[Congressional Record Volume 140, Number 144 (Thursday, October 6, 1994)]
[Senate]
[Page S]
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[Congressional Record: October 6, 1994]
From the Congressional Record Online via GPO Access [wais.access.gpo.gov]

 
             INDIAN SELF-DETERMINATION CONTRACT REFORM ACT

                                 ______


                       McCAIN AMENDMENT NO. 2635

  Mr. SIMPSON (for Mr. McCain) proposed an amendment to the bill (S. 
2036) to specify the terms of contracts entered into by the United 
States and Indian tribal organizations under the Indian Self-
Determination and Education Assistance Act, and for other purposes; as 
follows:

       Strike all after the enacting clause and insert the 
     following:

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Indian Self-Determination 
     Contract Reform Act of 1994''.

     SEC. 2. GENERAL AMENDMENTS.

       The Indian Self-Determination and Education Assistance Act 
     (25 U.S.C. 450 et seq.) is amended--
       (1) in section 4--
       (A) in subsection (g), by striking ``indirect costs rate'' 
     and inserting ``indirect cost rate'';
       (B) by striking ``and'' at the end of subsection (k);
       (C) by striking the period at the end of subsection (l) and 
     inserting ``; and''; and
       (D) by adding at the end the following new subsection:
       ``(m) `construction contract' means a fixed-price or cost-
     reimbursement self-determination contract for a construction 
     project, except that such term does not include any 
     contract--
       ``(1) that is limited to providing planning services and 
     construction management services (or a combination of such 
     services);
       ``(2) for the Housing Improvement Program or roads 
     maintenance program of the Bureau of Indian Affairs 
     administered by the Secretary of the Interior; or
       ``(3) for the health facility maintenance and improvement 
     program administered by the Secretary of Health and Human 
     Services.'';
       (2) by striking subsection (f) of section 5 and inserting 
     the following new subsection:
       ``(f)(1) For each fiscal year during which an Indian tribal 
     organization receives or expends funds pursuant to a contract 
     entered into, or grant made, under this Act, the tribal 
     organization that requested such contract or grant shall 
     submit to the appropriate Secretary a single-agency audit 
     report required by chapter 75 of title 31, United States 
     Code.
       ``(2) In addition to submitting a single-agency audit 
     report pursuant to paragraph (1), a tribal organization 
     referred to in such paragraph shall submit such additional 
     information concerning the conduct of the program, function, 
     service, or activity carried out pursuant to the contract or 
     grant that is the subject of the report as the tribal 
     organization may negotiate with the Secretary.
       ``(3) Any disagreement over reporting requirements shall be 
     subject to the declination criteria and procedures set forth 
     in section 102.'';
       (3) in section 7(a), by striking ``of subcontractors'' and 
     inserting in lieu thereof ``or subcontractors (excluding 
     tribes and tribal organizations)'';
       (4) at the end of section 7, add the following new 
     subsection:
       ``(c) Notwithstanding subsections (a) and (b), with respect 
     to any self-determination contract, or portion of a self-
     determination contract, that is intended to benefit one 
     tribe, the tribal employment or contract preference laws 
     adopted by such tribe shall govern with respect to the 
     administration of the contract or portion of the contract.'';
       (5) at the end of section 102(a)(1), add the following new 
     flush sentence:

     ``The programs, functions, services, or activities that are 
     contracted under this paragraph shall include administrative 
     functions of the Department of the Interior and the 
     Department of Health and Human Services (whichever is 
     applicable) that support the delivery of services to Indians, 
     including those administrative activities supportive of, but 
     not included as part of, the service delivery programs 
     described in this paragraph that are otherwise contractable. 
     The administrative functions referred to in the preceding 
     sentence shall be contractable without regard to the 
     organizational level within the department that carries out 
     such functions.'';
       (6) in section 102(a)--
       (A) in paragraph (2)--
       (i) in the first sentence, by inserting ``, or a proposal 
     to amend or renew a self-determination contract,'' before 
     ``to the Secretary for review'';
       (ii) in the second sentence--

