Courtesy KeyBank
Mike Lettig

Meeting the Economic Development Challenge in Indian Country: How Streamlined Regulations Can Boost Growth

KeyBank
8/18/14

Native American communities have taken great strides in developing their economies and raising the quality of life on tribal lands. However, as President Obama noted during his historic visit to Indian Country in June 2014, there are still wide disparities between Native Americans and the overall U.S. population.

On June 25, 2014, William “Mike” Lettig, Executive Vice President and National Executive of KeyBank’s Native American Financial Services segment, had the privilege to testify at a U.S. Senate Committee on Indian Affairs Hearing on the role that investment plays in encouraging economic development in Indian Country. KeyBank has helped raise more than $3 billion in capital for Indian Country in the past 5 years and is on track to assist in raising more than $1 billion in 2014 alone making Key a formidable expert on Indian Country investment matters.

In his testimony, Lettig delivered a very clear message to the U.S. Senate Committee: Tribes have access to resources and assets that – if fully developed – could significantly enhance the well-being of their communities. Unfortunately, economic progress is often blocked by burdensome regulatory barriers. Reducing the review process and creating more autonomy for tribes to attract business, investors and developers is imperative to helping Indian Country communities thrive.

The Economic Development Need in Indian Country

While incomes for Native Americans living on reservations have nearly doubled since 1970, their earnings are only a fraction of the U.S. average. In several states, less than 50 percent of working-age Native Americans on or near tribal lands are working. In addition, progress is uneven: Some tribes are experiencing economic gains in recent years while many others face overwhelming hardships.

Poverty on reservations from 2006-2010 was 30 percent compared with 14 percent nationally, and some of the worst poverty rates in the nation are in Indian Country communities, as Lettig noted in his remarks. Native American communities face significant challenges in developing a workforce able to meet the needs of business. Indian Country lags the rest of the country by significant margins in high school graduation rates and attainment of technical and college degrees.

Streamlined Regulations + Tribal Independence = Economic Sustainability

In his testimony, Lettig underscored that the private sector still has doubts about Indian Country as an investment opportunity. Government regulatory obstacles contribute to this uncertainty and present significant challenges to economic development in Native America. For example, all new infrastructure construction on tribal lands requires rights-of-way approval – a time-consuming and ponderous process – and tribes must gain Department of Interior (DOI) approval before any public-private partnership initiatives move forward.

Economic development on tribal lands can involve multiple agencies, including not only the DOI but Housing and Urban Development, the Small Business Administration, the Department of Agriculture, the Department of Energy and the Indian Health Service, to name just a few. Astonishingly, there is no single coordinator for economic activity at the federal government.

Regulatory Simplification Initiatives – Progress is on the Way

On June 16, 2014, Secretary of the Interior Sally Jewell emphasized the need for reducing the regulatory burden on Indian Country and moving toward greater tribal independence. To that end, the administration has designed a package of regulatory initiatives with the goal of greater tribal self-governance and autonomy. The most significant initiatives include:

—Facilitating Indian Country infrastructure development The Bureau of Indian Affairs (BIA) is proposing streamlined rules for right-of-way approvals on Native American land and provide tribal leaders, private companies, utility firms and energy developers greater certainty when designing or implementing infrastructure projects.

—Removing barriers to land development through increased tribal self-governance The BIA will ramp up training on the Helping Expedite & Advance Responsible Tribal Homeownership (HEARTH) Act. The HEARTH Act provides tribes the opportunity to establish and enforce their own land leasing regulations in order to expedite the process for long-term leasing of tribal trust lands.

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