before the
Committee on how tribal governments, the banks, and the Federal
Government could facilitate access to capital in Indian
Country.\24\ He stated, ``it is very helpful for tribal
governments to establish a uniform commercial code
system.''\25\ Businesses can utilize such systems to resolve
commercial disputes in fair and equitable ways in tribal
courts. With access to capital highlighted as one of the most
prevalent problems for tribal economic development, the need to
address the legal infrastructure issues is a significant
priority. Various Federal programs provide tribal court funding
for code development, but these are usually designed to address
criminal justice needs.
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\24\ Accessing Capital in Indian Country, Hearing Before S. Comm.
Indian Affairs, 114. Cong. 1 (2015) (Statement of Derrick Watchman,
Chairman, Board of Dir.'s, National Center for American Indian
Enterprise Dev, at 8).
\25\Id.
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Rather than divert resources designed to build tribal
criminal justice capacity, the Committee turned to the social
and economic development programs authorized by the Native
American Programs Act to assist in developing the legal
infrastructure necessary for increasing access to capital.
Mr. Watchman further testified that ``[s]trategic clarity
(with strategies that are aligned with community ideals and
backed with community support)'' is an important consideration
for tribal policymakers in facilitating economic development.
To that end, S. 212 prioritizes the development of tribal
master plans for community and economic development as
authorized activities for the Native American Programs Act's
grant programs. The Harvard Project findings also suggest that
such master plans will be useful in promoting economic
development. The Project has found that ``successful economies
in Indian Country stand on the shoulders of culturally
appropriate governing institutions.''\26\
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\26\Indian Tribal Good Governance Practices as they Relate to
Economic Development, Hearing before the S. Comm. Indian Affairs, 107
Cong. 1 (2001) (Statement of Andrew Lee, Ex. Dir., Harvard Proj. on
American Indian Econ. Dev., John F Kennedy Sch. Of Gov., Harvard Uni.,
at 29).
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However, the grants authorized by the Native American
Programs Act neither prioritized nor encouraged a focus on
legal infrastructure building or master planning for economic
development purposes. This legislation, S. 212, would change
this by restructuring the priorities among the social and
economic development grants so that the following applications
would receive priority consideration: those that would provide
technical assistance related to building tribal court systems
and codes; those that develop Native CDFIs; and those that
promote master planning for economic development purposes.
Those priorities, however, would only extend to fifty
percent of the funding for the Act's social and economic
development programs. This is necessary to ensure that a
variety of economic development projects are funded through
these programs each year.
According to the officials of the Administration for Native
Americans, which administers these grants, the current method
for selecting grantees does not have set percentages for
different types of projects; nor does it otherwise distinguish
among them. Grants are awarded based only on the number of
points received during the assessment process.
Because there are so many applications, a priority
structure without caps based on project type could potentially
exhaust all funding on one or two types of projects, at the
expense of all other economic and social projects. By requiring
that only fifty percent of available grant funding be governed
by the bill's priority structure, S. 212 can achieve its twin
ends of prioritizing the projects that research has shown are
most fundamental to increasing access to capital, and not
impeding other types of economic development projects.
Buy Indian Act. The bill would amend the Buy Indian Act to:
Facilitate agency compliance with the Buy
Indian Act's provisions when covered agencies, such as
the Bureau of Indian Affairs (BIA) and Indian Health
Services (IHS), engage in procurement; and
Require more accountability in implementing
this Act.
The Buy Indian Act was enacted in 1910. The Bureau of
Indian Affairs ``has obtained services and supplies from Indian
sources using the Buy Indian Program since 1965, based on
policy memoranda and acquisition.''\27\
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\27\78 F.R. 34266 (June 7, 2013).
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In 2013, the Bureau of Indian Affairs issued regulations to
``describe[] uniform administrative procedures that [the
agency] will use in all of its locations to encourage
procurement relationships with eligible Indian Economic
Enterprises in the execution of the Buy Indian Act.''\28\ On
the other hand, the Indian Health Service, to which the Buy
Indian Act also applies, has yet to issue regulations governing
its use of the Buy Indian Act.
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\28\ Id.
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Indian business owners and entrepreneurs have long
expressed concerns that both agencies have not fully or
appropriately implemented the Buy Indian Act, thereby denying a
significant amount of business to Indian entrepreneurs.\29\
According to Michael G. Anderson, Executive Director for the
Native American Contractors Association:
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\29\See Economic Development: Encouraging Investment in Indian
Country.
