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Federal Register / Vol. 86, No. 183 / Friday, September 24, 2021 / Rules and Regulations
serve as an overarching descriptor to the entire list of eligible entities.1
There is no background preamble language or other documentation that EDA has found that explains EDAs 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 forprofit 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 selfdetermination, 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 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.
2 Harvard Project on American Indian Economic Development HPAIED COVID Letter to Treasury, April 10, 2020. 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.

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through tourism, manufacturing, and services sectors.3
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 forprofit entities may also enjoy the Tribes sovereign immunity from lawsuits, exemption from certain Federal and state taxes, or exemption from otherwise-applicable state laws. Most importantly from EDAs 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 nonIndian business partners. Under this update to EDAs 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 EDAs 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 EDAs 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 3 Tribal Business Structure Handbook. Office of Indian Energy and Economic Development, Department of Interior, I1.

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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, triballyowned 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 forprofit 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
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