Rule2021-20633
Permitting Additional Eligible Tribal Entities
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
September 24, 2021
Effective
September 24, 2021
Issuing agencies
Commerce DepartmentEconomic Development Administration
Abstract
Through this final rule, the Economic Development Administration (EDA), U.S. Department of Commerce, expands the definition of Tribal entities eligible to receive grants under the Public Works and Economic Development Act of 1965 (PWEDA) to include for-profit Tribal corporations so long as they are wholly owned by, and established exclusively for the benefit of, a Tribe.
Full Text
<html>
<head>
<title>Federal Register, Volume 86 Issue 183 (Friday, September 24, 2021)</title>
</head>
<body><pre>
[Federal Register Volume 86, Number 183 (Friday, September 24, 2021)]
[Rules and Regulations]
[Pages 52957-52959]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2021-20633]
=======================================================================
-----------------------------------------------------------------------
DEPARTMENT OF COMMERCE
Economic Development Administration
13 CFR Part 300
[Docket No.: 210916-0191]
RIN 0610-AA82
Permitting Additional Eligible Tribal Entities
AGENCY: Economic Development Administration, U.S. Department of
Commerce.
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: Through this final rule, the Economic Development
Administration (EDA), U.S. Department of Commerce, expands the
definition of Tribal entities eligible to receive grants under the
Public Works and Economic Development Act of 1965 (PWEDA) to include
for-profit Tribal corporations so long as they are wholly owned by, and
established exclusively for the benefit of, a Tribe.
DATES: This rule is effective September 24, 2021.
FOR FURTHER INFORMATION CONTACT: Mara Quintero Campbell, Senior
Advisor, email: <a href="/cdn-cgi/l/email-protection#e5a8a684889587808989a5808184cb828a93"><span class="__cf_email__" data-cfemail="9cd1dffdf1ecfef9f0f0dcf9f8fdb2fbf3ea">[email protected]</span></a>, telephone: (202) 603-9960, or
Jeffrey Roberson, Chief Counsel, email: <a href="/cdn-cgi/l/email-protection#aae0f8c5c8cfd8d9c5c4eacfcecb84cdc5dc"><span class="__cf_email__" data-cfemail="5218003d303720213d3c123736337c353d24">[email protected]</span></a>, telephone:
(202) 482-1315, Economic Development Administration, U.S. Department of
Commerce, 1401 Constitution Avenue NW, Suite 72023, Washington, DC
20230.
SUPPLEMENTARY INFORMATION:
Background
History of EDA's Definition of Eligible Tribal Entities
When Congress created EDA in 1965, it recognized the unique
economic needs of American Indian Nations (AINs or Tribes) and carved
out a special provision within PWEDA that authorized Indian Tribes to
be eligible for a 100% grant rate, across all of EDA's PWEDA programs.
42 U.S.C. 3144(c)(1). No other category of eligible entity is provided
such broad flexibility with regard to grant rate under PWEDA.
PWEDA defines ``Indian Tribe'' as any Indian tribe, band, nation,
pueblo, or other organized group or community, including any Alaska
Native village or Regional Corporation (as defined in or established
under the Alaska Native Claims Settlement Act (43 U.S.C. 1601 et
seq.)), that is recognized as eligible for the special programs and
services provided by the United States to Indians because of their
status as Indians. 42 U.S.C. 3122(7).
EDA has long recognized that AINs have diverse organizational,
governance, and operating structures. In deference to the special
government-to-government relationship that exists between the U.S.
Government and AINs and recognizing their sovereign interest in
determining their own organizational arrangements, EDA has historically
interpreted the term ``Indian Tribe'' broadly to include a range of
Tribally controlled entities in addition to the AIN's primary governing
body. EDA's regulations, codified at 13 CFR 300.3, therefore provide
that the term ``Indian Tribe'' includes the governing body of an Indian
Tribe, non-profit Indian corporation (restricted to Indians), Indian
authority, or other non-profit Indian tribal organization or entity;
provided that the Indian tribal organization or entity is wholly owned
by, and established for the benefit of, the Indian Tribe or Alaska
Native Village.