The Federal Procurement Data System shows that since
[F]iscal [Y]ear 2013, the [BIA] has procured $103.3
million under Buy Indian [sic] out of $1.22 billion
spent (8.5 percent). At the same time, the [IHS]
procured $15.1 million under Buy Indian [sic] out of
$3.3 billion spent (0.5 percent). If we were to assume
a Buy Indian [sic] goal of just 23 percent--the goal
for [F]ederal small business contracting--that would
translate to $200 million more in potential BIA
opportunities and $800 million more in potential IHS
opportunities.\30\
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\30\Michael G. Anderson. Tribal Business Journal. Buy Indian Act.
Available at http://tribalbusinessjournal.com/news/buy-indian-act/.
Mr. Anderson, who before House Committee on Natural
Resources Subcommittee on Indian, Insular, and Alaska Native
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Affairs last Congress, further testified that:
The investment impact to Native communities is
quantifiable. For Interior every 1% increase in Buy
Indian awards equates to a $118 million increase.
Assuming a conservative 5% profit to IEEs, a 1%
increase equates to $5.9 million in economic
development to Native communities. For IHS, every 1%
increase in Buy Indian awards equates to a $30 million
increase. Using the same 5% profit, a 1% increase
translates to $1.5 million in economic development
available to Native communities.\31\
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\31\Legislative Hearing on S. 607 and S. 1116 Before H. Comm. on
Nat. Res. Subcom. on Indian, Insular, and Alaska Native Affairs, 115th
Cong. 2 (2018) (Statement of Michael G. Anderson, Executive Director,
Native American Contractors Association).
At a Committee on Indian Affairs hearing in the 114th
Congress, the Department of Interior's Senior Policy Advisor to
the Acting Assistant Secretary on Indian Affairs Ms. Andrews-
Maltais testified, ``Buy Indian Act is an important component
of the Department's goal of fostering and supporting American
Indian/Alaska Native entrepreneurship.''\32\
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\32\Legislative Hearing on S. 2285, S. 3234, S. 3261, and H.R. 4685
Before the S. Comm. Indian Affairs, 114 Cong. (2016) (Statement of
Cheryl Andrews-Maltais, at 12).
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Although the new BIA regulations have been issued to
improve such procurement, the Committee strongly believes that
legislative refinements are needed to ensure that the Buy
Indian Act will be implemented more fully and consistently
throughout both the BIA and IHS. S. 212 codifies several
provisions of BIA's regulations, adds more training
requirements, and increases accountability for both agencies.
The Committee expects that the agencies will expeditiously and
consistently implement these provisions.
LEGISLATIVE HISTORY
On January 24, 2018, Senator Hoeven introduced S. 212.
Senator McSally joined as a co-sponsor on February 4, 2019. The
Senate referred the bill to the Committee on Indian Affairs. On
January 29, 2019, the Committee met at a duly called business
meeting to consider S. 212, among other bills. By voice vote,
the Committee ordered the bill, without amendment, favorably
reported to the Senate.
In the 115th Congress, Senator Hoeven introduced S. 1116, a
similar predecessor bill, on May 11, 2017. Senator McCain
joined him as an original co-sponsor. The bill was referred to
the Committee on Indian Affairs, which held a business meeting
on May 17, 2017, to consider the bill. Senator Cortez Masto
proposed an amendment, which the Committee adopted, that
provided changes to the consultation procedures between the
Securities and Exchange Commission and Indian tribes. The
Committee ordered the bill, as amended, reported favorably.
On March 22, 2018, the Senate passed S. 1116 by voice vote
and sent the bill to the House of Representatives, which
referred it to the Committees on Natural Resources and on
Education and the Workforce. On July 24, 2018, the Subcommittee
on Indian, Insular and Alaska Native Affairs of the Committee
on Natural Resources held a hearing on the bill. The House of
Representatives took no further action on the bill.
In the 114th Congress, Senator Barrasso introduced S. 3234,
a similar predecessor bill, on July 24, 2016. Senator McCain
joined him as an original co-sponsor. The Senate referred the
bill to the Committee on Indian Affairs. On September 7, 2016,
the Committee held a legislative hearing on the bill. Ms.
