[Congressional Bills 107th Congress]
[From the U.S. Government Publishing Office]
[S. 211 Introduced in Senate (IS)]







107th CONGRESS
  1st Session
                                 S. 211

 To amend the Education Amendments of 1978 and the Tribally Controlled 
Schools Act of 1988 to improve education for Indians, Native Hawaiians, 
                          and Alaskan Natives.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                            January 30, 2001

Mr. Campbell (for himself and for Mr. Inouye) introduced the following 
  bill; which was read twice and referred to the Committee on Indian 
                                Affairs

_______________________________________________________________________

                                 A BILL


 
 To amend the Education Amendments of 1978 and the Tribally Controlled 
Schools Act of 1988 to improve education for Indians, Native Hawaiians, 
                          and Alaskan Natives.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Native American Education 
Improvement Act of 2001''.

        TITLE I--AMENDMENTS TO THE EDUCATION AMENDMENTS OF 1978

SEC. 101. AMENDMENTS TO THE EDUCATION AMENDMENTS OF 1978.

    Part B of title XI of the Education Amendments of 1978 (25 U.S.C. 
2001 et seq.) is amended to read as follows:

              ``PART B--BUREAU OF INDIAN AFFAIRS PROGRAMS

``SEC. 1120. FINDING AND POLICY.

    ``(a) Finding.--Congress finds and recognizes that--
            ``(1) the Federal Government's unique and continuing trust 
        relationship with and responsibility to the Indian people 
        includes the education of Indian children; and
            ``(2) the Federal Government has the responsibility for the 
        operation and financial support of the Bureau of Indian Affairs 
        funded school system that the Federal Government has 
        established on or near reservations and Indian trust lands 
        throughout the Nation for Indian children.
    ``(b) Policy.--It is the policy of the United States to work in 
full cooperation with tribes toward the goal of assuring that the 
programs of the Bureau of Indian Affairs funded school system are of 
the highest quality and provide for the basic elementary and secondary 
educational needs of Indian children, including meeting the unique 
educational and cultural needs of these children.

``SEC. 1121. ACCREDITATION AND STANDARDS FOR THE BASIC EDUCATION OF 
              INDIAN CHILDREN IN BUREAU OF INDIAN AFFAIRS SCHOOLS.

    ``(a) Purpose; Declarations of Purpose.--
            ``(1) Purpose.--The purpose of the standards implemented 
        under this section shall be to ensure that Indian students 
        being served by a school funded by the Bureau of Indian Affairs 
        are provided with educational opportunities that equal or 
        exceed those for all other students in the United States.
            ``(2) Declarations of purpose.--
                    ``(A) In general.--Local school boards for schools 
                operated by the Bureau of Indian Affairs, in 
                cooperation and consultation with the appropriate 
                tribal governing bodies and their communities, are 
                encouraged to adopt declarations of purpose for 
                education for their communities, taking into account 
                the implications of such declarations on education in 
                their communities and for their schools. In adopting 
                such declarations of purpose, the school boards shall 
                consider the effect the declarations may have on the 
                motivation of students and faculties.
                    ``(B) Contents.--A declaration of purpose for a 
                community shall--
                            ``(i) represent the aspirations of the 
                        community for the kinds of people the community 
                        would like the community's children to become; 
                        and
                            ``(ii) contain an expression of the 
                        community's desires that all students in the 
                        community shall--
                                    ``(I) become accomplished in things 
                                and ways important to the students and 
                                respected by their parents and 
                                community;
                                    ``(II) shape worthwhile and 
                                satisfying lives for themselves;
                                    ``(III) exemplify the best values 
                                of the community and humankind; and
                                    ``(IV) become increasingly 
                                effective in shaping the character and 
                                quality of the world all students 
                                share.
                    ``(C) Standards.--The declarations of purpose shall 
                influence the standards for accreditation to be 
                accepted by the schools.
    ``(b) Studies and Surveys Relating to Standards.--Not later than 1 
year after the date of enactment of the Native American Education 
Improvement Act of 2001, the Secretary, in consultation with the 
Secretary of Education, consortia of education organizations, and 
Indian organizations and tribes, and making the fullest use possible of 
other existing studies, surveys, and plans, shall carry out, by 
contract with an Indian organization, studies and surveys to establish 
and revise standards for the basic education of Indian children 
attending Bureau funded schools. Such studies and surveys shall take 
into account factors such as academic needs, local cultural 
differences, type and level of language skills, geographic isolation, 
and appropriate teacher-student ratios for such children, and shall be 
directed toward the attainment of equal educational opportunity for 
such children.
    ``(c) Revision of Minimum Academic Standards.--
            ``(1) In general.--Not later than 2 years after the date of 
        enactment of the Native American Education Improvement Act of 
2001, the Secretary shall--
                    ``(A) propose revisions to the minimum academic 
                standards contained in part 36 of title 25, Code of 
                Federal Regulations (on the date of enactment of the 
                Native American Education Improvement Act of 2001) for 
                the basic education of Indian children attending Bureau 
                funded schools, in accordance with the purpose 
                described in subsection (a) and the findings of the 
                studies and surveys carried out under subsection (b);
                    ``(B) publish such proposed revisions to such 
                standards in the Federal Register for the purpose of 
                receiving comments from the tribes, local school 
                boards, Bureau funded schools, and other interested 
                parties; and
                    ``(C) consistent with the provisions of this 
                section and section 1130, take such actions as are 
                necessary to coordinate standards implemented under 
                this section with--
                            ``(i) the Comprehensive School Reform Plan 
                        developed by the Bureau; and
                            ``(ii)(I) the standards of the State in 
                        which any Bureau funded school is located; or
                            ``(II) in a case where schools operated by 
                        the Bureau are within the boundaries of the 
                        reservation land of 1 tribe but within the 
                        boundaries of more than 1 State, the standards 
                        of the State selected by the tribe.
            ``(2) Final standards.--Not later than 6 months after the 
        close of the comment period for comments described in paragraph 
        (1)(B), the Secretary shall establish final standards under 
        this subsection, distribute such standards to all tribes, and 
        publish such standards in the Federal Register.
            ``(3) Further revisions.--The Secretary shall revise 
        standards under this subsection periodically as necessary. 
        Prior to making any revisions of such standards, the Secretary 
        shall distribute proposed revisions of the standards to all the 
        tribes, and publish such proposed revisions in the Federal 
        Register, for the purpose of receiving comments from the tribes 
        and other interested parties.
            ``(4) Applicability of standards.--Except as provided in 
        subsection (e), the final standards published under this 
        subsection shall apply to all Bureau funded schools not 
        accredited under subsection (f), and may also serve as model 
        standards for educational programs for Indian children in 
        public schools.
            ``(5) Considerations when establishing and revising 
        standards.--In establishing and revising standards under this 
        subsection, the Secretary shall take into account the unique 
        needs of Indian students and support and reinforce the specific 
        cultural heritage of each tribe.
    ``(d) Alternative or Modified Standards.--With respect to a school 
that is located in a State or region with standards that are in 
conflict with the standards established under subsection (c), the 
Secretary shall provide alternative or modified standards in lieu of 
the standards established under such subsection so that the programs of 
such school are in compliance with the minimum accreditation standards 
required for schools in the State or region where the school is 
located.
    ``(e) Waiver of Standards; Alternative Standards.--
            ``(1) Waiver.--A tribal governing body, or the local school 
        board so designated by the tribal governing body, shall have 
        the local authority to waive, in part or in whole, the 
        standards established under subsection (c) and (d) if such 
        standards are determined by such body or board to be 
        inappropriate for the needs of students from that tribe.
            ``(2) Alternative standards.--The tribal governing body or 
        school board involved shall, not later than 60 days after 
        providing a waiver under paragraph (1) for a school, submit to 
        the Director a proposal for alternative standards that take 
        into account the specific needs of the tribe's children. Such 
        alternative standards shall be established by the Director for 
        the school involved unless specifically rejected by the 
        Director for good cause and in writing provided to the affected 
        tribes or local school board.
    ``(f) Accreditation and Implementation of Standards.--
            ``(1) Deadline.--Not later than the second academic year 
        after publication of final standards established under 
        subsection (c) or (d), or after the approval of alternative 
        standards under subsection (e), to the extent necessary funding 
        is provided, each Bureau funded school to which such standards 
        would apply shall meet the applicable standards or be 
        accredited--
                    ``(A) by a tribal accrediting body that has been 
                accepted by formal action of the appropriate tribal 
                governing body;
                    ``(B) by a regional accreditation agency;
                    ``(C) in accordance with State accreditation 
                standards for the State in which the school is located; 
                or
                    ``(D) in the case of a school that is located on a 
                reservation that is located in more than 1 State, in 
                accordance with the State accreditation standards of 1 
                State as selected by the tribal government.
            ``(2) Determination of standards to be applied.--The 
        accreditation type or standards applied for each school shall 
        be determined by the school board of the school, in 
        consultation with the Administrator of the school, provided 
        that in the case where the School Board and the Administrator 
        fail to agree on the type of accreditation and standards to 
        apply, the decision of the school board with the approval of 
        the tribal governing body shall be final.
            ``(3) Assistance to school boards.--The Secretary, through 
        contracts and grants, shall assist school boards of contract or 
        grant schools in implementing standards established under 
        subsections (c), (d), and (e), if the school boards request 
        that such standards, in part or in whole, be implemented.
            ``(4) Fiscal control and fund accounting standards.--The 
        Bureau shall, either directly or through a contract with an 
        Indian organization, establish a consistent system of reporting 
        standards for fiscal control and fund accounting for all 
        contract and grant schools. Such standards shall yield data 
        results comparable to the data provided by Bureau schools.
    ``(g) Annual Plan for Meeting of Standards.--
            ``(1) In general.--Except as provided in subsections (e) 
        and (f), the Secretary shall begin to implement the standards 
        established under this section on the date of their 
        establishment.
            ``(2) Plan.--On an annual basis, the Secretary shall submit 
        to the appropriate committees of Congress, all Bureau funded 
        schools, and the tribal governing bodies of such schools a 
        detailed plan to bring all Bureau funded schools up to the 
        level required by the applicable standards established under 
        this section. Such plan shall include detailed information on 
        the status of each school's educational program in relation to 
        the applicable standards established under this section, 
        specific cost estimates for meeting such standards at each 
        school, and specific timelines for bringing each school up to 
        the level required by such standards.
    ``(h) Closure or Consolidation of Schools.--
            ``(1) In general.--Except as specifically required by law, 
        no Bureau funded school or dormitory operated on or after 
        January 1, 1992, may be closed, consolidated, or transferred to 
        another authority and no program of such a school may be 
        substantially curtailed except in accordance with the 
        requirements of this subsection.
            ``(2) Exceptions.--This subsection (other than this 
        paragraph) shall not apply--
                    ``(A) in those cases in which the tribal governing 
                body for a school, or the local school board concerned 
                (if designated by the tribal governing body to act 
                under this paragraph), requests the closure, 
                consolidation, or substantial curtailment; or
                    ``(B) if a temporary closure, consolidation, or 
                substantial curtailment is required by facility 
                conditions that constitute an immediate hazard to 
                health and safety.
            ``(3) Regulations.--The Secretary shall, by regulation, 
        promulgate standards and procedures for the closure, transfer 
        to another authority, consolidation, or substantial curtailment 
        of school programs of Bureau schools, in accordance with the 
        requirements of this subsection.
            ``(4) Notification.--
                    ``(A) Consideration.--Whenever closure, transfer to 
                another authority, consolidation, or substantial 
                curtailment of a school program of a Bureau school is 
                under active consideration or review by any division of 
                the Bureau or the Department of the Interior, the head 
                of the division or the Secretary shall ensure that the 
                affected tribe, tribal governing body, and local school 
                board, are notified (in writing) immediately, kept 
                fully and currently informed, and afforded an 
                opportunity to comment with respect to such 
                consideration or review.
                    ``(B) Formal decision.--When the head of any 
                division of the Bureau or the Secretary makes a formal 
                decision to close, transfer to another authority, 
                consolidate, or substantially curtail a school program 
                of a Bureau school, the head of the division or the 
                Secretary shall notify (in writing) the affected 
                tribes, tribal governing body, and local school board 
                at least 6 months prior to the end of the academic year 
                preceding the date of the proposed action.
                    ``(C) Copies of notifications and information.--The 
                Secretary shall transmit copies of the notifications 
                described in this paragraph promptly to the appropriate 
                committees of Congress and publish such notifications 
                copies in the Federal Register.
            ``(5) Report.--
                    ``(A) In general.--The Secretary shall submit a 
                report to the appropriate committees of Congress, the 
                affected tribal governing body and the designated local 
                school board, describing the process of the active 
                consideration or review referred to in paragraph (4).
                    ``(B) Contents.--The report shall include the 
                results of a study of the impact of the action under 
                consideration or review on the student population of 
                the school involved, identify those students at the 
                school with particular educational and social needs, 
                and ensure that alternative services are available to 
                such students. Such report shall include a description 
                of consultation conducted between the potential service 
provider and current service provider of such services, parents, tribal 
representatives, the tribe involved, and the Director of the Office 
regarding such students.
            ``(6) Limitation on certain actions.--No irreversible 
        action may be taken to further any proposed school closure, 
        transfer to another authority, consolidation, or substantial 
        curtailment described in this subsection concerning a school 
        (including any action that would prejudice the personnel or 
        programs of such school) prior to the end of the first full 
        academic year after the report described in paragraph (5) is 
        submitted.
            ``(7) Tribal governing body approval required for certain 
        actions.--The Secretary may terminate, contract, transfer to 
        any other authority, consolidate, or substantially curtail the 
        operation or facilities of--
                    ``(A) any Bureau funded school that is operated on 
                or after January 1, 1999;
                    ``(B) any program of such a school that is operated 
                on or after January 1, 1999; or
                    ``(C) any school board of a school operated under a 
                grant under the Tribally Controlled Schools Act of 
                1988,
        only if the tribal governing body for the school involved 
        approves such action.
    ``(i) Application for Contracts or Grants for Non-Bureau Funded 
Schools or Expansion of Bureau Funded Schools.--
            ``(1) In general.--
                    ``(A) Applications.--
                            ``(i) Tribes; school boards.--The Secretary 
                        shall only consider the factors described in 
                        subparagraph (B) in reviewing--
                                    ``(I) applications from any tribe 
                                for the awarding of a contract or grant 
                                for a school that is not a Bureau 
                                funded school; and
                                    ``(II) applications from any tribe 
                                or school board associated with any 
                                Bureau funded school for the awarding 
                                of a contract or grant for the 
                                expansion of a Bureau funded school 
                                that would increase the amount of funds 
                                received by the tribe or school board 
                                under section 1126.
                            ``(ii) Limitation.--With respect to 
                        applications described in this subparagraph, 
                        the Secretary shall give consideration to all 
                        the factors described in subparagraph (B), but 
                        no such application shall be denied based 
                        primarily upon the geographic proximity of 
                        comparable public education.
                    ``(B) Factors.--With respect to applications 
                described in subparagraph (A) the Secretary shall 
                consider the following factors relating to the program 
                and services that are the subject of the application:
                            ``(i) The adequacy of existing facilities 
                        to support the proposed program and services or 
                        the applicant's ability to obtain or provide 
                        adequate facilities.
                            ``(ii) Geographic and demographic factors 
                        in the affected areas.
                            ``(iii) The adequacy of the applicant's 
                        program plans or, in the case of a Bureau 
                        funded school, of a projected needs analysis 
                        conducted either by the tribe or the Bureau.
                            ``(iv) Geographic proximity of comparable 
                        public education.
                            ``(v) The stated needs of all affected 
                        parties, including students, families, tribal 
                        governing bodies at both the central and local 
                        levels, and school organizations.
                            ``(vi) Adequacy and comparability of 
                        programs and services already available.
                            ``(vii) Consistency of the proposed program 
                        and services with tribal educational codes or 
                        tribal legislation on education.
                            ``(viii) The history and success of these 
                        services for the proposed population to be 
                        served, as determined from all factors, 
                        including standardized examination performance.
            ``(2) Determination on application.--
                    ``(A) Period.--The Secretary shall make a 
                determination concerning whether to approve any 
                application described in paragraph (1)(A) not later 
                than 180 days after the date such application is 
                submitted to the Secretary.
                    ``(B) Failure to make determination.--If the 
                Secretary fails to make the determination with respect 
                to an application by the date described in subparagraph 
                (A), the application shall be treated as having been 
                approved by the Secretary.
            ``(3) Requirements for applications.--
                    ``(A) Approval.--Notwithstanding paragraph (2)(B), 
                an application described in paragraph (1)(A) may be 
                approved by the Secretary only if--
                            ``(i) the application has been approved by 
                        the tribal governing body of the students 
                        served by (or to be served by) the school or 
                        program that is the subject of the application; 
                        and
                            ``(ii) the tribe or designated school board 
                        involved submits written evidence of such 
                        approval with the application.
                    ``(B) Information.--Each application described in 
                paragraph (1)(A) shall contain information discussing 
                each of the factors described in paragraph (1)(B).
            ``(4) Denial of applications.--If the Secretary denies an 
        application described in paragraph (1)(A), the Secretary 
        shall--
                    ``(A) state the objections to the application in 
                writing to the applicant not later than 180 days after 
                the date the application is submitted to the Secretary;
                    ``(B) provide assistance to the applicant to 
                overcome the stated objections;
                    ``(C) provide to the applicant a hearing on the 
                record regarding the denial, under the same rules and 
                regulations as apply under the Indian Self-
                Determination and Education Assistance Act; and
                    ``(D) provide to the applicant a notice of the 
                applicant's appeals rights and an opportunity to appeal 
                the decision resulting from the hearing under 
                subparagraph (D).
            ``(5) Effective date of a subject application.--
                    ``(A) In general.--Except as otherwise provided in 
                this paragraph, the action that is the subject of any 
                application described in paragraph (1)(A) that is 
                approved by the Secretary shall become effective--
                            ``(i) on the first day of the academic year 
                        following the fiscal year in which the 
                        application is approved; or
                            ``(ii) on an earlier date determined by the 
                        Secretary.
                    ``(B) Application treated as approved.--If an 
                application is treated as having been approved by the 
                Secretary under paragraph (2)(B), the action that is 
                the subject of the application shall become effective--
                            ``(i) on the date that is 18 months after 
                        the date on which the application is submitted 
                        to the Secretary; or
                            ``(ii) on an earlier date determined by the 
                        Secretary.
            ``(6) Statutory construction.--Nothing in this section 
        shall be construed to preclude the expansion of grades and 
        related facilities at a Bureau funded school, if such expansion 
        is paid for with non-Bureau funds.
    ``(j) Joint Administration.--Funds received by Bureau funded 
schools from the Bureau of Indian Affairs and under any program from 
the Department of Education or any other Federal agency for the purpose 
of providing education or related services, and other funds received 
for such education and related services from non-Federally funded 
programs, may apportion joint administrative, transportation, and 
program costs between such programs and the funds shall be retained at 
the school.
    ``(k) General Use of Funds.--Funds received by Bureau funded 
schools from the Bureau of Indian Affairs and under any program from 
the Department of Education or any other Federal agency for the purpose 
of providing education or related services may be used for schoolwide 
projects to improve the educational program of the schools for all 
Indian students.
    ``(l) Study on Adequacy of Funds and Formulas.--
            ``(1) Study.--The Comptroller General of the United States 
        shall conduct a study, in consultation with tribes and local 
        school boards, to determine the adequacy of funding, and 
        formulas used by the Bureau to determine funding, for programs 
        operated by Bureau funded schools, taking into account unique 
        circumstances applicable to Bureau funded schools, including 
        isolation, limited English proficiency of Indian students, the 
        costs of educating disabled Indian students in isolated 
        settings, and other factors that may disproportionately 
        increase per-pupil costs, as well as expenditures for 
        comparable purposes in public schools nationally.
            ``(2) Findings.--On completion of the study under paragraph 
        (1), the Secretary shall take such action as may be necessary 
        to ensure distribution of the findings of the study to the 
        appropriate authorizing and appropriating committees of 
        Congress, all affected tribes, local school boards, and 
        associations of local school boards.

``SEC. 1122. NATIONAL STANDARDS FOR HOME LIVING SITUATIONS.

