Legislature(2009 - 2010)Anch LIO Conf Rm
10/26/2009 11:00 AM Senate WORLD TRADE, TECH, INNOVATIONS
| Audio | Topic |
|---|---|
| Start | |
| Economic Impact of Native 8(a) Contracting | |
| Julie Kitka, President, Alaska Federation of Natives | |
| Clara Pratte, Director, Office of Native American Affairs, U.s. Small Business Administration | |
| Sarah Lukin, Executive Director* Native American Contractors Association | |
| Maver Carey, President and Ceo, the Kuskokwim Corporation | |
| Barney Uhart, President, Chugach Alaska Corporation | |
| Roy Tansy, Jr. Chief Operating Officer, Ahtna Inc. | |
| Tom Harris, Ceo, Tyonek Native Corporation | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | TELECONFERENCED | ||
ALASKA STATE LEGISLATURE
JOINT MEETING
SENATE SPECIAL COMMITTEE ON WORLD TRADE, TECHNOLOGY AND
INNOVATION
HOUSE SPECIAL COMMITTEE ON ECONOMIC DEVELOPMENT, INTERNATIONAL
TRADE AND TOURISM
October 26, 2009
11:11 a.m.
MEMBERS PRESENT
SENATE MEMBERS
Senator Lesil McGuire, Chair
Senator Hollis French
Senator Bill Wielechowski
HOUSE MEMBERS
Representative Jay Ramras, Chair
Representative Nancy Dahlstrom
Representative Reggie Joule
Representative Mike Doogan
Representative Chris Tuck
MEMBERS ABSENT
SENATE MEMBERS
Senator Lyman Hoffman
Senator Gary Stevens
HOUSE MEMBERS
Representative Mike Chenault
Representative Kyle Johansen
Representative Mark Neuman
Representative Lindsey Holmes
OTHER LEGISLATORS PRESENT
Representative John Harris
COMMITTEE CALENDAR
Presentation: Economic Impact of Native 8(a) Contracting
HEARD
PREVIOUS COMMITTEE ACTION
No previous action to record
WITNESS REGISTER
JULIE KITKA, President
Alaska Federation of Natives (AFN)
POSITION STATEMENT: Presented the history of ANSCA and Native
participation in 8(a) contracting.
SARAH LUKIN, Executive Director
Native American Contractors Association (NACA)
POSITION STATEMENT: Presented policy issues and opportunities
of Native 8(a) contracts.
MAVER CAREY, President and CEO
The Kuskokwim Corporation
POSITION STATEMENT: Delivered a PowerPoint presentation to
demonstrate the benefits derived from participation in Native
8(a) contracting.
ROY TANSY, JR. Chief Operating Officer
Ahtna Inc.
POSITION STATEMENT: Testified about the benefits derived from
participation in Native 8(a) contracting.
TOM HARRIS, CEO
Tyonek Corporation
POSITION STATEMENT: Testified about the benefits derived from
participation in Native 8(a) contracting.
ACTION NARRATIVE
11:11:20 AM
CO-CHAIR JAY RAMRAS, Alaska State Legislature, called the joint
meeting of the House Special Committee on Economic Development,
International Trade and Tourism and the Senate Special Committee
on World Trade Technology and Innovation to order at 11:11 a.m.
Present at the call to order were Representatives Dahlstrom,
Doogan, Tuck, and Ramras and Senators McGuire, French, and
Wielechowski. Representatives Joule and Harris joined the
meeting soon thereafter.
^Economic Impact of Native 8(a) Contracting
CO-CHAIR JAY RAMRAS, Alaska State Legislature, announced that
the business before the committees is to hear about the economic
impact of Native 8(a) contracting. He asked Senator McGuire if
she had any opening remarks.
11:12:44 AM
CO-CHAIR LESIL MCGUIRE, Alaska State Legislature, said we know
how important the Native 8(a) provision has been to economic
development in Alaska, not just the Native corporations but also
for the trickle-down effect it has had for all of Alaska. She
maintained that more than any other provision in history, 8(a)
has helped Natives in Alaska regain their livelihood and access
to their culture. Feedback from colleagues in the Lower-48
indicates that the model is a tremendous success.
CO-CHAIR MCGUIRE, noting that recent congressional hearings have
focused on changes to the 8(a) program, stated that she would
like the provision to be retained to the greatest extent
possible. It has and continues to achieve its purpose. Conceding
that there may be changes to the sole-source provision, she
pointed out that the program has been of great benefit to
village corporations, regional corporations and Alaskans in
general. The Alaska State Legislature recognizes that this is a
federal issue, but wherever possible it wants to partner with
the Native community to highlight these issues. "To the extent
that we can, we're with you," she said.
Representative Reggie Joule and Representative John Harris
joined the committee.
CO-CHAIR RAMRAS said that his perspective as a born and raised
Alaskan is that the value of the repatriation of dollars through
the 8(a) program is second only to the Trans Alaska Pipeline
System (TAPS) pipeline. He noted that he recently read that the
Arctic Slope Regional Corporation (ASRC) has paid out more than
$400 million in dividends in the last couple of decades. "They
are only one success story out of many," he said.
CO-CHAIR RAMRAS stated that the intention is to send the
testimony and the public record from the meeting today to the
Alaska congressional delegation so that there is a fair
discussion in Congress about how valuable the 8(a) program is to
Alaska.
11:18:27 AM
^Julie Kitka, President, Alaska Federation of Natives
JULIE KITKA, President, Alaska Federation of Natives (AFN),
expressed appreciation for the Legislature's interest in the
issue. The preservation of government contracting opportunities
and the 8(a) provision is of critical importance to Alaska
Natives and the state of Alaska, she said.
MS. KITKA said before she gives a history of ANSCA and Native
participation in the 8(a) program, she wants the Legislature to
know that there are things it can do to support economic
development in the rural areas of the state. This is the notion
of setting up economic ecosystems and corridors of activity that
merge research and development of the university, energy,
technology, and high speed telecommunications. We'd like to
explore ideas at some future time, she said.
11:21:38 AM
MS. KITKA said her testimony today speaks to the legal and
equitable basis of the Small Business Administration 8(a)
program and its importance to the Native people of Alaska.
Providing background, she explained that the Alaska Federation
of Natives (AFN) is Alaska's largest statewide Native
organization. It represents more than 25,000 Alaska Natives that
reside in the state and more than 120,000 Alaska Natives living
in other states, making it probably the third largest Native
group in the U.S. AFN is a membership organization that was
organized in 1966 to advocate with one voice primarily for a
fair settlement of aboriginal land claims. This culminated in
the Alaska Native Claims Settlement Act (ANCSA) of 1971.
