[Congressional Record Volume 147, Number 12 (Tuesday, January 30, 2001)]
[Senate]
[Pages S715-S735]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. CAMPBELL (for himself and Mr. Inouye):
  S. 211. A bill to amend the Education Amendments of 1978 and the 
Tribally Controlled Schools Act of 1988 to improve education for 
Indians, Native Hawaiians, and Alaskan Natives; to the Committee on 
Indian Affairs.

[[Page S716]]

  Mr. CAMPBELL. Mr. President, I am pleased today to be joined by the 
Vice Chairman of the Committee on Indian Affairs, Senator Daniel K. 
Inouye, in introducing legislation to improve the education delivery 
systems in Indian schools so that the President's goal that ``no child 
be left behind'' is as true for Native youngsters as for all Americans.
  Grounded in the Constitution, treaties, federal statutes and court 
decisions, the United States has a unique role in the education of 
Native people. This is especially true for the Bureau of Indian Affairs 
school system for schools on or near reservations built and designed by 
the federal government. The only other school system in which the 
federal role is so significant is with Department of Defense schools 
for the children of those serving our nation in the armed forces.
  As a youngster from a troubled background and a former teacher 
myself, I firmly believe that more than ever a quality education holds 
the key to a brighter and more hopeful future. I also know that the 
life-blood of Native people and the best chance they have for improving 
the lives of all their members lies in a well-educated community. In 
short, I believe community development starts with individual 
development and education is the key.
  Like President Bush, I believe that education reform stands at the 
top of our national agenda. Education reform in Indian country is 
critical if this nation's Native people are to make the kind of 
advancement that is so clearly needed.
  The geography of much of Indian country is difficult: from wintry 
Alaska, to the windswept Plains, to the searing heat of the Southwest, 
the terrain often makes it hard to get to school, let alone do well in 
school. I believe this reality must be acknowledged as we work to 
improve Native school systems.
  Members of the Committee on Indian Affairs know all too well that the 
conditions in many, if not most, Indian schools is appalling: crumbling 
facilities, asbestos and PCBs, lead paint, lack of heat and other 
problems combine to make the schools nearly uninhabitable. Most 
members, indeed most Americans, would probably pull their children from 
school if they were subjected to these conditions.
  We made a solid start at facilities replacement and repair with the 
Fiscal Year 2001 Interior appropriations bill which provided nearly 
$300 million in funds for these purposes.
  Nevertheless, the backlog in school construction needs is still in 
the $800 to 900 million range.
  I am very encouraged by President Bush's plan to establish an Indian 
tribal school capital improvement fund of more than $900 million to 
rectify the facilities crisis.
  The bill I am introducing today, the Native American Educational 
Improvement Act of 2001, will improve education for Native people in a 
variety of ways.
  Title I of the bill will amend the Education Amendments of 1978 in 
several respects. This legislation was enacted to provide a 
comprehensive structure for the BIA funded schools system including 
grant, contract and BIA operated schools.
  The bill addresses most aspects of the BIA school system including 
standards and accreditation, facilities and various funding issues. It 
also provides guidance for how funding should be allocated by 
establishing a formula to effect a more equitable distribution of 
funds. The formula is based on weighted student units with extra weight 
given for such things as disabilities of gifted and talented abilities.
  In keeping with the policy of Indian Self Determination, the bill 
carves out a key role for Indian Tribes by requiring that actions 
undertaken pursuant to the Act be done in consultation with the Tribes. 
This emphasis on maximizing local, Indian involvement is witnessed in 
the bill in several respects including the use of negotiated rule-
making in proposing and developing regulations to carry out the Act.
  There is no single federal policy more successful than the 
contracting and compacting opportunities provided by the Indian Self 
Determination and Education Assistance Act of 1975, as amended.

  Tribes and Tribal consortia have demonstrated that when they are 
provided the resources and flexibility to design and implement programs 
and services formerly provided by the Federal government, good things 
happen: 1, the quality of those services is refined; 2, the Tribe or 
consortium enhances its administrative and managerial abilities; and 3, 
federal resources are used more efficiently and effectively.
  In keeping with this pattern, the bill authorizes Tribal contractors 
to perform all functions that are not inherently federal.
  The bill will unshackle local authorities from the constraints of 
centralized management by authorizing Tribes to waive BIA school 
standards and design and implement standards that will better meet the 
needs of that Tribe's students.
  Standards, flexibility and accreditation are important aspects of any 
good school system, but so is a sufficient pool of resources.
  This bill will help evaluate whether funding levels for BIA schools 
are sufficient and seeks a review by the General Accounting Office to 
that effect.
  While the core purpose of the Act is to provide a blueprint for the 
BIA school system, the bill I introduce today incorporates Tribal 
departments of education as well as early childhood development 
programs that provide services to meet the needs of parents and 
children under age six.
  Title II of the bill amends the Tribally Controlled Schools Act of 
1988, TCSA, by expanding the opportunities for Tribal operation of 
schools that would otherwise be run by the BIA.
  Passage of the TCSA in 1988 grew out of dissatisfaction with the 
method of contracting educational services under the Indian Self 
Determination and Education Assistance Act, P.L. 93-638, ISDEAA.
  While many services were being successfully contracted by Tribes 
under ISDEAA, education continued to be plagued with problems and 
Tribes were looking for an alternative to contracts.
  The bill I am introducing today is grounded in the concept of ``lump-
sum'' financing to Indian Tribes. This approach is intended to address 
some of the problems faced by ISDEAA contractors. That is, if a Tribe 
wants to operate a school pursuant to contract, it would be forced to 
negotiate a separate contract for each of the various school functions. 
A separate contract was required for transportation, for programs, for 
operations and maintenance, and other functions. This bill will 
consolidate these and other functions into one contract.
  The grant schools operated by Tribes are provided considerable 
latitude in managing their finances provided that four specific 
requirements are met: As long as a grant school 1, submits an annual 
program report; 2, submits an evaluation report; 3, is accredited; and 
4, adheres to the federal Single Audit Act, then that school may 
continue to enjoy the flexibility afforded it under P.L. 100-297.
  Last, to ensure that Tribal initiative and creativity are not 
thwarted unnecessarily, this bill prohibits regulations from being 
established unless specifically authorized.
  I have highlighted but a few of the major provisions included in this 
bill and I urge my colleagues to join me in supporting this important 
initiative. I ask unanimous consent that a copy of the legislation be 
printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 211

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

     SECTION 1. SHORT TITLE.

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

        TITLE I--AMENDMENTS TO THE EDUCATION AMENDMENTS OF 1978

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

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

              ``PART B--BUREAU OF INDIAN AFFAIRS PROGRAMS

     ``SEC. 1120. FINDING AND POLICY.

       ``(a) Finding.--Congress finds and recognizes that--
       ``(1) the Federal Government's unique and continuing trust 
     relationship with and responsibility to the Indian people 
     includes the education of Indian children; and

[[Page S717]]

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

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

       ``(a) Purpose; Declarations of Purpose.--
       ``(1) Purpose.--The purpose of the standards implemented 
     under this section shall be to ensure that Indian students 
     being served by a school funded by the Bureau of Indian 
     Affairs are provided with educational opportunities that 
     equal or exceed those for all other students in the United 
     States.
       ``(2) Declarations of purpose.--
       ``(A) In general.--Local school boards for schools operated 
     by the Bureau of Indian Affairs, in cooperation and 
     consultation with the appropriate tribal governing bodies and 
     their communities, are encouraged to adopt declarations of 
     purpose for education for their communities, taking into 
     account the implications of such declarations on education in 
     their communities and for their schools. In adopting such 
     declarations of purpose, the school boards shall consider the 
     effect the declarations may have on the motivation of 
     students and faculties.
       ``(B) Contents.--A declaration of purpose for a community 
     shall--
       ``(i) represent the aspirations of the community for the 
     kinds of people the community would like the community's 
     children to become; and
       ``(ii) contain an expression of the community's desires 
     that all students in the community shall--

       ``(I) become accomplished in things and ways important to 
     the students and respected by their parents and community;
       ``(II) shape worthwhile and satisfying lives for 
     themselves;
       ``(III) exemplify the best values of the community and 
     humankind; and
       ``(IV) become increasingly effective in shaping the 
     character and quality of the world all students share.

       ``(C) Standards.--The declarations of purpose shall 
     influence the standards for accreditation to be accepted by 
     the schools.
       ``(b) Studies and Surveys Relating to Standards.--Not later 
     than 1 year after the date of enactment of the Native 
     American Education Improvement Act of 2001, the Secretary, in 
     consultation with the Secretary of Education, consortia of 
     education organizations, and Indian organizations and tribes, 
     and making the fullest use possible of other existing 
     studies, surveys, and plans, shall carry out, by contract 
     with an Indian organization, studies and surveys to establish 
     and revise standards for the basic education of Indian 
     children attending Bureau funded schools. Such studies and 
     surveys shall take into account factors such as academic 
     needs, local cultural differences, type and level of language 
     skills, geographic isolation, and appropriate teacher-student 
     ratios for such children, and shall be directed toward the 
     attainment of equal educational opportunity for such 
     children.
       ``(c) Revision of Minimum Academic Standards.--
       ``(1) In general.--Not later than 2 years after the date of 
     enactment of the Native American Education Improvement Act of 
     2001, the Secretary shall--
       ``(A) propose revisions to the minimum academic standards 
     contained in part 36 of title 25, Code of Federal Regulations 
     (on the date of enactment of the Native American Education 
     Improvement Act of 2001) for the basic education of Indian 
     children attending Bureau funded schools, in accordance with 
     the purpose described in subsection (a) and the findings of 
     the studies and surveys carried out under subsection (b);
       ``(B) publish such proposed revisions to such standards in 
     the Federal Register for the purpose of receiving comments 
     from the tribes, local school boards, Bureau funded schools, 
     and other interested parties; and
       ``(C) consistent with the provisions of this section and 
     section 1130, take such actions as are necessary to 
     coordinate standards implemented under this section with--
       ``(i) the Comprehensive School Reform Plan developed by the 
     Bureau; and
       ``(ii)(I) the standards of the State in which any Bureau 
     funded school is located; or
       ``(II) in a case where schools operated by the Bureau are 
     within the boundaries of the reservation land of 1 tribe but 
     within the boundaries of more than 1 State, the standards of 
     the State selected by the tribe.
       ``(2) Final standards.--Not later than 6 months after the 
     close of the comment period for comments described in 
     paragraph (1)(B), the Secretary shall establish final 
     standards under this subsection, distribute such standards to 
     all tribes, and publish such standards in the Federal 
     Register.
       ``(3) Further revisions.--The Secretary shall revise 
     standards under this subsection periodically as necessary. 
     Prior to making any revisions of such standards, the 
     Secretary shall distribute proposed revisions of the 
     standards to all the tribes, and publish such proposed 
     revisions in the Federal Register, for the purpose of 
     receiving comments from the tribes and other interested 
     parties.
       ``(4) Applicability of standards.--Except as provided in 
     subsection (e), the final standards published under this 
     subsection shall apply to all Bureau funded schools not 
     accredited under subsection (f), and may also serve as model 
     standards for educational programs for Indian children in 
     public schools.
       ``(5) Considerations when establishing and revising 
     standards.--In establishing and revising standards under this 
     subsection, the Secretary shall take into account the unique 
     needs of Indian students and support and reinforce the 
     specific cultural heritage of each tribe.
       ``(d) Alternative or Modified Standards.--With respect to a 
     school that is located in a State or region with standards 
     that are in conflict with the standards established under 
     subsection (c), the Secretary shall provide alternative or 
     modified standards in lieu of the standards established under 
     such subsection so that the programs of such school are in 
     compliance with the minimum accreditation standards required 
     for schools in the State or region where the school is 
     located.
       ``(e) Waiver of Standards; Alternative Standards.--
       ``(1) Waiver.--A tribal governing body, or the local school 
     board so designated by the tribal governing body, shall have 
     the local authority to waive, in part or in whole, the 
     standards established under subsection (c) and (d) if such 
     standards are determined by such body or board to be 
     inappropriate for the needs of students from that tribe.
       ``(2) Alternative standards.--The tribal governing body or 
     school board involved shall, not later than 60 days after 
     providing a waiver under paragraph (1) for a school, submit 
     to the Director a proposal for alternative standards that 
     take into account the specific needs of the tribe's children. 
     Such alternative standards shall be established by the 
     Director for the school involved unless specifically rejected 
     by the Director for good cause and in writing provided to the 
     affected tribes or local school board.
       ``(f) Accreditation and Implementation of Standards.--
       ``(1) Deadline.--Not later than the second academic year 
     after publication of final standards established under 
     subsection (c) or (d), or after the approval of alternative 
     standards under subsection (e), to the extent necessary 
     funding is provided, each Bureau funded school to which such 
     standards would apply shall meet the applicable standards or 
     be accredited--
       ``(A) by a tribal accrediting body that has been accepted 
     by formal action of the appropriate tribal governing body;
       ``(B) by a regional accreditation agency;
       ``(C) in accordance with State accreditation standards for 
     the State in which the school is located; or
       ``(D) in the case of a school that is located on a 
     reservation that is located in more than 1 State, in 
     accordance with the State accreditation standards of 1 State 
     as selected by the tribal government.
       ``(2) Determination of standards to be applied.--The 
     accreditation type or standards applied for each school shall 
     be determined by the school board of the school, in 
     consultation with the Administrator of the school, provided 
     that in the case where the School Board and the Administrator 
     fail to agree on the type of accreditation and standards to 
     apply, the decision of the school board with the approval of 
     the tribal governing body shall be final.
       ``(3) Assistance to school boards.--The Secretary, through 
     contracts and grants, shall assist school boards of contract 
     or grant schools in implementing standards established under 
     subsections (c), (d), and (e), if the school boards request 
     that such standards, in part or in whole, be implemented.
       ``(4) Fiscal control and fund accounting standards.--The 
     Bureau shall, either directly or through a contract with an 
     Indian organization, establish a consistent system of 
     reporting standards for fiscal control and fund accounting 
     for all contract and grant schools. Such standards shall 
     yield data results comparable to the data provided by Bureau 
     schools.
       ``(g) Annual Plan for Meeting of Standards.--
       ``(1) In general.--Except as provided in subsections (e) 
     and (f), the Secretary shall begin to implement the standards 
     established under this section on the date of their 
     establishment.
       ``(2) Plan.--On an annual basis, the Secretary shall submit 
     to the appropriate committees of Congress, all Bureau funded 
     schools, and the tribal governing bodies of such schools a 
     detailed plan to bring all Bureau funded schools up to the 
     level required by the applicable standards established under 
     this section. Such plan shall include detailed information on 
     the status of each school's educational program in relation 
     to the applicable standards established under this section, 
     specific cost estimates for meeting such standards at each 
     school, and specific timelines for bringing each school up to 
     the level required by such standards.
       ``(h) Closure or Consolidation of Schools.--
       ``(1) In general.--Except as specifically required by law, 
     no Bureau funded school or dormitory operated on or after 
     January 1, 1992, may be closed, consolidated, or transferred 
     to another authority and no program of such a school may be 
     substantially curtailed except in accordance with the 
     requirements of this subsection.

[[Page S718]]

       ``(2) Exceptions.--This subsection (other than this 
     paragraph) shall not apply--
       ``(A) in those cases in which the tribal governing body for 
     a school, or the local school board concerned (if designated 
     by the tribal governing body to act under this paragraph), 
     requests the closure, consolidation, or substantial 
     curtailment; or
       ``(B) if a temporary closure, consolidation, or substantial 
     curtailment is required by facility conditions that 
     constitute an immediate hazard to health and safety.
       ``(3) Regulations.--The Secretary shall, by regulation, 
     promulgate standards and procedures for the closure, transfer 
     to another authority, consolidation, or substantial 
     curtailment of school programs of Bureau schools, in 
     accordance with the requirements of this subsection.
       ``(4) Notification.--
       ``(A) Consideration.--Whenever closure, transfer to another 
     authority, consolidation, or substantial curtailment of a 
     school program of a Bureau school is under active 
     consideration or review by any division of the Bureau or the 
     Department of the Interior, the head of the division or the 
     Secretary shall ensure that the affected tribe, tribal 
     governing body, and local school board, are notified (in 
     writing) immediately, kept fully and currently informed, and 
     afforded an opportunity to comment with respect to such 
     consideration or review.
       ``(B) Formal decision.--When the head of any division of 
     the Bureau or the Secretary makes a formal decision to close, 
     transfer to another authority, consolidate, or substantially 
     curtail a school program of a Bureau school, the head of the 
     division or the Secretary shall notify (in writing) the 
     affected tribes, tribal governing body, and local school 
     board at least 6 months prior to the end of the academic year 
     preceding the date of the proposed action.
       ``(C) Copies of notifications and information.--The 
     Secretary shall transmit copies of the notifications 
     described in this paragraph promptly to the appropriate 
     committees of Congress and publish such notifications copies 
     in the Federal Register.
       ``(5) Report.--
       ``(A) In general.--The Secretary shall submit a report to 
     the appropriate committees of Congress, the affected tribal 
     governing body and the designated local school board, 
     describing the process of the active consideration or review 
     referred to in paragraph (4).
       ``(B) Contents.--The report shall include the results of a 
     study of the impact of the action under consideration or 
     review on the student population of the school involved, 
     identify those students at the school with particular 
     educational and social needs, and ensure that alternative 
     services are available to such students. Such report shall 
     include a description of consultation conducted between the 
     potential service provider and current service provider of 
     such services, parents, tribal representatives, the tribe 
     involved, and the Director of the Office regarding such 
     students.
       ``(6) Limitation on certain actions.--No irreversible 
     action may be taken to further any proposed school closure, 
     transfer to another authority, consolidation, or substantial 
     curtailment described in this subsection concerning a school 
     (including any action that would prejudice the personnel or 
     programs of such school) prior to the end of the first full 
     academic year after the report described in paragraph (5) is 
     submitted.
       ``(7) Tribal governing body approval required for certain 
     actions.--The Secretary may terminate, contract, transfer to 
     any other authority, consolidate, or substantially curtail 
     the operation or facilities of--
       ``(A) any Bureau funded school that is operated on or after 
     January 1, 1999;
       ``(B) any program of such a school that is operated on or 
     after January 1, 1999; or
       ``(C) any school board of a school operated under a grant 
     under the Tribally Controlled Schools Act of 1988,

     only if the tribal governing body for the school involved 
     approves such action.
       ``(i) Application for Contracts or Grants for Non-Bureau 
     Funded Schools or Expansion of Bureau Funded Schools.--
       ``(1) In general.--
       ``(A) Applications.--
       ``(i) Tribes; school boards.--The Secretary shall only 
     consider the factors described in subparagraph (B) in 
     reviewing--

       ``(I) applications from any tribe for the awarding of a 
     contract or grant for a school that is not a Bureau funded 
     school; and
       ``(II) applications from any tribe or school board 
     associated with any Bureau funded school for the awarding of 
     a contract or grant for the expansion of a Bureau funded 
     school that would increase the amount of funds received by 
     the tribe or school board under section 1126.

