[Congressional Record Volume 140, Number 144 (Thursday, October 6, 1994)]
[House]
[Page H]
From the Congressional Record Online through the Government Printing Office [www.gpo.gov]


[Congressional Record: October 6, 1994]
From the Congressional Record Online via GPO Access [wais.access.gpo.gov]

 
            INDIAN SELF-DETERMINATION ACT AMENDMENTS OF 1994

  Mr. RICHARDSON. Mr. Speaker, I ask unanimous consent to take from the 
Speaker's table the bill (H.R. 4842) 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, and ask for its immediate consideration.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentleman from New Mexico?
  Mr. THOMAS of Wyoming. Mr. Speaker, reserving the right to object, I 
yield to the gentleman from New Mexico [Mr. Richardson] to explain the 
bill.
  Mr. RICHARDSON. Mr. Speaker, title I of H.R. 4842 will allow Indian 
tribes to more easily exercise their right to enter into self-
determination contracts with several agencies. The measure provides for 
a model contract which tribes in the United States can follow, and 
creates a procedure for expeditious rulemaking in a limited number of 
areas.
  Mr. Speaker, the bill has been negotiated with and reflects the 
concerns of the tribes, the departments, and other committees. Both 
titles are supported by the administration and continue the avowed 
Federal policy of self-determination. I urge my colleagues to support 
it.
  The following outlines the Indian Self-Determination Act Amendments 
of 1994:

                                Purpose

       The purpose of Title I of H.R. 4842 is to limit the 
     promulgation of regulations under the Indian Self-
     Determination and Education Assistance Act, and 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.
       The purpose of Title II of H.R. 4842 is to amend the Indian 
     Self-Determination and Education Assistance Act to 
     permanently establish Tribal Self-Governance in the 
     Department of the Interior.

                               Background


  title i. the Indian self-determination contract reform act of 1994.

       The Indian Self-Determination and Education Assistance Act 
     was signed into law in 1975 in order to maximize tribal 
     participation in the planning and administration of federal 
     services and programs, as well as to reduce the federal 
     bureaucracy within those Indian programs. The policy of self-
     determination has proven to be very successful in terms of 
     promoting tribal operation of federal programs and services 
     administered by the Bureau of Indian Affairs (BIA) and the 
     Indian Health Service (IHS).
       The policy of self-determination has it origins in 
     President Nixon's 1970 ``Special Message to the Congress on 
     Indian Affairs'' which stated:
       For years we have talked about encouraging Indians to 
     exercise greater self-determination, but our progress has 
     never been commensurate with our promises. Part of the reason 
     for this situation has been the threat of termination. But 
     another reason is the fact that when a decision is made as to 
     whether a Federal program will be turned over to Indian 
     administration, it is the federal authorities and not the 
     Indian people who finally make that decision.
       This situation should be reversed. In my judgment, it 
     should be up to the Indian tribe to determine whether it is 
     willing to assume administrative responsibility for a service 
     program which is presently administered by a federal agency.
       Today, approximately $531 million of the funds appropriated 
     to the BIA are administered by tribal governments or 
     organizations under self-determination contracts. There are 
     over 400 contracts between Indian tribes and the IHS 
     involving approximately $497 million. Indian tribes contract 
     with the IHS for the operation of 8 fully-accredited 
     hospitals, 347 health centers and 70 service units.
       Despite passage of the Act, tribal attempts to assume the 
     operation of federal programs were hindered by an increased 
     federal bureaucracy as well as restrictive and unnecessary 
     contracting regulations. In fact, so many layers of 
     bureaucracy and rules had been imposed that the contract 
     approval process required an average of 6 months rather than 
     the 60 days mandated by the Act.
       In response, Congress amended the Indian Self-Determination 
     Act in 1988 in order to remove these barriers to contracting. 
     The 1988 Amendments required the Bureau of Indian Affairs and 
     the Indian Health Service to develop new regulations with the 
     participation of Indian tribes by October of 1989. Congress 
     made clear that these amendments should be simple, 
     straightforward, and short.
       The 1988 amendments were intended to increase tribal 
     participation through contracting in the management of 
     federal Indian programs and to help ensure long-term 
     financial stability for tribally-operated programs. The 1988 
     amendments also required the Securities of the Departments of 
     the Interior and Health and Human Services to consider and 
     formulate appropriate regulations with the participation of 
     the Indian tribes. It was intended for the Departments to 
     then issue joint regulations in order to avoid the 
     unnecessary paperwork and confusion that two sets of 
     regulations would entail.
       Six years after passage of the 1988 Amendments, the 
     Departments have yet to promulgate regulations. Despite two 
     productive negotiating sessions between tribes and the 
     Departments that resulted in the negotiation of draft 
     regulations, the Departments in both instances rejected those 
     negotiated drafts. The regulatory process has cost the tribes 
     hundreds of thousands of dollars, and has led to great 
     confusion within Indian Country and among the federal 
     agencies.
       On January 20, 1994, the Departments finally published the 
     proposed joint set of regulations. The set of regulations 
     which emerged, however, was not the simple vehicle that 
     Congress had intended. Rather, the proposed regulations 
     contain hundreds of new requirements. In fact, it is apparent 
     that the new regulations are more complicated and restrictive 
     than existing regulations and raise new obstacles and burdens 
     for Indian tribes seeking to exercise the right of self-
     determination. Should the regulatory process continue on its 
     present course, it is very likely to last an additional two 
     to three years.
       An overwhelming number of tribes throughout the country 
     have denounced the proposed regulations. In May of this year, 
     tribes attending a national conference with the Departments 
     on the proposed regulations unanimously called for 
     legislation that would supplant the regulatory process. The 
     Committee has received numerous phone calls and letters from 
     tribes regarding H.R. 4842. Every single such communication 
     has been in strong support of H.R. 4842 and has requested its 
     swift passage.


                       Title II. Self-Governance.

       In 1987, the Congress considered, as part of the amendments 
     to P.L. 93-638, the Indian Self-Determination Act, the 
     establishment of the Tribal Self-Governance Demonstration 
     Project. The Tribal Self-Governance Project was authorized by 
     Congress under Title III of P.L. 100-472. Under the Tribal 
     Self-Governance Project, Indian tribes could enter into 
     annual funding agreements with the Secretary of the Interior. 
     These agreements authorized Indian tribes to plan, 
     consolidate, and administer programs, services, and functions 
     administered by the Bureau of Indian Affairs. It also 
     authorized Indian tribes to redesign programs, functions, and 
     services and to reallocate funds to carry out these 
     activities. The Tribal Self-Governance Project provides 
     Indian tribes with the flexibility to develop programs and to 
     establish funding priorities to meet their specific needs.
       In the annual funding agreements, Indian tribes are 
     allocated funds from the agency, area, and central office 
     accounts of the Bureau of Indian Affairs. The amount 
     available under a funding agreement is determined on the 
     basis of what the tribe would have received in funds and 
     services in the absence of the agreement. In negotiating 
     self-governance compacts, an Indian tribe may negotiate for 
     all or part of the programs, services, functions, and other 
     activities as well as any direct or indirect program costs 
     incurred by the Secretary in delivering services to the 
     Indian tribe and its members. Specifically exempted from the 
     Self-Governance Project are funds from the Tribally 
     Controlled Community College Assistance Act, the Indian 
     School Equalization Formula, and the Flathead Irrigation 
     Project.
       Since 1988, twenty-eight Indian tribes have entered into 
     Self-Governance compacts with the Department of the Interior. 
     After the Self-Governance Project was expanded to include the 
     programs of the Indian Health Service in 1992, fourteen 
     Indian tribes have entered into compacts with the Secretary 
     of Health and Human Services. Despite initial delays and 
     setbacks in both the Department of the Interior and the 
     Indian Health Service, the Committee has been encouraged by 
     the demonstrated success of the Tribal Self-Governance 
     Project. The Committee has concluded that due to the success 
     of tribal self-governance, it is appropriate to make Tribal 
     Self-Governance a permanent program within the Department of 
     the Interior. The Committee will continue to monitor the 
     progress made in implementing tribal self-governance within 
     the Indian Health Service and after an appropriate period of 
     time will make tribal self-governance a permanent program in 
     the Indian Health Service.
       The Committee is very concerned about reports from many of 
     the Self-Governance tribes that officials of the Indian 
     Health Service have refused to negotiate for the transfer of 
     central office funds and have exhibited an overall resistance 
     to tribal efforts to redesign programs and reallocate 
     resources and personnel under the authority of Tribal Self-
     Governance. This resistance is due in large part to the 
     misapprehension that Tribal Self-Governance is a temporary 
     project. Tribal Self-Governance, as reflected in this 
     legislation, will be a permanent program and it is the 
     Committee's intent to expand Tribal Self-Governance to 
     include each Department of the Federal government. Therefore, 
     the Committee directs the Indian Health Service to begin to 
     plan for and implement changes that will result in reductions 
     in the Federal bureaucracy which correspond to the 
     transferred of program funds, resources, and responsibilities 
     to Self-Governance tribes. All Federal savings derived 
     from these reductions should be transferred to the 
     appropriate Indian tribe pursuant to the Tribal Self-
     Governance agreements.
       Tribal Self-Governance is grounded upon the unique 
     relationship between the Federal government and each Indian 
     tribe. While there has been some progress made under the 
     Indian Self-Determination Act, the Federal bureaucracy 
     continues to erode tribal self-governance and dominate tribal 
     affairs. The Tribal Self-Governance Demonstration Project has 
     redefined the relationship between Indian tribes and the 
     Federal government by placing control over Federal funding 
     and program management in the hands of Indian tribes. Self-
     Governance promises an orderly transition from the Federal 
     domination of programs and services benefitting Indian tribes 
     to tribal authority and control over those programs and 
     services. While tribal control over programs and services is 
     enhanced under the Tribal Self-Governance process, there 
     should be a corresponding reduction in the Federal 
     bureaucracy. These agreements have streamlined management 
     processes and removed layer upon layer of bureaucratic 
     regulation and control. Tribal Self-Governance has encouraged 
     experimentation and flexibility at both the tribal and 
     Federal level. Tribal Self-Governance is premised upon 
     bilateral, negotiated agreements between the Secretary and 
     the Indian tribes which detail the transfer of programmatic 
     responsibilities and the associated funds to Indian tribes. 
     Tribal Self-Governance agreements are in part, a reflection 
     of the treaties negotiated between Indian tribes and the 
     Federal government. Like the earlier treaties, the Self-
     Governance agreements reflect bilateral, consensual 
     negotiations which define the relationship between two 
     sovereigns. The Committee intends Tribal Self-Governance to 
     continue to develop as a major policy initiative and a 
     blueprint for future Federal-tribal relations.

          The Indian Self-Determination Act Amendments of 1994


   Title I. The Indian Self-Determination Contract Reform Act of 1994

       On July 27, 1994, Congressmen Richardson and Thomas (of 
     Wyoming) introduced H.R. 4842, the Indian Self-Determination 
     Act Amendments of 1994. As introduced, the Indian Self-
     Determination Act Amendments of 1994, amended Title I of the 
     Indian Self-Determination and Education Assistance Act by 
     limiting the Departments of the Interior and Health and Human 
     Services by limiting the Departments' rulemaking authority 
     and by establishing a model contract. The model contract 
     would govern the terms under which Indian tribes and tribal 
     organizations could assume the operation and management of 
     federal programs and functions benefitting Indians that are 
     operated within the Department of the Interior and the 
     Department of Health and Human Services, including programs 
     and functions of the Bureau of Indian Affairs and the Indian 
     Health Service. H.R. 4842 would greatly simplify the 
     contracting process, as the 1988 Amendments were originally 
     intended to do H.R. 4842 would also greatly reduce the 
     unnecessary regulations, paperwork, cost and layers of 
     federal bureaucracy that have prevented tribes from fully 
     exercising the right to enter into self-determination 
     contracts.


            Title II. The Tribal Self-Governance Act of 1994

       On November 15, 1993, Congressman Richardson introduced 
     H.R. 3508, the Tribal Self-Governance Act of 1993. H.R. 3508 
     amends the Indian Self-Determination and Education Assistance 
     Act by creating a new Title IV to the Act. Under this new 
     title, the Secretary is directed to establish the Tribal 
     Self-Governance program within the Department of the 
     Interior. The bill permanently establishes Tribal Self-
     Governance with the Department of the Interior. The bill 
     would transfer Indian tribes participating in Self-Governance 
     under Title III into the program established under title IV. 
     Title IV would govern all existing and future Self-Governance 
     agreements with the Department of the Interior. While 
     agreements with the Department of the Interior would no 
     longer be governed by Title III, the existing and future 
     agreements with the Indian Health Service will continue to be 
     governed by Title III. The legislation authorizes the 
     Secretary to select up to 20 new tribes per year to 
     participate in Tribal Self-Governance. Any Indian tribe 
     participating in a Self-Governance agreement may, at its 
     discretion, elect to cease participation through exercise of 
     their retrocession authorities or to refuse to renegotiate or 
     renew an annual funding agreement.
       The Bill also requires each applicant to complete the 
     planning phase in order to be eligible to participate in 
     Tribal Self-Governance. The bill provides that the Secretary 
     shall negotiate annual funding agreements with each Indian 
     tribe. These agreements authorize the tribe to plan, conduct 
     consolidate, and administer programs, services, functions, 
     and activities of the Department of the Interior that are 
     otherwise available to Indian tribes or Indians. Pursuant to 
     the terms of the agreement and at the request of the 
     tribe, the Secretary shall provide funds to carry out the 
     agreement in an amount equal to the amount that the Indian 
     tribe would have been eligible for under Self-
     Determination Act contracts and grants. The bill also 
     provides that the Secretary shall interpret each Federal 
     law in a manner that will facilitate inclusion of programs 
     or activities under the agreement. The bill also includes 
     provisions which authorize the Secretary to receive 
     application of a Federal regulations with regard to self-
     governance agreement. The Secretary is required to submit 
     a report to the Congress on January 1st of each year which 
     shall contain the relative cost and benefits of self-
     governance all funds functionally related to services and 
     benefits under Self-Governance and the corresponding 
     reduction in the Federal bureaucracy. The bill also 
     authorizes the Secretary to initiate negotiated rulemaking 
     procedures for the development of regulations under the 
     Act.
       The Subcommittee held a hearing on H.R. 3508 on February 
     25, 1994 at which time the Subcommittee at which time the 
     Subcommittee took testimony from the Department of the 
     Interior and several representatives of Indian tribes. The 
     Department of Interior expressed general support for Tribal 
     Self-Governance and requested that the Subcommittee staff 
     work with the Department on amendments to the bill. The 
     overwhelming majority of tribal witnesses supported the bill 
     and the general concept of Tribal Self-Governance. Most of 
     the witnesses were participants in the Self-Governance 
     Demonstration Project and found the project to have had a 
     positive impact on their tribal governments. An exception to 
     the general approval of the tribal witnesses was provided by 
     a representative of the allottees from the Quinault Indian 
     reservation. The allottee witness was opposed to Tribal Self-
     Governance because he asserted that Tribal Self-Governance 
     interfered with the trust responsibility which exists between 
     an individual allottee and the Federal government. The 
     witness contended that Tribal Self-Governance usurped the 
     relationship between the allottee and his Federal trustee. 
     The Committee notes that in the Committee Amendment the 
     rights of individual allottees are upheld, and it is the 
     Committee's intent that the trust responsibility between the 
     United States and an individual allottee will continue after 
     enactment of this measure. The Committee notes that the 
     concept of Tribal Self-Governance was endorsed by all the 
     tribal witnesses at the hearing except for the witness 
     representing the allottees.

                          Committee Amendment

       The Committee Amendment in the nature of a substitute makes 
     numerous modifications to H.R. 4842 as introduced. The 
     Committee Amendment places the provisions regarding self-
     determination contracts into Title I adds a new Title II 
     which incorporates provisions of H.R. 3508, the Tribal Self-
     Governance Act of 1994.