Cheryl Andrews-Maltais testified on behalf of the Department of
the Interior in support of the bill and recommended technical
refinements for the bill.
On September 21, 2016, the Committee held a duly called
business meeting to consider S. 3234. Senator Barrasso offered
a substitute amendment which made a number of technical or
clarifying, conforming, and substantive changes to the bill as
introduced.
The technical or clarifying changes occurred in:
the findings in Section 2 of the bill;
the duties of the Director in Section 3;
the position responsible for interagency
coordination in Section 3;
the permanent waiver of the cost sharing
requirement for Native CDFIs in Section 3; and
the reporting requirements under the Buy
Indian Act in Section 4.
The substitute amendment's conforming changes modified the
definitions in Section 3 of the bill by striking the
definitions of ``Fund'' and ``Native community development
financial institution'' and clarifying ``Native community
development financial institution''.
For the interagency coordination initiatives in Section 3,
the substitute amendment:
included Indian organizations with
experience in providing entrepreneurial training as
participants in these initiatives;
required the agencies to work with the
Authority established in 2000 to identify barriers to
increasing investments and economic measures in Indian
communities; and
required a report (every 3 years) to
Congress regarding improvements to Indian communities
from these initiatives.
The amendment additionally made the following changes:
Replaced the Indian Economic Development
Fund with a GAO study on Federal capitalization
programs, capital needs and demand in Indian
communities, extent of and comparison between Indian
and non-Indian use of these programs;
Struck the definition of ``Fund,'' and
clarified the definition of ``Native Community
Development Financial Institution'' in Section 3;
Struck the Indian Trader Act provisions from
the bill; and
Set a fifty percent cap on the amount of
grant funding for the Native American Programs Act
social and economic development programs which would be
governed by the priorities set forth in S. 3234.
The Committee adopted the amendment and ordered the bill,
as amended, reported favorably. The Congressional Budget Office
did not issue a cost estimate prior to the end of the 114th
Congress. The Senate took no further action on the bill.
SECTION-BY-SECTION ANALYSIS
Section 1. Short title
Section 1 sets forth the short title of the bill as the
``Indian Community Economic Enhancement Act of 2019''.
Section 2. Findings
Section 2 sets forth the findings which state that Indian
tribes must overcome many barriers to bring industry and
economic development to Indian communities. These barriers
include geographic location, lack of infrastructure, lack of
sufficient collateral and capital, and regulatory bureaucracy.
These barriers increase the costs of doing business in Indian
communities.
The Federal government has an important government-to-
government relationship with tribes, and a role in facilitating
healthy and sustainable tribal economies. The input of tribes
is important for developing Federal policies and programs
designed to assist Indian tribes and Indian entrepreneurs in
building tribal economies.
Tribal infrastructure needs repair, but access to private
capital is limited. Federal capital improvement programs, such
as loan guarantees and programs that facilitate tax-exempt bond
financing, can help build tribal infrastructure.
Tribes are not treated as states or local governments under
federal tax and regulatory law, which impedes their ability to
raise capital, invest, and benefit from other investment
incentives. As a result, investors may avoid financing in
Indian communities, making economic projects costly and
inaccessible. In order to facilitate private financing for
urgent development needs, federal loan programs specific to
Indian communities need support. Tribal trust or restricted
property cannot be held as collateral. Transactions involving
trust or restricted property, such as leases or rights-of-ways,
are subject to the Bureau of Indian Affairs' approval process
which adds delays or costs to projects.
Section 3. Community development
Section 3 amends the Native American Business Development,
Trade, Promotion, and Tourism Act of 2000 (25 U.S.C. 4301) by
clarifying policies, adding definitions, and creating two new
subsections. This section would ensure that the findings and
purposes of trade promotion and business development apply to
all Indian businesses, not just those that seek assistance
pursuant to this statute.
This section would add definitions for the ``Director''
(which is referenced but not defined in current law); ``Native
Community Development Financial Institutions (CDFIs)'' which
are CDFIs authorized under Section 103 of the Community
Development Banking and Financial Institutions Act of 1994
serving Indian reservations or tribes; and ``Office'' which is
the Office of Native American Business Development within the
Department of Commerce.