       ``(ii) Limitation.--With respect to applications described 
     in this subparagraph, the Secretary shall give consideration 
     to all the factors described in subparagraph (B), but no such 
     application shall be denied based primarily upon the 
     geographic proximity of comparable public education.
       ``(B) Factors.--With respect to applications described in 
     subparagraph (A) the Secretary shall consider the following 
     factors relating to the program and services that are the 
     subject of the application:
       ``(i) The adequacy of existing facilities to support the 
     proposed program and services or the applicant's ability to 
     obtain or provide adequate facilities.
       ``(ii) Geographic and demographic factors in the affected 
     areas.
       ``(iii) The adequacy of the applicant's program plans or, 
     in the case of a Bureau funded school, of a projected needs 
     analysis conducted either by the tribe or the Bureau.
       ``(iv) Geographic proximity of comparable public education.
       ``(v) The stated needs of all affected parties, including 
     students, families, tribal governing bodies at both the 
     central and local levels, and school organizations.
       ``(vi) Adequacy and comparability of programs and services 
     already available.
       ``(vii) Consistency of the proposed program and services 
     with tribal educational codes or tribal legislation on 
     education.
       ``(viii) The history and success of these services for the 
     proposed population to be served, as determined from all 
     factors, including standardized examination performance.
       ``(2) Determination on application.--
       ``(A) Period.--The Secretary shall make a determination 
     concerning whether to approve any application described in 
     paragraph (1)(A) not later than 180 days after the date such 
     application is submitted to the Secretary.
       ``(B) Failure to make determination.--If the Secretary 
     fails to make the determination with respect to an 
     application by the date described in subparagraph (A), the 
     application shall be treated as having been approved by the 
     Secretary.
       ``(3) Requirements for applications.--
       ``(A) Approval.--Notwithstanding paragraph (2)(B), an 
     application described in paragraph (1)(A) may be approved by 
     the Secretary only if--
       ``(i) the application has been approved by the tribal 
     governing body of the students served by (or to be served by) 
     the school or program that is the subject of the application; 
     and
       ``(ii) the tribe or designated school board involved 
     submits written evidence of such approval with the 
     application.
       ``(B) Information.--Each application described in paragraph 
     (1)(A) shall contain information discussing each of the 
     factors described in paragraph (1)(B).
       ``(4) Denial of applications.--If the Secretary denies an 
     application described in paragraph (1)(A), the Secretary 
     shall--
       ``(A) state the objections to the application in writing to 
     the applicant not later than 180 days after the date the 
     application is submitted to the Secretary;
       ``(B) provide assistance to the applicant to overcome the 
     stated objections;
       ``(C) provide to the applicant a hearing on the record 
     regarding the denial, under the same rules and regulations as 
     apply under the Indian Self-Determination and Education 
     Assistance Act; and
       ``(D) provide to the applicant a notice of the applicant's 
     appeals rights and an opportunity to appeal the decision 
     resulting from the hearing under subparagraph (D).
       ``(5) Effective date of a subject application.--
       ``(A) In general.--Except as otherwise provided in this 
     paragraph, the action that is the subject of any application 
     described in paragraph (1)(A) that is approved by the 
     Secretary shall become effective--
       ``(i) on the first day of the academic year following the 
     fiscal year in which the application is approved; or
       ``(ii) on an earlier date determined by the Secretary.
       ``(B) Application treated as approved.--If an application 
     is treated as having been approved by the Secretary under 
     paragraph (2)(B), the action that is the subject of the 
     application shall become effective?--
       ``(i) on the date that is 18 months after the date on which 
     the application is submitted to the Secretary; or
       ``(ii) on an earlier date determined by the Secretary.
       ``(6) Statutory construction.--Nothing in this section 
     shall be construed to preclude the expansion of grades and 
     related facilities at a Bureau funded school, if such 
     expansion is paid for with non-Bureau funds.
       ``(j) Joint Administration.--Funds received by Bureau 
     funded schools from the Bureau of Indian Affairs and under 
     any program from the Department of Education or any other 
     Federal agency for the purpose of providing education or 
     related services, and other funds received for such education 
     and related services from non-Federally funded programs, may 
     apportion joint administrative, transportation, and program 
     costs between such programs and the funds shall be retained 
     at the school.
       ``(k) General Use of Funds.--Funds received by Bureau 
     funded schools from the Bureau of Indian Affairs and under 
     any program from the Department of Education or any other 
     Federal agency for the purpose of providing education or 
     related services may be used for schoolwide projects to 
     improve the educational program of the schools for all Indian 
     students.
       ``(l) Study on Adequacy of Funds and Formulas.--
       ``(1) Study.--The Comptroller General of the United States 
     shall conduct a study, in consultation with tribes and local 
     school boards, to determine the adequacy of funding, and 
     formulas used by the Bureau to determine funding, for 
     programs operated by Bureau funded schools, taking into 
     account unique circumstances applicable to Bureau funded 
     schools, including isolation, limited English proficiency of 
     Indian students, the costs of educating disabled Indian 
     students in isolated settings, and other factors that may 
     disproportionately increase per-pupil

[[Page S719]]

     costs, as well as expenditures for comparable purposes in 
     public schools nationally.
       ``(2) Findings.--On completion of the study under paragraph 
     (1), the Secretary shall take such action as may be necessary 
     to ensure distribution of the findings of the study to the 
     appropriate authorizing and appropriating committees of 
     Congress, all affected tribes, local school boards, and 
     associations of local school boards.

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

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

     ``SEC. 1123. SCHOOL BOUNDARIES.

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

     ``SEC. 1124. FACILITIES CONSTRUCTION.

       ``(a) National Survey of Facilities Conditions.--
       ``(1) In general.--Not later than 12 months after the date 
     of enactment of the Native American Education Improvement Act 
     of 2001, the General Accounting Office shall compile, 
     collect, and secure the data that is needed to prepare a 
     national survey of the physical conditions of all Bureau 
     funded school facilities.
       ``(2) Data and methodologies.--In preparing the national 
     survey required under paragraph (1), the General Accounting 
     Office shall use the following data and methodologies:
       ``(A) The existing Department of Defense formula for 
     determining the condition and adequacy of Department of 
     Defense facilities.
       ``(B) Data related to conditions of Bureau funded schools 
     that has previously been compiled, collected, or secured from 
     whatever source derived so long as the data is relevant, 
     timely, and necessary to the survey.
       ``(C) The methodologies of the American Institute of 
     Architects, or other accredited and reputable architecture or 
     engineering associations.
       ``(3) Consultations.--
       ``(A) In general.--In carrying out the survey required 
     under paragraph (1), the General Accounting Office shall, to 
     the maximum extent practicable, consult (and if necessary 
     contract) with national, regional, and tribal Indian 
     education organizations to ensure that a complete and 
     accurate national survey is achieved.
       ``(B) Requests for information.--All Bureau funded schools 
     shall comply with reasonable requests for information by the 
     General Accounting Office and shall respond to such requests 
     in a timely fashion.
       ``(4) Submission to congress.--Not later than 24 months 
     after the date of enactment of the Native American Education 
     Improvement Act of 2001, the General Accounting Office shall 
     submit the results of the national survey conducted under 
     paragraph (1) to the Committee on Indian Affairs and 
     Committee on Appropriations of the Senate, and the Committee 
     on Resources and Committee on Appropriations of the House.
       ``(5) Negotiated rulemaking committee.--
       ``(A) In general.--Not later than 6 months after the date 
     on which the submission is made under paragraph (4), the 
     Secretary shall establish a negotiated rule making committee 
     pursuant to section 1137(c). The negotiated rulemaking 
     committee shall prepare and submit to the Secretary the 
     following:
       ``(i) A catalogue of the condition of school facilities at 
     all Bureau funded schools that--

       ``(I) rates such facilities with respect to the rate of 
     deterioration and useful life structures and major systems;
       ``(II) establishes a routine maintenance schedule for each 
     facility; and
       ``(III) makes projections on the amount of funds needed to 
     keep each school viable, consistent with the standards of 
     this Act.

       ``(ii) A school replacement and new construction report 
     that determines replacement and new construction need, and a 
     formula for the equitable distribution of funds to address 
     such need, for Bureau funded schools. Such formula shall 
     utilize necessary factors in determining an equitable 
     distribution of funds, including--

       ``(I) the size of school;
       ``(II) school enrollment;
       ``(III) the age of the school;
       ``(IV) the condition of the school;
       ``(V) environmental factors at the school; and
       ``(VI) school isolation.

       ``(iii) A renovation repairs report that determines 
     renovation need (major and minor), and a formula for the 
     equitable distribution of funds to address such need, for 
     Bureau

[[Page S720]]

     funded schools. Such report shall identify needed repairs or 
     renovations with respect to a facility, or a part of a 
     facility, or the grounds of the facility, to remedy a need 
     based on disabilities access or health and safety changes to 
     a facility. The formula developed shall utilize necessary 
     factors in determining an equitable distribution of funds, 
     including the factors described in subparagraph (B).
       ``(B) Not later 24 months after the negotiated rulemaking 
     committee is established under subparagraph (A), the reports 
     described in clauses (ii) and (iii) of subparagraph (A) shall 
     be submitted to the committees of Congress referred to in 
     paragraph (4), the national and regional Indian education 
     organizations, and to all Indian tribes.
       ``(6) Facilities information systems support database.--The 
     Secretary shall develop a Facilities Information Systems 
     Support Database to maintain and update the information 
     contained in the reports under clauses (ii) and (iii) of 
     paragraph (5)(A) and the information contained in the survey 
     conducted under paragraph (1). The system shall be updated 
     every 3 years by the Bureau of Indian Affairs and monitored 
     by General Accounting Office, and shall be made available to 
     Indian tribes, Bureau funded schools, and Congress.
       ``(b) Compliance With Health and Safety Standards.--The 
     Secretary shall immediately begin to bring all schools, 
     dormitories, and other Indian education-related facilities 
     operated by the Bureau or under contract or grant with the 
     Bureau into compliance with all applicable tribal, Federal, 
     or State health and safety standards, whichever provides 
     greater protection (except that the tribal standards to be 
     applied shall be no greater than any otherwise applicable 
     Federal or State standards), with section 504 of the 
     Rehabilitation Act of 1973, and with the Americans with 
     Disabilities Act of 1990. Nothing in this section shall 
     require termination of the operations of any facility which 
     does not comply with such provisions and which is in use on 
     the date of the enactment of the Native American Education 
     Improvement Act of 2001.
       ``(c) Compliance Plan.--At the time that the annual budget 
     request for Bureau educational services is presented, the 
     Secretary shall submit to the appropriate committees of 
     Congress a detailed plan to bring all facilities covered 
     under subsection (b) of this section into compliance with the 
     standards referred to in subsection (b). Such plan shall 
     include detailed information on the status of each facility's 
     compliance with such standards, specific cost estimates for 
     meeting such standards at each school, and specific timelines 
     for bringing each school into compliance with such standards.
       ``(d) Construction Priorities.--
       ``(1) System to establish priorities.--The Secretary shall 
     annually prepare and submit to the appropriate committees of 
     Congress, and publish in the Federal Register, information 
     describing the system used by the Secretary to establish 
     priorities for replacement and construction projects for 
     Bureau funded schools and home-living schools, including 
     boarding schools, and dormitories. On making each budget 
     request described in subsection (c), the Secretary shall 
     publish in the Federal Register and submit with the budget 
     request a list of all of the Bureau funded school 
     construction priorities, as described in paragraph (2).
       ``(2) Long-term construction and replacement list.--In 
     addition to submitting the plan described in subsection (c), 
     the Secretary shall--
       ``(A) not later than 18 months after the date of enactment 
     of the Native American Education Improvement Act of 2001, 
     establish a long-term construction and replacement priority 
     list for all Bureau funded schools;
       ``(B) using the list prepared under subparagraph (A), 
     propose a list for the orderly replacement of all Bureau 
     funded education-related facilities over a period of 40 years 
     to facilitate planning and scheduling of budget requests;
       ``(C) publish the list prepared under subparagraph (B) in 
     the Federal Register and allow a period of not less than 120 
     days for public comment;
       ``(D) make such revisions to the list prepared under 
     subparagraph (B) as are appropriate based on the comments 
     received; and
       ``(E) publish a final list in the Federal Register.
       ``(3) Effect on other list.--Nothing in this section shall 
     be construed as interfering with or changing in any way the 
     construction and replacement priority list established by the 
     Secretary, as the list exists on the date of enactment of the 
     Native American Education Improvement Act of 2001.
       ``(e) Hazardous Condition at Bureau Funded School.--
       ``(1) Closure, consolidation, or curtailment.--
       ``(A) In general.--A Bureau funded school may be closed or 
     consolidated, and the programs of a Bureau funded school may 
     be substantially curtailed by reason of facility conditions 
     that constitute an immediate hazard to health and safety only 
     if a health and safety officer of the Bureau and an 
     individual designated by the tribe involved under 
     subparagraph (B), determine that such conditions exist at a 
     facility of the Bureau funded school.
       ``(B) Designation of individual by tribe.--To be designated 
     by a tribe for purposes of subparagraph (A), an individual 
     shall--
       ``(i) be a licensed or certified facilities safety 
     inspector;
       ``(ii) have demonstrated experience in the inspection of 
     facilities for health and safety purposes with respect to 
     occupancy; or
       ``(iii) have a significant educational background in the 
     health and safety of facilities with respect to occupancy.
       ``(C) Inspection.--In making a determination described in 
     subparagraph (A), the Bureau health and safety officer and 
     the individual designated by the tribe shall conduct an 
     inspection of the conditions of such facility in order to 
     determine whether conditions at such facility constitute an 
     immediate hazard to health and safety.
       ``(D) Failure to concur.--If the Bureau health and safety 
     officer, and the individual designated by the tribe, 
     conducting the inspection of a facility required under 
     subparagraph (A) do not concur that conditions at the 
     facility constitute an immediate hazard to health and safety, 
     such officer and individual shall immediately notify the 
     tribal governing body and provide written information related 
     to their determinations.
       ``(E) Consideration by tribal governing body.--Not later 
     than 10 days after a tribal governing body received notice 
     under subparagraph (D), the tribal governing body shall 
     consider all information related to the determinations of the 
     Bureau health and safety officer and the individual 
     designated by the tribe and make a determination regarding 
     the closure, consolidation, or curtailment involved.
       ``(F) Cessation of closure, consolidation, or 
     curtailment.--If the Bureau health and safety officer, and 
     the individual designated by the tribe, conducting the 
     inspection of a facility required under subparagraph (A), 
     concur that conditions at the facility constitute an 
     immediate hazard to health and safety, or if the tribal 
     governing body makes such a determination under subparagraph 
     (E) the facility involved shall be closed immediately.
       ``(G) General closure report.--If a Bureau funded school is 
     temporarily closed or consolidated or the programs of a 
     Bureau funded school are temporarily substantially curtailed 
     under this subsection and the Secretary determines that the 
     closure, consolidation, or curtailment will exceed 1 year, 
     the Secretary shall submit to the appropriate committees of 
     Congress, the affected tribe, and the local school board, not 
     later than 3 months after the date on which the closure, 
     consolidation, or curtailment was initiated, a report that 
     specifies--
       ``(i) the reasons for such temporary action;
       ``(ii) the actions the Secretary is taking to eliminate the 
     conditions that constitute the hazard;
       ``(iii) an estimated date by which the actions described in 
     clause (ii) will be concluded; and
       ``(iv) a plan for providing alternate education services 
     for students enrolled at the school that is to be closed.
       ``(2) Nonapplication of certain standards for temporary 
     facility use.--
       ``(A) Classroom activities.--The Secretary shall permit the 
     local school board to temporarily utilize facilities adjacent 
     to the school, or satellite facilities, if such facilities 
     are suitable for conducting classroom activities. In 
     permitting the use of facilities under the preceding 
     sentence, the Secretary may waive applicable minor standards 
     under section 1121 relating to such facilities (such as the 
     required number of exit lights or configuration of restrooms) 
     so long as such waivers do not result in the creation of an 
     environment that constitutes an immediate and substantial 
     threat to the health, safety, and life of students and staff.
       ``(B) Administrative activities.--The provisions of 
     subparagraph (A) shall apply with respect to administrative 
     personnel if the facilities involved are suitable for 
     activities performed by such personnel.
       ``(C) Temporary.--In this paragraph, the term `temporary' 
     means--
       ``(i) with respect to a school that is to be closed for not 
     more than 1 year, 3 months or less; and
       ``(ii) with respect to a school that is to be closed for 
     not less than 1 year, a time period determined appropriate by 
     the Bureau.
       ``(3) Treatment of closure.--Any closure of a Bureau funded 
     school under this subsection for a period that exceeds 1 
     month but is less than 1 year, shall be treated by the Bureau 
     as an emergency facility improvement and repair project.
       ``(4) Use of funds.--With respect to a Bureau funded school 
     that is closed under this subsection, the tribal governing 
     body, or the designated local school board of each Bureau 
     funded school, involved may authorize the use of school 
     operations funds, which have otherwise been allocated for 
     such school, to abate the hazardous conditions without 
     further action by Congress.
       ``(f) Funding Requirement.--
       ``(1) Distribution of funds.--Beginning with the first 
     fiscal year following the date of enactment of the Native 
     American Education Improvement Act of 2001, all funds 
     appropriated to the budget accounts for the operations and 
     maintenance of Bureau funded schools shall be distributed by 
     formula to the schools. No funds from these accounts may be 
     retained or segregated by the Bureau to pay for 
     administrative or other costs of any facilities branch or 
     office, at any level of the Bureau.
       ``(2) Requirements for certain uses.--
       ``(A) Agreement.--The Secretary shall not withhold funds 
     that would be distributed under paragraph (1) to any grant or 
     contract