       (I) by striking ``The'' and inserting ``Subject to the 
     provisions of paragraph (4), the'';
       (II) by inserting ``and award the contract'' after 
     ``approve the proposal'';
       (III) by striking ``, within sixty days of receipt of the 
     proposal,''; and
       (IV) by striking ``a specific finding is made that'' and 
     inserting ``the Secretary provides written notification to 
     the applicant that contains a specific finding supported by 
     clearly demonstrated evidence or a controlling legal 
     authority that'';

       (iii) in subparagraph (B), by striking ``or'' after the 
     semicolon;
       (iv) in subparagraph (C), by striking the period at the end 
     and inserting a semicolon;
       (v) by adding at the end the following new subparagraphs:
       ``(D) the amount of funds proposed under the contract is in 
     excess of the applicable funding level for the contract, as 
     determined under section 106(a); or
       ``(E) the program, function, service, or activity (or 
     portion thereof) that is the subject of the proposal is 
     beyond the scope of programs, functions, services, or 
     activities covered under paragraph (1) because the proposal 
     includes activities that cannot lawfully be carried out by 
     the contractor.''; and
       (vi) by adding at the end of the paragraph the following 
     new flush material:

     ``Notwithstanding any other provision of law, the Secretary 
     may extend or otherwise alter the 90-day period specified in 
     the second sentence of this subsection, if before the 
     expiration of such period, the Secretary obtains the 
     voluntary and express written consent of the tribe or tribal 
     organization to extend or otherwise alter such period. The 
     contractor shall include in the proposal of the contractor 
     the standards under which the tribal organization will 
     operate the contracted program, service, function, or 
     activity, including in the area of construction, provisions 
     regarding the use of licensed and qualified architects, 
     applicable health and safety standards, adherence to 
     applicable Federal, State, local, or tribal building codes 
     and engineering standards. The standards referred to in the 
     preceding sentence shall ensure structural integrity, 
     accountability of funds, adequate competition for 
     subcontracting under tribal or other applicable law the 
     commencement, performance, and completion of the contract, 
     adherence to project plans and specifications (including any 
     applicable Federal construction guidelines and manuals), the 
     use of proper materials or workmanship, necessary inspection 
     and testing, and changes, modifications, stop work, and 
     termination of the work when warranted.''; and
       (B) by adding at the end the following new paragraph:
       ``(4) The Secretary shall approve any severable portion of 
     a contract proposal that does not support a declination 
     finding described in paragraph (2). If the Secretary 
     determines under such paragraph that a contract proposal--
       ``(A) proposes in part to plan, conduct, or administer a 
     program, function, service, or activity that is beyond the 
     scope of programs covered under paragraph (1), or
       ``(B) proposes a level of funding that is in excess of the 
     applicable level determined under section 106(a),