This section describes the role of the Director of the
Office of Native American Business Development, giving the
holder of that office significant responsibility. The Director
would report to the Secretary of Commerce, and serve as the
policy advisor on the trust responsibility and as the point of
contact for Indian tribes for Departmental programs. The
Director would be required to coordinate with all Department
offices and agencies to ensure there is an accountable process
for consultation regarding Departmental programs and policies.
This section also caps the amount of funding authorized for the
operations of this Office at $2 million per fiscal year.
This section adds a new Section 8 (25 U.S.C. 4307) to
Native American Business Development, Trade Promotion, and
Tourism Act of 2000, and would:
Require, not later than one year after
enactment, interagency coordination between the
Secretaries of Interior, Commerce, and Treasury to
develop initiatives
to encourage investments in Indian
communities, examine collateral alternatives, and use
tribal colleges to provide entrepreneurial training;
to identify regulatory or legal barriers
to increasing such investments; and to consult with
Indian tribes regarding increasing such investments;
Require, at least once every three years, a
report to Congress that details the impact of these
initiatives on Indian communities;
Require consultation between the Securities and Exchange
Commission (SEC) and Indian tribes on statutory or regulatory
changes needed for Indian tribes to qualify as an accredited
investor under SEC regulations, so that Indian tribes have the
ability to withstand investment loss on a basis comparable to
other legal entities who are not natural persons; and
Require that the Government Accountability
Office conduct a study to assess current Federal
capitalization and programs that are available to
assist Indian communities with economic and community
development.
The study shall assess the demand and
utilization of each program, the capital needs of
Indian tribes and communities related to economic
development, and the extent to which similar programs
have been used to assist non-Indian communities in
comparison.
The GAO shall submit a report on the
findings of this study to the Senate Committee on
Indian Affairs and the House Committee on Natural
Resources not later than 18 months after the date of
enactment.
Section 4. Buy Indian Act
Section 4 would amend the Buy Indian Act (25 U.S.C. 47) in
three substantive ways.
First, it would ensure that the Bureau of Indian Affairs
and the Indian Health Service consider the Buy Indian Act in
its procurement decisions by
Requiring the agencies to utilize the Buy
Indian Act preferences unless the Departments determine
such procurement decisions would not be practicable and
reasonable; and
Clarifying that facilities construction is
also authorized for Buy Indian Act consideration.
In addition, this section would require:
The Secretaries of Interior and Health and
Human Services to conduct outreach to Indian
businesses, provide training, and issue regulations;
Regional office data on implementation;
Procurement management reviews to include a
review of implementation of the Buy Indian Act; and
Consultations with various stakeholders on
how compliance with this statute can be harmonized with
other procurement goals.
This section would require a biannual report from the
agencies on implementation, including:
The names and efforts of each agency under
the respective Secretaries' jurisdiction and
Departments to which this Act applies;
A summary of the purchases;
Data on increases or decreases in usage;
Methods for conducting market searches for
qualified vendors;
A summary of deviations;
The total number and dollar amount of
contract awards;
Any administrative or legal barriers to
achieving the goals of the statute; and
Recommendations for legislative or
administrative actions to address the barriers.
Section 5. Native American Programs Act
Section 5 amends the Native American Programs Act of 1974
(42 U.S.C. 2991) in three substantive ways.
First, for economic development programs administered under
this Act, this section would authorize Native CDFIs to be
eligible grantees. It also creates a priority structure for the
grant assessment process, giving priority to those applicants
whose programs seek to develop tribal codes and court systems
relating to economic development; aim at developing nonprofit
subsidiaries or other tribal business structures; develop or
maintain CDFIs; or develop tribal master plans for community
and economic development and infrastructure.
Additionally, the Commissioner of the Administration for
Native Americans, who oversees the grant program, shall also
prioritize projects that fall into the above mentioned
categories when providing technical advice.
Finally, this section reauthorizes the Act's grants for
fiscal years 2018 through 2022 at level funding.
COST AND BUDGETARY CONSIDERATION
The cost estimate for S. 212, as calculated by the
Congressional Budget Office, is set forth below:
U.S. Congress,
Congressional Budget Office,
Washington, DC, March 5, 2019.
Hon. John Hoeven,
Chairman, Committee on Indian Affairs,
U.S. Senate, Washington, DC.
Dear Mr. Chairman: The Congressional Budget Office has
prepared the enclosed cost estimate for S. 212, the Indian
Community Economic Enhancement Act.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contact is Jon Sperl.