   Title I. The Indian Self-Determination Contract Reform Act of 1994

       The Committee Amendment reflects changes made to 
     accommodate the concerns of the Indian tribes, the 
     Departments of the Interior and Health and Human Services, 
     and the Committees on Merchant Marines and Fisheries and 
     Education and Labor. A description of certain key changes 
     follows.
       In section 102(1), the Amendment deletes architectural and 
     engineering services from the category of programs not 
     covered by the Federal Acquisition Regulations that are 
     applicable to construction contracts.
       In section 102(6), the Amendment enlarges the declination 
     timeframe from 60 days to 90 days. The Amendment also 
     requires the Secretary to provide written notice to the 
     contractor that sets forth a specific finding that clearly 
     demonstrates the proposal falls within five enumerated 
     declination criteria. The Committee adopted the ``clearly 
     demonstrates'' standard for the Secretary's finding as an 
     intermediate standard that is higher than a standard 
     requiring the Secretary to support his or her finding by a 
     preponderance of the evidence, but lower than a standard 
     requiring the Secretary to support his or her finding by 
     clear and convincing evidence. The Amendment also deletes 
     references to ``tribal organization'' in declination criteria 
     A and B and makes clear that funding and contractibility are 
     separate declination criteria. The Amendment also deletes the 
     proposed amendment to the ``satisfactory services'' standard 
     of existing law. The Amendment also adds new paragraph 
     requiring the contractor to include program standards when 
     submitting a contract proposal.
       In section 102(9), the Amendment replaces the Secretary's 
     ``clear and convincing'' burden of proof for sustaining for 
     declination appeals with a standard requiring the Secretary 
     to ``establish by clearly demonstrating'' the validity of his 
     or her grounds for declining a contract proposal. The 
     Committee adopted the ``clearly demonstrating'' burden of 
     proof standard as an intermediate standard which is higher 
     than a standard requiring the Secretary to support his or 
     her decision by a preponderance of the evidence, but lower 
     than a standard requiring the Secretary to support his or 
     her decision by clear and convincing evidence. The 
     Amendment deletes the requirement that a declination 
     finding include a technical assistance finding. The 
     Amendment also eliminates the Alaska tribal organization 
     redelegation authority.
       In section 102(10), the Amendment requires that program 
     standards be included in contract proposals and in final 
     contracts so that the Departments can evaluate those 
     standards in light of the declination criteria. The Amendment 
     also deletes the exemption from the Work Hours Act of 1962.
       In section 102(11), the Amendment limits the authority of a 
     tribal organization that is itself not a tribe to retrocede a 
     program back to the government to instances where the 
     authority has been previously delegated to the tribal 
     organization by a tribe.
       In section 102(12), the Amendment eliminates the limitation 
     on return of property to the federal government which would 
     have permitted such return only in instances where the 
     property remained in use in support of the contracted 
     program. The Amendment also makes clear that property vesting 
     in the tribe or tribal organization remain eligible for 
     replacement on the same basis as if title to such property 
     were in the United States.
       In section 102(13), the Amendment deletes virtually all of 
     the divisibility section, leaving in place existing law, 
     while adding in a new explicit protection for non-contracting 
     tribes. The Amendment limits tribal authority to redesign 
     non-construction contracts and prohibits any redesign that 
     would be contrary to statute. The Amendment also clarifies 
     that certain sections of Title I do not apply to construction 
     contracts, including the model contract and the reassumption 
     section.
       In section 102(14), the Amendment adds language to assure 
     against any inadvertent double payment of contract support 
     costs duplicative of the Secretarial amount already included 
     in the contract. The Committee wishes to make clear that by 
     adding a new paragraph (3), the Congress is not creating a 
     third funding category in addition to direct and contract 
     support costs.
       In section 102(15), the Amendment changes the reporting 
     deadlines from March 15 to May 15, to provide the Departments 
     adequate time to include reports relating to calendar year 
     contracts within the supplemental appropriations cycle.
       In section 102(17), the Amendment changes the word 
     ``allocate'' to ``add.''
       In section 102(19), the Amendment revises the suspension of 
     contract funds to permit the Secretary to suspend funds upon 
     a determination that the contractor has failed to 
     substantially carry out the contract. The Amendment reflects 
     the Committee's intent that the Secretary follow the 
     reassumption procedures, but not criteria. The Amendment also 
     requires the Secretary to ``establish by clearly 
     demonstrating'' the validity of his or her grounds for 
     suspending payments contract funds. The Committee adopted the 
     ``clearly demonstrating'' burden of proof standard as an 
     intermediate standard which is higher than a standard 
     requiring the Secretary to support his or her decision by a 
     preponderance of the evidence, but lower than a standard 
     requiring the Secretary to support his or her decision by 
     clear and convincing evidence. The Amendment rewrites the 
     savings provision so that savings equally benefit both 
     contracted and non-contracted parts of the Secretary's 
     programs.
       In section 103 of the bill, the Amendment deletes the 
     paragraph relating to tribal forums. The Amendment requires 
     that the contract set forth the program standards applicable 
     to the contracted programs. The Amendment revises the 
     ``limitation of cost'' clause to comport with limitation of 
     cost clauses currently used in self-determination contracts. 
     The Amendment enlarges the Secretary's monitoring rights, and 
     is not intended to restrict the Secretary's right to make 
     trust-related monitoring visits. The Amendment clarifies that 
     the funding amount specified in the annual funding agreement 
     is tied to the funding amount required to be paid under 
     section 106(a) of the Act.
       In section 104 of the bill, the Amendment adds a new basis 
     for reassumption relating to the endangerment of trust 
     resources. The Amendment provides for partial reassumption. 
     The Amendment also replaces the Secretary's ``clear and 
     convincing'' burden of proof for sustaining on appeal 
     the grounds for reassumption with a standard requiring the 
     Secretary to ``establish by clearly demonstrating'' the 
     validity of his or her grounds for reassuming a contract. 
     The Committee adopted the ``clearly demonstrating'' burden 
     of proof standard as an intermediate standard which is 
     higher than a standard requiring the Secretary to support 
     his or her decision by a preponderance of the evidence, 
     but lower than a standard requiring the Secretary to 
     support his or her decision by clear and convincing 
     evidence.
       In section 105 of the bill, the Amendment adds 11 
     additional topic areas with respect to which Congress 
     delegates its legislative rulemaking authority to the 
     Departments. The Amendment extends from 12 to 18 months 
     period for rulemaking. The Amendment adds an explicit 
     regulatory repeal authority. The Amendment also substantially 
     rewrites the waiver and exception provisions to make clear 
     that the declination procedures, but not the declination 
     criteria, apply to waiver requests.

                      Section-By-Section Analysis


                         section 1. short title

       Section 1 provides that the Act may be cited as the 
     ``Indian Self-Determination Act Amendments of 1994''.


                        section 101. short title

       Section 101 provides that Title I may be cited as the 
     ``Indian Self-Determination Contract Reform Act of 1994.''


                    Section 102. General Amendments

       Section 102(1) amends the definitions section of the Act by 
     changing the term ``indirect costs rate'' to ``indirect cost 
     rate'' in order to comport with other provisions of the Act. 
     Section 2(a) adds a new subsection (m) at the end of section 
     4. This new subsection provides a definition for the term 
     ``construction contract,'' a term which is presently used but 
     not defined in the statute. The term excludes contracts for 
     planning services and construction management services, 
     programs administered under the Bureau of Indian Affairs' 
     Housing Improvement Program and roads maintenance program, 
     and the health facility and maintenance program administered 
     by the Secretary of Health and Human Services. As the term is 
     later used in the statute, the amendment will assure that the 
     federal acquisition regulations are not applied to contracts 
     which do not involve classic construction activities. The 
     amendment clarifies that the BIA roads program is not be 
     considered a construction activity for purposes of the Act 
     and the application of federal procurement laws.
       Section 102(2) conforms portions of section 5(f) of the Act 
     with the 1988 Amendments, and also clarifies and reinforces 
     that intent of Congress to minimize the reporting 
     requirements applicable to tribal contractors. One of the 
     primary goals of the 1988 amendments was to eliminate 
     excessive and burdensome reporting requirements. The 
     amendment is designed to compel the Departments to 
     substantially cut back on the amount of reporting now 
     required from tribal contractors. The amendment provides that 
     reporting requirements over and above the annual audit report 
     are to be negotiated, with disagreements evaluated under the 
     declination procedures of Section 102 of the Act.
       Section 102(3) corrects a typographical error in section 
     7(a) of the Act, and also conforms the statute with the long-
     accepted Labor Department interpretation exempting tribal 
     employees from the Davis-Bacon Act. The amendment makes a 
     technical correction referring to multi-tribal organizations.
       Section 102(4) amends section 7 of the statute to add a new 
     subsection (c) to recognize tribal laws addressing employment 
     preferences. Presently, tribal governments are unable to 
     reconcile the terms of tribal employment rights ordinances 
     (TERO) (which generally provide for tribal preferences in 
     employment for tribal members) with section 7(b) of the Act 
     (which establishes a general Indian preference). Presently, 
     the Bureau of Indian Affairs and the Indian Health Service 
     disagree on the applicability of tribal TERO ordinances to 
     employment under a self-determination contract. The new 
     amendment will remove the source of conflict by endorsing 
     tribal TERO ordinances where they are in place. The amendment 
     makes a technical grammatical change.
       Section 102(5) amends section 102(a)(1) to reinforce the 
     congressional intent that all programs and functions of the 
     Secretary are contractible without regard to the level within 
     the Department in which a program or a portion of the program 
     is administered. The Secretary may not lawfully refuse to 
     enter  into a contract on the ground that the resources 
     supporting the program are situated at an Area Office or 
     other administrative location rather than in the field. If 
     is complementary to the amendment to section 106(a)(1) 
     addressed in section 102(14).
       Section 102(6) addresses section 102(a) of the Act. The 
     rewritten section reinforces the existing limitations on the 
     Secretary when evaluating the merits of a contract proposal 
     (although the current law appears unambiguous, the amendment 
     would remove any potential doubt regarding the scope of the 
     Secretary's review); makes explicit that the protections of 
     the declination appeals process apply to proposals to amend 
     or renew a self-determination contract, and not merely to 
     initial contracting proposals; when declining a contract 
     proposal, requires specific and written findings that clearly 
     demonstrate the applicability of the declination criteria or 
     are supported by controlling legal authority; refines the 
     grounds for declining a contract proposal; makes clear that 
     when a contract proposal involves the management of trust 
     resources, the Secretary is to confine his examination to the 
     trust resources directly involved in the contract proposed by 
     the tribal organization; establishes a 90 day deadline by 
     which the Secretary must either award the contract or make 
     declination findings; and clarifies that the Secretary's 
     determinations regarding whether a contract proposal is 
     authorized by the Act (the issue known as 
     ``contractibility''), and regarding contract funding levels 
     are issues which must be assessed as part of the declination 
     contract review approval and appeal process set forth in 
     section 102(a)(2) of the Act (that is, these issues may not 
     be identified as part of some ``threshold'' assessment, nor 
     in any other way that would escape the critical procedural 
     protections available under section 102).
       In addition, section 102(6) requires the contractor to 
     include in its contract proposal the standards under which 
     the contractor will operate the contracted program; and adds 
     a new subsection 102(a)(4) to correct the prevailing 
     departmental misinterpretation that a contract proposal must 
     either be approved in its entirety or declined in its 
     entirety. As originally intended, and as clarified by the 
     amendment, the Secretary is to approve any severable and 
     approvable portion of a contract proposal. The only condition 
     on award of the contract is that the Secretary and the tribal 
     organization must agree on any alteration in the proposed 
     contract scope of work necessitated by the partial 
     declination of the original proposal. The Secretary remains 
     free to decline that portion of the contract which he 
     determines should not be approved, and the tribal 
     organization is free to appeal that determination as provided 
     in the Act.
       Section 102(7) of the bill has been added by the Committee 
     to conform with the Committee's amendment to section 110(a) 
     of the Act, assuring tribal access to immediate federal court 
     review of decisions to decline a contract proposal, in lieu 
     of first pursuing an administrative appeal process. The 
     Committee notes that it is likely that the majority of 
     appeals will remain administrative in nature, rather than 
     judicial, because attorneys fees are recoverable for 
     administrative appeals but not judicial appeals under the 
     Equal Access to Justice Act. The Committee amendments also 
     assures that traditional discovery procedures such as 
     document production and depositions are available in 
     declination administrative appeals.
       Section 102(8) of the bill conforms liability protections 
     under the Act with those that will be applicable to the 
     Secretary under Title II of the Department of the Interior 
     and Related Agencies 1995 Appropriations Act.
       Section 102(9) amends section 102 to add new subsections 
     (e) and (f). The addition of subsection (e) makes clear that 
     the Secretary has the burden of proof to establish by clearly 
     demonstrating that all of part of a contract proposal should 
     be declined. The Committee adopted the ``clearly 
     demonstrating'' standard, in the declination, suspension, and 
     reassumption provisions of the Act, as an intermediate 
     standard between the higher civil standard of ``clear and 
     convincing evidence'' that was originally proposed, and the 
     lower civil standard of ``the preponderance of the evidence'' 
     which the Departments proposed. The amendment also removes 
     the potential for a very real conflict of interest in 
     resolving appeals, by requiring that appeals be decided at a 
     level higher than the agency making the original decision or 
     by an administrative law judge. For instance, appeals of IHS 
     declinations would have to be finally resolved at a level no 
     lower than the Assistant Secretary of Health or by an 
     administrative law judge.
       Section 102(10) amends section 105(a) of the Act to address 
     both a technical and a substantive problem. The technical 
     problem is that the 1988 Amendments overlooked the need to 
     conform the 1975 language with the 1988 Amendments. As a 
     substantive matter, the 1988 Amendments have 
     been misconstrued as requiring that the full panoply of 
     federal acquisition regulations must apply to construction 
     contracts, despite the congressional intent in 1988 to 
     minimize the application of federal acquisition 
     regulations (FAR) to construction contracting activities. 
     The amendment clarifies that the federal acquisition 
     regulations are only to be applied to the limited extent 
     that doing so is necessary to ensure that the contract may 
     be carried out in a satisfactory manner, is directly 
     related to the contraction activity, and is not 
     inconsistent with the underlying purpose of the Self-
     Determination Act. The Committee wishes to underscore that 
     Congress does not intend for the Departments to treat any 
     Self-Determination Act contracts as ordinary federal 
     contracts. They are not. Rather, Self-Determination Act 
     contracts should be guided by the principle that Indian 
     tribes are sovereign nations, contracts entered into with 
     Indian tribes are done so on a government-to-government 
     basis, and should be free of all unnecessary federal 
     administrative oversight. The Committee amendment also 
     narrows the scope of acquisition regulations and similar 
     requirements which may be unilaterally imposed on tribal 
     contractors.
       Section 102(11) amends section 105(e) to clarify that a 
     tribe may rescind a retrocession request and a retroceding 
     tribe cannot be compelled to operate a contract beyond the 
     contract termination date set forth in the contract, since no 
     contract with the government under the Act can be 
     unilaterally extended in time without the consent of the 
     tribal organization. The amendment also makes clear that 
     tribal organizations that have secured prior authorization 
     from Indian tribes may also retrocede a contract.
       Section 102(12) amends section 105(f)(2) to address both 
     the acquisition of property with contract funds after a 
     contract has been awarded and also the management of 
     government-furnished property. Currently, standard grant 
     regulations provide that title to property purchased with 
     grant funds vests in the grantee. The amendment extends the 
     same policy to property purchased with self-determination 
     contract funds. The policy reasons underlying the Self-
     Determination Act strongly counsel in favor of such a regime, 
     and the amendment eliminates the need for a technical 
     ``donation'' of the property in such circumstances. At the 
     same time, the amendment provides a mechanism for the return 
     of property still in use to the Secretary, in the event a 
     contracting program is retroceded back to the federal 
     government. Finally, in conjunction with Paragraph 1(b)(7) of 
     the model contract set forth in section 3 of the bill, the 
     amendment assures that, although title to such property will 
     vest in the tribe or tribal organization, the Secretary is to 
     treat such property in the same manner for purposes of 
     replacement as he or she would have had title to the property 
     vested in the government.
       Section 102(13) adds six new subsections to section 105 of 
     the Act. New subsection (i) addresses the impact of dividing 
     programs which serve many tribes in order to allow one or 
     more tribes to contract for the operation of a portion of 
     such programs. The amendment clarifies that the Secretary may 
     take such action as necessary to ensure the tribes not served 
     by the contract will are not reduced.
       New subsection 105(j) clarifies that tribal organizations 
     are authorized to propose a redesign of their programs to 
     best meet their local needs. The amendment is consistent with 
     the approach taken in Title III of the Self-Determination 
     Act, as well as the original premise underlying the 1975 Act, 
     and has been necessitated by the continuing efforts by the 
     Department of the Interior and the Department of Health and 
     Human Services to impose upon tribes program requirements, 
     including reporting requirements and program standards, which 
     in many instances compel tribal organizations to virtually 
     duplicate the federal government's programs. Such duplication 
     of programs undermines the statute's fundamental purpose of 
     vesting in tribal governments greater authority and self-
     determination over how Indian programs are administered under 
     contract. If the Secretary challenges a tribal organization's 
     redesign proposal, such challenge must be within the criteria 
     and framework of the declination process set forth in section 
     102 of the Act.
       New subsection 105(k) cures a technical problem which has 
     deprived tribal organizations of the ability to take 
     advantage of the same federal airfares and lodging rates 
     which apply when Indian programs are administered by federal 
     employees. This unintended consequence has substantially 
     increased the cost of administering programs subject to the 
     Act, and effectively treats self-determination contracts as 
     if they were ordinary government procurement contracts, 
     ignoring the government-to-government relationship upon which 
     the Act is based. The amendment corrects the problem and 
     allows tribal organizations and their employees the same 
     access as federal agencies to rates for air travel and 
     similar sources of supply which are regularly negotiated by 
     the General Services Administration.
       New subsection 105(l) overcomes existing impediments to the 
     leasing of facilities owned by Indian tribes and tribal 
     organizations and which are used in the operation of programs 
     contracted under the Act.
       New subsection 105(m) provides clear guidance to the 
     Secretary and to Indian tribes on the special procedures 
     applicable to construction contracts. The amendments make 
     clear that such contracts are not to be treated as ordinary 
     procurement contracts but rather as government-to-government 
     agreements entered into pursuant to the self-determination 
     policy that is the foundation of the Act. Thus, construction 
     contracts are subject to all provisions of the Act except 
     sections 102(a)(2) (declination procedures), 106(l) 
     (suspension of payments), 108 (the model contract), and 109 
     (reassumption procedures). The amendment requires the 
     Secretary to provide important information to tribal 
     contractors regarding construction projects, call for a pre-
     negotiation phase, allows for reasonable costs, and provides 
     a mechanism for resolution of situations where the Secretary 
     and the tribal organization cannot develop a mutually 
     agreeable construction contract proposal.
       New subsection 105(n) makes uniform existing policies 
     governing government quarters which house federal and tribal 
     employees carrying out contracts under the Act. Existing 
     policies prohibit subsidy in rural Alaska, with the short-
     fall covered by program funds instead of rents. The 1,500 
     population standard currently applies to all states other 
     than Alaska. Subsection(n) extends the same standard to 
     Alaska. In this way, rents for rural quarters will not be 
     fixed according to the less expensive Anchorage and Fairbanks 
     markets.
       Section 102(14) amends section 106(a) of the Act in several 
     respects. The amendment to section 106(a)(1) provides that 
     the Secretary may not withhold monies which fund a program 
     simply because the monies are allocated for expenditure at a 
     departmental level higher or other than the field office, 
     service unit or agency level. The Committee amendment changes 
     the format of this subsection.
       The amendments to sections 106(a)(2) and (3) more fully 
     define the meaning of the term ``contract support costs'' as 
     presently used in the Act, defining it to include both funds 
     required for administrative and other overhead expenses and 
     ``direct'' type expenses of program operation. In the event 
     the Secretarial amount under section 106(a)(1) for a 
     particular function proves to be insufficient in light of a 
     contractor's needs for prudent management of the contract, 
     contract support costs are to be available to supplement such 
     sums. The amendment also mandates the negotiation of such 
     funding needs with the Secretary, including the optional 
     periodic renegotiation of such funding needs as circumstances 
     may warrant. The amendment does not alter the process 
     employed by many tribal contractors for negotiating indirect 
     cost agreements with the appropriate cognizant agency for 
     purposes of cost-recovery accounting under the Act.
       Throughout this section the Committee's objective has been 
     to assure that there is no diminution in program resources 
     when programs, services, functions or activities are 
     transferred to tribal operation. In the absence of section 
     106(a)(2), as amended, a tribe would be compelled to divert 
     program funds to prudently manage the contract, a result 
     Congress has consistently sought to avoid.
       New subsection 106(a)(4) makes clear that savings in funds 
     obligated to construction cost-reimbursement contracts do not 
     go back to the Government, but instead are to remain with the 
     tribal contractor and subject to the Act's provisions 
     regarding ``savings.''
       The addition of new subsections (5) and (6) to section 
     106(a) clarify that the costs incurred in preparing for 
     entering into a contract are to be made available as part of 
     the contract support costs payable under section 106(a)(2) of 
     the Act, including start-up costs incurred on a one-time 
     basis and costs incurred prior to award of the contract, 
     provided the Secretary has been notified in writing and in 
     advance of the nature and extent of such costs.
       Section 102(15) amends the reporting requirements of 
     section 106(c) of the Act. The amendment moves the reporting 
     deadline back from March 15 to May 15. The amendment to 
     section 106(c)(1) adds existing contract support cost 
     expenditures to the information required to be reported to 
     Congress. The amendment to section 106(c)(2) makes clear that 
     the Secretaries are required to report to Congress on all 
     deficiencies regarding contract support costs. With this 
     information Congress can then make an informed decision 
     regarding whether to appropriate funds to address such 
     deficiencies.
       The addition of a new subsection (6) to section 106(c) is 
     designed to deal with the tangential adverse impacts which 
     contracting activities may produce on other portions of the 
     Secretary's programs. In the event contracting activities, in 
     fact, lead directly to a lower level of services being 
     provided by the Secretary to any tribes affected by 
     contracting activities, the new language will provide a 
     mechanism for the Secretary to report the resulting funding 
     needs to Congress.
       Section 102(16) defines when the 365 day statute of 
     limitation begins to run under section 106(f) of the Act.
       Section 102(17) amends section 106(g) to clarify how 
     contracts are to be funded under the Act pursuant to section 
     106(a).
       Section 102(18) amends section 106(i) to strengthen and 
     clarify the Secretaries' existing duty to consult with Indian 
     tribes in the formulation of annual budget requests.
       Section 102(19), as amended by the Committee, adds seven 
     new subsections to section 106 of the Act.
       Subsections (j) and (k) address the cost principles 
     applicable to self-determination contracts. The purpose of 
     these amendments is to remove those provisions of presently-
     applicable circulars which impede, rather than foster, the 
     administration of self-determination contracts. While these 
     improvements have been made in ``self-governance compacts'' 
     entered into under Title III of the Act, the Departments have 
     resisted extending these innovations to self-determination 
     contracting. The Committee amendment corrects a typographical 
     error in subsection (k)(1), and (as in Title III compacts) 
     also adds as an allowable cost the cost of managing pension 
     funds, self-insurance funds and like funds containing federal 
     funds originally awarded under a self-determination contract.
       Subsection (l) permits the Secretary to suspend, delay or 
     withhold payments under a contract upon following the same 
     procedures, but not criteria, generally applicable to 
     reassumption. This subsection, which formerly prohibited 
     suspension of payments, was revised in order to accommodate 
     Departmental concerns that such a prohibition might encourage 
     reassumption actions. The Amendment would authorize 
     suspension in cases where the contractor has failed to 
     substantially carry out the contract. In any hearing or 
     appeal, the Secretary has the burden of proof to establish by 
     clearly demonstrating the validity of the grounds for payment 
     suspension.
       Subsection (m) codifies the current policy and practice 
     regarding program income earned by a tribal organization 
     during the course of administering a contract (such as third 
     party income paid by insurance companies insuring persons 
     served by a tribal organization's health program).
       Subsection (n) requires that the Secretary pass on to 
     tribes the benefit of the reduced administrative burden, in 
     the form of savings, resulting from the transfer of programs 
     services, functions and activities from Secretarial 
     administration to tribal administration. As observed in 1988, 
     Congress' goal of shifting resources to tribal operation has 
     continually been frustrated by the enormous growth in the 
     government's contract monitoring and contract administration 
     bureaucracy. The reduced role of the Secretaries in the wake 
     of contracting activities requires that the bureaucracy be 
     correspondingly trimmed and the savings put into tribal 
     programs so as to increase the quality and quantity of 
     services provided to Indian people.
       Subsection (o) expands tribal rebudgeting authority to 
     further the Act's purpose of vesting greater local control in 
     tribal program administration as long as rebudgeting would 
     not have an adverse impact on the performance of the 
     contract.