     subject to any alteration in the scope of the proposal that 
     the Secretary and the tribal organization agree to, the 
     Secretary shall, as appropriate, approve such portion of the 
     program, function, service, or activity as is authorized 
     under paragraph (1) or approve a level of funding authorized 
     under section 106(a). If a tribal organization elects to 
     carry out a severable portion of a contract proposal pursuant 
     to this paragraph, subsection (b) shall only apply to the 
     portion of the contract that is declined by the Secretary 
     pursuant to this subsection.'';
       (7) in section 102(b)(3)--
       (A) by inserting after ``record'' the following: ``with the 
     right to engage in full discovery relevant to any issue 
     raised in the matter''; and
       (B) by inserting before the period the following: ``, 
     except that the tribe or tribal organization may, in lieu of 
     filing such appeal, exercise the option to initiate an action 
     in a Federal district court and proceed directly to such 
     court pursuant to section 110(a)'';
       (8) in section 102(d), by striking ``as provided in section 
     2671 of title 28)'' and inserting ``as provided in section 
     2671 of title 28, United States Code, and including an 
     individual who provides health care services pursuant to a 
     personal services contract with a tribal organization for the 
     provision of services in any facility owned, operated, or 
     constructed under the jurisdiction of the Indian Health 
     Service)'';
       (9) by adding at the end of section 102 the following new 
     subsection:
       ``(e)(1) With respect to any hearing or appeal conducted 
     pursuant to subsection (b)(3), the Secretary shall have the 
     burden of proof to establish by clearly demonstrated evidence 
     the validity of the grounds for declining the contract 
     proposal (or portion thereof).
       ``(2) Notwithstanding any other provision of law, a 
     decision by an official of the Department of the Interior or 
     the Department of Health and Human Services, as appropriate 
     (referred to in this paragraph as the `Department') that 
     constitutes final agency action and that relates to an appeal 
     within the Department that is conducted under subsection 
     (b)(3) shall be made either--
       ``(A) by an official of the Department who holds a position 
     at a higher organizational level within the Department than 
     the level of the departmental agency (such as the Indian 
     Health Service or the Bureau of Indian Affairs) in which the 
     decision that is the subject of the appeal was made; or
       ``(B) by an administrative judge.'';
       (10) by striking subsection (a) of section 105 and 
     inserting the following new subsection:
       ``(a)(1) Notwithstanding any other provision of law, 
     subject to paragraph (3), the contracts and cooperative 
     agreements entered into with, and grants made to, tribal 
     organizations pursuant to sections 102 and 103 shall not be 
     subject to Federal contracting, discretionary grant or 
     cooperative agreement laws (including any regulations), 
     except to the extent that such laws expressly apply to Indian 
     tribes.
       ``(2) Program standards applicable to a nonconstruction 
     self-determination contract shall be set forth in the 
     contract proposal and the final contract of the tribe or 
     tribal organization.
       ``(3)(A) With respect to a construction contract (or a 
     subcontract of such a construction contract), the provisions 
     of the Office of Federal Procurement Policy Act (41 U.S.C. 
     401 et seq.) and the regulations relating to acquisitions 
     promulgated under such Act shall apply only to the extent 
     that the application of such provision to the construction 
     contract (or subcontract) is--
       ``(i) necessary to ensure that the contract may be carried 
     out in a satisfactory manner;
       ``(ii) directly related to the construction activity; and
       ``(iii) not inconsistent with this Act.
       ``(B) A list of the Federal requirements that meet the 
     requirements of clauses (i) through (iii) of subparagraph (A) 
     shall be included in an attachment to the contract pursuant 
     to negotiations between the Secretary and the tribal 
     organization.
       ``(C)(i) Except as provided in subparagraph (B), no Federal 
     law listed in clause (ii) or any other provision of Federal 
     law (including an Executive order) relating to acquisition by 
     the Federal Government shall apply to a construction contract 
     that a tribe or tribal organization enters into under this 
     Act, unless expressly provided in such law.
       ``(ii) The laws listed in this paragraph are as follows:
       ``(I) The Federal Property and Administrative Services Act 
     of 1949 (40 U.S.C. 471 et seq.).
       ``(II) Section 3709 of the Revised Statutes.
       ``(III) Section 9(c) of the Act of Aug. 2, 1946 (60 Stat. 
     809, chapter 744).
       ``(IV) Title III of the Federal Property and Administrative 
     Services Act of 1949 (63 Stat. 393 et seq., chapter 288).
       ``(V) Section 13 of the Act of Oct. 3, 1944 (58 Stat. 770; 
     chapter 479).
       ``(VI) Chapters 21, 25, 27, 29, and 31 of title 44, United 
     States Code.
       ``(VII) Section 2 of the Act of June 13, 1934 (48 Stat 948, 
     chapter 483).
       ``(VIII) Sections 1 through 12 of the Act of June 30, 1936 
     (49 Stat. 2036 et seq. chapter 881).
       ``(IX) The Service Control Act of 1965 (41 U.S.C. 351 et 
