[House Report 105-765]
[From the U.S. Government Publishing Office]



105th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES

 2d Session                                                     105-765
_______________________________________________________________________


 
               TRIBAL SELF-GOVERNANCE AMENDMENTS OF 1998

_______________________________________________________________________


October 2, 1998.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

                                _______
                                

  Mr. Young of Alaska, from the Committee on Resources, submitted the 
                               following

                              R E P O R T

                             together with

                            ADDITIONAL VIEWS

                        [To accompany H.R. 1833]

      [Including cost estimate of the Congressional Budget Office]

  The Committee on Resources, to whom was referred the bill 
(H.R. 1833) to amend the Indian Self-Determination and 
Education Assistance Act to provide for further Self-Governance 
by Indian Tribes, and for other purposes, having considered the 
same, report favorably thereon with an amendment and recommend 
that the bill as amended do pass.
  The amendment is as follows:
  Strike out all after the enacting clause and insert in lieu 
thereof the following:

SECTION 1. SHORT TITLE.

  This Act may be cited as the ``Tribal Self-Governance Amendments of 
1998''.

SEC. 2. FINDINGS.

  Congress finds that--
          (1) the tribal right of self-government flows from the 
        inherent sovereignty of Indian tribes and nations;
          (2) the United States recognizes a special government-to-
        government relationship with Indian tribes, including the right 
        of the Indian tribes to Self-Governance, as reflected in the 
        Constitution, treaties, Federal statutes, and the course of 
        dealings of the United States with Indian tribes;
          (3) although progress has been made, the Federal bureaucracy, 
        with its centralized rules and regulations, has eroded tribal 
        Self-Governance and dominates tribal affairs;
          (4) the Tribal Self-Governance Project, established under 
        title III of the Indian Self-Determination and Education 
        Assistance Act of 1975 (25 U.S.C. 450f note) was designed to 
        improve and perpetuate the government-to-government 
        relationship between Indian tribes and the United States and to 
        strengthen tribal control over Federal funding and program 
        management;
          (5) although the Federal Government has made considerable 
        strides in improving Indian health care, it has failed to fully 
        meet its trust responsibilities and to satisfy its obligations 
        to the Indian tribes under treaties and other laws; and
          (6) Congress has reviewed the results of the Tribal Self-
        Governance Demonstration Project and finds that transferring 
        full control and funding to tribal governments, upon tribal 
        request, over decision making for Federal programs, services, 
        functions, and activities (or portions thereof)--
                  (A) is an appropriate and effective means of 
                implementing the Federal policy of government-to-
                government relations with Indian tribes; and
                  (B) strengthens the Federal policy of Indian self-
                determination.

SEC. 3. DECLARATION OF POLICY.

  It is the policy of Congress to--
          (1) permanently establish and implement tribal Self-
        Governance within the Department of Health and Human Services;
          (2) call for full cooperation from the Department of Health 
        and Human Services and its constituent agencies in the 
        implementation of tribal Self-Governance--
                  (A) to enable the United States to maintain and 
                improve its unique and continuing relationship with, 
                and responsibility to, Indian tribes;
                  (B) to permit each Indian tribe to choose the extent 
                of its participation in Self-Governance;
                  (3) in accordance with the provisions of the Indian 
                Self-Determination Act relating to the provision of 
                Federal services to Indian tribes;
                  (D) to ensure the continuation of the trust 
                responsibility of the United States to Indian tribes 
                and Indian individuals;
                  (E) to affirm and enable the United States to fulfill 
                its obligations to the Indian tribes under treaties and 
                other laws;
                  (F) to strengthen the government-to-government 
                relationship between the United States and Indian 
                tribes through direct and meaningful consultation with 
                all tribes;
                  (G) to permit an orderly transition from Federal 
                domination of programs and services to provide Indian 
                tribes with meaningful authority, control, funding and 
                discretion to plan, conduct, redesign and administer 
                programs, services, functions and activities (or 
                portions thereof) that meet the needs of the individual 
                tribal communities;
                  (H) to provide for a measurable parallel reduction in 
                the Federal bureaucracy as programs, services, 
                functions, and activities (or portions thereof) are 
                assumed by Indian tribes;
                  (I) to encourage the Secretary to identify all 
                programs, services, functions, and activities (or 
                portions thereof) of the Department of Health and Human 
                Services that may be managed by an Indian tribe under 
                this Act and to assist Indian tribes in assuming 
                responsibility for such programs, services, functions, 
                and activities (or portions thereof); and
                  (J) to provide Indian tribes with the earliest 
                opportunity to administer programs, services, 
                functions, and activities (or portions thereof) from 
                throughout the Department of Health and Human Services.

SEC. 4. TRIBAL SELF-GOVERNANCE.

  The Indian Self-Determination and Education Assistance Act (25 U.S.C. 
450 et seq.) is amended by adding at the end the following new title:

                   ``TITLE V--TRIBAL SELF-GOVERNANCE

``SEC. 501. ESTABLISHMENT.

  ``The Secretary of Health and Human Services shall establish and 
carry out a program within the Department of Health and Human Services 
to be known as the `Tribal Self-Governance Program' in accordance with 
this title.

``SEC. 502. DEFINITIONS.

  ``(a) In General.--For purposes of this title--
          ``(1) the term `inherent Federal functions' means those 
        Federal functions which cannot legally be delegated to Indian 
        tribes;
          ``(2) the term `inter-tribal consortium' means a coalition of 
        two or more separate Indian tribes that join together for the 
        purpose of participating in Self-Governance, including, but not 
        limited to, a tribal organization;
          ``(3) the term `tribal shares' means an Indian tribe's 
        portion of all funds and resources that support secretarial 
        programs, services, functions, and activities (or portions 
        thereof) that are not required by the Secretary for performance 
        of inherent Federal functions;
          ``(4) the term `Secretary' means the Secretary of Health and 
        Human Services; and
          ``(5) the term `Self-Governance' means the program 
        established pursuant to section 501.
  ``(b) Indian Tribe.--Where an Indian tribe has authorized another 
Indian tribe, an inter-tribal consortium, or a tribal organization to 
plan for or carry out programs, services, functions, or activities (or 
portions thereof) on its behalf under this title, the authorized Indian 
tribe, inter-tribal consortium, or tribal organization shall have the 
rights and responsibilities of the authorizing Indian tribe (except as 
otherwise provided in the authorizing resolution or in this title). In 
such event, the term `Indian tribe' as used in this title shall include 
such other authorized Indian tribe, inter-tribal consortium, or tribal 
organization.

``SEC. 503. SELECTION OF PARTICIPATING INDIAN TRIBES.

  ``(a) Continuing Participation.--Each Indian tribe that is 
participating in the Tribal Self-Governance Demonstration Project under 
title III on the date of enactment of this title may elect to 
participate in Self-Governance under this title under existing 
authority as reflected in tribal resolution.
  ``(b) Additional Participants.--
          ``(1) In addition to those Indian tribes participating in 
        Self-Governance under subsection (a), each year an additional 
        50 Indian tribes that meet the eligibility criteria specified 
        in subsection (c) shall be entitled to participate in Self-
        Governance.
          ``(2)(A) An Indian tribe that has withdrawn from 
        participation in an inter-tribal consortium or tribal 
        organization, in whole or in part, shall be entitled to 
        participate in Self-Governance provided the Indian tribe meets 
        the eligibility criteria specified in subsection (c).
          ``(B) If an Indian tribe has withdrawn from participation in 
        an inter-tribal consortium or tribal organization, it shall be 
        entitled to its tribal share of funds supporting those 
        programs, services, functions, and activities (or portions 
        thereof) that it will be carrying out under its compact and 
        funding agreement.
          ``(C) In no event shall the withdrawal of an Indian tribe 
        from an inter-tribal consortium or tribal organization affect 
        the eligibility of the inter-tribal consortium or tribal 
        organization to participate in Self-Governance.
  ``(c) Applicant Pool.--The qualified applicant pool for Self-
Governance shall consist of each Indian tribe that--
          ``(1) successfully completes the planning phase described in 
        subsection (d);
          ``(2) has requested participation in Self-Governance by 
        resolution or other official action by the governing body (or 
        bodies) of the Indian tribe or tribes to be served; and
          ``(3) has demonstrated, for the previous 3 fiscal years, 
        financial stability and financial management capability.
Evidence that during such years the Indian tribe had no uncorrected 
significant and material audit exceptions in the required annual audit 
of the Indian tribe's self-determination contracts or Self-Governance 
funding agreements with any Federal agency shall be conclusive evidence 
of the required stability and capability for the purposes of this 
subsection.
  ``(d) Planning Phase.--Each Indian tribe seeking participation in 
Self-Governance shall complete a planning phase. The planning phase 
shall be conducted to the satisfaction of the Indian tribe and shall 
include--
          ``(1) legal and budgetary research; and
          ``(2) internal tribal government planning and organizational 
        preparation relating to the administration of health care 
        programs.
  ``(e) Grants.--Subject to the availability of appropriations, any 
Indian tribe meeting the requirements of subsections (c)(2) and (3) 
shall be eligible for grants--
          ``(1) to plan for participation in Self-Governance; and
          ``(2) to negotiate the terms of participation by the Indian 
        tribe or tribal organization in Self-Governance, as set forth 
        in a compact and a funding agreement.
  ``(f) Receipt of Grant Not Required.--Receipt of a grant under 
subsection (e) shall not be a requirement of participation in Self-
Governance.

``SEC. 504. COMPACTS.

  ``(a) Compact Required.--The Secretary shall negotiate and enter into 
a written compact with each Indian tribe participating in Self-
Governance in a manner consistent with the Federal Government's trust 
responsibility, treaty obligations, and the government-to-government 
relationship between Indian tribes and the United States.
  ``(b) Contents.--Each compact required under subsection (a) shall set 
forth the general terms of the government-to-government relationship 
between the Indian tribe and the Secretary, including such terms as the 
parties intend shall control year after year. Such compacts may only be 
amended by mutual agreement of the parties.
  ``(c) Existing Compacts.--An Indian tribe participating in the tribal 
Self-Governance on the date of enactment of this title shall have the 
option at any time thereafter to--
          ``(1) retain its Tribal Self-Governance Project compact (in 
        whole or in part) to the extent the provisions of such compact 
        are not directly contrary to any express provision of this 
        title, or
          ``(2) negotiate in lieu thereof (in whole or in part) a new 
        compact in conformity with this title.
  ``(d) Term and Effective Date.--The effective date of a compact shall 
be the date of the approval and execution by the Indian tribe or 
another date agreed upon by the parties, and shall remain in effect for 
so long as permitted by Federal law or until terminated by mutual 
written agreement, retrocession, or reassumption.

``SEC. 505. FUNDING AGREEMENTS.