[[Page S721]]

     school, in order to use the funds for maintenance or any 
     other facilities or road-related purposes, unless such 
     school--
       ``(i) has consented to the withholding of such funds, 
     including the amount of the funds, the purpose for which the 
     funds will be used, and the timeline for the services to be 
     provided with the funds; and
       ``(ii) has provided the consent by entering into an 
     agreement that is--

       ``(I) a modification to the contract; and
       ``(II) in writing (in the case of a school that receives a 
     grant).

       ``(B) Cancellation.--The school may, at the end of any 
     fiscal year, cancel an agreement entered into under this 
     paragraph, on giving the Bureau 30 days notice of the intent 
     of the school to cancel the agreement.
       ``(g) No Reduction in Federal Funding.--Nothing in this 
     section shall be construed to reduce any Federal funding for 
     a school because the school received funding for facilities 
     improvement or construction from a State or any other source.

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

       ``(a) Formulation and Establishment of Policy and 
     Procedure; Supervision of Programs and Expenditures.--The 
     Secretary shall vest in the Assistant Secretary for Indian 
     Affairs all functions with respect to formulation and 
     establishment of policy and procedure, and supervision of 
     programs and expenditures of Federal funds for the purpose of 
     Indian education administered by the Bureau. The Assistant 
     Secretary shall carry out such functions through the Director 
     of the Office of Indian Education Programs.
       ``(b) Direction and Supervision of Personnel Operations.--
       ``(1) In general.--Not later than 6 months after the date 
     of the enactment of the Native American Education Improvement 
     Act of 2001, the Director of the Office shall direct and 
     supervise the operations of all personnel directly and 
     substantially involved in the provision of education services 
     by the Bureau, including school or institution custodial or 
     maintenance personnel, and facilities management, 
     contracting, procurement, and finance personnel.
       ``(2) Transfers.--The Assistant Secretary for Indian 
     Affairs shall coordinate the transfer of functions relating 
     to procurements for, contracts of, operation of, and 
     maintenance of schools and other support functions to the 
     Director.
       ``(c) Inherent Federal Function.--For purposes of this Act, 
     all functions relating to education that are located at the 
     Area or Agency level and performed by an education line 
     officer shall be subject to contract under the Indian Self-
     Determination and Education Assistance Act, unless determined 
     by the Secretary to be inherently Federal functions.
       ``(d) Evaluation of Programs; Services and Support 
     Functions; Technical and Coordination Assistance.--Education 
     personnel who are under the direction and supervision of the 
     Director of the Office in accordance with subsection (b)(1) 
     shall--
       ``(1) monitor and evaluate Bureau education programs;
       ``(2) provide all services and support functions for 
     education programs with respect to personnel matters 
     involving staffing actions and functions; and
       ``(3) provide technical and coordination assistance in 
     areas such as procurement, contracting, budgeting, personnel, 
     curricula, and operation and maintenance of school 
     facilities.
       ``(e) Construction, Improvement, Operation, and Maintenance 
     of Facilities.--
       ``(1) Plan for construction.--The Assistant Secretary for 
     Indian Affairs shall submit as part of the annual budget 
     request for educational services (as contained in the 
     President's annual budget request under section 1105 of title 
     31, United States Code) a plan--
       ``(A) for the construction of school facilities in 
     accordance with section 1124(d);
       ``(B) for the improvement and repair of education 
     facilities and for establishing priorities among the 
     improvement and repair projects involved, which together 
     shall form the basis for the distribution of appropriated 
     funds; and
       ``(C) for capital improvements to education facilities to 
     be made over the 5 years succeeding the year covered by the 
     plan.
       ``(2) Program for operation and maintenance.--
       ``(A) In general.--
       ``(i) Program.--The Assistant Secretary shall establish a 
     program, including a program for the distribution of funds 
     appropriated under this part, for the operation and 
     maintenance of education facilities. Such program shall 
     include--

       ``(I) a method of computing the amount necessary for the 
     operation and maintenance of each education facility;
       ``(II) a requirement of similar treatment of all Bureau 
     funded schools;
       ``(III) a notice of an allocation of the appropriated funds 
     from the Director of the Office directly to the appropriate 
     education line officers and school officials;
       ``(IV) a method for determining the need for, and priority 
     of, facilities improvement and repair projects, both major 
     and minor; and
       ``(V) a system for conducting routine preventive 
     maintenance.

       ``(ii) Meetings.--In making the determination referred to 
     in clause (i)(IV), the Assistant Secretary shall cause a 
     series of meetings to be conducted at the area and agency 
     level with representatives of the Bureau funded schools in 
     the corresponding areas and served by corresponding agencies, 
     to receive comment on the projects described in clause 
     (i)(IV) and prioritization of such projects.
       ``(B) Maintenance.--The appropriate education line officers 
     shall make arrangements for the maintenance of the education 
     facilities with the local supervisors of the Bureau 
     maintenance personnel. The local supervisors of Bureau 
     maintenance personnel shall take appropriate action to 
     implement the decisions made by the appropriate education 
     line officers. No funds made available under this part may be 
     authorized for expenditure for maintenance of such an 
     education facility unless the appropriate education line 
     officer is assured that the necessary maintenance has been, 
     or will be, provided in a reasonable manner.
       ``(3) Implementation.--The requirements of this subsection 
     shall be implemented as soon as practicable after the date of 
     enactment of the Native American Education Improvement Act of 
     2001.
       ``(f) Acceptance of Gifts and Bequests.--
       ``(1) Guidelines.--Notwithstanding any other provision of 
     law, the Director of the Office shall promulgate guidelines 
     for the establishment and administration of mechanisms for 
     the acceptance of gifts and bequests for the use and benefit 
     of particular schools or designated Bureau operated education 
     programs, including, in appropriate cases, the establishment 
     and administration of trust funds.
       ``(2) Monitoring and reports.--Except as provided in 
     paragraph (3), in a case in which a Bureau operated education 
     program is the beneficiary of such a gift or bequest, the 
     Director shall--
       ``(A) make provisions for monitoring use of the gift or 
     bequest; and
       ``(B) submit a report to the appropriate committees of 
     Congress that describes the amount and terms of such gift or 
     bequest, the manner in which such gift or bequest shall be 
     used, and any results achieved by such use.
       ``(3) Exception.--The requirements of paragraph (2) shall 
     not apply in the case of a gift or bequest that is valued at 
     $5,000 or less.
       ``(g) Functions Clarified.--In this section, the term 
     `functions' includes powers and duties.

     ``SEC. 1126. ALLOTMENT FORMULA.

       ``(a) Factors Considered; Revision To Reflect Standards.--
       ``(1) Formula.--The Secretary shall establish, by 
     regulation adopted in accordance with section 1137, a formula 
     for determining the minimum annual amount of funds necessary 
     to operate each Bureau funded school. In establishing such 
     formula, the Secretary shall consider--
       ``(A) the number of eligible Indian students served by the 
     school and the total student population of the school;
       ``(B) special cost factors, such as--
       ``(i) the isolation of the school;
       ``(ii) the need for special staffing, transportation, or 
     educational programs;
       ``(iii) food and housing costs;
       ``(iv) maintenance and repair costs associated with the 
     physical condition of the educational facilities;
       ``(v) special transportation and other costs of an isolated 
     or small school;
       ``(vi) the costs of home-living (dormitory) arrangements, 
     where determined necessary by a tribal governing body or 
     designated school board;
       ``(vii) costs associated with greater lengths of service by 
     education personnel;
       ``(viii) the costs of therapeutic programs for students 
     requiring such programs; and
       ``(ix) special costs for gifted and talented students;
       ``(C) the costs of providing academic services that are at 
     least equivalent to the services provided by public schools 
     in the State in which the school is located;
       ``(D) whether the available funding will enable the school 
     involved to comply with the accreditation standards 
     applicable to the school under section 1121; and
       ``(E) such other relevant factors as the Secretary 
     determines are appropriate.
       ``(2) Revision of formula.--On the establishment of the 
     standards required in sections 1121 and 1122, the Secretary 
     shall--
       ``(A) revise the formula established under paragraph (1) to 
     reflect the cost of compliance with such standards; and
       ``(B)(i) by not later than January 1, 2002, review the 
     formula established under paragraph (1) and take such action 
     as may be necessary to increase the availability of 
     counseling and therapeutic programs for students in off-
     reservation home-living schools and other Bureau operated 
     residential facilities; and
       ``(ii) concurrently with any actions taken under clause 
     (i), review the standards established under section 1121 to 
     be certain that the standards adequately provide for parental 
     notification regarding, and consent for, such counseling and 
     therapeutic programs.
       ``(b) Pro Rata Allotment.--Notwithstanding any other 
     provision of law, Federal funds appropriated for the general 
     local operation of Bureau funded schools shall be allotted on 
     a pro rata basis in accordance with the formula established 
     under subsection (a).
       ``(c) Annual Adjustment; Reservation of Amount for School 
     Board Activities.--
       ``(1) Annual adjustment.--
       ``(A) In general.--For fiscal year 2002, and for each 
     subsequent fiscal year, the Secretary shall adjust the 
     formula established under subsection (a) to--
       ``(i) use a weighted factor of 1.2 for each eligible Indian 
     student enrolled in the seventh

[[Page S722]]

     and eighth grades of the school in considering the number of 
     eligible Indian students served by the school;
       ``(ii) consider a school with an enrollment of fewer than 
     50 eligible Indian students as having an average daily 
     attendance of 50 eligible Indian students for purposes of 
     implementing the adjustment factor for small schools;
       ``(iii) take into account the provision of residential 
     services on less than a 9-month basis at a school in a case 
     in which the school board and supervisor of the school 
     determine that the school will provide the services for fewer 
     than 9 months for the academic year involved;
       ``(iv) use a weighted factor of 2.0 for each eligible 
     Indian student that--

       ``(I) is gifted and talented; and
       ``(II) is enrolled in the school on a full-time basis,

     in considering the number of eligible Indian students served 
     by the school; and
       ``(v) use a weighted factor of 0.25 for each eligible 
     Indian student who is enrolled in a year long credit course 
     in an Indian or Native language as part of the regular 
     curriculum of a school, in considering the number of eligible 
     Indian students served by such school.
       ``(B) Timing.--The Secretary shall make the adjustment 
     required under subparagraph (A)(v) for such school after--
       ``(i) the school board of such school provides a 
     certification of the Indian or Native language curriculum of 
     the school to the Secretary, together with an estimate of the 
     number of full-time students expected to be enrolled in the 
     curriculum in the second academic year after the academic 
     year for which the certification is made; and
       ``(ii) the funds appropriated for allotments under this 
     section are designated, in the appropriations Act 
     appropriating such funds, as the funds necessary to implement 
     such adjustment at such school without reducing an allotment 
     made under this section to any school by virtue of such 
     adjustment.
       ``(2) Reservation of amount.--
       ``(A) In general.--From the funds allotted in accordance 
     with the formula established under subsection (a) for each 
     Bureau school, the local school board of such school may 
     reserve an amount which does not exceed the greater of--
       ``(i) $8,000; or
       ``(ii) the lesser of--

       ``(I) $15,000; or
       ``(II) 1 percent of such allotted funds,

     for school board activities for such school, including 
     (notwithstanding any other provision of law) meeting expenses 
     and the cost of membership in, and support of, organizations 
     engaged in activities on behalf of Indian education.
       ``(B) Training.--Each local school board, and any agency 
     school board that serves as a local school board for any 
     grant or contract school, shall ensure that each individual 
     who is a new member of the school board receives, within 12 
     months after the individual becomes a member of the school 
     board, 40 hours of training relevant to that individual's 
     service on the board. Such training may include training 
     concerning legal issues pertaining to Bureau funded schools, 
     legal issues pertaining to school boards, ethics, and other 
     topics determined to be appropriate by the school board.
       ``(d) Reservation of Amount for Emergencies.--
       ``(1) In general.--The Secretary shall reserve from the 
     funds available for allotment for each fiscal year under this 
     section an amount that, in the aggregate, equals 1 percent of 
     the funds available for allotment for that fiscal year.
       ``(2) Use of funds.--Amounts reserved under paragraph (1) 
     shall be used, at the discretion of the Director of the 
     Office, to meet emergencies and unforeseen contingencies 
     affecting the education programs funded under this section. 
     Funds reserved under this subsection may only be expended for 
     education services or programs, including emergency repairs 
     of education facilities, at a school site (as defined in 
     section 5204(c)(2) of the Tribally Controlled Schools Act of 
     1988).
       ``(3) Funds remaining available.--Funds reserved under this 
     subsection shall remain available without fiscal year 
     limitation until expended. The aggregate amount of such 
     funds, from all fiscal years, that is available for 
     expenditure in a fiscal year may not exceed an amount equal 
     to 1 percent of the funds available for allotment under this 
     section for that fiscal year.
       ``(4) Reports.--If the Secretary makes funds available 
     under this subsection, the Secretary shall submit a report 
     describing such action to the appropriate committees of 
     Congress as part of the President's next annual budget 
     request under section 1105 of title 31, United States Code).
       ``(e) Supplemental Appropriations.--Any funds provided in a 
     supplemental appropriations Act to meet increased pay costs 
     attributable to school level personnel of Bureau funded 
     schools shall be allotted under this section.
       ``(f) Eligible Indian Student Defined.--In this section, 
     the term `eligible Indian student' means a student who--
       ``(1) is a member of, or is at least \1/4\ degree Indian 
     blood descendant of a member of, a tribe that is eligible for 
     the special programs and services provided by the United 
     States through the Bureau to Indians because of their status 
     as Indians;
       ``(2) resides on or near a reservation or meets the 
     criteria for attendance at a Bureau off-reservation home-
     living school; and
       ``(3) is enrolled in a Bureau funded school.
       ``(g) Tuition.--
       ``(1) In general.--A Bureau school or contract or grant 
     school may not charge an eligible Indian student tuition for 
     attendance at the school. A Bureau school may not charge a 
     student attending the school under the circumstances 
     described in paragraph (2)(C) tuition for attendance at the 
     school.
       ``(2) Attendance of non-indian students at bureau 
     schools.--The Secretary may permit the attendance at a Bureau 
     school of a student who is not an eligible Indian student 
     if--
       ``(A)(i) the Secretary determines that the student's 
     attendance will not adversely affect the school's program for 
     eligible Indian students because of cost, overcrowding, or 
     violation of standards or accreditation requirements; and
       ``(ii) the local school board consents; and
       ``(B)(i) the student is a dependent of a Bureau, Indian 
     Health Service, or tribal government employee who lives on or 
     near the school site; or
       ``(ii) tuition is paid for the student in an amount that is 
     not more than the amount of tuition charged by the nearest 
     public school district for out-of-district students, and is 
     paid in addition to the school's allotment under this 
     section.
       ``(3) Attendance of non-indian students at contract and 
     grant schools.--The school board of a contract or grant 
     school may permit students who are not eligible Indian 
     students to attend the contract or grant school. Any tuition 
     collected for those students shall be in addition to the 
     amount the school received under this section.
       ``(h) Funds Available Without Fiscal Year Limitation.--
     Notwithstanding any other provision of law, at the election 
     of the local school board of a Bureau school made at any time 
     during a fiscal year, a portion equal to not more than 15 
     percent of the funds allotted for the school under this 
     section for the fiscal year shall remain available to the 
     school for expenditure without fiscal year limitation. The 
     Assistant Secretary for Indian Affairs shall take such steps 
     as may be necessary to implement this subsection.
       ``(i) Students at Richfield Dormitory, Richfield, Utah.--
     Tuition for the instruction of each out-of-State Indian 
     student in a home-living situation at the Richfield dormitory 
     in Richfield, Utah, who attends Sevier County high schools in 
     Richfield, Utah, for an academic year, shall be paid from 
     Indian school equalization program funds authorized in this 
     section and section 1129, at a rate not to exceed the 
     weighted amount provided for under subsection (b) for a 
     student for that year. No additional administrative cost 
     funds shall be provided under this part to pay for 
     administrative costs relating to the instruction of the 
     students.