     seq.).
       ``(X) The Small Business Act (15 U.S.C. 631 et seq.).
       ``(XI) Executive Order Nos. 12138, 11246, 11701 and 
     11758.'';
       (11) by striking subsection (e) and inserting the following 
     new subsection:
       ``(e) If an Indian tribe, or a tribal organization 
     authorized by a tribe, requests retrocession of the 
     appropriate Secretary for any contract or portion of a 
     contract entered into pursuant to this Act, unless the tribe 
     or tribal organization rescinds the request for retrocession, 
     such retrocession shall become effective on--
       ``(1) the earlier of--
       ``(A) the date that is 1 year after the date the Indian 
     tribe or tribal organization submits such request; or
       ``(B) the date on which the contract expires; or
       ``(2) such date as may be mutually agreed by the Secretary 
     and the Indian tribe.'';
       (12) by striking paragraph (2) of section 105(f) and 
     inserting the following new paragraph:
       ``(2) donate to an Indian tribe or tribal organization 
     title to any personal or real property found to be excess to 
     the needs of the Bureau of Indian Affairs, the Indian Health 
     Service, or the General Services Administration, except 
     that--
       ``(A) subject to the provisions of subparagraph (B), title 
     to property and equipment furnished by the Federal Government 
     for use in the performance of the contract or purchased with 
     funds under any self-determination contract or grant 
     agreement shall, unless otherwise requested by the tribe or 
     tribal organization, vest in the appropriate tribe or tribal 
     organization;
       ``(B) if property described in subparagraph (A) has a value 
     in excess of $5,000 at the time of the retrocession, 
     rescission, or termination of the self-determination contract 
     or grant agreement, at the option of the Secretary, upon the 
     retrocession, rescission, or termination, title to such 
     property and equipment shall revert to the Department of the 
     Interior or the Department of Health and Human Services, as 
     appropriate; and
       ``(C) all property referred to in subparagraph (A) shall 
     remain eligible for replacement on the same basis as if title 
     to such property were vested in the United States; and'';
       (13) by adding at the end of section 105 the following new 
     subsections:
       ``(i)(1) If a self-determination contract requires the 
     Secretary to divide the administration of a program that has 
     previously been administered for the benefit of a greater 
     number of tribes than are represented by the tribal 
     organization that is a party to the contract, the Secretary 
     shall take such action as may be necessary to ensure that 
     services are provided to the tribes not served by a self-
     determination contract, including program redesign in 
     consultation with the tribal organization and all affected 
     tribes.
       ``(2) Nothing in this title shall be construed to limit or 
     reduce in any way the funding for any program, project, or 
     activity serving a tribe under this or other applicable 
     Federal law. Any tribe or tribal organization that alleges 
     that a self-determination contract is in violation of this 
     section may apply the provisions of section 110.
       ``(j) Upon providing notice to the Secretary, a tribal 
     organization that carries out a nonconstruction self-
     determination contract may propose a redesign of a program, 
     activity, function, or service carried out by the tribal 
     organization under the contract, including any nonstatutory 
     program standard, in such manner as to best meet the local 
     geographic, demographic, economic, cultural, health, and 
     institutional needs of the Indian people and tribes served 
     under the contract. The Secretary shall evaluate any proposal 
     to redesign any program, activity, function, or service 
     provided under the contract. With respect to declining to 
     approve a redesigned program, activity, function, or service 
     under this subsection, the Secretary shall apply the criteria 
     and procedures set forth in section 102.
       ``(k) For purposes of section 201(a) of the Federal 
     Property and Administrative Services Act of 1949 (40 U.S.C. 
     481(a)) (relating to Federal sources of supply, including 
     lodging providers, airlines and other transportation 
     providers), a tribal organization carrying out a contract, 
     grant, or cooperative agreement under this Act shall be 
     deemed an executive agency when carrying out such contract, 
     grant, or agreement and the employees of the tribal 
     organization shall be eligible to have access to such sources 
     of supply on the same basis as employees of an executive 
     agency have such access.
       ``(l)(1) Upon the request of an Indian tribe or tribal 
     organization, the Secretary shall enter into a lease with the 
     Indian tribe or tribal organization that holds title to, a 
     leasehold interest in, or a trust interest in, a facility 
     used by the Indian tribe or tribal organization for the 
     administration and delivery of services under this Act.
       ``(2) The Secretary shall compensate each Indian tribe or 
     tribal organization that enters into a lease under paragraph 
     (1) for the use of the facility leased for the purposes 
     specified in such paragraph. Such compensation may include 
     rent, depreciation based on the useful life of the facility, 
