AN ACT ESTABLISHING A STATE-TRIBAL ECONOMIC DEVELOPMENT COMMISSION THAT IS ADMINISTRATIVELY ATTACHED TO THE GOVERNOR'S OFFICE; SPECIFYING THE PURPOSE AND DUTIES OF THE COMMISSION; ESTABLISHING SPECIAL REVENUE ACCOUNTS AND PROVIDING AN APPROPRIATION TO THE COMMISSION; MANDATING AN ASSESSMENT OF ECONOMIC CONDITIONS ON INDIAN RESERVATIONS IN THE STATE; ENABLING THE MICROBUSINESS LOAN PROGRAM TO SERVE A QUALIFIED ORGANIZATION OPERATING ON AT LEAST FOUR INDIAN RESERVATIONS; FURTHER CLARIFYING THE RESPONSIBILITIES OF THE COMMERCE DEPARTMENT AND THE STATE COORDINATOR OF INDIAN AFFAIRS TO ASSIST TRIBES IN ECONOMIC DEVELOPMENT; REQUIRING THE COORDINATOR OF INDIAN AFFAIRS TO REPORT IN DETAIL AT EVERY MEETING OF A CERTAIN LEGISLATIVE INTERIM COMMITTEE THE ACTIONS TAKEN BY THE COMMISSION TO CARRY OUT ITS DUTIES; AMENDING SECTIONS 2-15-217, 17-6-406, 17-6-407, 17-6-408, 90-1-105, 90-9-202, AND 90-11-102, MCA; AND PROVIDING EFFECTIVE DATES AND A TERMINATION DATE.

WHEREAS, Indians comprise approximately 7% of Montana's population, and tribal lands comprise about 9% of the total land area of the state; and

WHEREAS, the seven federally recognized tribes in Montana do not receive an equitable proportion of certain categories of federal funds disbursed to Montana; and

WHEREAS, state law requires the Department of Commerce to assist Indian communities and tribal governments in efforts to expand business activity and economic development on the seven Indian reservations in Montana; and

WHEREAS, the Governor and certain state agencies could, if provided with guidance and suitable resources from the Legislature, more actively seek federal assistance that would directly benefit tribal communities and the state; and

WHEREAS, the efforts expended by the Agricultural Development Council and other state boards and commissions intended to help boost the Montana economy will be enhanced by Indian representation; and

WHEREAS, certain Montana statutes and state programs, including loan programs, fail to include tribal entities and thereby fail to maximize the benefit of the existing network of tribal business information centers and other economic development opportunities in Indian communities across the state; and

WHEREAS, Indians who are citizens of Montana are both entitled to and deserving of a more vigorous effort on the part of the state, in cooperation with tribal governments, to foster economic development on the reservations in the state; and

WHEREAS, each of the tribal governments and their respective reservation communities will benefit from closer cooperation with new and existing boards, commissions, and agencies of the state, especially those most directly related to economic development.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MONTANA:

Section 1. Short title. [Sections 1 through 6] may be cited as the "Native American Economic Development Act of 1999".

Section 2. State-tribal economic development commission -- composition -- compensation for members. (1) There is a state-tribal economic development commission administratively attached to the office of the governor as prescribed in 2-15-121.

(2) The commission is composed of nine members, each appointed by the governor to 3-year staggered terms commencing on July 1 of each year of appointment, and must include:

(a) the state coordinator of Indian affairs;

(b) one member from the department of commerce;

(c) one member from each of the seven federally recognized tribes in Montana. If a tribal government nominates or otherwise recommends more than one person for membership on the commission, the governor shall select one individual from among those recommended persons.

(3) Each member may be reappointed for successive terms.

(4) The members of the commission shall elect a presiding officer from among the members.

(5) Six members of the commission constitute a quorum and the affirmative vote of the majority of the members present is sufficient for any action taken by the commission.

(6) Any vacancy on the commission must be filled in the same manner as the original appointment.