     ``SEC. 1127. ADMINISTRATIVE COST GRANTS.

       ``(a) Definitions.--In this section:
       ``(1) Administrative cost.--
       ``(A) In general.--The term `administrative cost' means the 
     cost of necessary administrative functions which--
       ``(i) the tribe or tribal organization incurs as a result 
     of operating a tribal elementary or secondary educational 
     program;
       ``(ii) are not customarily paid by comparable Bureau 
     operated programs out of direct program funds; and
       ``(iii) are either--
       ``(I) normally provided for comparable Bureau programs by 
     Federal officials using resources other than Bureau direct 
     program funds; or
       ``(II) are otherwise required of tribal self-determination 
     program operators by law or prudent management practice.
       ``(B) Inclusions.--The term `administrative cost' may 
     include--
       ``(i) contract or grant (or other agreement) 
     administration;
       ``(ii) executive, policy, and corporate leadership and 
     decisionmaking;
       ``(iii) program planning, development, and management;
       ``(iv) fiscal, personnel, property, and procurement 
     management;
       ``(v) related office services and record keeping; and
       ``(vi) costs of necessary insurance, auditing, legal, 
     safety and security services.
       ``(2) Bureau elementary and secondary functions.--The term 
     `Bureau elementary and secondary functions' means--
       ``(A) all functions funded at Bureau schools by the Office;
       ``(B) all programs--
       ``(i) funds for which are appropriated to other agencies of 
     the Federal Government; and
       ``(ii) which are administered for the benefit of Indians 
     through Bureau schools; and
       ``(C) all operation, maintenance, and repair funds for 
     facilities and government quarters used in the operation or 
     support of elementary and secondary education functions for 
     the benefit of Indians, from whatever source derived.
       ``(3) Direct cost base.--
       ``(A) In general.--Except as otherwise provided in 
     subparagraph (B), the direct cost base of a tribe or tribal 
     organization for the fiscal year is the aggregate direct cost 
     program funding for all tribal elementary or secondary 
     educational programs operated by the tribe or tribal 
     organization during--
       ``(i) the second fiscal year preceding such fiscal year; or

[[Page S723]]

       ``(ii) if such programs have not been operated by the tribe 
     or tribal organization during the two preceding fiscal years, 
     the first fiscal year preceding such fiscal year.
       ``(B) Functions not previously operated.--In the case of 
     Bureau elementary or secondary education functions which have 
     not previously been operated by a tribe or tribal 
     organization under contract, grant, or agreement with the 
     Bureau, the direct cost base for the initial year shall be 
     the projected aggregate direct cost program funding for all 
     Bureau elementary and secondary functions to be operated by 
     the tribe or tribal organization during that fiscal year.
       ``(4) Maximum base rate.--The term `maximum base rate' 
     means 50 percent.
       ``(5) Minimum base rate.--The term `minimum base rate' 
     means 11 percent.
       ``(6) Standard direct cost base.--The term `standard direct 
     cost base' means $600,000.
       ``(7) Tribal elementary or secondary educational 
     programs.--The term `tribal elementary or secondary 
     educational programs' means all Bureau elementary and 
     secondary functions, together with any other Bureau programs 
     or portions of programs (excluding funds for social services 
     that are appropriated to agencies other than the Bureau and 
     are expended through the Bureau, funds for major 
     subcontracts, construction, and other major capital 
     expenditures, and unexpended funds carried over from prior 
     years) which share common administrative cost functions, that 
     are operated directly by a tribe or tribal organization under 
     a contract, grant, or agreement with the Bureau.
       ``(b) Grants; Effect Upon Appropriated Amounts.--
       ``(1) Grants.--
       ``(A) In general.--Subject to the availability of 
     appropriated funds, the Secretary shall provide a grant to 
     each tribe or tribal organization operating a contract or 
     grant school, in an amount determined under this section, for 
     the purpose of paying the administrative and indirect costs 
     incurred in operating the contract or grant school, in order 
     to--
       ``(i) enable the tribe or tribal organization operating the 
     school, without reducing direct program services to the 
     beneficiaries of the program, to provide all related 
     administrative overhead services and operations necessary to 
     meet the requirements of law and prudent management practice; 
     and
       ``(ii) carry out other necessary support functions that 
     would otherwise be provided by the Secretary or other Federal 
     officers or employees, from resources other than direct 
     program funds, in support of comparable Bureau operated 
     programs.
       ``(B) Amount.--No school operated as a stand-alone 
     institution shall receive less than $200,000 per year under 
     this paragraph.
       ``(2) Effect upon appropriated amounts.--Amounts 
     appropriated to fund the grants provided for under this 
     section shall be in addition to, and shall not reduce, the 
     amounts appropriated for the program being administered by 
     the contract or grant school.
       ``(c) Determination of Grant Amount.--
       ``(1) In general.--The amount of the grant provided to each 
     tribe or tribal organization under this section for each 
     fiscal year shall be determined by applying the 
     administrative cost percentage rate determined under 
     subsection (d) of the tribe or tribal organization to the 
     aggregate cost of the Bureau elementary and secondary 
     functions operated by the tribe or tribal organization for 
     which funds are received from or through the Bureau. The 
     administrative cost percentage rate does not apply to 
     programs not relating to such functions that are operated by 
     the tribe or tribal organization.
       ``(2) Direct cost base funds.--The Secretary shall--
       ``(A) reduce the amount of the grant determined under 
     paragraph (1) to the extent that payments for administrative 
     costs are actually received by a tribe or tribal organization 
     under any Federal education program that is included in the 
     direct cost base of the tribe or tribal organization; and
       ``(B) take such actions as may be necessary to be 
     reimbursed by any other department or agency of the Federal 
     Government (other than the Department of the Interior) for 
     the portion of grants made under this section for the costs 
     of administering any program for Indians that is funded by 
     appropriations made to such other department or agency.
       ``(3) Reductions.--If the total amount of funds necessary 
     to provide grants to tribes and tribal organizations in the 
     amounts determined under paragraph (1) and (2) for a fiscal 
     year exceeds the amount of funds appropriated to carry out 
     this section for such fiscal year, the Secretary shall reduce 
     the amount of each grant determined under this subsection for 
     such fiscal year by an amount that bears the same 
     relationship to such excess as the amount of such grants 
     determined under this subsection bears to the total of all 
     grants determined under this subsection for all tribes and 
     tribal organizations for such fiscal year.
       ``(d) Administrative Cost Percentage Rate.--
       ``(1) In general.--For purposes of this section, the 
     administrative cost percentage rate for a contract or grant 
     school for a fiscal year is equal to the percentage 
     determined by dividing--
       ``(A) the sum of--
       ``(i) the amount equal to--

       ``(I) the direct cost base of the tribe or tribal 
     organization for the fiscal year; multiplied by
       ``(II) the minimum base rate; plus

       ``(ii) the amount equal to--

       ``(I) the standard direct cost base; multiplied by
       ``(II) the maximum base rate; by

       ``(B) the sum of--
       ``(i) the direct cost base of the tribe or tribal 
     organization for the fiscal year; and
       ``(ii) the standard direct cost base.
       ``(2) Rounding.--The administrative cost percentage rate 
     shall be determined to \1/100\ of a percent.
       ``(e) Combining Funds.--
       ``(1) In general.--Funds received by a tribe, tribal 
     organization, or contract or grant school through grants made 
     under this section for tribal elementary or secondary 
     educational programs may be combined by the tribe, tribal 
     organization, or contract or grant school and placed into a 
     single administrative cost account without the necessity of 
     maintaining separate funding source accounting.
       ``(2) Indirect cost funds.--Indirect cost funds for 
     programs at the school that share common administrative 
     services with the tribal elementary or secondary educational 
     programs may be included in the administrative cost account 
     described in paragraph (1).
       ``(f) Availability of Funds.--Funds received through a 
     grant made under this section with respect to tribal 
     elementary or secondary educational programs at a contract or 
     grant school shall remain available to the contract or grant 
     school--
       ``(1) without fiscal year limitation; and
       ``(2) without reducing the amount of any grants otherwise 
     payable to the school under this section for any fiscal year 
     after the fiscal year for which the grant is provided.
       ``(g) Treatment of Funds.--Funds received through a grant 
     made under this section for Bureau funded programs operated 
     by a tribe or tribal organization under a contract or grant 
     shall not be taken into consideration for purposes of 
     indirect cost underrecovery and overrecovery determinations 
     by any Federal agency for any other funds, from whatever 
     source derived.
       ``(h) Treatment of Entity Operating Other Programs.--In 
     applying this section and section 106 of the Indian Self-
     Determination and Education Assistance Act with respect to an 
     Indian tribe or tribal organization that--
       ``(1) receives funds under this section for administrative 
     costs incurred in operating a contract or grant school or a 
     school operated under the Tribally Controlled Schools Act of 
     1988; and
       ``(2) operates one or more other programs under a contract 
     or grant provided under the Indian Self-Determination and 
     Education Assistance Act,

     the Secretary shall ensure that the Indian tribe or tribal 
     organization is provided with the full amount of the 
     administrative costs that are associated with operating the 
     contract or grant school, and of the indirect costs, that are 
     associated with all of such other programs, except that funds 
     appropriated for implementation of this section shall be used 
     only to supply the amount of the grant required to be 
     provided by this section.
       ``(i) Applicability to Schools Operating Under Tribally 
     Controlled Schools Act of 1988.--The provisions of this 
     section that apply to contract or grant schools shall also 
     apply to those schools receiving assistance under the 
     Tribally Controlled Schools Act of 1988.
       ``(j) Authorization of Appropriations.--There are 
     authorized to be appropriated such sums as may be necessary 
     to carry out this section.

     ``SEC. 1128. DIVISION OF BUDGET ANALYSIS.

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

[[Page S724]]

       ``(3) such other information as the Director of the Office 
     considers to be appropriate.
       ``(d) Use of Reports.--The Director of the Office and the 
     Assistant Secretary for Indian Affairs shall use the 
     information contained in the annual report required by 
     subsection (c) in preparing their annual budget requests.

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

       ``(a) Establishment of System and Forward Funding.--
       ``(1) In general.--The Secretary shall establish, by 
     regulation adopted in accordance with section 1137, a system 
     for the direct funding and support of all Bureau funded 
     schools. Such system shall allot funds in accordance with 
     section 1126. All amounts appropriated for distribution in 
     accordance with this section may be made available in 
     accordance with paragraph (2).
       ``(2) Timing for use of funds.--
       ``(A) Availability.--With regard to funds for affected 
     schools under this part that become available for obligation 
     on October 1 of the fiscal year for which such funds are 
     appropriated, the Secretary shall make payments to such 
     affected schools not later than December 1 of the fiscal 
     year, except that operations and maintenance funds shall be 
     forward funded and shall be available for obligation not 
     later than July 15 and December 1 of each fiscal year, and 
     shall remain available for obligation through the succeeding 
     fiscal year.
       ``(B) Publications.--The Secretary shall, on the basis of 
     the amounts appropriated as described in this paragraph--
       ``(i) publish, not later than July 1 of the fiscal year for 
     which the amounts are appropriated, information indicating 
     the amount of the allotments to be made to each affected 
     school under section 1126, of 85 percent of such appropriated 
     amounts; and
       ``(ii) publish, not later than September 30 of such fiscal 
     year, information indicating the amount of the allotments to 
     be made under section 1126, from the remaining 15 percent of 
     such appropriated amounts, adjusted to reflect the actual 
     student attendance.
       ``(3) Limitation.--
       ``(A) Expenditures.--Notwithstanding any other provision of 
     law (including a regulation), the supervisor of a Bureau 
     school may expend an aggregate of not more than $50,000 of 
     the amount allotted to the school under section 1126 to 
     acquire materials, supplies, equipment, operation services, 
     maintenance services, and other services for the school, and 
     amounts received as operations and maintenance funds, funds 
     received from the Department of Education, or funds received 
     from other Federal sources, without competitive bidding if--
       ``(i) the cost for any single item acquired does not exceed 
     $15,000;
       ``(ii) the school board approves the acquisition;
       ``(iii) the supervisor certifies that the cost is fair and 
     reasonable;
       ``(iv) the documents relating to the acquisition executed 
     by the supervisor of the school or other school staff cite 
     this paragraph as authority for the acquisition; and
       ``(v) the acquisition transaction is documented in a 
     journal maintained at the school that clearly identifies when 
     the transaction occurred, the item that was acquired and from 
     whom, the price paid, the quantities acquired, and any other 
     information the supervisor or the school board considers to 
     be relevant.
       ``(B) Notice.--Not later than 6 months after the date of 
     enactment of the Native American Education Improvement Act of 
     2001, the Secretary shall send notice of the provisions of 
     this paragraph to each supervisor of a Bureau school and 
     associated school board chairperson, the education line 
     officer of each agency and area, and the Bureau division in 
     charge of procurement, at both the local and national levels.
       ``(C) Application and guidelines.--The Director of the 
     Office shall be responsible for--
       ``(i) determining the application of this paragraph, 
     including the authorization of specific individuals to carry 
     out this paragraph;
       ``(ii) ensuring that there is at least 1 such individual at 
     each Bureau facility; and
       ``(iii) the provision of guidelines on the use of this 
     paragraph and adequate training on such guidelines.
       ``(b) Local Financial Plans for Expenditure of Funds.--
       ``(1) Plan required.--
       ``(A) In general.--Each Bureau school that receives an 
     allotment under section 1126 shall prepare a local financial 
     plan that specifies the manner in which the school will 
     expend the funds made available under the allotment and 
     ensures that the school will meet the accreditation 
     requirements or standards for the school established pursuant 
     to section 1121.
       ``(B) Requirement.--A local financial plan under 
     subparagraph (A) shall comply with all applicable Federal and 
     tribal laws.
       ``(C) Preparation and revision.--The financial plan for a 
     school under subparagraph (A) shall be prepared by the 
     supervisor of the school in active consultation with the 
     local school board for the school. The local school board for 
     each school shall have the authority to ratify, reject, or 
     amend such financial plan and, at the initiative of the local 
     school board or in response to the supervisor of the school, 
     to revise such financial plan to meet needs not foreseen at 
     the time of preparation of the financial plan.
       ``(D) Role of supervisor.--The supervisor of the school--
       ``(i) shall put into effect the decisions of the school 
     board relating to the financial plan under subparagraph (A); 
     and
       ``(ii) shall provide the appropriate local union 
     representative of the education employees of the school with 
     copies of proposed financial plans relating to the school and 
     all modifications and proposed modifications to the plans, 
     and at the same time submit such copies to the local school 
     board.
       ``(iii) may appeal any such action of the local school 
     board to the appropriate education line officer of the Bureau 
     agency by filing a written statement describing the action 
     and the reasons the supervisor believes such action should be 
     overturned.