     principal and interest paid or accrued, operation and 
     maintenance expenses, and such other reasonable expenses that 
     the Secretary determines, by regulation, to be allowable.
       ``(m)(1) Each construction contract requested, approved, or 
     awarded under this Act shall be subject to--
       ``(A) except as otherwise provided in this Act, the 
     provisions of this Act, other than sections 102(a)(2), 
     106(m), 108 and 109; and
       ``(B) section 314 of the Department of the Interior and 
     Related Agencies Appropriations Act, 1991 (104 Stat. 1959).
       ``(2) In providing technical assistance to tribes and 
     tribal organizations in the development of construction 
     contract proposals, the Secretary shall provide, not later 
     than 30 days after receiving a request from a tribe or tribal 
     organization, all information available to the Secretary 
     regarding the construction project, including construction 
     drawings, maps, engineering reports, design reports, plans of 
     requirements, cost estimates, environmental assessments or 
     environmental impact reports, and archaeological reports.
       ``(3) Prior to finalizing a construction contract proposal 
     pursuant to section 102(a), and upon request of the tribe or 
     tribal organization that submits the proposal, the Secretary 
     shall provide for a precontract negotiation phase in the 
     development of a contract proposal. Such phase shall include, 
     at a minimum, the following elements:
       ``(A) The provision of technical assistance pursuant to 
     section 103 and paragraph (2).
       ``(B) A joint scoping session between the Secretary and the 
     tribe or tribal organization to review all plans, 
     specifications, engineering reports, cost estimates, and 
     other information available to the parties, for the purpose 
     of identifying all areas of agreement and disagreement.
       ``(C) An opportunity for the Secretary to revise the plans, 
     designs, or cost estimates of the Secretary in response to 
     concerns raised, or information provided by, the tribe or 
     tribal organization.
       ``(D) A negotiation session during which the Secretary and 
     the tribe or tribal organization shall seek to develop a 
     mutually agreeable contract proposal.
       ``(E) Upon the request of the tribe or tribal organization, 
     the use of an alternative dispute resolution mechanism to 
     seek resolution of all remaining areas of disagreement 
     pursuant to the dispute resolution provisions under 
     subchapter IV of chapter 5 of title 5, United States Code.
       ``(F) The submission to the Secretary by the tribe or 
     tribal organization of a final contract proposal pursuant to 
     section 102(a).
       ``(4)(A) Subject to subparagraph (B), in funding a fixed-
     price construction contract pursuant to section 106(a), the 
     Secretary shall provide for the following:
       ``(i) The reasonable costs to the tribe or tribal 
     organization for general administration incurred in 
     connection with the project that is the subject of the 
     contract.
       ``(ii) The ability of the contractor that carries out the 
     construction contract to make a reasonable profit, taking 
     into consideration the risks associated with carrying out the 
     contract and other relevant considerations.
       ``(B) In establishing a contract budget for a construction 
     project, the Secretary shall not be required to separately 
     identify the components described in clauses (i) and (ii) of 
     subparagraph (A).
       ``(C) The total amount awarded under a construction 
     contract shall reflect an overall fair and reasonable price 
     to the parties, including the following costs:
       ``(i) The reasonable costs to the tribal organization of 
     performing the contract, taking into consideration the terms 
     of the contract and the requirements of this Act and any 
     other applicable law.
       ``(ii) The costs of preparing the contract proposal and 
     supporting cost data.
       ``(iii) The costs associated with auditing the general and 
     administrative costs of the tribal organization associated 
     with the management of the construction contract.
       ``(iv) In the case of a fixed-price contract, a fair profit 
     determined by taking into consideration the relevant risks 
     and local market conditions.
       ``(v) If the Secretary and the tribe or tribal organization 
     are unable to develop a mutually agreeable construction 
     contract proposal pursuant to the procedures set forth in 
     this subsection, the tribe or tribal organization may submit 
     a final contract proposal to the Secretary. Not later than 30 
     days after receiving such final contract proposal, the 
     Secretary shall approve the contract proposal and award the 
     contract, unless, during such period the Secretary declines 
     the proposal pursuant to sections 102(a)(2) and 102(b) of 
     section 102 (including providing opportunity for an appeal 
     pursuant to section 102(b)).
       ``(n) Notwithstanding any other provision of law, the 
     rental rates for housing provided to an employee by the 
     Federal Government in Alaska pursuant to a self-determination 
     contract shall be determined on the basis of--
       ``(1) the reasonable value of the quarters and facilities 
     (as such terms are defined under section 5911 of title 5, 
     United States Code) to such employee, and
       ``(2) the circumstances under which such quarters and 
     facilities are provided to such employee,