  ``(a) Funding Agreement Required.--The Secretary shall negotiate and 
enter into a written funding agreement with each Indian tribe 
participating in Self-Governance in a manner consistent with the 
Federal Government's trust responsibility, treaty obligations, and the 
government-to-government relationship between Indian tribes and the 
United States.
  ``(b) Contents.--Each funding agreement required under subsection (a) 
shall, as determined by the Indian tribe, authorize the Indian tribe to 
plan, conduct, consolidate, administer, and receive full tribal share 
funding for all programs, services, functions, and activities (or 
portions thereof), including tribal shares of discretionary Indian 
Health Service competitive grants (excluding congressionally earmarked 
competitive grants), that are carried out for the benefit of Indians 
because of their status as Indians (including all programs, services, 
functions, or activities (or portions thereof) where Indian tribes or 
Indians are primary or significant beneficiaries, administered by the 
Department of Health and Human Services through the Indian Health 
Service and grants (which may be added to a funding agreement after 
award of such grants)) without regard to the agency or office of the 
Indian Health Service (or of such other agency) within which the 
program, service, function, or activity (or portion thereof) is 
performed, including tribal share funding for all local, field, service 
unit, area, regional, and central headquarters or national office 
functions administered under the authority of--
          ``(1) the Act of November 2, 1921 (25 U.S.C. 13);
          ``(2) the Act of April 16, 1934 (25 U.S.C. 452 et seq.);
          ``(3) the Act of August 5, 1954 (68 Stat. 674);
          ``(4) the Indian Health Care Improvement Act (25 U.S.C. 1601 
        et seq.);
          ``(5) the Indian Alcohol and Substance Abuse Prevention and 
        Treatment Act of 1986 (25 U.S.C. 2401 et seq.);
          ``(6) any other act of Congress authorizing agencies of the 
        Department of Health and Human Services to administer, carry 
        out or provide financial assistance to such programs, services, 
        functions or activities (or portions thereof) described in this 
        section; or
          ``(7) any other act of Congress authorizing such programs, 
        services, functions or activities (or portions thereof) under 
        which appropriations are made to agencies other than agencies 
        within the Department of Health and Human Services, when the 
        Secretary administers such programs, services, functions or 
        activities (or portions thereof).
  ``(c) Inclusion in Compact or Funding Agreement.--Indian tribes or 
Indians need not be identified in the authorizing statute for a program 
or element of a program to be eligible for inclusion in a compact or 
funding agreement under this title.
  ``(d) Funding Agreement Terms.--Each funding agreement shall set 
forth terms that generally identify the programs, services, functions, 
and activities (or portions thereof) to be performed or administered, 
the general budget category assigned, the funds to be provided, 
including those to be provided on a recurring basis,the time and method 
of transfer of the funds, the responsibilities of the Secretary, and 
any other provisions to which the Indian tribe and the Secretary agree.
  ``(e) Subsequent Funding Agreements.--Absent notification from an 
Indian tribe that is withdrawing or retroceding the operation of one or 
more programs, services, functions, or activities (or portions thereof) 
identified in a funding agreement, or unless otherwise agreed to by the 
parties, each funding agreement shall remain in full force and effect 
until a subsequent funding agreement is executed, and the terms of the 
subsequent funding agreement shall be retroactive to the end of the 
term of the preceding funding agreement.
  ``(f) Existing Funding Agreements.--Each Indian tribe participating 
in the Tribal Self-Governance Project established under title III, as 
in force before the enactment of the Tribal Self-Governance Amendments 
of 1998, on the date of enactment of this title shall have the option 
at any time thereafter to--
          ``(1) retain its Tribal Self-Governance Project funding 
        agreement (in whole or in part) to the extent the provisions of 
        such funding agreement are not directly contrary to any express 
        provision of this title, or
          ``(2) adopt in lieu thereof (in whole or in part) a new 
        funding agreement in conformity with this title.
  ``(g) Stable Base Funding.--At the option of an Indian tribe, a 
funding agreement may provide for a stable base budget specifying the 
recurring funds (including, for purposes of this provision, funds 
available under section 106(a) of the Act) to be transferred to such 
Indian tribe, for such period as may be specified in the funding 
agreement, subject to annual adjustment only to reflect changes in 
congressional appropriations by sub-sub activity excluding earmarks.

``SEC. 506. SELF-GOVERNANCE FEASIBILITY STUDY.

  ``(a) In General.--The Secretary shall conduct a study, in 
consultation with Indian tribes and other entities specified in 
subsection (b), to determine the feasibility of including in Self-
Governance, on a demonstration project basis, programs of the 
Department of Health and Human Services, other than the Indian Health 
Service, that benefit Indian tribes or their members, and to identify 
the programs suitable for inclusion in such demonstration.
  ``(b) Entities To Be Consulted.--In conducting the study required 
under this section, the Secretary shall consult with Indian tribes, 
States, counties and municipalities, program beneficiaries, and 
concerned public interest groups, and may consult with other entities 
as the Secretary finds appropriate.
  ``(c) Issues.--The study under this section shall consider the 
following issues with respect to the feasibility and design of a Self-
Governance demonstration:
          ``(1) The probable effects on specific programs and program 
        beneficiaries.
          ``(2) Statutory, regulatory, or operational impediments to 
        implementation.
          ``(3) Strategies for facilitating Self-Governance.
          ``(4) Probable costs associated with Self-Governance.
          ``(5) Methods to ensure quality and accountability in Self-
        Governance demonstrations.
          ``(6) Such other issues as may be identified by the 
        Secretary.
  ``(d) Report to Congress.--Not later than 18 months after the date of 
the enactment of this Act, the Secretary shall report to the Congress 
the findings and conclusions of the study under this section and any 
separate or dissenting views of the entities consulted pursuant to 
subsection (b).
  ``(e) Authorization of Appropriations.--There are authorized to be 
appropriated for fiscal years 1999 and 2000 such sums as necessary to 
carry out the purposes of this section, to remain available until 
expended.

``SEC. 507. GENERAL PROVISIONS.

  ``(a) Applicability.--The provisions of this section shall apply to 
compacts and funding agreements negotiated under this title and an 
Indian tribe may, at its option, include provisions that reflect such 
requirements in a compact or funding agreement.
  ``(b) Conflicts of Interest.--Indian tribes participating in Self-
Governance under this title shall ensure that internal measures are in 
place to address conflicts of interest in the administration of Self-
Governance programs, services, functions, or activities (or portions 
thereof).
  ``(c) Audits.--
          ``(1) Single agency audit act.--The provisions of chapter 75 
        of title 31, United States Code requiring a single agency audit 
        report shall apply to funding agreements under this title.
          ``(2) Cost principles.--An Indian tribe shall apply cost 
        principles under the applicable Office of Management and Budget 
        Circular, except as modified by section 106, or by any 
        exemptions to applicable Office of Management and Budget 
        Circulars subsequently granted by Office of Management and 
        Budget. No other audit or accounting standards shall be 
        required by the Secretary. Any claim by the Federal Government 
        against the Indian tribe relating to funds received under a 
        funding agreement based on any audit under this subsection 
        shall be subject to the provisions of section 106(f).
  ``(d) Records.--
          ``(1) In general.--Unless an Indian tribe specifies otherwise 
        in the compact or funding agreement, records of the Indian 
        tribe shall not be considered Federal records for purposes of 
        chapter 5 of title 5, United States Code.
          ``(2) Recordkeeping system.--The Indian tribe shall maintain 
        a recordkeeping system, and, after 30 days advance notice, 
        provide the Secretary with reasonable access to such records to 
        enable the Department of Health and Human Services to meet its 
        minimum legal recordkeeping system requirements under the 
        sections 3101 through 3106 of title 44, United States Code.
  ``(e) Redesign and Consolidation.--An Indian tribe may redesign or 
consolidate programs, services, functions, and activities (or portions 
thereof) included in a funding agreement under section 505 and 
reallocate or redirect funds for such programs, services, functions, 
and activities (or portions thereof) in any manner which the Indian 
tribe deems to be in the best interest of the health and welfare of the 
Indian community being served, only if the redesign or consolidation 
does not have the effect of denying eligibility for services to 
population groups otherwise eligible to be served.
  ``(f) Retrocession.--An Indian tribe may retrocede, fully or 
partially, to the Secretary programs, services, functions, or 
activities (or portions thereof) included in the compact or funding 
agreement. Unless the Indian tribe rescinds the request for 
retrocession, such retrocession will become effective within the time 
frame specified by the parties in the compact or funding agreement. In 
the absence of such a specification, such retrocession shall become 
effective on--
          ``(1) the earlier of--
                  ``(A) one year from the date of submission of such 
                request; or
                  ``(B) the date on which the funding agreement 
                expires; or
          (2) such date as may be mutually agreed by the Secretary and 
        the Indian tribe.
  ``(g) Withdrawal.--
          ``(1) Process.--An Indian tribe may fully or partially 
        withdraw from a participating inter-tribal consortium or tribal 
        organization its share of any program, function, service, or 
        activity (or portions thereof) included in a compact or funding 
        agreement. Such withdrawal shall become effective within the 
        time frame specified in the resolution which authorizes 
        transfer to the participating tribal organization or inter-
        tribal consortium. In the absence of a specific time frame set 
        forth in the resolution, such withdrawal shall become effective 
        on--
                  ``(A) the earlier of--
                          ``(i) one year from the date of submission of 
                        such request; or
                          ``(ii) the date on which the funding 
                        agreement expires; or
                  ``(B) such date as may be mutually agreed upon by the 
                Secretary, the withdrawing Indian tribe and the 
                participating tribal organization or inter-tribal 
                consortium that has signed the compact or funding 
                agreement on behalf of the withdrawing Indian tribe, 
                inter-tribal consortium, or tribal organization.
          ``(2) Distribution of funds.--When an Indian tribe or tribal 
        organization eligible to enter into a self-determination 
        contract under title I or a compact or funding agreement under 
        this title fully or partially withdraws from a participating 
        inter-tribal consortium or tribal organization, the withdrawing 
        Indian tribe or tribal organization shall be entitled to its 
        tribal share of funds supporting those programs, services, 
        functions, or activities (or portions thereof) which it will be 
        carrying out under its own self-determination contract or 
        compact and funding agreement (calculated on the same basis as 
        the funds were initially allocated in the funding agreement of 
        the inter-tribal consortium or tribal organization), and such 
        funds shall be transferred from the funding agreement of the 
        inter-tribal consortium or tribal organization, provided that 
        the provisions of sections 102, 105(i), and 506, as 
        appropriate, shall apply to such withdrawing Indian tribe.
          ``(3) Regaining mature contract status.--If an Indian tribe 
        elects to operate all or some programs, services, functions, or 
        activities (or portions thereof) carried out under a compact or 
        funding agreement under this title through a self-determination 
        contract under title I, at the option of the Indian tribe, the 
        resulting self-determination contract shall be a mature self-
        determination contract.
  ``(h) Nonduplication.--For the period for which, and to the extent to 
which, funding is provided under this title or under the compact or 
funding agreement, the Indian tribe shall not be entitled to contract 
with the Secretary for such funds under section 102, except that such 
Indian tribe shall be eligible for new programs on the same basis as 
other Indian tribes.

``SEC. 508. PROVISIONS RELATING TO THE SECRETARY.

  ``(a) Mandatory Provisions.--
          ``(1) Health status reports.--Compacts or funding agreements 
        negotiated between the Secretary and an Indian tribe shall 
        include a provision that requires the Indian tribe to report on 
        health status and service delivery--
                  ``(A) to the extent such data is not otherwise 
                available to the Secretary and specific funds for this 
                purpose are provided by the Secretary under the funding 
                agreement; and
                  ``(B) if such reporting shall impose minimal burdens 
                on the participating Indian tribe and such requirements 
                are promulgated under section 518 of this title.
          ``(2) Reassumption.--(A) Contracts or funding agreements 
        negotiated between the Secretary and an Indian tribe shall 
        include a provision authorizing the Secretary to reassume 
        operation of a program, service, function, or activity (or 
        portions thereof) if there is a finding of imminent 
        endangerment of the public health caused by an act or omission 
        of the Indian tribe, and the imminent endangerment arises out 
        of a failure to carry out the compact or funding agreement.
          ``(B) The Secretary shall not reassume operation of a 
        program, service, function, or activity unless (i) the 
        Secretary has first provided written notice and a hearing on 
        the record to the Indian tribe; and (ii) the Indian tribe has 
        not taken corrective action to remedy the imminent endangerment 
        to public health.
          ``(C) Notwithstanding subparagraph (B), the Secretary may, 
        upon written notification to the tribe, immediately reassume 
        operation of a program, service, function, or activity (or 
        portion thereof) if (i) the Secretary makes a finding of 
        imminent substantial and irreparable endangerment of the public 
        health caused by an act or omission of the Indian tribe; and 
        (ii) the endangerment arises out of a failure to carry out the 
        compact or funding agreement. If the Secretary reassumes 
        operation of a program, service, function, or activity (or 
        portion thereof) under this subparagraph, the Secretary shall 
        provide the tribe with a hearing on the record not later than 
        10 days after such reassumption.
          ``(D) In any hearing or appeal involving a decision to 
        reassume operation of a program, service, function, or activity 
        (or portion thereof), the Secretary shall have the burden of 
        proof of demonstrating by clear and convincing evidence the 
        validity of the grounds for the reassumption.
  ``(b) Final Offer.--In the event the Secretary and a participating 
Indian tribe are unable to agree, in whole or in part, on the terms of 
a compact or funding agreement (including funding levels), the Indian 
tribe may submit a final offer to the Secretary. The Secretary shall 
have no more than 45 days after such submission, or within a longer 
time agreed upon by the Indian tribe made in compliance to review and 
make a determination with respect to such offer. In the absence of a 
timely rejection of the offer, in whole or in part, made in compliance 
with subsection (c), the offer shall be deemed agreed to by the 
Secretary.
  ``(c) Rejection of Final Offers.--If the Secretary rejects an offer, 
made under subsection (b) (or one or more provisions or funding levels 
in such offer), the Secretary shall provide--
          ``(1) a timely written notification to the Indian tribe that 
        contains a specific finding that clearly demonstrates, or that 
        is supported by a controlling legal authority, that--
                  ``(A) the amount of funds proposed in the final offer 
                exceeds the applicable funding level to which the 
                Indian tribe is entitled under this title;
                  ``(B) the program, function, service, or activity (or 
                portion thereof) that is the subject of the final offer 
                is an inherent Federal function that cannot legally be 
                delegated to an Indian tribe;
                  ``(C) the Indian tribe cannot carry out the program, 
                function, service, or activity (or portion thereof) in 
                a manner that would not result in imminent danger to 
                the public health; or
                  ``(D) the tribe is not eligible to participate in 
                Self-Governance under section 503 of this title;
          ``(2) technical assistance to overcome the objections stated 
        in the notification required by paragraph (1);
          ``(3) the Indian tribe with a hearing on the record with the 
        right to engage in full discovery relevant to any issue raised 
        in the matter and the opportunity for appeal on the objections 
        raised, provided that the Indian tribe may, in lieu of filing 
        such appeal, directly proceed to initiate an action in a 
        Federal district court pursuant to section 110(a); and
          ``(4) the Indian tribe with the option of entering into the 
        severable portions of a final proposed compact or funding 
        agreement, or provision thereof, (including lesser funding 
        amount, if any), that the Secretary did not reject, subject to 
        any additional alterations necessary to conform the compact or 
        funding agreement to the severed provisions. If an Indian tribe 
        exercises the option specified herein, it shall retain the 
        right to appeal the Secretary's rejection under this section, 
        and paragraphs (1), (2), and (3) shall only apply to that 
        portion of the proposed final compact, funding agreement or 
        provision thereof that was rejected by the Secretary.
  ``(d) Burden of Proof.--With respect to any hearing or appeal or 
civil action conducted pursuant to this section, the Secretary shall 
have the burden of demonstrating by clear and convincing evidence the 
validity of the grounds for rejecting the offer (or a provision 
thereof) made under subsection (b).
  ``(e) Good Faith.--In the negotiation of compacts and funding 
agreements the Secretary shall at all times negotiate in good faith to 
maximize implementation of the Self-Governance policy. The Secretary 
shall carry out this title in a manner that maximizes the policy of 
tribal Self-Governance, consistent with section 3.
  ``(f) Savings.--To the extent that programs, functions, services, or 
activities (or portions thereof) carried out by Indian tribes under 
this title reduce the administrative or other responsibilities of the 
Secretary with respect to the operation of Indian programs and result 
in savings that have not otherwise been included in the amount of 
tribal shares and other funds determined under section 509(d), the 
Secretary shall make such savings available to the Indian tribes, 
inter-tribal consortia, or tribal organizations for the provision of 
additional services to program beneficiaries in a manner equitable to 
directly served, contracted, and compacted programs.
  ``(g) Trust Responsibility.--The Secretary is prohibited from 
waiving, modifying or diminishing in any way the trust responsibility 
of the United States with respect to Indian tribes and individual 
Indians that exist under treaties, Executive orders, other laws, and/or 
court decisions.
  ``(h) Decisionmaker.--A decision that constitutes final agency action 
and relates to an appeal within the Department of Health and Human 
Services conducted under subsection (c) shall be made either--
          ``(1) by an official of the Department who holds a position 
        at a higher organizational level within the Department than the 
        level of the departmental agency in which the decision that is 
        the subject of the appeal was made; or
          ``(2) by an administrative judge.