                  section 103. contract specifications

       Section 103 of the bill, as reported, sets forth model 
     contract language for all self-determination contracts. These 
     mandatory provisions are also made a part of the statute. 
     These improvements build on the successful experiences of 
     tribes involved in the Title III demonstration project.
       Section 108 has been revised to conform with the 
     definitions in Section 4(j) of the Act and use of the term 
     ``self-determination contract.'' Similarly, throughout the 
     model contract, the wording has been revised to make 
     reference to both tribes and tribal organizations, since 
     contracting under P.L. 93-638 is available to both types of 
     entities. (At Section 4(1) of the Act, 
     ``tribal organization'' is the term used to refer to both 
     a tribe and a separate organization sanctioned by one or 
     more tribes). For ease of reference, the balance of the 
     model contract uses the single term ``Contractor.''
       Subsection 1(a)(1) of the model contract sets forth the 
     authority for entering into the contract and incorporates the 
     provisions of title I of the Indian Self-Determination Act 
     into the contract.
       Subsection 1(a)(2) of the model contract incorporates the 
     longstanding canon of statutory interpretation that laws 
     enacted for the benefit of Indians are to be liberally 
     construed in their favor, and further to clarify that all 
     functions, services, activities or programs or portions 
     thereof, as well as all administrative functions, are 
     contractible, as clearly provided in the Act.
       Subsection 1(b)(1) of the model contract, as amended, sets 
     forth the term of the contract. As provided in section 
     105(c)(1) of the Act, the amendment provides that upon the 
     contractor's election, the calendar year will be utilized for 
     a contract, unless the Secretary and the Contractor agree on 
     a different period in the Annual Funding Agreement. These 
     provisions conform with Sections 105(c)(1) and 105(d)(1) of 
     the Act, and provide a place (i.e., the Annual Funding 
     Agreement) for this agreement to be memorialized and a 
     timeframe for doing so.
       Subsection 1(b)(2) of the model contract, as amended, makes 
     the effective date of the contract the date of execution 
     unless otherwise agreed to by the Secretary and the 
     Contractor.
       Subsection 1(b)(3) of the model contract requires the 
     contractor to administer the contract in accordance with 
     program standards incorporated into the contract as a result 
     of contract negotiations.
       Subsection 1(b)(4) of the model contract, as amended, 
     provides that the annual agreement will be known as an Annual 
     Funding Agreement and references the funding amounts provided 
     in Section 106(a) of the Act. That section provides that the 
     Contractor shall receive no less than the Secretary would 
     have provided for the operation of the programs or portions 
     thereof for the period covered by the contract, plus funding 
     for contract support cost needs.
       Subsection 1(b)(5) has been added to protect contractors 
     from being legally obligated to operate the contract when 
     there are insufficient funds to do so, a principal which 
     would be contrary to the purposes of the Act and current 
     regulations (in particular, the ``Limitation of Costs'' 
     clause). This subsection is intended to assist contractors 
     that operate programs for which the agencies habitually 
     request from Congress less that the minimum amount necessary 
     to operate the program.
       Subsection 1(b)(6) of the model contract, as revised, makes 
     a variety of payment options available to tribes and tribal 
     organizations. In addition, the Prompt Payment Act is made 
     applicable to contract funding amounts.
       Subsection 1(b)(7) of the model contract, as revised, is 
     focused on ensuring that the Secretaries follow the mandate 
     of the Act to eliminate excessive and burdensome reporting 
     requirements, that the Secretaries limit and provide 
     reasonable advance notice to contractors prior to routine 
     Secretarial monitoring visits, and that the contract make 
     clear that primary responsibility for day-to-day monitoring 
     rests with the tribal contractor not the Secretary. These 
     provisions are consistent with the monitoring guidelines 
     which the respective Secretaries have recently set forth in 
     their promulgated proposed regulations to implement the 
     Indian Self-Determination Act.
       Subsection 1(b)(8) of the model contract, as amended, is 
     consistent with Section 105(f) of the Act. The new language 
     carries out the original intent of the Act to place tribes 
     and tribal organizations in the same position as those 
     government agencies that would otherwise be carrying out the 
     activities, so that no benefits or cost savings are lost 
     merely by virtue of the contracting of an activity by a 
     tribal organization. This section applies this principle to 
     the area of property acquisition. Significantly, the section 
     provides for the periodic replacement of transferred or 
     acquired property as would occur had the Secretary retained 
     title and continued operating the program directly.
       Further, the General Services Administration (GSA) will be 
     required to respect the tribal right of access to excess 
     property and, under Section 1(b)(9) of the model contract, to 
     provide access to government motor vehicle pools.
       Subsection 1(b)(9) of the model contract, as revised, is 
     consistent with Section 108 of the Act and with annual 
     appropriation acts which make all funds subject to an Indian 
     Self-Determination Act contract or grant award deemed 
     obligated and thereafter available for carryover and 
     expenditure without fiscal year limitation. See, e.g., 
     Pub. L. No. 103-138, 107 Stat. 1379, 1390 (BIA) and 1408 
     (IHS) for FY '94 appropriations.
       Subsection 1(b)(10) of the model contract allows the 
     contractor to obtain interagency motor pool vehicles and 
     services in performance of the contract.
       Subsection 1(b)(11) makes clear that the contractor is not 
     subject to the Department's manuals, guidelines, or 
     unpublished requirements unless expressly authorized under 
     the Act, other statutes, or agreed to by the Contractor.
       Subsection 1(b)(12) of the model contract, as revised, 
     provides alternative dispute resolution mechanisms. The 
     provision permits mediation. The mediation alternatives are 
     optional and require the consent of both parties in order to 
     invoke them.
       Subsection 1(b)(3) of the model contract requires tribal 
     contractors to comply with the Indian Civil Rights Act.
       Subsection 1(b)(4) governs the negotiation of the annual 
     funding agreement and imposes information disclosure duties 
     on the Secretary.
       Subsection 1(b)(15) removes Secretarial pre-approval 
     requirements for certain contracts, consistent with the 
     policy of self-determination and independence from excessive 
     Secretarial oversight. Subsection (b), as amended, clarifies 
     that the section deals solely with requirements for contracts 
     with third parties.
       Section 1(c) of the model contract, relating to obligations 
     of the tribal contractor, has been revised by the Committee 
     to make various wording changes to clarify the intent and to 
     make the section consistent with the remainder of the 
     amendments. The first three subsections address the 
     contractor's obligation to carry out the contracted 
     functions, to execute a funding agreement, and to administer 
     the contracted programs within available funds. Subsection 
     (4) clarifies that maintaining the pre-existing level of 
     services is mandatory with respect to certain trust resource 
     programs. In other areas tribal contractors retain the 
     flexibility within appropriation limitations to redesign 
     their programs and rebudget their contract funds as local 
     needs and conditions warrant.
       Subsection 1(c)(5) of the model contract is included to 
     comply with the specific mandate of section 105(h) of the 
     Act.
       Subsection 1(d)(1) of the model contract addresses the 
     government's trust responsibility. The Committee believes 
     that the government's trust responsibility is not limited to 
     tangible assets, and includes federal services such as the 
     delivery of health care. Nevertheless, the Committee 
     amendment responds to Departmental objections to this 
     interpretation, and thus places the Secretary of Health and 
     Human Services' duties in a separate subsection. Subsection 
     1(d)(2) specifies that if the contract is to include a health 
     program, the Secretary will assist the contractor in 
     achieving the goals stated in the Indian Health Care 
     Improvement Act. Subsection 1(d)(3) requires the Departments 
     to continue operating those activities and functions not 
     included in the contract and annual funding agreement.
       Subsection 1(e)(1) of the model contract provides for the 
     designation of federal senior officials. Subsection 1(e)(2) 
     addresses contract modifications, and permits modifications 
     of the contract upon mutual consent of the parties.
       Subsections 1(e) (3) and (4) prevent Members of Congress 
     and resident commissioners from personally benefitting from 
     Self-Determination Act contracts and prevent third parties 
     from soliciting or securing contracts on a contingency basis.
       Subsection 1(f)(1) specifies that resolutions will be 
     provided and attached to the contract if they have not 
     already been submitted to the Department in prior years. Many 
     tribes that belong to multi-tribal organizations grant 
     authorizing resolutions which confer on the tribal 
     organizations for an indefinite period the authority to 
     contract on the tribe's behalf. Authority is granted to 
     continue this process.
       Subsection 1(f)(2) of the model contract contains a 
     specific description of what is to be contained in the annual 
     funding agreement and allows for additional terms to be 
     included if the contractor so requests and the Secretary 
     agrees. These amendments insure that the contract correctly 
     describes the programs, services, functions, and activities 
     to be performed by the contractor and that any further 
     provisions are to be included only with the consent of the 
     contractor in order to assure that the general purposes of 
     the Act are carried out.


                   section 104. additional amendments

       Section 104(1) amends section 109 to incorporate case law 
     from recent administrative decisions under the Act regarding 
     the reassumption process, and also establishes the 
     Secretary's burden of proof, by clearly demonstrating the 
     validity of the grounds for reassumption, in section 109 
     proceedings. The Secretary may immediately rescind a 
     contract, in whole or in part, if the Secretary finds an 
     immediate threat of harm to personal safety or an imminent 
     substantial and irreparable harm to trust funds, trust lands, 
     or interests in trust lands.
       Section 104(2) amends section 110(a) to clarify the right 
     of contractors to seek immediate judicial relief to review a 
     declination finding or to secure the award and funding of an 
     approved contract, without first invoking further 
     administrative levels of appeal or similar ``exhaustion'' 
     procedures which could further delay the contracting process.
       Section 104(3) amends section 110(d) to direct that all 
     appeals arising out of the Contract Disputes Act be heard by 
     the Interior Board of Contract Appeals. The amendment will do 
     away with the current practice of referring such appeals from 
     the Department of Health and Human Services to the Armed 
     Services Board of Contract Appeals, a result of the fact that 
     DHHS does not have its own contract appeals board.