     as based on the cost of comparable private rental housing in 
     the nearest established community with a year-round 
     population of 1,500 or more individuals.'';
       (14) in section 106(a)--
       (A) in paragraph (1), by inserting before the period at the 
     end the following: ``, without regard to any organizational 
     level within the Department of the Interior or the Department 
     of Health and Human Services, as appropriate, at which the 
     program, function, service, or activity or portion thereof, 
     including supportive administrative functions that are 
     otherwise contractable, is operated'';
       (B) in paragraph (2), by inserting after ``consist of'' the 
     following: ``an amount for''; and
       (C) by striking paragraph (3) and inserting the following 
     new paragraphs:
       ``(3)(A) The contract support costs that are eligible costs 
     for the purposes of receiving funding under this Act shall 
     include the costs of reimbursing each tribal contractor for 
     reasonable and allowable costs of--
       ``(i) direct program expenses for the operation of the 
     Federal program that is the subject of the contract, and
       ``(ii) any additional administrative or other expense 
     related to the overhead incurred by the tribal contractor in 
     connection with the operation of the Federal program, 
     function, service, or activity pursuant to the contract,

     except that such funding shall not duplicate any funding 
     provided under section 106(a)(1).
       ``(B) On an annual basis, during such period as a tribe or 
     tribal organization operates a Federal program, function, 
     service, or activity pursuant to a contract entered into 
     under this Act, the tribe or tribal organization shall have 
     the option to negotiate with the Secretary the amount of 
     funds that the tribe or tribal organization is entitled to 
     receive under such contract pursuant to this paragraph.
       ``(4) For each fiscal year during which a self-
     determination contract is in effect, any savings attributable 
     to the operation of a Federal program, function, service, or 
     activity under a self-determination contract by a tribe or 
     tribal organization (including a cost reimbursement 
     construction contract) shall--
       ``(A) be used to provide additional services or benefits 
     under the contract; or
       ``(B) be expended by the tribe or tribal organization in 
     the succeeding fiscal year, as provided in section 8.
       ``(5) Subject to paragraph (6), during the initial year 
     that a self-determination contract is in effect, the amount 
     required to be paid under paragraph (2) shall include startup 
     costs consisting of the reasonable costs that have been 
     incurred or will be incurred on a one-time basis pursuant to 
     the contract necessary--
       ``(A) to plan, prepare for, and assume operation of the 
     program, function, service, or activity that is the subject 
     of the contract; and
       ``(B) to ensure compliance with the terms of the contract 
     and prudent management.
       ``(6) Costs incurred before the initial year that a self-
     determination contract is in effect may not be included in 
     the amount required to be paid under paragraph (2) if the 
     Secretary does not receive a written notification of the 
     nature and extent of the costs prior to the date on which 
     such costs are incurred.'';
       (15) in section 106(c)--
       (A) by striking ``March 15'' and inserting ``May 15'';
       (B) in paragraphs (1) and (2), by striking ``indirect 
     costs'' each place it appears and inserting ``contract 
     support costs'';
       (C) in paragraph (4), by striking ``and'' at the end;
       (D) in paragraph (5), by striking the period at the end and 
     inserting ``; and''; and
       (E) by adding at the end the following new paragraph:
       ``(6) an accounting of any deficiency of funds needed to 
     maintain the preexisting level of services to any tribes 
     affected by contracting activities under this Act, and a 
     statement of the amount of funds needed for transitional 
     purposes to enable contractors to convert from a Federal 
     fiscal year accounting cycle to a different accounting cycle, 
     as authorized by section 105(d).'';
       (16) in section 106(f), by inserting immediately after the 
     second sentence the following new sentence: ``For the purpose 
     of determining the 365-day period specified in this 
     paragraph, an audit report shall be deemed to have been 
     received on the date of actual receipt by the Secretary, if, 
     within 60 days after receiving the report, the Secretary does 
     not give notice of a determination by the Secretary to reject 
     the single-agency report as insufficient due to noncompliance 
     with chapter 75 of title 31, United States Code, or 
     noncompliance with any other applicable law.'';
       (17) by striking subsection (g) of section 106 and 
     inserting the following new subsection:
       ``(g) Upon the approval of a self-determination contract, 
     the Secretary shall add to the contract the full amount of 
     funds to which the contractor is entitled under section 
     106(a), subject to adjustments for each subsequent year that 
     such tribe or tribal organization administers a Federal 
     program, function, service, or activity under such 
     contract.'';