``SEC. 509. TRANSFER OF FUNDS.

  ``(a) In General.--Pursuant to the terms of any compact or funding 
agreement entered into under this title, the Secretary shall transfer 
to the Indian tribe all funds provided for in the funding agreement, 
pursuant to subsection (d), and provide funding for periods covered by 
joint resolution adopted by Congress making continuing appropriations, 
to the extent permitted by such resolutions. In any instance where a 
funding agreement requires an annual transfer of funding to be made at 
the beginning of a fiscal year, or requires semi-annual or other 
periodic transfers of funding to be made commencing at the beginning of 
a fiscal year, the first such transfer shall be made not later than 10 
days after the apportionment of such funds by the Office of Management 
and Budget to the Department, unless the funding agreement provides 
otherwise.
  ``(b) Multi-Year Funding.--The Secretary is hereby authorized to 
employ, upon tribal request, multi-year funding agreements for 
construction or other multi-year activities, and references in this 
title to funding agreements shall include such multi-year agreements.
  ``(c) Funding for Construction Programs.--Compacts or funding 
agreements authorized by this title, including agreements encompassing 
construction programs, shall provide for advance transfers of funding 
to the Indian tribe in the form of full funding or annual or semi-
annual installments, at the discretion of the Indian tribe.
  ``(d) Amount of Funding.--The Secretary shall provide funds under a 
funding agreement under this title in an amount equal to the amount 
that the Indian tribe would have been entitled to receive under self-
determination contracts under this Act, including amounts for direct 
program costs specified under section 106(a)(1) and amounts for 
contract support costs specified under sections 106(a)(2), 
(a)(3),(a)(5), and (a)(6), including any funds that are specifically or 
functionally related to the provision by the Secretary of services and 
benefits to the Indian tribe or its members, all without regard to the 
organizational level within the Department where such functions are 
carried out.
  ``(e) Prohibitions.--The Secretary is expressly prohibited from--
          ``(1) failing or refusing to transfer to an Indian tribe its 
        full share of any central, headquarters, regional, area, or 
        service unit office or other funds due under this Act, except 
        as required by other Federal law;
          ``(2) withholding portions of such funds for transfer over a 
        period of years; and
          ``(3) reducing the amount of funds required herein--
                  ``(A) to make funding available for Self-Governance 
                monitoring or administration by the Secretary;
                  ``(B) in subsequent years, except pursuant to--
                          ``(i) a reduction in appropriations from the 
                        previous fiscal year for the program or 
                        function to be included in a compact or funding 
                        agreement;
                          ``(ii) a congressional directive in 
                        legislation or accompanying report;
                          ``(iii) a tribal authorization;
                          ``(iv) a change in the amount of pass-through 
                        funds subject to the terms of the funding 
                        agreement; or
                          ``(v) completion of a project, activity, or 
                        program for which such funds were provided;
                  ``(C) to pay for Federal functions, including Federal 
                pay costs, Federal employee retirement benefits, 
                automated data processing, technical assistance, and 
                monitoring of activities under this Act; or
                  ``(D) to pay for costs of Federal personnel displaced 
                by self-determination contracts under this Act or Self-
                Governance;
except that such funds may be increased by the Secretary if necessary 
to carry out this Act or as provided in section 105(c)(2).
  ``(f) Other Resources.--In the event an Indian tribe elects to carry 
out a compact or funding agreement with the use of Federal personnel, 
Federal supplies (including supplies available from Federal warehouse 
facilities), Federal supply sources (including lodging, airline 
transportation, and other means of transportation including the use of 
Interagency Motor Pool vehicles) or other Federal resources (including 
supplies, services, and resources available to the Secretary under any 
procurement contracts in which the Department is eligible to 
participate), the Secretary is authorized to and shall acquire and 
transfer such personnel, supplies, or resources to the Indian tribe.
  ``(g) Reimbursement to Indian Health Service.--With respect to 
functions transferred by the Indian health Service to an Indian tribe, 
the Indian Health Service is authorized to provide goods and services 
to the Indian tribe, on a reimbursable basis, including payment in 
advance with subsequent adjustment, and the reimbursements received 
therefrom, along with the funds received from the Indian tribe pursuant 
to this title, may be credited to the same or subsequent appropriation 
account which provided the funding, such amounts to remain available 
until expended.
  ``(h) Prompt Payment Act.--Chapter 39 of title 31, United States 
Code, shall apply to the transfer of funds due under a compact or 
funding agreement authorized under this title.
  ``(i) Interest or Other Income on Transfers.--An Indian tribe is 
entitled to retain interest earned on any funds paid under a compact or 
funding agreement to carry out governmental or health purposes and such 
interest shall not diminish the amount of funds the Indian tribe is 
authorized to receive under its funding agreement in the year the 
interest is earned or in any subsequent fiscal year. Funds transferred 
under this Act shall be managed using the prudent investment standard.
  ``(j) Carryover Funds.--All funds paid to an Indian tribe in 
accordance with a compact or funding agreement shall remain available 
until expended. In the event that an Indian tribe elects to carry over 
funding from one year to the next, such carryover shall not diminish 
the amount of funds the Indian tribe is authorized to receive under its 
funding agreement in that or any subsequent fiscal year.
  ``(k) Program Income.--All Medicare, medicaid, or other program 
income earned by an Indian tribe shall be treated as supplemental 
funding to that negotiated in the funding agreement and the Indian 
tribe may retain all such income and expend such funds in the current 
year or in future years except to the extent that the Indian Health 
Care Improvement Act (25 U.S.C. 1601 et seq.) provides otherwise for 
medicaid and Medicare receipts, and such funds shall not result in any 
offset or reduction in the amount of funds the Indian tribe is 
authorized to receive under its funding agreement in the year the 
program income is received or for any subsequent fiscal year.
  ``(l) Limitation of Costs.--An Indian tribe shall not be obligated to 
continue performance that requires an expenditure of funds in excess of 
the amount of funds transferred under a compact or funding agreement. 
If at any time the Indian tribe has reason to believe that the total 
amount provided for a specific activity in the compact or funding 
agreement is insufficient the Indian tribe shall provide reasonable 
notice of such insufficiency to the Secretary. If the Secretary does 
not increase the amount of funds transferred under the funding 
agreement, the Indian tribe may suspend performance of the activity 
until such time as additional funds are transferred.

``SEC. 510. CONSTRUCTION PROJECTS.

  ``(a) In General.--Unless agreed to by the participating Indian 
tribe, no provision of the Office of Federal Procurement Policy Act or 
the Federal acquisition regulations or any other general law or 
regulation pertaining to Federal procurement (including executive 
orders), shall apply to any construction activity included in a compact 
or funding agreement.
  ``(b) Health and Safety Standards.--In all construction projects 
performed pursuant to this title, the parties shall specify appropriate 
health and safety standards relevant to the construction activity which 
shall be in conformity with nationally recognized standards for 
comparable projects.

``SEC. 511. FEDERAL PROCUREMENT LAWS AND REGULATIONS.

  ``Notwithstanding any other provision of law, unless expressly agreed 
to by the participating Indian tribe, the compacts and funding 
agreements entered into under this title shall not be subject to 
Federal contracting or cooperative agreement laws and regulations 
(including executive orders and the Secretary's procurement 
regulations), except to the extent that such laws expressly apply to 
Indian tribes.

``SEC. 512. CIVIL ACTIONS.

  ``(a) Contract Defined.--For the purposes of section 110, the term 
`contract' shall include compacts and funding agreements entered into 
under this title.
  ``(b) Applicability of Certain Laws.--Section 2103 of the Revised 
Statutes of the United States Code (25 U.S.C. 81) and section 16 of the 
Act of June 18, 1934 (25 U.S.C. 476), shall not apply to attorney and 
other professional contracts entered into by Indian tribes 
participating in Self-Governance under this title.

``SEC. 513. FACILITATION.

  ``(a) Secretarial Interpretation.--Except as otherwise provided by 
law, the Secretary shall interpret all Federal laws, Executive orders 
and regulations in a manner that will facilitate--
          ``(1) the inclusion of programs, services, functions, and 
        activities (or portions thereof) and funds associated 
        therewith, in the agreements entered into under this section;
          ``(2) the implementation of compacts and funding agreements 
        entered into under this title; and
          ``(3) the achievement of tribal health goals and objectives.
  ``(b) Regulation Waiver.--
          ``(1) An Indian tribe may submit a written request to waive 
        application of a regulation for a compact or funding agreement 
        entered into with the Indian Health Service under this title, 
        to the Secretary identifying the applicable Federal regulation 
        sought to be waived and the basis for the request.
          ``(2) Not later than 90 days after receipt by the Secretary 
        of a written request by an Indian tribe to waive application of 
        a regulation for a compact or funding agreement entered into 
        under this title, the Secretary shall either approve or deny 
        the requested waiver in writing. A denial may be made only upon 
        a specific finding by the Secretary that identified language in 
        the regulation may not be waived because such waiver is 
        prohibited by Federal law. A failure to approve or deny a 
        waiver request not later than 90 days after receipt shall be 
        deemed an approval of such request. The Secretary's decision 
        shall be final for the Department.
  ``(c) Access to Federal Property.--In connection with any compact or 
funding agreement executed pursuant to this title or an agreement 
negotiated under the Tribal Self-Governance Project established under 
title III, as in effect before the enactment of the Tribal Self-
Governance Amendments of 1998, upon the request of an Indian tribe, the 
Secretary--
          ``(1) shall permit an Indian tribe to use existing school 
        buildings, hospitals, and other facilities and all equipment 
        therein or appertaining thereto and other personal property 
        owned by the Government within the Secretary's jurisdiction 
        under such terms and conditions as may be agreed upon by the 
        Secretary and the tribe for their use and maintenance;
          ``(2) may donate to an Indian tribe title to any personal or 
        real property found to be excess to the needs of any agency of 
        the Department, or the General Services Administration, except 
        that--
                  ``(A) subject to the provisions of subparagraph (B), 
                title to property and equipment furnished by the 
                Federal Government for use in the performance of the 
                compact or funding agreement or purchased with funds 
                under any compact or funding agreement shall, unless 
                otherwise requested by the Indian tribe, vest in the 
                appropriate Indian tribe;
                  ``(B) if property described in subparagraph (A) has a 
                value in excess of $5,000 at the time of retrocession, 
                withdrawal, or reassumption, at the option of the 
                Secretary upon the retrocession, withdrawal, or 
                reassumption, title to such property and equipment 
                shall revert to the Department of Health and Human 
                Services; and
                  ``(C) all property referred to in subparagraph (A) 
                shall remain eligible for replacement, maintenance, and 
                improvement on the same basis as if title to such 
                property were vested in the United States; and
          ``(3) shall acquire excess or surplus Government personal or 
        real property for donation to an Indian tribe if the Secretary 
        determines the property is appropriate for use by the entity 
        for any purpose for which a compact or funding agreement is 
        authorized under this title.
  ``(d) Matching or Cost-Participation Requirement.--All funds provided 
under compacts, funding agreements, or grants made pursuant to this 
Act, shall be treated as non-Federal funds for purposes of meeting 
matching or cost participation requirements under any other Federal or 
non-Federal program.
  ``(e) State Facilitation.--States are hereby authorized and 
encouraged to enact legislation, and to enter into agreements with 
Indian tribes to facilitate and supplement the initiatives, programs, 
and policies authorized by this title and other Federal laws benefiting 
Indians and Indian tribes.
  ``(f) Rules of Construction.--Each provision of this title and each 
provision of a compact or funding agreement shall be liberally 
construed for the benefit of the Indian tribe participating in Self-
Governance and any ambiguity shall be resolved in favor of the Indian 
tribe.