(7) Each member of the commission is entitled to reimbursement for expenses as provided in 2-18-501 through 2-18-503.

Section 3. Commission purposes -- duties and responsibilities. (1) The general purposes of the commission include:

(a) assisting, promoting, encouraging, developing, and advancing economic prosperity and employment on Indian reservations in Montana by fostering the expansion of business, manufacturing, tourism, agriculture, and community development programs;

(b) cooperating and acting in conjunction with other organizations, public and private, to benefit tribal communities;

(c) recruiting business enterprises to locate on or invest in enterprises on the reservations; and

(d) identifying, obtaining, and coordinating federal, state, and private sector gifts, grants, loans, and donations to further economic development on the Indian reservations in Montana.

(2) The state-tribal economic development commission shall:

(a) determine, with assistance from the tribal business center coordinator and the federal grants coordinator in the office of the Indian affairs coordinator, the availability of federal, state, and private sector gifts, grants, loans, and donations to tribal governments, Indian business enterprises, and communities located on Indian reservations in Montana;

(b) apply for grants listed in the Catalog of Federal Domestic Assistance for which the commission is eligible and which would, if awarded, supply identifiable economic benefits to any or all of the Indian reservations in Montana;

(c) in cooperation with a tribal government, and when allowed by federal law and regulation, assist the tribe in applying for grants listed in the Catalog of Federal Domestic Assistance for which an appropriate tribal entity is eligible and which would, if awarded, supply identifiable economic benefits to any or all of the Indian reservations in Montana;

(d) evaluate the apportionment of current spending of federal funds by state agencies in areas including but not limited to economic development, housing, community infrastructure, business finance, tourism promotion, transportation, and agriculture;

(e) conduct or commission and oversee a comprehensive assessment of the economic development needs and priorities of each Indian reservation in the state;

(f) notify tribal governments, the governor, the Indian affairs coordinator, and the directors of the departments of commerce, agriculture, and transportation, of the availability of specific federal, state, or private sector funding programs or opportunities that would directly benefit Indian communities in Montana;

(g) assist tribal governments and other tribal entities that are eligible for federal assistance programs as provided in the most recent published edition in the Catalog of Federal Domestic Assistance in applying for funds that would contribute to the respective tribes' economic development;

(h) work cooperatively with tribal government officials, the state coordinator of Indian affairs, and other appropriate state officials to help foster state-tribal cooperative agreements pursuant to Title 18, chapter 11, part 1, that will:

(i) enhance economic development on the Indian reservations in Montana; and

(ii) help the department of commerce to fully implement and comply with the provisions of 90-1-105; and

(i) provide to the governor, the legislative council, the legislative auditor, and to each of the presiding officers of the tribal governments in Montana a biennial report that summarizes the activities of the commission.

Section 4. Comprehensive assessment on reservations. (1) The state-tribal economic development commission shall conduct an accurate, comprehensive, detailed, and objective assessment of economic conditions on each of the Indian reservations in the state. In addition to an initial assessment, the commission may also require periodic updates of the data and analysis contained in the assessment, mainly for the purpose of monitoring progress toward goals and objectives set forth by the commission.

(2) The commission, the coordinator of Indian affairs, or the governor may issue a request for proposals and, on the basis of a competitive bidding process, select a qualified researcher or research team from the private sector or a college or university to conduct the assessment and report findings and conclusions to the commission.

(3) If the commission has adequate financial resources, the commission may, at its discretion, conduct or commission subsequent follow-up studies or assessments to obtain updated information.

(4) An assessment of economic conditions on the Indian reservations in Montana must include the consideration of multiple dimensions of economic development, including reservation demographics, economic development strengths and weaknesses, salient factors relating to economic development, natural resources, conditions in the natural environment, human resources, financial resources, business assistance programs, job training programs, education curriculum, the availability of technical training and assistance, and relevant tribal, state, and federal policies.

Section 5. No waiver of tribal sovereignty. [Sections 3 and 4] do not constitute or imply any waiver of sovereignty on the part of any of the federally recognized tribes in Montana.