       (18) by striking subsection (i) of section 106 and 
     inserting the following new subsection:
       ``(i) On an annual basis, the Secretary shall consult with, 
     and solicit the participation of, Indian tribes and tribal 
     organizations in the development of the budget for the Indian 
     Health Service and the Bureau of Indian Affairs (including 
     participation of Indian tribes and tribal organizations in 
     formulating annual budget requests that the Secretary submits 
     to the President for submission to Congress pursuant to 
     section 1105 of title 31, United States Code).''; and
       (19) by adding at the end of section 106 the following new 
     subsections:
       ``(j) Notwithstanding any other provision of law, a tribal 
     organization may use funds provided under a self-
     determination contract to meet matching or cost participation 
     requirements under other Federal and non-Federal programs.
       ``(k) Without intending any limitation, a tribal 
     organization may, without the approval of the Secretary, 
     expend funds provided under a self-determination contract for 
     the following purposes, to the extent that the expenditure of 
     the funds is supportive of a contracted program:
       ``(1) Depreciation and use allowances not otherwise 
     specifically prohibited by law, including the depreciation of 
     facilities owned by the tribe or tribal organization.
       ``(2) Publication and printing costs.
       ``(3) Building, realty, and facilities costs, including 
     rental costs or mortgage expenses.
       ``(4) Automated data processing and similar equipment or 
     services.
       ``(5) Costs for capital assets and repairs.
       ``(6) Management studies.
       ``(7) Professional services, other than services provided 
     in connection with judicial proceedings by or against the 
     United States.
       ``(8) Insurance and indemnification, including insurance 
     covering the risk of loss of or damage to property used in 
     connection with the contract without regard to the ownership 
     of such property.
       ``(9) Costs incurred to raise funds or contributions from 
     non-Federal sources for the purpose of furthering the goals 
     and objectives of the self-determination contract.
       ``(10) Interest expenses paid on capital expenditures such 
     as buildings, building renovation, or acquisition or 
     fabrication of capital equipment, and interest expenses on 
     loans necessitated due to delays by the Secretary in 
     providing funds under a contract.
       ``(11) Expenses of a governing body of a tribal 
     organization that are attributable to the management or 
     operation of programs under this Act.
       ``(12) Costs associated with the management of pension 
     funds, self-insurance funds, and other funds of the tribal 
     organization that provide for participation by the Federal 
     Government.
       ``(l) The Secretary may only suspend, withhold, or delay 
     the payment of funds for a period of 30 days beginning on the 
     date the Secretary makes a determination under this paragraph 
     to a tribal organization under a self-determination contract, 
     if the Secretary determines that the tribal organization has 
     failed to substantially carry out the contract without good 
     cause. In any such case, the Secretary shall provide the 
     tribal organization with reasonable advance written notice, 
     technical assistance (subject to available resources) to 
     assist the tribal organization, a hearing on the record not 
     later than 10 days after the date of such determination or 
     such later date as the tribal organization shall approve, and 
     promptly release any funds withheld upon subsequent 
     compliance.
       ``(2) With respect to any hearing or appeal conducted 
     pursuant to this subsection, the Secretary shall have the 
     burden of proof to establish by clearly demonstrated evidence 
     the validity of the grounds for suspending, withholding, or 
     delaying payment of funds.
       ``(m) The program income earned by a tribal organization in 
     the course of carrying out a self-determination contract--
       ``(1) shall be used by the tribal organization to further 
     the general purposes of the contract; and
       ``(2) shall not be a basis for reducing the amount of funds 
     otherwise obligated to the contract.
       ``(n) To the extent that programs, functions, services, or 
     activities carried out by tribal organizations pursuant to 
     contracts entered into under this Act reduce the 
     administrative or other responsibilities of the Secretary 
     with respect to the operation of Indian programs and result 
     in savings that have not otherwise been included in the 
     amount of contract funds determined under subsection (a), the 
     Secretary shall make such savings available for the provision 
     of additional services to program beneficiaries, either 
     directly or through contractors, in a manner equitable to 
     both direct and contracted programs.
       ``(o) Notwithstanding any other provision of law (including 
     any regulation), a tribal organization that carries out a 
     self-determination contract may, with respect to allocations 
     within the approved budget of the contract, rebudget to meet 
     contract requirements, if such rebudgeting would not have an 
     adverse effect on the performance of the contract.''.