     A copy of statement under clause (iii) shall be submitted to 
     the local school board and such board shall be afforded an 
     opportunity to respond, in writing, to such appeal. After 
     reviewing such written appeal and response, the appropriate 
     education line officer may, for good cause, overturn the 
     action of the local school board. The appropriate education 
     line officer shall transmit the determination of such appeal 
     in the form of a written opinion to such board and to such 
     supervisor identifying the reasons for overturning such 
     action.
       ``(2) Requirement.--A Bureau school shall expend amounts 
     received under an allotment under section 1126 in accordance 
     with the local financial plan prepared under paragraph (1).
       ``(c) Tribal Division of Education, Self-Determination 
     Grant and Contract Funds.--The Secretary may approve 
     applications for funding tribal divisions of education and 
     developing tribal codes of education, from funds made 
     available pursuant to section 103(a) of the Indian Self-
     Determination and Education Assistance Act.
       ``(d) Technical Assistance and Training.--A local school 
     board may, in the exercise of the authority of the school 
     board under this section, request technical assistance and 
     training from the Secretary. The Secretary shall, to the 
     greatest extent possible, provide such assistance and 
     training, and make appropriate provision in the budget of the 
     Office for such assistance and training.
       ``(e) Summer Program of Academic and Support Services.--
       ``(1) In general.--A financial plan prepared under 
     subsection (b) for a school may include, at the discretion of 
     the supervisor and the local school board of such school, a 
     provision for funding a summer program of academic and 
     support services for students of the school. Any such program 
     may include activities related to the prevention of alcohol 
     and substance abuse. The Assistant Secretary for Indian 
     Affairs shall provide for the utilization of facilities of 
     the school for such program during any summer in which such 
     utilization is requested.
       ``(2) Use of other funds.--Notwithstanding any other 
     provision of law, funds authorized under the Act of April 16, 
     1934 (commonly known as the `Johnson-O'Malley Act'; 48 Stat. 
     596, chapter 147) and this Act may be used to augment the 
     services provided in each summer program referred to in 
     paragraph (1) at the option of the tribe or school receiving 
     such funds. The augmented services shall be under the control 
     of the tribe or school.
       ``(3) Technical assistance and program coordination.--The 
     Assistant Secretary for Indian Affairs, acting through the 
     Director of the Office, shall provide technical assistance 
     and coordination of activities for any program described in 
     paragraph (1) and shall, to the extent possible, encourage 
     the coordination of such programs with any other summer 
     programs that might benefit Indian youth, regardless of the 
     funding source or administrative entity of such programs.
       ``(f) Cooperative Agreements.--
       ``(1) In general.--From funds allotted to a Bureau school 
     under section 1126, the Secretary shall, if specifically 
     requested by the appropriate tribal governing body, implement 
     a cooperative agreement that is entered into between the 
     tribe, the Bureau, the local school board, and a local public 
     school district that meets the requirements of paragraph (2) 
     and involves the school. The tribe, the Bureau, the school 
     board, and the local public school district shall determine 
     the terms of the agreement.
       ``(2) Coordination provisions.--An agreement under 
     paragraph (1) may, with respect to the Bureau school and 
     schools in the school district involved, encompass 
     coordination of all or any part of the following:
       ``(A) The academic program and curriculum, unless the 
     Bureau school is accredited by a State or regional 
     accrediting entity and would not continue to be so accredited 
     if the agreement encompassed the program and curriculum.
       ``(B) Support services, including procurement and 
     facilities maintenance.
       ``(C) Transportation.
       ``(3) Equal benefit and burden.--
       ``(A) In general.--Each agreement entered into pursuant to 
     the authority provided in paragraph (1) shall confer a 
     benefit upon the Bureau school commensurate with the burden 
     assumed by the school.
       ``(B) Limitation.--Subparagraph (A) shall not be construed 
     to require equal expenditures, or an exchange of similar 
     services, by the Bureau school and schools in the school 
     district.
       ``(g) Product or Result of Student Projects.--
     Notwithstanding any other provision of law, where there is 
     agreement on

[[Page S725]]

     action between the superintendent and the school board of a 
     Bureau funded school, the product or result of a project 
     conducted in whole or in major part by a student may be given 
     to that student upon the completion of such project.
       ``(h) Matching Fund Requirements.--
       ``(1) Not considered federal funds.--Notwithstanding any 
     other provision of law, funds received by a Bureau funded 
     school under this title for education-related activities (not 
     including funds for construction, maintenance and facilities, 
     improvement or repair) shall not be considered to be Federal 
     funds for the purposes of meeting a matching funds 
     requirement for any Federal program.
       ``(2) Nonapplication of requirements.--
       ``(A) In general.--Notwithstanding any other provision of 
     law, no requirement relating to the provision of matching 
     funds or the provision of services or in-kind activity as a 
     condition of participation in a program or project or receipt 
     of a grant, shall apply to a Bureau funded school unless the 
     provision of law authorizing such requirement specifies that 
     such requirement applies to such a school.
       ``(B) Limitation.--In considering an application from a 
     Bureau funded school for participation in a program or 
     project that has a requirement described in subparagraph (A), 
     the entity administering such program or project or receiving 
     such grant shall not give positive or negative weight to such 
     application based solely on the provisions of this paragraph. 
     Such an application shall be considered as if it fully met 
     any matching requirement.

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

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

     ``SEC. 1131. INDIAN EDUCATION PERSONNEL.

       ``(a) Definitions.--In this section:
       ``(1) Education position.--The term `education position' 
     means a position in the Bureau the duties and 
     responsibilities of which--
       ``(A) are performed on a school-year basis principally in a 
     Bureau school and involve--
       ``(i) classroom or other instruction or the supervision or 
     direction of classroom or other instruction;
       ``(ii) any activity (other than teaching) that requires 
     academic credits in educational theory and practice equal to 
     the academic credits in educational theory and practice 
     required for a bachelor's degree in education from an 
     accredited institution of higher education;
       ``(iii) any activity in or related to the field of 
     education, whether or not academic credits in educational 
     theory and practice are a formal requirement for the conduct 
     of such activity; or
       ``(iv) provision of support services at, or associated 
     with, the site of the school; or
       ``(B) are performed at the agency level of the Bureau and 
     involve the implementation of education-related programs, 
     other than the position of agency superintendent for 
     education.
       ``(2) Educator.--The term `educator' means an individual 
     whose services are required, or who is employed, in an 
     education position.
       ``(b) Civil Service Authorities Inapplicable.--Chapter 51, 
     subchapter III of chapter 53, and chapter 63 of title 5, 
     United States Code, relating to classification, pay, and 
     leave, respectively, and the sections of such title relating 
     to the appointment, promotion, hours of work, and removal of 
     civil service employees, shall not apply to educators or to 
     education positions.
       ``(c) Regulations.--Not later than 60 days after the date 
     of enactment of the Native American Education Improvement Act 
     of 2001, the Secretary shall prescribe regulations to carry 
     out this section. Such regulations shall include provisions 
     relating to--
       ``(1) the establishment of education positions;
       ``(2) the establishment of qualifications for educators and 
     education personnel;
       ``(3) the fixing of basic compensation for educators and 
     education positions;
       ``(4) the appointment of educators;
       ``(5) the discharge of educators;
       ``(6) the entitlement of educators to compensation;
       ``(7) the payment of compensation to educators;
       ``(8) the conditions of employment of educators;
       ``(9) the leave system for educators;
       ``(10) the length of the school year applicable to 
     education positions described in subsection (a)(1)(A); and
       ``(11) such matters as may be appropriate.
       ``(d) Qualifications of Educators.--
       ``(1) Requirements.--In prescribing regulations to govern 
     the qualifications of educators, the Secretary shall 
     require--
       ``(A) that lists of qualified and interviewed applicants 
     for education positions be maintained in the appropriate 
     agency or area office of the Bureau or, in the case of 
     individuals applying at the national level, the Office;
       ``(B)(i) that a local school board have the authority to 
     waive, on a case-by-case basis, any formal education or 
     degree qualification established by regulation, in order for 
     a tribal member to be hired in an education position to teach 
     courses on tribal culture and language; and
       ``(ii) that a determination by a local school board that 
     such a tribal member be hired shall be instituted by the 
     supervisor of the school involved; and
       ``(C) that it shall not be a prerequisite to the employment 
     of an individual in an education position at the local 
     level--
       ``(i) that such individual's name appear on a list 
     maintained pursuant to subparagraph (A); or
       ``(ii) that such individual have applied at the national 
     level for an education position.
       ``(2) Exception for certain temporary employment.--The 
     Secretary may authorize the temporary employment in an 
     education position of an individual who has not met the 
     certification standards established pursuant to regulations, 
     if the Secretary determines that failure to authorize the 
     employment would result in that position remaining vacant.
       ``(e) Hiring of Educators.--
       ``(1) Requirements.--In prescribing regulations to govern 
     the appointment of educators, the Secretary shall require--
       ``(A)(i)(I) that educators employed in a Bureau school 
     (other than the supervisor of the school) shall be hired by 
     the supervisor of the school; and
       ``(II) that, in a case in which there are no qualified 
     applicants available to fill a vacancy at a Bureau school, 
     the supervisor may consult a list maintained pursuant to 
     subsection (d)(1)(A);
       ``(ii) each supervisor of a Bureau school shall be hired by 
     the education line officer of the agency office of the Bureau 
     for the jurisdiction in which the school is located;
       ``(iii) each educator employed in an agency office of the 
     Bureau shall be hired by the superintendent for education of 
     the agency office; and
       ``(iv) each education line officer and educator employed in 
     the office of the Director of the Office shall be hired by 
     the Director;
       ``(B)(i) that, before an individual is employed in an 
     education position in a Bureau school by the supervisor of 
     the school (or, with respect to the position of supervisor, 
     by the appropriate agency education line officer), the local 
     school board for the school shall be consulted; and
       ``(ii) that a determination by such school board, as 
     evidenced by school board records, that such individual 
     should or should not be so employed shall be instituted by 
     the supervisor (or with respect to the position of 
     supervisor, by the superintendent for education of the agency 
     office);
       ``(C)(i) that, before an individual is employed in an 
     education position in an agency office of the Bureau, the 
     appropriate agency school board shall be consulted; and
       ``(ii) that a determination by such school board, as 
     evidenced by school board records, that such individual 
     should or should not be employed shall be instituted by the 
     superintendent for education of the agency office;
       ``(D) that before an individual is employed in an education 
     position (as described in subsection (a)(1)(B)) in the office 
     of the Director of the Office (other than the position of 
     Director), the school boards representing all Bureau schools 
     shall be consulted; and
       ``(E) that all employment decisions or actions be in 
     compliance with all applicable Federal, State and tribal 
     laws.
       ``(2) Information regarding application at national 
     level.--
       ``(A) In general.--Any individual who applies at the local 
     level for an education position shall state on such 
     individual's application whether or not such individual has 
     applied at the national level for an education position.
       ``(B) Effect of inaccurate statement.--If an individual 
     described in subparagraph (A) is employed at the local level, 
     such individual's name shall be immediately forwarded to the 
     Secretary by the local employer. The Secretary shall, as soon 
     as practicable but in no event later than 30 days after the 
     receipt of the name, ascertain the accuracy of the statement 
     made by such individual pursuant

[[Page S726]]

     to subparagraph (A). Notwithstanding subsection (g), if the 
     Secretary finds that the individual's statement was false, 
     such individual, at the Secretary's discretion, may be 
     disciplined or discharged.
       ``(C) Effect of application at national level.--If an 
     individual described in subparagraph (A) has applied at the 
     national level for an education position, the appointment of 
     such individual at the local level shall be conditional for a 
     period of 90 days. During that period, the Secretary may 
     appoint a more qualified individual (as determined by the 
     Secretary) from a list maintained pursuant to subsection 
     (e)(1)(A) to the position to which such individual was 
     appointed.
       ``(3) Statutory construction.--Except as expressly 
     provided, nothing in this section shall be construed as 
     conferring upon local school boards authority over, or 
     control of, educators at Bureau funded schools or the 
     authority to issue management decisions.
       ``(4) Appeals.--
       ``(A) By supervisor.--The supervisor of a school may appeal 
     to the appropriate agency education line officer any 
     determination by the local school board for the school that 
     an individual be employed, or not be employed, in an 
     education position in the school (other than that of 
     supervisor) by filing a written statement describing the 
     determination and the reasons the supervisor believes such 
     determination should be overturned. A copy of such statement 
     shall be submitted to the local school board and such board 
     shall be afforded an opportunity to respond, in writing, to 
     such appeal. After reviewing such written appeal and 
     response, the education line officer may, for good cause, 
     overturn the determination of the local school board. The 
     education line officer shall transmit the determination of 
     such appeal in the form of a written opinion to such board 
     and to such supervisor identifying the reasons for 
     overturning such determination.
       ``(B) By education line officer.--The education line 
     officer of an agency office of the Bureau may appeal to the 
     Director of the Office any determination by the local school 
     board for the school that an individual be employed, or not 
     be employed, as the supervisor of a school by filing a 
     written statement describing the determination and the 
     reasons the supervisor believes such determination should be 
     overturned. A copy of such statement shall be submitted to 
     the local school board and such board shall be afforded. an 
     opportunity to respond, in writing, to such appeal. After 
     reviewing such written appeal and response, the Director may, 
     for good cause, overturn the determination of the local 
     school board. The Director shall transmit the determination 
     of such appeal in the form of a written opinion to such board 
     and to such education line officer identifying the reasons 
     for overturning such determination.
       ``(5) Other appeals.--The education line officer of an 
     agency office of the Bureau may appeal to the Director of the 
     Office any determination by the agency school board that an 
     individual be employed, or not be employed, in an education 
     position in such agency office by filing a written statement 
     describing the determination and the reasons the supervisor 
     believes such determination should be overturned. A copy of 
     such statement shall be submitted to the agency school board 
     and such board shall be afforded an opportunity to respond, 
     in writing, to such appeal. After reviewing such written 
     appeal and response, the Director may, for good cause, 
     overturn the determination of the agency school board. The 
     Director shall transmit the determination of such appeal in 
     the form of a written opinion to such board and to such 
     education line officer identifying the reasons for 
     overturning such determination.
       ``(f) Discharge and Conditions of Employment of 
     Educators.--
       ``(1) Regulations.--In prescribing regulations to govern 
     the discharge and conditions of employment of educators, the 
     Secretary shall require--
       ``(A) that procedures shall be established for the rapid 
     and equitable resolution of grievances of educators;
       ``(B) that no educator may be discharged without notice of 
     the reasons for the discharge and an opportunity for a 
     hearing under procedures that comport with the requirements 
     of due process; and
       ``(C) that each educator employed in a Bureau school shall 
     be notified 30 days prior to the end of an academic year 
     whether the employment contract of the individual will be 
     renewed for the following year.
       ``(2) Procedures for discharge.--
       ``(A) Determinations.--The supervisor of a Bureau school 
     may discharge (subject to procedures established under 
     paragraph (1)(B)) for cause (as determined under regulations 
     prescribed by the Secretary) any educator employed in such 
     school. On giving notice to an educator of the supervisor's 
     intention to discharge the educator, the supervisor shall 
     immediately notify the local school board of the proposed 
     discharge. A determination by the local school board that 
     such educator shall not be discharged shall be followed by 
     the supervisor.
       ``(B) Appeals.--The supervisor shall have the right to 
     appeal a determination by a local school board under 
     subparagraph (A), as evidenced by school board records, not 
     to discharge an educator to the education line officer of the 
     appropriate agency office of the Bureau. Upon hearing such an 
     appeal, the agency education line officer may, for good 
     cause, issue a decision overturning the determination of the 
     local school board with respect to the employment of such 
     individual. The education line officer shall make the 
     decision in writing and submit the decision to the local 
     school board.
       ``(3) Recommendations of school boards for discharge.--Each 
     local school board for a Bureau school shall have the right--
       ``(A) to recommend to the supervisor that an educator 
     employed in the school be discharged; and
       ``(B) to recommend to the education line officer of the 
     appropriate agency office of the Bureau and to the Director 
     of the Office, that the supervisor of the school be 
     discharged.
       ``(g) Applicability of Indian Preference Laws.--
       ``(1) In general.--Notwithstanding any provision of the 
     Indian preference laws, such laws shall not apply in the case 
     of any personnel action carried out under this section with 
     respect to an applicant or employee not entitled to an Indian 
     preference if each tribal organization concerned grants a 
     written waiver of the application of such laws with respect 
     to such personnel action and states that such waiver is 
     necessary. This paragraph shall not be construed to relieve 
     the Bureau's responsibility to issue timely and adequate 
     announcements and advertisements concerning any such 
     personnel action if such action is intended to fill a vacancy 
     (no matter how such vacancy is created).
       ``(2) Definitions.--In this subsection:
       ``(A) Indian preference laws.--The term `Indian preference 
     laws' means section 12 of the Act of June 18, 1934 (48 Stat. 
     986, chapter 576) or any other provision of law granting a 
     preference to Indians in promotions and other personnel 
     actions. Such term shall not include section 7(b) of the 
     Indian Self-Determination and Education Assistance Act.
       ``(B) Tribal organization.--The term `tribal organization' 
     means--
       ``(i) the recognized governing body of any Indian tribe, 
     band, nation, pueblo, or other organized community, including 
     a Native village (as defined in section 3(c) of the Alaska 
     Native Claims Settlement Act); or
       ``(ii) in connection with any personnel action referred to 
     in this subsection, any local school board to which the 
     governing body has delegated the authority to grant a waiver 
     under this subsection with respect to a personnel action.
       ``(h) Compensation or Annual Salary.--
       ``(1) In general.--
       ``(A) Compensation for educators and education positions.--
     Except as otherwise provided in this section, the Secretary 
     shall fix the basic compensation for educators and education 
     positions--
       ``(i) at rates in effect under the General Schedule for 
     individuals with comparable qualifications, and holding 
     comparable positions, to whom chapter 51 of title 5, United 
     States Code, is applicable; or
       ``(ii) on the basis of the Federal Wage System schedule in 
     effect for the locality involved, and for the comparable 
     positions, at the rates of compensation in effect for the 
     senior executive service.
       ``(B) Compensation or salary for teachers and counselors.--
     The Secretary shall establish the rate of basic compensation, 
     or annual salary rate, for the positions of teachers and 
     counselors (including dormitory counselors and home-living 
     counselors) at the rate of basic compensation applicable (on 
     the date of enactment of the Native American Education 
     Improvement Act of 2001 and thereafter) for comparable 
     positions in the overseas schools under the Defense 
     Department Overseas Teachers Pay and Personnel Practices Act. 
     The Secretary shall allow the local school boards involved 
     authority to implement only the aspects of the Defense 
     Department Overseas Teachers Pay and Personnel Practices Act 
     pay provisions that are considered essential for recruitment 
     and retention of teachers and counselors. Implementation of 
     such provisions shall not be construed to require the 
     implementation of that entire Act.
       ``(C) Rates for new hires.--
       ``(i) In general.--Beginning with the first fiscal year 
     following the date of enactment of the Native American 
     Education Improvement Act of 2001, each local school board of 
     a Bureau school may establish a rate of compensation or 
     annual salary rate described in clause (ii) for teachers and 
     counselors (including academic counselors) who are new hires 
     at the school and who had not worked at the school, as of the 
     first day of such fiscal year.
       ``(ii) Consistent rates.--The rates established under 
     clause (i) shall be consistent with the rates paid for 
     individuals in the same positions, with the same tenure and 
     training, as the teachers and counselors, in any other school 
     within whose boundaries the Bureau school is located.
       ``(iii) Decreases.--In an instance in which the 
     establishment of rates under clause (i) causes a reduction in 
     compensation at a school from the rate of compensation that 
     was in effect for the first fiscal year following the date of 
     enactment of the Native American Education Improvement Act of 
     2001, the new rates of compensation may be applied to the 
     compensation of employees of the school who worked at the 
     school as of such date of enactment by applying those rates 
     at each contract renewal for the employees so that the 
     reduction takes effect in 3 equal installments.
       ``(iv) Increases.--In an instance in which the 
     establishment of such rates at a school causes an increase in 
     compensation from the

[[Page S727]]

     rate of compensation that was in effect for the first fiscal 
     year following the date of enactment of the Native American 
     Education Improvement Act of 2001, the school board may apply 
     the new rates at the next contract renewal so that either--

       ``(I) the entire increase occurs on 1 date; or
       ``(II) the increase takes effect in 3 equal installments.