Section 6. Special revenue accounts. (1) There is an account in the state treasury for the receipt of state and private funds and an account in the state treasury for the receipt of federal funds for expenditure by the state-tribal economic development commission established in [section 2].

(2) Money in the accounts established in subsection (1) must be used to pay:

(a) the commission's administrative costs;

(b) the salary, benefits, and administrative expenses of the tribal business center coordinator and the federal grants coordinator; and

(c) the costs of conducting or commissioning and periodically updating or otherwise modifying a comprehensive assessment of economic development needs and priorities on each of the Indian reservations in the state.

(3) Money in the accounts that is not expended for the purposes identified in subsection (2) may be used for other purposes that the commission considers prudent or necessary.

(4) Interest and income earned on the money in the accounts must be deposited in the accounts for the commission's use.

(5) Money in the accounts that is not expended by June 30, 2001, must remain in the accounts for the commission's use.

Section 7. Appropriation. (1) There is transferred $200,000 from the general fund to the state special revenue account established in [section 6], which must be allocated to and expended by the commission, in appropriate amounts as determined by the commission to:

(a) fund a tribal business center coordinator position, a federal grants coordinator position, and related administrative support costs for both positions;

(b) conduct or commission, through a competitive bid process that results in a contract for services with a private sector or college or university research entity that is considered qualified by the commission, a comprehensive assessment of economic development needs and priorities as required in [section 4]; and

(c) pay the administrative costs and expenses of the commission.

(2) There is appropriated to the state-tribal economic development commission from the state special revenue account established in [section 6] $200,000 for the purpose of funding the commission's activities, including but not limited to those specified in subsection (1).

(3) Money received in federal programs or grants that is deposited in the federal special revenue account established in [section 7] is appropriated in an amount not to exceed $2 million to the state-tribal economic commission for purposes consistent with [this act].

(4) The appropriations in this section are biennial.

Section 8. Section 2-15-217, MCA, is amended to read:

"2-15-217. Office of state coordinator of Indian affairs. (1) There is an office of state coordinator of Indian affairs. The office is allocated to the governor's office for administrative purposes only as prescribed in 2-15-121.

(2) The coordinator must be appointed by the governor from a list of five qualified Indian applicants agreed upon by the tribal councils of the respective Indian tribes of the state. The coordinator shall serve at the pleasure of the governor.

(3) Except as provided in subsection (4), the qualifications for applicants must include but are not limited to:

(a) a bachelor's degree in a relevant public policy field, as determined by the governor;

(b) not less than 3 years experience in a professional administrative capacity; and

(c) demonstrated skills in conducting policy research and obtaining grant funds from federal, state, or private sector sources.

(4) The governor may appoint an applicant agreed upon by the tribal councils as provided in subsection (2) whose skills and experience are commensurate with the qualifications set forth in subsection (3)."

Section 9. Section 17-6-406, MCA, is amended to read:

"17-6-406. Microbusiness finance program -- powers and duties of department. There is a microbusiness finance program administered by the department. The department shall adopt rules to implement the provisions of this part, including but not limited to:

(1) establishing criteria and procedures for certifying microbusiness development corporations;

(2) establishing criteria and procedures to select from competing development loan applications and to award development loans to certified microbusiness development corporations;

(3) establishing criteria and procedures to be followed by certified microbusiness development corporations that administer revolving loan funds supported by the program;

(4) determining the amount and method of computation and payment of interest rates charged to recipients of development loans and specifying amortization schedules and other terms and conditions for development loans as may be necessary;

(5) establishing criteria for determining nonperformance and declaring default in the administration of development loans and requiring the refund of defaulted development loan funds to the microbusiness development loan account;

(6) establishing criteria for satisfactory performance in development loan administration to determine eligibility for renewal of development loans or for additional development loans;

(7) establishing guidelines for maximum and minimum interest rates that may be charged by certified microbusiness development corporations on microbusiness loans; and

(8) dividing the state into not more than 12 multicounty service regions within each of which not more than one microbusiness development corporation may be funded at any time. However, a corporation that is funded as a statewide microbusiness development corporation under 17-6-408 may offer specialized services to constituents within regions or within an Indian reservation having a funded regional microbusiness development corporation."