AFN today is governed by a 37 member board of directors
representing both federally recognized tribes and ANCSA village
corporations - 12 regional tribal consortiums and 13 regional
ANCSA corporations. The AFN convention is the largest annual
gathering of Native people within the United States. Delegates
are selected on the basis of population, with one delegate for
every 25 in the population. The AFN mission is to enhance and
promote the cultural, economic and political voice of Alaska
Natives. She expressed hope that the hearing today would provide
a broader basis for understanding the background and nature of
the contracting status of Native American tribes and Alaska
Native corporations.
MS. KITKA explained that the 1971 Alaska Native Claims
Settlement Act embodies most of the economic and relational
agreements with the federal government for which the Alaska
Native people relinquished valid legal claims to land and
resources of their homelands. This settlement freed the State of
Alaska to receive Alaska Native lands, and the federal
government to manage those lands.
U. S. citizens and the federal government received a bargain in
the ANCSA, but for the Native people and the Native corporations
the land conveyance process dragged on year after year. "Our
economies have struggled and we were, by any measure, an
economically disadvantaged group, and clearly a minority," Ms.
Kitka said. The laws enacted by Congress that provide legal
status under the 8(a) program simply recognize these facts.
11:25:35 AM
MS. KITKA highlighted that the world-class discovery of oil in
Prudhoe Bay and the need for a clear title to build an oil
pipeline across Alaska in order to meet the energy needs of the
country, created a sense of urgency and a historic opportunity
for a settlement of Alaska Native land claims. In December of
1971, after years of effort by members of the U.S. Congress and
Alaska Native leadership, the Alaska Native Claims Settlement
Act was signed into law by President Richard Nixon.
For extinguishing their aboriginal claims, Alaska Natives were
allowed to retain fee simple title to 44 million acres of land
and to receive $962.5 million for lands that were transferred to
the state, federal government, and private interests. ANCSA
created 13 regional for-profit corporations and more than 200
village corporations to receive and oversee these land and
monetary entitlements. It took decades to implement the promises
made in ANCSA.
MS. KITKA clarified, "It is critically important to understand
ANCSA was a land settlement and the ability to retain our
homelands and our identity and culture were and continue to be
paramount." The structure of the corporations established under
ANCSA was a secondary issue to the Alaska Native people.
Protecting the land and our traditional way of live was as
critically important then as it is today, she stated.
11:27:14 AM
MS. KITKA said that since ANCSA was signed into law in 1971 it
has been amended over 19 times. Alaska Native people consider it
living law that is intended to reflect their needs. She
continued to state:
We have maintained an ongoing working relationship
with all the committees that have jurisdiction over
our land claims and have advanced amendments in
clarifying and [making] even major substantive changes
in our land claims every Congress since the signing of
the original bill. That's important to know because
that is part of the ongoing relationship that Alaska
Natives have with the Congress and the federal
government. The 8(a) treatment of Alaska Natives is
part of ANCSA literally.
MS. KITKA related that, on behalf of the AFN, she worked on a
package of amendments called the 1991 amendments, of which 8(a)
was a part. This ANCSA modification addressed fundamental land
protections, inclusion of young Alaska Natives, a legal ability
to provide special benefits to Native elders, and major changes
to the Native corporate structure. One major provision
eliminated the statutory requirement that in 1991 all Native
corporation stock would be recalled and resold on the public
market. Had ANCSA remained as originally enacted, the Alaska
Native people would lose their corporations and all their lands
and resources.
Because of evidence that Alaska Native corporations were
excluded from the 8(a) program, amendments to the Small Business
Administration (SBA) 8(a) program were included in the 1991
amendments. Congress in 1987 unanimously passed the 1991
amendments and they were signed into law. In 1992 the 8(a)
amendments again were considered by Congress, passed without
opposition, and were signed by the President. These 8(a)
amendments provided contracting opportunities to all Native
American tribes, not just Alaska Native corporations.
MS. KITKA pointed out that there is a basis for the laws
distinguishing between Native American relationships and others.
In many cases when Native Americans entered into treaty and
statutory agreements relinquishing ownership and use and
occupancy of their lands, an agreement was embedded in those
treaties and statutes for differential treatments under federal
law. Thus, Congress can properly distinguish between Native
American and non-Native American contracting opportunities. This
authority comes from the unique status of Indian tribes under
federal law and the plenary power of Congress to legislate on
behalf of federally recognized tribes and Alaska Native
corporations.
MS. KITKA cited Morton v. Mancari as an example in which the
Supreme Court upheld legislation that singles out Native
Americans for special treatment. The Court stated that as long
as the special treatment can be rationally tied to the
fulfillment of Congress's unique obligation to Indians, then
legislation regulating commerce with Indian tribes will not be
disturbed. This is a very important component of federal Indian
law.
MS. KITKA said it would not be just or fair to now seek to
separate the economic treatment of Alaska Natives from the
settlement of aboriginal claims. Even today, 39 years later, not
all the lands that were promised to the Alaska Native people and
corporations have been conveyed. "What is the net present value
of the lost use of our land, the development of our resources,
[and]…the litigation…to try to advocate and protect and get what
is our right?" she asked.
To refer to ANCSA as an economic development statute is like
calling the Civil Rights Act a community development law or the
Voting Rights Act a polling statute. Those two laws are
fundamental to the relationship that the federal government has
with minority groups and should not be minimalized or
disparaged. To the Alaska Native people ANCSA is nearly as
important because it recognizes and validates Alaska Native
claims to lands and waters in Alaska where their people have
resided for thousands of years. "To pull out pieces now and
examine them out of context would be wrong," Ms. Kitka said.
MS. KITKA said that ANCSA corporations are more than just for-
profit corporations. They are stewards of the Native homeland,
sponsors of education and training opportunities, and employers
of first resort for Alaska Native people. The lands that are
held by these corporations are key to our heritage, culture, and
future, she said. Just as Congress intended, these corporations
were formed under a requirement not applied anywhere else in
aboriginal land settlements, and perhaps not any other
corporations in America.
11:33:20 AM
MS. KITKA said that Native leadership followed the law in
setting up these new corporations. In many cases they struggled
to overcome social and economic disadvantages of operating in
what the business world deemed "remote Alaska," but they did
persevere and run the corporations as Congress intended. Our
corporations are key to our heritage, our land, and our economic
base; they are essential to our well-being, she said.
As these corporations began to succeed, the indicators of a
healthy society begin to improve. Life expectancy for Alaska
Native men and women has increased, infant mortality has
decreased, and poverty has been reduced from over 60 percent to
20 percent. An AFN commissioned report shows a dramatic
improvement in positive indicators and a dramatic decrease in
negative indicators. It also found "a continuing thread of
disparity between Alaska Native population and non-Alaska Native
population both in Alaska and the United States in all
indicators." Although AFN does not assert that Native
corporations are the source of the improvements, they are a part
of it. The actions of the state Legislature, the state
government, and the federal government are part of this success.
"Collectively over the last 30 years we have done remarkable
things," Ms. Kitka said.