``SEC. 514. BUDGET REQUEST.

  ``(a) In General.--The President shall identify in the annual budget 
request submitted to the Congress under section 1105 of title 31, 
United States Code, all funds necessary to fully fund all funding 
agreements authorized under this title, including funds specifically 
identified to fund tribal base budgets. All funds so identified shall 
be apportioned to the Indian Health Service, Office of Tribal Self-
Governance. The Office shall be responsible for distribution of all 
funds provided under section 505. Nothing in this provision shall be 
construed to authorize the IHS to reduce the amount of funds that a 
Self-Governance tribe is otherwise entitled to receive under its 
funding agreement or other applicable law, whether or not such funds 
are apportioned to the Office of Tribal Self-Governance under this 
section.
  ``(b) Present Funding; Shortfalls.--In such budget request, the 
President shall identify the level of need presently funded and any 
shortfall in funding (including direct program and contract support 
costs) for each Indian tribe in the United States, either directly by 
the Secretary, under self-determination contracts, or under compacts 
and funding agreements authorized under this title.

``SEC. 515. REPORTS.

  ``(a) Annual Report.--The Secretary shall submit to Congress on 
January 1 of each year following the date of enactment of this title a 
written report regarding the administration of this title. Such report 
shall include a detailed report on the level of need being presently 
funded or unfunded for each Indian tribe in the United States, either 
directly by the Secretary, under self-determination contracts under 
this Act, or under compacts and funding agreements authorized under 
this Act.
  ``(b) Contents.--The report shall be compiled from information 
contained in funding agreements, annual audit reports, and Secretarial 
data regarding the disposition of Federal funds and shall--
          ``(1) identify the relative costs and benefits of Self-
        Governance;
          ``(2) identify, with particularity, all funds that are 
        specifically or functionally related to the provision by the 
        Secretary of services and benefits to Self-Governance Indian 
        tribes and their members;
          ``(3) identify the funds transferred to each Self-Governance 
        Indian tribe and the corresponding reduction in the Federal 
        bureaucracy;
          ``(4) identify the funding formula for individual tribal 
        shares of all central and headquarters funds, together with the 
        comments of affected Indian tribes or tribal organizations, 
        developed under subsection (c);
          ``(5) identify amounts expended in the preceding fiscal year 
        to carry out inherent Federal functions, including an 
        identification of those functions by type and location;
          ``(6) include the separate views and comments of the Indian 
        tribes or tribal organizations; and
          ``(7) prior to being submitted to Congress, be distributed to 
        the Indian tribes for comment, such comment period to be for no 
        less than 30 days.
In compiling this report the Secretary shall not impose any reporting 
requirements on participating Indian tribes or tribal organizations, 
not otherwise provided in this Act.
  ``(c) Report on IHS Funds.--Not later than 180 days after the date of 
enactment of this title, the Secretary shall, in consultation with 
Indian tribes, report on funding formula or formulas used to determine 
the individual tribal share of funds controlled by all components of 
the Indian Health Service (including funds assessed by any other 
Federal agency) for inclusion in Self-Governance compacts or funding 
agreements. The Secretary shall include such formula or formulas (or 
any revisions thereof) in the annual report submitted to the Congress 
under subsection (b), together with the views of the affected Indian 
tribes and tribal organizations.

``SEC. 516. DISCLAIMERS.

  ``(a) No Funding Reduction.--Nothing in this title shall be construed 
to limit or reduce in any way the funding for any program, project, or 
activity serving an Indian tribe under this or other applicable Federal 
law. Any Indian tribe that alleges that a compact or funding agreement 
is in violation of this section may apply the provisions of section 
110.
  ``(b) Federal Trust and Treaty Responsibilities.--Nothing in this Act 
shall be construed to diminish in any way the trust responsibility of 
the United States to Indian tribes and individual Indians that exist 
under treaties, Executive orders, or other laws and court decisions.
  ``(c) Tribal Employment.--For purposes of section 2(2) of the Act of 
July 5, 1935 (49 Stat. 450, chapter 372) (commonly known as the 
National Labor Relations Act), an Indian tribe carrying out a self-
determination contract, compact, annual funding agreement, grant, or 
cooperative agreement under this Act shall not be considered an 
employer.
  ``(d) Obligations of the United States.--The Indian Health Service 
shall neither bill nor charge those Indians who may have the economic 
means to pay for services, nor require any Indian tribe to do so.

``SEC. 517. APPLICATION OF OTHER SECTIONS OF THE ACT.

  ``(a) Mandatory Application.--All provisions of sections 6, 7, 8, 
102(c) and (d), 104, 105(k) and (l), 106(a) through (k), and 111 of 
this Act and section 314 of Public Law 101-512 (coverage under the 
Federal Tort Claims Act), to the extent not in conflict with this 
title, shall apply to compacts and funding agreements authorized by 
this title.
  ``(b) Discretionary Application.--At the request of a participating 
Indian tribe, any other provision of title I, to the extent such 
provision is not in conflict with this title, shall be made a part of a 
funding agreement or compact entered into under this title. The 
Secretary is obligated to include such provision at the option of the 
participating Indian tribe or tribes. If such provision is incorporated 
it shall have the same force and effect as if it were set out in full 
in this title. In the event an Indian tribe requests such incorporation 
at the negotiation stage of a compact or funding agreement, such 
incorporation shall be deemed effective immediately and shall control 
the negotiation and resulting compact and funding agreement.

``SEC. 518. REGULATIONS.

  ``(a) In General.--
          ``(1) Not later than 90 days after the date of enactment of 
        this title, the Secretary shall initiate procedures under 
        subchapter III of chapter 5 of title 5, United States Code, to 
        negotiate and promulgate such regulations as are necessary to 
        carry out this title.
          ``(2) Proposed regulations to implement this title shall be 
        published in the Federal Register by the Secretary no later 
        than 1 year after the date of enactment of this title.
          ``(3) No regulations to implement this title may be published 
        unless they are recommended by the committee formed under 
        subsection (b).
          ``(4) The authority to promulgate regulations under this 
        title shall expire 21 months after the date of enactment of 
        this title.
  ``(b) Committee.--A negotiated rulemaking committee established 
pursuant to section 565 of title 5, United States Code, to carry out 
this section shall have as its members only Federal and tribal 
government representatives, a majority of whom shall be nominated by 
and be representatives of Indian tribes with funding agreements under 
this title, and the Committee shall confer with, and accommodate 
participation by, representatives of Indian tribes, inter-tribal 
consortia, tribal organizations, and individual tribal members.
  ``(c) Adaptation of Procedures.--The Secretary shall adapt the 
negotiated rulemaking procedures to the unique context of Self-
Governance and the government-to-government relationship between the 
United States and Indian tribes.
  ``(d) Effect.--The lack of promulgated regulations shall not limit 
the effect of this title.
  ``(e) Effect of Circulars, Policies, Manuals, Guidances, and Rules.--
Unless expressly agreed to by the participating Indian tribe in the 
compact or funding agreement, the participating Indian tribe shall not 
be subject to any agency circular, policy, manual, guidance, or rule 
adopted by the Indian Health Service, except as provided in section 
105(g) and 510.

``SEC. 519. APPEALS.

  ``In any appeal (including civil actions) involving decisions made by 
the Secretary under this title, the Secretary shall have the burden of 
proof of demonstrating by clear and convincing evidence--
          ``(1) the validity of the grounds for the decision made; and
          ``(2) the decision is fully consistent with provisions and 
        policies of this title.

``SEC. 520. AUTHORIZATION OF APPROPRIATIONS.

  ``There are authorized to be appropriated such sums as may be 
necessary to carry out this title.''.

SEC. 5. AMENDMENTS CLARIFYING CIVIL PROCEEDINGS.

  (a) Burden of Proof in District Court Actions.--Section 102(e)(1) of 
the Indian Self-Determination and Education Assistance Act (25 U.S.C. 
450f(e)(1)) is amended by inserting after ``subsection (b)(3)'' the 
following: ``or any civil action conducted pursuant to section 
110(a)''.
  (b) Confirmation of Trial de Novo.--Section 110(a) of the Indian 
Self-Determination and Education Assistance Act (25 U.S.C. 450m-1) is 
amended by adding at the end the following new sentence: ``In any 
action brought under this subsection, the district courts shall conduct 
a trial de novo with full rights of discovery and proceed in accordance 
with the Federal Rules of Civil Procedure.''.
  (c) Effective Date.--This section shall apply to any proceedings 
commenced after October 25, 1994.

SEC. 6. REPEAL.

  (a) In General.--Title III of the Indian Self-Determination and 
Education Assistance Act (25 U.S.C. 450f note) is hereby repealed.
  (b) Effective Date.--This section shall take effect on October 1, 
1998.

SEC. 7. EFFECTIVE DATE.

  Except as otherwise provided, the provisions of this Act shall take 
effect on the date of the enactment of this Act.

                          Purpose of the Bill

    The purpose of H.R.1833 is to amend the Indian Self-
Determination and Education Assistance Act to provide for 
further Self-Governance by Indian Tribes, and for other 
purposes.

                  Background and Need for Legislation

    H.R. 1833, the Tribal Self-Governance Amendments of 1998, 
would create a new title in the 1975 Indian Self-Determination 
and Education Assistance Act (40 U.S.C. 450 et seq.). The 1975 
Act allows Indian tribes to contract for or take over the 
administration and operation of certain federal programs which 
provide services to Indian tribes. Subsequent amendments to the 
1975 Act created Title III of the Act which provided for a 
Self-Governance Demonstration Project that allows for large-
scale tribal Self-Governance compacts and funding agreements on 
a demonstration basis.
    The new title created by H.R. 1833 would make this 
contracting by tribes permanent for programs contracted for 
within the Indian Health Service (IHS). Under this authority, 
Indian and Alaska Native tribes would be able to contract for 
the operation, control, and redesign of various IHS activities. 
Pursuant to H.R. 1833, tribes which have already contracted for 
IHS activities would continue under their contracts while an 
additional 50 new tribes would be selected each year to enter 
into new contracts.
    H.R. 1833 also allows for a feasibility study regarding the 
execution of tribal Self-Governance compacts and funding 
agreements of Indian-related programs outside the IHS but 
within the Department of Health and Human Services (HHS) on a 
demonstration project basis.