Section 10. Section 17-6-407, MCA, is amended to read:

"17-6-407. Microbusiness development loan account and finance program administrative account -- criteria -- limitations. (1) There is in the state special revenue fund a microbusiness development loan account into which the funds appropriated pursuant to section 11, Chapter 602, Laws of 1991, money appropriated pursuant to section 3, Chapter 413, Laws of 1995, and money received in repayment of the principal of development loans must be deposited. The department may make development loans from the account in amounts not to exceed $250,000 a loan to a certified microbusiness development corporation.

(2) There is in the state special revenue fund a microbusiness finance program administrative account into which all interest received on development loans, service charges or fees received from certified microbusiness development corporations, grants, donations, and private or public income must be deposited. Money in the administrative account may be transferred to the development loan account or be used to pay the costs of the program, including personnel, travel, equipment, supplies, consulting costs, and other operating expenses of the program.

(3) Subject to subsection (1), a certified microbusiness development corporation that receives a development loan may apply for an additional loan if the applicant meets the performance criteria established by the department.

(4) To establish the criteria for making development loans, the department shall consider:

(a) the plan for providing services to microbusinesses;

(b) the scope of services to be provided by the certified microbusiness development corporation;

(c) geographic representation of all regions of the state, including urban , rural, and tribal communities;

(d) the plan for providing service to minorities, women, and low-income persons;

(e) the ability of the corporation to provide business training and technical assistance to microbusiness clients;

(f) the ability of the corporation, with its plan, to:

(i) monitor and provide financial oversight of recipients of microbusiness loans;

(ii) administer a revolving loan fund; and

(iii) investigate and qualify financing proposals and to service credit accounts;

(g) sources and sufficiency of operating funds for the certified microbusiness development corporation; and

(h) the intent of the corporation, with its plan and written indications of local institutional support, to provide services to a designated multicounty region of the state.

(5) Development loan funds may be used by a certified microbusiness development corporation to:

(a) satisfy matching fund requirements for other state, federal, or private funding only if funding is intended and used for the purpose of providing or enhancing the certified microbusiness development corporation's ability to provide and administer loans, technical assistance, or management training to microbusinesses;

(b) establish a revolving loan fund from which the certified microbusiness development corporation may make loans to qualified microbusinesses, provided that a single loan does not exceed $35,000 and the outstanding balance of all loans to a microbusiness or a project participated in by more than one microbusiness or to two or more microbusinesses in which any one person holds more than a 20% equity share does not exceed $35,000;

(c) establish a guarantee fund from which the certified microbusiness development corporation may guarantee loans made by financial institutions to qualified microbusinesses. However, a single guarantee may not exceed $35,000, and the aggregate of all guarantees to a microbusiness or a project participated in by more than one microbusiness or to two or more microbusinesses in which any one person holds more than a 20% equity share may not exceed $35,000.

(6) Development loan funds may not be:

(a) loaned for relending or investment in stocks, bonds, or other securities or for property not intended for use in production by the recipient of the loan; or

(b) used to:

(i) refinance a nonperforming loan held by a financial institution; or

(ii) pay the operating costs of a certified microbusiness development corporation. However, interest income earned from the proceeds of a development loan may be used to pay operating expenses.

(7) Certified microbusiness development corporations are required to contribute cash from other sources to leverage and secure development loans from the program. Contributions provided by the corporation must be on a ratio of at least $1 from other sources for each $6 from the program. These contributions may come from a public or private source other than the program and may be in the form of equity capital, loans, or grants.

(8) Development loans must be made pursuant to a development loan agreement and may be amortization or term loans, bear interest at less than the market rate, be renewable, be callable, and contain other terms and conditions considered appropriate by the department that are consistent with the purposes of and with rules promulgated to implement this part.