    ``(a) In General.--The Secretary, in accordance with section 1137, 
shall revise the national standards for home-living (dormitory) 
situations to include such factors as heating, lighting, cooling, 
adult-child ratios, need for counselors (including special needs 
related to off-reservation home-living (dormitory) situations), 
therapeutic programs, space, and privacy. Such standards shall be 
implemented in Bureau schools. Any subsequent revisions shall also be 
in accordance with such section 1137.
    ``(b) Implementation.--The Secretary shall implement the revised 
standards established under this section immediately upon their 
issuance.
    ``(c) Plan.--
            ``(1) In general.--Upon the submission of each annual 
        budget request for Bureau educational services (as contained in 
        the President's annual budget request under section 1105 of 
        title 31, United States Code), the Secretary shall submit to 
        the appropriate committees of Congress, the tribes, and the 
        affected schools, and publish in the Federal Register, a 
        detailed plan to bring all Bureau funded schools that have 
        dormitories or provide home-living (dormitory) situations into 
        compliance with the standards established under this section.
            ``(2) Contents.--Each plan under paragraph (1) shall 
        include--
                    ``(A) a statement of the relative needs of each of 
                the home-living schools and projected future needs of 
                each of the home-living schools;
                    ``(B) detailed information on the status of each of 
                the schools in relation to the standards established 
                under this section;
                    ``(C) specific cost estimates for meeting each 
                standard for each such school;
                    ``(D) aggregate cost estimates for bringing all 
                such schools into compliance with the standards 
                established under this section; and
                    ``(E) specific timelines for bringing each school 
                into compliance with such standards.
    ``(d) Waiver.--A tribal governing body or local school board may, 
in accordance with section 1121(e), waive the standards established 
under this section for a school described in subsection (a) in the same 
manner as the governing body or school board may waive the standards 
provided under section 1121(c) for a Bureau funded school.
    ``(e) Closure for Failure To Meet Standards Prohibited.--No school 
in operation on or before July 1, 1999 (regardless of compliance or 
noncompliance with the standards established under this section), may 
be closed, transferred to another authority, or consolidated, and no 
program of such a school may be substantially curtailed, because the 
school failed to meet such standards.

``SEC. 1123. SCHOOL BOUNDARIES.

    ``(a) Establishment by Secretary.--Except as described in 
subsection (b), the Secretary shall establish, by regulation, separate 
geographical attendance areas for each Bureau funded school.
    ``(b) Establishment by Tribal Body.--In any case in which there is 
more than 1 Bureau funded school located on a reservation of a tribe, 
at the direction of the tribal governing body, the relevant school 
boards of the Bureau funded schools on the reservation may, by mutual 
consent, establish the boundaries of the relevant geographical 
attendance areas for such schools, subject to the approval of the 
tribal governing body. Any such boundaries so established shall be 
accepted by the Secretary.
    ``(c) Boundary Revisions.--
            ``(1) In general.--Effective on July 1, 1999, the Secretary 
        may not establish or revise boundaries of a geographical 
        attendance area with respect to any Bureau funded school unless 
        the tribal governing body concerned or the school board 
        concerned (if designated by the tribal governing body to act 
        under this paragraph) has been afforded--
                    ``(A) at least 6 months notice of the intention of 
                the Secretary to establish or revise such boundaries; 
                and
                    ``(B) the opportunity to propose alternative 
                boundaries.
            ``(2) Petitions.--Any tribe may submit a petition to the 
        Secretary requesting a revision of the geographical attendance 
        area boundaries referred to in paragraph (1).
            ``(3) Boundaries.--The Secretary shall accept proposed 
        alternative boundaries described in paragraph (1)(B) or revised 
        boundaries described in a petition submitted under paragraph 
        (2) unless the Secretary finds, after consultation with the 
        affected tribe, that such alternative or revised boundaries do 
        not reflect the needs of the Indian students to be served or do 
        not provide adequate stability to all of the affected programs. 
        On accepting the boundaries, the Secretary shall publish 
        information describing the boundaries in the Federal Register.
            ``(4) Tribal resolution determination.--Nothing in this 
        section shall be interpreted as denying a tribal governing body 
        the authority, on a continuing basis, to adopt a tribal 
        resolution allowing parents a choice of the Bureau funded 
        school their child may attend, regardless of the geographical 
        attendance area boundaries established under this section.
    ``(d) Funding Restrictions.--The Secretary shall not deny funding 
to a Bureau funded school for any eligible Indian student attending the 
school solely because that student's home or domicile is outside of the 
boundaries of the geographical attendance area established for that 
school under this section. No funding shall be made available for 
transportation without tribal authorization to enable the school to 
provide transportation for any student to or from the school and a 
location outside the approved attendance area of the school.
    ``(e) Reservation as Boundary.--In any case in which there is only 
1 Bureau funded school located on a reservation, the boundaries of the 
geographical attendance area for the school shall be the boundaries (as 
established by treaty, agreement, legislation, court decision, or 
executive decision and as accepted by the tribe involved) of the 
reservation served, and those students residing near the reservation 
shall also receive services from such school.
    ``(f) Off-Reservation Home-Living Schools.--Notwithstanding the 
boundaries of the geographical attendance areas established under this 
section, each Bureau funded school that is an off-reservation home-
living school shall implement special emphasis programs and permit the 
attendance of students requiring the programs. The programs provided 
for such students shall be coordinated among education line officers, 
the families of the students, the schools, and the entities operating 
programs that referred the students to the schools.

``SEC. 1124. FACILITIES CONSTRUCTION.

    ``(a) National Survey of Facilities Conditions.--
            ``(1) In general.--Not later than 12 months after the date 
        of enactment of the Native American Education Improvement Act 
        of 2001, the General Accounting Office shall compile, collect, 
        and secure the data that is needed to prepare a national survey 
        of the physical conditions of all Bureau funded school 
        facilities.
            ``(2) Data and methodologies.--In preparing the national 
        survey required under paragraph (1), the General Accounting 
        Office shall use the following data and methodologies:
                    ``(A) The existing Department of Defense formula 
                for determining the condition and adequacy of 
                Department of Defense facilities.
                    ``(B) Data related to conditions of Bureau funded 
                schools that has previously been compiled, collected, 
                or secured from whatever source derived so long as the 
                data is relevant, timely, and necessary to the survey.
                    ``(C) The methodologies of the American Institute 
                of Architects, or other accredited and reputable 
                architecture or engineering associations.
            ``(3) Consultations.--
                    ``(A) In general.--In carrying out the survey 
                required under paragraph (1), the General Accounting 
                Office shall, to the maximum extent practicable, 
consult (and if necessary contract) with national, regional, and tribal 
Indian education organizations to ensure that a complete and accurate 
national survey is achieved.
                    ``(B) Requests for information.--All Bureau funded 
                schools shall comply with reasonable requests for 
                information by the General Accounting Office and shall 
                respond to such requests in a timely fashion.
            ``(4) Submission to congress.--Not later than 24 months 
        after the date of enactment of the Native American Education 
        Improvement Act of 2001, the General Accounting Office shall 
        submit the results of the national survey conducted under 
        paragraph (1) to the Committee on Indian Affairs and Committee 
        on Appropriations of the Senate, and the Committee on Resources 
        and Committee on Appropriations of the House.
            ``(5) Negotiated rulemaking committee.--
                    ``(A) In general.--Not later than 6 months after 
                the date on which the submission is made under 
                paragraph (4), the Secretary shall establish a 
                negotiated rule making committee pursuant to section 
                1137(c). The negotiated rulemaking committee shall 
                prepare and submit to the Secretary the following:
                            ``(i) A catalogue of the condition of 
                        school facilities at all Bureau funded schools 
                        that--
                                    ``(I) rates such facilities with 
                                respect to the rate of deterioration 
                                and useful life structures and major 
                                systems;
                                    ``(II) establishes a routine 
                                maintenance schedule for each facility; 
                                and
                                    ``(III) makes projections on the 
                                amount of funds needed to keep each 
                                school viable, consistent with the 
                                standards of this Act.
                            ``(ii) A school replacement and new 
                        construction report that determines replacement 
                        and new construction need, and a formula for 
                        the equitable distribution of funds to address 
                        such need, for Bureau funded schools. Such 
                        formula shall utilize necessary factors in 
                        determining an equitable distribution of funds, 
                        including--
                                    ``(I) the size of school;
                                    ``(II) school enrollment;
                                    ``(III) the age of the school;
                                    ``(IV) the condition of the school;
                                    ``(V) environmental factors at the 
                                school; and
                                    ``(VI) school isolation.
                            ``(iii) A renovation repairs report that 
                        determines renovation need (major and minor), 
                        and a formula for the equitable distribution of 
                        funds to address such need, for Bureau funded 
                        schools. Such report shall identify needed 
                        repairs or renovations with respect to a 
                        facility, or a part of a facility, or the 
                        grounds of the facility, to remedy a need based 
                        on disabilities access or health and safety 
                        changes to a facility. The formula developed 
                        shall utilize necessary factors in determining 
                        an equitable distribution of funds, including 
                        the factors described in subparagraph (B).
                    ``(B) Not later 24 months after the negotiated 
                rulemaking committee is established under subparagraph 
                (A), the reports described in clauses (ii) and (iii) of 
                subparagraph (A) shall be submitted to the committees 
                of Congress referred to in paragraph (4), the national 
                and regional Indian education organizations, and to all 
                Indian tribes.
            ``(6) Facilities information systems support database.--The 
        Secretary shall develop a Facilities Information Systems 
        Support Database to maintain and update the information 
        contained in the reports under clauses (ii) and (iii) of 
        paragraph (5)(A) and the information contained in the survey 
        conducted under paragraph (1). The system shall be updated 
        every 3 years by the Bureau of Indian Affairs and monitored by 
        General Accounting Office, and shall be made available to 
        Indian tribes, Bureau funded schools, and Congress.
    ``(b) Compliance With Health and Safety Standards.--The Secretary 
shall immediately begin to bring all schools, dormitories, and other 
Indian education-related facilities operated by the Bureau or under 
contract or grant with the Bureau into compliance with all applicable 
tribal, Federal, or State health and safety standards, whichever 
provides greater protection (except that the tribal standards to be 
applied shall be no greater than any otherwise applicable Federal or 
State standards), with section 504 of the Rehabilitation Act of 1973, 
and with the Americans with Disabilities Act of 1990. Nothing in this 
section shall require termination of the operations of any facility 
which does not comply with such provisions and which is in use on the 
date of the enactment of the Native American Education Improvement Act 
of 2001.
    ``(c) Compliance Plan.--At the time that the annual budget request 
for Bureau educational services is presented, the Secretary shall 
submit to the appropriate committees of Congress a detailed plan to 
bring all facilities covered under subsection (b) of this section into 
compliance with the standards referred to in subsection (b). Such plan 
shall include detailed information on the status of each facility's 
compliance with such standards, specific cost estimates for meeting 
such standards at each school, and specific timelines for bringing each 
school into compliance with such standards.
    ``(d) Construction Priorities.--
            ``(1) System to establish priorities.--The Secretary shall 
        annually prepare and submit to the appropriate committees of 
        Congress, and publish in the Federal Register, information 
        describing the system used by the Secretary to establish 
        priorities for replacement and construction projects for Bureau 
        funded schools and home-living schools, including boarding 
        schools, and dormitories. On making each budget request 
        described in subsection (c), the Secretary shall publish in the 
        Federal Register and submit with the budget request a list of 
        all of the Bureau funded school construction priorities, as 
        described in paragraph (2).
            ``(2) Long-term construction and replacement list.--In 
        addition to submitting the plan described in subsection (c), 
        the Secretary shall--
                    ``(A) not later than 18 months after the date of 
                enactment of the Native American Education Improvement 
                Act of 2001, establish a long-term construction and 
                replacement priority list for all Bureau funded 
                schools;
                    ``(B) using the list prepared under subparagraph 
                (A), propose a list for the orderly replacement of all 
                Bureau funded education-related facilities over a 
                period of 40 years to facilitate planning and 
                scheduling of budget requests;
                    ``(C) publish the list prepared under subparagraph 
                (B) in the Federal Register and allow a period of not 
                less than 120 days for public comment;
                    ``(D) make such revisions to the list prepared 
                under subparagraph (B) as are appropriate based on the 
                comments received; and
                    ``(E) publish a final list in the Federal Register.
            ``(3) Effect on other list.--Nothing in this section shall 
        be construed as interfering with or changing in any way the 
        construction and replacement priority list established by the 
        Secretary, as the list exists on the date of enactment of the 
        Native American Education Improvement Act of 2001.
    ``(e) Hazardous Condition at Bureau Funded School.--
            ``(1) Closure, consolidation, or curtailment.--
                    ``(A) In general.--A Bureau funded school may be 
                closed or consolidated, and the programs of a Bureau 
                funded school may be substantially curtailed by reason 
                of facility conditions that constitute an immediate 
                hazard to health and safety only if a health and safety 
                officer of the Bureau and an individual designated by 
                the tribe involved under subparagraph (B), determine 
                that such conditions exist at a facility of the Bureau 
                funded school.
                    ``(B) Designation of individual by tribe.--To be 
                designated by a tribe for purposes of subparagraph (A), 
                an individual shall--
                            ``(i) be a licensed or certified facilities 
                        safety inspector;
                            ``(ii) have demonstrated experience in the 
                        inspection of facilities for health and safety 
                        purposes with respect to occupancy; or
                            ``(iii) have a significant educational 
                        background in the health and safety of 
                        facilities with respect to occupancy.
                    ``(C) Inspection.--In making a determination 
                described in subparagraph (A), the Bureau health and 
                safety officer and the individual designated by the 
                tribe shall conduct an inspection of the conditions of 
                such facility in order to determine whether conditions 
                at such facility constitute an immediate hazard to 
                health and safety.
                    ``(D) Failure to concur.--If the Bureau health and 
                safety officer, and the individual designated by the 
                tribe, conducting the inspection of a facility required 
                under subparagraph (A) do not concur that conditions at 
                the facility constitute an immediate hazard to health 
                and safety, such officer and individual shall 
                immediately notify the tribal governing body and 
                provide written information related to their 
                determinations.
                    ``(E) Consideration by tribal governing body.--Not 
                later than 10 days after a tribal governing body 
                received notice under subparagraph (D), the tribal 
                governing body shall consider all information related 
                to the determinations of the Bureau health and safety 
                officer and the individual designated by the tribe and 
                make a determination regarding the closure, 
                consolidation, or curtailment involved.
                    ``(F) Cessation of closure, consolidation, or 
                curtailment.--If the Bureau health and safety officer, 
                and the individual designated by the tribe, conducting 
                the inspection of a facility required under 
                subparagraph (A), concur that conditions at the 
                facility constitute an immediate hazard to health and 
                safety, or if the tribal governing body makes such a 
                determination under subparagraph (E) the facility 
                involved shall be closed immediately.
                    ``(G) General closure report.--If a Bureau funded 
                school is temporarily closed or consolidated or the 
programs of a Bureau funded school are temporarily substantially 
curtailed under this subsection and the Secretary determines that the 
closure, consolidation, or curtailment will exceed 1 year, the 
Secretary shall submit to the appropriate committees of Congress, the 
affected tribe, and the local school board, not later than 3 months 
after the date on which the closure, consolidation, or curtailment was 
initiated, a report that specifies--
                            ``(i) the reasons for such temporary 
                        action;
                            ``(ii) the actions the Secretary is taking 
                        to eliminate the conditions that constitute the 
                        hazard;
                            ``(iii) an estimated date by which the 
                        actions described in clause (ii) will be 
                        concluded; and
                            ``(iv) a plan for providing alternate 
                        education services for students enrolled at the 
                        school that is to be closed.
            ``(2) Nonapplication of certain standards for temporary 
        facility use.--
                    ``(A) Classroom activities.--The Secretary shall 
                permit the local school board to temporarily utilize 
                facilities adjacent to the school, or satellite 
                facilities, if such facilities are suitable for 
                conducting classroom activities. In permitting the use 
                of facilities under the preceding sentence, the 
                Secretary may waive applicable minor standards under 
                section 1121 relating to such facilities (such as the 
                required number of exit lights or configuration of 
                restrooms) so long as such waivers do not result in the 
                creation of an environment that constitutes an 
                immediate and substantial threat to the health, safety, 
                and life of students and staff.
                    ``(B) Administrative activities.--The provisions of 
                subparagraph (A) shall apply with respect to 
                administrative personnel if the facilities involved are 
                suitable for activities performed by such personnel.
                    ``(C) Temporary.--In this paragraph, the term 
                `temporary' means--
                            ``(i) with respect to a school that is to 
                        be closed for not more than 1 year, 3 months or 
                        less; and
                            ``(ii) with respect to a school that is to 
                        be closed for not less than 1 year, a time 
                        period determined appropriate by the Bureau.
            ``(3) Treatment of closure.--Any closure of a Bureau funded 
        school under this subsection for a period that exceeds 1 month 
        but is less than 1 year, shall be treated by the Bureau as an 
        emergency facility improvement and repair project.
            ``(4) Use of funds.--With respect to a Bureau funded school 
        that is closed under this subsection, the tribal governing 
        body, or the designated local school board of each Bureau 
        funded school, involved may authorize the use of school 
        operations funds, which have otherwise been allocated for such 
        school, to abate the hazardous conditions without further 
        action by Congress.
    ``(f) Funding Requirement.--
            ``(1) Distribution of funds.--Beginning with the first 
        fiscal year following the date of enactment of the Native 
        American Education Improvement Act of 2001, all funds 
        appropriated to the budget accounts for the operations and 
        maintenance of Bureau funded schools shall be distributed by 
        formula to the schools. No funds from these accounts may be 
        retained or segregated by the Bureau to pay for administrative 
        or other costs of any facilities branch or office, at any level 
        of the Bureau.
            ``(2) Requirements for certain uses.--
                    ``(A) Agreement.--The Secretary shall not withhold 
                funds that would be distributed under paragraph (1) to 
                any grant or contract school, in order to use the funds 
                for maintenance or any other facilities or road-related 
                purposes, unless such school--
                            ``(i) has consented to the withholding of 
                        such funds, including the amount of the funds, 
                        the purpose for which the funds will be used, 
                        and the timeline for the services to be 
                        provided with the funds; and
                            ``(ii) has provided the consent by entering 
                        into an agreement that is--
                                    ``(I) a modification to the 
                                contract; and
                                    ``(II) in writing (in the case of a 
                                school that receives a grant).
                    ``(B) Cancellation.--The school may, at the end of 
                any fiscal year, cancel an agreement entered into under 
                this paragraph, on giving the Bureau 30 days notice of 
                the intent of the school to cancel the agreement.
    ``(g) No Reduction in Federal Funding.--Nothing in this section 
shall be construed to reduce any Federal funding for a school because 
the school received funding for facilities improvement or construction 
from a State or any other source.

``SEC. 1125. BUREAU OF INDIAN AFFAIRS EDUCATION FUNCTIONS.

    ``(a) Formulation and Establishment of Policy and Procedure; 
Supervision of Programs and Expenditures.--The Secretary shall vest in 
the Assistant Secretary for Indian Affairs all functions with respect 
to formulation and establishment of policy and procedure, and 
supervision of programs and expenditures of Federal funds for the 
purpose of Indian education administered by the Bureau. The Assistant 
Secretary shall carry out such functions through the Director of the 
Office of Indian Education Programs.
    ``(b) Direction and Supervision of Personnel Operations.--
            ``(1) In general.--Not later than 6 months after the date 
        of the enactment of the Native American Education Improvement 
        Act of 2001, the Director of the Office shall direct and 
        supervise the operations of all personnel directly and 
        substantially involved in the provision of education services 
        by the Bureau, including school or institution custodial or 
maintenance personnel, and facilities management, contracting, 
procurement, and finance personnel.
            ``(2) Transfers.--The Assistant Secretary for Indian 
        Affairs shall coordinate the transfer of functions relating to 
        procurements for, contracts of, operation of, and maintenance 
        of schools and other support functions to the Director.
    ``(c) Inherent Federal Function.--For purposes of this Act, all 
functions relating to education that are located at the Area or Agency 
level and performed by an education line officer shall be subject to 
contract under the Indian Self-Determination and Education Assistance 
Act, unless determined by the Secretary to be inherently Federal 
functions.
    ``(d) Evaluation of Programs; Services and Support Functions; 
Technical and Coordination Assistance.--Education personnel who are 
under the direction and supervision of the Director of the Office in 
accordance with subsection (b)(1) shall--
            ``(1) monitor and evaluate Bureau education programs;
            ``(2) provide all services and support functions for 
        education programs with respect to personnel matters involving 
        staffing actions and functions; and
            ``(3) provide technical and coordination assistance in 
        areas such as procurement, contracting, budgeting, personnel, 
        curricula, and operation and maintenance of school facilities.
    ``(e) Construction, Improvement, Operation, and Maintenance of 
Facilities.--
            ``(1) Plan for construction.--The Assistant Secretary for 
        Indian Affairs shall submit as part of the annual budget 
        request for educational services (as contained in the 
        President's annual budget request under section 1105 of title 
        31, United States Code) a plan--
                    ``(A) for the construction of school facilities in 
                accordance with section 1124(d);
                    ``(B) for the improvement and repair of education 
                facilities and for establishing priorities among the 
                improvement and repair projects involved, which 
                together shall form the basis for the distribution of 
                appropriated funds; and
                    ``(C) for capital improvements to education 
                facilities to be made over the 5 years succeeding the 
                year covered by the plan.
            ``(2) Program for operation and maintenance.--
                    ``(A) In general.--
                            ``(i) Program.--The Assistant Secretary 
                        shall establish a program, including a program 
                        for the distribution of funds appropriated 
                        under this part, for the operation and 
                        maintenance of education facilities. Such 
                        program shall include--
                                    ``(I) a method of computing the 
                                amount necessary for the operation and 
                                maintenance of each education facility;
                                    ``(II) a requirement of similar 
                                treatment of all Bureau funded schools;
                                    ``(III) a notice of an allocation 
                                of the appropriated funds from the 
                                Director of the Office directly to the 
                                appropriate education line officers and 
                                school officials;
                                    ``(IV) a method for determining the 
                                need for, and priority of, facilities 
                                improvement and repair projects, both 
                                major and minor; and
                                    ``(V) a system for conducting 
                                routine preventive maintenance.
                            ``(ii) Meetings.--In making the 
                        determination referred to in clause (i)(IV), 
                        the Assistant Secretary shall cause a series of 
                        meetings to be conducted at the area and agency 
                        level with representatives of the Bureau funded 
                        schools in the corresponding areas and served 
                        by corresponding agencies, to receive comment 
                        on the projects described in clause (i)(IV) and 
                        prioritization of such projects.
                    ``(B) Maintenance.--The appropriate education line 
                officers shall make arrangements for the maintenance of 
                the education facilities with the local supervisors of 
                the Bureau maintenance personnel. The local supervisors 
                of Bureau maintenance personnel shall take appropriate 
                action to implement the decisions made by the 
                appropriate education line officers. No funds made 
                available under this part may be authorized for 
                expenditure for maintenance of such an education 
                facility unless the appropriate education line officer 
                is assured that the necessary maintenance has been, or 
                will be, provided in a reasonable manner.
            ``(3) Implementation.--The requirements of this subsection 
        shall be implemented as soon as practicable after the date of 
        enactment of the Native American Education Improvement Act of 
        2001.
    ``(f) Acceptance of Gifts and Bequests.--
            ``(1) Guidelines.--Notwithstanding any other provision of 
        law, the Director of the Office shall promulgate guidelines for 
        the establishment and administration of mechanisms for the 
        acceptance of gifts and bequests for the use and benefit of 
        particular schools or designated Bureau operated education 
        programs, including, in appropriate cases, the establishment 
        and administration of trust funds.
            ``(2) Monitoring and reports.--Except as provided in 
        paragraph (3), in a case in which a Bureau operated education 
        program is the beneficiary of such a gift or bequest, the 
        Director shall--
                    ``(A) make provisions for monitoring use of the 
                gift or bequest; and
                    ``(B) submit a report to the appropriate committees 
                of Congress that describes the amount and terms of such 
                gift or bequest, the manner in which such gift or 
                bequest shall be used, and any results achieved by such 
                use.
            ``(3) Exception.--The requirements of paragraph (2) shall 
        not apply in the case of a gift or bequest that is valued at 
        $5,000 or less.
    ``(g) Functions Clarified.--In this section, the term `functions' 
includes powers and duties.