                        section 105. regulations

       Section 105 of the bill addresses the Secretaries' 
     authority to promulgate interpretative regulations in 
     carrying out the mandates of the Act. It amends Section 107 
     (a) and (b) of the Act by limiting the delegated 
     authorization of the Secretaries to promulgate regulations. 
     This action is a direct result of the failure of the 
     Secretaries to respond promptly and appropriately to the 
     comprehensive amendments developed by this Committee six 
     years ago. The recently promulgated proposed regulations 
     severely undercut Congress' intent in the original Act and 
     those amendments to liberalize the contracting process and to 
     put these programs firmly in the hands of the tribes. The 
     proposed regulations erect a myriad of new barriers and 
     restrictions upon contractors rather than simplifying the 
     contracting process and freeing tribes from the yoke of 
     excessive federal oversight and control. It is this 
     unfortunate experience that is a major impetus of this bill.
       Section 105(1) amends section 107(a) by delegating to the 
     Secretary the authority only to promulgate implementing 
     regulations in certain limited subject matter areas. By and 
     large these areas correspond to the areas of concern 
     identified by the Departments in testimony and in 
     discussions. Beyond the ten areas specified in subsection 
     (a)--the Federal Tort Claims Act, the Contract Disputes Act, 
     declination and waiver procedures, appeal procedures, 
     reassumption procedures, discretionary grant procedures, 
     property donation procedures, internal agency procedures, 
     retrocession procedures, contract proposal contents, 
     conflicts of interest, construction, programmatic reports and 
     data requirements, procurement standards, property management 
     standards, and financial management standards--no further 
     delegated authority is conferred.
       A second key limitation on the delegation of rulemaking 
     authority is provided in the eighteen month limitation on the 
     Secretaries' authority to promulgate the regulations. This 
     limit is necessary to prevent another regulation drafting 
     process which goes on for years without satisfactory or final 
     resolution.
       Section 105(1) also amends section 107(b) to clarify that 
     the Act's provisions supersede conflicting provisions of law 
     and authorize the Secretary to repeals inconsistent 
     regulations.
       To remain consistent with the original intent of the Act 
     and to assure that the input received from the tribes and 
     tribal organizations in the regulation drafting process is 
     not disregarded as has previously been the case, Section 107 
     also has been amended by adding a new subsection (d), 
     requiring the Secretaries to employ the negotiated rulemaking 
     process. It is expected that negotiations shall be conducted 
     in a timely manner and that the regulations called for in the 
     Act, as amended by the bill, will be published as a proposed 
     rule within six months from the date of enactment of these 
     amendments, unless the deadline is extended by Congress.
       New Section 107(e) details the contours of the Secretaries' 
     authority to waive regulatory provisions that impede 
     contracting activities under the Act. The declination appeal 
     process is made applicable to the Secretaries' action on 
     waiver requests.


                   section 106. conforming amendments

       Section 106 of the bill provides for conforming amendments 
     to be made to Sections 105(h) of the Act in order to delete 
     specific references to rules and regulations. Such provisions 
     are no longer appropriate in light of Section 5 of the bill.
  Mr. THOMAS of Wyoming. Mr. Speaker, continuing my reservation of 
objection.
  Mr. Speaker, the BIA had 6 years to enact these regulations and they 
failed; it's more than past time that we did it for them. Moreover, I 
have always been very supportive of efforts to turn more of the day-to-
day decisionmaking and planning to the tribes. Self-governance works, 
it's time to make it available to all the tribes.
  Mr. Speaker, I withdraw my reservation of objection.
  Mr. SPEAKER. Is there objection to the requests of the gentleman from 
New Mexico?
  There was no objection.
  The Clerk read the bill, as follows:

                               H.R. 4842

       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 ``Indian Self-Determination 
     Act Amendments of 1994''.

     SEC. 2. AMENDMENTS.

       The Indian Self-Determination and Education Assistance Act 
     (25 U.S.C. 450 et seq.) is amended as follows:
       (1) At the beginning of section 4, insert the following new 
     paragraph and redesignate all other paragraphs accordingly:
       ``(1) `construction contract' means a fixed-price or cost-
     reimbursement self-determination contract for a construction 
     project. Contracts (i) limited to providing architectural and 
     engineering services, planning services, and/or construction 
     management services; (ii) for the Housing Improvement Program 
     or roads maintenance program administered by the Secretary of 
     the Interior; and (iii) for the health facility maintenance 
     and improvement program administered by the Secretary of 
     Health and Human Services, shall not be deemed to be 
     construction contracts within the meaning of this Act;''.
       (2) Amend section 5(f) to read as follows:
       ``(f) For each fiscal year during which an Indian tribal 
     organization receives or expends funds pursuant to a contract 
     or grant under this title, the tribal organization which 
     requested such contract or grant shall submit to the 
     appropriate Secretary a single agency audit report as 
     required by chapter 75 of title 31, United States Code. Such 
     tribal organization shall also submit such additional 
     information on the conduct of the program or service involved 
     as the tribal organization may negotiate with the Secretary. 
     Any disagreement over reporting requirements shall be subject 
     to the declination standards and procedures set forth in 
     section 102 of this Act.''.
       (3) In section 7(a) strike ``of subcontractors'' and insert 
     in lieu thereof ``or subcontractors (excluding tribes and 
     tribal organization)''.
       (4) At the end of section 7, insert the following new 
     subsection:
       ``(c) Notwithstanding subsections (a) and (b), where a 
     self-determination contract, or portion thereof, is intended 
     to benefit one tribe, tribal employment or contract 
     preference laws adopted by such tribe shall govern with 
     respect to the administration of such contract or portion 
     thereof.''.
       (5) At the end of paragraph (1) of section 102(a), insert 
     the following new sentence: ``Such programs shall include 
     administrative functions of the Department of the Interior or 
     the Department of Health and Human Services which support the 
     delivery of services to Indians, including those 
     administrative activities related to, but not part of, the 
     service delivery program, which are otherwise contractible, 
     without regard to the organization level within the 
     Department where such functions are carried out.''.
       (6) Amend paragraph (2) of section 102(a) as follows--
       (A) insert ``, or to amend or renew a self-determination 
     contract,'' before ``to the Secretary for review'';
       (B) in the second sentence strike ``The'' and insert 
     ``Subject to the provisions of subsection 4 hereof, the'';
       (C) insert ``and award the contract'' before ``unless'';
       (D) in subparagraph (A), insert ``by the tribal 
     organization'' after ``rendered'';
       (E) in subparagraph (B), insert ``by the tribal 
     organization'' after ``resources'';
       (F) at the end of subparagraph (C) add the following: ``, 
     either because (i) the amount of funds proposed in the 
     contract is in excess of the funding levels specified in 
     section 106(a) of this Act, or (ii) the program (or portion 
     thereof) to be contracted is beyond the scope of paragraph 
     (1) thereof because the proposal includes activities which 
     cannot be lawfully carried out by the contractor;''; and
       (G) insert the following new paragraph:
       ``(4) The Secretary shall approve any severable portion of 
     a contract proposal which does not support a declination 
     finding as provided in paragraph (3) of this subsection. 
     Whenever the Secretary determines under paragraph (3) that a 
     contract proposal (A) proposes in part to plan, conduct, or 
     administer a program that is beyond the scope of paragraph 
     (1), or (B) proposes a funding level in excess of the funding 
     levels specified in section 106(a) of this Act, the Secretary 
     shall approve the proposal to the extent authorized to 
     paragraph (1) of section 106(a) of this Act, as appropriate 
     (subject to any agreed-upon alteration in the proposed scope 
     of work). In the event the tribal organization elects to 
     operate the severable portion of a contract proposal, 
     subsection (b) thereof shall apply only with respect to the 
     declined portion of the contract.''.
       (7) In section 102(b)(3), insert before the period ``, 
     subject to the tribe's or tribal organization's option to 
     proceed directly to Federal district court as provided in 
     section 110(a)''.
       (8) At the end of section 102, insert the following new 
     subsections:
       ``(e) In any hearing or appeal provided under subsection 
     (b)(3), the Secretary shall carry the burden of proof to 
     establish by clear and convincing evidence that the contract 
     proposal should be declined. Final departmental decisions in 
     all such appeals shall be made at a level higher than the 
     level of the agency whose decision under subsection (b) is 
     appealed.
       ``(f) A tribal organization in Alaska authorized by tribal 
     resolution or resolutions to contract under this Act the 
     operation of one or more programs may redelegate that 
     authority, by formal action of the tribal organization's 
     governing body, to another tribal organization provided 
     advance notice of such redelegation and a copy of the 
     contracting proposal, prior to its submission to the 
     Secretary, are provided to all tribes served by the tribal 
     organization. Nothing herein is to be construed as a 
     limitation on the authority of a tribe to limit, restrict or 
     rescind its resolution at any time or in any manner 
     whatsoever. A tribe receiving such notice shall have 60 days 
     from receipt of the notice to notify the tribal organization 
     in writing of its intent to adopt a limiting resolution 
     prohibiting or conditioning the proposed redelegation, and 
     thereafter shall have 60 days to adopt and transmit such 
     resolution to the tribal organization. A tribal organization 
     so notified of a tribe's intent shall not proceed with any 
     redelegation proposal until the expiration of the 60-day 
     period.''.
       (9) Amend section 105(a) to read as follows:
       ``(a) Contracts, grants, and cooperative agreements with 
     tribal organizations pursuant to sections 102 and 103 of this 
     title shall not be subject to general Federal contracting, 
     discretionary grant or cooperative agreement laws and 
     regulations, except to the extent such laws expressly apply 
     to Indian tribes: Provided, That with respect to construction 
     contracts as defined in section 4 of this Act (or 
     subcontracts of such a construction contract), the Office of 
     Federal Procurement Policy Act (88 Stat. 796; 41 U.S.C. 401 
     et seq.) and Federal acquisition regulations promulgated 
     thereunder shall apply to the limited extent such statute or 
     regulations are necessary to assure proper completion of the 
     contract, are directly relevant to the construction activity, 
     and are not inconsistent with the provisions or policy of 
     this Act: Provided further, That all such requirements shall 
     be negotiated between the Secretary and the tribal 
     organization and set forth as an attachment to the contract: 
     Provided further, That no other laws or executive orders 
     shall be applicable to construction contracts subject to this 
     Act unless expressly so stated in such other laws or orders, 
     including chapter 10 of title 40, United States Code; section 
     9(a) and (c) of the Act of August 2, 1946, as amended, 60 
     Stat. 809; sections 301-310 of the Act of June 30, 1949, as 
     amended, 63 Stat. 393-397; section 13 of the Act of October 
     3, 1944, as amended, 58 Stat. 770; chapters 21, 25, 27, 29, 
     and 31 of title 44, United States Code; chapter 5 of title 
     40, United States Code, section 2 of the Act of June 13, 
     1934, as amended, 48 Stat. 948; sections 1-12 of the Act of 
     June 30, 1936, as amended, 49 Stat. 2036-39; chapter 6 of 
     title 41, United States Code; chapter 14A of title 15, United 
     States Code; and Executive Orders 12138, 11246, 11701, and 
     11758.''.
       (10) Amend section 105(e) to read as follows:
       ``(e) Whenever an Indian tribe or tribal organization 
     requests retrocession of the appropriate Secretary for any 
     contract, or portion thereof, entered into pursuant to this 
     Act, such retrocession shall, unless the request for 
     retrocession is rescinded by such tribe or tribal 
     organization, become effective one year from the date of the 
     request by the Indian tribe or tribal organization, or the 
     date of contract expiration, whichever is earlier, or at such 
     date as may be mutually agreed by the Secretary and the 
     Indian tribe.''.
       (11) Amend paragraph (2) of section 105(f) to read as 
     follows:
       ``(2) donate to an Indian tribe or tribal organization the 
     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 
     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, and upon retrocession, rescission, or 
     termination of such self-determination contract or grant, 
     title to such property having a present value in excess of 
     $5,000 and remaining in use in support of the contracted 
     program shall, at the Secretary's option, revert to the 
     Secretary; and''.
       (12) At the end of section 105, insert the following new 
     subsections:
       ``(i) Where a self-determination contract requires the 
     Secretary to administratively divide a program which 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--
       ``(1) endeavor to minimize any adverse effect on the level 
     of services to be provided to all affected tribes;
       ``(2) notify all affected tribes not party to the contract 
     of the receipt of the contract proposal at the earliest 
     possible date, and of the right of such tribes to comment on 
     how the Secretary's program should be divided to best meet 
     the needs of all affected tribes;
       ``(3) explore the feasibility of instituting cooperative 
     agreements amongst the affected tribes not a party to the 
     contract, the tribal organization operating the contract, and 
     the Secretary; and
       ``(4) identify and report to Congress the nature of any 
     diminution in quality, level or quantity of services to any 
     affected tribe resulting from the division of the Secretary's 
     program, together with an estimate of the funds which would 
     be required to correct such diminution. In determining 
     whether to decline a contract under section 102(a)(2), the 
     Secretary shall not consider the effect which a contract 
     proposal will have on tribes not represented by the tribal 
     organization submitting such proposal, nor on Indians not 
     served by the portion of the program to be contracted. The 
     Secretary shall make such special provisions as may be 
     necessary to assure that services are provided to the tribes 
     not served by a self-determination contract.
       ``(j) Upon notice to the Secretary, tribal organizations 
     carrying out self-determination contracts are authorized to 
     redesign programs, activities, functions and services under 
     contract, including program standards, 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 redesign 
     proposal against the declination criteria set forth in 
     section 102 of this Act.
       ``(k) For purposes of section 201(a) of the Act of June 30, 
     1949 (40 U.S.C. 481(a)) (involving Federal sources of supply, 
     including lodging providers, airlines, and other 
     transportation providers), an Indian tribe or 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.
       ``(l) Upon the request of an Indian tribe or tribal 
     organization, the Secretary shall enter into leases with 
     Indian tribes and tribal organizations which hold title to, a 
     leasehold interest in, or a beneficial interest in, 
     facilities used by Indian tribes or tribal organizations for 
     the administration and delivery of contract services under 
     the Act. The Secretary shall compensate such Indian tribes or 
     tribal organizations for the use of leased facilities for 
     contract purposes. Lease compensation may include: rent, 
     depreciation based on the useful life of the building, 
     principal and interest paid or accrued, operation and 
     maintenance expenses, and such other reasonable expenses 
     determined by regulation to be allowable.
       ``(m) Construction contracts:
       ``(1) Construction contracts requested, approved, or 
     awarded under this Act shall be subject to all of the 
     provisions of this Act, including without intending any 
     limitation, sections 7, 102(a), 102(b), 103(d) and (e), 
     105(f), 106(a), 106(f), 110, and 111, and section 314 of 
     Public Law No. 101-512, as amended.
       ``(2) In providing technical assistance to tribes and 
     tribal organizations in the development of construction 
     contract proposals, the Secretary shall provide a requesting 
     tribe or tribal organization, within 30 days of receipt of a 
     request, with all available information regarding the 
     construction project, including without intending any 
     limitation, construction drawings, maps, engineering reports, 
     design reports, plans of requirements, cost estimates, 
     environmental assessments or impact reports, and 
     archaeological reports.
       ``(3) Prior to finalization of a construction contract 
     proposal pursuant to section 102(a), and upon request of the 
     contracting tribe or tribal organization, there shall be a 
     precontract negotiation phase which shall, at a minimum, 
     include--
       ``(A) the provision of technical assistance pursuant to 
     section 103 and paragraph (2) hereof;
       ``(B) a joint scoping session 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 his or her 
     plans, designs, or cost estimates 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, 
     use of an alternative dispute resolution mechanism to seek 
     resolution of all remaining areas of disagreement pursuant to 
     the Administrative Dispute Resolution Act (5 U.S.C. 571); and
       ``(F) submission of a final contract proposal pursuant to 
     section 102(a).
       ``(4) In funding a fixed-price construction contract 
     pursuant to section 106(a), the Secretary shall include funds 
     for (A) the reasonable costs of the tribe or tribal 
     organization for general administration to be incurred in 
     connection with the contracted project, and (B) a reasonable 
     profit in light of the risk and other relevant 
     considerations: Provided, That the Secretary shall not be 
     required to separately identify such components in the 
     contract budget: and Provided further, That the total amount 
     awarded under the contract shall reflect an overall fair and 
     reasonable price to the parties, including but not limited to 
     (i) the reasonable costs to the tribal organization of 
     performing the contract given 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 the 
     tribal organization's audited general and administrative 
     costs, and (iv) in the case of a fixed-price contract, a fair 
     profit determined in light of the relevant risks and local 
     market conditions.''.
       (13) Amend section 106(a) as follows--
       (A) at the end of paragraph (1), insert the following ``, 
     without regard to the organizational level or levels within 
     the Department at which the program (or portion thereof), 
     including supportive administrative functions which are 
     otherwise contractible is operated'';
       (B) in paragraph (2), after ``consist of'', insert ``an 
     amount for'', and add the following at the end thereof: 
     ``Contract support costs shall include, without distinction, 
     funds to reimburse tribal contractors for reasonable and 
     allowable costs of contracting attributable to direct program 
     expenses, and reasonable additional administrative or other 
     overhead expenses in connection with tribal operation of 
     Federal programs. The amount of funds to which a tribe or 
     tribal organization is entitled pursuant to this subparagraph 
     shall be negotiated annually with the Secretary.''; and
       (C) strike paragraph (3) and insert the following new 
     paragraphs (3) and (4):
       ``(3) Any savings in operation under a self-determination 
     contract (including a cost reimbursement construction 
     contract) shall be utilized to provide additional services or 
     benefits under the contract or be expended in the succeeding 
     fiscal year as provided in section 8 of this Act.
       ``(4) During the initial year of a self-determination 
     contract there shall be included, in the amount required to 
     be paid under paragraph (2), start-up costs consisting of the 
     reasonable costs, either previously incurred or to be 
     incurred under the contract on a one-time basis, necessary to 
     plan, prepare for and take over operation of the contracted 
     program and to also ensure compliance with the terms of the 
     contract and prudent management: Provided, That previously 
     incurred costs shall not be included to the extent the 
     Secretary was not notified in advance and in writing of the 
     nature and extent of the costs to be incurred.''.
       (14) Amend section 106(c) as follows:
       (A) In each of paragraphs (1) and (2), strike ``indirect 
     costs'' and insert in lieu thereof ``indirect costs and other 
     negotiated contract support costs''.
       (B) Strike ``and'' at the end of paragraph (4).
       (C) Strike the period at the end of paragraph (5) and 
     insert in lieu thereof ``; and''.
       (D) Insert the following new paragraph:
       ``(6) a reporting of any deficiency of funds needed to 
     maintain the preexisting level of services to any tribes 
     affected by contracting activities under this Act, and the 
     amount of funds needed for transitional purposes to enable 
     contractors to convert from Federal fiscal year accounting to 
     a different accounting cycle, as authorized under section 
     105(d) of this Act.''.
       (15) At the end of paragraph (2) of section 106(d), insert 
     the following new sentence: ``Notwithstanding any other 
     provision of law, and subject to the availability of 
     appropriations, every Federal agency and every State shall 
     pay its full proportionate share of the indirect costs 
     associated with federally funded contracts or grants awarded 
     to tribes or tribal organizations under any other law. In the 
     event that appropriations are not sufficient for agencies 
     other than the Department of the Interior and the Department 
     of Health and Human Services, or for State governments or 
     State agencies, to pay their full proportionate share as 
     provided herein, the Secretary shall, subject to the 
     availability of appropriations for this purpose, fund and pay 
     such shortfalls and report all unfunded shortfalls to the 
     Congress, as provided in section 106(c)(2).''.
       (16) Amend section 106(f) by inserting immediately after 
     the second sentence thereof the following: ``For the purpose 
     of the 365-day period, an audit report shall be deemed 
     received on the date of actual receipt by the Secretary, 
     absent a notice by the Secretary within 60 days of receipt 
     that the report will be rejected as insufficient due to 
     noncompliance with chapter 75 of title 31, United States 
     Code, or other applicable law.''.
       (17) Amend section 106(g) to read as follows:
       ``(g) Upon approval of a self-determination contract, the 
     Secretary shall allocate to the contract the full amount to 
     which the contractor is entitled under section 106(a), 
     subject to adjustments for each subsequent year that Federal 
     programs are administered by such tribe or tribal 
     organization.''.
       (18) Amend section 106(i) to read as follows:
       ``(i) The Secretary shall consult annually 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 in the formulation of annual budget requests to 
     Congress.''.
       (19) Amend section 106 by adding at the end thereof the 
     following new subsections:
       ``(j) 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 approval, expend funds provided 
     under a self-determination contract for the following 
     purposes to the extent supportive of a contracted program--
       ``(1) depreciation and use allowances not otherwise 
     specifically prohibited by law, including depreciation of 
     facilities owned by the tribe or tribal organization and 
     constructed with Federal financial assistance;
       ``(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) cost of 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 a 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 secretarial delays in providing 
     funds under a contract;
       ``(11) expenses of a tribal organization's governing body 
     to the extent attributable to the management or operation of 
     programs under this Act; and
       ``(12) costs associated with the management of pension, 
     self-insurance and other funds which include Federal 
     participation.
       ``(l) Within 12 months following the date of enactment of 
     this subsection, the Office of Management and Budget, with 
     the active participation of Indian tribes and tribal 
     organizations, the Department of the Interior, Office of the 
     Inspector General, and the Health and Human Services 
     Department, Cost Determination Branch, shall develop a 
     separate set of cost principles applicable to Indian tribes 
     and tribal organizations consistent with the government-to-
     government Federal-tribal relationship embodied in this Act.
       ``(m) Except in connection with rescission and reassumption 
     of a contract under section 109 of this Act, the Secretary 
     shall in no circumstance suspend, withhold or delay the 
     payment of funds to a tribal organization under a self-
     determination contract.
       ``(n) Program income earned by a tribal organization in the 
     course of carrying out a self-determination contract shall be 
     used by the tribal organization to further the general 
     purposes of the contract and shall not be a basis for 
     reducing the amount of funds otherwise obligated to the 
     contract.
       ``(o) To the extent contracting activities under this Act 
     reduce the Secretary's administrative or other 
     responsibilities in connection with the operation of Indian 
     programs, resulting in savings which have not otherwise been 
     included in the contract amount specified in subsection (a) 
     of this section, and to the extent that doing so will not 
     adversely affect the Secretary's ability to carry out his 
     responsibilities to other tribes and tribal organizations, 
     the Secretary shall make such savings available to tribal 
     organizations contracting under this Act.
       ``(p) Notwithstanding any laws or regulations to the 
     contrary, a tribal organization may rebudget within the 
     approved budget of its contract to meet contract 
     requirements, if such rebudgeting does not have a significant 
     and adverse effect upon the level or nature of services.''.

