October 07,2004

Baucus Bill Would Use Tax Credit Bonds To Improve Indian Jails

Senator’s Proposal Would Help Rehabilitate Tribal Detention Centers

(WASHINGTON, D.C.) U.S. Senator Max Baucus, Ranking Member of the Senate Finance Committee, introduced legislation today that would allow Indian tribes to issue bonds to helpbuild or improve jails.

Baucus introduced the bill following reports of overcrowding, poor sanitary conditions, escapes, and violence at the Indian detention centers in Montana and on reservations in otherparts of the country during a Senate Finance Committee hearing held this past September atBaucus’ request.

Baucus’ bill would give tribes the authority to issue tax-credit bonds to construct,maintain, and operate the facilities. The bonds will give tax credits rather than interest to privateinvestors, allowing tribes to earn the interest off the proceeds. This interest can provide a steadystream of income designed to maintain and staff the jails, Baucus said.

“This bill isn’t meant to fix all the problems we have with Indian jails, but it should reallyhelp,” said Baucus. “It will enable the tribes to raise money from the private sector to get startedfixing these jails up without having to wait for Washington, D.C. to act.”

Baucus and the Finance Committee recently reviewed a report by the InteriorDepartment’s inspector general that was highly critical of the Bureau of Indian Affairs, theagency charged with running the detention facilities. Baucus’ bill wouldn’t change or effect howBIA operates the facilities, he noted.

Baucus said he got input from Montana tribes before introducing the bill.“This has to be a government-to-government solution,” Baucus said. “This bill takes a commonsenseapproach that respects tribal sovereignty while using the private sector to generate moredollars to repair or build new jails.”

The Wall Street-style financing mechanism would require the tribes to meet the followingcriteria: must be a federally recognized Indian tribe, 95 percent of the proceeds must be used toconstruct, improve, or repair a prison on an Indian reservation, and the term of the bond can’t belonger than 10 years.

After introducing the measure today, Baucus said he will work to gain support and buildmomentum in the Congress for passing it.