For over 45 years, EDA's regulations have limited the types of
organizations included within the term ``Indian Tribe'' to non-profit
Tribal organizations. The word non-profit first appeared in EDA's
regulations in 1973 to condition the term ``corporation.'' In 1999, EDA
further modified the definition and added a second use of ``non-
profit'' to
[[Page 52958]]
serve as an overarching descriptor to the entire list of eligible
entities.\1\
---------------------------------------------------------------------------
\1\ Since its first inclusion in 1973, the definition of Indian
Tribe has undergone a number of other changes, primarily combining
what was previously two separate definitions of Alaska Native and
other Tribes into one all-encompassing definition reflected in the
1999 update.
---------------------------------------------------------------------------
There is no background preamble language or other documentation
that EDA has found that explains EDA's reasoning at that time for
including ``non-profit'' as a limitation in these two instances. As a
result of the use of the term ``non-profit'' in the regulations,
however, for-profit Tribal entities have been found ineligible for EDA
Tribal funds.
Need for Revised Definition
While EDA has a long history of supporting AINs, the agency has
also seen a stagnation in funding to Tribes even while there is broad
recognition that these communities are among the most economically
distressed in the country. To address this gap, EDA has identified
several internal and external actions it can take to strengthen its
work with AINs. One action is to extend EDA Tribal eligibility to
include additional entities beyond those already included in the
definition, specifically for-profit entities that are wholly owned by
and established for the benefit of the Tribe, which, as noted above, is
currently prohibited by EDA regulation.
Over the past decade, EDA has seen an increase in applications from
for-profit Tribal entities. These applications were often submitted by
Tribal corporations chartered under Section 17 of the Indian
Reorganization Act (25 U.S.C. 477) (also referred to as ``Section 17
corporations''), limited liability corporations organized under state
or Tribal law, or other similar structures. This increase tracks both
the evolution of these entities and their expanding economic
development role within Tribes.
Under Federal policies of self-determination, Tribes play a similar
role as state and local governments and are generally responsible for
providing basic services within the Tribe (e.g., roads, water,
electricity, and telecommunications).\2\ To generate revenue to provide
these services, Tribes can create corporations to participate in the
private marketplace through tourism, manufacturing, and services
sectors.\3\
---------------------------------------------------------------------------
\2\ Harvard Project on American Indian Economic Development
(HPAIED) COVID Letter to Treasury, April 10, 2020. <a href="https://ash.harvard.edu/files/ash/files/hpaied_covid_letter_to_treasury_04-10-20_vsignedvfinv02.pdf?utm_medium=Email&utm_campaign=HPAIED+COVID+Recommendations&utm_source=Press">https://ash.harvard.edu/files/ash/files/hpaied_covid_letter_to_treasury_04-10-20_vsignedvfinv02.pdf?utm_medium=Email&utm_campaign=HPAIED+COVID+Recommendations&utm_source=Press</a>.
\3\ Tribal Business Structure Handbook. Office of Indian Energy
and Economic Development, Department of Interior, I-1.
---------------------------------------------------------------------------
Tribal corporations are distinct from ordinary ``for-profit''
entities. Tribal corporations may be organized under Federal law and
granted the same legal protections and advantages as the Tribe itself.
Depending on their structure and place of operation, Tribally owned
for-profit entities may also enjoy the Tribe's sovereign immunity from
lawsuits, exemption from certain Federal and state taxes, or exemption
from otherwise-applicable state laws. Most importantly from EDA's
perspective, many of these entities are furthering the long-term
economic development of AINs.
Such corporate entities can be owned by the Tribe or they may have
non-Indian business partners. Under this update to EDA's regulations,
EDA will only authorize for-profit entities that are wholly owned and
managed by the Tribe to be eligible for EDA Tribal funding, thereby
ensuring the EDA investment directly and principally benefits the
Tribe. As is currently the case, EDA will verify the status largely
through a review of articles of incorporation, business charters, and
other formation documents.
Results of Tribal Consultations on EDA's Proposal To Update Regulation
EDA conducted extensive Tribal consultations under Executive Order
13175 (Nov. 6, 2000) regarding the change to the regulations provided
in this final rule. On April 6, 2021, EDA sent a letter requesting
consultation with Tribal Leaders to the Tribal Leaders of existing EDA
grantees, national and regional Tribal Organizations, and entities and
persons on the White House Tribal Affairs email listserv. This notice
was also posted on EDA's website. EDA leadership held two virtual
meetings with Tribal representatives on April 16 and 19, 2021. In
addition, EDA accepted comments on the proposal by email and voicemail
through April 28, 2021.