(9) (a) Unless subject to federal law or rule, each certified microbusiness development corporation that receives a development loan under this part shall pay the cost of an audit of its operations to be conducted at least once every 2 years. The department shall designate an auditor to conduct the audit.

(b) If an audit is performed under a requirement of federal law or rule, the department shall waive the audit required in subsection (9)(a) with respect to all issues addressed by the federal audit report. However, the department may require an audit of matters that are not, in the department's judgment, addressed by the federal report--for example, verification of compliance with requirements specific to the program, such as job-generation standards and reporting.

(10) A certified microbusiness development corporation that is in default for nonperformance under rules established by the department may be required to refund the outstanding balance of development loans awarded prior to the default declaration. A development loan is secured by a first lien on the receivables of the corporation receiving the loan."

Section 11. Section 17-6-408, MCA, is amended to read:

"17-6-408. Certification of microbusiness development corporations. The department may certify:

(1) a microbusiness development corporation when it determines that the corporation:

(a) has developed a viable plan for providing training, access to financing, and technical assistance for qualified microbusinesses;

(b) has broad-based community support in a designated multicounty region of the state, as reflected, for example, by the membership of its board of directors; and

(c) has an adequate source of operating capital; or

(2) a statewide microbusiness development corporation when the department determines that the corporation meets the conditions under subsections (1)(a) and (1)(c) and, in addition:

(a) has a viable plan to provide specialized services to constituents throughout the state or within at least four Indian reservations in Montana; and

(b) does not preempt or duplicate efforts of microbusiness development corporations within local communities."

Section 12. Section 90-1-105, MCA, is amended to read:

"90-1-105. Functions of department of commerce -- economic development. The department of commerce shall:

(1) provide coordinating services to aid state and local groups and Indian tribal governments in the promotion of new economic enterprises and conduct publicity and promotional activities in connection with new economic enterprises;

(2) collect and disseminate information regarding the advantages of developing agricultural, recreational, commercial, and industrial enterprises within this state;

(3) serve as the state's official liaison between persons interested in locating new economic enterprises in Montana and state and local groups and Indian tribal governments seeking new enterprises;

(4) aid communities and Indian tribal governments interested in obtaining new business or expanding existing business;

(5) study and promote means of expanding markets for Montana products;

(6) encourage and coordinate public and private agencies or bodies in publicizing the facilities and attractions of the state;

(7) explore the use of cooperative agreements, as provided in Title 18, chapter 11, part 1, for the promotion and enhancement of economic opportunities on the state's Indian reservations; and

(8) assist the state-tribal economic development commission established in [section 2] in:

(a) identifying federal government and private sector funding sources for economic development on Indian reservations in Montana; and

(b) fostering and providing assistance to prepare, develop, and implement cooperative agreements, in accordance with Title 18, chapter 11, part 1, with each of the tribal governments in Montana."

Section 13. Section 90-9-202, MCA, is amended to read:

"90-9-202. Powers and duties of the council. The council shall:

(1) establish policies and priorities to enhance the future development of agriculture in Montana, including the Indian reservations in the state;

(2) make investments or loans in agricultural development projects that have a short- or long-term ability to stimulate agriculture development and diversification in rural, urban, and tribal settings in Montana, including but not limited to:

(a) seed capital loans for development and commercialization of new products and processes;

(b) agricultural business incubators;

(c) foreign and domestic market development activities;

(d) applied technological research; and

(e) agricultural technology assistance and transfer; and

(3) accept grants or receive devises of money or property for use in making the investments or loans authorized by this chapter."

Section 14. Section 90-11-102, MCA, is amended to read:

"90-11-102. Duties and assistance. (1) It is the duty of the state coordinator of Indian affairs to carry out the legislative policy set forth in 90-11-101.