     SEC. 3. CONTRACT SPECIFICATIONS.

       Section 108 of the Indian Self-Determination and Education 
     Assistance Act (25 U.S.C. 450j), currently reserved, is 
     amended to read as follows:

     ``SEC. 108. CONTRACT OR GRANT SPECIFICATIONS.

       ``Each Self-Determination Contract or grant entered into 
     under this Act shall contain, or incorporate by reference, 
     the following provisions, with modifications where indicated 
     and the blanks appropriately filled together with such other 
     provisions as the parties may agree upon:
       ``(1) Authority and purpose.--
       ``(A) Authority.--This agreement, denoted a Self-
     Determination Contract (hereinafter referred to as the 
     `Contract'), is entered into by the Secretary of the Interior 
     or the Secretary of Health and Human Services (hereinafter 
     referred to as the `Secretary'), for and on behalf of the 
     United States pursuant to titles I and II of the Indian Self-
     Determination and Education Assistance Act and by the 
     authority of the ______________ tribal government or tribal 
     organization (hereinafter referred to as the `Contractor'). 
     Unless otherwise provided in this agreement, all of the 
     provisions of title I of the Indian Self-Determination and 
     Education Assistance Act are incorporated herein.
       ``(B) Purpose.--Each and every provision of the Indian 
     Self-Determination Act and 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 portion thereof), 
     including all related administrative functions from the 
     Federal Government to the Contractor: (List functions, 
     services, activities, and programs.)
       ``(C) Tribal law and forums.--The laws and/or policies and 
     procedures of the Contractor shall be applied in the 
     performance of this Contract and the powers and decisions of 
     the Contractor's Tribal Court or other dispute resolution 
     mechanism shall be binding to the extent that Federal law, 
     construed in accordance with the applicable canons of 
     construction and the Indian Self-Determination and Education 
     Assistance Act, is not inconsistent.
       ``(2) Terms, provisions and conditions.--
       ``(A) Term.--The term of this Contract shall not exceed 3 
     years, unless the Secretary and the Contractor agree on a 
     longer period pursuant to section 105(c)(1)(B) of the Indian 
     Self-Determination and Education Assistance Act. Pursuant to 
     section 105(d)(1) of the Act, upon the Contractor's election, 
     the calendar year shall be the basis for contracts under this 
     Act, unless the Secretary and the Contractor agree on a 
     different period in the annual funding agreement.
       ``(B) Effective date.--This Contract shall become effective 
     upon approval and execution by the Contractor and the 
     Secretary, unless otherwise agreed to by the Secretary and 
     the Contractor.
       ``(C) Funding amount.--
       ``(i) Amount of annual funding agreement.--Subject to the 
     appropriation of funds by Congress, the Secretary shall make 
     available to the Contractor the total amount specified in the 
     annual funding agreement incorporated by reference in 
     paragraph (6)(B), which amount shall not be less than the 
     amounts specified in section 106(a) of the Act.
       ``(ii) Limitation of costs.--The Contractor shall not be 
     obligated to continue performance beyond the amount of funds 
     awarded, and if at any time the Contractor has reason to 
     believe that the total amount for performance of this 
     contract or a specific activity of this Contract will be 
     greater than the amount awarded, the Contractor shall notify 
     the appropriate Secretary. If the amount awarded is not 
     increased, the Contractor may cease performance. In such 
     event all duties and responsibilities previously assumed by 
     the Contractor shall become the duties and responsibilities 
     of the Secretary.
       ``(D) Payment.--
       ``(i) In general.--Payments shall be made as expeditiously 
     as possible and shall include financial arrangements to cover 
     funding during periods under continuing resolutions to the 
     extent permitted by such resolutions.
       ``(ii) Quarterly semiannual, lump sum, and other methods of 
     payment.--Notwithstanding the provisions of any other law, 
     for each fiscal year covered by this Contract, the Secretary 
     is authorized to and shall make available the funds specified 
     for the fiscal year under the annual funding agreement by 
     paying to the Contractor on a quarterly basis one-quarter of 
     the total amount provided for in the annual funding agreement 
     for that fiscal year, by making a lump-sum payment or 
     semiannual payments, or by using any other method authorized 
     by law, as may be requested by the Contractor and specified 
     in the annual funding agreement. Each quarterly payment shall 
     be made on the first day of each quarter of the fiscal year 
     except that in instances where the contract year coincides 
     with the Federal fiscal year, payment for the first quarter 
     shall be made not later than the date that is 10 calendar 
     days after the date on which the Office of Management and 
     Budget apportions the appropriations for the fiscal year for 
     the programs, servicers, functions, and activities subject to 
     the Contract. Chapter 39 of title 31, United States Code, 
     shall apply to the payment of funds due under the contract 
     and the annual funding agreement.
       ``(E) Records and Monitoring.--(i) Except for previously 
     provided copies of tribal records that the Secretary 
     demonstrates are clearly required to be maintained as part of 
     the recordkeeping system of the Department of the Interior 
     and/or the Department of Health and Human Services, 
     Contractor records shall not be considered Federal records 
     for purposes of chapter 5 of title 5, United States Code.
       ``(ii) The Contractor shall maintain a recordkeeping 
     system, and upon reasonable advance request provide 
     reasonable access to such records to the Secretary.
       ``(iii) Contractors are responsible for managing the day-
     to-day operations of the Contract and for monitoring 
     activities to assure compliance with the Contract and 
     applicable Federal requirements. Monitoring visits shall be 
     limited to not more than one performance monitoring visit per 
     contract by each operating division, departmental bureau or 
     departmental agency or duly authorized representatives 
     thereof unless (I) the Contractor has agreed to such 
     additional visits, or (II) there is reasonable cause to 
     believe that grounds for reassumption of the contract or 
     other serious contract performance deficiency exists: 
     Provided, however, That such additional visits shall not be 
     made until after reasonable advance notice has been given to 
     the Contractor, including the nature of the problem which 
     requires the additional visits.
       ``(F) Property.--(i) As provided in section 105(f) of the 
     Act, as amended, at the request of the Contractor the 
     Secretary shall make available or transfer to the Contractor 
     all reasonably divisible real property, facilities, 
     equipment, and personal property that the Secretary had 
     previously utilized to provide or administer the programs, 
     services, functions, and activities covered by this Contract. 
     A mutually agreed upon list specifying the property, 
     facilities, and equipment so furnished shall also be prepared 
     and periodically revised. The Secretary shall maintain a 
     record of all such property for purposes of replacement and 
     shall replace such property on the same basis as property 
     remaining under the Secretary's control. Upon the request of 
     the Contractor, the Secretary and the Contractor shall enter 
     into a separate joint use agreement to address the parties' 
     shared use of real or personal property that is not 
     reasonably divisible.
       ``(ii) The Secretary shall delegate to the Contractor the 
     authority to acquire such `excess' property as may be 
     appropriate in the judgment of the Contractor to support the 
     programs, services, functions, and activities operated 
     pursuant to this Contract. The Secretary shall assist the 
     Contractor in obtaining such confiscated or excess property 
     as may become available to tribes, tribal organizations, or 
     local governments. A screener identification card (General 
     Services Administration form 2946) shall be issued to the 
     Contractor not later than the effective date of this 
     Contract. The designated official shall, upon request, assist 
     the Contractor in securing the use of the card.
       ``(iii) The Contractor shall determine what capital 
     equipment, leases, rentals, property, or services it shall 
     require to perform its obligations under this subsection, and 
     shall acquire and maintain records of such capital equipment, 
     property rentals, leases, property, or services through 
     tribal procurement procedures.
       ``(G) Savings.--Notwithstanding any other provision of law, 
     any funds provided under this Contract shall remain available 
     until expended and shall require no further approval by the 
     Secretary nor further justifying documentation from the 
     Contractor prior to expenditure.
       ``(H) Transportation.--Upon the effective date of this 
     contract, the Secretary shall authorize the Contractor to 
     obtain interagency motor pool vehicles and related services 
     for performance of any activities under this Contract.
       ``(I) Regulatory authority.--The Contractor is not required 
     to abide by Federal program guidelines, manuals, or policy 
     directives unless otherwise agreed to by the Contractor and 
     the Secretary.
       ``(J) Disputes.--(i) In addition or as an alternative to 
     remedies and procedures prescribed by section 110 of the 
     Indian Self-Determination and Education Assistance Act, the 
     parties may jointly--
       ``(I) submit disputes under this Contract to third-party 
     mediation, which for purposes of this section means that the 
     Secretary and the Contractor nominate a third party who 
     together choose a third party mediator (`third-party' means a 
     person not employed by or significantly involved with either 
     the Contractor, the Secretary, or the Department of the 
     Interior or the Department of Health and Human Services);
       ``(II) submit the dispute to the court of the Contractor's 
     adjudicatory body, including but not limited to the 
     Contractor's tribal court;
       ``(III) submit the dispute to mediation processes provided 
     for under the Contractor's laws, policies, or procedures; or
       ``(IV) use the processes authorized in the Administrative 
     Dispute Resolution Act (5 U.S.C. 571).
       ``(ii) The Secretary shall be bound by decisions reached by 
     the processes set forth in clause (i) of this subparagraph of 
     this Contract, except that the Secretary shall not be bound 
     by any decision that significantly conflicts with the 
     interests of the Indians or the United States.
       ``(K) Contractor's administrative procedures.--Pursuant to 
     the Indian Civil Rights Act of 1968 (25 U.S.C. 1301 et seq.), 
     the Contractor's laws, policies, and procedures shall provide 
     for administrative due process (or its equivalent) with 
     respect to programs, services, functions, and activities that 
     are provided by the Contractor pursuant to this Contract.
       ``(L) Successor annual funding agreement.--Negotiations for 
     a successor annual funding agreement, as provided for in 
     paragraph (6)(B), shall begin not later than 120 days prior 
     to the conclusion of the preceding annual funding agreement. 
     Funding of successor annual funding agreements shall only be 
     reduced pursuant to section 106(b) of the Indian Self-
     Determination and Education Assistance Act. The Secretary 
     shall prepare and supply relevant information, and promptly 
     comply with any request by the Contractor for information 
     reasonably needed to determine the funds that may be 
     available for a successor annual funding agreement as 
     provided for in paragraph (6)(B) of this Contract.
       ``(M) Secretarial approval.--(i) Except as provided in 
     clause (ii), for the term of the Contract, section 2103 of 
     the Revised Statutes (25 U.S.C. 81) and section 16 of the Act 
     of June 18, 1934 (25 U.S.C. 476), shall not apply to any 
     contract entered into in connection with this Contract.
       ``(ii) Each contract entered into by the Contractor with 
     third parties in connection with performing its obligations 
     under this Contract shall--
       ``(I) be in writing;
       ``(II) identify the interested parties, their authorities, 
     and purposes;
       ``(III) state the work to be performed; and
       ``(IV) state the process for making any claim, the payments 
     to be made, and the terms of the contract, which shall be 
     fixed.
       ``(3) Obligation of the contractor.--
       ``(A) Contract performance.--Except as provided in 
     paragraph (4)(B), the Contractor shall perform the programs, 
     services, functions, and activities as provided in the annual 
     funding agreement under paragraph (6)(B) of this Contract.
       ``(B) Amount of funds.--The total amount of funds to be 
     paid under this Contract shall be determined in an annual 
     funding agreement entered into between the Secretary and the 
     Contractor, which shall be incorporated in its entirety into 
     this Contract.
       ``(C) Contracted programs.--Subject to the availability of 
     appropriated funds, the Contractor shall administer the 
     programs, services, functions, and activities identified 
     herein and funded through the annual funding agreement.
       ``(D) Trust services for individual Indians.--To the extent 
     that the annual funding agreement provides funding for the 
     delivery of trust services to individual Indians that were 
     formerly provided by the Secretary, the Contractor shall 
     maintain at least the same level of service as was previously 
     provided by the Secretary, subject to the availability of 
     appropriated funds for such services. Strictly for the 
     purposes of this subsection only, ``trust services for 
     individual Indians'' means only those services that pertain 
     to land or financial management connected to individually 
     held allotments.
       ``(E) Fair and uniform services.--The Contractor shall 
     provide services under this contract in a fair and uniform 
     manner and shall provide access to an administrative or 
     judicial body empowered to adjudicate or otherwise resolve 
     complaints, claims, and grievances brought by program 
     beneficiaries against the Contractor arising out of the 
     performance of the Contract.
       ``(4) Obligation of the united states.--
       ``(A) Trust responsibility.--The United States reaffirms 
     its trust responsibility to the ______________ Indian tribes 
     to protect and conserve the trust resources of the Indian 
     tribes and of individual Indians. Nothing in this Contract is 
     intended to, nor shall be construed, to terminate, waive, 
     modify, or reduce the trust responsibility of the United 
     States to the tribes or individual Indians. The Secretary 
     shall act in good faith in upholding said trust 
     responsibility. To the extent that health programs are 
     included in this Contract, the Secretary shall act in good 
     faith in cooperating with the Contractor to achieve the goals 
     set forth in chapter 18 of title 25, United States Code.
       ``(B) Programs retained.--As specified in the annual 
     funding agreement, the United States hereby retains the 
     programs, services, functions, and activities with respect to 
     the tribes that are not specially assumed by the Contractor 
     in the annual funding agreement.
       ``(5) Other provisions.--
       ``(A) Designated officials.--On or before the effective 
     date of this Contract, both the United States and the 
     Contractor shall provide each other with a written 
     designation of a senior official as its representative for 
     notices, proposed amendments to the Contract and other 
     purposes for this Contract.
       ``(B) Contract modifications or amendment.--To be effective 
     any modifications of this Contract shall be in the form of a 
     written amendment to the Contract, and shall require the 
     written consent of the Contractor and the Secretary, except 
     for the addition of supplemental funds for programs, 
     functions, and activities (or portions thereof) already 
     included in the annual funding agreement.
       ``(C) Officials not to benefit.--No Member of Congress, or 
     resident commissioner, shall be admitted to any share or part 
     of any contract executed pursuant to this Contract, or to any 
     benefit that may arise therefrom; but this provision shall 
     not be construed to extend to any contract under this 
     Contract if made with a corporation for its general benefit.
       ``(D) Covenant against contingent fees.--The parties 
     warrant that no person or selling agency has been employed or 
     retained to solicit or secure any contract executed pursuant 
     to this Contract upon an agreement or understanding for a 
     commission, percentage, brokerage, or contingent fee, 
     excepting bona fide employees or bona fide established 
     commercial or selling agencies maintained by the contractor 
     for the purpose of securing business.
       ``(6) Attachments.--
       ``(A) Approval of contract.--Unless previously furnished to 
     the Secretary, the resolution of the ____ Indian tribe(s) 
     authorizing the contracting of the programs, services, 
     functions, and activities identified herein is (are) attached 
     hereto as attachment 1.
       ``(B) Annual funding agreement.--The negotiated and duly 
     approved annual funding agreement shall only contain terms 
     that identify the programs, services, functions, and 
     activities to be performed or administered, the general 
     budget category assigned, the funds to be provided, the time 
     and method of payment, and such other provisions, including 
     but not limited to, a brief description of the programs, 
     services, functions, and activities to be performed 
     (including those supported by financial resources other than 
     those provided by the Secretary), as the Contractor may 
     request and to which the parties agree. The annual funding 
     agreement is hereby incorporated in its entirety in this 
     Contract and attached hereto as attachment 2.''.