AINs participating in the consultation were broadly supportive of
the change. Several AINs commented that allowing Tribally owned for-
profit organizations to be eligible for EDA grants would increase
Tribal access to economic development opportunities and support long-
term prosperity. One letter noted:
Expanding the EDA tribal eligibility to include wholly-owned
for-profit tribal corporations, arms of the tribe, limited liability
companies, organizations, and other tribal entities would go a long
way toward increasing tribal access to economic development
opportunities for our communities. For many tribes, such entities
are tasked with the specific purpose of creating economic
development for tribal communities. Without a tax base, tribally-
owned corporations, economic development organizations, and other
entities must generate critical tribal revenue to provide important
governmental services to our members.
Many other AINs made similar comments in support of the change
provided in this final rule. Several AINs also noted that Tribally
owned businesses are often major employers for Tribal communities and
that extending EDA eligibility to these organizations would support job
growth.
Some AINs supported the change, encouraging EDA to extend
eligibility to all forms of Tribally owned corporations, whether
chartered under Tribal or state law. Other commenters urged EDA to take
care to ensure that the benefits of for-profit activity are in fact
flowing back to a Tribe and its members before extending eligibility.
Commenters also suggested that EDA provide clear guidance on how it
would make eligibility determinations.
Under the new definition of ``Indian Tribe,'' a for-profit entity
may be eligible for EDA assistance provided that it is wholly owned by
a Tribe and organized for the benefit of the Tribe. Eligibility is not
limited to any particular type of entity. Indian corporations, Section
17 corporations, state-chartered corporations, and Limited Liability
Corporations (among others) are all potentially eligible. EDA intends
to verify both that the for-profit entity is wholly owned by a Tribe
and that the entity is organized for the benefit of that Tribe before
extending eligibility. EDA anticipates that these determinations will
largely be made on the basis of corporate organizational documents
(e.g., charters, by-laws), but will also look to other sources, as
needed, to verify eligibility. Because EDA does not currently have
experience with examining the eligibility of Tribal for-profit
entities, EDA will initially consider eligibility on a case-by-case
basis. EDA will communicate openly with affected Tribes to ensure that
its eligibility determinations take account of all relevant
considerations.
Some AINs expressed concerns regarding the change to the
regulations provided in this final rule. Some commenters cautioned
that, if EDA extended eligibility to for-profit entities, smaller and
less well-resourced Tribes would be disadvantaged in competition for
EDA funding. EDA appreciates this
[[Page 52959]]
concern and will take steps when reviewing applications to ensure that
applications from smaller tribes receive proper attention. Because
economic development need is always an important consideration in
funding decisions, EDA does not believe that larger tribes with
associated for-profit entities will necessarily have an advantage over
smaller tribes in the competitive process. Nonetheless, EDA will
monitor the distribution of funding and make adjustments to its
application review process, as necessary, to ensure that funding is
distributed equitably.
Other commenters expressed particular concern that the change
provided in this final rule would make Alaska Native Corporations
(ANCs) eligible for EDA funding. The eligibility of ANCs for EDA
funding is governed by the language of PWEDA, however, and is therefore
not within the scope of this action and not affected by this final
rule. Based on the Supreme Court's recent decision in Yellen v.
Confederated Tribes of the Chehalis Reservation, 121 S. Ct. 2434
(2021), EDA has determined that ANCs fall within PWEDA's definition of
``Indian Tribe.''
Regulation Change
To enable for-profits that are wholly owned by, and established for
the benefit of, the Indian Tribe to be eligible for EDA Tribal funding,
this final rule changes EDA's regulation by deleting the first instance
of ``non-profit'' where it appears in the second sentence of the
definition at 13 CFR 300.3, so that ``non-profit'' no longer modifies
the type of ``Indian corporation (restricted to Indians)'' that is
eligible. This final rule also adds ``, corporation'' in the proviso to
the second sentence to ensure that any such corporation must be wholly
owned by, and established for the benefit of, the Tribe.