                            Committee Action

    H.R. 1833 was introduced on June 7, 1997, by Congressman 
George Miller (D-CA) and was cosponsored by Congressman Don 
Young (R-AK), Congressman Dale Kildee (D-MI), Delegate Eni 
Faleomavaega (D-AS), and Congressman Patrick Kennedy (D-RI). 
The bill was referred to the Committee on Resources. On March 
17, 1998, the Full Committee on Resources held a hearing on the 
bill where the Administration and various other witnesses 
testified in support. On March 25, 1998, the Full Committee on 
Resources met to consider H.R.1833. Congressman Miller offered 
an amendment in the nature of a substitute which was adopted by 
voice vote. The amendment: (1) referenced federal treaty 
obligations in the findings section of H.R. 1833; (2) 
referenced treaty obligations and encouraged meaningful tribal 
consultation in the declaration of policy section; (3) provided 
that inherent federal functions are those functions that cannot 
be legally delegated to the tribes; (4) referenced treaty 
obligation in the compacting and funding agreements sections; 
(5) provided that eligible tribal shares include portions of 
discretionary grants but not statutorily mandated grants; (6) 
provided that existing funding agreements remain in effect 
until subsequent funding agreements are executed; (7) provided 
for stable base funding; (8) created a separate section for a 
non-IHS Self-Governance feasibility study; (9) provided that 
program redesigns should not unjustly deny services to existing 
service populations; (10) allowed the IHS to provide goods and 
services to tribes on a reimbursable basis; (11) allowed tribes 
to manage advance transfer of funds using the prudent 
investment standard; (12) confirmed that provisions of this law 
shall be liberally construed for the benefit of participating 
Indian tribes and that ambiguities shall be resolved in their 
favor; (13) gave the Secretary of HHS 45 days rather than 30 
days to reject a tribe's final compact offer; (14) gave the 
Secretary 90 days rather than 60 days to act on a tribe's 
waiver request; (15) provided that funds identified in the 
budget request shall be apportioned to the IHS Office of Tribal 
Self-Governance; (16) limited the Secretary's reporting 
requirements; (17) prohibited the IHS from charging Indian 
patients for services or requiring Indian tribes to do so; (18) 
limited the effect of agency circulars, policies, manuals, 
guidances, and rules without tribal assent except as provided 
for in construction contracts; (19) authorized the 
appropriation of such sums as necessary; and (20) repealed 
title III of the Indian Self-Determination and Education 
Assistance Act.
    The bill as amended was then ordered favorably reported to 
the House of Representative by voice vote.

                      Section-by-section Analysis

                         Section 1. Short Title

    This provision sets forth the short title, the Tribal Self-
Governance Amendments of 1998.

                          Section 2. Findings

    This provision sets forth the findings of Congress which, 
among other things, reaffirm the sovereignty of Indian tribes 
and the unique government-to-government relationship between 
the United States and Indian tribes. The findings make clear 
that the federal government has failed to fully meet its trust 
responsibility and to satisfy its obligations under treaties 
and other laws. The findings also explain that Congress has 
concluded that Self-Governance is an effective mechanism to 
implement and strengthen the federal policy of government-to-
government relations with Indian tribes by transferring to 
Indian tribes full control and funding for federal programs, 
functions, services, or activities, or portions thereof.
    Throughout this bill, but particularly in the Findings and 
Declaration of Policy sections, the phrase ``under treaties'' 
is used in describing the United States' trust obligation to 
Indian tribes and individuals. This phrase is intended to 
explain that much of the federal-Indian relationship is 
predicated on a government-to-government relationship as 
reflected in the treaties, which are contractual relationships 
between governments. Treaties are a significant part of the 
legal relationship between Indian tribes and the United States. 
Self-Governance, by its use of compacts, another traditional 
contracting device used between governments, is designed to 
honor the government-to-government relationship and remind the 
parties to these agreements of the historical basis for their 
relationship.

                    Section 3. Declaration of Policy

    This section states Congress' policy to permanently 
establish and implement tribal Self-Governance within HHS with 
the full cooperation of its agencies. Among the key policy 
objectives Congress seeks to achieve through the Self-
Governance Program are to: (1) maintain and continue the United 
States' unique relationship with Indian tribes; (2) allow 
Indian tribes the flexibility to choose whether they wish to 
participate in Self-Governance; (3) ensure the continuation and 
fulfillment of the United States' trust responsibility and 
other responsibilities towards Indian tribes that are contained 
in treaties and other laws; (4) permit a transition to tribal 
control and authority over programs, functions, services, or 
activities (or portions thereof); and (5) provide a 
corresponding parallel reduction in the federal bureaucracy.

                   Section 4. Tribal Self-Governance

    This section sets out the substantive provisions of the 
Self-Governance Program in the IHS by adding a new Title V to 
the Indian Self-Determination and Education Assistance Act (25 
U.S.C. 450 et seq.). All references in this section to new 
sections are to new sections of that Act.

Section 501. Establishment

    This provision directs the Secretary of HHS to establish a 
permanent Tribal Self-Governance Program in the IHS.

Section 502. Definitions

    Subsection (a)(1) defines ``inherent Federal functions''. 
These are functions which the Executive Branch cannot by law 
delegate to other branches of government or to non-governmental 
entities. This definition is consistent with the Department of 
the Interior Solicitor's Memorandum of May 17, 1996, entitled 
``Inherently Federal Functions under the Tribal Self-Governance 
Act of 1994.'' It is the Committee's understanding that this 
definition recognizes that there are differences between 
departmental and agency functions and those may be analyzed on 
a case-by-case basis. It is important to note that, in the 
tribal procurement context, there is another factor the 
Committee has considered--when the federal government is 
returning tribal governmental powers and functions that are 
inherent in tribes' governmental status such as those possessed 
by tribes before the establishment of the federal Indian 
bureaucracy, the scope of allowable transfers is broader than 
in the transfer of federal governmental powers to private or 
other governmental entities.
    Subsection (a)(2) defines ``inter-tribal consortium''. The 
Committee notes that during the Title III Self-Governance 
Demonstration Project, the IHS authorized inter-tribal 
consortia, such as the co-signers to the Alaska Tribal Health 
Compact, to participate in the Project and that participation 
has had great success. The definition of ``inter-tribal 
consortium'' is intended to include ``tribal organizations'' as 
that term is defined in section 4(l) of the Indian Self-
Determination Act, Public Law 93-638. This would include 
consortia such as those involved in the Alaska Tribal Health 
Consortium. It is the Committee's intent that inter-tribal 
consortia and tribal organizations shall count as one tribe for 
purposes of the 50 tribe per year limitation contained in new 
section 503(a), as added by H.R. 1833.
    Subsection (a)(3) defines ``tribal shares''. This 
definition is consistent with the Title IV Rule-making 
Committee's determination that residual funds are those 
``necessary to carry out the inherently federal functions that 
must be performed by federal officials if all tribes assume 
responsibilities for all BIA programs.'' 29 Fed. Reg. 63, at 
7235 (Feb. 12, 1998) (Proposed Rule, 25 Code of Federal 
Regulations 1000.91). All funds appropriated under the Indian 
Self-Determination and Education Assistance Act are either 
tribal shares or agency residual.
    Subsection (a)(4) defines ``Secretary'' as the Secretary of 
Health and Human Services.
    Subsection (a)(5) defines ``Self-Governance'' as the 
program established under this title.
    The Committee plans to add a definition of ``gross 
mismanagement'' to this section at the request of HHS. The 
inclusion of this term is to govern one of the criteria that 
the Secretary is to consider in the reassumption of a tribally-
operated program. The Secretary will be given the authority to 
reassume programs that imminently endanger the public health 
where the danger arises out of a compact or funding agreement 
violation. The Committee believes that the inclusion of a 
performance standard, in this case gross mismanagement, is also 
an appropriate grounds for reassumption. Gross mismanagement 
will be defined as a significant, clear, and convincing 
violation of compact, funding agreement, regulatory or 
statutory requirements related to the transfer of Self-
Governance funds to the tribe that results in a significant 
reduction of funds to the tribe's Self-Governance Program. The 
Committee's definition of gross mismanagement is narrowly 
tailored and will require a high degree of proof by the 
Secretary. The Committee is well aware of tribal concerns and 
agrees that the inclusion of this performance standard must not 
be utilized by the Secretary in such a manner as to needlessly 
impose monitoring and auditing requirements that hinder the 
efficient operation of tribal programs. Intrusive and over 
burdensome monitoring and auditing activities are antithetical 
to the goals of Self-Governance.
    Subsection (b) defines ``Indian Tribe''. This definition 
enables an Indian tribe to authorize another Indian tribe, 
inter-tribal consortium or tribal organization to participate 
in Self-Governance on its behalf. The authorized Indian tribe, 
inter-tribal consortium or tribal organization may exercise the 
authorizing Indian tribe's rights as specified by tribal 
resolution.

Section 503. Selection of participating tribes

    This section describes the eligibility criteria that must 
be satisfied by any Indian tribe interested in participating.
    Under subsection (a), all tribes presently participating in 
the Tribal Self-Governance Demonstration Project under Title 
III of the Indian Self-Determination and Education Assistance 
Act may elect to participate in the permanent Self-Governance 
Program. Tribes must do so through tribal resolution.
    Subsection (b) allows an additional 50 tribes a year to 
participate in Self-Governance. This subsection also allows an 
Indian tribe that chooses to withdraw from an inter-
tribalconsortium or tribal organization to participate in Self-
Governance provided it independently meets the eligibility criteria in 
Title V. Tribes and tribal organizations that withdraw from tribal 
organizations and inter-tribal consortia under this section shall be 
entitled to participate in the permanent program under new section 
503(b)(2) and this participation shall not be counted against the 50 
tribe a year limitation contained in section 503(a).
    Under subsection (c), the eligibility criteria for Self-
Governance tribes are the same as those that apply under Title 
IV. To participate, an Indian tribe must successfully complete 
a planning phase, must request participation in the program 
through a resolution or official action of the governing body, 
and must have demonstrated financial stability and financial 
management capability for the past three years. Proof of no 
material audit exceptions in the tribe's self determination 
contracts or Self-Governance funding agreements is conclusive 
proof of such qualification. The Committee notes that the 
financial examination addressed in subsection 503(c)(3) refers 
solely to funds managed by the tribe under Title I and Title IV 
of the Indian Self-Determination and Education Assistance Act. 
H.R. 1833 has been deliberately crafted to make clear that a 
tribe's activities in other economic endeavors are not subject 
of the section 503(c) examination. Similarly, the ``budgetary 
research'' referred to in new section 503(d)(1) requires a 
tribe to research only budgetary issues related to the 
administration of the programs the tribe anticipates 
transferring to tribal operation under Self-Governance.
    Under subsection (d), every Indian tribe interested in 
participating in Self-Governance shall complete a planning 
phase prior to participating in the program. The planning phase 
is to include legal and budgetary research and internal tribal 
government planning and organizational preparation. The 
planning phase is to be completed to the satisfaction of the 
tribe.
    Under subsection (e), subject to available appropriations, 
any Indian tribe interested in participating in Self-Governance 
is eligible to receive a grant to plan for participation in the 
program or to negotiate the terms of a compact and funding 
agreement.
    Subsection (f) provides that receipt of a grant from HHS is 
not required to participate in the permanent program.

Section 504. Compacts

    This section authorizes Indian tribes to negotiate compacts 
with the Secretary and identifies generally the contents of 
compacts. While the compact process was not specifically part 
of prior legislative enactment, the Committee understands that 
compacts have developed as an integral part of Self-Governance. 
The Committee believes that compacts serve an important and 
necessary function in establishing government-to-government 
relations, which as noted earlier, is the keystone of modern 
federal Indian policy.
    Under subsection (a), the Secretary is required to 
negotiate and enter into a written compact consistent with the 
trust responsibility, treaty obligations and the government-to-
government relationship between the United States and each 
participating tribe.
    Subsection (b) requires that compacts state the terms of 
the government-to-government relationship between the Indian 
tribe and the United States. Compacts may only be amended by 
agreement of both parties.
    Under subsection (c), upon enactment of Title V, Indian 
tribes have the option of retaining their existing compacts, or 
any portion of the compacts that do not contradict the 
provisions of Title V.
    Under subsection (d), the date of approval and execution by 
the Indian tribe is generally the effective date of a compact, 
unless otherwise agreed to by the parties. A compact will 
remain in effect as long as permitted by federal law or until 
terminated by written agreement of the parties, or by 
retrocession or reassumption.