     SEC. 4. ADDITIONAL AMENDMENTS.

       The Indian Self-Determination and Education Assistance Act 
     is further amended as follows:
       (1) In section 109--
       (A) strike ``as prescribed by him'' and all that follows 
     through ``in such cases'' and insert ``prescribed by him to 
     remedy the contract deficiency. The appropriate Secretary 
     may, upon written notice to a tribal organization, and the 
     tribes served thereby, immediately rescind a contract or 
     grant and resume control or operation of a program, activity, 
     or service if he finds that there is an immediate threat of 
     imminent harm to the safety of any person and that such 
     threat arises from the Contractor's failure to fulfill the 
     requirements of the contract. In such cases''; and
       (B) insert the following immediately before the last 
     sentence: ``In any hearing or appeal provided for under this 
     section, the Secretary shall carry the burden of proof to 
     establish by clear and convincing evidence that the contract 
     should be rescinded, assumed, or reassumed.''.
       (2) In section 110(a), insert before the period at the end 
     thereof the following: ``(including immediate injunctive 
     relief to reverse a declination finding under section 
     102(a)(2) or to compel the Secretary to award and fund an 
     approved self-determination contractor)''.
       (3) In section 110(d), insert before the period at the end 
     thereof the following: ``except that all such administrative 
     appeals shall be heard by the Interior Board of Contract 
     Appeals''.

     SEC. 5. REGULATIONS.

       Section 107 of the Indian Self-Determination and Education 
     Assistance Act is amended--
       (1) by amending subsections (a) and (b) to read as follows:
       ``(a) General.--Except as may be specifically authorized 
     herein and elsewhere in this Act, the Secretary of the 
     Interior and the Secretary of Health and Human Services shall 
     not promulgate any regulation, nor impose any nonregulatory 
     requirement, relating to self-determination contracts: 
     Provided, however, That the Secretary may promulgate 
     regulations relating to the Federal Tort Claims Act, the 
     Contract Disputes Act, declination appeal procedures, 
     reassumption procedures, and retrocession procedures. All 
     regulations including those referred to in this section shall 
     be promulgated in conformity with sections 552 and 553 of 
     title 5 of the United States Code and with subsections (c), 
     (d), and (e) hereof, and shall be promulgated as a single set 
     of regulations in title 25 of the Code of Federal 
     Regulations. Any authorization to promulgate regulations set 
     forth in this Act shall expire if such regulations are not 
     finally promulgated within 12 months from the date of 
     enactment of these amendments.
       ``(b) Existing Regulations.--The provisions of this Act 
     shall supersede any conflicting provisions of law or 
     regulation in existence on the date of enactment of this 
     Act.''.
       (2) Add the following new subsections:
       ``(d) In drafting and promulgating regulations as provided 
     in section 107(a) of this Act (including any revisions or 
     amendments thereto), the Secretaries shall confer with and 
     allow for active participation by representatives of Indian 
     tribes, tribal organizations, individual tribal members, and 
     representatives of other parties interested in the 
     implementation of this Act, as amended. The rulemaking 
     process shall follow the guidance of the Negotiated 
     Rulemaking Act of 1990 and of the Administrative Conference 
     of the United States in Recommendations 82-094 and 85-095, 
     `Procedures for Negotiating Proposed Regulations' (1 CFR 
     305.82-094 and 305.85-095), and any successor recommendation, 
     regulation, or law. Tribal participants in the negotiation 
     shall be chosen by the tribes and tribal organizations 
     participating in regional and national meetings to be 
     convened by the Secretary, representing the groups described 
     herein and shall include tribal representatives from all 
     geographic regions. The negotiations shall be conducted in a 
     timely manner and the proposed rule implementing these 
     amendments shall be published in the Federal Register by the 
     Secretaries no later than 6 months from the date of enactment 
     of these amendments. Notwithstanding any other law or 
     regulation to the contrary, the Secretary of the Interior and 
     the Secretary of Health and Human Services shall be 
     authorized to jointly establish and jointly fund such 
     interagency committees or other interagency bodies, including 
     advisory bodies comprised of tribal representatives, as may 
     be necessary or appropriate to carry out the provisions of 
     this Act.
       ``(e) Notwithstanding any laws or regulations to the 
     contrary, the Secretary shall waive or make exceptions to his 
     regulations where the Secretary finds that such waiver or 
     exceptions is in the best interest of the Indians served by 
     the contract. The Secretary shall review a waiver request 
     under the declination criteria and procedures contained in 
     section 102(a)(2) of this Act.''.

     SEC. 6. CONFORMING AMENDMENT.

       Section 105(h) of the Indian Self-Determination and 
     Education Assistance Act (25 U.S.C. 450j(h)) is amended by 
     striking ``and the rules and regulations adopted by the 
     Secretaries of the Interior and Health and Human Services 
     pursuant to section 107 of this Act''.


   amendment in the nature of a substitute offered by mr. richardson

  Mr. RICHARDSON. Mr. Speaker, I offer an amendment in the nature of a 
substitute.
  The Clerk read as follows:

       Amendment in the nature of a substitute offered by Mr. 
     Richardson:
       Strike all after the enacting clause and insert the 
     following:

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Indian Self-Determination 
     Act Amendments of 1994''.
            TITLE I--INDIAN SELF-DETERMINATION ACT CONTRACTS

     SEC. 101. SHORT TITLE.

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

     SEC. 102. 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 that clearly 
     demonstrates that, or that is supported by 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 and 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 demonstrating 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 tribal organizations pursuant to 
     section 102 shall not be subject to Federal contracting 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(l), 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 demonstrating 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. 103. 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.
       ```(3) Program standard.--The Contractor agrees to 
     administer the program, services, functions and activities 
     (or portions thereof) listed in subsection (a)(2) of the 
     Contract in conformity with the following standards: (list 
     standards).
       ```(4) Funding amount.--Subject to the availability of 
     appropriations, the Secretary shall make available to the 
     Contractor the total amount specified in the annual funding 
     agreement incorporated by reference in subsection (f)(2). 
     Such amount shall not be less than the applicable amount 
     determined pursuant to section 106(a) of the Indian Self-
     Determination and Education Assistance Act (25 U.S.C. 450j-
     1).
       ```(5) Limitation of costs.--The Contractor shall not be 
     obligated to continue performance that requires an 
     expenditure of funds in excess of the amount of funds awarded 
     under this Contract. If, at any time, the Contractor has 
     reason to believe that the total amount required for 
     performance of this Contract or a specific activity conducted 
     under this Contract would be greater than the amount of funds 
     awarded under this Contract, the Contractor shall provide 
     reasonable notice to the appropriate Secretary. If the 
     appropriate Secretary does not take such action as may be 
     necessary to increase the amount of funds awarded under this 
     Contract, the Contractor may suspend performance of the 
     Contract until such time as additional funds are awarded.
       ```(6) Payment.--
       ```(A) In general.--Payments to the Contractor under this 
     Contract shall--
       ```(i) be made as expeditiously as practicable; and
       ```(ii) include financial arrangements to cover funding 
     during periods covered by joint resolutions adopted by 
     Congress making continuing appropriations, to the extent 
     permitted by such resolutions.
       ```(B) Quarterly, semiannual, lump-sum, and other methods 
     of payment.--
       ```(i) In general.--Pursuant to section 108(b) of the 
     Indian Self-Determination and Education Assistance Act, and 
     notwithstanding any other provision of law, for each fiscal 
     year covered by this Contract, the Secretary shall make 
     available to the Contractor the funds specified for the 
     fiscal year under the annual funding agreement incorporated 
     by reference pursuant to subsection (f)(2) by paying to the 
     Contractor, on a quarterly basis, one-quarter of the total 
     amount provided for in the annual funding agreement for that 
     fiscal year, in a lump-sum payment or as semiannual payments, 
     or any other method of payment authorized by law, in 
     accordance with such method as may be requested by the 
     Contractor and specified in the annual funding agreement.
       ```(ii) Method of quarterly payment.--If quarterly payments 
     are specified in the annual funding agreement incorporated by 
     reference pursuant to subsection (f)(2), each quarterly 
     payment made pursuant to clause (i) shall be made on the 
     first day of each quarter of the fiscal year, except that in 
     any case in which the contract year coincides with the 
     Federal fiscal year, payment for the first quarter shall be 
     made not later than the date that is 10 calendar days after 
     the date on which the Office of Management and Budget 
     apportions the appropriations for the fiscal year for the 
     programs, services, functions, and activities subject to this 
     Contract.
       ```(iii) Applicability.--Chapter 39 of title 31, United 
     States Code, shall apply to the payment of funds due under 
     this Contract and the annual funding agreement referred to in 
     clause (i).
       ```(7) Records and monitoring.--
       ```(A) In general.--Except for previously provided copies 
     of tribal records that the Secretary demonstrates are clearly 
     required to be maintained as part of the recordkeeping system 
     of the Department of the Interior or the Department of Health 
     and Human Services (or both), records of the Contractor shall 
     not be considered Federal records for purposes of chapter 5 
     of title 5, United States Code.
       ```(B) Recordkeeping system.--The Contractor shall maintain 
     a recordkeeping system and, upon reasonable advance request, 
     provide reasonable access to such records to the Secretary.
       ```(C) Responsibilities of contractor.--The Contractor 
     shall be responsible for managing the day-to-day operations 
     conducted under this Contract and for monitoring activities 
     conducted under this Contract to ensure compliance with the 
     contract and applicable Federal requirements. With respect to 
     the monitoring activities of the Secretary, the routine 
     monitoring visits shall be limited to not more than one 
     performance monitoring visit for this Contract by the head of 
     each operating division, departmental bureau, or departmental 
     agency, or duly authorized representative of such head 
     unless--
       ```(i) the Contractor agrees to one or more additional 
     visits; or
       ```(ii) the appropriate official determines that there is 
     reasonable cause to believe that grounds for reassumption of 
     the Contract, suspension of contract payments, or other 
     serious contract performance deficiency may exist.

