CNIGA Tribal Solar Presentation

CNIGA Tribal Solar Flyer

California Gaming Tribes use Solar projects to create a positive public image.

Indian gaming is an important part of tribal America and has paved the way for many tribes to become self reliant.  However, due to pending legislation and many state gaming compacts coming up for renewal, our Indian gaming industry may be at risk.

So how can California tribes combat looming legislation?

Much of what happens in Washington DC is a product of public perception.  According to recent polls, the positive public perception of tribes and Indian gaming is increasing.  This is very important to the longevity of this industry.  Now, more than ever, it is essential that tribes work together to show California and the rest of the nation the positive impact Indian gaming has had on America.  It is time for a unified, tribal alliance to show America and our great state how much tribes give back to this country.

Positive Press for Indian Gaming!

  At the October 7, 2010 CNIGA bi-monthly meeting, Chairman Tucker and others discussed this idea.  It was suggested that every tribe participate in putting positive ads in their local news papers to inform the public of the good that the tribes are doing.  This is a great idea and well worth the marketing dollars involved.  In addition to running news paper ads, other types of media could also be beneficial.  So how do tribes attract positive press?

Give the Public What They Want and Get Free Press!

  There are many opportunities for tribes to attract positive public attention.  One of these opportunities is Solar and other Renewable Energy projects.  Tribes were the first environmentalists, long before it was popular.  Now the country is buzzing with environmental agendas, mandates and incentives.  It is the perfect storm for tribal domination in the renewable energy revolution. Indian tribes control more than 55 million acres of land across the nation, and those lands are capable of producing an estimated 17 trillion kilowatt hours per year from solar, or more than four times the amount of electricity generated annually in the U.S. according to the U.S. Department of Energy’s Tribal Energy Program.  You’ve heard it said, “Build it and they will come”.  With renewable energy projects, that is reality.  What a great way to get free, positive press.  Build renewable energy projects on tribal land, offsetting the electricity usage of tribal casinos and other tribal businesses.  The press will eat it up.  Better yet, a renewable energy project has the ability to attract free press and be a source of ongoing marketing.  It is critical that gaming tribes show Mr.. and Mrs. Public how they are giving back to the community and are an invaluable part of California.

CNIGA Member Tribes Working Together!

  If CNIGA member tribes band together and begin implementing Solar and other Renewable Energy projects all at once, up and down the state, it will get the publics attention on a much larger scale than individual tribes on their own.  Many tribes with one purpose make a very loud voice!

Jason Watson is a consultant with Titus & Associates where he consults with Indian tribes and facilitates economic development projects on tribal land. For more information, please contact Jason Watson @ (530) 873-0308 or visit www.thetribalconsultant.com 

 

 economic development /   Indian gaming  /  renewable energy  /  public relations / tribal energy  /  tribal energy program  / tribal solar  /  tribal solar initiative  / CNIGA / Indian gaming  / gaming compact / economic sovereignty / Chairman Tucker / net-metering / investor tax credit / renewable energy credits / recs / employment tax credits / accelerated depreciation / tax exempt financing / clean renewable energy bonds / REAP grants / economic stimulus bonds / BIA loan guarantee

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Leveraging Tribal Solar Economic Development Advantages

Leveraging Tribal Solar Economic Development Advantages
to Attract Private Investment in Indian Country

By Jason Watson, InREFco

Using a tribes’ governmental and legal status to create successful economic development is essential to develop governmental practices that sustain healthy tribal economies. 

As a result of the Indian gaming phenomenon, many tribes have experienced tremendous economic growth and opportunity.  However, tribal leadership has recently expressed some concern regarding the future of gaming and its governmental benefits. “Indian gaming will one day cease to exist,” Anthony Pico, Chairman of the Viejas Band of the Kumeyaay Indians from California was quoted as saying in a Reuters article aptly titled, “U.S. Indian tribes need to look beyond casinos.” Chairman Pico goes on to explain that the threatened expansion of non-Indian gaming, the over-saturation of the national gaming market, and public policy concerns about gambling addiction, are all factors that will sooner or later contribute to the demise of the $18.5 billion Indian gaming industry.

Chairman Pico’s wise foresight, from the perspective of California tribes who have operated governmental gaming operations since the 1970s, should be heeded by gaming tribes throughout the country. There were 15 gambling measures on the ballot in six states last November, which embody the type of threat of expanded non-Indian gaming and market over-saturation that Chairman Pico speaks of. Fifteen states have conducted statewide prevalence studies on “problem gambling” and several states are considering legislation to combat gambling addiction, just as Chairman Pico eludes. As such, it is imperative that tribes diversify their revenue sources beyond gaming and avoid placing all of their economic eggs in one basket.