     SEC. 3. CONTRACT SPECIFICATIONS.

       The Indian Self-Determination Education Assistance Act (25 
     U.S.C. 450 et seq.) is amended by inserting after section 107 
     the following new section:

     ``SEC. 108. CONTRACT OR GRANT SPECIFICATIONS.

       ``(a) Each self-determination contract entered into under 
     this Act shall--
       ``(1) contain, or incorporate by reference, the provisions 
     of the model agreement described in subsection (c) (with 
     modifications where indicated and the blanks appropriately 
     filled in), and
       ``(2) contain such other provisions as are agreed to by the 
     parties.
       ``(b) Notwithstanding any other provision of law, the 
     Secretary may make payments pursuant to section 1(b)(6) of 
     such model agreement. As provided in section 1(b)(7) of the 
     model agreement, the records of the tribal government or 
     tribal organization specified in such section shall not be 
     considered Federal records for purposes of chapter 5 of title 
     5, United States Code.
       ``(c) The model agreement referred to in subsection (a)(1) 
     reads as follows:

     ```SECTION 1. AGREEMENT BETWEEN THE SECRETARY AND THE ____ 
                   TRIBAL GOVERNMENT.

       ```(a) Authority and Purpose.--
       ```(1) Authority.--This agreement, denoted a Self-
     Determination Contract (referred to in this agreement as the 
     ``Contract''), is entered into by the Secretary of the 
     Interior or the Secretary of Health and Human Services 
     (referred to in this agreement as the ``Secretary''), for and 
     on behalf of the United States pursuant to title I of the 
     Indian Self-Determination and Education Assistance Act (25 
     U.S.C. 450 et seq.) and by the authority of the ____ tribal 
     government or tribal organization (referred to in this 
     agreement as the ``Contractor''). The provisions of title I 
     of the Indian Self-Determination and Education Assistance Act 
     (25 U.S.C. 450 et seq.) are incorporated in this agreement.
       ```(2) Purpose.--Each provision of the Indian Self-
     Determination and Education Assistance Act (25 U.S.C. 450 et 
     seq.) and each provision of this Contract shall be liberally 
     construed for the benefit of the Contractor to transfer the 
     funding and the following related functions, services, 
     activities, and programs (or portions thereof), that are 
     otherwise contractable under section 102(a) of such Act, 
     including all related administrative functions, from the 
     Federal Government to the Contractor: (List functions, 
     services, activities, and programs).
       ```(b) Terms, Provisions, and Conditions.--
       ```(1) Term.--Pursuant to section 105(c)(1) of the Indian 
     Self-Determination and Education Assistance Act (25 U.S.C. 
     450j(c)(1)), the term of this contract shall be ____ years. 
     Pursuant to section 105(d)(1) of such Act (25 U.S.C. 
     450j(d)), upon the election by the Contractor, the period of 
     this Contract shall be determined on the basis of a calendar 
     year, unless the Secretary and the Contractor agree on a 
     different period in the annual funding agreement incorporated 
     by reference in subsection (f)(2).
       ```(2) Effective date.--This Contract shall become 
     effective upon the date of the approval and execution by the 
     Contractor and the Secretary, unless the Contractor and the 
     Secretary agree on an effective date other than the date 
     specified in this paragraph.

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