Tribal economic development bonds : lessons learned and implications for nation-building

Abstract

Pursuant to the UN Declaration of the Rights of Indigenous Peoples which the United States signed in 2009, "Indigenous peoples have the right to self-determination. By virtue of that right they freely determine their political status and freely pursue their economic, social and cultural development." Despite the premise of this commitment, Tribal Governments face limitations on the ability to issue tax free debt - limitations that are not applied to State or Local governments. Tribal government leaders say these restrictions unjustly limit their economic sovereignty and prohibit their ability to offer favorable conditions for financing economic development when compared to offerings made by State and Local governments. This research evaluates the Tribal Economic Development Bond Program (TEDB Program), a policy intervention aimed to address the root cause of this issue by temporarily expanding Tribal municipal bonding authority and other forms of tax-free debt service. I used IRS published schedules of TEDB allocations, Bloomberg, EMMA and CBXMarkets to construct a data set that identifies TEDB securities, and to derive lessons learned from the program. I interviewed stakeholders to further illustrate these findings and inform recommendations for reform. Ultimately, I recommend that the TEDB Program be reauthorized or that the IRC [section] 7871 sub sections (b) and (e) be eliminated, thus granting equality to Native Nations on this particular provision for tax free debt issuance.