``SEC. 1126. ALLOTMENT FORMULA.

    ``(a) Factors Considered; Revision To Reflect Standards.--
            ``(1) Formula.--The Secretary shall establish, by 
        regulation adopted in accordance with section 1137, a formula 
        for determining the minimum annual amount of funds necessary to 
        operate each Bureau funded school. In establishing such 
        formula, the Secretary shall consider--
                    ``(A) the number of eligible Indian students served 
                by the school and the total student population of the 
                school;
                    ``(B) special cost factors, such as--
                            ``(i) the isolation of the school;
                            ``(ii) the need for special staffing, 
                        transportation, or educational programs;
                            ``(iii) food and housing costs;
                            ``(iv) maintenance and repair costs 
                        associated with the physical condition of the 
                        educational facilities;
                            ``(v) special transportation and other 
                        costs of an isolated or small school;
                            ``(vi) the costs of home-living (dormitory) 
                        arrangements, where determined necessary by a 
                        tribal governing body or designated school 
                        board;
                            ``(vii) costs associated with greater 
                        lengths of service by education personnel;
                            ``(viii) the costs of therapeutic programs 
                        for students requiring such programs; and
                            ``(ix) special costs for gifted and 
                        talented students;
                    ``(C) the costs of providing academic services that 
                are at least equivalent to the services provided by 
                public schools in the State in which the school is 
                located;
                    ``(D) whether the available funding will enable the 
                school involved to comply with the accreditation 
                standards applicable to the school under section 1121; 
                and
                    ``(E) such other relevant factors as the Secretary 
                determines are appropriate.
            ``(2) Revision of formula.--On the establishment of the 
        standards required in sections 1121 and 1122, the Secretary 
        shall--
                    ``(A) revise the formula established under 
                paragraph (1) to reflect the cost of compliance with 
                such standards; and
                    ``(B)(i) by not later than January 1, 2002, review 
                the formula established under paragraph (1) and take 
                such action as may be necessary to increase the 
                availability of counseling and therapeutic programs for 
                students in off-reservation home-living schools and 
                other Bureau operated residential facilities; and
                    ``(ii) concurrently with any actions taken under 
                clause (i), review the standards established under 
                section 1121 to be certain that the standards 
                adequately provide for parental notification regarding, 
                and consent for, such counseling and therapeutic 
                programs.
    ``(b) Pro Rata Allotment.--Notwithstanding any other provision of 
law, Federal funds appropriated for the general local operation of 
Bureau funded schools shall be allotted on a pro rata basis in 
accordance with the formula established under subsection (a).
    ``(c) Annual Adjustment; Reservation of Amount for School Board 
Activities.--
            ``(1) Annual adjustment.--
                    ``(A) In general.--For fiscal year 2002, and for 
                each subsequent fiscal year, the Secretary shall adjust 
                the formula established under subsection (a) to--
                            ``(i) use a weighted factor of 1.2 for each 
                        eligible Indian student enrolled in the seventh 
                        and eighth grades of the school in considering 
                        the number of eligible Indian students served 
                        by the school;
                            ``(ii) consider a school with an enrollment 
                        of fewer than 50 eligible Indian students as 
                        having an average daily attendance of 50 
                        eligible Indian students for purposes of 
                        implementing the adjustment factor for small 
                        schools;
                            ``(iii) take into account the provision of 
                        residential services on less than a 9-month 
                        basis at a school in a case in which the school 
                        board and supervisor of the school determine 
                        that the school will provide the services for 
                        fewer than 9 months for the academic year 
                        involved;
                            ``(iv) use a weighted factor of 2.0 for 
                        each eligible Indian student that--
                                    ``(I) is gifted and talented; and
                                    ``(II) is enrolled in the school on 
                                a full-time basis,
                        in considering the number of eligible Indian 
                        students served by the school; and
                            ``(v) use a weighted factor of 0.25 for 
                        each eligible Indian student who is enrolled in 
                        a year long credit course in an Indian or 
                        Native language as part of the regular 
                        curriculum of a school, in considering the 
                        number of eligible Indian students served by 
                        such school.
                    ``(B) Timing.--The Secretary shall make the 
                adjustment required under subparagraph (A)(v) for such 
                school after--
                            ``(i) the school board of such school 
                        provides a certification of the Indian or 
                        Native language curriculum of the school to the 
                        Secretary, together with an estimate of the 
                        number of full-time students expected to be 
                        enrolled in the curriculum in the second 
                        academic year after the academic year for which 
                        the certification is made; and
                            ``(ii) the funds appropriated for 
                        allotments under this section are designated, 
                        in the appropriations Act appropriating such 
                        funds, as the funds necessary to implement such 
                        adjustment at such school without reducing an 
                        allotment made under this section to any school 
                        by virtue of such adjustment.
            ``(2) Reservation of amount.--
                    ``(A) In general.--From the funds allotted in 
                accordance with the formula established under 
                subsection (a) for each Bureau school, the local school 
                board of such school may reserve an amount which does 
                not exceed the greater of--
                            ``(i) $8,000; or
                            ``(ii) the lesser of--
                                    ``(I) $15,000; or
                                    ``(II) 1 percent of such allotted 
                                funds,
                for school board activities for such school, including 
                (notwithstanding any other provision of law) meeting 
                expenses and the cost of membership in, and support of, 
                organizations engaged in activities on behalf of Indian 
                education.
                    ``(B) Training.--Each local school board, and any 
                agency school board that serves as a local school board 
                for any grant or contract school, shall ensure that 
                each individual who is a new member of the school board 
                receives, within 12 months after the individual becomes 
                a member of the school board, 40 hours of training 
                relevant to that individual's service on the board. 
                Such training may include training concerning legal 
                issues pertaining to Bureau funded schools, legal 
                issues pertaining to school boards, ethics, and other 
                topics determined to be appropriate by the school 
                board.
    ``(d) Reservation of Amount for Emergencies.--
            ``(1) In general.--The Secretary shall reserve from the 
        funds available for allotment for each fiscal year under this 
        section an amount that, in the aggregate, equals 1 percent of 
        the funds available for allotment for that fiscal year.
            ``(2) Use of funds.--Amounts reserved under paragraph (1) 
        shall be used, at the discretion of the Director of the Office, 
        to meet emergencies and unforeseen contingencies affecting the 
        education programs funded under this section. Funds reserved 
        under this subsection may only be expended for education 
        services or programs, including emergency repairs of education 
        facilities, at a school site (as defined in section 5204(c)(2) 
        of the Tribally Controlled Schools Act of 1988).
            ``(3) Funds remaining available.--Funds reserved under this 
        subsection shall remain available without fiscal year 
        limitation until expended. The aggregate amount of such funds, 
        from all fiscal years, that is available for expenditure in a 
        fiscal year may not exceed an amount equal to 1 percent of the 
        funds available for allotment under this section for that 
        fiscal year.
            ``(4) Reports.--If the Secretary makes funds available 
        under this subsection, the Secretary shall submit a report 
        describing such action to the appropriate committees of 
        Congress as part of the President's next annual budget request 
        under section 1105 of title 31, United States Code).
    ``(e) Supplemental Appropriations.--Any funds provided in a 
supplemental appropriations Act to meet increased pay costs 
attributable to school level personnel of Bureau funded schools shall 
be allotted under this section.
    ``(f) Eligible Indian Student Defined.--In this section, the term 
`eligible Indian student' means a student who--
            ``(1) is a member of, or is at least \1/4\ degree Indian 
        blood descendant of a member of, a tribe that is eligible for 
        the special programs and services provided by the United States 
        through the Bureau to Indians because of their status as 
        Indians;
            ``(2) resides on or near a reservation or meets the 
        criteria for attendance at a Bureau off-reservation home-living 
        school; and
            ``(3) is enrolled in a Bureau funded school.
    ``(g) Tuition.--
            ``(1) In general.--A Bureau school or contract or grant 
        school may not charge an eligible Indian student tuition for 
        attendance at the school. A Bureau school may not charge a 
        student attending the school under the circumstances described 
        in paragraph (2)(C) tuition for attendance at the school.
            ``(2) Attendance of non-indian students at bureau 
        schools.--The Secretary may permit the attendance at a Bureau 
        school of a student who is not an eligible Indian student if--
                    ``(A)(i) the Secretary determines that the 
                student's attendance will not adversely affect the 
                school's program for eligible Indian students because 
                of cost, overcrowding, or violation of standards or 
                accreditation requirements; and
                    ``(ii) the local school board consents; and
                    ``(B)(i) the student is a dependent of a Bureau, 
                Indian Health Service, or tribal government employee 
                who lives on or near the school site; or
                    ``(ii) tuition is paid for the student in an amount 
                that is not more than the amount of tuition charged by 
                the nearest public school district for out-of-district 
                students, and is paid in addition to the school's 
                allotment under this section.
            ``(3) Attendance of non-indian students at contract and 
        grant schools.--The school board of a contract or grant school 
        may permit students who are not eligible Indian students to 
        attend the contract or grant school. Any tuition collected for 
        those students shall be in addition to the amount the school 
        received under this section.
    ``(h) Funds Available Without Fiscal Year Limitation.--
Notwithstanding any other provision of law, at the election of the 
local school board of a Bureau school made at any time during a fiscal 
year, a portion equal to not more than 15 percent of the funds allotted 
for the school under this section for the fiscal year shall remain 
available to the school for expenditure without fiscal year limitation. 
The Assistant Secretary for Indian Affairs shall take such steps as may 
be necessary to implement this subsection.
    ``(i) Students at Richfield Dormitory, Richfield, Utah.--Tuition 
for the instruction of each out-of-State Indian student in a home-
living situation at the Richfield dormitory in Richfield, Utah, who 
attends Sevier County high schools in Richfield, Utah, for an academic 
year, shall be paid from Indian school equalization program funds 
authorized in this section and section 1129, at a rate not to exceed 
the weighted amount provided for under subsection (b) for a student for 
that year. No additional administrative cost funds shall be provided 
under this part to pay for administrative costs relating to the 
instruction of the students.

``SEC. 1127. ADMINISTRATIVE COST GRANTS.

    ``(a) Definitions.--In this section:
            ``(1) Administrative cost.--
                    ``(A) In general.--The term `administrative cost' 
                means the cost of necessary administrative functions 
                which--
                    ``(i) the tribe or tribal organization incurs as a 
                result of operating a tribal elementary or secondary 
                educational program;
                    ``(ii) are not customarily paid by comparable 
                Bureau operated programs out of direct program funds; 
                and
                    ``(iii) are either--
                            ``(I) normally provided for comparable 
                        Bureau programs by Federal officials using 
                        resources other than Bureau direct program 
                        funds; or
                            ``(II) are otherwise required of tribal 
                        self-determination program operators by law or 
                        prudent management practice.
                    ``(B) Inclusions.--The term `administrative cost' 
                may include--
                    ``(i) contract or grant (or other agreement) 
                administration;
                    ``(ii) executive, policy, and corporate leadership 
                and decisionmaking;
                    ``(iii) program planning, development, and 
                management;
                    ``(iv) fiscal, personnel, property, and procurement 
                management;
                    ``(v) related office services and record keeping; 
                and
                    ``(vi) costs of necessary insurance, auditing, 
                legal, safety and security services.
            ``(2) Bureau elementary and secondary functions.--The term 
        `Bureau elementary and secondary functions' means--
                    ``(A) all functions funded at Bureau schools by the 
                Office;
                    ``(B) all programs--
                            ``(i) funds for which are appropriated to 
                        other agencies of the Federal Government; and
                            ``(ii) which are administered for the 
                        benefit of Indians through Bureau schools; and
                    ``(C) all operation, maintenance, and repair funds 
                for facilities and government quarters used in the 
                operation or support of elementary and secondary 
                education functions for the benefit of Indians, from 
                whatever source derived.
            ``(3) Direct cost base.--
                    ``(A) In general.--Except as otherwise provided in 
                subparagraph (B), the direct cost base of a tribe or 
                tribal organization for the fiscal year is the 
                aggregate direct cost program funding for all tribal 
                elementary or secondary educational programs operated 
                by the tribe or tribal organization during--
                    ``(i) the second fiscal year preceding such fiscal 
                year; or
                    ``(ii) if such programs have not been operated by 
                the tribe or tribal organization during the two 
                preceding fiscal years, the first fiscal year preceding 
                such fiscal year.
                    ``(B) Functions not previously operated.--In the 
                case of Bureau elementary or secondary education 
                functions which have not previously been operated by a 
                tribe or tribal organization under contract, grant, or 
                agreement with the Bureau, the direct cost base for the 
                initial year shall be the projected aggregate direct 
                cost program funding for all Bureau elementary and 
                secondary functions to be operated by the tribe or 
                tribal organization during that fiscal year.
            ``(4) Maximum base rate.--The term `maximum base rate' 
        means 50 percent.
            ``(5) Minimum base rate.--The term `minimum base rate' 
        means 11 percent.
            ``(6) Standard direct cost base.--The term `standard direct 
        cost base' means $600,000.
            ``(7) Tribal elementary or secondary educational 
        programs.--The term `tribal elementary or secondary educational 
        programs' means all Bureau elementary and secondary functions, 
        together with any other Bureau programs or portions of programs 
        (excluding funds for social services that are appropriated to 
        agencies other than the Bureau and are expended through the 
        Bureau, funds for major subcontracts, construction, and other 
        major capital expenditures, and unexpended funds carried over 
        from prior years) which share common administrative cost 
        functions, that are operated directly by a tribe or tribal 
        organization under a contract, grant, or agreement with the 
        Bureau.
    ``(b) Grants; Effect Upon Appropriated Amounts.--
            ``(1) Grants.--
                    ``(A) In general.--Subject to the availability of 
                appropriated funds, the Secretary shall provide a grant 
                to each tribe or tribal organization operating a 
                contract or grant school, in an amount determined under 
                this section, for the purpose of paying the 
                administrative and indirect costs incurred in operating 
                the contract or grant school, in order to--
                            ``(i) enable the tribe or tribal 
                        organization operating the school, without 
                        reducing direct program services to the 
                        beneficiaries of the program, to provide all 
                        related administrative overhead services and 
                        operations necessary to meet the requirements 
                        of law and prudent management practice; and
                            ``(ii) carry out other necessary support 
                        functions that would otherwise be provided by 
                        the Secretary or other Federal officers or 
                        employees, from resources other than direct 
                        program funds, in support of comparable Bureau 
                        operated programs.
                    ``(B) Amount.--No school operated as a stand-alone 
                institution shall receive less than $200,000 per year 
                under this paragraph.
            ``(2) Effect upon appropriated amounts.--Amounts 
        appropriated to fund the grants provided for under this section 
        shall be in addition to, and shall not reduce, the amounts 
        appropriated for the program being administered by the contract 
        or grant school.
    ``(c) Determination of Grant Amount.--
            ``(1) In general.--The amount of the grant provided to each 
        tribe or tribal organization under this section for each fiscal 
        year shall be determined by applying the administrative cost 
        percentage rate determined under subsection (d) of the tribe or 
        tribal organization to the aggregate cost of the Bureau 
        elementary and secondary functions operated by the tribe or 
        tribal organization for which funds are received from or 
        through the Bureau. The administrative cost percentage rate 
        does not apply to programs not relating to such functions that 
        are operated by the tribe or tribal organization.
            ``(2) Direct cost base funds.--The Secretary shall--
                    ``(A) reduce the amount of the grant determined 
                under paragraph (1) to the extent that payments for 
                administrative costs are actually received by a tribe 
                or tribal organization under any Federal education 
                program that is included in the direct cost base of the 
                tribe or tribal organization; and
                    ``(B) take such actions as may be necessary to be 
                reimbursed by any other department or agency of the 
                Federal Government (other than the Department of the 
                Interior) for the portion of grants made under this 
                section for the costs of administering any program for 
                Indians that is funded by appropriations made to such 
                other department or agency.
            ``(3) Reductions.--If the total amount of funds necessary 
        to provide grants to tribes and tribal organizations in the 
        amounts determined under paragraph (1) and (2) for a fiscal 
        year exceeds the amount of funds appropriated to carry out this 
        section for such fiscal year, the Secretary shall reduce the 
        amount of each grant determined under this subsection for such 
        fiscal year by an amount that bears the same relationship to 
        such excess as the amount of such grants determined under this 
        subsection bears to the total of all grants determined under 
        this subsection for all tribes and tribal organizations for 
        such fiscal year.
    ``(d) Administrative Cost Percentage Rate.--
            ``(1) In general.--For purposes of this section, the 
        administrative cost percentage rate for a contract or grant 
        school for a fiscal year is equal to the percentage determined 
        by dividing--
                    ``(A) the sum of--
                            ``(i) the amount equal to--
                                    ``(I) the direct cost base of the 
                                tribe or tribal organization for the 
                                fiscal year; multiplied by
                                    ``(II) the minimum base rate; plus
                            ``(ii) the amount equal to--
                                    ``(I) the standard direct cost 
                                base; multiplied by
                                    ``(II) the maximum base rate; by
                    ``(B) the sum of--
                            ``(i) the direct cost base of the tribe or 
                        tribal organization for the fiscal year; and
                            ``(ii) the standard direct cost base.
            ``(2) Rounding.--The administrative cost percentage rate 
        shall be determined to \1/100\ of a percent.
    ``(e) Combining Funds.--
            ``(1) In general.--Funds received by a tribe, tribal 
        organization, or contract or grant school through grants made 
under this section for tribal elementary or secondary educational 
programs may be combined by the tribe, tribal organization, or contract 
or grant school and placed into a single administrative cost account 
without the necessity of maintaining separate funding source 
accounting.
            ``(2) Indirect cost funds.--Indirect cost funds for 
        programs at the school that share common administrative 
        services with the tribal elementary or secondary educational 
        programs may be included in the administrative cost account 
        described in paragraph (1).
    ``(f) Availability of Funds.--Funds received through a grant made 
under this section with respect to tribal elementary or secondary 
educational programs at a contract or grant school shall remain 
available to the contract or grant school--
            ``(1) without fiscal year limitation; and
            ``(2) without reducing the amount of any grants otherwise 
        payable to the school under this section for any fiscal year 
        after the fiscal year for which the grant is provided.
    ``(g) Treatment of Funds.--Funds received through a grant made 
under this section for Bureau funded programs operated by a tribe or 
tribal organization under a contract or grant shall not be taken into 
consideration for purposes of indirect cost underrecovery and 
overrecovery determinations by any Federal agency for any other funds, 
from whatever source derived.
    ``(h) Treatment of Entity Operating Other Programs.--In applying 
this section and section 106 of the Indian Self-Determination and 
Education Assistance Act with respect to an Indian tribe or tribal 
organization that--
            ``(1) receives funds under this section for administrative 
        costs incurred in operating a contract or grant school or a 
        school operated under the Tribally Controlled Schools Act of 
        1988; and
            ``(2) operates one or more other programs under a contract 
        or grant provided under the Indian Self-Determination and 
        Education Assistance Act,
the Secretary shall ensure that the Indian tribe or tribal organization 
is provided with the full amount of the administrative costs that are 
associated with operating the contract or grant school, and of the 
indirect costs, that are associated with all of such other programs, 
except that funds appropriated for implementation of this section shall 
be used only to supply the amount of the grant required to be provided 
by this section.
    ``(i) Applicability to Schools Operating Under Tribally Controlled 
Schools Act of 1988.--The provisions of this section that apply to 
contract or grant schools shall also apply to those schools receiving 
assistance under the Tribally Controlled Schools Act of 1988.
    ``(j) Authorization of Appropriations.--There are authorized to be 
appropriated such sums as may be necessary to carry out this section.