Sincerely,
Keith Hall,
Director.
Enclosure.
S. 212--To amend the Native American Business Development, Trade
Promotion, and Tourism Act of 2000, the Buy Indian Act, and the
Native American Programs Act of 1974 to provide industry and
economic development opportunities to Indian communities.
S. 212 would reorganize the Office of Native American
Business Development (ONABD) within the Department of Commerce
(DOC), require that office to serve as the liaison between DOC
and Indian tribes, and permanently authorize the appropriation
of $2 million a year for that office (or $20 million through
2029). Current law authorizes the appropriation of whatever
amounts are necessary for ONABD operations; however, no funds
have been appropriated for such purposes since ONABD was
originally authorized.
The bill also would authorize the appropriation of $34
million a year from 2020 through 2024 (totaling $170 million
over the five years) for the Department of Health and Human
Services (HHS) to make grants to assist the social and economic
development of Native American communities. The authority to
make those grants expired at the end of 2002. However, HHS has
continued to allocate funds each year for those grants from its
appropriation. In 2018, the most recent year for which data is
available, that allocation was $34 million.
Finally, the bill would require DOC, the Department of the
Interior, and the Department of the Treasury to develop
coordinated initiatives to encourage investment in Indian
communities. Using information from those departments, CBO
estimates that implementing those requirements would have no
significant effect on the federal budget.
CBO assumes that the bill will be enacted in 2019 and that
the authorized amounts will be appropriated each year.
Estimated outlays are based on historical spending patterns and
would total $144 million over the 2019-2024 period, CBO
estimates.
The costs of the legislation fall within budget functions
450 (community and regional development) and 500 (education,
training, employment, and social services) and are detailed in
Table 1.
TABLE 1.--ESTIMATED INCREASES IN SPENDING SUBJECT TO APPROPRIATION UNDER S. 212
--------------------------------------------------------------------------------------------------------------------------------------------------------
By fiscal year, millions of dollars--
--------------------------------------------------------------------------------------------------
2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2019-2024 2019-2029
--------------------------------------------------------------------------------------------------------------------------------------------------------
Department of Commerce:
Authorization.................................... 0 2 2 2 2 2 2 2 2 2 2 10 20
Estimated Outlays................................ 0 2 2 2 2 2 2 2 2 2 2 10 20
Department of Health and Human Services:
Authorization.................................... 0 34 34 34 34 34 0 0 0 0 0 170 170
Estimated Outlays................................ 0 1 31 34 34 34 33 3 0 0 0 134 170
Total Changes:
Authorization.................................... 0 36 36 36 36 36 2 2 2 2 2 180 190
Estimated Outlays................................ 0 3 33 36 36 36 35 5 2 2 2 144 190
--------------------------------------------------------------------------------------------------------------------------------------------------------
Although S. 212 contains no intergovernmental or private-
sector mandates as defined in the Unfunded Mandates Reform Act,
tribal governments would benefit from the reauthorization of
the Buy Indian Act. Such reauthorization would allow the award
of federal contracts to Indian-owned businesses and bypass the
standard competitive process. Tribal governments would benefit
from provision in the bill promoting private investment in
Indian communities. Any costs to tribal governments would
result from complying with conditions of assistance.
The CBO staff contacts for this estimate are Jon Sperl (for
the Department of Commerce), Jennifer Gray (for the Department
of Health and Human Services), and Rachel Austin (for
mandates). The estimate was reviewed by H. Samuel Papenfuss,
Deputy Assistant Director for Budget Analysis.
REGULATORY IMPACT STATEMENT
Paragraph 11(b) of rule XXVI of the Standing Rules of the
Senate requires that each report accompanying a bill to
evaluate the regulatory paperwork impact that would be incurred
in implementing the legislation. The Committee has concluded
that enactment of S. 212 will create only de minimis regulatory
or paperwork burdens.
EXECUTIVE COMMUNICATIONS
The Committee has received no official communications from
the Administration on the provisions of this bill.
CHANGES IN EXISTING LAW
In compliance with the Standing Rules of the Senate and the
Committee Rules, subsection 12 of rule XXVI of the Standing
Rules of the Senate is waived. In the opinion of the Committee,
it is necessary to dispense with subsection 12 of rule XXVI of
the Standing Rules of the Senate in order to expedite the
business of the Senate.
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