     No additional visit referred to in clause (ii) shall be made 
     until such time as reasonable advance notice that includes a 
     description of the nature of the problem that requires the 
     additional visit has been given to the Contractor.
       ```(8) Property.--
       ```(A) In general.--As provided in section 105(f) of the 
     Indian Self-Determination and Education Assistance Act (25 
     U.S.C. 450j(f)), at the request of the Contractor, the 
     Secretary may make available, or transfer to the Contractor, 
     all reasonably divisible real property, facilities, 
     equipment, and personal property that the Secretary has used 
     to provide or administer the programs, services, functions, 
     and activities covered by this Contract. A mutually agreed 
     upon list specifying the property, facilities, and equipment 
     so furnished shall also be prepared by the Secretary, with 
     the concurrence of the Contractor, and periodically revised 
     by the Secretary, with the concurrence of the Contractor.
       ```(B) Records.--The Contractor shall maintain a record of 
     all property referred to in subparagraph (A) or other 
     property acquired by the Contractor under section 
     105(f)(2)(A) of such Act for purposes of replacement.
       ```(C) Joint use agreements.--Upon the request of the 
     Contractor, the Secretary and the Contractor shall enter into 
     a separate joint use agreement to address the shared use by 
     the parties of real or personal property that is not 
     reasonably divisible.
       ```(D) Acquisition of property.--The Contractor is granted 
     the authority to acquire such excess property as the 
     Contractor may determine to be appropriate in the judgment of 
     the Contractor to support the programs, services, functions, 
     and activities operated pursuant to this Contract.
       ```(E) Confiscated or excess property.--The Secretary shall 
     assist the Contractor in obtaining such confiscated or excess 
     property as may become available to tribes, tribal 
     organizations, or local governments.
       ```(F) Screener identification card.--A screener 
     identification card (General Services Administration form 
     numbered 2946) shall be issued to the Contractor not later 
     than the effective date of this Contract. The designated 
     official shall, upon request, assist the Contractor in 
     securing the use of the card.
       ```(G) Capital equipment.--The Contractor shall determine 
     the capital equipment, leases, rentals, property, or services 
     the Contractor requires to perform the obligations of the 
     Contractor under this subsection, and shall acquire and 
     maintain records of such capital equipment, property rentals, 
     leases, property, or services through applicable procurement 
     procedures of the Contractor.
       ```(9) Availability of funds.--Notwithstanding any other 
     provision of law, any funds provided under this contract--
       ```(A) shall remain available until expended; and
       ```(B) with respect to such funds, no further--
       ```(i) approval by the Secretary, or
       ```(ii) justifying documentation from the Contractor, shall 
     be required prior to the expenditure of such funds.
       ```(10) Transportation.--Beginning on the effective date of 
     this Contract, the Secretary shall authorize the Contractor 
     to obtain interagency motor pool vehicles and related 
     services for performance of any activities carried out under 
     this Contract.
       ```(11) Federal program guidelines, manuals, or policy 
     directives.--Except as specifically provided in the Indian 
     Self-Determination and Education Assistance Act (25 U.S.C. 
     450 et seq.) the Contractor is not required to abide by 
     program guidelines, manuals, or policy directives of the 
     Secretary, unless otherwise agreed to by the Contractor and 
     the Secretary, or otherwise required by law.
       ```(12) Disputes.--
       ```(A) Third-party mediation defined.--For the purposes of 
     this Contract, the term ``third-party mediation'' means a 
     form of mediation whereby the Secretary and the Contractor 
     nominate a third party who is not employed by or 
     significantly involved with the Secretary of the Interior, 
     the Secretary of Health and Human Services, or the 
     Contractor, to serve as a third-party mediator to mediate 
     disputes under this Contract.
       ```(B) Alternative procedures.--In addition to, or as an 
     alternative to, remedies and procedures prescribed by section 
     110 of the Indian Self-Determination and Education Assistance 
     Act (25 U.S.C. 450m-1), the parties to this Contract may 
     jointly--
       ```(i) submit disputes under this Contract to third-party 
     mediation;
       ```(ii) submit the dispute to the adjudicatory body of the 
     Contractor, including the tribal court of the Contractor;
       ```(iii) submit the dispute to mediation processes provided 
     for under the laws, policies, or procedures of the 
     Contractor; or
       ```(iv) use the administrative dispute resolution processes 
     authorized in subchapter IV of chapter 5 of title 5, United 
     States Code.
       ```(C) Effect of decisions.--The Secretary shall be bound 
     by decisions made pursuant to the processes set forth in 
     subparagraph (B), except that the Secretary shall not be 
     bound by any decision that significantly conflicts with the 
     interests of Indians or the United States.
       ```(13) Administrative procedures of contractor.--Pursuant 
     to the Indian Civil Rights Act of 1968 (25 U.S.C. 1301 et 
     seq.), the laws, policies, and procedures of the Contractor 
     shall provide for administrative due process (or the 
     equivalent of administrative due process) with respect to 
     programs, services, functions, and activities that are 
     provided by the Contractor pursuant to this Contract.
       ```(14) Successor annual funding agreement.--
       ```(A) In general.--Negotiations for a successor annual 
     funding agreement, provided for in subsection (f)(2), shall 
     begin not later than 120 days prior to the conclusion of the 
     preceding annual funding agreement. Except as provided in 
     section 105(c)(2) of the Indian Self-Determination and 
     Education Assistance Act (25 U.S.C. 450j(c)(2)) the funding 
     for each such successor annual funding agreement shall only 
     be reduced pursuant to section 106(b) of such Act (25 U.S.C. 
     450j-1(b)).
       ```(B) Information.--The Secretary shall prepare and supply 
     relevant information, and promptly comply with any request by 
     the Contractor for information that the Contractor reasonably 
     needs to determine the amount of funds that may be available 
     for a successor annual funding agreement, as provided for in 
     subsection (f)(2) of this Contract.
       ```(15) Contract requirements; approval by secretary.--
       ```(A) In general.--Except as provided in subparagraph (B), 
     for the term of the Contract, section 2103 of the Revised 
     Statutes (25 U.S.C. 81) and section 16 of the Act of June 18, 
     1934 (48 Stat. 987, chapter 576; 25 U.S.C. 476), shall not 
     apply to any contract entered into in connection with this 
     Contract.
       ```(B) Requirements.--Each Contract entered into by the 
     Contractor with a third party in connection with performing 
     the obligations of the Contractor under this Contract shall--
       ```(i) be in writing;
       ```(ii) identify the interested parties, the authorities of 
     such parties, and purposes of the Contract;
       ```(iii) state the work to be performed under the Contract; 
     and
       ```(iv) state the process for making any claim, the 
     payments to be made, and the terms of the Contract, which 
     shall be fixed.
       ```(c) Obligation of the Contractor.--
       ```(1) Contract performance.--Except as provided in 
     subsection (d)(2), the Contractor shall perform the programs, 
     services, functions, and activities as provided in the annual 
     funding agreement under subsection (f)(2) of this Contract.
       ```(2) Amount of funds.--The total amount of funds to be 
     paid under this Contract pursuant to section 106(a) shall be 
     determined in an annual funding agreement entered into 
     between the Secretary and the Contractor, which shall be 
     incorporated into this Contract.
       ```(3) Contracted programs.--Subject to the availability of 
     appropriated funds, the Contractor shall administer the 
     programs, services, functions, and activities identified in 
     this Contract and funded through the annual funding agreement 
     under subsection (f)(2).
       ```(4) Trust services for individual indians.--
       ```(A) In general.--To the extent that the annual funding 
     agreement provides funding for the delivery of trust services 
     to individual Indians that have been provided by the 
     Secretary, the Contractor shall maintain at least the same 
     level of service as the Secretary provided for such 
     individual Indians, subject to the availability of 
     appropriated funds for such services.
       ```(B) Trust services to individual indians.--For the 
     purposes of this paragraph only, the term ``trust services 
     for individual Indians'' means only those services that 
     pertain to land or financial management connected to 
     individually held allotments.
       ```(5) Fair and uniform services.--The Contractor shall 
     provide services under this Contract in a fair and uniform 
     manner and shall provide access to an administrative or 
     judicial body empowered to adjudicate or otherwise resolve 
     complaints, claims, and grievances brought by program 
     beneficiaries against the Contractor arising out of the 
     performance of the Contract.
       ```(d) Obligation of the United States.--
       ```(1) Trust responsibility.--
       ```(A) In general.--The United States reaffirms the trust 
     responsibility of the United States to the ____ Indian 
     tribe(s) to protect and conserve the trust resources of the 
     Indian tribe(s) and the trust resources of individual 
     Indians.
       ```(B) Construction of contract.--Nothing in this Contract 
     may be construed to terminate, waive, modify, or reduce the 
     trust responsibility of the United States to the tribe(s) or 
     individual Indians. The Secretary shall act in good faith in 
     upholding such trust responsibility.
       ```(2) Good faith.--To the extent that health programs are 
     included in this Contract, and within available funds, the 
     Secretary shall act in good faith in cooperating with the 
     Contractor to achieve the goals set forth in the Indian 
     Health Care Improvement Act (25 U.S.C. 1601 et seq.).
       ```(3) Programs retained.--As specified in the annual 
     funding agreement, the United States hereby retains the 
     programs, services, functions, and activities with respect to 
     the tribe(s) that are not specifically assumed by the 
     Contractor in the annual funding agreement under subsection 
     (f)(2).
       ```(e) Other Provisions.--
       ```(1) Designated officials.--Not later than the effective 
     date of this Contract, the United States shall provide to the 
     Contractor, and the Contractor shall provide to the United 
     States, a written designation of a senior official to serve 
     as a representative for notices, proposed amendments to the 
     Contract, and other purposes for this Contract.
       ```(2) Contract modifications or amendment.--
       ```(A) In general.--Except as provided in subparagraph (B), 
     no modification to this Contract shall take effect unless 
     such modification is made in the form of a written amendment 
     to the Contract, and the Contractor and the Secretary provide 
     written consent for the modification.
       ```(B) Exception.--The addition of supplemental funds for 
     programs, functions, and activities (or portions thereof) 
     already included in the annual funding agreement under 
     subsection (f)(2), and the reduction of funds pursuant to 
     section 106(b)(2), shall not be subject to subparagraph (A).
       ```(3) Officials not to benefit.--No Member of Congress, or 
     resident commissioner, shall be admitted to any share or part 
     of any contract executed pursuant to this Contract, or to any 
     benefit that may arise from such contract. This paragraph may 
     not be construed to apply to any contract with a third party 
     entered into under this Contract if such contract is made 
     with a corporation for the general benefit of the 
     corporation.
       ```(4) Covenant against contingent fees.--The parties 
     warrant that no person or selling agency has been employed or 
     retained to solicit or secure any contract executed pursuant 
     to this Contract upon an agreement or understanding for a 
     commission, percentage, brokerage, or contingent fee, 
     excepting bona fide employees or bona fide established 
     commercial or selling agencies maintained by the Contractor 
     for the purpose of securing business.
       ```(f) Attachments.--
       ```(1) Approval of contract.--Unless previously furnished 
     to the Secretary, the resolution of the ____ Indian tribe(s) 
     authorizing the contracting of the programs, services, 
     functions, and activities identified in this Contract is 
     attached to this Contract as attachment 1.
       ```(2) Annual funding agreement.--
       ```(A) In general.--The annual funding agreement under this 
     Contract shall only contain--
       ```(i) terms that identify the programs, services, 
     functions, and activities to be performed or administered, 
     the general budget category assigned, the funds to be 
     provided, and the time and method of payment; and
       ```(ii) such other provisions, including a brief 
     description of the programs, services, functions, and 
     activities to be performed (including those supported by 
     financial resources other than those provided by the 
     Secretary), to which the parties agree.
       ```(B) Incorporation by reference.--The annual funding 
     agreement is hereby incorporated in its entirety in this 
     Contract and attached to this Contract as attachment 2.'''.

     SEC. 104. ADDITIONAL AMENDMENTS.

       The Indian Self-Determination and Education Assistance Act 
     (25 U.S.C. 450 et seq.), as amended by sections 102 and 103, 
     is further amended--
       (1) in section 109--
       (A) by inserting after ``pursuant to such contract or grant 
     agreement,'' the following ``or in the management of trust 
     fund, trust lands or interests in such lands pursuant to such 
     contract or grant agreement,'';
       (B) by striking ``action as prescribed by him'' and all 
     that follows through ``in such cases, he'' and inserting the 
     following: ``action as prescribed by the Secretary to remedy 
     the contract deficiency, except that the appropriate 
     Secretary may, upon written notice to a tribal organization, 
     and the tribe served by the tribal organization, immediately 
     rescind a contract or grant, in whole or in part, and resume 
     control or operation of a program, activity, function, or 
     service, if the Secretary finds that (i) there is an 
     immediate threat of imminent harm to the safety of any 
     person, or imminent substantial and irreparable harm to trust 
     funds, trust lands, or interests in such lands, and (ii) such 
     threat arises from the failure of the contractor to fulfill 
     the requirements of the contract. In such cases, the 
     Secretary'';
       (C) by inserting after ``rescind such contract or grant 
     agreement'' the following: ``, in whole or in part,'';
       (D) by striking the second period after ``the tribal 
     organization may approve''; and
       (E) by inserting before the last sentence, the following 
     new sentence: ``In any hearing or appeal provided for under 
     this section, the Secretary shall have the burden of proof to 
     establish, by clearly demonstrating the validity of the 
     grounds for rescinding, assuming, or reassuming the contract 
     that is the subject of the hearing.'';
       (2) in section 110(a), by inserting immediately before the 
     period at the end the following: ``(including immediate 
     injunctive relief to reverse a declination finding under 
     section 102(a)(2) or to compel the Secretary to award and 
     fund an approved self-determination contract)''; and
       (3) in section 110(d), by inserting immediately before the 
     period at the end the following: ``, except that all 
     administrative appeals relating to such contracts shall be 
     heard by the Interior Board of Contract Appeals established 
     pursuant to section 8 of such Act (41 U.S.C. 607)''.

     SEC. 105. REGULATIONS.

       The Indian Self-Determination and Education Assistance Act 
     (25 U.S.C. 450 et seq.), as amended by sections 2 through 4, 
     is further amended--
       (1) by striking subsections (a) and (b) of section 107 and 
     inserting the following new subsections:
       ``(a)(1) Except as may be specifically authorized in this 
     subsection, or in any other provision of this Act, the 
     Secretary of the Interior and the Secretary of Health and 
     Human Services may not promulgate any regulation, nor impose 
     any nonregulatory requirement, relating to self-determination 
     contracts or the approval, award, or declination of such 
     contracts, except that the Secretary of the Interior and the 
     Secretary of Health and Human Services may promulgate 
     regulations under this Act relating to chapter 171 of title 
     28, United States Code, commonly known as the `Federal Tort 
     Claims Act', the Contract Disputes Act of 1978 (41 U.S.C. 601 
     et seq.), declination and waiver procedures, appeal 
     procedures, reassumption procedures, discretionary grant 
     procedures for grants awarded under section 103, property 
     donation procedures arising under section 105(f), internal 
     agency procedures relating to the implementation of this Act, 
     retrocession and tribal organization relinquishment 
     procedures, contract proposal contents, conflicts of 
     interest, construction, programmatic reports and data 
     requirements, procurement standards, property management 
     standards, and financial management standards.
       ``(2)(A) The regulations promulgated under this Act, 
     including the regulations referred to in this subsection, 
     shall be promulgated--
       ``(i) in conformance with sections 552 and 553 of title 5, 
     United States Code and subsections (c), (d), and (e) of this 
     section; and
       ``(ii) as a single set of regulations in title 25 of the 
     Code of Federal Regulations.
       ``(B) The authority to promulgate regulations set forth in 
     this Act shall expire if final regulations are not 
     promulgated within 18 months after the date of enactment of 
     the Indian Self-Determination Contract Reform Act of 1994.
       ``(b) The provisions of this Act shall supersede any 
     conflicting provisions of law (including any conflicting 
     regulations) in effect on the day before the date of 
     enactment of the Indian Self-Determination Contract Reform 
     Act of 1994, and the Secretary is authorized to repeal any 
     regulation inconsistent with the provisions of this Act.''; 
     and
       (2) by adding at the end of section 107, the following new 
     subsections:
       ``(d)(1) In drafting and promulgating regulations as 
     provided in subsection (a) (including drafting and 
     promulgating any revised regulations), the Secretary of the 
     Interior and the Secretary of Health and Human Services shall 
     confer with, and allow for active participation by, 
     representatives of Indian tribes, tribal organizations, and 
     individual tribal members.
       ``(2)(A) In carrying out rulemaking processes under this 
     Act, the Secretary of the Interior and the Secretary of 
     Health and Human Services shall follow the guidance of--
       ``(i) subchapter III of chapter 5 of title 5, United States 
     Code, commonly known as the `Negotiated Rulemaking Act of 
     1990'; and
       ``(ii) the recommendations of the Administrative Conference 
     of the United States numbered 82-4 and 85-5 entitled 
     `Procedures for Negotiating Proposed Regulations' under 
     sections 305.82-4 and 305.85-5 of title 1, Code of Federal 
     Regulations, and any successor recommendation or law 
     (including any successor regulation).
       ``(B) The tribal participants in the negotiation process 
     referred to in subparagraph (A) shall be nominated by and 
     shall represent the groups described in this paragraph and 
     shall include tribal representatives from all geographic 
     regions.
       ``(C) The negotiations referred to in subparagraph (B) 
     shall be conducted in a timely manner. Proposed regulations 
     to implement the amendments made by the Indian Self-
     Determination Contract Reform Act of 1994 shall be published 
     in the Federal Register by the Secretary of the Interior and 
     the Secretary of Health and Human Services not later than 180 
     days after the date of enactment of such Act.
       ``(D) Notwithstanding any other provision of law (including 
     any regulation), the Secretary of the Interior and the 
     Secretary of Health and Human Services are authorized to 
     jointly establish and fund such interagency committees or 
     other interagency bodies, including advisory bodies comprised 
     of tribal representatives, as may be necessary or appropriate 
     to carry out the provisions of this Act.
       ``(E) If the Secretary determines that an extension of the 
     deadlines under subsection (a)(2)(B) and subparagraph (C) of 
     this paragraph is appropriate, the Secretary may submit 
     proposed legislation to Congress for the extension of such 
     deadlines.
       ``(e) The Secretary may, with respect to a contract entered 
     into under this Act, make exceptions in the regulations 
     promulgated to carry out this Act, or waive such regulations, 
     if the Secretary finds that such exception or waiver is in 
     the best interest of the Indians served by the contract or is 
     consistent with the policies of this Act, and is not contrary 
     to statutory law. In reviewing each request, the Secretary 
     shall follow the timeline, findings, assistance, hearing, and 
     appeal procedures set forth in section 102.''.

     SEC. 106. CONFORMING AMENDMENTS.

       Section 105(h) of the Indian Self-Determination and 
     Education Assistance Act (25 U.S.C. 450j(h)) is amended by 
     striking ``and the rules and regulations adopted by the 
     Secretaries of the Interior and Health and Human Services 
     pursuant to section 107 of this Act''.
                       TITLE II--SELF-GOVERNANCE

     SEC. 201. SHORT TITLE.

       This title may be cited as the ``Tribal Self-Governance Act 
     of 1994''.

     SEC. 202. FINDINGS.

       Congress finds that--
       (1) the tribal right of self-government flows from the 
     inherent sovereignty of Indian tribes and nations;
       (2) the United States recognizes a special government-to-
     government relationship with Indian tribes, including the 
     right of the tribes to self-governance, as reflected in the 
     Constitution, treaties, Federal statutes, and the course of 
     dealings of the United States with Indian tribes;
       (3) although progress has been made, the Federal 
     bureaucracy, with its centralized rules and regulations, has 
     eroded tribal self-governance and dominates tribal affairs;
       (4) the Tribal Self-Governance Demonstration Project was 
     designed to improve and perpetuate the government-to-
     government relationship between Indian tribes and the United 
     States and to strengthen tribal control over Federal funding 
     and program management; and
       (5) Congress has reviewed the results of the Tribal Self-
     Governance Demonstration Project and finds that--
       (A) transferring control to tribal governments, upon tribal 
     request, over funding and decisionmaking for Federal 
     programs, services, functions, and activities, or portions 
     thereof, is an effective way to implement the Federal policy 
     of government-to-government relations with Indian tribes; and
       (B) transferring control to tribal governments, upon tribal 
     request, over funding and decisionmaking for Federal 
     programs, services, functions, and activities strengthens the 
     Federal policy of Indian self-determination.

     SEC. 203. DECLARATION OF POLICY.

       It is the policy of this title to permanently establish and 
     implement tribal self-governance--
       (1) to enable the United States to maintain and improve its 
     unique and continuing relationship with, and responsibility 
     to, Indian tribes;
       (2) to permit each Indian tribe to choose the extent of the 
     participation of such tribe in self-governance;
       (3) to coexist with the provisions of the Indian Self-
     Determination Act relating to the provision of Indian 
     services by designated Federal agencies;
       (4) to ensure the continuation of the trust responsibility 
     of the United States to Indian tribes and Indian individuals;
       (5) to permit an orderly transition from Federal domination 
     of programs and services to provide Indian tribes with 
     meaningful authority to plan, conduct, redesign, and 
     administer programs, services, functions, and activities that 
     meet the needs of the individual tribal communities; and
       (6) to provide for an orderly transition through a planned 
     and measurable parallel reduction in the Federal bureaucracy.