Although some tribes have begun to devise ways to attract private investment and industry to the reservation, it has become more important than ever for Indian Country to create new economic opportunities that will withstand the volatile gaming market. Some tribes are major players in the local and regional economy. They are investing heavily in infrastructure and building major centers for trade and commerce, and as a result have acquired some wealth to benefit their communities. In short, tribes are ready to explore investment opportunities, invite industry and participate in the mainstream commercial market.

Economic sovereignty requires commercial diversification and strategic capital plans that attract investors to Indian Country. Aggressive business plans that favor economic development and job creation are tried-and-true methods of generating income and creating a thriving private sector, all of which is not dependent on Indian gaming.

Harnessing renewable resources is on the rise in Indian Country.  Solar has been a big part of that energy independent revolution.  But up until now, solar projects on tribal lands have primarily been small, “Quality of Life” projects.  Making life with electricity possible where it had not been available before or mitigating utility costs on tribal housing. 

The next wave of the Tribal Solar Revolution will usher in larger scale Tribal Solar Systems for Economic Development.

Indian tribes control more than 55 million acres of land across the nation, and those lands are capable of producing an estimated 17 trillion kilowatt hours per year from solar, or more than four times the amount of electricity generated annually in the U.S. according to the U.S. Department of Energy’s Tribal Energy Program. 

Solar energy development is one of many viable economic opportunities for Indian Country.  Energy development on tribal lands today is much like bingo was for many tribe’s years ago.  Just as bingo evolved into Las Vegas style Indian gaming, Indian country is about to embark on an energy explosion.  Energy projects on tribal land can be much more attractive to investors than traditional developments.  Tribal Solar Economic Development should be a part of your tribes’ master plan.

Many tribes have become well-armed and extremely savvy in the political arena and thus have withstood attack from non-Indian gaming interests. Notwithstanding, tribes cannot afford to focus the bulk of their governmental attention towards gaming as the gateway to obtaining wealth and prosperity for future tribal generations. Tribes are at a turning point in their professional and business growth and should make governmental decisions to avoid being held hostage to a single industry – Indian gaming. In doing so, tribes need attract worthy outside investors (including other tribal enterprises, via intra­tribal trade and commerce), major franchises, government, and the technology industry, as commercial partners. Our mission is to so assist tribes and Native communities; to create and harness tribal sovereign advantages and to leverage such advantages into vibrant and dynamic economic opportunities that will benefit Indian people.

To those ends, consider the following advantages and savings available to tribes and/or investors to invest in tribal commercial ventures or locate business facilities on tribal lands.

 

New Market Tax Credits. The New Markets Tax Credit (NMTC) Program permits investors to receive a federal income tax credit for making qualified equity investments in designated Community Development Entities (CDEs), which in turn provide investments in low-income communities, including Indian reservations. Off-reservation tribal fee or trust land, particularly in rural areas, may also be designated as low-income areas for NMTC purposes. Qualified investments in tribal economic development ventures, made through CDEs allow the investor(s) tax credits equal to 39% of the investment allocated over a seven-year period. If tapped, the NMTC program could spur millions of dollars in private capital investment in tribal communities.  Most Native American tribes do qualify for the NMTC due to their rural location.  It can be responsible for up to 20% of your project finance needs.

 Utility Net-Metering Rebate. Many utilities are mandated by the states to provide net-metering opportunities for residents and business owners.  The size limits and rebate structures offered vary from state to state and utility to utility.  For instance, right now in the state of California they have the CSI Rebate, non-profits or tribes get $0.15 per kWh for the first 5 years.  Commercial owners get $0.05 per kWh for the first 5 years.

 Investor Tax Credit (ITC).  Solar. The credit is equal to 30% of expenditures, with no maximum credit. Eligible solar energy property includes equipment that uses solar energy to generate electricity, to heat or cool (or provide hot water for use in) a structure, or to provide solar process heat. Hybrid solar lighting systems, which use solar energy to illuminate the inside of a structure using fiber-optic distributed sunlight, are eligible. Passive solar systems and solar pool-heating systems are not eligible. (The Solar Energy Industries Association has published a three-page document that provides answers to frequently asked questions regarding the federal tax credits for solar energy.)  To qualify for this tax credit, you must be a taxable entity.  Tribes may benefit from this credit if they have a taxable entity that owns the system or by entering a joint venture with an outside investor.