``SEC. 1128. DIVISION OF BUDGET ANALYSIS.

    ``(a) Establishment.--Not later than 12 months after the date of 
enactment of the Native American Education Improvement Act of 2001, the 
Secretary shall establish within the Office of Indian Education 
Programs a Division of Budget Analysis (referred to in this section as 
the `Division'). Such Division shall be under the direct supervision 
and control of the Director of the Office.
    ``(b) Functions.--In consultation with the tribal governing bodies 
and local school boards the Director of the Office, through the head of 
the Division, shall conduct studies, surveys, or other activities to 
gather demographic information on Bureau funded schools and project the 
amounts necessary to provide to Indian students in such schools the 
educational program set forth in this part.
    ``(c) Annual Reports.--Not later than the date that the Assistant 
Secretary for Indian Affairs submits the annual budget request as part 
of the President's annual budget request under section 1105 of title 
31, United States Code for each fiscal year after the date of enactment 
of the Native American Education Improvement Act of 2001, the Director 
of the Office shall submit to the appropriate committees of Congress 
(including the Committee on Appropriations of the House of 
Representatives and the Committee on Appropriations of the Senate), all 
Bureau funded schools, and the tribal governing bodies relating to such 
schools, a report that shall contain--
            ``(1) projections, based on the information gathered 
        pursuant to subsection (b) and any other relevant information, 
        of amounts necessary to provide to Indian students in Bureau 
        funded schools the educational program set forth in this part;
            ``(2) a description of the methods and formulas used to 
        calculate the amounts projected pursuant to paragraph (1); and
            ``(3) such other information as the Director of the Office 
        considers to be appropriate.
    ``(d) Use of Reports.--The Director of the Office and the Assistant 
Secretary for Indian Affairs shall use the information contained in the 
annual report required by subsection (c) in preparing their annual 
budget requests.

``SEC. 1129. UNIFORM DIRECT FUNDING AND SUPPORT.

    ``(a) Establishment of System and Forward Funding.--
            ``(1) In general.--The Secretary shall establish, by 
        regulation adopted in accordance with section 1137, a system 
        for the direct funding and support of all Bureau funded 
        schools. Such system shall allot funds in accordance with 
        section 1126. All amounts appropriated for distribution in 
        accordance with this section may be made available in 
        accordance with paragraph (2).
            ``(2) Timing for use of funds.--
                    ``(A) Availability.--With regard to funds for 
                affected schools under this part that become available 
                for obligation on October 1 of the fiscal year for 
                which such funds are appropriated, the Secretary shall 
                make payments to such affected schools not later than 
                December 1 of the fiscal year, except that operations 
                and maintenance funds shall be forward funded and shall 
                be available for obligation not later than July 15 and 
                December 1 of each fiscal year, and shall remain 
                available for obligation through the succeeding fiscal 
                year.
                    ``(B) Publications.--The Secretary shall, on the 
                basis of the amounts appropriated as described in this 
                paragraph--
                            ``(i) publish, not later than July 1 of the 
                        fiscal year for which the amounts are 
                        appropriated, information indicating the amount 
                        of the allotments to be made to each affected 
                        school under section 1126, of 85 percent of 
                        such appropriated amounts; and
                            ``(ii) publish, not later than September 30 
                        of such fiscal year, information indicating the 
                        amount of the allotments to be made under 
                        section 1126, from the remaining 15 percent of 
                        such appropriated amounts, adjusted to reflect 
                        the actual student attendance.
            ``(3) Limitation.--
                    ``(A) Expenditures.--Notwithstanding any other 
                provision of law (including a regulation), the 
                supervisor of a Bureau school may expend an aggregate 
                of not more than $50,000 of the amount allotted to the 
                school under section 1126 to acquire materials, 
                supplies, equipment, operation services, maintenance 
                services, and other services for the school, and 
                amounts received as operations and maintenance funds, 
                funds received from the Department of Education, or 
                funds received from other Federal sources, without 
                competitive bidding if--
                            ``(i) the cost for any single item acquired 
                        does not exceed $15,000;
                            ``(ii) the school board approves the 
                        acquisition;
                            ``(iii) the supervisor certifies that the 
                        cost is fair and reasonable;
                            ``(iv) the documents relating to the 
                        acquisition executed by the supervisor of the 
                        school or other school staff cite this 
                        paragraph as authority for the acquisition; and
                            ``(v) the acquisition transaction is 
                        documented in a journal maintained at the 
                        school that clearly identifies when the 
                        transaction occurred, the item that was 
                        acquired and from whom, the price paid, the 
                        quantities acquired, and any other information 
                        the supervisor or the school board considers to 
                        be relevant.
                    ``(B) Notice.--Not later than 6 months after the 
                date of enactment of the Native American Education 
                Improvement Act of 2001, the Secretary shall send 
                notice of the provisions of this paragraph to each 
                supervisor of a Bureau school and associated school 
                board chairperson, the education line officer of each 
                agency and area, and the Bureau division in charge of 
                procurement, at both the local and national levels.
                    ``(C) Application and guidelines.--The Director of 
                the Office shall be responsible for--
                            ``(i) determining the application of this 
                        paragraph, including the authorization of 
                        specific individuals to carry out this 
                        paragraph;
                            ``(ii) ensuring that there is at least 1 
                        such individual at each Bureau facility; and
                            ``(iii) the provision of guidelines on the 
                        use of this paragraph and adequate training on 
                        such guidelines.
    ``(b) Local Financial Plans for Expenditure of Funds.--
            ``(1) Plan required.--
                    ``(A) In general.--Each Bureau school that receives 
                an allotment under section 1126 shall prepare a local 
                financial plan that specifies the manner in which the 
                school will expend the funds made available under the 
                allotment and ensures that the school will meet the 
                accreditation requirements or standards for the school 
                established pursuant to section 1121.
                    ``(B) Requirement.--A local financial plan under 
                subparagraph (A) shall comply with all applicable 
                Federal and tribal laws.
                    ``(C) Preparation and revision.--The financial plan 
                for a school under subparagraph (A) shall be prepared 
                by the supervisor of the school in active consultation 
                with the local school board for the school. The local 
                school board for each school shall have the authority 
                to ratify, reject, or amend such financial plan and, at 
                the initiative of the local school board or in response 
                to the supervisor of the school, to revise such 
                financial plan to meet needs not foreseen at the time 
                of preparation of the financial plan.
                    ``(D) Role of supervisor.--The supervisor of the 
                school--
                            ``(i) shall put into effect the decisions 
                        of the school board relating to the financial 
                        plan under subparagraph (A); and
                            ``(ii) shall provide the appropriate local 
                        union representative of the education employees 
                        of the school with copies of proposed financial 
                        plans relating to the school and all 
                        modifications and proposed modifications to the 
                        plans, and at the same time submit such copies 
                        to the local school board.
                            ``(iii) may appeal any such action of the 
                        local school board to the appropriate education 
                        line officer of the Bureau agency by filing a 
                        written statement describing the action and the 
                        reasons the supervisor believes such action 
                        should be overturned.
                A copy of statement under clause (iii) shall be 
                submitted to the local school board and such board 
                shall be afforded an opportunity to respond, in 
                writing, to such appeal. After reviewing such written 
                appeal and response, the appropriate education line 
                officer may, for good cause, overturn the action of the 
                local school board. The appropriate education line 
                officer shall transmit the determination of such appeal 
in the form of a written opinion to such board and to such supervisor 
identifying the reasons for overturning such action.
            ``(2) Requirement.--A Bureau school shall expend amounts 
        received under an allotment under section 1126 in accordance 
        with the local financial plan prepared under paragraph (1).
    ``(c) Tribal Division of Education, Self-Determination Grant and 
Contract Funds.--The Secretary may approve applications for funding 
tribal divisions of education and developing tribal codes of education, 
from funds made available pursuant to section 103(a) of the Indian 
Self-Determination and Education Assistance Act.
    ``(d) Technical Assistance and Training.--A local school board may, 
in the exercise of the authority of the school board under this 
section, request technical assistance and training from the Secretary. 
The Secretary shall, to the greatest extent possible, provide such 
assistance and training, and make appropriate provision in the budget 
of the Office for such assistance and training.
    ``(e) Summer Program of Academic and Support Services.--
            ``(1) In general.--A financial plan prepared under 
        subsection (b) for a school may include, at the discretion of 
        the supervisor and the local school board of such school, a 
        provision for funding a summer program of academic and support 
        services for students of the school. Any such program may 
        include activities related to the prevention of alcohol and 
        substance abuse. The Assistant Secretary for Indian Affairs 
        shall provide for the utilization of facilities of the school 
        for such program during any summer in which such utilization is 
        requested.
            ``(2) Use of other funds.--Notwithstanding any other 
        provision of law, funds authorized under the Act of April 16, 
        1934 (commonly known as the `Johnson-O'Malley Act'; 48 Stat. 
        596, chapter 147) and this Act may be used to augment the 
        services provided in each summer program referred to in 
        paragraph (1) at the option of the tribe or school receiving 
        such funds. The augmented services shall be under the control 
        of the tribe or school.
            ``(3) Technical assistance and program coordination.--The 
        Assistant Secretary for Indian Affairs, acting through the 
        Director of the Office, shall provide technical assistance and 
        coordination of activities for any program described in 
        paragraph (1) and shall, to the extent possible, encourage the 
        coordination of such programs with any other summer programs 
        that might benefit Indian youth, regardless of the funding 
        source or administrative entity of such programs.
    ``(f) Cooperative Agreements.--
            ``(1) In general.--From funds allotted to a Bureau school 
        under section 1126, the Secretary shall, if specifically 
        requested by the appropriate tribal governing body, implement a 
        cooperative agreement that is entered into between the tribe, 
        the Bureau, the local school board, and a local public school 
        district that meets the requirements of paragraph (2) and 
        involves the school. The tribe, the Bureau, the school board, 
        and the local public school district shall determine the terms 
        of the agreement.
            ``(2) Coordination provisions.--An agreement under 
        paragraph (1) may, with respect to the Bureau school and 
        schools in the school district involved, encompass coordination 
        of all or any part of the following:
                    ``(A) The academic program and curriculum, unless 
                the Bureau school is accredited by a State or regional 
                accrediting entity and would not continue to be so 
                accredited if the agreement encompassed the program and 
                curriculum.
                    ``(B) Support services, including procurement and 
                facilities maintenance.
                    ``(C) Transportation.
            ``(3) Equal benefit and burden.--
                    ``(A) In general.--Each agreement entered into 
                pursuant to the authority provided in paragraph (1) 
                shall confer a benefit upon the Bureau school 
                commensurate with the burden assumed by the school.
                    ``(B) Limitation.--Subparagraph (A) shall not be 
                construed to require equal expenditures, or an exchange 
                of similar services, by the Bureau school and schools 
                in the school district.
    ``(g) Product or Result of Student Projects.--Notwithstanding any 
other provision of law, where there is agreement on action between the 
superintendent and the school board of a Bureau funded school, the 
product or result of a project conducted in whole or in major part by a 
student may be given to that student upon the completion of such 
project.
    ``(h) Matching Fund Requirements.--
            ``(1) Not considered federal funds.--Notwithstanding any 
        other provision of law, funds received by a Bureau funded 
        school under this title for education-related activities (not 
        including funds for construction, maintenance and facilities, 
        improvement or repair) shall not be considered to be Federal 
        funds for the purposes of meeting a matching funds requirement 
        for any Federal program.
            ``(2) Nonapplication of requirements.--
                    ``(A) In general.--Notwithstanding any other 
                provision of law, no requirement relating to the 
                provision of matching funds or the provision of 
                services or in-kind activity as a condition of 
                participation in a program or project or receipt of a 
                grant, shall apply to a Bureau funded school unless the 
                provision of law authorizing such requirement specifies 
                that such requirement applies to such a school.
                    ``(B) Limitation.--In considering an application 
                from a Bureau funded school for participation in a 
                program or project that has a requirement described in 
                subparagraph (A), the entity administering such program 
                or project or receiving such grant shall not give 
                positive or negative weight to such application based 
                solely on the provisions of this paragraph. Such an 
application shall be considered as if it fully met any matching 
requirement.

``SEC. 1130. POLICY FOR INDIAN CONTROL OF INDIAN EDUCATION.

    ``(a) Facilitation of Indian Control.--It shall be the policy of 
the Secretary and the Bureau, in carrying out the functions of the 
Bureau, to facilitate Indian control of Indian affairs in all matters 
relating to education.
    ``(b) Consultation With Tribes.--
            ``(1) In general.--All actions under this Act shall be done 
        with active consultation with tribes. The Bureau and tribes 
        shall work in a government-to-government relationship to ensure 
        quality education for all tribal members.
            ``(2) Requirements.--The consultation required under 
        paragraph (1) means a process involving the open discussion and 
        joint deliberation of all options with respect to potential 
        issues or changes between the Bureau and all interested 
        parties. During such discussions and joint deliberations, 
        interested parties (including tribes and school officials) 
        shall be given an opportunity to present issues including 
        proposals regarding changes in current practices or programs 
        which will be considered for future action by the Bureau. All 
        interested parties shall be given an opportunity to participate 
        and discuss the options presented or to present alternatives, 
        with the views and concerns of the interested parties given 
        effect unless the Secretary determines, from information 
        available from or presented by the interested parties during 
        one or more of the discussions and deliberations, that there is 
        a substantial reason for another course of action. The 
        Secretary shall submit to any Member of Congress, within 18 
        days of the receipt of a written request by such Member, a 
        written explanation of any decision made by the Secretary which 
        is not consistent with the views of the interested parties.

``SEC. 1131. INDIAN EDUCATION PERSONNEL.