MS. KITKA said it may be tempting to look at the recent great
success of Alaska Native corporations and forget where these
corporations started. Please don't skip over that part. She
continued:
We live and work in what is to most business people
the most remote corner of America, in one of the
harshest climates in the world, with a history of
extreme prejudice and discrimination against our
people, a history of wariness towards a people who in
many great cases literally spoke a different language
than most business people in America, a history of
exclusion from genuine business opportunities, and a
history of no business history with mainstream large
economies in America.
Is this not a case study of an economically disadvantaged
minority business? Ms. Kitka asked. This is why ANCSA and the
Small Business Act were amended to provide economic
opportunities for Alaska Native corporations.
11:36:18 AM
MS. KITKA said that SBA 8(a) contracting created the benefits it
was intended to create. As a result, Alaska Native corporations
built up a previously nonexistent capacity to provide employment
to their shareholders, scholarships, and training to their young
people so that they learn what it takes to succeed in a modern
America. Just as intended, these corporations have built
managerial and business expertise that can carry forward. They
helped create economic stability where none previously existed.
"It is an accomplishment to behold, one which is worth
understanding in full for its roots, path and basis in law,
including a Native American law," Ms. Kitka stated.
MS. KITKA stated her view that one success of the SBA program is
the great value that Alaska Native people and Alaska Native
corporations are providing to the federal government through
contracting. "This is not a handout; this is providing services
to the government in value, under budget, on time, or you're not
doing it," she added. The current trend is for developing
countries to use more contracting so it is significant that
Alaska Native people are involved in this. Clearly we need to
protect that economic opportunity and continue to grow that
capacity because that is the wave of the future, Ms. Kitka said.
11:37:46 AM
CO-CHAIR RAMRAS stated for the record that he is co-chairing the
meeting.
CO-CHAIR RAMRAS mentioned the importance of legislative intent
and asked if the original legislation worked and if it is
working today in its amended form.
MS. KITKA replied ANSCA is working incredibly well. The intent
was to create an opportunity for Alaska Natives to enter the
economic sphere by establishing an organization that was
separate from the federally recognized, and rather political,
tribal model. It is incredible that people thought of it at that
time, she said.
With respect to the changes to ANCSA, she said that the original
intent was for the corporations to be made public after 20
years. The stock was to be recalled and sold on the open market.
Native leaders rightly spent years trying to change that portion
of the law, she said. They argued that if the corporations were
made public, Alaska Natives would be disenfranchised by the loss
of their land and resources. The changes that Congress made into
the law, which kept the corporations closed, were the right
decisions, Ms. Kitka said.
MS. KITKA said a critical component is the ability for a
corporation to adapt to make a more workable structure for the
benefit of the people. The Native corporations established under
ANCSA are a world-class model and if people in government at the
highest levels understood more of what was going on here in
Alaska, they would be more supportive. She restated that
legislative intent is working beyond what people imagined. "Many
people thought that we would fail and we are not failing, we are
succeeding."
11:46:58 AM
REPRESENTATIVE HARRIS asked how the 8(a) program can help bring
jobs and an economy back into rural Alaska so that people can
afford to live there.
MS. KITKA replied it's not directly related to 8(a) contracting,
but if the federal government expanded broadband Internet access
in Alaska the expansion of economic opportunities would quickly
be apparent. She added that tax credits, pools of low interest
long term loans, and incentives for economic development at the
village and community and regional hub levels would also be
helpful. Again she urged the committees to look at the notion of
economic ecosystems and corridors of activity to try to put
together economic incentives to build up local village
economies.
REPRESENTATIVE HARRIS asked if AFN has developed those
suggestions into a proposal to take to the Legislature.
MS. KITKA replied they have a number of resolutions including
one she would like to submit for the record in support of the
8(a) program.
She thanked the Legislature for honoring Hawaii Senator Inouye
who is very supportive of Alaska Natives.
CO-CHAIR MCGUIRE noted that the 13 Alaska Native corporations
have developed different business models in response to ANCSA
and might have different opinions about the proposed amendments.
She said she would like to know about any sensitivities related
to the amendments and things to be aware of on the political
level.
11:51:58 AM
MS. KITKA agreed that there are sensitivities. She said that we
respect that the Homeland Security Committee has jurisdiction
and a legitimate purpose when it looks at any kind of government
contracting. Our criticism is that we don't feel that the
process has been fair. The whole aspect of what we contribute to
the program has been left off the table, she said. That being
said, it's important to be sensitive to the jurisdiction the
different committees have.
MS. KITKA said the AFN has requested an oversight hearing at the
Senate Indian Affairs Committee and that might be an avenue for
the Legislature and the governor to submit supporting letters.
That committee will be looking at this issue with a clear
understanding of Indian law and the intent behind the provision.
That scrutiny is most welcome, she said.
With regard to the Native community, she said we respect that
different people have different approaches. AFN is looking at
solutions that will affect the greatest number of people and
that are fair to the corporations. She emphasized respect for
the congressional process.
CO-CHAIR MCGUIRE said she would like to know about the different
approaches the corporations might take. She observed that you
can support the concept and still misstep if you don't recognize
subtle nuances.
MS. KITKA added that it's important to remember that this
impacts more than just Alaska Native corporations. Native
Hawaiian organizations and American Indian tribes are affected
by any changes; they too want a say in how this goes forward.
11:55:35 AM
REPRESENTATIVE CHRIS TUCK asked if there are situations where
only 8(a) companies compete against one another and how those
contracts differ.
MS. KITKA deferred to subsequent witnesses.
CO-CHAIR RAMRAS said it's a privilege to hear from people like
you who were witness to the start of Alaska's economic
development.
MS. KITKA said thank you, and shared credit with the great
number of other Native and non-Native Alaskans who worked to get
where we are today.
11:58:02 AM
^CLARA PRATTE, Director, Office of Native American Affairs, U.S.
Small Business Administration
CLARA PRATTE, Director, Office of Native American Affairs, U.S.
Small Business Administration (SBA), thanked the committee for
inviting the SBA to provide testimony on the 8(a) program,
specifically in regard to the role it plays in the economic
development of Native communities. She read the following:
The SBA's 8(a) business development program is a
program created to help small disadvantaged businesses
compete in the American economy and gain access to the
federal procurement market. To understand the
provisions contained for Alaska Native and tribally
owned entities as well as Native Hawaiian
organizations, one must have a base understanding of
the historical context and how the provisions came
into existence.
The legal context for which tribally owned entities
and Alaska Native corporations have specific
privileges in the 8(a) program are based on specific
legislation that is rooted in the trust responsibility
and in the U.S. Constitution. As a result of the
unique government-to-government relationship that the
United States has with indigenous government entities
and government structures, several provisions have
been passed and enacted into law to fulfill the
obligation that the U.S. has to its indigenous
peoples.
In general, the 8(a) program authorized by section
8(a) of the Small Business Act seeks to remedy
discrimination by helping eligible small businesses
compete in the American economy through business
development. Participation in the 8(a) program is
restricted to businesses owned and controlled by
socially and economically disadvantaged individuals
and entities. In addition to management and technical
assistance provided under the program, certified 8(a)
firms may be eligible to receive federal contracts.
