Native American Legal Update : Native American Law : Foster Pepper Law Firm : Northwest, Seattle, Spokane, Portland Lawyer & Attorney

The second billion-dollar tranche of Tribal Economic Development Bonds has now been allocated by the federal government, with the funding authorization being spread over 76 projects for Tribes throughout the country. The largest dollar allocation for any single project in this financing tranche is $30,000,000.00, which was authorized for five projects, with the remainder receiving smaller authorizations.

Examples of approved projects in the second allocation round include:

Campo Band of Mission Indians in California: $30,000,000.00 for Renewable Energy, Tourism, and Wastewater Facilities

Delaware Nation in Oklahoma: $27,253,437.90 for Retail, Industrial, Tourism, Housing, and Renewable Energy Facilities

Ohkay Owingeh in New Mexico: $22,913,488.65 for Refinancing, Recreational, Governmental, and Commercial Facilities

Yankton Sioux Tribe in South Dakota: $10,934,616.39 for Retail, Farming, Renewable Energy, Tourism, and Governmental Facilities

Confederated Tribes of the Umatilla Indian Reservation in Oregon: $5,330,048.86 for Health Facilities

Skokomish Indian Tribe in Washington: $1,822,436.05 for Refinancing

The complete list of Tribal projects authorized for bond issues in this second phase is available HERE.
 

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This week the National Public Radio program “All Things Considered” airs a two-episode series on Tribal economic development in the Southwest. The programs highlight the diverse issues, challenges, and opportunities for Tribes in different locations and which possess different levels of resources. The program focuses on two particular Native economic development models: The Navajo Nation and The Salt River Pima – Maricopa Indian Community.

Interviews include:

Joe Shirley, Navajo Nation President

Martin Harvier, Vice President of the Salt River Pima – Maricopa Indian Community

Quannah Dallas, Salt River Pima’s Economic Development Manager

Brett Isaac, Shonto Community Development Corporation

Joseph Kalt, Director of Harvard University’s American Indian Economic Development Project

Greg Guedel, Chair of Foster Pepper PLLC’s Native American Legal Services Group

Part I of the program, focusing on the Navajo Nation, can be downloaded HERE.

Part II of the program, focusing on the Salt River Pima – Maricopa Indian Community, can be downloaded HERE.

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The first billion-dollar tranche of Tribal Economic Development Bonds has now been allocated by the federal government, with the funds being spread over 58 projects for Tribes throughout the country.  The largest dollar allocation for any single project in this financng tranche is $22,565,088.46, which was authorized for over 30 projects, with the remainder receiving smaller authorizations. 

Examples of approved projects in the first financing round include:

Confederated Tribes of the Warm Springs Reservation of Oregon: Water Infrastructure and Tourism Facility Improvements -- $22,565,088.46

Lummi Nation (Washington): Environmental and Transportation Infrastructure -- $22,565,088.46

Santee Sioux Tribe of Nebraska: Health Facility -- $13,539,053.08

Pueblo of Acoma (New Mexico): Manufacturing Facility -- $8,273,865.77

Mille Lacs Band of Ojibwe (Minnesota): Education Facility -- $6,279,393.17

The first tranche of bond authorization was significantly oversubscribed, with the IRS receiving many more applications for projects than the available funding could support.  In an unusual move, rather than reject certain projects completely, the IRS imposed an across-the-board percentage cut to nearly all projects that were approved.  As a result, many projects did not receive the full amount of funding sought, and Tribes may need to revise the scope of work to achieve completion with available funds.

The complete list of Tribal projects authorized for bond issues in this first phase is available here.

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Foster Pepper PLLC and KeyBank are Co-Sponsors of the huge Native American Economic Development Conference to be held at Caesar's Palace in Las Vegas September 16-18, 2009.  The far-ranging seminar will cover topics of immense importance to Tribal economies, including:

• Tribal Leaders Roundtable: The Impact of President Obama’s Administration
• Economic Development Bonds and the Federal Stimulus Package: Effects on Tribal Financing
• Tribal Enterprises Facing Bankruptcy
• CEO Roundtable: Private Enterprise Boards vs. Tribal Governments
• CFO Roundtable- External Diversification vs. Internal Reinvestment: Weighing Risk Management Issues
• Economic Development Roundtable: Stimulating Revenue Growth
• Effective Master Planning
• Design and Construction Roundtable: Climbing out of a Recession
• Strategic Marketing in a New Economic Era
• Using Sports and Entertainment to Maximize Casino Traffic
• Planning for Retirement in Indian Country
  

The conference presenters possess unparalleled expertise in Tribal economic development issues, and include:

• William "Mike" Lettig, Executive Vice President & National Executive, KeyBank
• Mellor Willie, Executive Director, National American Indian Housing Council
• Elaine Fink, Chairperson, Northfork Rancheria of Mono Indians
• Henry Cagey, Chairman, Lummi Nation
• Bob Garcia, Chairman, The Confederated Tribes of the Coos, Lower Umpqua, and Siuslaw Indians
• Robert Martin, Chairman, Morongo Band of Mission Indians
• Georgia Noble, Chairperson, Sac & Fox National Business Enterprise Board
• Mel Sheldon, Chairman, Tulalip Tribes of Washington
• Glenn Hall, CEO, Bishop Paiute Tribe
• Robert Mele, CFO, Seneca Construction Management Corporation
• Robert Winter, CEO, Navajo National Gaming Enterprises
• Chris Kelley, CFO, Viejas Band of Kumeyaay Indians
• Eletta Tiam, CFO, Nisqually Tribe
• Michael Marchand, President, Affiliated Tribes of Northwest Indians Economic Development Corporation
• Virgil Moorhead, Chairman, Big Lagoon Rancheria
• Morris Reid, Chairman, Picayune Rancheria of Chuckchansi Indians
• Ivan Posey, Chairman, Shoshone Tribe of the Winder River Reservation
• Theresa Two Bulls, President, Ogalala Sioux Tribe of The Pine Ridge Reservation
• Cedric Black Eagle, Chairman, Crow Nation
• Louis J. Manuel Jr., Chairman, Ak-Chin Indian Community
• Michael Broderick, Director of Marketing, Lake of the Torches Resort Casino
• Mary Galbraith, Director of Strategic Marketing, Cherokee National Entertainment
• Michael L. Bearhart, Director of Gaming, St. Croix Casino & Hotel
• Scott Eldredge, General Manager, Santa Ana Start Casino