     SEC. 204. TRIBAL SELF-GOVERNANCE.

       The Indian Self-Determination and Education Assistance Act 
     is amended by adding at the end the following new title:
                   ``TITLE IV--TRIBAL SELF-GOVERNANCE

     ``SEC. 401. ESTABLISHMENT.

       ``The Secretary of the Interior (hereinafter in this title 
     referred to as the `Secretary') shall establish and carry out 
     a program within the Department of the Interior to be known 
     as Tribal Self-Governance (hereinafter in this title referred 
     to as `Self-Governance') in accordance with this title.

     ``SEC. 402. SELECTION OF PARTICIPATING INDIAN TRIBES.

       ``(a) Continuing Participation.--Each Indian tribe that is 
     participating in the Tribal Self-Governance Demonstration 
     Project at the Department of the Interior under title III on 
     the date of enactment of this title shall thereafter 
     participate in Self-Governance under this title and cease 
     participation in the Tribal Self-Governance Demonstration 
     Project under title III with respect to the Department of the 
     Interior.
       ``(b) Additional Participants.--(1) In addition to those 
     Indian tribes participating in Self-Governance under 
     subsection (a), the Secretary, acting through the Director of 
     the Office of Self-Governance, may select up to 20 new tribes 
     per year from the applicant pool described in subsection (c) 
     to participate in Self-Governance.
       ``(2) If each tribe requests, two or more otherwise 
     eligible Indian tribes may be treated as a single Indian 
     tribe for the purpose of participating in Self-Governance as 
     a consortium.
       ``(c) Applicant Pool.--The qualified applicant pool for 
     Self-Governance shall consist of each tribe that--
       ``(1) successfully completes the planning phase described 
     in subsection (d);
       ``(2) has requested participation in Self-Governance by 
     resolution or other official action by the tribal governing 
     body; and
       ``(3) has demonstrated, for the previous three fiscal 
     years, financial stability and financial management 
     capability as evidenced by the tribe having no material audit 
     exceptions in the required annual audit of the self-
     determination contracts of the tribe.
       ``(d) Planning Phase.--Each Indian tribe seeking to begin 
     participation in Self-Governance shall complete a planning 
     phase in accordance with this subsection. The tribe shall be 
     eligible for a grant to plan and negotiate participation in 
     Self-Governance. The planning phase shall include--
       ``(1) legal and budgetary research; and
       ``(2) internal tribal government planning and 
     organizational preparation.

     ``SEC. 403. FUNDING AGREEMENTS.

       ``(a) Authorization.--The Secretary shall negotiate and 
     enter into an annual written funding agreement with the 
     governing body of each participating tribal government in a 
     manner consistent with the Federal Government's laws and 
     trust relationship to and responsibility for the Indian 
     people.
       ``(b) Contents.--Each funding agreement shall--
       ``(1) authorize the tribe to plan, conduct, consolidate, 
     and administer programs, services, functions, and activities, 
     or portions thereof, administered by the Department of the 
     Interior through the Bureau of Indian Affairs, without regard 
     to the agency or office of the Bureau of Indian Affairs 
     within which the program, service, function, and activity, or 
     portion thereof, is performed, including funding for agency, 
     area, and central office functions in accordance with 
     subsection (g)(3), and including any program, service, 
     function, and activity, or portion thereof, administered 
     under the authority of--
       ``(A) the Act of April 16, 1934 (25 U.S.C. 452 et seq.);
       ``(B) the Act of November 2, 1921 (25 U.S.C. 13); and
       ``(C) programs, services, functions, and activities or 
     portions thereof administered by the Secretary of the 
     Interior that are otherwise available to Indian tribes or 
     Indians for which appropriations are made to agencies other 
     than the Department of the Interior;
       ``(2) subject to such terms as may be negotiated, authorize 
     the tribe to plan, conduct, consolidate, and administer 
     programs, services, functions, and activities, or portions 
     thereof, administered by the Department of the Interior, 
     other than through the Bureau of Indian Affairs, that are 
     otherwise available to Indian tribes or Indians, as 
     identified in section 405(c), except that nothing in this 
     subsection may be construed to provide any tribe with a 
     preference with respect to the opportunity of the tribe to 
     administer programs, services, functions, and activities, or 
     portions thereof, unless such preference is otherwise 
     provided for by law;
       ``(3) subject to the terms of the agreement, authorize the 
     tribe to redesign or consolidate programs, services, 
     functions, and activities, or portions thereof, and 
     reallocate funds for such programs, services, functions, and 
     activities, or portions thereof, except that, with respect to 
     the reallocation, consolidation, and redesign of programs 
     described in paragraph (2), a joint agreement between the 
     Secretary and the tribe shall be required;
       ``(4) prohibit the inclusion of funds provided--
       ``(A) pursuant to the Tribally Controlled Community College 
     Assistance Act of 1978 (25 U.S.C. 1801 et seq.);
       ``(B) for elementary and secondary schools under the 
     formula developed pursuant to section 1128 of the Education 
     Amendments of 1978 (25 U.S.C. 2008); and
       ``(C) the Flathead Agency Irrigation Division or the 
     Flathead Agency Power Division, except that nothing in this 
     section shall affect the contract authority of such divisions 
     under section 102;
       ``(5) specify the services to be provided, the functions to 
     be performed, and the responsibilities of the tribe and the 
     Secretary pursuant to the agreement;
       ``(6) authorize the tribe and the Secretary to reallocate 
     funds or modify budget allocations within any year, and 
     specify the procedures to be used;
       ``(7) allow for retrocession of programs or portions of 
     programs pursuant to section 105(e);
       ``(8) provide that, for the year for which, and to the 
     extent to which, funding is provided to a tribe under this 
     section, the tribe--
       ``(A) shall not be entitled to contract with the Secretary 
     for such funds under section 102, except that such tribe 
     shall be eligible for new programs on the same basis as other 
     tribes; and
       ``(B) shall be responsible for the administration of 
     programs, services, functions, and activities pursuant to 
     agreements entered into under this section; and
       ``(9) prohibit the Secretary from waiving, modifying, or 
     diminishing in any way the trust responsibility of the United 
     States with respect to Indian tribes and individual Indians 
     that exists under treaties, Executive orders, and other laws.
       ``(c) Additional Activities.--Each funding agreement 
     negotiated pursuant to subsections (a) and (b) may, in 
     accordance to such additional terms as the parties deem 
     appropriate, also include other programs, services, 
     functions, and activities, or portions thereof, administered 
     by the Secretary of the Interior which are of special 
     geographic, historical, or cultural significance to the 
     participating Indian tribe requesting a compact.
       ``(d) Provisions Relating to the Secretary.--Funding 
     agreements negotiated between the Secretary and an Indian 
     tribe shall include provisions--
       ``(1) to monitor the performance of trust functions by the 
     tribe through the annual trust evaluation, and
       ``(2) for the Secretary to reassume a program, service, 
     function, or activity, or portions thereof, if there is a 
     finding of imminent jeopardy to a physical trust asset, 
     natural resources, or public health and safety.
       ``(e) Construction Projects.--(1) Regarding construction 
     programs or projects, the Secretary and Indian tribes may 
     negotiate for the inclusion of specific provisions of the 
     Office of Federal Procurement and Policy Act and Federal 
     acquisition regulations in any funding agreement entered into 
     under this Act. Absent a negotiated agreement, such 
     provisions and regulatory requirements shall not apply.
       ``(2) In all construction projects performed pursuant to 
     this title, the Secretary shall ensure that proper health and 
     safety standards are provided for in the funding agreements.
       ``(f) Submission for Review.--Not later than 90 days before 
     the proposed effective date of an agreement entered into 
     under this section, the Secretary shall submit a copy of such 
     agreement to--
       ``(1) each Indian tribe that is served by the Agency that 
     is serving the tribe that is a party to the funding 
     agreement;
       ``(2) the Committee on Indian Affairs of the Senate; and
       ``(3) the Subcommittee on Native American Affairs of the 
     Committee on Natural Resources of the House of 
     Representatives.
       ``(g) Payment.--(1) At the request of the governing body of 
     the tribe and under the terms of an agreement entered into 
     under this section, the Secretary shall provide funding to 
     the tribe to carry out the agreement.
       ``(2) The funding agreements authorized by this title and 
     title III of this Act shall provide for advance payments to 
     the tribes in the form of annual or semi-annual installments 
     at the discretion of the tribes.
       ``(3) Subject to paragraph (4) of this subsection and 
     paragraphs (1) through (3) of subsection (b), the Secretary 
     shall provide funds to the tribe under an agreement under 
     this title for programs, services, functions, and activities, 
     or portions thereof, in an amount equal to the amount that 
     the tribe would have been eligible to receive under contracts 
     and grants under this Act, including amounts for direct 
     program and contract support costs and, in addition, any 
     funds that are specifically or functionally related to the 
     provision by the Secretary of services and benefits to the 
     tribe or its members, without regard to the organization 
     level within the Department where such functions are carried 
     out.
       ``(4) Funds for trust services to individual Indians shall 
     be available under an agreement entered into under this 
     section only to the extent that the same services that would 
     have been provided by the Secretary are provided to 
     individual Indians by the tribe.
       ``(h) Civil Actions.--(1) Except as provided in paragraph 
     (2), for the purposes of section 110, the term `contract' 
     shall include agreements entered into under this title.
       ``(2) For the period that an agreement entered into under 
     this title is in effect, the provisions of section 2103 of 
     the Revised Statutes of the United States (25 U.S.C. 81), and 
     section 16 of the Act of June 18, 1934 (25 U.S.C. 476), shall 
     not apply to attorney and other professional contracts by 
     Indian tribal governments participating in Self-Governance 
     under this title.
       ``(i) Facilitation.--(1) Except as otherwise provided by 
     law, the Secretary shall interpret each Federal law and 
     regulation in a manner that will facilitate--
       ``(A) the inclusion of programs, services, functions, and 
     activities in the agreements entered into under this section; 
     and
       ``(B) the implementation of agreements entered into under 
     this section.
       ``(2)(A) A tribe may submit a written request for a waiver 
     to the Secretary identifying the regulation sought to be 
     waived and the basis for the request.
       ``(B) Not later than 60 days after receipt by the Secretary 
     of a written request by a tribe to waive application of a 
     Federal regulation for an agreement entered into under this 
     section, the Secretary shall either approve or deny the 
     requested waiver in writing to the tribe. A denial may be 
     made only upon a specific finding by the Secretary that 
     identified language in the regulation may not be waived 
     because such waiver is prohibited by Federal law. The 
     Secretary's decision shall be final for the Department.
       ``(j) Funds.--All funds provided under funding agreements 
     entered into pursuant to this Act, and all funds provided 
     under contracts or grants made pursuant to this Act, shall be 
     treated as non-Federal funds for purposes of meeting matching 
     requirements under any other Federal law.
       ``(k) Disclaimer.--Nothing in this section is intended or 
     shall be construed to expand or alter existing statutory 
     authorities in the Secretary so as to authorize the Secretary 
     to enter into any agreement under sections 403(b)(2) and 
     405(c)(1) with respect to functions that are inherently 
     Federal or where the statute establishing the existing 
     program does not authorize the type of participation sought 
     by the tribe: Provided, however an Indian tribe or tribes 
     need not be identified in the authorizing statute in order 
     for a program or element of a program to be included in a 
     compact under section 403(b)(2).

     ``SEC. 404. BUDGET REQUEST.

       ``The Secretary shall identify, in the annual budget 
     request of the President to the Congress under section 1105 
     of title 31, United States Code, any funds proposed to be 
     included in agreements authorized under this title.

     ``SEC. 405. REPORTS.

       ``(a) Requirement.--The Secretary shall submit to Congress 
     a written report on January 1 of each year following the date 
     of enactment of this title regarding the administration of 
     this title.
       ``(b) Contents.--The report shall--
       ``(1) identify the relative costs and benefits of Self-
     Governance;
       ``(2) identify, with particularity, all funds that are 
     specifically or functionally related to the provision by the 
     Secretary of services and benefits to Self-Governance tribes 
     and their members;
       ``(3) identify the funds transferred to each Self-
     Governance tribe and the corresponding reduction in the 
     Federal bureaucracy;
       ``(4) include the separate views of the tribes; and
       ``(5) include the funding formula for individual tribal 
     shares of Central Office funds, together with the comments of 
     affected Indian tribes, developed under subsection (d).
       ``(c) Report on Non-BIA Programs.--(1) In order to optimize 
     opportunities for including non-Bureau of Indian Affairs 
     programs, services, functions, and activities, or portions 
     thereof, in agreements with tribes participating in Self-
     Governance under this title, the Secretary shall--
       ``(A) review all programs, services, functions, and 
     activities, or portions thereof, administered by the 
     Department of the Interior, other than through the Bureau of 
     Indian Affairs, without regard to the agency or office 
     concerned; and
       ``(B) not later than 90 days after the date of enactment of 
     this title, provide to the appropriate committees of Congress 
     a listing of all such programs, services, functions, and 
     activities, or portions thereof, that the Secretary 
     determines, with the concurrence of tribes participating in 
     Self-Governance under this title, are eligible for inclusion 
     in such agreements at the request of a participating Indian 
     tribe.
       ``(2) The Secretary shall establish programmatic targets, 
     after consultation with tribes participating in Self-
     Governance under this title, to encourage bureaus of the 
     Department to assure that a significant portion of such 
     programs, services, functions, and activities are actually 
     included in the agreements negotiated under section 403.
       ``(3) The listing and targets under paragraphs (1) and (2) 
     shall be published in the Federal Register and be made 
     available to any Indian tribe participating in Self-
     Governance under this title. The list shall be published 
     before January 1, 1995, and annually thereafter by January 1 
     preceding the fiscal year in which the targets are to be met.
       ``(4) Thereafter, the Secretary shall annually review and 
     publish in the Federal Register, after consultation with 
     tribes participating in Self-Governance under this title, a 
     revised listing and programmatic targets.
       ``(d) Report on Central Office Funds.--Within 90 days after 
     the date of the enactment of this title, the Secretary shall, 
     in consultation with Indian tribes, develop a funding formula 
     to determine the individual tribal share of funds controlled 
     by the Central Office of the Bureau of Indian Affairs for 
     inclusion in the Self-Governance compacts. The Secretary 
     shall include such formula in the annual report submitted to 
     the Congress under subsection (b), together with the views of 
     the affected Indian tribes.

     ``SEC. 406. DISCLAIMERS.

       ``(a) Other Services, Contracts, and Funds.--Nothing in 
     this title shall be construed to limit or reduce in any way 
     the services, contracts, or funds that any other Indian tribe 
     or tribal organization is eligible to receive under section 
     102 or any other applicable Federal law.
       ``(b) Federal Trust Responsibilities.--Nothing in this Act 
     shall be construed to diminish the Federal trust 
     responsibility to Indian tribes, individual Indians, or 
     Indians with trust allotments.
       ``(c) Application of Other Sections of Act.--All provisions 
     of sections 6, 102(c), 104, 105(f), 110, and 111 of this Act 
     shall apply to agreements provided under this title.

     ``SEC. 407. REGULATIONS.

       ``(a) In General.--Not later than 90 days after the date of 
     enactment of this title, at the request of a majority of the 
     Indian tribes with agreements under of this title, the 
     Secretary shall initiate procedures under subchapter III of 
     chapter 5 of title 5, United States Code, to negotiate and 
     promulgate such regulations as are necessary to carry out 
     this title.
       ``(b) Committee.--A negotiated rulemaking committee 
     established pursuant to section 565 of title 5, United States 
     Code, to carry out this section shall have as its members 
     only Federal and tribal government representatives, a 
     majority of whom shall be representatives of Indian tribes 
     with agreements under this title.
       ``(c) Adaptation of Procedures.--The Secretary shall adapt 
     the negotiated rulemaking procedures to the unique context of 
     Self-Governance and the government-to-government relationship 
     between the United States and the Indian tribes.
       ``(d) Effect.--The lack of promulgated regulations shall 
     not limit the effect of this title.

     ``SEC. 408. AUTHORIZATION OF APPROPRIATIONS.

       ``There are authorized to be appropriated such sums as may 
     be necessary to carry out this title.''.
  Mr. RICHARDSON (during the reading). Mr. Speaker, I ask unanimous 
consent that the amendment in the nature of a substitute be considered 
as read and printed in the Record.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentleman from New Mexico?
  There was no objection.
  The SPEAKER pro tempore. The question is on the amendment in the 
nature of a substitute offered by the gentleman from New Mexico [Mr. 
Richardson].
  The amendment in the nature of a substitute was agreed to.
  The bill was ordered to be engrossed and read a third time, was read 
the third time, and passed.


               title amendment offered by mr. richardson

  Mr. RICHARDSON. Mr. Speaker, I offer an amendment to the title.
  The Clerk read as follows:

       Amendment to the title offered by Mr. Richardson: Amend the 
     title so as to read: ``A bill to specify the terms of 
     contracts entered into by the United States and Indian tribal 
     organizations under Indian Self-Determination and Education 
     Assistance Act and to provide for tribal Self-Governance, and 
     for other purposes.''.

  The title amendment was agreed to.
  A motion to reconsider was laid on the table.

                          ____________________