    ``(a) Definitions.--In this section:
            ``(1) Education position.--The term `education position' 
        means a position in the Bureau the duties and responsibilities 
        of which--
                    ``(A) are performed on a school-year basis 
                principally in a Bureau school and involve--
                            ``(i) classroom or other instruction or the 
                        supervision or direction of classroom or other 
                        instruction;
                            ``(ii) any activity (other than teaching) 
                        that requires academic credits in educational 
                        theory and practice equal to the academic 
                        credits in educational theory and practice 
                        required for a bachelor's degree in education 
                        from an accredited institution of higher 
                        education;
                            ``(iii) any activity in or related to the 
                        field of education, whether or not academic 
                        credits in educational theory and practice are 
                        a formal requirement for the conduct of such 
                        activity; or
                            ``(iv) provision of support services at, or 
                        associated with, the site of the school; or
                    ``(B) are performed at the agency level of the 
                Bureau and involve the implementation of education-
                related programs, other than the position of agency 
                superintendent for education.
            ``(2) Educator.--The term `educator' means an individual 
        whose services are required, or who is employed, in an 
        education position.
    ``(b) Civil Service Authorities Inapplicable.--Chapter 51, 
subchapter III of chapter 53, and chapter 63 of title 5, United States 
Code, relating to classification, pay, and leave, respectively, and the 
sections of such title relating to the appointment, promotion, hours of 
work, and removal of civil service employees, shall not apply to 
educators or to education positions.
    ``(c) Regulations.--Not later than 60 days after the date of 
enactment of the Native American Education Improvement Act of 2001, the 
Secretary shall prescribe regulations to carry out this section. Such 
regulations shall include provisions relating to--
            ``(1) the establishment of education positions;
            ``(2) the establishment of qualifications for educators and 
        education personnel;
            ``(3) the fixing of basic compensation for educators and 
        education positions;
            ``(4) the appointment of educators;
            ``(5) the discharge of educators;
            ``(6) the entitlement of educators to compensation;
            ``(7) the payment of compensation to educators;
            ``(8) the conditions of employment of educators;
            ``(9) the leave system for educators;
            ``(10) the length of the school year applicable to 
        education positions described in subsection (a)(1)(A); and
            ``(11) such matters as may be appropriate.
    ``(d) Qualifications of Educators.--
            ``(1) Requirements.--In prescribing regulations to govern 
        the qualifications of educators, the Secretary shall require--
                    ``(A) that lists of qualified and interviewed 
                applicants for education positions be maintained in the 
                appropriate agency or area office of the Bureau or, in 
                the case of individuals applying at the national level, 
                the Office;
                    ``(B)(i) that a local school board have the 
                authority to waive, on a case-by-case basis, any formal 
                education or degree qualification established by 
                regulation, in order for a tribal member to be hired in 
                an education position to teach courses on tribal 
                culture and language; and
                    ``(ii) that a determination by a local school board 
                that such a tribal member be hired shall be instituted 
                by the supervisor of the school involved; and
                    ``(C) that it shall not be a prerequisite to the 
                employment of an individual in an education position at 
                the local level--
                            ``(i) that such individual's name appear on 
                        a list maintained pursuant to subparagraph (A); 
                        or
                            ``(ii) that such individual have applied at 
                        the national level for an education position.
            ``(2) Exception for certain temporary employment.--The 
        Secretary may authorize the temporary employment in an 
        education position of an individual who has not met the 
        certification standards established pursuant to regulations, if 
        the Secretary determines that failure to authorize the 
        employment would result in that position remaining vacant.
    ``(e) Hiring of Educators.--
            ``(1) Requirements.--In prescribing regulations to govern 
        the appointment of educators, the Secretary shall require--
                    ``(A)(i)(I) that educators employed in a Bureau 
                school (other than the supervisor of the school) shall 
                be hired by the supervisor of the school; and
                    ``(II) that, in a case in which there are no 
                qualified applicants available to fill a vacancy at a 
                Bureau school, the supervisor may consult a list 
                maintained pursuant to subsection (d)(1)(A);
                    ``(ii) each supervisor of a Bureau school shall be 
                hired by the education line officer of the agency 
                office of the Bureau for the jurisdiction in which the 
                school is located;
                    ``(iii) each educator employed in an agency office 
                of the Bureau shall be hired by the superintendent for 
                education of the agency office; and
                    ``(iv) each education line officer and educator 
                employed in the office of the Director of the Office 
                shall be hired by the Director;
                    ``(B)(i) that, before an individual is employed in 
                an education position in a Bureau school by the 
                supervisor of the school (or, with respect to the 
                position of supervisor, by the appropriate agency 
                education line officer), the local school board for the 
                school shall be consulted; and
                    ``(ii) that a determination by such school board, 
                as evidenced by school board records, that such 
                individual should or should not be so employed shall be 
                instituted by the supervisor (or with respect to the 
                position of supervisor, by the superintendent for 
                education of the agency office);
                    ``(C)(i) that, before an individual is employed in 
                an education position in an agency office of the 
                Bureau, the appropriate agency school board shall be 
                consulted; and
                    ``(ii) that a determination by such school board, 
                as evidenced by school board records, that such 
                individual should or should not be employed shall be 
                instituted by the superintendent for education of the 
                agency office;
                    ``(D) that before an individual is employed in an 
                education position (as described in subsection 
                (a)(1)(B)) in the office of the Director of the Office 
                (other than the position of Director), the school 
                boards representing all Bureau schools shall be 
                consulted; and
                    ``(E) that all employment decisions or actions be 
                in compliance with all applicable Federal, State and 
                tribal laws.
            ``(2) Information regarding application at national 
        level.--
                    ``(A) In general.--Any individual who applies at 
                the local level for an education position shall state 
                on such individual's application whether or not such 
                individual has applied at the national level for an 
                education position.
                    ``(B) Effect of inaccurate statement.--If an 
                individual described in subparagraph (A) is employed at 
                the local level, such individual's name shall be 
                immediately forwarded to the Secretary by the local 
                employer. The Secretary shall, as soon as practicable 
                but in no event later than 30 days after the receipt of 
                the name, ascertain the accuracy of the statement made 
                by such individual pursuant to subparagraph (A). 
                Notwithstanding subsection (g), if the Secretary finds 
                that the individual's statement was false, such 
                individual, at the Secretary's discretion, may be 
                disciplined or discharged.
                    ``(C) Effect of application at national level.--If 
                an individual described in subparagraph (A) has applied 
                at the national level for an education position, the 
                appointment of such individual at the local level shall 
                be conditional for a period of 90 days. During that 
                period, the Secretary may appoint a more qualified 
                individual (as determined by the Secretary) from a list 
                maintained pursuant to subsection (e)(1)(A) to the 
                position to which such individual was appointed.
            ``(3) Statutory construction.--Except as expressly 
        provided, nothing in this section shall be construed as 
        conferring upon local school boards authority over, or control 
        of, educators at Bureau funded schools or the authority to 
        issue management decisions.
            ``(4) Appeals.--
                    ``(A) By supervisor.--The supervisor of a school 
                may appeal to the appropriate agency education line 
                officer any determination by the local school board for 
                the school that an individual be employed, or not be 
                employed, in an education position in the school (other 
                than that of supervisor) by filing a written statement 
                describing the determination and the reasons the 
                supervisor believes such determination should be 
                overturned. A copy of such statement shall be submitted 
                to the local school board and such board shall be 
                afforded an opportunity to respond, in writing, to such 
                appeal. After reviewing such written appeal and 
                response, the education line officer may, for good 
                cause, overturn the determination of the local school 
                board. The education line officer shall transmit the 
                determination of such appeal in the form of a written 
opinion to such board and to such supervisor identifying the reasons 
for overturning such determination.
                    ``(B) By education line officer.--The education 
                line officer of an agency office of the Bureau may 
                appeal to the Director of the Office any determination 
                by the local school board for the school that an 
                individual be employed, or not be employed, as the 
                supervisor of a school by filing a written statement 
                describing the determination and the reasons the 
                supervisor believes such determination should be 
                overturned. A copy of such statement shall be submitted 
                to the local school board and such board shall be 
                afforded. an opportunity to respond, in writing, to 
                such appeal. After reviewing such written appeal and 
                response, the Director may, for good cause, overturn 
                the determination of the local school board. The 
                Director shall transmit the determination of such 
                appeal in the form of a written opinion to such board 
                and to such education line officer identifying the 
                reasons for overturning such determination.
            ``(5) Other appeals.--The education line officer of an 
        agency office of the Bureau may appeal to the Director of the 
        Office any determination by the agency school board that an 
        individual be employed, or not be employed, in an education 
        position in such agency office by filing a written statement 
        describing the determination and the reasons the supervisor 
        believes such determination should be overturned. A copy of 
        such statement shall be submitted to the agency school board 
        and such board shall be afforded an opportunity to respond, in 
        writing, to such appeal. After reviewing such written appeal 
        and response, the Director may, for good cause, overturn the 
        determination of the agency school board. The Director shall 
        transmit the determination of such appeal in the form of a 
        written opinion to such board and to such education line 
        officer identifying the reasons for overturning such 
        determination.
    ``(f) Discharge and Conditions of Employment of Educators.--
            ``(1) Regulations.--In prescribing regulations to govern 
        the discharge and conditions of employment of educators, the 
        Secretary shall require--
                    ``(A) that procedures shall be established for the 
                rapid and equitable resolution of grievances of 
                educators;
                    ``(B) that no educator may be discharged without 
                notice of the reasons for the discharge and an 
                opportunity for a hearing under procedures that comport 
                with the requirements of due process; and
                    ``(C) that each educator employed in a Bureau 
                school shall be notified 30 days prior to the end of an 
                academic year whether the employment contract of the 
                individual will be renewed for the following year.
            ``(2) Procedures for discharge.--
                    ``(A) Determinations.--The supervisor of a Bureau 
                school may discharge (subject to procedures established 
                under paragraph (1)(B)) for cause (as determined under 
                regulations prescribed by the Secretary) any educator 
                employed in such school. On giving notice to an 
                educator of the supervisor's intention to discharge the 
                educator, the supervisor shall immediately notify the 
                local school board of the proposed discharge. A 
                determination by the local school board that such 
                educator shall not be discharged shall be followed by 
                the supervisor.
                    ``(B) Appeals.--The supervisor shall have the right 
                to appeal a determination by a local school board under 
                subparagraph (A), as evidenced by school board records, 
                not to discharge an educator to the education line 
                officer of the appropriate agency office of the Bureau. 
                Upon hearing such an appeal, the agency education line 
                officer may, for good cause, issue a decision 
                overturning the determination of the local school board 
                with respect to the employment of such individual. The 
                education line officer shall make the decision in 
                writing and submit the decision to the local school 
                board.
            ``(3) Recommendations of school boards for discharge.--Each 
        local school board for a Bureau school shall have the right--
                    ``(A) to recommend to the supervisor that an 
                educator employed in the school be discharged; and
                    ``(B) to recommend to the education line officer of 
                the appropriate agency office of the Bureau and to the 
                Director of the Office, that the supervisor of the 
                school be discharged.
    ``(g) Applicability of Indian Preference Laws.--
            ``(1) In general.--Notwithstanding any provision of the 
        Indian preference laws, such laws shall not apply in the case 
        of any personnel action carried out under this section with 
        respect to an applicant or employee not entitled to an Indian 
        preference if each tribal organization concerned grants a 
        written waiver of the application of such laws with respect to 
        such personnel action and states that such waiver is necessary. 
        This paragraph shall not be construed to relieve the Bureau's 
        responsibility to issue timely and adequate announcements and 
        advertisements concerning any such personnel action if such 
        action is intended to fill a vacancy (no matter how such 
        vacancy is created).
            ``(2) Definitions.--In this subsection:
                    ``(A) Indian preference laws.--The term `Indian 
                preference laws' means section 12 of the Act of June 
                18, 1934 (48 Stat. 986, chapter 576) or any other 
                provision of law granting a preference to Indians in 
                promotions and other personnel actions. Such term shall 
                not include section 7(b) of the Indian Self-
                Determination and Education Assistance Act.
                    ``(B) Tribal organization.--The term `tribal 
                organization' means--
                            ``(i) the recognized governing body of any 
                        Indian tribe, band, nation, pueblo, or other 
organized community, including a Native village (as defined in section 
3(c) of the Alaska Native Claims Settlement Act); or
                            ``(ii) in connection with any personnel 
                        action referred to in this subsection, any 
                        local school board to which the governing body 
                        has delegated the authority to grant a waiver 
                        under this subsection with respect to a 
                        personnel action.
    ``(h) Compensation or Annual Salary.--
            ``(1) In general.--
                    ``(A) Compensation for educators and education 
                positions.--Except as otherwise provided in this 
                section, the Secretary shall fix the basic compensation 
                for educators and education positions--
                            ``(i) at rates in effect under the General 
                        Schedule for individuals with comparable 
                        qualifications, and holding comparable 
                        positions, to whom chapter 51 of title 5, 
                        United States Code, is applicable; or
                            ``(ii) on the basis of the Federal Wage 
                        System schedule in effect for the locality 
                        involved, and for the comparable positions, at 
                        the rates of compensation in effect for the 
                        senior executive service.
                    ``(B) Compensation or salary for teachers and 
                counselors.--The Secretary shall establish the rate of 
                basic compensation, or annual salary rate, for the 
                positions of teachers and counselors (including 
                dormitory counselors and home-living counselors) at the 
                rate of basic compensation applicable (on the date of 
                enactment of the Native American Education Improvement 
                Act of 2001 and thereafter) for comparable positions in 
                the overseas schools under the Defense Department 
                Overseas Teachers Pay and Personnel Practices Act. The 
                Secretary shall allow the local school boards involved 
                authority to implement only the aspects of the Defense 
                Department Overseas Teachers Pay and Personnel 
                Practices Act pay provisions that are considered 
                essential for recruitment and retention of teachers and 
                counselors. Implementation of such provisions shall not 
                be construed to require the implementation of that 
                entire Act.
                    ``(C) Rates for new hires.--
                            ``(i) In general.--Beginning with the first 
                        fiscal year following the date of enactment of 
                        the Native American Education Improvement Act 
                        of 2001, each local school board of a Bureau 
                        school may establish a rate of compensation or 
                        annual salary rate described in clause (ii) for 
                        teachers and counselors (including academic 
                        counselors) who are new hires at the school and 
                        who had not worked at the school, as of the 
                        first day of such fiscal year.
                            ``(ii) Consistent rates.--The rates 
                        established under clause (i) shall be 
                        consistent with the rates paid for individuals 
                        in the same positions, with the same tenure and 
                        training, as the teachers and counselors, in 
                        any other school within whose boundaries the 
                        Bureau school is located.
                            ``(iii) Decreases.--In an instance in which 
                        the establishment of rates under clause (i) 
                        causes a reduction in compensation at a school 
                        from the rate of compensation that was in 
                        effect for the first fiscal year following the 
                        date of enactment of the Native American 
                        Education Improvement Act of 2001, the new 
                        rates of compensation may be applied to the 
                        compensation of employees of the school who 
                        worked at the school as of such date of 
                        enactment by applying those rates at each 
                        contract renewal for the employees so that the 
                        reduction takes effect in 3 equal installments.
                            ``(iv) Increases.--In an instance in which 
                        the establishment of such rates at a school 
                        causes an increase in compensation from the 
                        rate of compensation that was in effect for the 
                        first fiscal year following the date of 
                        enactment of the Native American Education 
                        Improvement Act of 2001, the school board may 
                        apply the new rates at the next contract 
                        renewal so that either--
                                    ``(I) the entire increase occurs on 
                                1 date; or
                                    ``(II) the increase takes effect in 
                                3 equal installments.
                    ``(D) Established regulations, procedures, and 
                arrangements.--
                            ``(i) Promotions and advancements.--The 
                        establishment of rates of basic compensation 
                        and annual salary rates under subparagraphs (B) 
                        and (C) shall not preclude the use of 
                        regulations and procedures used by the Bureau 
                        prior to April 28, 1988, in making 
                        determinations regarding promotions and 
                        advancements through levels of pay that are 
                        based on the merit, education, experience, or 
                        tenure of an educator.
                            ``(ii) Continued employment or 
                        compensation.--The establishment of rates of 
                        basic compensation and annual salary rates 
                        under subparagraphs (B) and (C) shall not 
                        affect the continued employment or compensation 
                        of an educator who was employed in an education 
                        position on October 31, 1979, and who did not 
                        make an election under subsection (o), as in 
                        effect on January 1, 1990.
            ``(2) Post differential rates.--
                    ``(A) In general.--The Secretary may pay a post 
                differential rate not to exceed 25 percent of the rate 
                of basic compensation, for educators or education 
                positions, on the basis of conditions of environment or 
                work that warrant additional pay, as a recruitment and 
retention incentive.
                    ``(B) Supervisor's authority.--
                            ``(i) In general.--Except as provided in 
                        clause (ii) on the request of the supervisor 
                        and the local school board of a Bureau school, 
                        the Secretary shall grant the supervisor of the 
                        school authorization to provide 1 or more post 
                        differential rates under subparagraph (A).
                            ``(ii) Exception.--The Secretary shall 
                        disapprove, or approve with a modification, a 
                        request for authorization to provide a post 
                        differential rate if the Secretary determines 
                        for clear and convincing reasons (and advises 
                        the board in writing of those reasons) that the 
                        rate should be disapproved or decreased because 
                        the disparity of compensation between the 
                        appropriate educators or positions in the 
                        Bureau school, and the comparable educators or 
                        positions at the nearest public school, is--
                                    ``(I)(aa) at least 5 percent; or
                                    ``(bb) less than 5 percent; and
                                    ``(II) does not affect the 
                                recruitment or retention of employees 
                                at the school.
                            ``(iii) Approval of requests.--A request 
                        made under clause (i) shall be considered to be 
                        approved at the end of the 60th day after the 
                        request is received in the Central Office of 
                        the Bureau unless before that time the request 
                        is approved, approved with a modification, or 
                        disapproved by the Secretary.
                            ``(iv) Discontinuation of or decrease in 
                        rates.--The Secretary or the supervisor of a 
                        Bureau school may discontinue or decrease a 
                        post differential rate provided for under this 
                        paragraph at the beginning of an academic year 
                        if--
                                    ``(I) the local school board 
                                requests that such differential be 
                                discontinued or decreased; or
                                    ``(II) the Secretary or the 
                                supervisor, respectively, determines 
                                for clear and convincing reasons (and 
                                advises the board in writing of those 
                                reasons) that there is no disparity of 
                                compensation that would affect the 
                                recruitment or retention of employees 
                                at the school after the differential is 
                                discontinued or decreased.
                            ``(v) Reports.--On or before February 1 of 
                        each year, the Secretary shall submit to 
                        Congress a report describing the requests and 
                        approvals of authorization made under this 
                        paragraph during the previous year and listing 
                        the positions receiving post differential rates 
                        under contracts entered into under those 
                        authorizations.
    ``(i) Liquidation of Remaining Leave Upon Termination.--Upon 
termination of employment with the Bureau, any annual leave remaining 
to the credit of an individual within the purview of this section shall 
be liquidated in accordance with sections 5551(a) and 6306 of title 5, 
United States Code, except that leave earned or accrued under 
regulations prescribed pursuant to subsection (c)(9) shall not be so 
liquidated.
    ``(j) Transfer of Remaining Leave Upon Transfer, Promotion, or 
Reemployment.--In the case of any educator who--
            ``(1) is transferred, promoted, or reappointed, without a 
        break in service, to a position in the Federal Government under 
        a different leave system than the system for leave described in 
        subsection (c)(9); and
            ``(2) earned or was credited with leave under the 
        regulations prescribed under subsection (c)(9) and has such 
        leave remaining to the credit of such educator;
such leave shall be transferred to such educator's credit in the 
employing agency for the position on an adjusted basis in accordance 
with regulations that shall be prescribed by the Director of the Office 
of Personnel Management.
    ``(k) Ineligibility for Employment of Voluntarily Terminated 
Educators.--An educator who voluntarily terminates employment under an 
employment contract with the Bureau before the expiration of the 
employment contract shall not be eligible to be employed in another 
education position in the Bureau during the remainder of the term of 
such contract.
    ``(l) Dual Compensation.--In the case of any educator employed in 
an education position described in subsection (a)(1)(A) who--
            ``(1) is employed at the end of an academic year;
            ``(2) agrees in writing to serve in such position for the 
        next academic year; and
            ``(3) is employed in another position during the recess 
        period immediately preceding such next academic year, or during 
        such recess period receives additional compensation referred to 
        in section 5533 of title 5, United States Code, relating to 
        dual compensation;
such section 5533 shall not apply to such educator by reason of any 
such employment during the recess period with respect to any receipt of 
additional compensation.
    ``(m) Voluntary Services.--Notwithstanding section 1342 of title 
31, United States Code, the Secretary may, subject to the approval of 
the local school boards concerned, accept voluntary services on behalf 
of Bureau schools. Nothing in this part shall be construed to require 
Federal employees to work without compensation or to allow the use of 
volunteer services to displace or replace Federal employees. An 
individual providing volunteer services under this section shall be 
considered to be a Federal employee only for purposes of chapter 81 of 
title 5, United States Code, and chapter 171 of title 28, United States 
Code.
    ``(n) Proration of Pay.--
            ``(1) Election of employee.--Notwithstanding any other 
        provision of law, including laws relating to dual compensation, 
        the Secretary, at the election of an educator, shall prorate 
        the salary of the educator for an academic year over a 12-month 
        period. Each educator employed for the academic year shall 
        annually elect to be paid on a 12-month basis or for those 
        months while school is in session. No educator shall suffer a 
        loss of pay or benefits, including benefits under unemployment 
        or other Federal or federally assisted programs, because of 
        such election.
            ``(2) Change of election.--During the course of such 
        academic year, the employee may change the election made under 
        paragraph (1) once.
            ``(3) Lump-sum payment.--That portion of the employee's pay 
        that would be paid between academic years may be paid in a lump 
        sum at the election of the employee.
            ``(4) Application.--This subsection applies to educators, 
        whether employed under this section or title 5, United States 
        Code.
    ``(o) Extracurricular Activities.--
            ``(1) Stipend.--Notwithstanding any other provision of law, 
        the Secretary may provide, for Bureau employees in each Bureau 
        area, a stipend in lieu of overtime premium pay or compensatory 
        time off for overtime work. Any employee of the Bureau who 
        performs overtime work that consists of additional activities 
        to provide services to students or otherwise support the 
        school's academic and social programs may elect to be 
        compensated for all such work on the basis of the stipend. Such 
        stipend shall be paid as a supplement to the employee's base 
        pay.
            ``(2) Election not to receive stipend.--If an employee 
        elects not to be compensated through the stipend established by 
        this subsection, the appropriate provisions of title 5, United 
        States Code, shall apply with respect to the work involved.
            ``(3) Application.--This subsection applies to Bureau 
        employees, whether employed under this section or title 5, 
        United States Code.
    ``(p) Covered Individuals; Election.--This section shall apply with 
respect to any educator hired after November 1, 1979 (and to any 
educator who elected to be covered under this section or a 
corresponding provision after November 1, 1979) and to the position in 
which such educator is employed. The enactment of this section shall 
not affect the continued employment of an individual employed on 
October 31, 1979 in an education position, or such person's right to 
receive the compensation attached to such position.
    ``(q) Furlough Without Consent.--
            ``(1) In general.--An educator who was employed in an 
        education position on October 31, 1979, who was eligible to 
        make an election under subsection (p) at that time, and who did 
        not make the election under paragraph such subsection, may not 
        be placed on furlough (within the meaning of section 7511(a)(5) 
        of title 5, United States Code, without the consent of such 
        educator for an aggregate of more than 4 weeks within the same 
        calendar year, unless--
                    ``(A) the supervisor, with the approval of the 
                local school board (or of the education line officer 
                upon appeal under paragraph (2)), of the Bureau school 
                at which such educator provides services determines 
                that a longer period of furlough is necessary due to an 
                insufficient amount of funds available for personnel 
                compensation at such school, as determined under the 
                financial plan process as determined under section 
                1129(b); and
                    ``(B) all educators (other than principals and 
                clerical employees) providing services at such Bureau 
                school are placed on furloughs of equal length, except 
                that the supervisor, with the approval of the local 
                school board (or of the agency education line officer 
                upon appeal under paragraph (2)), may continue 1 or 
                more educators in pay status if--
                            ``(i) such educators are needed to operate 
                        summer programs, attend summer training 
                        sessions, or participate in special activities 
                        including curriculum development committees; 
                        and
                            ``(ii) such educators are selected based 
                        upon such educator's qualifications after 
                        public notice of the minimum qualifications 
                        reasonably necessary and without discrimination 
                        as to supervisory, nonsupervisory, or other 
                        status of the educators who apply.
            ``(2) Appeals.--The supervisor of a Bureau school may 
        appeal to the appropriate agency education line officer any 
        refusal by the local school board to approve any determination 
        of the supervisor that is described in paragraph (1)(A) by 
        filing a written statement describing the determination and the 
        reasons the supervisor believes such determination should be 
        approved. A copy of such statement shall be submitted to the 
        local school board and such board shall be afforded an 
        opportunity to respond, in writing, to such appeal. After 
        reviewing such written appeal and response, the education line 
        officer may, for good cause, approve the determination of the 
        supervisor. The educational line officer shall transmit the 
        determination of such appeal in the form of a written opinion 
        to such local school board and to the supervisor identifying 
        the reasons for approving such determination.

``SEC. 1132. COMPUTERIZED MANAGEMENT INFORMATION SYSTEM.

    ``(a) Establishment of System.--Not later than July 1, 2002, the 
Secretary shall establish within the Office a computerized management 
information system, which shall provide processing and information to 
the Office. The information provided shall include information 
regarding--
            ``(1) student enrollment;
            ``(2) curricula;
            ``(3) staffing;
            ``(4) facilities;
            ``(5) community demographics;
            ``(6) student assessment information;
            ``(7) information on the administrative and program costs 
        attributable to each Bureau program, divided into discrete 
        elements;
            ``(8) relevant reports;
            ``(9) personnel records;
            ``(10) finance and payroll; and
            ``(11) such other items as the Secretary determines to be 
        appropriate.
    ``(b) Implementation of System.--Not later than July 1, 2003, the 
Secretary shall complete implementation of such a system at each Bureau 
field office and Bureau funded school.

``SEC. 1133. UNIFORM EDUCATION PROCEDURES AND PRACTICES.

    ``Not later than 90 days after the date of enactment of the Native 
American Education Improvement Act of 2001, the Secretary shall cause 
the various divisions of the Bureau to formulate uniform procedures and 
practices with respect to such concerns of those divisions as relate to 
education, and shall submit a report on the procedures and practices to 
Congress.

``SEC. 1134. RECRUITMENT OF INDIAN EDUCATORS.

    ``The Secretary shall institute a policy for the recruitment of 
qualified Indian educators and a detailed plan to promote employees 
from within the Bureau. Such plan shall include provisions for 
opportunities for acquiring work experience prior to receiving an 
actual work assignment.

``SEC. 1135. ANNUAL REPORT; AUDITS.

    ``(a) Annual Reports.--The Secretary shall submit to each 
appropriate committee of Congress, all Bureau funded schools, and the 
tribal governing bodies of such schools, a detailed annual report on 
the state of education within the Bureau and any problems encountered 
in Indian education during the period covered by the report. Such 
report shall contain suggestions for the improvement of the Bureau 
educational system and for increasing tribal or local Indian control of 
such system. Such report shall also include information on the status 
of tribally controlled community colleges.
    ``(b) Budget Request.--The annual budget request for the Bureau's 
education programs, as submitted as part of the President's next annual 
budget request under section 1105 of title 31, United States Code) 
shall include the plans required by sections 1121(g), 1122(c), and 
1124(c).
    ``(c) Financial and Compliance Audits.--The Inspector General of 
the Department of the Interior shall establish a system to ensure that 
financial and compliance audits are conducted for each Bureau school at 
least once in every 3 years. Such an audit of a Bureau school shall 
examine the extent to which such school has complied with the local 
financial plan prepared by the school under section 1129(b).
    ``(d) Administrative Evaluation of Schools.--The Director shall, at 
least once every 3 to 5 years, conduct a comprehensive evaluation of 
Bureau operated schools. Such evaluation shall be in addition to any 
other program review or evaluation that may be required under Federal 
law.