Furthermore, the government is able to award contracts
to participating 8(a) firms without competition below
certain dollar thresholds. And the government can also
restrict competition for federal contracts above
stated dollar thresholds to certain 8(a) firms.
In 1971 the Alaska Native Claims Settlement Act
(ANCSA) established Alaska Native corporations (ANC)
on one hand to resolve historical land disputes, but
also to provide access to the euro-American economic
system. One of the many objectives of ANCSA is Native
American self determination by participation in a
capitalistic economy to create a sustainable economic
base.
After the passage of ANCSA, it became quite clear that
the objectives and thus the trust responsibility were
not being adequately met. Therefore, Congress
investigated how to strengthen the efficacy of ANCSA
in regards to creating economic self-sufficiency for
the Native peoples of Alaska. As a result of various
amendments, significant changes were made to the 8(a)
program when Congress enacted legislation that allowed
Alaska Native corporations, Native Hawaiian
organizations (NHO), community development
corporations, and tribally owned firms to participate
in the 8(a) program.
Participating in the 8(a) program would allow these
organizations to benefit from the business development
opportunities available. ANC-owned 8(a) firms,
tribally-owned companies, and program participants
owned by NHOs are not subject to the same rules as
other individually owned companies participating in
the program in a number of areas as a result of
recognizing the large number of stakeholders that
these entities have a responsibility to.
12:01:22 PM
Whereas individually owned businesses tend to have a
sole proprietor, maybe a couple of other people that
are stakeholders, tribally owned ANCs and NHOs are
responsible for thousands, literally thousands, of
shareholders and stakeholders.
The primary difference between the individual 8(a)
firm and the Alaska Native corporation provisions are:
· First, subsidiaries under these organization-
owned businesses can participate in the 8(a)
program without being considered affiliated with
one another. This allows for several subsidiaries
to participate in the program at the same time
and for each to be considered an individual small
business.
· Secondly, these firms are not subject to the
sole-source contract limitations. As a result of
legislation enacted in 1986, there is no cap on
the amount of federal contract award to an ANC
tribally-owned 8(a) program participant. This
means that these companies are able to receive a
federal contract in any amount without
competition. Similarly, in 2003 Congress
authorized Native Hawaiian organizations to
receive 8(a) contracts above the competitive
threshold for Department of Defense procurements,
which is where the majority of federal
contracting takes place. The federal cap for
other 8(a) participant individually owned is $3
million or no-bid service contracts.
· Lastly, companies owned by these organizations do
not have a limitation on participation by non-
disadvantaged individuals. For traditional 8(a)
firms, the individual claiming the social and
economic disadvantage must control the day-to-day
operations of the company and must be the highest
compensated and fees are not subject to such
restrictions.
The 8(a) program does not guarantee federal contracts. It
only allows increased access to the federal procurement
system. The onus is on the company to perform the work to
the specifications required by the customer. The success of
the Alaska Native corporations in this arena is testament
to the value and the quality of work. Federal contracting
officers when awarding contracts, particularly sole-source,
must attest that it is indeed the best value for the
taxpayer dollar. They are able to stop work at any time,
they can pull things out of the 8(a) program if they see
fit with consultation with SBA, which we try to avoid. But
there are mechanisms in place to ensure that any federal
procurement dollar spent is indeed the best value being
spent for the American taxpayer dollar.
In recent years SBA's inspector general, the Government
Accountability Office, and Congress have identified a
number of challenges within the 8(a) program and with ANCs
in particular. Some are valid concerns and some are what I
would term politics of perception. While we may differ over
our analysis of some of the details, we all agree on the
overarching need for greater oversight to ensure the
program operates in accordance with its intended purpose of
promoting opportunities for all firms free of waste, fraud,
and abuse. The SBA is working diligently to ensure that the
oversight of the 8(a) business development program is
strong and effective. To that end we've increased the
number of our staff that reviews 8(a) applications. We are
also releasing draft regulatory changes to the 8(a) program
this Wednesday that will be open and available for public
comment. And we are committed to receiving full input from
all of our stakeholders, and committed to going out and
having dialog with Alaska Native corporations, tribally
owned entities, and Native Hawaiian organizations on the
effects that the proposed draft regulations will have on
their companies.
Overall, the success of the 8(a) program has been a strong
step in the direction of trust and treaty obligation and
fulfillment. Its success has allowed for capital effusion
into some of the most rural and economically depressed
regions while providing a value-added service for the
government. And I have been fortunate to visit in the last
week a couple of these areas. And I can attest that while
success for many has been attained, much work is left to be
done in some of these economically depressed regions. And
the 8(a) contracting mechanism plays an important part in
that economic development puzzle. We recognize that it's
important not only for the Native peoples of the United
States, but also for the states in which they operate.
CO-CHAIR RAMRAS thanked Ms. Pratte for her helpful testimony and
said the committee would next hear from Sarah Lukin.
12:06:17 PM
^SARAH LUKIN, Executive Director* Native American Contractors
Association
SARAH LUKIN, Executive Director, Native American Contractors
Association (NACA) said she is from the Native village of Port
Lion on Kodiak Island. She is a Kodiak shareholder and a
shareholder of the Afognak Native Corporation. She explained
that NACA is a national Native organization based in Washington
D.C. that advocates for the rights of tribes, Alaska Native
corporations, and Native Hawaiians in government contracting,
particularly in the SBA 8(a) program. She read the following:
The summer of 2009 saw congressional attention focus
on Native participation in the 8(a) program. Some
critics referred to the program as a loophole, as if
Native success in government contracting could not
possibly be legitimate or appropriate. The term
loophole ignores the reality of our severe socio-
economic disadvantages.
The fact that Native enterprises are owned by Native
communities that are destitute and geographically
isolated, decimated by centuries of failed federal
policies, yet are still responsible for the health and
welfare of thousands of people and their dependents
and descendants - that's real.
When poverty in our Native communities exceeds all
other race categories and is twice the national
average, that's real. The fact that members of
Congress have tried to keep the promises made by their
predecessors in the Constitution, countless treaties,
and land settlements when taking hundreds of millions
of acres of Native lands - that's real.
And it's real too that Native women have earned an
education because of Native 8(a) benefits and that our
Native children can now speak their traditional
language that had been lost for generations, and that
Native elders now receive benefits to offset their
very limited income.
Here's a federal Indian program the government
actually got right. Native participation in 8a helps
our Native enterprises build business capacity and
educates teachers, accountants, and IT specialists.
The handout is replacing the handout. We need more
benefits for our people and more employment, more work
in our Native communities and more Native executives.
To cut the program that has gotten us so far is
absolutely wrong. So much more needs to be done.
Native American peoples represent four percent of
America, but Native enterprises still represent less
than 1.3 percent of the federal contracting pie. And
8(a) awards represent less than .8 of one percent of
federal contracting. Native 8(a) strives to increase
business opportunities for other small businesses and
8(a)s. And we offer real competition to the large
contractors and real value to the American taxpayer.