Section 505. Funding agreements

    This section authorizes Indian tribes to negotiate funding 
agreements with the Secretary and identifies generally the 
contents of those agreements.
    Under subsection (a), the Secretary is required to 
negotiate and enter into a written funding agreement consistent 
with the trust responsibility, treaty obligations and the 
government-to-government relationship between the United States 
and each participating tribe.
    Under subsection (b), an Indian tribe may include in an 
funding agreement all programs, functions, services, or 
activities, (or portions thereof) that it is authorized to 
carry out under Title I of the Indian Self-Determination and 
Education Assistance Act. Funding agreements may, at the option 
of the Indian tribe, authorize the tribe to plan and carry out 
all programs, functions, services, or activities (or portions 
thereof) administered by the IHS that are carried out for the 
benefit of Indians because of their status as Indians or where 
Indian tribes or Indian beneficiaries are the primary or 
significant beneficiaries, as set forth in statutes. For each 
program, function, service, or activity (or portion thereof) 
included in a funding agreement, an Indian tribe is entitled to 
receive its full tribal share of funding, including funding for 
all local, field, service unit, area, regional, and central/ 
headquarters or national office locations. Available funding 
includes the Indian tribe's share of discretionary IHS 
competitive grants but not statutorily mandated competitive 
grants.
    The Committee is concerned with the reluctance of the IHS 
to include all available federal health funding in self 
governance funding agreements. The Committee notes, as an 
example, the refusal of the IHS to so include the Diabetes 
Prevention Initiative funding. As a result, funding was delayed 
and undue administrative requirements diverted resources from 
direct services. This section is intended to directly remedy 
this situation.
    The Committee has received ample testimony showing the 
benefits of Self-Governance. In 1998, the National Indian 
Health Board recently released ``National Study on Self-
Determination and Self-Governance,'' providing empirical 
evidence that Self-Governance leads to more efficient 
management of tribal health service delivery, especially 
preventive services.This study consistently observed an overall 
improvement in quality of care when tribes operate their own health 
care systems. Less than full funding agreements will result in less 
than maximum use of federal resources to address the health care in 
Indian country. Accordingly, this section is to be interpreted broadly 
by affording a presumption in favor of including in a tribe's Self-
Governance funding agreement any federal funding administered by the 
IHS.
    Under subsection (c), Indians do not need to be 
specifically identified in authorizing legislation for a 
program to be eligible for inclusion in a compact or funding 
agreement.
    Under subsection (d), each funding agreement should 
generally set out the programs, functions, services, or 
activities (or portions thereof) to be performed by the Indian 
tribe, the general budget category assigned to each program, 
function, service, or activity (or portion thereof), the funds 
to be transferred, the time and method of payment and other 
provisions that the parties agree to.
    Under subsection (e), each funding agreement remains in 
full force and effect unless the Secretary receives notice from 
the Indian tribe that it will no longer operate one or more of 
the programs, functions, services, or activities (or portions 
thereof) included in the funding agreement or until a new 
funding agreement is executed by the parties.
    The Committee is concerned with reports that the IHS has 
been able to use the annual negotiations provisions of section 
303(a) of the Indian Self-Determination and Education 
Assistance Act to obtain an unfair bargaining advantage during 
negotiations by threatening to suspend application of the Act 
to a tribe if it does not sign an Annual Funding Agreement. 
This subsection is meant to facilitate negotiation between the 
tribes and the IHS on a true government-to-government basis. 
The Committee believes the retroactive provision is fair 
because this assures that no act or omission of the federal 
government endangers the health and welfare of tribal members.
    Under subsection (f), upon enactment of Title V, tribes may 
either retain their existing annual funding agreements, or any 
portions thereof, that do not conflict with provisions of Title 
V, or negotiate new funding agreements that conform to Title V.
    Under subsection (g), an Indian tribe may include a stable 
base budget in its funding agreement. A stable base budget 
contains the tribe's recurring funding amounts and provides for 
transfer of the funds in a predictable and consistent manner 
over a specific period of time. Adjustments are made annually 
only if there are changes in the level of funds appropriated by 
Congress. Non-recurring funds are not included and must be 
negotiated on an annual basis. The Committee intends this 
section to codify the existing IHS policy guidance on stable 
base funding.

Section 506. Self-governance feasibility study

    This provision requires an 18 month feasibility study with 
prior government-to-government consultation with tribes to 
determine how to implement Self-Governance, to identify any 
legal obstacles, costs or savings, develop quality assurances 
and such other issues as determined by the Secretary.
    The Committee has deferred to the Secretary's request not 
to provide for a demonstration or pilot project component to 
the feasibility study to determine how to best apply Self-
Governance to agencies other than the Indian Health Service at 
HHS. The Secretary has pledged to work in a cooperative spirit 
with the Indian tribes to quickly identify those programs 
outside the IHS that are suitable for Self-Governance. The 
Committee believes that there are agencies and programs outside 
of IHS that should be ready to participate in the Self-
Governance Program at the conclusion of the study and 
anticipates the introduction of legislation at that time to 
authorize such participation.
    The Committee understands that the Secretary already has 
the authority to utilize pilot agreements as a research tool in 
consultation with the tribes in the course of the 18 month 
feasibility study. The Committee agrees with the Secretary that 
this study authority should be contained in a new title of the 
Indian Self-Determination and Education Assistance Act.

Section 507. General provisions

    Under subsection (a), the provisions in this section may, 
at the tribe's option, be included in a compact or funding 
agreement negotiated under Title V.
    Subsection (b) clarifies that Indian tribes are to assure 
that internal measures are in place to address conflicts of 
interest in the administration of programs, functions, 
services, or activities (or portions thereof).
    Subsection (c) clarifies that the Single Agency Audit Act 
(31 U.S.C. chapter 75) applies to Title V funding agreements. 
Indian tribes are required to apply cost principles set out in 
applicable Office of Management and Budget (OMB) Circulars, as 
modified by section 106 of Title I or by any exemptions that 
may be applicable to future OMB Circulars. No other audit or 
accounting standards are required. Claims against Indian tribes 
by the federal government based on any audit of funds received 
under a Title V funding agreement are subject to the provisions 
of section 106(f) of Title I.
    Under subsection (d), an Indian tribe's records are not 
considered federal records for purposes of the Federal Privacy 
Act, unless otherwise stated in the compact or funding 
agreement. Indian tribes are required to maintain a record 
keeping system and, upon reasonable advance request, provide 
the Secretary with reasonable access to records to enable HHS 
to meet its minimum legal record keeping requirements under the 
Federal Records Act.
    Under subsection (e), an Indian tribe may redesign or 
consolidate programs, functions, services, or activities (or 
portions thereof) and reallocate or redirect funds in any way 
the Indian tribe considers to be in the best interest of the 
Indian community.
    Under subsection (f), an Indian tribe may retrocede fully 
or partially back to the Secretary any program, function, 
service, or activity (or portion thereof) included in a compact 
or funding agreement. A retrocession request becomes effective 
within the time frame specified in the compact or funding 
agreement, one year from the date the request was made, the 
date the funding agreement expires, or any date mutually agreed 
to by the parties, whichever occurs first.
    Under subsection (g), an Indian tribe that participates in 
Self-Governance through an inter-tribal consortium or tribal 
organization can withdraw from the consortium or organization. 
The withdrawal becomes effective within the timeframe set out 
in the tribe's authorizing resolution. If a timeframe is not 
specified, withdrawal becomes effective one year from the 
submission of the request or on the date the funding agreement 
expires, whichever occurs first. An alternative date can be 
agreed to by the parties, including the Secretary.
    When an Indian tribe withdraws from an inter-tribal 
consortium or tribal organization and wishes to enter into a 
Title I contract or Title V agreement on its own, it is 
entitled to receive its share of funds supporting the program, 
function, service, or activity (or portion thereof) that it 
will carry out under its new status. The funds must be removed 
from the funding agreement of the participating organization or 
inter-tribal consortium and included in the withdrawing tribe's 
agreement or contract. If the withdrawing tribe is to receive 
services directly from the Secretary, the tribe's share of 
funds must be removed from the funding agreement of the 
participating organization or inter-tribal consortium and 
retained by the Secretary to provide services. Finally, an 
Indian tribe that chooses to terminate its participation in the 
Self-Governance Program may, at its option, carry out programs, 
functions, services, or activities (or portions thereof) in a 
Title I contract or Self-Governance funding agreement and 
retain its mature contractor status.
    Subsection (h) provides that a tribe operating under a 
Self-Governance compact may not contract under section 102 (a 
``638 contract'') for the same programs.

Section 508. Provisions relating to the Secretary

    This section sets out mandatory and non-mandatory 
provisions relating to the Secretary's obligations.
    Subsection (a) delineates mandatory provisions which are 
health status reports and reassumption. To the extent that the 
data is not otherwise available to the Secretary, compacts and 
funding agreements must include a provision requiring the 
Indian tribe to report data on health status and service 
delivery. The Secretary is to use this data in her annual 
reports to Congress. The Secretary is required to provide 
funding to the Indian tribe to compile such data. Reporting 
requirements can only impose minimal burdens on the Indian 
tribe and may only be imposed if they are contained in 
regulations developed under negotiated rulemaking. Compacts or 
funding agreements must also include a provision authorizing 
the Secretary to reassume a program, function, service, or 
activity (or portion thereof) if she makes a finding of 
imminent endangerment of the public health caused by the Indian 
tribe's failure to carry out the compact or funding agreement 
or gross mismanagement that causes a significant reduction in 
available funding. The Secretary is required to provide the 
Indian tribe with notice of a finding. The Indian tribe may 
take action to correct the problem identified in the notice. 
The Secretary has the burden at the hearing of demonstrating by 
clear and convincing evidence the validity of the grounds for 
reassumption. In cases where the Secretary finds imminent 
substantial and irreparable endangerment of the public health 
caused by the tribe's failure to carry out the compact or 
funding agreement, the Secretary may immediately reassume the 
program but is required to provide the tribe with a hearing on 
the record within ten days after reassumption.
    Under subsection (b), if the parties cannot agree on the 
terms of a compact or funding agreement, the Indian tribe may 
submit a final offer to the Secretary. The Secretary has 45 
days to determine if the offer will be accepted or rejected. 
The 45 days can be extended by the Indian tribe. If the 
Secretary takes no action, the offer is deemed accepted by the 
Secretary.
    Subsection (c) describes the only circumstances under which 
the Secretary may reject an Indian tribe's final offer. A 
rejection requires written notice to the Indian tribe within 45 
days of receipt with specific findings that clearly demonstrate 
or are supported by controlling legal authority that: (1) the 
amount of funds proposed exceeds the funding level that the 
Indian tribe is entitled to; (2) the program, function, 
service, or activity (or portion thereof) that is the subject 
of the offer is an inherent federal function that only can be 
carried out by the Secretary; (3) the applicant is not eligible 
to participate in self-governance; or 4) the Indian tribe 
cannot carry out the program, function, service or activity (or 
portion thereof) without a significant danger or risk to the 
public health. The Committee believes the fourth provision 
appropriately balances the Secretary's trust responsibility to 
assure the delivery of health care services to Indian 
beneficiaries with the equally important goal of fostering 
maximum tribal self-determination in the administration of 
health care programs transferred under Title V. The Committee 
has included the requirement of a ``specific finding'' is 
included to avoid rejections which merely state conclusory 
statements that offer no analysis and determination of facts 
supporting the rejection.
    The Secretary must also offer assistance to the Indian 
tribe to overcome the stated objections, and must provide the 
Indian tribe with an opportunity to appeal the rejection and 
have a hearing on the record. In any hearing the Indian tribe 
has the right to engage in full discovery. The Indian tribe 
also has the option to proceed directly to federal district 
court under section 110 of Title I of the Indian Self-
Determination and Education Assistance Act.
    The Secretary may only reject those portions of a ``final 
offer'' that are supported by the findings and must agree to 
all severable portions of a ``final offer'' which do not 
justify a rejection. By entering into a partial compact or 
funding agreement, the Indian tribe does not waive its right to 
appeal the Secretary's decision for the rejected portions of 
the offer.
    Under subsection (d), the Secretary has the burden of 
demonstrating by clear and convincing evidence the validity of 
a rejection of a final offer in any hearing, appeal or civil 
action. A decision relating to an appeal within HHS is 
considered a final agency action if it was made by an 
administrative judge or by an official of HHS whose position is 
at a higher level than the level of the departmental agency in 
which the decision that is the subject of the appeal was made.
    Under subsection (e), the Secretary is required to 
negotiate in good faith and carry out his discretion under 
Title V in a manner that maximizes the implementation of Self-
Governance.
    Under subsection (f), any savings in HHS' administrative 
costs that result from the transfer of programs, functions, 
services, or activities (or portions thereof) to Indian tribes 
in Self-Governance agreements that are not otherwise 
transferred to Indian tribes under Title V must be made 
available to Indian tribes for inclusion in their compacts or 
funding agreements. We have consistently indicated that Self-
Governance should achieve reductions in federal bureaucracy and 
create resultant cost savings. This subsection makes clear that 
such savings are for the benefit of the Indian tribes. Savings 
are not to be utilized for other agency purposes, but rather 
are to be provided as additional funds or services to all 
tribes, inter-tribal consortia, and tribal organizations in a 
fair and equitable manner.
    Under subsection (g), the Secretary is prohibited from 
waiving, modifying or diminishing the trust responsibilities or 
other responsibilities as reflected in treaties, executive 
orders or other laws and court decisions of the United States 
to Indian tribes and individual Indians. The Committee 
reaffirms that the protection of the federal trust 
responsibility to Indian tribes and individuals is a key 
element of Self-Governance. The ultimate and legal 
responsibility for the management and preservation of trust 
resources resides with the United States as trustee. The 
Committee believes that health care is a trust resource 
consistent with federal court decisions. This subsection 
continues the practice of permitting substantial tribal 
management of its trust resources provided that tribal 
activities do not replace the trustee's specific legal 
responsibilities. New section 507(a)(2) (reassumption), with 
its concept of imminent endangerment of the public health, 
provides guidance in defining the Secretary's trust obligation 
in the health context.
    Under subsection (h), final agency action is a decision by 
either an official from HHS at any higher organizational level 
than the initial decision maker or an administrative law judge. 
Paragraph (h)(2) is included to assure that the persons 
deciding an administrative appeal are not the same individuals 
who made the initial decision to reject a tribe's ``final 
offer.''