``SEC. 1136. RIGHTS OF INDIAN STUDENTS.

    ``The Secretary shall prescribe such rules and regulations as may 
be necessary to ensure the protection of the constitutional and civil 
rights of Indian students attending Bureau funded schools, including 
such students' right to privacy under the laws of the United States, 
such students' right to freedom of religion and expression, and such 
students' right to due process in connection with disciplinary actions, 
suspensions, and expulsions.

``SEC. 1137. REGULATIONS.

    ``(a) In General.--The Secretary may issue only such regulations as 
may be necessary to ensure compliance with the specific provisions of 
this part. In issuing the regulations, the Secretary shall publish 
proposed regulations in the Federal Register, and shall provide a 
period of not less than 120 days for public comment and consultation on 
the regulations. The regulations shall contain, immediately following 
each regulatory section, a citation to any statutory provision 
providing authority to issue such regulatory section.
    ``(b) Regional Meetings.--Prior to publishing any proposed 
regulations under subsection (a) and prior to establishing the 
negotiated rulemaking committee under subsection (c), the Secretary 
shall convene regional meetings to consult with personnel of the Office 
of Indian Education Programs, educators at Bureau schools, 
representatives of Bureau employees, and tribal officials, parents, 
teachers and school board members of tribes served by Bureau funded 
schools to provide guidance to the Secretary on the content of 
regulations authorized to be issued under this part and the Tribally 
Controlled Schools Act of 1988.
    ``(c) Negotiated Rulemaking.--
            ``(1) In general.--Notwithstanding sections 563(a) and 
        565(a) of title 5, United States Code, the Secretary shall 
        promulgate regulations authorized under subsection (a) and 
        under the Tribally Controlled Schools Act of 1988, in 
        accordance with the negotiated rulemaking procedures provided 
        for under subchapter III of chapter 5 of title 5, United States 
        Code, and shall publish final regulations in the Federal 
        Register.
            ``(2) Expiration of authority.--The authority of the 
        Secretary to promulgate regulations under this part and under 
        the Tribally Controlled Schools Act of 1988, shall expire on 
        the date than is 18 months after the date of enactment of this 
        part. If the Secretary determines that an extension of the 
        deadline under this paragraph is appropriate, the Secretary may 
        submit proposed legislation to Congress for an extension of 
        such deadline.
            ``(3) Rulemaking committee.--The Secretary shall establish 
        a negotiated rulemaking committee to carry out this subsection. 
        In establishing such committee, the Secretary shall--
                    ``(A) apply the procedures provided for under 
                subchapter III of chapter 5 of title 5, United States 
                Code, in a manner that reflects the unique government-
                to-government relationship between Indian tribes and 
                the United States;
                    ``(B) ensure that the membership of the committee 
                includes only representatives of the Federal Government 
                and of tribes served by Bureau-funded schools;
                    ``(C) select the tribal representatives of the 
                committee from among individuals nominated by the 
                representatives of the tribal and tribally-operated 
                schools;
                    ``(D) ensure, to the maximum extent possible, that 
                the tribal representative membership on the committee 
                reflects the proportionate share of students from 
                tribes served by the Bureau funded school system; and
                    ``(E) comply with the Federal Advisory Committee 
                Act (5 U.S.C. App. 2).
            ``(4) Authorization of appropriations.--There is authorized 
        to be appropriated such sums as necessary to carry out the 
        negotiated rulemaking provided for under this section. In the 
        absence of a specific appropriation to carry out this 
        subsection, the Secretary shall pay the costs of the negotiated 
        rulemaking proceedings from the general administrative funds of 
        the Department of the Interior.
    ``(d) Application of Section.--
            ``(1) Supremacy of provisions.--The provisions of this 
        section shall supersede any conflicting provisions of law 
        (including any conflicting regulations) in effect on the day 
        before the date of enactment of this part, and the Secretary 
        may repeal any regulation that is inconsistent with the 
        provisions of this part.
            ``(2) Modifications.--The Secretary may modify regulations 
        promulgated under this section or the Tribally Controlled 
        Schools Act of 1988, only in accordance with this section.

``SEC. 1138. EARLY CHILDHOOD DEVELOPMENT PROGRAM.

    ``(a) Grants.--The Secretary shall make grants to tribes, tribal 
organizations, and consortia of tribes and tribal organizations to fund 
early childhood development programs that are operated by such tribes, 
organizations, or consortia.
    ``(b) Amount of Grants.--
            ``(1) In general.--The amount of the grant made under 
        subsection (a) to each eligible tribe, tribal organization, or 
        consortium of tribes or tribal organizations for each fiscal 
        year shall be equal to the amount that bears the same 
        relationship to the total amount appropriated under subsection 
        (g) for such fiscal year (other than amounts reserved under 
        subsection (f)) as--
                    ``(A) the total number of children under age 6 who 
                are members of--
                            ``(i) such tribe;
                            ``(ii) the tribe that authorized such 
                        tribal organization; or
                            ``(iii) any tribe that--
                                    ``(I) is a member of such 
                                consortium; or
                                    ``(II) so authorizes any tribal 
                                organization that is a member of such 
                                consortium; bears to
                    ``(B) the total number of all children under age 6 
                who are members of any tribe that--
                            ``(i) is eligible to receive funds under 
                        subsection (a);
                            ``(ii) is a member of a consortium that is 
                        eligible to receive such funds; or
                            ``(iii) is authorized by any tribal 
                        organization that is eligible to receive such 
                        funds.
            ``(2) Limitation.--No grant may be made under subsection 
        (a)--
                    ``(A) to any tribe that has fewer than 500 members;
                    ``(B) to any tribal organization that is authorized 
                to act--
                            ``(i) on behalf of only 1 tribe that has 
                        fewer than 500 members; or
                            ``(ii) on behalf of 1 or more tribes that 
                        have a combined total membership of fewer than 
                        500 members; or
                    ``(C) to any consortium composed of tribes, or 
                tribal organizations authorized by tribes to act on 
                behalf of the tribes, that have a combined total tribal 
                membership of fewer than 500 members.
    ``(c) Applications.--
            ``(1) In general.--To be eligible to receive a grant under 
        subsection (a), a tribe, tribal organization, or consortium 
        shall submit to the Secretary an application for the grant at 
        such time, in such manner, and containing such information as 
        the Secretary shall prescribe.
            ``(2) Contents.--An application submitted under paragraph 
        (1) shall describe the early childhood development program that 
        the applicant desires to operate.
    ``(d) Requirement of Programs Funded.--In operating an early 
childhood development program that is funded through a grant made under 
subsection (a), a tribe, tribal organization, or consortium--
            ``(1) shall coordinate the program with other childhood 
        development programs and may provide services that meet 
        identified needs of parents, and children under age 6, that are 
        not being met by the programs, including needs for--
                    ``(A) prenatal care;
                    ``(B) nutrition education;
                    ``(C) health education and screening;
                    ``(D) family literacy services;
                    ``(E) educational testing; and
                    ``(F) other educational services;
            ``(2) may include, in the early childhood development 
        program funded through the grant, instruction in the language, 
        art, and culture of the tribe served by the program; and
            ``(3) shall provide for periodic assessments of the 
        program.
    ``(e) Coordination of Family Literacy Programs.--An entity that 
operates a family literacy program under this section or another 
similar program funded by the Bureau shall coordinate the program 
involved with family literacy programs for Indian children carried out 
under part B of title I of the Elementary and Secondary Education Act 
of 1965 in order to avoid duplication and to encourage the 
dissemination of information on quality family literacy programs 
serving Indians.
    ``(f) Administrative Costs.--The Secretary shall reserve funds 
appropriated under subsection (g) to include in each grant made under 
subsection (a) an amount for administrative costs incurred by the 
tribe, tribal organization, or consortium involved in establishing and 
maintaining the early childhood development program.
    ``(g) Authorization of Appropriations.--For the purpose of carrying 
out this section, there are authorized to be appropriated such sums as 
may be necessary for each of fiscal years 2002, 2003, 2004, 2005, and 
2006.

``SEC. 1139. TRIBAL DEPARTMENTS OR DIVISIONS OF EDUCATION.

    ``(a) In General.--Subject to the availability of appropriations, 
the Secretary shall make grants and provide technical assistance to 
tribes for the development and operation of tribal departments or 
divisions of education for the purpose of planning and coordinating all 
educational programs of the tribe.
    ``(b) Applications.--For a tribe to be eligible to receive a grant 
under this section, the governing body of the tribe shall submit an 
application to the Secretary at such time, in such manner, and 
containing such information as the Secretary may require.
    ``(c) Diversity.--The Secretary shall award grants under this 
section in a manner that fosters geographic and population diversity.
    ``(d) Use.--Tribes that receive grants under this section shall use 
the funds made available through the grants--
            ``(1) to facilitate tribal control in all matters relating 
        to the education of Indian children on reservations (and on 
        former Indian reservations in Oklahoma);
            ``(2) to provide for the development of coordinated 
        educational programs (including all preschool, elementary, 
        secondary, and higher or vocational educational programs funded 
        by tribal, Federal, or other sources) on reservations (and on 
        former Indian reservations in Oklahoma) by encouraging tribal 
        administrative support of all Bureau funded educational 
        programs as well as encouraging tribal cooperation and 
        coordination with entities carrying out all educational 
        programs receiving financial support from other Federal 
        agencies, State agencies, or private entities; and
            ``(3) to provide for the development and enforcement of 
        tribal educational codes, including tribal educational policies 
        and tribal standards applicable to curriculum, personnel, 
        students, facilities, and support programs.
    ``(e) Priorities.--In making grants under this section, the 
Secretary shall give priority to any application that--
            ``(1) includes--
                    ``(A) assurances that the applicant serves 3 or 
                more separate Bureau funded schools; and
                    ``(B) assurances from the applicant that the tribal 
                department of education to be funded under this section 
                will provide coordinating services and technical 
                assistance to all of such schools; and
            ``(2) includes assurances that all education programs for 
        which funds are provided by such a contract or grant will be 
        monitored and audited, by or through the tribal department of 
        education, to ensure that the programs meet the requirements of 
        law; and
            ``(3) provides a plan and schedule that--
                    ``(A) provides for--
                            ``(i) the assumption, by the tribal 
                        department of education, of all assets and 
                        functions of the Bureau agency office 
                        associated with the tribe, to the extent the 
                        assets and functions relate to education; and
                            ``(ii) the termination by the Bureau of 
                        such functions and office at the time of such 
                        assumption; and
                    ``(B) provides that the assumption shall occur over 
                the term of the grant made under this section, except 
                that, when mutually agreeable to the tribal governing 
                body and the Assistant Secretary, the period in which 
                such assumption is to occur may be modified, reduced, 
                or extended after the initial year of the grant.
    ``(e) Time Period of Grant.--Subject to the availability of 
appropriated funds, a grant provided under this section shall be 
provided for a period of 3 years. If the performance of the grant 
recipient is satisfactory to the Secretary, the grant may be renewed 
for additional 3-year terms.
    ``(f) Terms, Conditions, or Requirements.--A tribe that receives a 
grant under this section shall comply with regulations relating to 
grants made under section 103(a) of the Indian Self-Determination and 
Education Assistance Act that are in effect on the date that the tribal 
governing body submits the application for the grant under subsection 
(c). The Secretary shall not impose any terms, conditions, or 
requirements on the provision of grants under this section that are not 
specified in this section.
    ``(g) Authorization of Appropriations.--For the purpose of carrying 
out this section, there are authorized to be appropriated $2,000,000 
for fiscal year 2002 and such sums as may be necessary for each of 
fiscal years 2003, 2004, 2005, and 2006.

``SEC. 1140. DEFINITIONS.

    ``In this part, unless otherwise specified:
            ``(1) Agency school board.--
                    ``(A) In general.--Except as provided in 
                subparagraph (B), the term `agency school board' means 
                a body, for which--
                            ``(i) the members are appointed by all of 
                        the school boards of the schools located within 
                        an agency, including schools operated under 
                        contracts or grants; and
                            ``(ii) the number of such members shall be 
                        determined by the Secretary in consultation 
                        with the affected tribes.
                    ``(B) Exceptions.--In the case of an agency serving 
                a single school, the school board of such school shall 
                be considered to be the agency school board. In the 
                case of an agency serving a school or schools operated 
under a contract or grant, at least 1 member of the body described in 
subparagraph (A) shall be from such a school.
            ``(2) Bureau.--The term `Bureau' means the Bureau of Indian 
        Affairs of the Department of the Interior.
            ``(3) Bureau funded school.--The term `Bureau funded 
        school' means--
                    ``(A) a Bureau school;
                    ``(B) a contract or grant school; or
                    ``(C) a school for which assistance is provided 
                under the Tribally Controlled Schools Act of 1988.
            ``(4) Bureau school.--The term `Bureau school' means--
                    ``(A) a Bureau operated elementary school or 
                secondary school that is a day or boarding school; or
                    ``(B) a Bureau operated dormitory for students 
                attending a school other than a Bureau school.
            ``(5) Contract or grant school.--The term `contract or 
        grant school' means an elementary school, secondary school, or 
        dormitory that receives financial assistance for its operation 
        under a contract, grant, or agreement with the Bureau under 
        section 102, 103(a), or 208 of the Indian Self-Determination 
        and Education Assistance Act, or under the Tribally Controlled 
        Schools Act of 1988.
            ``(6) Education line officer.--The term `education line 
        officer' means a member of the education personnel under the 
        supervision of the Director of the Office, whether located in a 
        central, area, or agency office.
            ``(7) Financial plan.--The term `financial plan' means a 
        plan of services provided by each Bureau school.
            ``(8) Indian organization.--The term `Indian organization' 
        means any group, association, partnership, corporation, or 
        other legal entity owned or controlled by a federally 
        recognized Indian tribe or tribes, or a majority of whose 
        members are members of federally recognized tribes.
            ``(9) Inherently federal functions.--The term `inherently 
        Federal functions' means functions and responsibilities which, 
        under section 1125(c), are non-contractible, including--
                    ``(A) the allocation and obligation of Federal 
                funds and determinations as to the amounts of 
                expenditures;
                    ``(B) the administration of Federal personnel laws 
                for Federal employees;
                    ``(C) the administration of Federal contracting and 
                grant laws, including the monitoring and auditing of 
                contracts and grants in order to maintain the 
                continuing trust, programmatic, and fiscal 
                responsibilities of the Secretary;
                    ``(D) the conducting of administrative hearings and 
                deciding of administrative appeals;
                    ``(E) the determination of the Secretary's views 
                and recommendations concerning administrative appeals 
                or litigation and the representation of the Secretary 
                in administrative appeals and litigation;
                    ``(F) the issuance of Federal regulations and 
                policies as well as any documents published in the 
                Federal Register;
                    ``(G) reporting to Congress and the President;
                    ``(H) the formulation of the Secretary's and the 
                President's policies and their budgetary and 
                legislative recommendations and views; and
                    ``(I) the non-delegable statutory duties of the 
                Secretary relating to trust resources.
            ``(10) Local educational agency.--The term `local 
        educational agency' means a board of education or other legally 
        constituted local school authority having administrative 
        control and direction of free public education in a county, 
        township, or independent or other school district located 
        within a State, and includes any State agency that directly 
        operates and maintains facilities for providing free public 
        education.
            ``(11) Local school board.--The term `local school board', 
        when used with respect to a Bureau school, means a body chosen 
        in accordance with the laws of the tribe to be served or, in 
        the absence of such laws, elected by the parents of the Indian 
        children attending the school, except that, for a school 
        serving a substantial number of students from different 
        tribes--
                    ``(A) the members of the body shall be appointed by 
                the tribal governing bodies of the tribes affected; and
                    ``(B) the number of such members shall be 
                determined by the Secretary in consultation with the 
                affected tribes.
            ``(12) Office.--The term `Office' means the Office of 
        Indian Education Programs within the Bureau.
            ``(13) Secretary.--The term `Secretary' means the Secretary 
        of the Interior.
            ``(14) Supervisor.--The term `supervisor' means the 
        individual in the position of ultimate authority at a Bureau 
        school.
            ``(15) Tribal governing body.--The term `tribal governing 
        body' means, with respect to any school, the tribal governing 
        body, or tribal governing bodies, that represent at least 90 
        percent of the students served by such school.
            ``(16) Tribe.--The term `tribe' means any Indian tribe, 
        band, nation, or other organized group or community, including 
        an Alaska Native Regional Corporation or Village Corporation 
        (as defined in or established pursuant to the Alaska Native 
        Claims Settlement Act), which is recognized as eligible for the 
        special programs and services provided by the United States to 
        Indians because of their status as Indians.''.

           TITLE II--TRIBALLY CONTROLLED SCHOOLS ACT OF 1988

SEC. 201. TRIBALLY CONTROLLED SCHOOLS.

    Sections 5202 through 5213 of the Tribally Controlled Schools Act 
of 1988 (25 U.S.C. 2501 et seq.) are amended to read as follows:

``SEC. 5202. FINDINGS.

    ``Congress, after careful review of the Federal Government's 
historical and special legal relationship with, and resulting 
responsibilities to, Indians, finds that--
            ``(1) the Indian Self-Determination and Education 
        Assistance Act, which was a product of the legitimate 
        aspirations and a recognition of the inherent authority of 
        Indian nations, was and is a crucial positive step towards 
        tribal and community control;
            ``(2) because of the Bureau of Indian Affairs' 
        administration and domination of the contracting process under 
        such Act, Indians have not been provided with the full 
        opportunity to develop leadership skills crucial to the 
        realization of self-government and have been denied an 
        effective voice in the planning and implementation of programs 
        for the benefit of Indians that are responsive to the true 
        needs of Indian communities;
            ``(3) Indians will never surrender their desire to control 
        their relationships both among themselves and with non-Indian 
        governments, organizations, and persons;
            ``(4) true self-determination in any society of people is 
        dependent upon an educational process that will ensure the 
        development of qualified people to fulfill meaningful 
        leadership roles;
            ``(5) the Federal administration of education for Indian 
        children have not effected the desired level of educational 
        achievement or created the diverse opportunities and personal 
        satisfaction that education can and should provide;
            ``(6) true local control requires the least possible 
        Federal interference; and
            ``(7) the time has come to enhance the concepts made 
        manifest in the Indian Self-Determination and Education 
        Assistance Act.

``SEC. 5203. DECLARATION OF POLICY.

    ``(a) Recognition.--Congress recognizes the obligation of the 
United States to respond to the strong expression of the Indian people 
for self-determination by assuring maximum Indian participation in the 
direction of educational services so as to render the persons 
administering such services and the services themselves more responsive 
to the needs and desires of Indian communities.
    ``(b) Commitment.--Congress declares its commitment to the 
maintenance of the Federal Government's unique and continuing trust 
relationship with and responsibility to the Indian people through the 
establishment of a meaningful Indian self-determination policy for 
education that will deter further perpetuation of Federal bureaucratic 
domination of programs.
    ``(c) National Goal.--Congress declares that a major national goal 
of the United States is to provide the resources, processes, and 
structure that will enable tribes and local communities to obtain the 
quantity and quality of educational services and opportunities that 
will permit Indian children--
            ``(1) to compete and excel in the life areas of their 
        choice; and
            ``(2) to achieve the measure of self-determination 
        essential to their social and economic well-being.
    ``(d) Educational Needs.--Congress affirms--
            ``(1) the reality of the special and unique educational 
        needs of Indian people, including the need for programs to meet 
        the linguistic and cultural aspirations of Indian tribes and 
        communities; and
            ``(2) that the needs may best be met through a grant 
        process.
    ``(e) Federal Relations.--Congress declares a commitment to the 
policies described in this section and support, to the full extent of 
congressional responsibility, for Federal relations with the Indian 
nations.
    ``(f) Termination.--Congress repudiates and rejects House 
Concurrent Resolution 108 of the 83d Congress and any policy of 
unilateral termination of Federal relations with any Indian Nation.

``SEC. 5204. GRANTS AUTHORIZED.