 Renewable Energy Credits (RECs). Renewable Energy Certificates (RECs), also known as Green tags, Renewable Energy Credits, Renewable Electricity Certificates, or Tradable Renewable Certificates (TRCs), are tradable, non-tangible energy commodities in the United States that represent proof that 1 megawatt-hour (MWh) of electricity was generated from an eligible renewable energy resource (renewable electricity). Solar Renewable Energy Certificates (SRECs) are RECs that are specifically generated by solar energy.

These certificates can be sold and traded or bartered, and the owner of the REC can claim to have purchased renewable energy. According to the U.S. Department of Energy‘s Green Power Network,[1] RECs represent the environmental attributes of the power produced from renewable energy projects and are sold separate from commodity electricity. While traditional carbon emissions trading programs promote low-carbon technologies by increasing the cost of emitting carbon, RECs can incentivize carbon-neutral renewable energy by providing a production subsidy to electricity generated from renewable sources. It is important to understand that the energy associated with a REC is sold separately and is used by another party. The consumer of a REC receives only a certificate.

In states that have a REC program, a green energy provider (such as a wind farm) is credited with one REC for every 1,000 kWh or 1 MWh of electricity it produces (for reference, an average residential customer consumes about 800 kWh in a month). A certifying agency gives each REC a unique identification number to make sure it doesn’t get double-counted. The green energy is then fed into the electrical grid (by mandate), and the accompanying REC can then be sold on the open market.

Legislation is constantly changing on renewable energy and most states have either already adopted or are in the process of adopting renewable energy portfolio standards.  The validation, valuation and standardization of RECs is changing rapidly and it is possible that the value of RECs will increase as new legislation is adopted.

 Employment Tax Credits. The Indian employment credit provides non-Indian businesses with an incentive to hire Indians who live on or near the reservation. A $20,000 tax credit is available to such businesses each tax year, for every “qualified employee” that is paid “qualified wages.” A qualified employee must: (1) be an enrolled member of an Indian tribe or the spouse of a tribal member; (2) perform substantially all of his or her services for the business on the reservation; and, (3) reside on or near the reservation. Qualified wages are any wages the business pays or incurs for services performed by a qualified employee, including health insurance costs. Thus, a non-tribal company that situates a business facility on the reservation could be eligible for sizeable employment tax savings annually.

Accelerated Depreciation. Non-Indian manufacturers with facilities in Indian Country can use shorter recovery periods when calculating depreciation deductions for its production equipment. “Qualified Indian reservation property” must be used predominately in the active conduct of a trade or business on the Reservation and, must be 3-, 5-, 7-, 10-, 15-, or 20-year property or non-residential real property. “Qualified infrastructure property” that is located off-reservation, but connected to qualified infrastructure within the reservation, is also eligible for shorter recovery periods. Power lines, water systems and telecommunication facilities are examples of qualified infrastructure property. Because the shorter recovery periods for qualified Indian and infrastructure property are in addition to the normal expense deduction of up to $100,000 for such assets, the depreciation tax savings to non-Indian manufacturers could also be significant.

Tax-Exempt Financing. Tribes can issue tax-exempt debt, like state and local government, so long as the proceeds will be used in the “exercise of an essential governmental function.” Accordingly, interest on tax-exempt tribal bonds can be excluded from income, which results in significantly decreased borrowing costs for the Nation as compared to conventional interest rates. Tribes can issue non-taxable bonds when exercising such essential governmental functions as energy production or constructing government buildings, health clinics and hospitals, parks, schools and libraries, roads, parking lots, and water and sewer systems. In recent years, however, the IRS has cast doubt on whether tribal “commercial” ventures like golf courses and hotel-resorts can be financed tax-exempt. Notwithstanding, tribal infrastructural developments achieved through tax-exempt savings can be passed on to non-Indian business who develop or lease commercial land in Indian Country.

Clean Renewable Energy Bonds (CREBs) CREBs are a new form of tax credit bond in which interest on the bonds is paid in the form of federal tax credits by the United States government in lieu of interest paid by the issuer. CREBs, therefore, provide qualified issuers/qualified borrowers with the ability to borrow at a 0% interest rate. The federal tax benefit to the holder of a CREB is greater than the benefit derived from taxexempt municipal bonds in that the tax credit derived from a CREB can be used to offset, on a dollarfor-dollar basis, a holder’s current-year tax liability, as opposed to excluding interest from gross income, as permitted for tax-exempt bonds. Unlike tax-exempt bonds, CREBs are taxable obligations, and the tax credits received are treated as interest and included in a bondholder’s taxable income.  Note: The IRS is not currently accepting applications for New CREB bond volume. The deadline for New CREB applications from electric cooperatives under IRS Announcement 2010-54 expired November 1, 2010. Bond volume for other eligible sectors (government entities and public power providers) was fully allocated in October 2009.  