12:09:36 PM
There have been difficulties. The SBA is understaffed
and underfunded, its enforcement assistance and
guidance in training have suffered. Thankfully, the
Anchorage district office has recently hired two new
business opportunity specialists to work with all the
ANC's serviced out of that office. Nonetheless, we
acknowledge that there are some very real problems. We
strongly believe everyone must play by the rules, and
those who don't should be held accountable.
Fortunately, those rules and enforcement mechanisms
already exist. Unfortunately, the SBA lacks the
resources it needs for these important oversight
tasks.
America needs the federal procurement system to work
and so do Native Americans. That's why the National
Congress of American Indians, the National Center for
American Indian Enterprise Development, and NACA have
been very active for over three years in pushing for
the GAO recommendations, regulatory reforms, and more
resources for the SBA. I am very excited that the SBA
will soon be publishing their long-awaited draft
regulations. NACA and the Native community look
forward to working positively with the SBA and urge
the SBA to hold a series of tribal consultations with
the Native community on any of the proposed
regulations that will impact our Native enterprises.
I only hope that Congress will allow the SBA and the
Native community to review and implement the new
regulations before additional attempts at sweeping
reforms occur. Over the last several years, the Native
community has found ourselves constantly fighting off
legislative reforms. In the 109th, 110th, and now the
111th Congress, we have experienced numerous attempts
to modify or altogether remove Alaska Native, tribal,
and Native Hawaiian participation in 8(a). Attempts
have been made to cap Native 8(a) awards and impose
agency requirements to minimize sole-source
contracting across the board. Meanwhile, we've seen
individual agencies like the Air Force and the Navy
attempt to regulate ANC awards and establish their own
limitations. We have testified at three congressional
hearings, most recently before the Senate subcommittee
on contracting oversight.
12:12:11 PM
We are so very grateful to Senator Murkowski, Senator
Begich, and Congressman Young. Their unwavering
support on Capitol Hill has been absolutely critical
to our Native corporations' success and the continued
growth of Alaska's economy. We are also very
appreciative that Alaskan policymakers have taken an
interest in this program and we hope that your
involvement will prove to be a positive influence on
this economic engine for Alaska.
Although thus far we have succeeded in protecting our
Native 8(a) rights, it is not a matter of if
additional attempts at reform will be made, but rather
when those attempts will be made. In 2010 we will see
intense scrutiny and investigation of government
contracting and both Congress and the administration
will continue to look at restricting sole-source
contracting across the board. Native 8(a)s,
representing less that 1.3 percent of the federal
contracting pie, make a very easy target. The problems
with government contracting are universal. The search
for solutions should be comprehensive and not
disproportionately focused on Native 8(a)s.
The Native community needs your support as we fight to
protect, preserve, and enhance Native 8(a) rights. I
ask the Alaska Legislature to pass a resolution of
support for Native 8(a)s and I ask for your help in
educating the Alaska public about what this program
means to Alaska's economy, Alaskans, and Alaska Native
peoples. I ask you to reach out to your networks in
other states and talk with them about what the 8(a)
program means for Native communities across this
country and their local economies.
CO-CHAIR RAMRAS related that Co-Chair McGuire is the president
of PNWER (Pacific NorthWest Economic Region) and he believes
that this would be an excellent discussion for that forum.
12:15:11 PM
REPRESENTATIVE JOULE said he doesn't expect a response, but he
wonders about applying this 8(a) model inside the state of
Alaska.
CO-CHAIR RAMRAS commented he gathers that was a rhetorical
question.
CO-CHAIR RAMRAS said he agrees with Ms. Lukin that there has
been a disproportionate negative focus on the Native 8(a)
program. He believes that it is poorly understood by some that
this program is an economic driver for the entire Alaskan
economy.
12:16:57 PM
^MAVER CAREY, President and CEO, The Kuskokwim Corporation
MAVER CAREY, President and CEO, The Kuskokwim Corporation (TKC),
and founder and chair of the Alaska Native Village CEO
Association, introduced herself. She said this new association
is about a year old and has 40 village corporation members.
MS. CAREY said she is using a PowerPoint to show how the 8(a)
program is working for The Kuskokwim Corporation and what it is
like for members of several other Native corporations that have
yet to tap into the 8(a) benefits.
12:18:06 PM
She displayed a slide showing of the organizational structure of
The Kuskoquim Corporation. Seven years ago when she became CEO,
TKC had a stock and bond portfolio and passive real estate
investments that paid for administrative overhead and minimal
dividend to the 1,100 shareholders. Since then TKC formed a
holding company that has two 8(a) companies and non-8(a)
subsidiaries that provide revenue back to the parent
corporation.
TKC is managed by a 12-member board of directors. She
highlighted individual board members to demonstrate that the
board is dynamic and stable. Unique to TKC, ten village
corporations in 1977 pooled resources and merged to form TKC.
These included: Aniak, Upper Kalskag, Lower Kalskag,
Chuathbaluk, Napaimute, Crooked Creek, Red Devil, Georgetown,
Sleetmute, and Stony River. All the villages are upriver from
Bethel.
MS. CAREY displayed several slides showing the location of the
10 villages along the Kuskokwim River and TKC ownership of
nearly 1 million acres of surface estate lands. Calista
Corporation owns the subsurface and resources. She noted that
Donlin Creek mine is located above Crooked Creek and is
potentially one of the largest gold mines in the world. Calista
Corporation owns those resources.
TKC has enrolled descendants and now has 3,100 shareholders. If
the board and shareholders agree to again open enrollment, TKC
could have 5,000 shareholders within 15 years.
MS. CAREY displayed pictures of elders and shareholders in the
region.
The TKC board and staff envision that by 2015 TKC will be a
shareholder-managed $100 million asset value village
corporation. At the same time shareholders will receive benefits
in the form of dividends, scholarships, and employment
opportunities. More than just revenue, they want to give
opportunity.
12:21:39 PM
MS. CAREY said that TKC is located in the poorest area in the
region. She displayed a slide showing children in Stony River
getting ready for the fishing season and noted that villagers
rely heavily on subsistence. Barges deliver cargo and bulk fuel
to villages that have no roads. Employment opportunities are
generally limited. Some residents find seasonal employment as
firefighters and some work as teacher assistants. Teachers
generally come from outside rural Alaska. About three jobs are
available at either the tribal council office or the city
office.
12:23:06 PM
She said that four-wheel ATVs are typical transportation and are
o
very cold at -45F. She displayed a slide showing snow machines
with sleds and described this as a typical way to haul water or
ice for domestic use. The Kuskoquim River is their road. In
summer it is traveled by boat and in winter it is an ice road
that's used by snow machines and ATVs. She displayed several
slides showing a fish-drying rack, a fish cleaning and fillet
table, a fish camp structure, and smokehouse. These are typical
scenes in June and July when people go to fish camp to catch and
prepare subsistence foods for use in the winter when food is
limited.