    ``(a) In General.--
            ``(1) Eligibility.--The Secretary shall provide grants to 
        Indian tribes and tribal organizations that--
                    ``(A) operate contract schools under title XI of 
                the Education Amendments of 1978 and notify the 
                Secretary of their election to operate the schools with 
                assistance under this part rather than continuing to 
                operate such schools as contract schools under such 
                title;
                    ``(B) operate other tribally controlled schools 
                eligible for assistance under this part and submit 
                applications (which are approved by their tribal 
                governing bodies) to the Secretary for such grants; or
                    ``(C) elect to assume operation of Bureau funded 
                schools with the assistance provided under this part 
                and submit applications (which are approved by their 
                tribal governing bodies) to the Secretary for such 
                grants.
            ``(2) Deposit of funds.--Funds made available through a 
        grant provided under this part shall be deposited into the 
        general operating fund of the tribally controlled school with 
        respect to which the grant is made.
            ``(3) Use of funds.--
                    ``(A) Education related activities.--Except as 
                otherwise provided in this paragraph, funds made 
                available through a grant provided under this part 
                shall be used to defray, at the discretion of the 
                school board of the tribally controlled school with 
                respect to which the grant is provided, any 
                expenditures for education related activities for which 
                the grant may be used under the laws described in 
                section 5205(a), or any similar activities, including 
                expenditures for--
                            ``(i) school operations, and academic, 
                        educational, residential, guidance and 
                        counseling, and administrative purposes; and
                            ``(ii) support services for the school, 
                        including transportation.
                    ``(B) Operations and maintenance expenditures.--
                Funds made available through a grant provided under 
                this part may, at the discretion of the school board of 
                the tribally controlled school with respect to which 
                such grant is provided, be used to defray operations 
                and maintenance expenditures for the school if any 
                funds for the operation and maintenance of the school 
                are allocated to the school under the provisions of any 
                of the laws described in section 5205(a).
            ``(4) Waiver of federal tort claims act.--Notwithstanding 
        section 314 of the Department of Interior and Related Agencies 
        Appropriations Act, 1991 (Public Law 101-512), the Federal Tort 
        Claims Act shall not apply to a program operated by a tribally 
        controlled school if the program is not funded by the Federal 
        agency. Nothing in the preceding sentence shall be construed to 
        apply to--
                    ``(A) the employees of the school involved; and
                    ``(B) any entity that enters into a contract with a 
                grantee under this section.
    ``(b) Limitations.--
            ``(1) 1 grant per tribe or organization per fiscal year.--
        Not more than 1 grant may be provided under this part with 
        respect to any Indian tribe or tribal organization for any 
        fiscal year.
            ``(2) Nonsectarian use.--Funds made available through any 
        grant provided under this part may not be used in connection 
        with religious worship or sectarian instruction.
            ``(3) Administrative costs limitation.--Funds made 
        available through any grant provided under this part may not be 
        expended for administrative cost (as defined in section 1127(a) 
        of the Education Amendments of 1978) in excess of the amount 
        generated for such cost under section 1127 of such Act.
    ``(c) Limitation on Transfer of Funds Among School Sites.--
            ``(1) In general.--In the case of a recipient of a grant 
        under this part that operates schools at more than 1 school 
        site, the grant recipient may expend not more than the lesser 
        of--
                    ``(A) 10 percent of the funds allocated for such 
                school site, under section 1127 of the Education 
                Amendments of 1978; or
                    ``(B) $400,000 of such funds;
        at any other school site.
            ``(2) Definition of school site.--In this subsection, the 
        term `school site' means the physical location and the 
        facilities of an elementary or secondary educational or 
        residential program operated by, or under contract or grant 
        with, the Bureau for which a discrete student count is 
        identified under the funding formula established under section 
        1126 of the Education Amendments of 1978.
    ``(d) No Requirement To Accept Grants.--Nothing in this part may be 
construed--
            ``(1) to require a tribe or tribal organization to apply 
        for or accept; or
            ``(2) to allow any person to coerce any tribe or tribal 
        organization to apply for, or accept,
a grant under this part to plan, conduct, and administer all of, or any 
portion of, any Bureau program. The submission of such applications and 
the timing of such applications shall be strictly voluntary. Nothing in 
this part may be construed as allowing or requiring the grant recipient 
to make any grant under this part to any other entity.
    ``(e) No Effect on Federal Responsibility.--Grants provided under 
this part shall not terminate, modify, suspend, or reduce the 
responsibility of the Federal Government to provide an educational 
program.
    ``(f) Retrocession.--
            ``(1) In general.--Whenever a tribal governing body 
        requests retrocession of any program for which assistance is 
        provided under this part, such retrocession shall become 
        effective on a date specified by the Secretary that is not 
        later than 120 days after the date on which the tribal 
        governing body requests the retrocession. A later date may be 
        specified if mutually agreed upon by the Secretary and the 
        tribal governing body. If such a program is retroceded, the 
        Secretary shall provide to any Indian tribe served by such 
        program at least the same quantity and quality of services that 
        would have been provided under such program at the level of 
        funding provided under this part prior to the retrocession.
            ``(2) Status after retrocession.--The tribe requesting 
        retrocession shall specify whether the retrocession relates to 
        status as a Bureau operated school or as a school operated 
        under a contract under the Indian Self-Determination Act.
            ``(3) Transfer of equipment and materials.--Except as 
        otherwise determined by the Secretary, the tribe or tribal 
        organization operating the program to be retroceded shall 
        transfer to the Secretary (or to the tribe or tribal 
        organization that will operate the program as a contract 
        school) the existing equipment and materials that were 
        acquired--
                    ``(A) with assistance under this part; or
                    ``(B) upon assumption of operation of the program 
                under this part if the school was a Bureau funded 
                school under title XI of the Education Amendments of 
                1978 before receiving assistance under this part.
    ``(g) Prohibition of Termination for Administrative Convenience.--
Grants provided under this part may not be terminated, modified, 
suspended, or reduced solely for the convenience of the administering 
agency.

``SEC. 5205. COMPOSITION OF GRANTS.

    ``(a) In General.--The funds made available through a grant 
provided under this part to an Indian tribe or tribal organization for 
any fiscal year shall consist of--
            ``(1) the total amount of funds allocated for such fiscal 
        year under sections 1126 and 1127 of the Education Amendments 
        of 1978 with respect to the tribally controlled school eligible 
        for assistance under this part that is operated by such Indian 
        tribe or tribal organization, including funds provided under 
        such sections, or under any other provision of law, for 
        transportation costs for such school;
            ``(2) to the extent requested by such Indian tribe or 
        tribal organization, the total amount of funds provided from 
        operations and maintenance accounts and, notwithstanding 
        section 105 of the Indian Self-Determination and Education 
        Assistance Act or any other provision of law, other facilities 
        accounts for such school for such fiscal year (including 
        accounts for facilities referred to in section 1125(d) of the 
        Education Amendments of 1978 or any other law); and
            ``(3) the total amount of funds that are allocated to such 
        school for such fiscal year under--
                    ``(A) title I of the Elementary and Secondary 
                Education Act of 1965;
                    ``(B) the Individuals with Disabilities Education 
                Act; and
                    ``(C) any other Federal education law.
    ``(b) Special Rules.--
            ``(1) In general.--
                    ``(A) Applicable provisions.--Funds allocated to a 
                tribally controlled school by reason of paragraph (1) 
                or (2) of subsection (a) shall be subject to the 
                provisions of this part and shall not be subject to any 
                additional restriction, priority, or limitation that is 
                imposed by the Bureau with respect to funds provided 
                under--
                            ``(i) title I of the Elementary and 
                        Secondary Education Act of 1965;
                            ``(ii) the Individuals with Disabilities 
                        Education Act; or
                            ``(iii) any Federal education law other 
                        than title XI of the Education Amendments of 
                        1978.
                    ``(B) Other bureau requirements.--Indian tribes and 
                tribal organizations to which grants are provided under 
                this part, and tribally controlled schools for which 
                such grants are provided, shall not be subject to any 
                requirements, obligations, restrictions, or limitations 
                imposed by the Bureau that would otherwise apply solely 
                by reason of the receipt of funds provided under any 
                law referred to in clause (i), (ii) or (iii) of 
                subparagraph (A).
            ``(2) Schools considered contract schools.--Tribally 
        controlled schools for which grants are provided under this 
        part shall be treated as contract schools for the purposes of 
        allocation of funds under sections 1125(d), 1126, and 1127 of 
        the Education Amendments of 1978.
            ``(3) Schools considered bureau schools.--Tribally 
        controlled schools for which grants are provided under this 
        part shall be treated as Bureau schools for the purposes of 
        allocation of funds provided under--
                    ``(A) title I of the Elementary and Secondary 
                Education Act of 1965;
                    ``(B) the Individuals with Disabilities Education 
                Act; and
                    ``(C) any other Federal education law, that are 
                distributed through the Bureau.
            ``(4) Accounts; use of certain funds.--
                    ``(A) Separate account.--Notwithstanding section 
                5204(a)(2), with respect to funds from facilities 
                improvement and repair, alteration and renovation 
                (major or minor), health and safety, or new 
                construction accounts included in the grant provided 
                under section 5204(a), the grant recipient shall 
                maintain a separate account for such funds. At the end 
                of the period designated for the work covered by the 
                funds received, the grant recipient shall submit to the 
                Secretary a separate accounting of the work done and 
                the funds expended. Funds received from those accounts 
                may only be used for the purpose for which the funds 
                were appropriated and for the work encompassed by the 
                application or submission for which the funds were 
                received.
                    ``(B) Requirements for projects.--
                            ``(i) Regulatory requirements.--With 
                        respect to a grant to a tribally controlled 
                        school under this part for new construction or 
                        facilities improvements and repair in excess of 
                        $100,000, such grant shall be subject to the 
                        Administrative and Audit Requirements and Cost 
                        Principles for Assistance Programs contained in 
                        part 12 of title 43, Code of Federal 
                        Regulations.
                            ``(ii) Exception.--Notwithstanding clause 
                        (i), grants described in such clause shall not 
                        be subject to section 12.61 of title 43, Code 
                        of Federal Regulations. The Secretary and the 
                        grantee shall negotiate and determine a 
                        schedule of payments for the work to be 
                        performed.
                            ``(iii) Applications.--In considering 
                        applications for a grant described in clause 
                        (i), the Secretary shall consider whether the 
                        Indian tribe or tribal organization involved 
                        would be deficient in assuring that the 
                        construction projects under the proposed grant 
                        conform to applicable building standards and 
                        codes and Federal, tribal, or State health and 
                        safety standards as required under section 1124 
                        of the Education Amendments of 1978 (25 U.S.C. 
                        2005(a)) with respect to organizational and 
                        financial management capabilities.
                            ``(iv) Disputes.--Any disputes between the 
                        Secretary and any grantee concerning a grant 
                        described in clause (i) shall be subject to the 
                        dispute provisions contained in section 
                        5209(e).
                    ``(C) New construction.--Notwithstanding 
                subparagraph (A), a school receiving a grant under this 
part for facilities improvement and repair may use such grant funds for 
new construction if the tribal governing body or tribal organization 
that submits the application for the grant provides funding for the new 
construction equal to at least 25 percent of the total cost of such new 
construction.
                    ``(D) Period.--Where the appropriations measure 
                under which the funds described in subparagraph (A) are 
                made available or the application submitted for the 
                funds does not stipulate a period for the work covered 
                by the funds, the Secretary and the grant recipient 
                shall consult and determine such a period prior to the 
                transfer of the funds. A period so determined may be 
                extended upon mutual agreement of the Secretary and the 
                grant recipient.
            ``(5) Enforcement of request to include funds.--
                    ``(A) In general.--If the Secretary fails to carry 
                out a request filed by an Indian tribe or tribal 
                organization to include in such tribe or organization's 
                grant under this part the funds described in subsection 
                (a)(2) within 180 days after the filing of the request, 
                the Secretary shall--
                            ``(i) be deemed to have approved such 
                        request; and
                            ``(ii) immediately upon the expiration of 
                        such 180-day period amend the grant 
                        accordingly.
                    ``(B) Rights.--A tribe or organization described in 
                subparagraph (A) may enforce its rights under 
                subsection (a)(2) and this paragraph, including rights 
                relating to any denial or failure to act on such 
                tribe's or organization's request, pursuant to the 
                dispute authority described in section 5209(e).

``SEC. 5206. ELIGIBILITY FOR GRANTS.

    ``(a) Rules.--
            ``(1) In general.--A tribally controlled school is eligible 
        for assistance under this part if the school--
                    ``(A) on April 28, 1988, was a contract school 
                under title XI of the Education Amendments of 1978 and 
                the tribe or tribal organization operating the school 
                submits to the Secretary a written notice of election 
                to receive a grant under this part;
                    ``(B) was a Bureau operated school under title XI 
                of the Education Amendments of 1978 and has met the 
                requirements of subsection (b);
                    ``(C) is not a Bureau funded school, but has met 
                the requirements of subsection (c); or
                    ``(D) is a school with respect to which an election 
                has been made under paragraph (2) and that has met the 
                requirements of subsection (b).
            ``(2) New schools.--Notwithstanding paragraph (1), for 
        purposes of determining eligibility for assistance under this 
        part, any application that has been submitted under the Indian 
        Self-Determination and Education Assistance Act by an Indian 
        tribe or tribal organization for a school that is not in 
        operation on the date of enactment of the Native American 
        Education Improvement Act of 2001 shall be reviewed under the 
        guidelines and regulations for applications submitted under the 
        Indian Self-Determination and Education Assistance Act that 
        were in effect at the time the application was submitted, 
        unless the Indian tribe or tribal organization elects to have 
        the application reviewed under the provisions of subsection 
        (b).
    ``(b) Additional Requirements for Bureau Funded Schools and Certain 
Electing Schools.--
            ``(1) Bureau funded schools.--A school that was a Bureau 
        funded school under title XI of the Education Amendments of 
        1978 on the date of enactment of the Native American Education 
        Improvement Act of 2001, and any school with respect to which 
        an election is made under subsection (a)(2), meets the 
        requirements of this subsection if--
                    ``(A) the Indian tribe or tribal organization that 
                operates, or desires to operate, the school submits to 
                the Secretary an application requesting that the 
                Secretary--
                            ``(i) transfer operation of the school to 
                        the Indian tribe or tribal organization, if the 
                        Indian tribe or tribal organization is not 
                        already operating the school; and
                            ``(ii) make a determination as to whether 
                        the school is eligible for assistance under 
                        this part; and
                    ``(B) the Secretary makes a determination that the 
                school is eligible for assistance under this part.
            ``(2) Certain electing schools.--
                    ``(A) Determination.--By not later than 120 days 
                after the date on which an application is submitted to 
                the Secretary under paragraph (1)(A), the Secretary 
                shall determine--
                            ``(i) in the case of a school that is not 
                        being operated by the Indian tribe or tribal 
                        organization, whether to transfer operation of 
                        the school to the Indian tribe or tribal 
                        organization; and
                            ``(ii) whether the school is eligible for 
                        assistance under this part.
                    ``(B) Consideration; transfers and eligibility.--In 
                considering applications submitted under paragraph 
                (1)(A), the Secretary--
                            ``(i) shall transfer operation of the 
                        school to the Indian tribe or tribal 
                        organization, if the tribe or tribal 
                        organization is not already operating the 
                        school; and
                            ``(ii) shall determine that the school is 
                        eligible for assistance under this part, unless 
                        the Secretary finds by clear and convincing 
                        evidence that the services to be provided by 
                        the Indian tribe or tribal organization will be 
                        deleterious to the welfare of the Indians 
served by the school and will not carry out the purposes of this Act.
                    ``(C) Consideration; possible deficiencies.--In 
                considering applications submitted under paragraph 
                (1)(A), the Secretary shall only consider whether the 
                Indian tribe or tribal organization would be deficient 
                in operating the school with respect to--
                            ``(i) equipment;
                            ``(ii) bookkeeping and accounting 
                        procedures;
                            ``(iii) ability to adequately manage a 
                        school; or
                            ``(iv) adequately trained personnel.
    ``(c) Additional Requirements for a School That Is Not a Bureau 
Funded School.--
            ``(1) In general.--A school that is not a Bureau funded 
        school under title XI of the Education Amendments of 1978 meets 
        the requirements of this subsection if--
                    ``(A) the Indian tribe or tribal organization that 
                operates, or desires to operate, the school submits to 
                the Secretary an application requesting a determination 
                by the Secretary as to whether the school is eligible 
                for assistance under this part; and
                    ``(B) the Secretary makes a determination that the 
                school is eligible for assistance under this part.
            ``(2) Deadline for determination by secretary.--
                    ``(A) Determination.--By not later than 180 days 
                after the date on which an application is submitted to 
                the Secretary under paragraph (1)(A), the Secretary 
                shall determine whether the school is eligible for 
                assistance under this part.
                    ``(B) Factors.--In making the determination under 
                subparagraph (A), the Secretary shall give equal 
                consideration to each of the following factors:
                            ``(i) With respect to the applicant's 
                        proposal--
                                    ``(I) the adequacy of facilities or 
                                the potential to obtain or provide 
                                adequate facilities;
                                    ``(II) geographic and demographic 
                                factors in the affected areas;
                                    ``(III) adequacy of the applicant's 
                                program plans;
                                    ``(IV) geographic proximity of 
                                comparable public education; and
                                    ``(V) the needs to be met by the 
                                school, as expressed by all affected 
                                parties, including but not limited to 
                                students, families, tribal governments 
                                at both the central and local levels, 
                                and school organizations.
                            ``(ii) With respect to all education 
                        services already available--
                                    ``(I) geographic and demographic 
                                factors in the affected areas;
                                    ``(II) adequacy and comparability 
                                of programs already available;
                                    ``(III) consistency of available 
                                programs with tribal education codes or 
                                tribal legislation on education; and
                                    ``(IV) the history and success of 
                                those services for the proposed 
                                population to be served, as determined 
                                from all factors including, if 
                                relevant, standardized examination 
                                performance.
                    ``(C) Exception regarding proximity.--The Secretary 
                may not make a determination under this paragraph that 
                is primarily based upon the geographic proximity of 
                comparable public education.
                    ``(D) Information on factors.--An application 
                submitted under paragraph (1)(A) shall include 
                information on the factors described in subparagraph 
                (B)(i), but the applicant may also provide the 
                Secretary such information relative to the factors 
                described in subparagraph (B)(ii) as the applicant 
                considers to be appropriate.
                    ``(E) Treatment of lack of determination.--If the 
                Secretary fails to make a determination under 
                subparagraph (A) with respect to an application within 
                180 days after the date on which the Secretary received 
                the application--
                            ``(i) the Secretary shall be deemed to have 
                        made a determination that the tribally 
                        controlled school is eligible for assistance 
                        under this part; and
                            ``(ii) the grant shall become effective 18 
                        months after the date on which the Secretary 
                        received the application, or on an earlier 
                        date, at the Secretary's discretion.
    ``(d) Filing of Applications and Reports.--
            ``(1) In general.--Each application or report submitted to 
        the Secretary under this part, and any amendment to such 
        application or report, shall be filed with the education line 
        officer designated by the Director of the Office of Indian 
        Education Programs of the Bureau of Indian Affairs. The date on 
        which the filing occurs shall, for purposes of this part, be 
        treated as the date on which the application, report, or 
        amendment was submitted to the Secretary.
            ``(2) Supporting documentation.--
                    ``(A) In general.--Any application that is 
                submitted under this part shall be accompanied by a 
                document indicating the action taken by the appropriate 
                tribal governing body concerning authorizing such 
                application.
                    ``(B) Authorization action.--The Secretary shall 
                administer the requirement of subparagraph (A) in a 
                manner so as to ensure that the tribe involved, through 
                the official action of the tribal governing body, has 
                approved of the application for the grant.
                    ``(C) Rule of construction.--Nothing in this 
                paragraph shall be construed as making a tribal 
                governing body (or tribe) that takes an action 
                described in subparagraph (A) a party to the grant 
                (unless the tribal governing body or the tribe is the 
                grantee) or as making the tribal governing body or 
                tribe financially or programmatically responsible for 
                the actions of the grantee.
            ``(3) Rules of construction.--Nothing in this subsection 
        shall be construed as making a tribe act as a surety for the 
        performance of a grantee under a grant under this part.
            ``(4) Clarification.--The provisions of paragraphs (2) and 
        (3) shall be construed as a clarification of policy in 
        existence on the date of enactment of the Native American 
        Education Improvement Act of 2001 with respect to grants under 
        this part and shall not be construed as altering such policy or 
        as a new policy.
    ``(e) Effective Date for Approved Applications.--Except as provided 
in subsection (c)(2)(E), a grant provided under this part shall be 
made, and any transfer of the operation of a Bureau school made under 
subsection (b) shall become effective, beginning on the first day of 
the academic year succeeding the fiscal year in which the application 
for the grant or transfer is made, or on an earlier date determined by 
the Secretary.
    ``(f) Denial of Applications.--
            ``(1) In general.--If the Secretary disapproves a grant 
        under this part, disapproves the transfer of operations of a 
        Bureau school under subsection (b), or determines that a school 
        is not eligible for assistance under this part, the Secretary 
        shall--
                    ``(A) state the objections in writing to the tribe 
                or tribal organization involved within the allotted 
                time;
                    ``(B) provide assistance to the tribe or tribal 
                organization to cure all stated objections;
                    ``(C) at the request of the tribe or tribal 
                organization, provide to the tribe or tribal 
                organization a hearing on the record regarding the 
                refusal or determination involved, under the same rules 
                and regulations as apply under the Indian Self-
                Determination and Education Assistance Act; and
                    ``(D) provide to the tribe or tribal organization 
                an opportunity to appeal the decision resulting from 
                the hearing.
            ``(2) Timeline for reconsideration of amended 
        applications.--The Secretary shall reconsider any amended 
        application submitted under this part within 60 days after the 
        amended application is submitted to the Secretary and shall 
        submit the determinations of the Secretary with respect to such 
        reconsideration to the tribe or the tribal organization.
    ``(g) Report.--The Bureau shall prepare and submit to Congress an 
annual report on all applications received, and actions taken 
(including the costs associated with such actions), under this section 
on the same date as the date on which the President is required to 
submit to Congress a budget of the United States Government under 
section 1105 of title 31, United States Code.