As noted above, this change has no effect on the eligibility of
ANCs, which are separately identified in PWEDA's definition of ``Indian
Tribe.''
Classification
Administrative Procedure Act and Regulatory Flexibility Act
Pursuant to 5 U.S.C. 553(b)(B), there is good cause to waive prior
notice and an opportunity for public comment on this action because EDA
formally consulted AINs on this change in accordance with Executive
Order 13125, and AINs are the only affected entities. Additional public
comment would therefore serve no purpose and is unnecessary. There is
also good cause under 5 U.S.C. 553(d)(3) to waive the 30-day delay in
effectiveness. Expanding eligibility of Native American communities is
urgent given the current availability of funds for such communities
under the American Rescue Plan Act (ARPA) of 2021 (Pub. L. 117-2).
Expanding eligibility within Native American communities as
accomplished by this rule is critically necessary to ensure the
benefits of ARPA effectively reach those communities and that they are
able to equally take part in the economic recovery from the pandemic.
Because prior notice and an opportunity for public comment are not
required pursuant to 5 U.S.C. 553, or any other law, the analytical
requirements of the Regulatory Flexibility Act (5 U.S.C. 601 et seq.)
are inapplicable. Therefore, a regulatory flexibility analysis has not
been prepared.
Executive Orders 12866 and 13563
The Office of Management and Budget (OMB) has determined that this
rule is not significant for purposes of Executive Order 12866.
Congressional Review Act
This final rule is not major under the Congressional Review Act (5
U.S.C. 801 et seq.).
Executive Order 13132
This final rule does not contain policies that have federalism
implications.
Paperwork Reduction Act
The Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq.)
(``PRA'') requires that a Federal agency consider the impact of
paperwork and other information collection burdens imposed on the
public and, under the provisions of PRA section 3507(d), obtain
approval from OMB for each collection of information it conducts,
sponsors, or requires through regulations. Notwithstanding any other
provision of law, no person is required to respond to, nor shall any
person be subject to a penalty for failure to comply with a collection
of information subject to the PRA unless that collection displays a
currently valid OMB Control Number. This final rule does not require
the collection of any information.
List of Subjects in 13 CFR Part 300
Organization and functions (Government agencies), Reporting and
recordkeeping requirements.
For the reasons discussed above, EDA is amending title 13, chapter
III of the Code of Federal Regulations as follows:
PART 300--GENERAL INFORMATION
0
1. The authority citation for part 300 continues to read as follows:
Authority: 42 U.S.C. 3121; 42 U.S.C. 3122; 42 U.S.C. 3211; 15
U.S.C. 3701; Department of Commerce Organization Order 10-4.
0
2. Amend Sec. 300.3 by revising the definition of Indian Tribe to read
as follows:
Sec. 300.3 Definitions.
* * * * *
Indian Tribe means an entity on the list of recognized tribes
published pursuant to the Federally Recognized Indian Tribe List Act of
1994, as amended (Pub. L. 103-454) (25 U.S.C. 479a et seq.), and any
Alaska Native Village or Regional Corporation (as defined in or
established under the Alaska Native Claims Settlement Act (43 U.S.C.
1601 et seq.). This term includes the governing body of an Indian
Tribe, Indian corporation (restricted to Indians), Indian authority, or
other non-profit Indian tribal organization or entity; provided that
the Indian tribal organization, corporation, or entity is wholly owned
by, and established for the benefit of, the Indian Tribe or Alaska
Native Village.
* * * * *
Dated: September 20, 2021.
Alejandra Y. Castillo,
Assistant Secretary of Commerce for Economic Development.
[FR Doc. 2021-20633 Filed 9-23-21; 8:45 am]
BILLING CODE 3510-24-P
</pre><script data-cfasync="false" src="/cdn-cgi/scripts/5c5dd728/cloudflare-static/email-decode.min.js"></script></body>
</html>Indexed from Federal Register on September 24, 2021.
This is legal information, not legal advice. Laws vary by jurisdiction and change frequently. Always verify current law with official sources and consult a licensed attorney in your jurisdiction for advice on your specific situation.