Additional conference information and registration information can be accessed through Pier Conference Group.

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The IRS has just released Notice 2009-51 soliciting applications for and providing interim guidance on the $2 billion of Tribal Economic Development Bonds authorized in the American Recovery and Reinvestment Tax Act, and providing an application form for Tribes to use.

Tribal Economic Development Bonds can be used to finance on a tax-exempt basis anything that a State or local government could finance on a tax-exempt basis, whether with tax-exempt governmental bonds or tax-exempt private activity bonds, except for any portion of a building in which gaming is conducted or any property actually used for gaming and facilities not located on the reservation.

The IRS notice appears to establish that no portion of a building may be financed with these bonds if gaming is conducted in any other portion of the same building, even if those portions are physically discrete from each other. The notice provides a safe harbor under which a structure will be treated as a separate building if it has an independent foundation, independent outer walls and an independent roof. Connections such as doorways, covered walkways or other enclosed common area connections between two adjacent independent walls of separate buildings may be disregarded as long as such connections do not affect the structural independence of either wall.

Other notable points from the IRS guidance include:

The volume cap for these bonds will be allocated in two $1 billion tranches.

Applications for an allocation from the first tranche must be filed with the IRS by August 15, 2009, and the bonds must be issued by December 31, 2009.

Applications for an allocation from the second tranche must be filed with the IRS after August 15, 2009 and before January 1, 2010, and the bonds must be issued on or before December 31, 2010.

No single Tribal government may be awarded more than $30 million from the first tranche, but there is authorization for projects to be financed jointly. If the total of applications for the first tranche exceed $1 billion each award will be reduced pro rata so the total does not exceed $1 billion.

A similar limit is expected to apply to applications for the second tranche, but the IRS reserves the right to change or eliminate the limit.

Unused volume cap for these bonds would carry over to future years under a process to be determined at some future date.
 

For further information on accessing funding and developing projects through Tribal Economic Development Bonds, contact William Tonkin.

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Tribal leaders and business experts from across the nation will gather at the Tulalip Resort June 1-2 for the Northwest Native American Economic Development Conference.  Speakers include:

• Mel Sheldon, Chairman, Tulalip Tribes of Washington

• Chief J. Allan, Chairman, Coeur d'Alene Tribe

• Cedric BlackEagle, Chairman, Crow Nation

• Bob Garcia, Chairman, Confederated Tribes of Coos, Lower Umpqua & Siuslaw Indians

• Ralph Sampson Jr., Chairman, Yakama Indian Nation

• Edward K. Thomas, President Emeritus, Central Council Tlingit & Haida Indian Tribes of Alaska & Board of Directors - Sealaska Corporation

• Jerry Lamb, Director of Economic Development, Confederated Salish and Kootenai Tribes

• Kary Nichols, Director of Business Development, Colville Tribal Enterprise Corporation

• Professor Ron Whitener, University of Washington Native American Law Center

The conference will cover a vast array of topics relating to the development of economic enterprises in Native lands, including:

• Tribal Leaders Roundtable: Defining Economic Development

• Tribal Economic Development Bonds: Strategic Financing for Business Ventures

• Tribal Gaming Outlook: Planning for the Future

• Reinventing your Casino & Resort Facilities

• Housing & Infrastructure Projects on the Reservation

• Renewable Energy Projects

• Taking Care of Your Own: Community Member Wealth

For anyone interested in the development of Tribal economies, this seminar is not to be missed. 

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The House and Senate are closing in on final draft legislation that would authorize the issuance by Tribes of up to $2 Billion worth of tax-exempt government bonds for economic development projects. The provisions are included in the “American Recovery and Reinvestment Tax Act of 2009” (H.R. 598) sponsored by Representative Charles Rangel of New York, a broad package of stimulus measures and tax credits designed to spur public infrastructure works and economic growth throughout the country.

Section 1532 of the Bill provides for federal support to “Indian Tribal governments” to issue up to $2 Billion in tax-exempt “Tribal economic development bonds”. The bonds will pay interest to investors who purchase them, but that interest will not be subject to federal taxes. The revenue generated by Tribes through the sale of these bonds may be used to provide capital for Tribal infrastructure projects and essential governmental functions. Tribes will not be permitted to apply such revenues to “any portion of a building in which class II or class III gaming is conducted”, nor for “any facility located outside the Indian reservation”.

The use of tax-exempt bonds by Tribal governments has increased significantly in recent years, as they provide both needed capital for Tribes and are attractive securities for tax-conscious investors. If signed by the President and fully implemented, H.R. 598 will provide significant assistance to Native communities in accessing capital markets for development projects in 2009.

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