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F I S C A L I M P A C T R E P O R T

SPONSOR Begaye

ORIGINAL DATE

LAST UPDATED

1/27/06

HB HJM 2

SHORT TITLE

NAVAJO NATION CAPITAL IMPROVEMENTS FUND

SB

ANALYST Weber

APPROPRIATION (dollars in thousands)

Appropriation

Recurring

or Non-Rec

Fund

Affected

FY06

FY07

NFI

(Parenthesis ( ) Indicate Expenditure Decreases)

SOURCES OF INFORMATION

LFC Files

Responses Received From

Indian Affairs Department (IAD)

SUMMARY

House Joint Memorial 2 requests that the Navajo Nation establish and fund a revolving loan fund

for chapter capital improvements, the disbursements from which will be reimbursed by capital

outlay appropriations from the State of New Mexico when such appropriations have been

approved by the state.

SIGNIFICANT ISSUES

The Indian Affairs Department notes:

The interim Indian Affairs Committee heard testimony during the 2005 interim that members of

the Navajo Nation living in remote areas may not have access to some of the basic necessities of

life, such as electricity and running water. Each year, the state appropriates to chapters hundreds

of thousands of dollars for capital improvements and extensions of infrastructure. There are 53

Navajo Nation chapters in the New Mexico portion of the Navajo Nation. These chapters do not

have the ability to pay up front costs of significant funding from the state and as a result funds

revert back and projects are cancelled.

House Joint Memorial Bill 2 – Page 2

Presently, capital outlay appropriation process works on a reimbursement basis. According to

Casey Begay, Capital Improvement Office for the Navajo Nation, there is a Navajo Nation

General Funds account that is used for payment of capital outlay projects for chapters, which is

then replenished upon receipt of the reimbursement from the funding source. These account(s)

are set up based on assurance of funding through JPAs, FAA’s, Letters of Commitment, Letters

of Assurance, etc., from outside resources. (Statement of Casey Begay, Jan. 24, 2006).

However, this statement reflects that the Navajo Nation may not have a revolving “Loan” fund

for chapters to access.

Navajo legislation for a revolving “loan” fund would have to be introduced in the Navajo Nation

Legislative process by one of 88 Council Delegates. It would be reviewed by the appropriate

standing committees in accordance with Tribal laws and procedures. The Navajo Nation

President has veto powers and the Council has override powers for tribal legislation.

Ultimately, the decision to establish such a fund would be up to the Navajo Nation and its Tribal

Council.

A Department of Energy study on the Navajo Nation revealed that close to 40 percent of homes

were without electricity (18,000 homes) – many of these in NM. Further, Indian tribes rely

primarily on federal funding for a majority of the infrastructure development. However, federal

funding for essential sanitation facilities, such as safe drinking water and adequate sewage

systems has been diminishing. In fact, the Indian Health Service, the primary provider of these

services, has a backlog of 275,000 Indian homes nationally and would require approximately

$1.9 billion to serve existing homes in 10 years. Many of these homes are located in tribal

communities throughout New Mexico. With inflation, new environmental requirements and

population growth in Indian communities, the current federal appropriations for infrastructure

cannot address the immediate infrastructure needs of tribal communities.

MW/mt