       ``(D) Established regulations, procedures, and 
     arrangements.--
       ``(i) Promotions and advancements.--The establishment of 
     rates of basic compensation and annual salary rates under 
     subparagraphs (B) and (C) shall not preclude the use of 
     regulations and procedures used by the Bureau prior to April 
     28, 1988, in making determinations regarding promotions and 
     advancements through levels of pay that are based on the 
     merit, education, experience, or tenure of an educator.
       ``(ii) Continued employment or compensation.--The 
     establishment of rates of basic compensation and annual 
     salary rates under subparagraphs (B) and (C) shall not affect 
     the continued employment or compensation of an educator who 
     was employed in an education position on October 31, 1979, 
     and who did not make an election under subsection (o), as in 
     effect on January 1, 1990.
       ``(2) Post differential rates.--
       ``(A) In general.--The Secretary may pay a post 
     differential rate not to exceed 25 percent of the rate of 
     basic compensation, for educators or education positions, on 
     the basis of conditions of environment or work that warrant 
     additional pay, as a recruitment and retention incentive.
       ``(B) Supervisor's authority.--
       ``(i) In general.--Except as provided in clause (ii) on the 
     request of the supervisor and the local school board of a 
     Bureau school, the Secretary shall grant the supervisor of 
     the school authorization to provide 1 or more post 
     differential rates under subparagraph (A).
       ``(ii) Exception.--The Secretary shall disapprove, or 
     approve with a modification, a request for authorization to 
     provide a post differential rate if the Secretary determines 
     for clear and convincing reasons (and advises the board in 
     writing of those reasons) that the rate should be disapproved 
     or decreased because the disparity of compensation between 
     the appropriate educators or positions in the Bureau school, 
     and the comparable educators or positions at the nearest 
     public school, is--

       ``(I)(aa) at least 5 percent; or
       ``(bb) less than 5 percent; and
       ``(II) does not affect the recruitment or retention of 
     employees at the school.

       ``(iii) Approval of requests.--A request made under clause 
     (i) shall be considered to be approved at the end of the 60th 
     day after the request is received in the Central Office of 
     the Bureau unless before that time the request is approved, 
     approved with a modification, or disapproved by the 
     Secretary.
       ``(iv) Discontinuation of or decrease in rates.--The 
     Secretary or the supervisor of a Bureau school may 
     discontinue or decrease a post differential rate provided for 
     under this paragraph at the beginning of an academic year 
     if--

       ``(I) the local school board requests that such 
     differential be discontinued or decreased; or
       ``(II) the Secretary or the supervisor, respectively, 
     determines for clear and convincing reasons (and advises the 
     board in writing of those reasons) that there is no disparity 
     of compensation that would affect the recruitment or 
     retention of employees at the school after the differential 
     is discontinued or decreased.

       ``(v) Reports.--On or before February 1 of each year, the 
     Secretary shall submit to Congress a report describing the 
     requests and approvals of authorization made under this 
     paragraph during the previous year and listing the positions 
     receiving post differential rates under contracts entered 
     into under those authorizations.
       ``(i) Liquidation of Remaining Leave Upon Termination.--
     Upon termination of employment with the Bureau, any annual 
     leave remaining to the credit of an individual within the 
     purview of this section shall be liquidated in accordance 
     with sections 5551(a) and 6306 of title 5, United States 
     Code, except that leave earned or accrued under regulations 
     prescribed pursuant to subsection (c)(9) shall not be so 
     liquidated.
       ``(j) Transfer of Remaining Leave Upon Transfer, Promotion, 
     or Reemployment.--In the case of any educator who--
       ``(1) is transferred, promoted, or reappointed, without a 
     break in service, to a position in the Federal Government 
     under a different leave system than the system for leave 
     described in subsection (c)(9); and
       ``(2) earned or was credited with leave under the 
     regulations prescribed under subsection (c)(9) and has such 
     leave remaining to the credit of such educator;

     such leave shall be transferred to such educator's credit in 
     the employing agency for the position on an adjusted basis in 
     accordance with regulations that shall be prescribed by the 
     Director of the Office of Personnel Management.
       ``(k) Ineligibility for Employment of Voluntarily 
     Terminated Educators.--An educator who voluntarily terminates 
     employment under an employment contract with the Bureau 
     before the expiration of the employment contract shall not be 
     eligible to be employed in another education position in the 
     Bureau during the remainder of the term of such contract.
       ``(l) Dual Compensation.--In the case of any educator 
     employed in an education position described in subsection 
     (a)(1)(A) who--
       ``(1) is employed at the end of an academic year;
       ``(2) agrees in writing to serve in such position for the 
     next academic year; and
       ``(3) is employed in another position during the recess 
     period immediately preceding such next academic year, or 
     during such recess period receives additional compensation 
     referred to in section 5533 of title 5, United States Code, 
     relating to dual compensation;

     such section 5533 shall not apply to such educator by reason 
     of any such employment during the recess period with respect 
     to any receipt of additional compensation.
       ``(m) Voluntary Services.--Notwithstanding section 1342 of 
     title 31, United States Code, the Secretary may, subject to 
     the approval of the local school boards concerned, accept 
     voluntary services on behalf of Bureau schools. Nothing in 
     this part shall be construed to require Federal employees to 
     work without compensation or to allow the use of volunteer 
     services to displace or replace Federal employees. An 
     individual providing volunteer services under this section 
     shall be considered to be a Federal employee only for 
     purposes of chapter 81 of title 5, United States Code, and 
     chapter 171 of title 28, United States Code.
       ``(n) Proration of Pay.--
       ``(1) Election of employee.--Notwithstanding any other 
     provision of law, including laws relating to dual 
     compensation, the Secretary, at the election of an educator, 
     shall prorate the salary of the educator for an academic year 
     over a 12-month period. Each educator employed for the 
     academic year shall annually elect to be paid on a 12-month 
     basis or for those months while school is in session. No 
     educator shall suffer a loss of pay or benefits, including 
     benefits under unemployment or other Federal or federally 
     assisted programs, because of such election.
       ``(2) Change of election.--During the course of such 
     academic year, the employee may change the election made 
     under paragraph (1) once.
       ``(3) Lump-sum payment.--That portion of the employee's pay 
     that would be paid between academic years may be paid in a 
     lump sum at the election of the employee.
       ``(4) Application.--This subsection applies to educators, 
     whether employed under this section or title 5, United States 
     Code.
       ``(o) Extracurricular Activities.--
       ``(1) Stipend.--Notwithstanding any other provision of law, 
     the Secretary may provide, for Bureau employees in each 
     Bureau area, a stipend in lieu of overtime premium pay or 
     compensatory time off for overtime work. Any employee of the 
     Bureau who performs overtime work that consists of additional 
     activities to provide services to students or otherwise 
     support the school's academic and social programs may elect 
     to be compensated for all such work on the basis of the 
     stipend. Such stipend shall be paid as a supplement to the 
     employee's base pay.
       ``(2) Election not to receive stipend.--If an employee 
     elects not to be compensated through the stipend established 
     by this subsection, the appropriate provisions of title 5, 
     United States Code, shall apply with respect to the work 
     involved.
       ``(3) Application.--This subsection applies to Bureau 
     employees, whether employed under this section or title 5, 
     United States Code.
       ``(p) Covered Individuals; Election.--This section shall 
     apply with respect to any educator hired after November 1, 
     1979 (and to any educator who elected to be covered under 
     this section or a corresponding provision after November 1, 
     1979) and to the position in which such educator is employed. 
     The enactment of this section shall not affect the continued 
     employment of an individual employed on October 31, 1979 in 
     an education position, or such person's right to receive the 
     compensation attached to such position.
       ``(q) Furlough Without Consent.--
       ``(1) In general.--An educator who was employed in an 
     education position on October 31, 1979, who was eligible to 
     make an election under subsection (p) at that time, and who 
     did not make the election under paragraph such subsection, 
     may not be placed on furlough (within the meaning of section 
     7511(a)(5) of title 5, United States Code, without the 
     consent of such educator for an aggregate of more than 4 
     weeks within the same calendar year, unless--
       ``(A) the supervisor, with the approval of the local school 
     board (or of the education line officer upon appeal under 
     paragraph (2)), of the Bureau school at which such educator 
     provides services determines that a longer period of furlough 
     is necessary due to an insufficient amount of funds available 
     for personnel compensation at such school, as determined 
     under the financial plan process as determined under section 
     1129(b); and
       ``(B) all educators (other than principals and clerical 
     employees) providing services at such Bureau school are 
     placed on furloughs of equal length, except that the 
     supervisor, with the approval of the local school board (or 
     of the agency education line officer upon appeal under 
     paragraph (2)), may continue 1 or more educators in pay 
     status if--
       ``(i) such educators are needed to operate summer programs, 
     attend summer training sessions, or participate in special 
     activities including curriculum development committees; and
       ``(ii) such educators are selected based upon such 
     educator's qualifications after public notice of the minimum 
     qualifications

[[Page S728]]

     reasonably necessary and without discrimination as to 
     supervisory, nonsupervisory, or other status of the educators 
     who apply.
       ``(2) Appeals.--The supervisor of a Bureau school may 
     appeal to the appropriate agency education line officer any 
     refusal by the local school board to approve any 
     determination of the supervisor that is described in 
     paragraph (1)(A) by filing a written statement describing the 
     determination and the reasons the supervisor believes such 
     determination should be approved. A copy of such statement 
     shall be submitted to the local school board and such board 
     shall be afforded an opportunity to respond, in writing, to 
     such appeal. After reviewing such written appeal and 
     response, the education line officer may, for good cause, 
     approve the determination of the supervisor. The educational 
     line officer shall transmit the determination of such appeal 
     in the form of a written opinion to such local school board 
     and to the supervisor identifying the reasons for approving 
     such determination.

     ``SEC. 1132. COMPUTERIZED MANAGEMENT INFORMATION SYSTEM.

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

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

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

     ``SEC. 1134. RECRUITMENT OF INDIAN EDUCATORS.

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

     ``SEC. 1135. ANNUAL REPORT; AUDITS.

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

     ``SEC. 1136. RIGHTS OF INDIAN STUDENTS.

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

     ``SEC. 1137. REGULATIONS.

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

     ``SEC. 1138. EARLY CHILDHOOD DEVELOPMENT PROGRAM.

       ``(a) Grants.--The Secretary shall make grants to tribes, 
     tribal organizations, and consortia of tribes and tribal 
     organizations to fund early childhood development programs 
     that are operated by such tribes, organizations, or 
     consortia.
       ``(b) Amount of Grants.--
       ``(1) In general.--The amount of the grant made under 
     subsection (a) to each eligible tribe, tribal organization, 
     or consortium of tribes or tribal organizations for each 
     fiscal year shall be equal to the amount that bears the same 
     relationship to the total amount appropriated under 
     subsection (g) for such fiscal year (other than amounts 
     reserved under subsection (f)) as--
       ``(A) the total number of children under age 6 who are 
     members of--
       ``(i) such tribe;
       ``(ii) the tribe that authorized such tribal organization; 
     or
       ``(iii) any tribe that--

       ``(I) is a member of such consortium; or
       ``(II) so authorizes any tribal organization that is a 
     member of such consortium; bears to

       ``(B) the total number of all children under age 6 who are 
     members of any tribe that--
       ``(i) is eligible to receive funds under subsection (a);
       ``(ii) is a member of a consortium that is eligible to 
     receive such funds; or
       ``(iii) is authorized by any tribal organization that is 
     eligible to receive such funds.
       ``(2) Limitation.--No grant may be made under subsection 
     (a)--

[[Page S729]]

       ``(A) to any tribe that has fewer than 500 members;
       ``(B) to any tribal organization that is authorized to 
     act--
       ``(i) on behalf of only 1 tribe that has fewer than 500 
     members; or
       ``(ii) on behalf of 1 or more tribes that have a combined 
     total membership of fewer than 500 members; or
       ``(C) to any consortium composed of tribes, or tribal 
     organizations authorized by tribes to act on behalf of the 
     tribes, that have a combined total tribal membership of fewer 
     than 500 members.
       ``(c) Applications.--
       ``(1) In general.--To be eligible to receive a grant under 
     subsection (a), a tribe, tribal organization, or consortium 
     shall submit to the Secretary an application for the grant at 
     such time, in such manner, and containing such information as 
     the Secretary shall prescribe.
       ``(2) Contents.--An application submitted under paragraph 
     (1) shall describe the early childhood development program 
     that the applicant desires to operate.
       ``(d) Requirement of Programs Funded.--In operating an 
     early childhood development program that is funded through a 
     grant made under subsection (a), a tribe, tribal 
     organization, or consortium--
       ``(1) shall coordinate the program with other childhood 
     development programs and may provide services that meet 
     identified needs of parents, and children under age 6, that 
     are not being met by the programs, including needs for--
       ``(A) prenatal care;
       ``(B) nutrition education;
       ``(C) health education and screening;
       ``(D) family literacy services;
       ``(E) educational testing; and
       ``(F) other educational services;
       ``(2) may include, in the early childhood development 
     program funded through the grant, instruction in the 
     language, art, and culture of the tribe served by the 
     program; and
       ``(3) shall provide for periodic assessments of the 
     program.
       ``(e) Coordination of Family Literacy Programs.--An entity 
     that operates a family literacy program under this section or 
     another similar program funded by the Bureau shall coordinate 
     the program involved with family literacy programs for Indian 
     children carried out under part B of title I of the 
     Elementary and Secondary Education Act of 1965 in order to 
     avoid duplication and to encourage the dissemination of 
     information on quality family literacy programs serving 
     Indians.
       ``(f) Administrative Costs.--The Secretary shall reserve 
     funds appropriated under subsection (g) to include in each 
     grant made under subsection (a) an amount for administrative 
     costs incurred by the tribe, tribal organization, or 
     consortium involved in establishing and maintaining the early 
     childhood development program.
       ``(g) Authorization of Appropriations.--For the purpose of 
     carrying out this section, there are authorized to be 
     appropriated such sums as may be necessary for each of fiscal 
     years 2002, 2003, 2004, 2005, and 2006.

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

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

     ``SEC. 1140. DEFINITIONS.