(2) The state coordinator shall:

(a) become acquainted with the problems confronting the Indians of Montana;

(b) advise the legislative and executive branches of the state of Montana of those problems;

(c) make recommendations for the alleviation of those problems;

(d) serve the Montana delegation in the federal congress as an adviser and intermediary in the field of Indian affairs;

(e) act on behalf of representative Indian organizations and groups, public and private, whenever the state coordinator's support is solicited by tribal entities;

(f) serve on the state-tribal economic development commission established in [section 2];

(g) report in detail at every meeting of the interim committee of the legislature having jurisdiction over the office of the coordinator those actions taken by the state-tribal economic development commission established by [section 2] to carry out its duties; and

(h) hire, with the concurrence of the other members of the state-tribal economic development commission, a tribal business center coordinator and a federal grants coordinator, and subsequently provide administrative support for both positions.

(3) All executive and legislative agencies of state government may within the area of their expertise and authority provide assistance to tribal councils or their official designees requesting assistance on any matter relating to coal development on Indian reservation lands and may make an appropriate charge for that assistance."

Section 15. Severability. If a part of [this act] is invalid, all valid parts that are severable from the invalid part remain in effect. If a part of [this act] is invalid in one or more of its applications, the part remains in effect in all valid applications that are severable from the invalid applications.

Section 16. Codification instruction. [Sections 1 through 6] are intended to be codified as an integral part of Title 90, chapter 1, part 1, and the provisions of Title 90, chapter 1, part 1, apply to [sections 1 through 6].

Section 17. Notification to tribal governments. The secretary of state shall send a copy of [this act] to each tribal government located on the seven Montana reservations and to the Little Shell band of Chippewa.

Section 18. Effective dates. (1) Except as provided in subsection (2), [this act] is effective on passage and approval.

(2) [Section 7] is effective July 1, 1999.

Section 19. Termination. [This act] terminates June 30, 2001.

- END -

I hereby certify that the within bill,

HB 0670, originated in the House.

Chief Clerk of the House

Speaker of the House

Signed this	day

of	, .

President of the Senate

Signed this	day

of	, .

HOUSE BILL NO. 670

INTRODUCED BY B. EGGERS, S. DOHERTY, B. CRIPPEN, H. HARPER, R. JABS, G. JERGESON, C. JUNEAU, M. MCCANN, J. MERCER, A. MOHL, L. NELSON, F. SMITH, E. SWANSON, F. THOMAS

AN ACT ESTABLISHING A STATE-TRIBAL ECONOMIC DEVELOPMENT COMMISSION THAT IS ADMINISTRATIVELY ATTACHED TO THE GOVERNOR'S OFFICE; SPECIFYING THE PURPOSE AND DUTIES OF THE COMMISSION; ESTABLISHING SPECIAL REVENUE ACCOUNTS AND PROVIDING AN APPROPRIATION TO THE COMMISSION; MANDATING AN ASSESSMENT OF ECONOMIC CONDITIONS ON INDIAN RESERVATIONS IN THE STATE; ENABLING THE MICROBUSINESS LOAN PROGRAM TO SERVE A QUALIFIED ORGANIZATION OPERATING ON AT LEAST FOUR INDIAN RESERVATIONS; FURTHER CLARIFYING THE RESPONSIBILITIES OF THE COMMERCE DEPARTMENT AND THE STATE COORDINATOR OF INDIAN AFFAIRS TO ASSIST TRIBES IN ECONOMIC DEVELOPMENT; REQUIRING THE COORDINATOR OF INDIAN AFFAIRS TO REPORT IN DETAIL AT EVERY MEETING OF A CERTAIN LEGISLATIVE INTERIM COMMITTEE THE ACTIONS TAKEN BY THE COMMISSION TO CARRY OUT ITS DUTIES; AMENDING SECTIONS 2-15-217, 17-6-406, 17-6-407, 17-6-408, 90-1-105, 90-9-202, AND 90-11-102, MCA; AND PROVIDING EFFECTIVE DATES AND A TERMINATION DATE.