Section 509. Transfer of funds

    Under subsection (a), the Secretary is required to transfer 
all funds provided for in a funding agreement, pursuant to 
section 509(d) below. Funds are also required to be provided 
for periods covered by continuing resolutions adopted by 
Congress, to the extent permitted by such resolutions. When a 
funding agreement requires that funds be transferred at the 
beginning of the fiscal year, the transfer are to be made 
within 10 days after OMB apportions the funds, unless the 
funding agreement states otherwise.
    Under subsection (b), the Secretary is authorized to 
negotiate multi-year funding agreements. Under subsection (c), 
requires that compacts or funding agreements authorized by 
Title V (including agreements for construction programs) 
provide for advance transfers of funding to the Indian tribe.
    Under subsection (d), the Secretary is required to provide 
an Indian tribe the same funding for a program, function, 
service, or activity (or portion thereof) under Self-Governance 
that the tribe would have received under Title I of the Indian 
Self-Determination and Education Assistance Act. This includes 
all Secretarial resources that support the transferred program, 
and all contract support costs (including indirect costs) that 
are not available from the Secretary but are reasonably 
necessary to operate the program. The bill requires that the 
transfer of funds occur along with the transfer of the program. 
Thus the bill states that ``the Secretary shall provide'' the 
funds specified, and the Secretary is not authorized to phase-
in funds in any manner that is not voluntarily agreed to by 
Self-Governance tribe.
    Under subsection (e), the Secretary is specifically 
prohibited from withholding, refusing to transfer or reducing 
any portion of an Indian tribe's full share of funds during a 
compact or funding agreement year, or for a period of years. 
The Committee is aware that for the first 21 years of 
administration of the Indian Self-Determination and Education 
Assistance Act, HHS has never taken the position that it has 
the discretion to delay funding for any program transferred 
under that Act absent tribal consent. However, a 1996 IHS 
circular purported to do just that. Since this circular was 
issued, several IHS area offices have refused to turn over 
substantial program funds to tribal operation. In one instance 
both an area office and IHS headquarters refused to transfer 
portions of programs for several years, and with respect to 
several headquarters functions, the IHS refused to transfer the 
functions altogether. A recent Oregon federal district court 
decision declared IHS' actions in these instances illegal and 
the Committee agrees.
    Additionally, funds that an Indian tribe is entitled to 
receive may not be reduced to make funds available to the 
Secretary for monitoring or administration; may not be used to 
pay for federal functions (such as pay costs or retirement 
benefits); and may not be used to pay costs associated with 
federal personnel displaced by Self-Governance or Title I 
contracting.
    In subsequent years, funds may only be reduced in very 
limited circumstances: if Congress reduces the amount available 
from the prior year's appropriation; if there is a directive in 
the statement of managers which accompanies an appropriation; 
if the Indian tribe agrees; if there is a change in the amount 
of pass-through funds; or if the project contained in the 
funding agreement has been completed.
    Under subsection (f), if an Indian tribe elects to carry 
out a compact or funding agreement using federal personnel, 
supplies, supply sources or other resources that the Secretary 
has available under procurement contracts, the Secretary is 
required to acquire and transfer the personnel, supplies or 
resources to the Indian tribe.
    Under subsection (g), the IHS is authorized on a 
reimbursable basis to provide goods and services to tribes. 
Reimbursements are to be credited to the same or subsequent 
appropriation account which provided the initial funding. The 
Secretary is authorized to receive and retain the reimbursed 
amounts until expended without remitting them to the Treasury.
    Subsection (h) makes the Prompt Payment Act (31 U.S.C. 
Chapter 39) applicable to the transfer of all funds due to a 
tribe under a compact or funding agreement. The first annual or 
semi-annual transfer due under a funding agreement must be made 
within 10 calendar days of the date OMB apportions the 
appropriations for that fiscal year. Under this section, the 
Secretary is obligated to pay to a Self-Governance tribe 
interest, as calculated under the Prompt Payment Act, for any 
late payment under a funding agreement
    Under subsection (i), an Indian tribe may retain interest 
earned or other income on funds transferred under a compact or 
funding agreement. Interest earned must not reduce the amount 
of funds the tribe is entitled to receive during the year the 
interest was earned or in subsequent years. An Indian tribe may 
invest funds received in a funding agreement as it wishes, 
provided it follows the ``prudent investment standard.''
    Subsection (j) clarifies that all funds paid to an Indian 
tribe under a compact or funding agreement are ``no year'' 
funds and may be spent in the year they are received or in any 
future fiscal year. Carryover funds are not to reduce the 
amount of funds that the tribe may receive in subsequent years.
    Under subsection (k), all program income (including 
Medicare/Medicaid) earned by an Indian tribe is supplemental to 
the funding that is included in its funding agreement. The 
Secretary may not reduce the amount of funds that the Indian 
tribe may receive under its funding agreement for future fiscal 
years. The Indian tribe may retain such income and spend it 
either in the current or future years.
    Subsection (l) clarifies that an Indian tribe is not 
required to continue performance of a program, function, 
service, or activity (or portion thereof) included in a funding 
agreement if doing so requires more funds than were provided 
under the funding agreement. If an Indian tribe believes that 
the amount of funds transferred is not enough to carry out a 
program, function, service, or activity (or portion thereof) 
for the full year, the Indian tribe may so notify the 
Secretary. If the Secretary does not supply additional funds 
the tribe may suspend performance of the program, function, 
service, or activity (or portion thereof) until additional 
funds are provided.

Section 510. Construction projects

    Under this section, unless agreed to by the Indian tribe, 
federal procurement or acquisition laws or regulations do not 
apply to any construction activity included in a compact or 
funding agreement. For all construction projects performed 
under Title V, the parties will negotiate appropriate health 
and safety standards relevant to the construction project.

Section 511. Federal procurement laws and program regulations

    Unless otherwise agreed to by the parties, compacts and 
funding agreements are not subject to federal contracting or 
cooperative agreement laws and regulations (including executive 
orders) unless those laws expressly apply to Indian tribes. 
Compacts and funding agreements are also not subject to program 
regulations that apply to the Secretary's operations.

Section 512. Civil actions

    The Committee intends that section 110 of the Indian Self-
Determination and Education Assistance Act, which grants tribes 
access to federal district court to challenge a decision by the 
Secretary, shall apply to new Title V.

Section 513. Facilitation

    Subsection (a) requires the Secretary to interpret all 
executive orders, regulations and federal laws in a manner that 
will facilitate the inclusion of programs, functions, services, 
or activities (or portions thereof) and funds associated 
therewith under Title V, implementation of Title V compacts and 
funding agreements, and the achievement of tribal health goals 
and objectives where they are not inconsistent with federal 
law. This section reinforces the Secretary's obligation not 
merely to provide health care services to Native American 
tribes, but to facilitate the efforts of tribes to manage those 
programs for the maximum benefit of their communities
    Under subsection (b), an Indian tribe may seek a waiver of 
any applicable federal regulation issued under new section 518 
by submitting a written waiver request to the Secretary. The 
Secretary has 90 days to respond and a failure to act within 
that period is deemed an approval of the request by operation 
of law. Action on a waiver request is final for HHS. Denials 
may only be made on a specific finding that the waiver is 
prohibited by federal law. No action within the 90 day period 
by the Secretary is deemed an approval. Although the waiver 
procedures do not apply to other departmental regulations, this 
section makes clear that tribes are not subject to departmental 
program regulations that govern how the department administers 
a particular program. Rather, tribes are expected to carry out 
transferred health care programs pursuant to tribal rules and 
regulations. The only exception is where a particular program 
requirement is set forth in statute, in which case a tribe must 
comply with the statutory limitation or mandate.
    Subsection (c) addresses tribal use of federal buildings, 
hospitals and other facilities, as well as the transfer to 
tribes of title to excess personal or real property. At the 
request of an Indian tribe the Secretary is required to permit 
the Indian tribe to use government-owned real or personal 
property under the Secretary's jurisdiction under such terms as 
the parties may agree to. The Secretary is required to donate 
title to personal or real property that is excess to the needs 
of any agency or the General Services Administration as long as 
the Secretary has determined that the property is appropriate 
for any purpose for which a compact is authorized, irrespective 
of whether a tribe is in fact administering a particular 
program that matches that purpose. For instance, if a tribe is 
not administering a mental health program under its IHS compact 
or funding agreement, the Secretary may nonetheless acquire 
excess or surplus property and donate such property to the 
tribe so long as the Secretary determines that the tribe will 
be using the property to administer mental health services.
    Title to property furnished by the government or purchased 
with funds received under a compact or funding agreement vests 
in the Indian tribe if it so chooses. Such property also 
remains eligible for replacement, maintenance or improvement on 
the same terms as if the United States had title to it. Any 
property that is worth $5,000 or more at the time of a 
retrocession, withdrawal or reassumption may revert back to the 
United States at the option of the Secretary.
    Under subsection (d), funds transferred under compacts and 
funding agreements are to be considered non-federal funds for 
purposes of meeting matching or cost participation requirements 
under federal or non-federal programs.
    Subsection (e) encourages and authorizes states to enter 
agreements with tribes supplementing and facilitating Title V 
and other federal laws that benefit Indians and Indian tribes, 
e.g., welfare reform. It is designed to provide federal 
authority so as to remove equal protection objections where 
states enter into special arrangements with tribes.
    The Committee wants to foster enlightened and productive 
partnerships between state and local governments, on the one 
hand, and Indian tribes on the other. The Committee wants to be 
sure that states are authorized by the federal government to 
undertake such initiatives, as part of the federal government's 
Constitutional authority to deal with Indian tribes as 
political entities, irrespective of any limitations which have 
from time to time been argued might otherwise exist with 
respect to state action under either state constitutional 
provisions or other provisions of the Constitution. Many state 
and tribal governments have undertaken positive initiatives 
both in health care issues and in natural resource management, 
and it is the Committee's strong desire to fully support, 
authorize and encourage such cooperative efforts.
    Subsection (f) clarifies that provisions in Title V and in 
compacts and funding agreements shall be liberally construed 
and ambiguities decided for the benefit of the Indian tribe 
participating in the program.

Section 514. Budget request

    Under subsection (a), the President is required to annually 
identify in his budget all funds needed to fully fund all Title 
V compacts and funding agreements. These funds are to be 
apportioned to the IHS Office of Tribal Self-Governance. The 
IHS may not thereafter reduce the funds a tribe is otherwise 
entitled to receive whether or not such funds have been 
apportioned to the Office of Tribal Self-Governance.
    The Committee has been made aware that the current system 
for payment and approval of funding and amendments for Annual 
Funding Agreements for Self-Governance Demonstration tribes is 
inefficient and time consuming. In addition, by leaving 
authority and responsibility for distributions to IHS area 
offices, there have been reported instances of excessive and 
unwarranted assertion of authority by area offices over Self-
Governance tribes. This includes area offices retaining shares 
of funds not authorized to be retained by the tribe's Annual 
Funding Agreement. The Committee concludes that by requiring a 
report on Self-Governance expenditures, and by moving all Self-
Governance funding onto a single line, the Congress will be 
able to achieve the following ends: more accurately gauge the 
amount of funding flowing directly to tribes through 
participation in Self-Governance; generate savings through 
decreasing the bureaucratic burden on the payment and approval 
process in the IHS; expedite the transferal of funding to 
tribal operating units; and aid in the implementation of true 
government to government relations and tribal self 
determination.
    Under subsection (b), the budget must identify the present 
level of need and any shortfalls in funding for every Indian 
tribe in the United States that receives services directly from 
the Secretary, through a Title I contract or in a Title V 
compact and funding agreement.