       ``In this part, unless otherwise specified:
       ``(1) Agency school board.--
       ``(A) In general.--Except as provided in subparagraph (B), 
     the term `agency school board' means a body, for which--
       ``(i) the members are appointed by all of the school boards 
     of the schools located within an agency, including schools 
     operated under contracts or grants; and
       ``(ii) the number of such members shall be determined by 
     the Secretary in consultation with the affected tribes.
       ``(B) Exceptions.--In the case of an agency serving a 
     single school, the school board of such school shall be 
     considered to be the agency school board. In the case of an 
     agency serving a school or schools operated under a contract 
     or grant, at least 1 member of the body described in 
     subparagraph (A) shall be from such a school.
       ``(2) Bureau.--The term `Bureau' means the Bureau of Indian 
     Affairs of the Department of the Interior.
       ``(3) Bureau funded school.--The term `Bureau funded 
     school' means--
       ``(A) a Bureau school;
       ``(B) a contract or grant school; or
       ``(C) a school for which assistance is provided under the 
     Tribally Controlled Schools Act of 1988.
       ``(4) Bureau school.--The term `Bureau school' means--
       ``(A) a Bureau operated elementary school or secondary 
     school that is a day or boarding school; or
       ``(B) a Bureau operated dormitory for students attending a 
     school other than a Bureau school.
       ``(5) Contract or grant school.--The term `contract or 
     grant school' means an elementary school, secondary school, 
     or dormitory that receives financial assistance for its 
     operation under a contract, grant, or agreement with the 
     Bureau under section 102, 103(a), or 208 of the Indian Self-
     Determination and Education Assistance Act, or under the 
     Tribally Controlled Schools Act of 1988.
       ``(6) Education line officer.--The term `education line 
     officer' means a member of the education personnel under the 
     supervision of the Director of the Office, whether located in 
     a central, area, or agency office.
       ``(7) Financial plan.--The term `financial plan' means a 
     plan of services provided by each Bureau school.
       ``(8) Indian organization.--The term `Indian organization' 
     means any group, association, partnership, corporation, or 
     other legal entity owned or controlled by a federally 
     recognized Indian tribe or tribes, or a majority of whose 
     members are members of federally recognized tribes.
       ``(9) Inherently federal functions.--The term `inherently 
     Federal functions' means functions and responsibilities 
     which, under section 1125(c), are non-contractible, 
     including--
       ``(A) the allocation and obligation of Federal funds and 
     determinations as to the amounts of expenditures;
       ``(B) the administration of Federal personnel laws for 
     Federal employees;
       ``(C) the administration of Federal contracting and grant 
     laws, including the monitoring and auditing of contracts and 
     grants in order to maintain the continuing trust, 
     programmatic, and fiscal responsibilities of the Secretary;
       ``(D) the conducting of administrative hearings and 
     deciding of administrative appeals;

[[Page S730]]

       ``(E) the determination of the Secretary's views and 
     recommendations concerning administrative appeals or 
     litigation and the representation of the Secretary in 
     administrative appeals and litigation;
       ``(F) the issuance of Federal regulations and policies as 
     well as any documents published in the Federal Register;
       ``(G) reporting to Congress and the President;
       ``(H) the formulation of the Secretary's and the 
     President's policies and their budgetary and legislative 
     recommendations and views; and
       ``(I) the non-delegable statutory duties of the Secretary 
     relating to trust resources.
       ``(10) Local educational agency.--The term `local 
     educational agency' means a board of education or other 
     legally constituted local school authority having 
     administrative control and direction of free public education 
     in a county, township, or independent or other school 
     district located within a State, and includes any State 
     agency that directly operates and maintains facilities for 
     providing free public education.
       ``(11) Local school board.--The term `local school board', 
     when used with respect to a Bureau school, means a body 
     chosen in accordance with the laws of the tribe to be served 
     or, in the absence of such laws, elected by the parents of 
     the Indian children attending the school, except that, for a 
     school serving a substantial number of students from 
     different tribes--
       ``(A) the members of the body shall be appointed by the 
     tribal governing bodies of the tribes affected; and
       ``(B) the number of such members shall be determined by the 
     Secretary in consultation with the affected tribes.
       ``(12) Office.--The term `Office' means the Office of 
     Indian Education Programs within the Bureau.
       ``(13) Secretary.--The term `Secretary' means the Secretary 
     of the Interior.
       ``(14) Supervisor.--The term `supervisor' means the 
     individual in the position of ultimate authority at a Bureau 
     school.
       ``(15) Tribal governing body.--The term `tribal governing 
     body' means, with respect to any school, the tribal governing 
     body, or tribal governing bodies, that represent at least 90 
     percent of the students served by such school.
       ``(16) Tribe.--The term `tribe' means any Indian tribe, 
     band, nation, or other organized group or community, 
     including an Alaska Native Regional Corporation or Village 
     Corporation (as defined in or established pursuant to the 
     Alaska Native Claims Settlement Act), which is recognized as 
     eligible for the special programs and services provided by 
     the United States to Indians because of their status as 
     Indians.''.

           TITLE II--TRIBALLY CONTROLLED SCHOOLS ACT OF 1988

     SEC. 201. TRIBALLY CONTROLLED SCHOOLS.

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

     ``SEC. 5202. FINDINGS.

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

     ``SEC. 5203. DECLARATION OF POLICY.

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

     ``SEC. 5204. GRANTS AUTHORIZED.

       ``(a) In General.--
       ``(1) Eligibility.--The Secretary shall provide grants to 
     Indian tribes and tribal organizations that--
       ``(A) operate contract schools under title XI of the 
     Education Amendments of 1978 and notify the Secretary of 
     their election to operate the schools with assistance under 
     this part rather than continuing to operate such schools as 
     contract schools under such title;
       ``(B) operate other tribally controlled schools eligible 
     for assistance under this part and submit applications (which 
     are approved by their tribal governing bodies) to the 
     Secretary for such grants; or
       ``(C) elect to assume operation of Bureau funded schools 
     with the assistance provided under this part and submit 
     applications (which are approved by their tribal governing 
     bodies) to the Secretary for such grants.
       ``(2) Deposit of funds.--Funds made available through a 
     grant provided under this part shall be deposited into the 
     general operating fund of the tribally controlled school with 
     respect to which the grant is made.
       ``(3) Use of funds.--
       ``(A) Education related activities.--Except as otherwise 
     provided in this paragraph, funds made available through a 
     grant provided under this part shall be used to defray, at 
     the discretion of the school board of the tribally controlled 
     school with respect to which the grant is provided, any 
     expenditures for education related activities for which the 
     grant may be used under the laws described in section 
     5205(a), or any similar activities, including expenditures 
     for--
       ``(i) school operations, and academic, educational, 
     residential, guidance and counseling, and administrative 
     purposes; and
       ``(ii) support services for the school, including 
     transportation.
       ``(B) Operations and maintenance expenditures.--Funds made 
     available through a grant provided under this part may, at 
     the discretion of the school board of the tribally controlled 
     school with respect to which such grant is provided, be used 
     to defray operations and maintenance expenditures for the 
     school if any funds for the operation and maintenance of the 
     school are allocated to the school under the provisions of 
     any of the laws described in section 5205(a).
       ``(4) Waiver of federal tort claims act.--Notwithstanding 
     section 314 of the Department of Interior and Related 
     Agencies Appropriations Act, 1991 (Public Law 101-512), the 
     Federal Tort Claims Act shall not apply to a program operated 
     by a tribally controlled school if the program is not funded 
     by the Federal agency. Nothing in the preceding sentence 
     shall be construed to apply to--
       ``(A) the employees of the school involved; and
       ``(B) any entity that enters into a contract with a grantee 
     under this section.
       ``(b) Limitations.--
       ``(1) 1 grant per tribe or organization per fiscal year.--
     Not more than 1 grant may be provided under this part with 
     respect to any Indian tribe or tribal organization for any 
     fiscal year.
       ``(2) Nonsectarian use.--Funds made available through any 
     grant provided under this part may not be used in connection 
     with religious worship or sectarian instruction.
       ``(3) Administrative costs limitation.--Funds made 
     available through any grant provided under this part may not 
     be expended for administrative cost (as defined in section 
     1127(a) of the Education Amendments of 1978) in excess of the 
     amount generated for such cost under section 1127 of such 
     Act.
       ``(c) Limitation on Transfer of Funds Among School Sites.--
       ``(1) In general.--In the case of a recipient of a grant 
     under this part that operates schools at more than 1 school 
     site, the grant recipient may expend not more than the lesser 
     of--
       ``(A) 10 percent of the funds allocated for such school 
     site, under section 1127 of the Education Amendments of 1978; 
     or
       ``(B) $400,000 of such funds;
     at any other school site.

[[Page S731]]

       ``(2) Definition of school site.--In this subsection, the 
     term `school site' means the physical location and the 
     facilities of an elementary or secondary educational or 
     residential program operated by, or under contract or grant 
     with, the Bureau for which a discrete student count is 
     identified under the funding formula established under 
     section 1126 of the Education Amendments of 1978.
       ``(d) No Requirement To Accept Grants.--Nothing in this 
     part may be construed--
       ``(1) to require a tribe or tribal organization to apply 
     for or accept; or
       ``(2) to allow any person to coerce any tribe or tribal 
     organization to apply for, or accept,

     a grant under this part to plan, conduct, and administer all 
     of, or any portion of, any Bureau program. The submission of 
     such applications and the timing of such applications shall 
     be strictly voluntary. Nothing in this part may be construed 
     as allowing or requiring the grant recipient to make any 
     grant under this part to any other entity.
       ``(e) No Effect on Federal Responsibility.--Grants provided 
     under this part shall not terminate, modify, suspend, or 
     reduce the responsibility of the Federal Government to 
     provide an educational program.
       ``(f) Retrocession.--
       ``(1) In general.--Whenever a tribal governing body 
     requests retrocession of any program for which assistance is 
     provided under this part, such retrocession shall become 
     effective on a date specified by the Secretary that is not 
     later than 120 days after the date on which the tribal 
     governing body requests the retrocession. A later date may be 
     specified if mutually agreed upon by the Secretary and the 
     tribal governing body. If such a program is retroceded, the 
     Secretary shall provide to any Indian tribe served by such 
     program at least the same quantity and quality of services 
     that would have been provided under such program at the level 
     of funding provided under this part prior to the 
     retrocession.
       ``(2) Status after retrocession.--The tribe requesting 
     retrocession shall specify whether the retrocession relates 
     to status as a Bureau operated school or as a school operated 
     under a contract under the Indian Self-Determination Act.
       ``(3) Transfer of equipment and materials.--Except as 
     otherwise determined by the Secretary, the tribe or tribal 
     organization operating the program to be retroceded shall 
     transfer to the Secretary (or to the tribe or tribal 
     organization that will operate the program as a contract 
     school) the existing equipment and materials that were 
     acquired--
       ``(A) with assistance under this part; or
       ``(B) upon assumption of operation of the program under 
     this part if the school was a Bureau funded school under 
     title XI of the Education Amendments of 1978 before receiving 
     assistance under this part.
       ``(g) Prohibition of Termination for Administrative 
     Convenience.--Grants provided under this part may not be 
     terminated, modified, suspended, or reduced solely for the 
     convenience of the administering agency.

     ``SEC. 5205. COMPOSITION OF GRANTS.

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

     ``SEC. 5206. ELIGIBILITY FOR GRANTS.

       ``(a) Rules.--
       ``(1) In general.--A tribally controlled school is eligible 
     for assistance under this part if the school--
       ``(A) on April 28, 1988, was a contract school under title 
     XI of the Education Amendments of 1978 and the tribe or 
     tribal organization operating the school submits to the 
     Secretary a written notice of election to receive a grant 
     under this part;
       ``(B) was a Bureau operated school under title XI of the 
     Education Amendments of 1978 and has met the requirements of 
     subsection (b);

[[Page S732]]

       ``(C) is not a Bureau funded school, but has met the 
     requirements of subsection (c); or
       ``(D) is a school with respect to which an election has 
     been made under paragraph (2) and that has met the 
     requirements of subsection (b).
       ``(2) New schools.--Notwithstanding paragraph (1), for 
     purposes of determining eligibility for assistance under this 
     part, any application that has been submitted under the 
     Indian Self-Determination and Education Assistance Act by an 
     Indian tribe or tribal organization for a school that is not 
     in operation on the date of enactment of the Native American 
     Education Improvement Act of 2001 shall be reviewed under the 
     guidelines and regulations for applications submitted under 
     the Indian Self-Determination and Education Assistance Act 
     that were in effect at the time the application was 
     submitted, unless the Indian tribe or tribal organization 
     elects to have the application reviewed under the provisions 
     of subsection (b).
       ``(b) Additional Requirements for Bureau Funded Schools and 
     Certain Electing Schools.--
       ``(1) Bureau funded schools.--A school that was a Bureau 
     funded school under title XI of the Education Amendments of 
     1978 on the date of enactment of the Native American 
     Education Improvement Act of 2001, and any school with 
     respect to which an election is made under subsection (a)(2), 
     meets the requirements of this subsection if--
       ``(A) the Indian tribe or tribal organization that 
     operates, or desires to operate, the school submits to the 
     Secretary an application requesting that the Secretary--
       ``(i) transfer operation of the school to the Indian tribe 
     or tribal organization, if the Indian tribe or tribal 
     organization is not already operating the school; and
       ``(ii) make a determination as to whether the school is 
     eligible for assistance under this part; and
       ``(B) the Secretary makes a determination that the school 
     is eligible for assistance under this part.
       ``(2) Certain electing schools.--
       ``(A) Determination.--By not later than 120 days after the 
     date on which an application is submitted to the Secretary 
     under paragraph (1)(A), the Secretary shall determine--
       ``(i) in the case of a school that is not being operated by 
     the Indian tribe or tribal organization, whether to transfer 
     operation of the school to the Indian tribe or tribal 
     organization; and
       ``(ii) whether the school is eligible for assistance under 
     this part.
       ``(B) Consideration; transfers and eligibility.--In 
     considering applications submitted under paragraph (1)(A), 
     the Secretary--
       ``(i) shall transfer operation of the school to the Indian 
     tribe or tribal organization, if the tribe or tribal 
     organization is not already operating the school; and
       ``(ii) shall determine that the school is eligible for 
     assistance under this part, unless the Secretary finds by 
     clear and convincing evidence that the services to be 
     provided by the Indian tribe or tribal organization will be 
     deleterious to the welfare of the Indians served by the 
     school and will not carry out the purposes of this Act.
       ``(C) Consideration; possible deficiencies.--In considering 
     applications submitted under paragraph (1)(A), the Secretary 
     shall only consider whether the Indian tribe or tribal 
     organization would be deficient in operating the school with 
     respect to--
       ``(i) equipment;
       ``(ii) bookkeeping and accounting procedures;
       ``(iii) ability to adequately manage a school; or
       ``(iv) adequately trained personnel.
       ``(c) Additional Requirements for a School That Is Not a 
     Bureau Funded School.--
       ``(1) In general.--A school that is not a Bureau funded 
     school under title XI of the Education Amendments of 1978 
     meets the requirements of this subsection if--
       ``(A) the Indian tribe or tribal organization that 
     operates, or desires to operate, the school submits to the 
     Secretary an application requesting a determination by the 
     Secretary as to whether the school is eligible for assistance 
     under this part; and
       ``(B) the Secretary makes a determination that the school 
     is eligible for assistance under this part.
       ``(2) Deadline for determination by secretary.--
       ``(A) Determination.--By not later than 180 days after the 
     date on which an application is submitted to the Secretary 
     under paragraph (1)(A), the Secretary shall determine whether 
     the school is eligible for assistance under this part.
       ``(B) Factors.--In making the determination under 
     subparagraph (A), the Secretary shall give equal 
     consideration to each of the following factors:
       ``(i) With respect to the applicant's proposal--

       ``(I) the adequacy of facilities or the potential to obtain 
     or provide adequate facilities;
       ``(II) geographic and demographic factors in the affected 
     areas;
       ``(III) adequacy of the applicant's program plans;
       ``(IV) geographic proximity of comparable public education; 
     and
       ``(V) the needs to be met by the school, as expressed by 
     all affected parties, including but not limited to students, 
     families, tribal governments at both the central and local 
     levels, and school organizations.

       ``(ii) With respect to all education services already 
     available--

       ``(I) geographic and demographic factors in the affected 
     areas;
       ``(II) adequacy and comparability of programs already 
     available;
       ``(III) consistency of available programs with tribal 
     education codes or tribal legislation on education; and
       ``(IV) the history and success of those services for the 
     proposed population to be served, as determined from all 
     factors including, if relevant, standardized examination 
     performance.