``SEC. 5207. DURATION OF ELIGIBILITY DETERMINATION.

    ``(a) In General.--If the Secretary determines that a tribally 
controlled school is eligible for assistance under this part, the 
eligibility determination shall remain in effect until the 
determination is revoked by the Secretary, and the requirements of 
subsection (b) or (c) of section 5206, if applicable, shall be 
considered to have been met with respect to such school until the 
eligibility determination is revoked by the Secretary.
    ``(b) Annual Reports.--
            ``(1) In general.--Each recipient of a grant provided under 
        this part for a school shall prepare an annual report 
        concerning the school involved, the contents of which shall be 
        limited to--
                    ``(A) an annual financial statement reporting 
                revenue and expenditures as defined by the cost 
                accounting standards established by the grant 
                recipient;
                    ``(B) a biannual financial audit conducted pursuant 
                to the standards of chapter 71 of title 31, United 
                States Code;
                    ``(C) a biannual compliance audit of the 
                procurement of personal property during the period for 
                which the report is being prepared that shall be in 
                compliance with written procurement standards that are 
                developed by the local school board;
                    ``(D) an annual submission to the Secretary 
                containing information on the number of students served 
                and a brief description of programs offered through the 
                grant; and
                    ``(E) a program evaluation conducted by an 
                impartial evaluation review team, to be based on the 
                standards established for purposes of subsection 
                (c)(1)(A)(ii).
            ``(2) Evaluation review teams.--In appropriate cases, 
        representatives of other tribally controlled schools and 
        representatives of tribally controlled community colleges shall 
        be members of the evaluation review teams.
            ``(3) Evaluations.--In the case of a school that is 
        accredited, the evaluations required under this subsection 
        shall be conducted at intervals under the terms of the 
        accreditation.
            ``(4) Submission of report.--
                    ``(A) To tribal governing body.--Upon completion of 
                the annual report required under paragraph (1), the 
                recipient of the grant shall send (via first class 
                mail, return receipt requested) a copy of such annual 
                report to the tribal governing body.
                    ``(B) To secretary.--Not later than 30 days after 
                receiving written confirmation that the tribal 
                governing body has received the report sent pursuant to 
                subparagraph (A), the recipient of the grant shall send 
                a copy of the report to the Secretary.
    ``(c) Revocation of Eligibility.--
            ``(1) In general.--
                    ``(A) Nonrevocation conditions.--The Secretary 
                shall not revoke a determination that a school is 
                eligible for assistance under this part if--
                            ``(i) the Indian tribe or tribal 
                        organization submits the reports required under 
                        subsection (b) with respect to the school; and
                            ``(ii) at least 1 of the following 
                        conditions applies with respect to the school:
                                    ``(I) The school is certified or 
                                accredited by a State certification or 
                                regional accrediting association or is 
                                a candidate in good standing for such 
                                certification or accreditation under 
                                the rules of the State certification or 
                                regional accrediting association, 
                                showing that credits achieved by the 
                                students within the education programs 
                                of the school are, or will be, accepted 
                                at grade level by a State certified or 
                                regionally accredited institution.
                                    ``(II) The Secretary determines 
                                that there is a reasonable expectation 
                                that the certification or accreditation 
                                described in subclause (I), or 
                                candidacy in good standing for such 
                                certification or accreditation, will be 
                                achieved by the school within 3 years 
                                and that the program offered by the 
                                school is beneficial to Indian 
                                students.
                                    ``(III) The school is accredited by 
                                a tribal department of education if 
                                such accreditation is accepted by a 
                                generally recognized State 
                                certification or regional accrediting 
                                agency.
                                    ``(IV) The school accepts the 
                                standards issued under section 1121 of 
                                the Education Amendments of 1978 and an 
                                impartial evaluator chosen by the grant 
                                recipient conducts a program evaluation 
                                for the school under this section in 
                                conformance with the regulations 
                                pertaining to Bureau operated schools, 
                                but no grant recipient shall be 
                                required to comply with the standards 
                                to a greater degree than a comparable 
                                Bureau operated school.
                                    ``(V)(aa) Every 3 years, an 
                                impartial evaluator agreed upon by the 
                                Secretary and the grant recipient 
                                conducts evaluations of the school, and 
                                the school receives a positive 
                                assessment under such evaluations. The 
                                evaluations are conducted under 
                                standards adopted by a contractor under 
                                a contract for the school entered into 
                                under the Indian Self-Determination and 
                                Education Assistance Act (or revisions 
                                of such standards agreed to by the 
                                Secretary and the grant recipient) 
                                prior to the date of enactment of the 
                                Native American Education Improvement 
                                Act of 2001.
                                    ``(bb) If the Secretary and a grant 
                                recipient other than a tribal governing 
                                body fail to agree on such an 
                                evaluator, the tribal governing body 
                                shall choose the evaluator or perform 
                                the evaluation. If the Secretary and a 
                                grant recipient that is a tribal 
                                governing body fail to agree on such an 
                                evaluator, item (aa) shall not apply.
                    ``(B) Standards.--The choice of standards employed 
                for the purposes of subparagraph (A)(ii) shall be 
                consistent with section 1121(e) of the Education 
                Amendments of 1978.
            ``(2) Notice requirements for revocation.--The Secretary 
        shall not revoke a determination that a school is eligible for 
        assistance under this part, or reassume control of a school 
        that was a Bureau school prior to approval of an application 
        submitted under section 5206(b)(1)(A), until the Secretary--
                    ``(A) provides notice, to the tribally controlled 
                school involved and the appropriate tribal governing 
                body (within the meaning of section 1140 of the 
                Education Amendments of 1978) for the tribally 
                controlled school, which states--
                            ``(i) the specific deficiencies that led to 
                        the revocation or reassumption determination; 
                        and
                            ``(ii) the actions that are needed to 
                        remedy such deficiencies; and
                    ``(B) affords such school and governing body an 
                opportunity to carry out the remedial actions.
            ``(3) Technical assistance.--The Secretary shall provide 
        such technical assistance to enable the school and governing 
        body to carry out such remedial actions.
            ``(4) Hearing and appeal.--In addition to notice and 
        technical assistance under this subsection, the Secretary shall 
        provide to the school and governing body--
                    ``(A) at the request of the school or governing 
                body, a hearing on the record regarding the revocation 
                or reassumption determination, to be conducted under 
                the rules and regulations described in section 
                5206(f)(1)(C); and
                    ``(B) an opportunity to appeal the decision 
                resulting from the hearing.
    ``(d) Applicability of Section Pursuant to Election Under Section 
5209(b).--With respect to a tribally controlled school that receives 
assistance under this part pursuant to an election made under section 
5209(b)--
            ``(1) subsection (b) shall apply; and
            ``(2) the Secretary may not revoke eligibility for 
        assistance under this part except in conformance with 
        subsection (c).

``SEC. 5208. PAYMENT OF GRANTS; INVESTMENT OF FUNDS; STATE PAYMENTS TO 
              SCHOOLS.

    ``(a) Payments.--
            ``(1) Manner of payments.--
                    ``(A) In general.--Except as otherwise provided in 
                this subsection, the Secretary shall make payments to 
                grant recipients under this part in 2 payments, of 
                which--
                            ``(i) the first payment shall be made not 
                        later than July 15 of each year in an amount 
                        equal to 80 percent of the amount that the 
                        grant recipient was entitled to receive during 
                        the preceding academic year; and
                            ``(ii) the second payment, consisting of 
                        the remainder to which the grant recipient was 
                        entitled for the academic year, shall be made 
                        not later than December 1 of each year.
                    ``(B) Excess funding.--In a case in which the 
                amount provided to a grant recipient under subparagraph 
                (A)(i) is in excess of the amount that the recipient is 
                entitled to receive for the academic year involved, the 
                recipient shall return to the Secretary such excess 
                amount. The amount returned to the Secretary under this 
                subparagraph shall be distributed equally to all 
                schools in the system.
            ``(2) Newly funded schools.--For any school for which no 
        payment under this part was made from Bureau funds in the 
        academic year preceding the year for which the payments are 
        being made, full payment of the amount computed for the school 
        for the first academic year of eligibility under this part 
        shall be made not later than December 1 of the academic year.
            ``(3) Late funding.--With regard to funds for grant 
        recipients under this part that become available for obligation 
        on October 1 of the fiscal year for which such funds are 
        appropriated, the Secretary shall make payments to the grant 
        recipients not later than December 1 of the fiscal year, except 
        that operations and maintenance funds shall be forward funded 
        and shall be available for obligation not later than July 15 
        and December 1 of each fiscal year.
            ``(4) Applicability of certain title 31 provisions.--The 
        provisions of chapter 39 of title 31, United States Code, shall 
        apply to the payments required to be made under paragraphs (1), 
        (2), and (3).
            ``(5) Restrictions.--Payments made under paragraphs (1), 
        (2), and (3) shall be subject to any restriction on amounts of 
        payments under this part that is imposed by a continuing 
        resolution or other Act appropriating the funds involved.
    ``(b) Investment of Funds.--
            ``(1) Treatment of interest and investment income.--
        Notwithstanding any other provision of law, any interest or 
        investment income that accrues on or is derived from any funds 
        provided under this part for a school after such funds are paid 
        to an Indian tribe or tribal organization and before such funds 
        are expended for the purpose for which such funds were provided 
        under this part shall be the property of the Indian tribe or 
        tribal organization. The interest or income shall not be taken 
        into account by any officer or employee of the Federal 
        Government in determining whether to provide assistance, or the 
        amount of assistance to be provided, under any provision of 
        Federal law.
            ``(2) Permissible investments.--Funds provided under this 
        part may be invested by an Indian tribe or tribal organization, 
        as approved by the grantee, before such funds are expended for 
        the objectives of this part if such funds are--
                    ``(A) invested by the Indian tribe or tribal 
                organization only--
                            ``(i) in obligations of the United States;
                            ``(ii) in obligations or securities that 
                        are guaranteed or insured by the United States; 
                        or
                            ``(iii) in mutual (or other) funds that are 
                        registered with the Securities and Exchange 
                        Commission and that only invest in obligations 
                        of the United States, or securities that are 
                        guaranteed or insured by the United States; or
                    ``(B) deposited only into accounts that are insured 
                by an agency or instrumentality of the United States, 
                or are fully supported by collateral to ensure 
                protection of the funds, even in the event of a bank 
                failure.
    ``(c) Recoveries.--Funds received under this part shall not be 
taken into consideration by any Federal agency for the purposes of 
making underrecovery and overrecovery determinations for any other 
funds, from whatever source derived.
    ``(d) Payments by States.--
            ``(1) In general.--With respect to a school that receives 
        assistance under this part, a State shall not--
                    ``(A) take into account the amount of such 
                assistance in determining the amount of funds that such 
                school is eligible to receive under applicable State 
                law; or
                    ``(B) reduce any State payments that such school is 
                eligible to receive under applicable State law because 
                of the assistance received by the school under this 
                part.
            ``(2) Violations.--
                    ``(A) In general.--Upon receipt of any information 
                from any source that a State is in violation of 
                paragraph (1), the Secretary shall immediately, but in 
no case later than 90 days after the receipt of such information, 
conduct an investigation and make a determination of whether such 
violation has occurred.
                    ``(B) Determination.--If the Secretary makes a 
                determination under subparagraph (A) that a State has 
                violated paragraph (1), the Secretary shall inform the 
                Secretary of Education of such determination and the 
                basis for the determination. The Secretary of Education 
                shall, in an expedient manner, pursue penalties under 
                paragraph (3) with respect to the State.
            ``(3) Penalties.--A State determined to have violated 
        paragraph (1) shall be subject to penalties similar to the 
        penalties described in section 8809(e) of the Elementary and 
        Secondary Education Act of 1965 for a violation of title VIII 
        of such Act.

``SEC. 5209. APPLICATION WITH RESPECT TO INDIAN SELF-DETERMINATION AND 
              EDUCATION ASSISTANCE ACT.

    ``(a) Certain Provisions To Apply to Grants.--The following 
provisions of the Indian Self-Determination and Education Assistance 
Act (and any subsequent revisions thereto or renumbering thereof), 
shall apply to grants provided under this part and the schools funded 
under such grants:
            ``(1) Section 5(f) (relating to single agency audits).
            ``(2) Section 6 (relating to criminal activities; 
        penalties).
            ``(3) Section 7 (relating to wage and labor standards).
            ``(4) Section 104 (relating to retention of Federal 
        employee coverage).
            ``(5) Section 105(f) (relating to Federal property).
            ``(6) Section 105(k) (relating to access to Federal sources 
        of supply).
            ``(7) Section 105(l) (relating to lease of facility used 
        for administration and delivery of services).
            ``(8) Section 106(e) (relating to limitation on remedies 
        relating to cost allowances).
            ``(9) Section 106(i) (relating to use of funds for matching 
        or cost participation requirements).
            ``(10) Section 106(j) (relating to allowable uses of 
        funds).
            ``(11) The portions of section 108(c) that consist of model 
        agreements provisions 1(b)(5) (relating to limitations of 
        costs), 1(b)(7) (relating to records and monitoring), 1(b)(8) 
        (relating to property), and 1(b)(9) (relating to availability 
        of funds).
            ``(12) Section 109 (relating to reassumption).
            ``(13) Section 111 (relating to sovereign immunity and 
        trusteeship rights unaffected).
    ``(b) Election for Grant in Lieu of Contract.--
            ``(1) In general.--A contractor that carries out an 
        activity to which this part applies and who has entered into a 
        contract under the Indian Self-Determination and Education 
        Assistance Act that is in effect on the date of enactment of 
        the Native American Education Improvement Act of 2001 may, by 
        giving notice to the Secretary, elect to receive a grant under 
        this part in lieu of such contract and to have the provisions 
        of this part apply to such activity.
            ``(2) Effective date of election.--Any election made under 
        paragraph (1) shall take effect on the first day of July 
        immediately following the date of such election.
            ``(3) Exception.--In any case in which the first day of 
        July immediately following the date of an election under 
        paragraph (1) is less than 60 days after such election, such 
        election shall not take effect until the first day of July of 
        year following the year in which the election is made.
    ``(c) No Duplication.--No funds may be provided under any contract 
entered into under the Indian Self-Determination and Education 
Assistance Act to pay any expenses incurred in providing any program or 
services if a grant has been made under this part to pay such expenses.
    ``(d) Transfers and Carryovers.--
            ``(1) Buildings, equipment, supplies, materials.--A tribe 
        or tribal organization assuming the operation of--
                    ``(A) a Bureau school with assistance under this 
                part shall be entitled to the transfer or use of 
                buildings, equipment, supplies, and materials to the 
                same extent as if the tribe or tribal organization were 
                contracting under the Indian Self-Determination and 
                Education Assistance Act; or
                    ``(B) a contract school with assistance under this 
                part shall be entitled to funding for improvements, 
                alterations, replacement and code compliance in 
                facilities where programs approved under this part were 
                used in the operation of the contract school to the 
                same extent as if it were contracting under the Indian 
                Self-Determination and Education Assistance Act and to 
                the transfer or use of buildings, equipment, supplies, 
                and materials that were used in the operation of the 
                contract school to the same extent as if the tribe or 
                tribal organization were contracting under such Act.
            ``(2) Funds.--Any tribe or tribal organization that assumes 
        operation of a Bureau school with assistance under this part 
        and any tribe or tribal organization that elects to operate a 
        school with assistance under this part rather than to continue 
        to operate the school as a contract school shall be entitled to 
        any funds that would remain available from the previous fiscal 
        year if such school remained a Bureau school or was operated as 
        a contract school, respectively.
    ``(e) Exceptions, Problems, and Disputes.--
            ``(1) In general.--Any exception or problem cited in an 
        audit conducted pursuant to section 5207(b)(1)(B), any dispute 
        regarding a grant authorized to be made pursuant to this part 
        or any modification of such grant, and any dispute involving an 
        administrative cost grant under section 1127 of the Education 
        Amendments of 1978, shall be administered under the provisions 
        governing such exceptions, problems, or disputes described in 
        this paragraph in the case of contracts under the Indian Self-
        Determination and Education Assistance Act.
            ``(2) Administrative appeals.--The Equal Access to Justice 
        Act (as amended) and the amendments made by such Act shall 
        apply to an administrative appeal filed after September 8, 
        1988, by a grant recipient regarding a grant provided under 
        this part, including an administrative cost grant.

``SEC. 5210. ROLE OF THE DIRECTOR.

    ``Applications for grants under this part, and all modifications to 
the applications, shall be reviewed and approved by personnel under the 
direction and control of the Director of the Office of Indian Education 
Programs. Reports required under this part shall be submitted to 
education personnel under the direction and control of the Director of 
such Office.

``SEC. 5211. REGULATIONS.

    ``The Secretary is authorized to issue regulations relating to the 
discharge of duties specifically assigned to the Secretary in this 
part. For all other matters relating to the details of planning, 
developing, implementing, and evaluating grants under this part, the 
Secretary shall not issue regulations. Regulations issued pursuant to 
this part shall not have the standing of a Federal statute for purposes 
of judicial review.

``SEC. 5212. THE TRIBALLY CONTROLLED GRANT SCHOOL ENDOWMENT PROGRAM.

    ``(a) In General.--
            ``(1) Establishment.--Each school receiving a grant under 
        this part may establish, at a federally insured financial 
        institution, a trust fund for the purposes of this section.
            ``(2) Deposits and use.--The school may provide--
                    ``(A) for deposit into the trust fund, only funds 
                from non-Federal sources, except that the interest on 
                funds received from grants provided under this part may 
                be used for that purpose;
                    ``(B) for deposit into the trust fund, any earnings 
                on funds deposited in the fund; and
                    ``(C) for the sole use of the school any noncash, 
                in-kind contributions of real or personal property, 
                which may at any time be used, sold, or otherwise 
                disposed of.
    ``(b) Interest.--Interest from the fund established under 
subsection (a) may periodically be withdrawn and used, at the 
discretion of the school, to defray any expenses associated with the 
operation of the school consistent with the purposes of this Act.

``SEC. 5213. DEFINITIONS.

    ``In this part:
            ``(1) Bureau.--The term `Bureau' means the Bureau of Indian 
        Affairs of the Department of the Interior.
            ``(2) Eligible indian student.--The term `eligible Indian 
        student' has the meaning given such term in section 1126(a) of 
        the Education Amendments of 1978.
            ``(3) Indian.--The term `Indian' means a member of an 
        Indian tribe, and includes individuals who are eligible for 
        membership in a tribe, and the child or grandchild of such an 
        individual.
            ``(4) Indian tribe.--The term `Indian tribe' means any 
        Indian tribe, band, nation, or other organized group or 
        community, including an Alaska Native Village Corporation or 
        Regional Corporation (as defined in or established pursuant to 
        the Alaskan Native Claims Settlement Act), which is recognized 
        as eligible for the special programs and services provided by 
        the United States to Indians because of their status as 
        Indians.
            ``(5) Local educational agency.--The term `local 
        educational agency' means a public board of education or other 
        public authority legally constituted within a State for either 
        administrative control or direction of, or to perform a service 
        function for, public elementary schools or secondary schools in 
        a city, county, township, school district, or other political 
        subdivision of a State or such combination of school districts 
        or counties as are recognized in a State as an administrative 
        agency for the State's public elementary schools or secondary 
        schools. Such term includes any other public institution or 
        agency having administrative control and direction of a public 
        elementary school or secondary school.
            ``(6) Secretary.--The term `Secretary' means the Secretary 
        of the Interior.
            ``(7) Tribal governing body.--The term `tribal governing 
        body' means, with respect to any school that receives 
        assistance under this Act, the recognized governing body of the 
        Indian tribe involved.
            ``(8) Tribal organization.--
                    ``(A) In general.--The term `tribal organization' 
                means--
                            ``(i) the recognized governing body of any 
                        Indian tribe; or
                            ``(ii) any legally established organization 
                        of Indians that--
                                    ``(I) is controlled, sanctioned, or 
                                chartered by such governing body or is 
                                democratically elected by the adult 
                                members of the Indian community to be 
                                served by such organization; and
                                    ``(II) includes the maximum 
                                participation of Indians in all phases 
                                of the organization's activities.
                    ``(B) Authorization.--In any case in which a grant 
                is provided under this part to an organization to 
                provide services through a tribally controlled school 
                benefiting more than 1 Indian tribe, the approval of 
                the governing bodies of Indian tribes representing 80 
                percent of the students attending the tribally 
                controlled school shall be considered a sufficient 
                tribal authorization for such grant.
            ``(9) Tribally controlled school.--The term `tribally 
        controlled school' means a school that--
                    ``(A) is operated by an Indian tribe or a tribal 
                organization, enrolling students in kindergarten 
                through grade 12, including a preschool;
                    ``(B) is not a local educational agency; and
                    ``(C) is not directly administered by the Bureau of 
                Indian Affairs.''.
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