MS. CAREY displayed several slides depicting typical homes in
Cripple Creek, population 144, Chuathbaluk, population 112, and
Stony River, population 56. In the very poor village of Stony
River, just two of the homes have running water and one has a
flush toilet. She pointed to a home that does not have running
water and noted that two grandparents, three of their children,
and ten grandchildren all live together. The cost of living is
high.
MS. CAREY displayed a chart comparing the price of gasoline in a
village to the price in Anchorage. If the cost is $2.80 per
gallon in Anchorage, Alaska, it is $5.50 per gallon in these
villages where residents don't have an income.
12:26:04 PM
CO-CHAIR RAMRAS encouraged members to also consider the
component of degree days because the temperature in some of
those communities is a great deal cooler than in Anchorage.
REPRESENTATIVE JOULE added that every business that offers a
service adds a fuel surcharge, which has a domino effect on
everything they have to do in order to live.
CO-CHAIR RAMRAS said he believes that that it's easy for some
people in the U.S. Senate to look at the Native corporation
buildings in Anchorage as a reflection of the standard of living
of Alaska Natives in rural Alaska.
MS. CAREY said some people ask why the people in rural Alaska
don't go to Anchorage to find economic opportunity, but flying
from Stony River to Anchorage involves a plane change in Aniak
and a cost of $1,045 per person. Even so, many of these people
do fly to Anchorage to go to Costco to do shopping for the year
because it's cheaper.
12:29:50 PM
In 2008 when the price of gas in Anchorage was $2.89 per gallon
it was $4.79 per gallon in Aniak, $5.95 per gallon in Crooked
Creek, $8.00 per gallon in Red Devil, and $6.35 per gallon in
Sleetmute. When she visited Kalskag last week the last barge of
the year arrived. Gas cost $6 per gallon and that's at the
beginning of the winter season. The cost of heating their homes
for a year ranges from $3,500 to $4,000 and boat fuel costs
about $5,000 per year.
MS. CAREY displayed several slides showing a small store in
Kalskag and comparable costs of food items in Aniak, Stony River
and Anchorage. For example, a loaf of white bread in Aniak might
cost four times what it does in Anchorage. The cost is even more
in Stony River. The cost of meat is so high that it's clear why
subsistence is needed in that area.
A 2007 data chart comparing village economy to the Anchorage
economy emphasizes that this region along the Kuskoquim River is
very poor. When Anchorage had 7.4 percent of the population
living below poverty level, the figure for Stony River was 38.7
percent. A subsequent slide shows a person dumping a honey
bucket, a common scene since most people do not have flush
toilets in their homes. Among the 10 TKC villages, between 10
percent and 57.7 percent live below the poverty level.
MS. CAREY displayed a number of slides showing scenery, a church
and typical homes in the region. In one slide, she recognized
board member Iyana Gusty. He is a respected Yupik Eskimo elder
who does not read or write, but is an accomplished barge captain
on the Kuskoquim River. Unfortunately, he is now showing signs
of dementia and a 10 year relative is now taking care of him in
his home that has no running water.
12:33:19 PM
Potential economic opportunity in the region includes Donlin
Creek. If it becomes a working mine, it could provide over 500
construction jobs. The next several slides show the location of
Donlin Creek and the current project.
MS. CAREY outlined the following social impacts in these
villages: unemployment, high cost of living, few economic
opportunities, teenage pregnancy, drug and alcohol abuse, and
high suicide rates. She noted that recently the board did stock
transfers for three 20-year-olds who committed suicide.
12:33:53 PM
MS. CAREY said that the 8(a) program will provide economic value
if TKC makes more income and is able to provide shareholders
with higher dividends. TKC is also working on employment
opportunities, including construction projects in the Lower-48.
She displayed a bar graph depicting the TKC balance sheet as
follows:
April 30, 2009 2008 2007
Current Assets $36.5m $34.7m $27.1m
Liabilities $19.3m $18.6m $ 8.4m
Shareholder Equity $17.2m $16.0m $18.7m
She displayed a line graph and said that TKC has paid out more
than $9 million in shareholder dividends. She noted that
shareholder equity would be higher had TKC not paid those
dividends, but that is an important source of income to
shareholders.
12:35:09 PM
CO-CHAIR RAMRAS asked how many of the 3,100 TKC shareholders
live in the 10 villages.
MS. CAREY replied historically it's been 51 percent but last
year it dropped to just 36 percent. Our people are moving to
Anchorage because of economic issues in the villages, she said.
She displayed the following TKC income statement:
April 30, 2009 2008 2007
Revenues $13.9m $30.6m $14.7m
Expenses $12.4m $30.9m $13.9m
Net Income $ 819.8t $ (223.1t) $ 4.4t
Gain on Sec. $ 255.2t $(1.6m) $ 44.4t
Comp. Income $ 1.0m $(1.8m) $ 4.5m
MS. CAREY noted that their balance sheet today is $45 million,
which in large part is due to the 8(a) program. They hope to
reap those benefits to shareholders as they continue to grow.
She displayed a bar graph showing TKC assets from 2004 projected
to 2015. Their vision is to be a $100 million corporation by
2015. The current $45 million shows TKC is slowly getting there,
she said.
TKC also provides scholarships to shareholders through the
Kuskokwim Educational Foundation Scholarship Program.
Individuals are able to receive up to $2,000 each year. Last
year TKC provided $22,000 to 23 recipients. Hopefully that too
will grow.
MS. CAREY displayed a slide showing students in the Red Devil,
Alaska school role-playing as she teaches them how their for-
profit village corporation works.
She thanked the committee and restated that she hopes that TKC
can continue to provide benefits to shareholders and continue to
grow with the 8(a) program. "There are so many village
corporations who have not even tapped into this yet," she again
pointed out. Hopefully the new CEO association will help educate
others about the benefits of the 8(a) program.
12:37:37 PM
CO-CHAIR RAMRAS highlighted that it's been statistically
demonstrated that rural students who have gone through the Rural
Alaska Honors Institute (RAHI) scholarship program are twice as
likely to matriculate to a college degree. He asked if TKC
follows scholarship recipients to know how many complete a
degree program.
MS. CAREY replied she doesn't have the statistics, but when she
started with TKC 16 years ago it wasn't uncommon for students to
attend college for just 6 months before dropping out. Now she
knows of three shareholders who are being funded to get their
masters degree.
CO-CHAIR RAMRAS suggested she gather the statistics because that
is a touch point to present to Congress.
12:39:41 PM
REPRESENTATIVE JOULE commented on the recent passing of the
founder of the Dragon Slayers in Aniak who was responsible for
many young ladies going on to enter healthcare programs. If a
corporation is sufficiently healthy that it can similarly turn
around and help young people, then it is returning large
dividends.