       ``(C) Exception regarding proximity.--The Secretary may not 
     make a determination under this paragraph that is primarily 
     based upon the geographic proximity of comparable public 
     education.
       ``(D) Information on factors.--An application submitted 
     under paragraph (1)(A) shall include information on the 
     factors described in subparagraph (B)(i), but the applicant 
     may also provide the Secretary such information relative to 
     the factors described in subparagraph (B)(ii) as the 
     applicant considers to be appropriate.
       ``(E) Treatment of lack of determination.--If the Secretary 
     fails to make a determination under subparagraph (A) with 
     respect to an application within 180 days after the date on 
     which the Secretary received the application--
       ``(i) the Secretary shall be deemed to have made a 
     determination that the tribally controlled school is eligible 
     for assistance under this part; and
       ``(ii) the grant shall become effective 18 months after the 
     date on which the Secretary received the application, or on 
     an earlier date, at the Secretary's discretion.
       ``(d) Filing of Applications and Reports.--
       ``(1) In general.--Each application or report submitted to 
     the Secretary under this part, and any amendment to such 
     application or report, shall be filed with the education line 
     officer designated by the Director of the Office of Indian 
     Education Programs of the Bureau of Indian Affairs. The date 
     on which the filing occurs shall, for purposes of this part, 
     be treated as the date on which the application, report, or 
     amendment was submitted to the Secretary.
       ``(2) Supporting documentation.--
       ``(A) In general.--Any application that is submitted under 
     this part shall be accompanied by a document indicating the 
     action taken by the appropriate tribal governing body 
     concerning authorizing such application.
       ``(B) Authorization action.--The Secretary shall administer 
     the requirement of subparagraph (A) in a manner so as to 
     ensure that the tribe involved, through the official action 
     of the tribal governing body, has approved of the application 
     for the grant.
       ``(C) Rule of construction.--Nothing in this paragraph 
     shall be construed as making a tribal governing body (or 
     tribe) that takes an action described in subparagraph (A) a 
     party to the grant (unless the tribal governing body or the 
     tribe is the grantee) or as making the tribal governing body 
     or tribe financially or programmatically responsible for the 
     actions of the grantee.
       ``(3) Rules of construction.--Nothing in this subsection 
     shall be construed as making a tribe act as a surety for the 
     performance of a grantee under a grant under this part.
       ``(4) Clarification.--The provisions of paragraphs (2) and 
     (3) shall be construed as a clarification of policy in 
     existence on the date of enactment of the Native American 
     Education Improvement Act of 2001 with respect to grants 
     under this part and shall not be construed as altering such 
     policy or as a new policy.
       ``(e) Effective Date for Approved Applications.--Except as 
     provided in subsection (c)(2)(E), a grant provided under this 
     part shall be made, and any transfer of the operation of a 
     Bureau school made under subsection (b) shall become 
     effective, beginning on the first day of the academic year 
     succeeding the fiscal year in which the application for the 
     grant or transfer is made, or on an earlier date determined 
     by the Secretary.
       ``(f) Denial of Applications.--
       ``(1) In general.--If the Secretary disapproves a grant 
     under this part, disapproves the transfer of operations of a 
     Bureau school under subsection (b), or determines that a 
     school is not eligible for assistance under this part, the 
     Secretary shall--
       ``(A) state the objections in writing to the tribe or 
     tribal organization involved within the allotted time;
       ``(B) provide assistance to the tribe or tribal 
     organization to cure all stated objections;
       ``(C) at the request of the tribe or tribal organization, 
     provide to the tribe or tribal organization a hearing on the 
     record regarding the refusal or determination involved, under 
     the same rules and regulations as apply under the Indian 
     Self-Determination and Education Assistance Act; and
       ``(D) provide to the tribe or tribal organization an 
     opportunity to appeal the decision resulting from the 
     hearing.
       ``(2) Timeline for reconsideration of amended 
     applications.--The Secretary shall reconsider any amended 
     application submitted under this part within 60 days after 
     the amended application is submitted to the Secretary and 
     shall submit the determinations of the Secretary with respect 
     to such reconsideration to the tribe or the tribal 
     organization.
       ``(g) Report.--The Bureau shall prepare and submit to 
     Congress an annual report on

[[Page S733]]

     all applications received, and actions taken (including the 
     costs associated with such actions), under this section on 
     the same date as the date on which the President is required 
     to submit to Congress a budget of the United States 
     Government under section 1105 of title 31, United States 
     Code.

     ``SEC. 5207. DURATION OF ELIGIBILITY DETERMINATION.

       ``(a) In General.--If the Secretary determines that a 
     tribally controlled school is eligible for assistance under 
     this part, the eligibility determination shall remain in 
     effect until the determination is revoked by the Secretary, 
     and the requirements of subsection (b) or (c) of section 
     5206, if applicable, shall be considered to have been met 
     with respect to such school until the eligibility 
     determination is revoked by the Secretary.
       ``(b) Annual Reports.--
       ``(1) In general.--Each recipient of a grant provided under 
     this part for a school shall prepare an annual report 
     concerning the school involved, the contents of which shall 
     be limited to--
       ``(A) an annual financial statement reporting revenue and 
     expenditures as defined by the cost accounting standards 
     established by the grant recipient;
       ``(B) a biannual financial audit conducted pursuant to the 
     standards of chapter 71 of title 31, United States Code;
       ``(C) a biannual compliance audit of the procurement of 
     personal property during the period for which the report is 
     being prepared that shall be in compliance with written 
     procurement standards that are developed by the local school 
     board;
       ``(D) an annual submission to the Secretary containing 
     information on the number of students served and a brief 
     description of programs offered through the grant; and
       ``(E) a program evaluation conducted by an impartial 
     evaluation review team, to be based on the standards 
     established for purposes of subsection (c)(1)(A)(ii).
       ``(2) Evaluation review teams.--In appropriate cases, 
     representatives of other tribally controlled schools and 
     representatives of tribally controlled community colleges 
     shall be members of the evaluation review teams.
       ``(3) Evaluations.--In the case of a school that is 
     accredited, the evaluations required under this subsection 
     shall be conducted at intervals under the terms of the 
     accreditation.
       ``(4) Submission of report.--
       ``(A) To tribal governing body.--Upon completion of the 
     annual report required under paragraph (1), the recipient of 
     the grant shall send (via first class mail, return receipt 
     requested) a copy of such annual report to the tribal 
     governing body.
       ``(B) To secretary.--Not later than 30 days after receiving 
     written confirmation that the tribal governing body has 
     received the report sent pursuant to subparagraph (A), the 
     recipient of the grant shall send a copy of the report to the 
     Secretary.
       ``(c) Revocation of Eligibility.--
       ``(1) In general.--
       ``(A) Nonrevocation conditions.--The Secretary shall not 
     revoke a determination that a school is eligible for 
     assistance under this part if--
       ``(i) the Indian tribe or tribal organization submits the 
     reports required under subsection (b) with respect to the 
     school; and
       ``(ii) at least 1 of the following conditions applies with 
     respect to the school:

       ``(I) The school is certified or accredited by a State 
     certification or regional accrediting association or is a 
     candidate in good standing for such certification or 
     accreditation under the rules of the State certification or 
     regional accrediting association, showing that credits 
     achieved by the students within the education programs of the 
     school are, or will be, accepted at grade level by a State 
     certified or regionally accredited institution.
       ``(II) The Secretary determines that there is a reasonable 
     expectation that the certification or accreditation described 
     in subclause (I), or candidacy in good standing for such 
     certification or accreditation, will be achieved by the 
     school within 3 years and that the program offered by the 
     school is beneficial to Indian students.
       ``(III) The school is accredited by a tribal department of 
     education if such accreditation is accepted by a generally 
     recognized State certification or regional accrediting 
     agency.
       ``(IV) The school accepts the standards issued under 
     section 1121 of the Education Amendments of 1978 and an 
     impartial evaluator chosen by the grant recipient conducts a 
     program evaluation for the school under this section in 
     conformance with the regulations pertaining to Bureau 
     operated schools, but no grant recipient shall be required to 
     comply with the standards to a greater degree than a 
     comparable Bureau operated school.
       ``(V)(aa) Every 3 years, an impartial evaluator agreed upon 
     by the Secretary and the grant recipient conducts evaluations 
     of the school, and the school receives a positive assessment 
     under such evaluations. The evaluations are conducted under 
     standards adopted by a contractor under a contract for the 
     school entered into under the Indian Self-Determination and 
     Education Assistance Act (or revisions of such standards 
     agreed to by the Secretary and the grant recipient) prior to 
     the date of enactment of the Native American Education 
     Improvement Act of 2001.
       ``(bb) If the Secretary and a grant recipient other than a 
     tribal governing body fail to agree on such an evaluator, the 
     tribal governing body shall choose the evaluator or perform 
     the evaluation. If the Secretary and a grant recipient that 
     is a tribal governing body fail to agree on such an 
     evaluator, item (aa) shall not apply.

       ``(B) Standards.--The choice of standards employed for the 
     purposes of subparagraph (A)(ii) shall be consistent with 
     section 1121(e) of the Education Amendments of 1978.
       ``(2) Notice requirements for revocation.--The Secretary 
     shall not revoke a determination that a school is eligible 
     for assistance under this part, or reassume control of a 
     school that was a Bureau school prior to approval of an 
     application submitted under section 5206(b)(1)(A), until the 
     Secretary--
       ``(A) provides notice, to the tribally controlled school 
     involved and the appropriate tribal governing body (within 
     the meaning of section 1140 of the Education Amendments of 
     1978) for the tribally controlled school, which states--
       ``(i) the specific deficiencies that led to the revocation 
     or reassumption determination; and
       ``(ii) the actions that are needed to remedy such 
     deficiencies; and
       ``(B) affords such school and governing body an opportunity 
     to carry out the remedial actions.
       ``(3) Technical assistance.--The Secretary shall provide 
     such technical assistance to enable the school and governing 
     body to carry out such remedial actions.
       ``(4) Hearing and appeal.--In addition to notice and 
     technical assistance under this subsection, the Secretary 
     shall provide to the school and governing body--
       ``(A) at the request of the school or governing body, a 
     hearing on the record regarding the revocation or 
     reassumption determination, to be conducted under the rules 
     and regulations described in section 5206(f)(1)(C); and
       ``(B) an opportunity to appeal the decision resulting from 
     the hearing.
       ``(d) Applicability of Section Pursuant to Election Under 
     Section 5209(b).--With respect to a tribally controlled 
     school that receives assistance under this part pursuant to 
     an election made under section 5209(b)--
       ``(1) subsection (b) shall apply; and
       ``(2) the Secretary may not revoke eligibility for 
     assistance under this part except in conformance with 
     subsection (c).

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

       ``(a) Payments.--
       ``(1) Manner of payments.--
       ``(A) In general.--Except as otherwise provided in this 
     subsection, the Secretary shall make payments to grant 
     recipients under this part in 2 payments, of which--
       ``(i) the first payment shall be made not later than July 
     15 of each year in an amount equal to 80 percent of the 
     amount that the grant recipient was entitled to receive 
     during the preceding academic year; and
       ``(ii) the second payment, consisting of the remainder to 
     which the grant recipient was entitled for the academic year, 
     shall be made not later than December 1 of each year.
       ``(B) Excess funding.--In a case in which the amount 
     provided to a grant recipient under subparagraph (A)(i) is in 
     excess of the amount that the recipient is entitled to 
     receive for the academic year involved, the recipient shall 
     return to the Secretary such excess amount. The amount 
     returned to the Secretary under this subparagraph shall be 
     distributed equally to all schools in the system.
       ``(2) Newly funded schools.--For any school for which no 
     payment under this part was made from Bureau funds in the 
     academic year preceding the year for which the payments are 
     being made, full payment of the amount computed for the 
     school for the first academic year of eligibility under this 
     part shall be made not later than December 1 of the academic 
     year.
       ``(3) Late funding.--With regard to funds for grant 
     recipients under this part that become available for 
     obligation on October 1 of the fiscal year for which such 
     funds are appropriated, the Secretary shall make payments to 
     the grant recipients not later than December 1 of the fiscal 
     year, except that operations and maintenance funds shall be 
     forward funded and shall be available for obligation not 
     later than July 15 and December 1 of each fiscal year.
       ``(4) Applicability of certain title 31 provisions.--The 
     provisions of chapter 39 of title 31, United States Code, 
     shall apply to the payments required to be made under 
     paragraphs (1), (2), and (3).
       ``(5) Restrictions.--Payments made under paragraphs (1), 
     (2), and (3) shall be subject to any restriction on amounts 
     of payments under this part that is imposed by a continuing 
     resolution or other Act appropriating the funds involved.
       ``(b) Investment of Funds.--
       ``(1) Treatment of interest and investment income.--
     Notwithstanding any other provision of law, any interest or 
     investment income that accrues on or is derived from any 
     funds provided under this part for a school after such funds 
     are paid to an Indian tribe or tribal organization and before 
     such funds are expended for the purpose for which such funds 
     were provided under this part shall be the property of the 
     Indian tribe or tribal organization. The interest or income 
     shall not be taken into account by any officer or employee of 
     the Federal Government in determining whether to provide 
     assistance, or the amount of assistance to be provided, under 
     any provision of Federal law.

[[Page S734]]

       ``(2) Permissible investments.--Funds provided under this 
     part may be invested by an Indian tribe or tribal 
     organization, as approved by the grantee, before such funds 
     are expended for the objectives of this part if such funds 
     are--
       ``(A) invested by the Indian tribe or tribal organization 
     only--
       ``(i) in obligations of the United States;
       ``(ii) in obligations or securities that are guaranteed or 
     insured by the United States; or
       ``(iii) in mutual (or other) funds that are registered with 
     the Securities and Exchange Commission and that only invest 
     in obligations of the United States, or securities that are 
     guaranteed or insured by the United States; or
       ``(B) deposited only into accounts that are insured by an 
     agency or instrumentality of the United States, or are fully 
     supported by collateral to ensure protection of the funds, 
     even in the event of a bank failure.
       ``(c) Recoveries.--Funds received under this part shall not 
     be taken into consideration by any Federal agency for the 
     purposes of making underrecovery and overrecovery 
     determinations for any other funds, from whatever source 
     derived.
       ``(d) Payments by States.--
       ``(1) In general.--With respect to a school that receives 
     assistance under this part, a State shall not--
       ``(A) take into account the amount of such assistance in 
     determining the amount of funds that such school is eligible 
     to receive under applicable State law; or
       ``(B) reduce any State payments that such school is 
     eligible to receive under applicable State law because of the 
     assistance received by the school under this part.
       ``(2) Violations.--
       ``(A) In general.--Upon receipt of any information from any 
     source that a State is in violation of paragraph (1), the 
     Secretary shall immediately, but in no case later than 90 
     days after the receipt of such information, conduct an 
     investigation and make a determination of whether such 
     violation has occurred.
       ``(B) Determination.--If the Secretary makes a 
     determination under subparagraph (A) that a State has 
     violated paragraph (1), the Secretary shall inform the 
     Secretary of Education of such determination and the basis 
     for the determination. The Secretary of Education shall, in 
     an expedient manner, pursue penalties under paragraph (3) 
     with respect to the State.
       ``(3) Penalties.--A State determined to have violated 
     paragraph (1) shall be subject to penalties similar to the 
     penalties described in section 8809(e) of the Elementary and 
     Secondary Education Act of 1965 for a violation of title VIII 
     of such Act.

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

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

     ``SEC. 5210. ROLE OF THE DIRECTOR.

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

     ``SEC. 5211. REGULATIONS.

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

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

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

     ``SEC. 5213. DEFINITIONS.

       ``In this part:
       ``(1) Bureau.--The term `Bureau' means the Bureau of Indian 
     Affairs of the Department of the Interior.
       ``(2) Eligible indian student.--The term `eligible Indian 
     student' has the meaning given such term in section 1126(a) 
     of the Education Amendments of 1978.
       ``(3) Indian.--The term `Indian' means a member of an 
     Indian tribe, and includes individuals who are eligible for 
     membership in a tribe, and the child or grandchild of such an 
     individual.
       ``(4) Indian tribe.--The term `Indian tribe' means any 
     Indian tribe, band, nation, or other organized group or 
     community, including an Alaska Native Village Corporation or

[[Page S735]]

     Regional Corporation (as defined in or established pursuant 
     to the Alaskan Native Claims Settlement Act), which is 
     recognized as eligible for the special programs and services 
     provided by the United States to Indians because of their 
     status as Indians.
       ``(5) Local educational agency.--The term `local 
     educational agency' means a public board of education or 
     other public authority legally constituted within a State for 
     either administrative control or direction of, or to perform 
     a service function for, public elementary schools or 
     secondary schools in a city, county, township, school 
     district, or other political subdivision of a State or such 
     combination of school districts or counties as are recognized 
     in a State as an administrative agency for the State's public 
     elementary schools or secondary schools. Such term includes 
     any other public institution or agency having administrative 
     control and direction of a public elementary school or 
     secondary school.
       ``(6) Secretary.--The term `Secretary' means the Secretary 
     of the Interior.
       ``(7) Tribal governing body.--The term `tribal governing 
     body' means, with respect to any school that receives 
     assistance under this Act, the recognized governing body of 
     the Indian tribe involved.
       ``(8) Tribal organization.--
       ``(A) In general.--The term `tribal organization' means--
       ``(i) the recognized governing body of any Indian tribe; or
       ``(ii) any legally established organization of Indians 
     that--

       ``(I) is controlled, sanctioned, or chartered by such 
     governing body or is democratically elected by the adult 
     members of the Indian community to be served by such 
     organization; and
       ``(II) includes the maximum participation of Indians in all 
     phases of the organization's activities.

       ``(B) Authorization.--In any case in which a grant is 
     provided under this part to an organization to provide 
     services through a tribally controlled school benefiting more 
     than 1 Indian tribe, the approval of the governing bodies of 
     Indian tribes representing 80 percent of the students 
     attending the tribally controlled school shall be considered 
     a sufficient tribal authorization for such grant.
       ``(9) Tribally controlled school.--The term `tribally 
     controlled school' means a school that--
       ``(A) is operated by an Indian tribe or a tribal 
     organization, enrolling students in kindergarten through 
     grade 12, including a preschool;
       ``(B) is not a local educational agency; and
       ``(C) is not directly administered by the Bureau of Indian 
     Affairs.''.
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