USDA – Rural Energy for America Program (REAP) Grants The Food, Conservation, and Energy Act of 2008 (H.R. 2419), enacted by Congress in May 2008, converted the federal Renewable Energy Systems and Energy Efficiency Improvements Program,* into the Rural Energy for America Program (REAP). Similar to its predecessor, the REAP promotes energy efficiency and renewable energy for agricultural producers and rural small businesses through the use of (1) grants and loan guarantees for energy efficiency improvements and renewable energy systems, and (2) grants for energy audits and renewable energy development assistance. Congress has allocated funding for the new program in the following amounts: $55 million for FY 2009, $60 million for FY 2010, $70 million for FY 2011, and $70 million for FY 2012. REAP is administered by the U.S. Department of Agriculture (USDA). In addition to these mandatory funding levels, there may also be discretionary funding issued each year. Note: The U.S. Department of Agriculture’s Rural Development issues periodic Notices of Solicitation of Applications for the Rural Energy for America Program (REAP). The deadline to apply for grants and loan guarantees under the most recent solicitation was June 30, 2010. Grants and loan guarantees will be awarded for investments in renewable energy systems, energy efficiency improvements and renewable energy feasibility studies.     

Economic Stimulus Bonds.  How would you like to pay for your next tribal economic development project using cheaper tax exempt bonds? Or what if the federal government offered to pay 35% of your borrowing costs, would that make your project more affordable? How about funding new improvements for your tribal school at zero percent interest? Sound too good to be true? On February 17, 2009, President Obama signed into law the $787 billion American Recovery and Reinvestment Act of 2009. It is the single largest piece of economic stimulus legislation in U.S. history, and it contains a number of groundbreaking provisions that benefit Indian country.  Tribal Economic Development Bonds, Build America Bonds, Tribal Housing Programs and a variety of additional Tax Incentives.

Discounted Leasing Rates. Tribal trust lands and improvements on such lands are exempt from state taxation. As such, typical pass-through lease costs such as real property taxes can be significantly minimized, if not eliminated, to the benefit of non-Indian commercial lessees. A non-Indian company’s leasehold interest in trust lands may also be exempt from state excise taxation. In October 2004, the Wall Street Journal reported how the Salt River Pima-Maricopa Indian Community attracted a private developer to lease land from tribal members and construct two office parks on those lands for leasing purposes. Although purchasing off-reservation land in Phoenix would cost $10 per square foot, lands within the Pima-Maricopa community were leasing for $1.50 per square foot annually, resulting in tremendous savings for both the developer and lessees. Tribes could also lure developers and lessees to their reservations by offering below-market lease rates

Federal Contracting Preferences.  Initiated in 1997, the Historically Underutilized Business Zone (HUBZone), program, gives qualified participants preference in competing for federal contracts and creates jobs in historically distressed areas. A HUBZone is defined as a non-metropolitan county, area on an Indian reservation or qualified census tract. Also, Non-Indian business can obtain federal contracting priority based on the designation of tribal trust lands as a HUBZone. The HUBZone Empowerment Contracting Program is designed to stimulate economic development and create jobs in, e.g., tribal communities by providing federal contracting preferences to small business that locate in and hire employees from HUBZones. To receive preferential treatment by federal departments and agencies, a non-Indian business situated in a HUBZone must: (1) be owned by U.S. citizens; (2) ensure 35% of its workers reside in the HUBZone; (3) maintain its principal office in the HUBZone; and, (4) qualify as “small” under the Small Business Administration’s (SBA) regulations. According to the North American Industry Classification System followed by SBA, a small” company could employ as many as 500 to 1,000 people and thus qualify for HUBZone preferences.