MS. CAREY added that as these for-profit corporations continue
to grow, they are not only able to pay dividends to shareholders
but also to provide other economic benefits. This is a huge area
in which to grow, she said.
12:40:58 PM
CO-CHAIR MCGUIRE observed that the state struggles with similar
challenges. Last last year it gave every Alaskan a $1,200 energy
rebate yet some people in this community are still struggling to
pay their energy bills. Their rebate money is gone and they made
no refits that would reduce energy consumption. The payment was
appropriate, but it doesn't address the need for basic
infrastructure.
CO-CHAIR RAMRAS asked if TKC pays taxes to the federal
government.
MS. CAREY said yes.
CO-CHAIR RAMRAS suggested that she highlight that point to
demonstrate that the federal government is getting its share of
the work that corporations are doing through the 8(a) program.
12:42:55 PM
^BARNEY UHART, President, Chugach Alaska Corporation
BARNEY UHART, President, Chugach Alaska Corporation (CAC), said
he has been employed by CAC for the past 16 years and involved
in federal contracting for the past 30 years. His testimony will
be specific to the benefits that the 8(a) program has provided
to Chugach Alaska Corporation.
MR. UHART explained that CAC, which is the regional corporation
for the Prince William Sound area of Alaska, includes five
Native villages and the communities of Cordova, Valdez,
Whittier, and Seward. The corporation was created in the '70s;
its first businesses included fish processing, timbering, and
minor construction and maintenance on TAPS. In the late '80s CAC
made a poor investment choice to build a sawmill in Seward, had
a devastating cannery fire, experienced a glut in the salmon
industry, and saw timber prices fall. Then in 1989 the Exxon
Valdez spilled 11 million gallons of oil in the heart of the
Chugach region. Many people did and continue to think that was
the keystone event that forced CAC into Chapter 11 bankruptcy in
the early '90s. In 1991 the corporation had revenue of less than
$10 million and net losses approaching $64 million.
In 1994 CAC received 8(a) certification and was awarded an
airport caretaker contract at King Salmon Alaska. The last of
the bankruptcy creditors were paid off in 2000 and shareholders
were paid a $5 per share dividend. Since then CAC has developed
additional benefits including internships, apprenticeships,
scholarships, elder dividends, shareholder business assistance
training, and succession planning and training. A corporate goal
is to have only Alaska Natives running the corporation.
As a result of the success in 8(a) programs along with other
forms of contracting and investment opportunities, revenue in
2008 approached $1 billion. The Alaska Business Monthly ranked
CAC fourth in Alaska-owned businesses; the corporation has
ranked in the top five for past seven years. The 8(a) program
has provided the corporation the opportunity to dig itself out
of bankruptcy and achieve success. To Chugach shareholders, the
greatest benefit to the 8(a) program is that CAC is still here.
12:48:46 PM
REPRESENTATIVE DOOGAN questioned why the 8(a) program has
suddenly become so interesting to people in Washington D.C.
MR. UHART replied it's a combination of things and it's not new.
Over the past several years a lot of attention has been focused
on sole-source or no-bid contracting. Native corporations have a
different statutory model, but it may be that they are an easier
target than the Lockheed Martins of the world.
12:51:38 PM
^ROY TANSY, JR. Chief Operating Officer, Ahtna Inc.
ROY TANSY, JR. Chief Operating Officer, Ahtna Inc., explained
that Ahtna was incorporated in 1972 and did a lot of profitable
contracting with Alyeska Pipeline Service Company on the TAPS
pipeline. Alyeska work declined and Ahtna Inc. started its first
8(a) company in 1994. By the late '90s it had four 8(a)
companies that generated about $50 million in annual revenue. An
overly complex management structure and some wrong-doing by
management brought Ahtna to the verge of bankruptcy by 2001.
Management was changed and ownership of companies was made more
transparent. In 2005 Ahtna was able to secure an $80 million
three-year 8(a) contract that enabled it to climb out of the
hole. Today Ahtna owns 100 percent of ten companies; four are in
the 8(a) program and revenues approach $225 million. Those 8(a)
companies have fueled other economic development for the
corporation, Mr. Tansy said.
12:57:54 PM
MR. TANSY said that about 45 percent of Ahtna's budget is
dedicated to shareholder benefits including scholarships, ten
internships, and $3,000 death benefits to shareholders. The
corporation has been able to addresses issues and protections
such as the homesite program, culture preservation, and
subsistence preservation. Ahtna Inc. issued $500,000 in
dividends in 2007 and 2008 and this year it started an elder
benefits program and opened its stock to new shareholders. Ahtna
Inc. currently has 1,322 shareholders.
REPRESENTATIVE DOOGAN asked what would happen to the corporation
if Congress were to do away with the 8(a) program.
MR. TANSY speculated that economic development would be
hampered. The more mature companies have proven they can move
forward but Ahtna puts profits from 8(a) operations into things
that aren't necessarily profitable including tourism, regional
development, and energy. Those would suffer.
REPRESENTATIVE DOOGAN summarized that the corporation would make
it as a business, but the parts of that business that benefit
the people in the region might suffer.
1:01:58 PM
REPRESENTATIVE TUCK asked if Ahtna is competing against other
Native corporations for these 8(a) contracts.
MR. TANSY said absolutely.
REPRESENTATIVE TUCK commented that there needs to be a system
whereby the public understands completely how the 8(a) program
benefits everyone, particularly villages in Alaska.
MR. TANSY agreed, adding that increasing shareholder hire is
equally important. He noted that last year Ahtna had about 122
shareholders working fulltime for the corporation, which was
roughly one-third of its Alaska operations. The corporation had
1,600 employees and the shareholder payroll was about 10
percent.
1:06:01 PM
CO-CHAIR RAMRAS reminded members that the contracts go where the
federal services are required. The issue isn't about trying to
push services into rural Alaska. The discussion today is about
keeping 8(a) opportunities intact so that minority groups have a
way to compete. When those contracts bring a profit, the revenue
is repatriated to these rural communities and villages.
Finding that no one from the Bering Straits Native Corporation
(BSNC) was available to testify, Co-Chair Ramras relayed that
BSNC is building a series of small wind turbines outside of
Nome. Local residents will be trained to do the service work and
energy will be more affordable for the community. "And there is
a direct relationship between the 8(a) contracts … and what some
of these corporations are doing with some of their profits,"
Chair Ramras stated.
1:12:50 PM
^TOM HARRIS, CEO, Tyonek Native Corporation
TOM HARRIS, CEO, Tyonek Native Corporation (TNC) said he is a
member of the Tongass Tribe. His comments will be in regard to
his position as CEO and as a Tlingit who understands the
importance of what Tyonek has been to ANSCA. The Tyonek Native
Corporation predates ANSCA as a result of the land claims issues
that the village of Tyonek wrestled with.
