Memorandum of Disapproval on a Bill Concerning Southern California Indian Land Transfers

I am withholding my approval of H.R. 3621, which would establish, among other things, an Indian Development Finance Corporation that would be authorized to provide development capital to Indian businesses that meet certain criteria. The bill would have created an expensive and unnecessary new bureaucracy and duplicated currently existing programs. It would not have addressed the underlying problems of economic development in Indian country. Finally, the legislation places the Government at risk of substantial financial loss and does not provide sufficient authority for governmental oversight of the financial activities that could result in such loss.

Instead of creating a new institution to deliver additional capital, I believe that we need to better utilize existing sources of capital, including such Federal programs as the Indian Financing Act. In this regard, I recently signed Public Law 100-442, which increased the ceiling on guaranteed loans for Indian businesses under the Indian Financing Act from $200 million to $500 million, raised the limitation on loan guarantees to individual Indian and Indian economic enterprises from $350,000 to $500,000, and provided other means for reservation economic development. Sufficient authority, therefore, exists to carry out the activities envisioned in H.R. 3621.

I would also emphasize that H.R. 3621, with its further proliferation of Federal credit programs, is contrary to this Administration's long-standing and ongoing efforts to manage more effectively Federal credit programs.

Because this legislation takes the wrong approach to Indian economic development, I am withholding my approval of H.R. 3621. I note that this bill also contains an unrelated and beneficial provision relating to the transfer of Federal land in Southern California to several bands of Southern California Mission Indians. My disapproval of H.R. 3621 does not affect this needed legislation, which was also included in H.R. 2677, an omnibus Indian affairs bill that I have already approved.

RONALD REAGAN

The White House,

November 2, 1988.