Customs Duty Deferral, Elimination or Reduction. Businesses involved in international trade, which locate on a reservation designated as a Foreign-Trade Zone (“FTZ”) could defer, reduce or, in some instances, eliminate U.S. Customs duties on products imported or exported through the reservation. Such is the case no matter how long the products were in the FTZ. In addition, as a matter of federal law, state and local ad valorem taxes cannot be imposed upon imported tangible personal property stored or processed on the reservation-FTZ, or produced in the U.S. and held in the FTZ for exportation in its original or processed form. FTZ businesses could also save tens of thousands of dollars by avoiding per-shipment customs processing fees ranging from $25 to $485, in favor of a $485 “weekly entry” fee that is imposed irrespective of the number of shipments. In 1986, the Lummi Nation was successful in petitioning the Foreign-Trade Zones Board in Washington, DC, to have the Lummi Reservation designated an FTZ. Other tribes in close proximity to the Canadian or Mexican borders or deep water ports and/or access, might consider doing the same as a means to attract international trade.

State/County Land Use Exemption. If a non-Indian company sought to build a facility on trust lands, the development would be exempt from local, county and state zoning and land use restrictions. See Gobin v. Snohomish County, 304 F.3d 909 (9th Cir. 2002), cert. denied, 538 U.S. 908 (2003) (Tulalip Tribes, not Snohomish County, possesses land use jurisdiction over land within the exterior boundaries of the Tulalip Reservation). As such, the business could save a tremendous amount of time – and time is money – by avoiding, among other things, state permitting requirements.

Loan Guarantees.  Both the BIA and the USDA have federal loan guarantee programs to make investment in projects on Tribal Trust land more appealing for financing.  Investment security is always a consideration when looking for funding.  With these programs, investors can feel more secure when investing in tribal projects.

As you can see, there are many ways to offset the cost of your solar economic development projects as well as encourage outside investment in Indian country.  Now is the time to take inventory of your renewable energy potential and take action to diversify your streams of ongoing revenue.  Unlike gaming, the need for green energy production will be around for a very long time.  Will your tribe benefit from the tribal energy revenue revolution?

Jason Watson is a consultant with Titus & Associates where he consults with Indian tribes and facilitates economic development projects on tribal land. For more information, please contact Jason Watson @ (530) 873-0308 or visit www.thetribalconsultant.com.

Credit for information in this article is attributed in part to Wikapedia, Debora Juarez and Gabriel S. Galanda, Dsire, IRS and other internet resources.  All rights reserved

 economic development /   Indian gaming  /  renewable energy  /  sovereign status  / tribal energy  /  tribal energy program  / tribal solar  /  tribal solar initiative  /  turn-key / stimulus / energy grants / economic sovereignty / new market tax credits / net-metering / investor tax credit / renewable energy credits / recs / employment tax credits / accelerated depreciation / tax exempt financing / clean renewable energy bonds / REAP grants / economic stimulus bonds / BIA loan guarantee

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Tribal Solar Initiative

Press Release………Tribal Solar Initiative is a Turn-Key solution to unlock your tribes Renewable Energy Potential and grow your economic development fund. 

The type of economic development a tribe engages in should be determined by factoring all of its unique advantages and political and economic motivations. To a large degree tribal business serve a social function related to improving the lives of tribal members. Tribes should implement a reservation wide economic development strategy that minimizes upfront capital investment, maximizes corporate resources, and has an immediate social impact. 

 
 “”Using a tribe’s governmental and legal status to create successful economic development.”  
 
 
 Indian Gaming is a great example of using a tribe’s governmental and legal status to create successful economic development. Twenty Three years after the legalization of Indian Gaming, tribes are looking for other ways to use their sovereign status and abundant resources to support their economic development initiatives and provide for their needs. 
  
 For centuries, Native Americans have been caring for Earth Mother and depending on her natural resources. Our Technology Partner, one of the largest solar manufactures in the world, is committed to Indian Country and has developed technology that will allow Native American Tribes to harness the energy of the sun and also create a revenue stream. 
 
Harnessing renewable resources is on the rise in Indian Country. Solar has been a big part of that energy independent revolution. But up until now, solar projects on tribal lands have primarily been small, “Quality of Life” projects. Making life with electricity possible where it had not been available before or mitigating utility costs on tribal housing. The next wave of the Tribal Solar Revolution will usher in larger scale Tribal Solar Systems for Economic Development.
  
 Indian tribes control more than 55 million acres of land across the nation, and those lands are capable of producing an estimated 17 trillion kilowatt hours per year from solar, or more than four times the amount of electricity generated annually in the U.S. according to the U.S. Department of Energy’s Tribal Energy Program. 
  
Contact Titus & Associates today (530-873-0308) to find out how your tribe can benefit from a turn-key solar system.

    

  
 

   

  
 

  

  

  
 
 
 

 

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