MR. HARRIS explained that Native elders don't stop teaching a
child until he or she says, "I can do it for others." He
described the process as "dependent, independent, and
interdependent" and described the task that was given to the
Native corporations an interdependent and entirely congruous
with tribal cultures. One of the early interdependent decisions
that Tyonek Native Corporation made was to help fund the first
AFN convention.
TNC is comprised of more than 700 shareholders that come from
the community of Tyonek, which is on the west side of Cook
Inlet. It has 12 subsidiaries with about 700 employees in eight
states. TNC has grown from its original 229 shareholders only
because of the success of the 8(a) program. TNC opened the roles
for the children so that they may become interdependent. TNC
provides scholarships, dividends, internships, funding for
cultural activities, life insurance, and currently is working on
a shareholder homesite program. This is all to further
interdependence.
MR. HARRIS, noting that the packet contains development work TNC
is doing, said TNC looks upon those developments not as an
independent company where it would keep all the profits but in
its role as an interdependent member of the interdependent
community. He said you're not serving in your current position
for personal profit; you are interdependent people and you have
earned the right to be our leaders. We are looking to contribute
back. We recognize and appreciate that the federal government
has given us an opportunity to be 8(a) and we are looking at our
next role, which is not being dependent, not being independent,
but to do for others. "Others" includes the non-Native
community. We count Anchorage in the expanded interdependent
community and we see it needs significant power, he said. As a
result, looking around our community we find that 900 megawatts
of power will be available in the not too distant future. We
recognize that in welcoming those projects we are going to be
welcoming the 5,000 construction jobs that have been identified
for that area.
1:17:57 PM
MR. HARRIS said 8(a) is helping us prepare for those jobs.
Without 8(a) we would be a dependent community and would be
forced to become a poster child for one of the many
environmental groups who want to take us on. We're not
interested in that; we're interested in being contributing
members to our expanded community.
CO-CHAIR RAMRAS asked him to repeat that because it goes to the
heart of the matter.
MR. HARRIS restated that TNC wants to be an interdependent
community and 8(a) contracting has helped it to become a strong
and contributing member of the interdependent community. Were it
not for 8(a), TNC would be a dependent community and a poster
child for many outside groups that have offered help and
protection. We understand that, he said. "We were originally
called the 'coal people;' that's how we kept the villages warm."
MR. HARRIS directed attention to a handout and noted that about
$18 billion in development projects are being planned by people
from outside the state and nation. The development opportunities
in this area are tremendous and TNC is planning to create a new
community called Nakacheba. That is the deny word for nowhere,
he said. This new community is designed to be part of the
interdependent community that will house 5,000 construction
members. Next to the coal is the Chakachamna hydropower project
and next to that is the geothermal project. Part of the coal is
not open pit mining. There is opportunity for dozens of
underground coal gasification systems and coal to liquid.
MR. HARRIS said this state and you as interdependent leaders
need to be aware that TNC has had more visitors from outside the
nation than it has had from inside the nation and more from
outside the state than from inside the state. They're coming in
part because of the study that the state paid for in 1993
identifying Tyonek as the most cost-effective bulk commodity
support site in Southcentral Alaska. The Asian trading companies
say that is an understatement. Rather, Tyonek is the most cost-
effective bulk commodities port site in the North Pacific Rim
with 900 megawatts of available cheap power directly adjacent.
He added that the new ferry that's being built in Ketchikan will
serve not only Point Mac Kinsey to Anchorage it will also serve
the community of Tyonek and the new community of Nakacheba.
MR. HARRIS said Tyonek is also a community dedicated to
protecting wildlife in order to protect the food resources.
Today most of the upper Cook Inlet has lost its king salmon, but
the Chuit River adjacent to the village still has its run
because the village has protected the spawning beds. "We are
looking as an interdependent member of this community to use
that to rebuild those other rivers," he said. Our elders know
not to take king salmon out of the food chain when the beluga
whale calves are nursing. Our legends say the stocks can be
rebuilt and as part of an interdependent community we are
encouraged to share this information.
1:24:59 PM
MR. HARRIS reflected on the cost of food in rural Alaska and
said the permanent fund has been a wonderful resource that's
kept communities alive, but unfortunately it has been used to
buy food that could have been grown locally. It's been
documented that Alaska is the least wildlife productive state in
the nation. Compared to other states it receives almost no
USDA/NRCS [Natural Resources Conservation Service] funding to
rebuild wildlife habitat and populations. To put it in
perspective, he said, one moose is worth nine of this year's
$1,300 permanent fund checks. So when a village loses one moose,
the food for nine members of that community is gone. He added
that the other sad fact is that 97 percent of wildlife grown in
the Lower-48 is on private land. Only 12.5 percent of Alaska
lands are ANSCA lands and perhaps one percent of the rest are
[private] lands. Clearly, we've got a big problem that can't be
solved without working together, he said.
CO-CHAIR RAMRAS said you articulated a unique currency
conversion that some in Washington D.C. might find difficult to
contemplate. It's what hard dollars mean to the subsistence
communities that make up the cultural identity of Alaska. The
conversion of the permanent fund to moose meat to maintain a
subsistence lifestyle is equally appropriate.
1:30:29 PM
REPRESENTATIVE JOULE said he appreciates the testimony and is
getting a sense from this Legislature of the Alaska Native place
and contribution to this state. This has been lacking for many
years and as an Alaska Native who is serving from rural Alaska
he very much appreciates this. More importantly, there is
finally a sense of something that we've known for a long time,
which is that we must face these challenges together. He added
that he read a little bit more into Tom Harris's last remarks on
the value of the moose by the things that he did not say. That
is that the moose does not know land or government jurisdiction.
Neither do the fish and other species that make their
contribution. We have a challenge in managing all these
resources. "All those things he didn't talk about were present
as I was listening," Representative Joule said.
He continued to make the point that it's not rhetorical to ask
if the state might benefit by looking at the 8(a) model. When
8(a) money comes home to the parent corporation in some form or
fashion, it often creates employment someplace else. When state
money passes through DOTPF or some other department it might
never end up as a boardwalk or a road in rural Alaska.
Representative Joule said that Native 8(a) contracts have been
very beneficial here in Alaska and it is interesting that they
have become a focal point because they're such a small piece
compared to the big corporations that do get those sole-source
contracts. "I can't help but think that this is some sort of
diversion," he concluded.
CO-CHAIR RAMRAS said he is told that official transcripts will
be available in about two weeks. Check with Representative
Joule's, Senator McGuire's, or his office for copies.
1:38:22 PM
CO-CHAIR MCGUIRE said she is delighted that in the last two
years there is a renewed effort in the Legislature to have
conversations to try to bridge the gap between rural and urban
Alaska. When we talk about things face-to-face it helps us to
move further. This has been heartening and it's a formal hearing
for the specific purpose of letting the people in Washington
D.C. know that the Alaska State Legislature is an advocate for
the 8(a) program and see the benefits.
1:42:16 PM
There being no further business to come before the committees,
CO-CHAIR RAMRAS adjourned the joint meeting at 1:42 p.m.
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