Section 515. Reports

    Under subsection (a), the Secretary is required to submit 
to Congress on January 1 of every year a written report on the 
Self-Governance Program. The report is to include the level of 
need presently funded or unfunded for every Indian tribe in the 
United States that receives services directly from the 
Secretary, through a Title I contract or in a Title V compact 
and funding agreement.
    Under subsection (b), the Secretary's report must identify: 
the costs and benefits of Self-Governance; all funds related to 
the Secretary's provision of services and benefits to Self-
Governance tribes and their members; all funds transferred to 
Self-Governance tribes and the corresponding reduction in the 
federal bureaucracy; the funding formula for individual tribal 
shares; and the amount expended by the Secretary during the 
preceding fiscal year to carry out inherent federal functions.
    The Secretary's report must, at the request of any Indian 
tribe, include comments from the tribe. The report must be 
distributed to all Indian tribes for comment no less than 30 
days prior to its submission to Congress. Finally, the 
Secretary may not impose reporting requirements on Indian 
tribes unless specified in Title V.
    Subsection (c) requires the Secretary to consult with 
Indian tribes and report, within 180 days after Title V is 
enacted, on funding formulae used to determine tribal shares of 
funds controlled by IHS. The formulae are to become a part of 
the annual report to Congress discussed above in section 
514(b). This provision is not intended to relieve HHS from its 
obligation under Title V to make all funds controlled by the 
central office, national, headquarters or regional offices 
available to Indian tribes. This provision is also not intended 
to require reopening funding formulae that are already being 
used by HHS to distribute funds to Indian tribes. Any new 
formulae or revision of existing formulae should be determined 
only after significant regional and national tribal 
consultation.

Section 516. Disclaimers

    Subsection (a) states that nothing in Title V shall be 
interpreted to limit or reduce the funding for any program, 
project or activity that any other Indian tribe may receive 
under Title I or other applicable federal laws. A tribe that 
alleges that a compact or funding agreementviolates this 
section may rely on section 110 of the Indian Self-Determination and 
Education Assistance Act to seek judicial review of the allegation.
    Subsection (b) clarifies that the trust responsibility of 
the United States to Indian tribes and individual Indians which 
exists under treaties, executive orders, laws and court 
decisions shall not be reduced by any provision of Title V.
    Subsection (c) excludes Indian tribes carrying out 
responsibilities under a compact or funding agreement from 
falling under the definition of ``employer'' as that term is 
used in the National Labor Regulations Act.
    Under subsection (d), the IHS is prohibited from billing, 
or requiring Indian tribes from billing, individual Indians who 
have the economic means to pay for services. For many years the 
Interior and Related Agencies Appropriation Acts included 
language that prohibited the IHS, without explicit direction 
from Congress, from billing or charging Indians who have the 
economic means to pay. In 1997 the language was removed from 
the appropriation bills and it has not been included since. 
This section reflects the Committee's intent that the IHS is 
prohibited from billing Indians for services, and is further 
prohibited from requiring any Indian tribe to do so.

Section 517. Application of other sections of the Act

    Subsection (a) incorporates a number of sections from Title 
I of the Indian Self-Determination and Education Assistance Act 
and makes them applicable to Title V. These sections include 
section 6 (setting out penalties that apply if an individual 
embezzles or otherwise misappropriates funds under Title V); 
section 7 (Davis-Bacon wage and labor standards and Indian 
preference requirements); section 102(c)-(d) (relating to 
Federal Tort Claims Act coverage); section 104 (relating to the 
right to use federal personnel to carry out responsibilities in 
a compact or funding agreement); section 105(k) (access to 
federal supplies); section 111 (clarifying that Title V shall 
have no impact on existing sovereign immunity and the United 
States' trust responsibility); and section 314 from Public Law 
101-512, as amended (relating to Federal Tort Claims Act 
coverage).
    Under subsection (b), at the request of an Indian tribe, 
other provisions of Title I of the Act which do not conflict 
with provisions in Title V may be incorporated into a compact 
or funding agreement. If incorporation is requested during 
negotiations, it will be considered effective immediately.

Section 518. Regulations

    This section gives the Secretary limited authority to 
promulgate regulations implementing Title V.
    Under subsection (a), the Secretary is required to initiate 
procedures to negotiate and promulgate regulations necessary to 
carry out Title V within 90 days of its enactment. The 
procedures must be developed under the Federal Advisory 
Committee Act. The Secretary is required to publish proposed 
regulations no later than one year after the date of enactment 
of Title V. The authority to promulgate final regulations under 
Title V expires 21 months after enactment. The Committee is 
aware of the success of the Title I negotiated rulemaking and 
believes that one reason for its success is a similar 
limitation of rulemaking authority contained in section 1070(a) 
of the Indian Self-Determination and Education Assistance Act, 
which this section is modeled after.
    Subsection (b) requires a negotiated rulemaking committee 
established under 5 U.S.C. 565 to carry out this section shall 
be comprised only of federal and tribal government members. A 
majority of the tribal committee members must be 
representatives of and must have been nominated by Indian 
tribes with Title V compacts and funding agreements. The 
committee will confer with and allow representatives of Indian 
tribes, inter-tribal consortiums, tribal organizations and 
individual tribal members to actively participate in the 
rulemaking process.
    Subsection (c) clarifies that the negotiated rulemaking 
procedures may be modified by the Secretary to ensure that the 
unique context of Self-Governance and the government-to-
government relationship between the United States and Indian 
tribes is accommodated.
    Subsection (d) clarifies that the effect of Title V shall 
not be limited if regulations are not published.
    Under subsection (e), unless an Indian tribe agrees 
otherwise in a compact or funding agreement, no agency 
circulars, policies, manuals, guidances or rules adopted by the 
IHS apply to the tribe except as specified in this subsection.

Section 519. Appeals

    In any appeal (including civil actions) involving a 
decision by the Secretary under Title V, the Secretary carries 
the burden of proof. To satisfy this burden the Secretary must 
establish by clear and convincing evidence the validity of the 
grounds for the decision made and that the decision is fully 
consistent with provisions and policies of Title V.

Section 520. Authorization of appropriations

    This section authorizes Congress to appropriate such funds 
as are necessary to carry out Title V.

Section 5. Amendments clarifying civil proceedings

    Subsection (a) amends section 102(e)(1) of the Indian Self-
Determination and Education Assistance Act to clarify that the 
Secretary has the burden of proof in any civil action pursuant 
to section 110(a).
    Subsection (b) confirms that the district courts were able 
to conduct a de novo review of claims arising under section 110 
of the Indian Self-Determination and Education Assistance Act. 
Section 110 provides tribes and tribal contractors with the 
right to pursue civil claims over tribal contracts, compacts, 
and funding agreements in the federal district courts. Congress 
provided tribes with this relief to assure that tribes had a 
strong, effective, and immediate means to obtain agency 
compliance with the Act's requirements. The federal courts, 
however, have given opposing interpretations over whether this 
section vests courts with de novo review authority. Legislative 
history arising under the 1994 Indian Self-Determination Act 
Amendments indicates that Congress may very well have intended 
for the courts to have de novo review. The Committee proposes 
to eliminate this provision when H.R. 1833 is considered by the 
House of Representatives. The Committee's elimination of the de 
novo provision from this bill is not intended in any way to 
send a signal to the courts or the Administration that de novo 
review was not intended in the first place. Rather, elimination 
of this provision is simply intended to let litigation between 
the tribes and the Administration continue on, and for the 
courts to ultimately decide this matter.
    Under subsection (c), the amendment to sections 102(e)(1) 
and 110(a) set out in subsections (a) and (b) above shall apply 
to any proceeding commenced after October 25, 1994.

                           section 6. repeal

    This section repeals Title III of the Indian Self-
Determination and Education Assistance Act effective as of 
October 1, 1998.

                       section 7. effective date

    This section provides that the provisions of H.R. 1833 
shall take effect on the date of its enactment, unless 
otherwise provided.

            Committee Oversight Findings and Recommendations

    With respect to the requirements of clause 2(l)(3) of rule 
XI of the Rules of the House of Representatives, and clause 
2(b)(1) of rule X of the Rules of the House of Representatives, 
the Committee on Resources' oversight findings and 
recommendations are reflected in the body of this report.

                   Constitutional Authority Statement

    Article I, section 8 of the Constitution of the United 
States grants Congress the authority to enact H.R. 1833.

                        Cost of the Legislation

    Clause 7(a) of rule XIII of the Rules of the House of 
Representatives requires an estimate and a comparison by the 
Committee of the costs which would be incurred in carrying out 
H.R. 1833. However, clause 7(d) of that Rule provides that this 
requirement does not apply when the Committee has included in 
its report a timely submitted cost estimate of the bill 
prepared by the Director of the Congressional Budget Office 
under section 403 of the Congressional Budget Act of 1974.

                     Compliance With House Rule XI

    1. With respect to the requirement of clause 2(l)(3)(B) of 
rule XI of the Rules of the House of Representatives and 
section 308(a) of the Congressional Budget Act of 1974, the 
bill does not contain any new budget authority, spending 
authority, credit authority, or an increase or decrease in 
revenues or tax expenditures.
    2. With respect to the requirement of clause 2(l)(3)(D) of 
rule XI of the Rules of the House of Representatives, the 
Committee has received no report of oversight findings and 
recommendations from the Committee on Government Reform and 
Oversight on the subject of this bill.
    3. With respect to the requirement of clause 2(l)(3)(C) of 
rule XI of the Rules of the House of Representatives and 
section 403 of the Congressional Budget Act of 1974, the 
Committee has received the following cost estimate for this 
bill from the Director of the Congressional Budget Office.

               Congressional Budget Office Cost Estimate

                                     U.S. Congress,
                               Congressional Budget Office,
                                Washington, DC, September 25, 1998.
Hon. Don Young,
Chairman, Committee on Resources,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 1833, the Tribal 
Self-Governance Amendment of 1998.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Dorothy 
Rosenbaum.
            Sincerely,
                                         June E. O'Neill, Director.
    Enclosure.

H.R. 1833--The Tribal Self-Governance Amendments of 1998

    CBO estimates that H.R. 1833 would increase authorizations 
of appropriations by less than $500,000 during 1999 and 2000. 
Because enacting the bill would not affect direct spending or 
receipts, pay-as-you-go procedures would not apply. The 
legislation contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act (UMRA) 
and would impose no costs on state, local, and tribal 
governments.
    H.R. 1833 would amend the Indian Self-Determination and 
Education Assistance Act to establish a permanent tribal self-
governance program within the Indian Health Service (IHS). 
Under existing demonstration authority, the IHS and tribes 
enter into funding agreements whereby the tribe assumes 
administrative and programmatic duties that were previously 
performed by the federal government. Because the current 
demonstration authority does not end until 2006, and because 
the provisions of the new permanent program would not be 
significantly different from current law, CBO estimates that 
establishing a permanent program would have no federal 
budgetary impact over fiscal years 1998 to 2003. Under the 
existing demonstration program, IHS may select 30 new tribes 
each year to participate. Under the bill, the number would be 
raised to 50. Because in recent years fewer than 10 new tribes 
each year have become eligible to participate, CBO assumes that 
this change in law would have no effect.
    H.R. 1833 would authorize appropriations for fiscal years 
1999 and 2000 for the IHS to conduct a study and report to 
Congress on the feasibility of expanding self-governance 
compacts to include programs operated by units of the 
Department of Health and Human Services other than the IHS. CBO 
estimates that this study would cost less than $500,000.
    The CBO staff contact for this estimate is Dorothy 
Rosenbaum. This estimate was approved by Paul N. Van de Water, 
Assistant Director for Budget Analysis.

                    Compliance With Public Law 104-4

    H.R. 1833 contains no unfunded mandates.

         Changes in Existing Law Made by the Bill, as Reported

  In compliance with clause 3 of rule XIII of the Rules of the 
House of Representatives, changes in existing law made by the 
bill, as reported, are shown as follows (existing law proposed 
to be omitted is enclosed in black brackets, new matter is 
printed in italic, existing law in which no change is proposed 
is shown in roman):

       INDIAN SELF-DETERMINATION ACT AND EDUCATION ASSISTANCE ACT

TITLE I--INDIAN SELF-DETERMINATION ACT

           *       *       *       *       *       *       *


               contracts by the secretary of the interior

      Sec. 102. (a) * * *

           *       *       *       *       *       *       *

  (e)(1) With respect to any hearing or appeal conducted 
pursuant to subsection (b)(3) or any civil action conducted 
pursuant to section 110(a), the Secretary shall have the burden 
of proof to establish by clearly demonstrating the validity of 
the grounds for declining the contract proposal (or portion 
thereof).

           *       *       *       *       *       *       *

      Sec. 110. (a) The United States district courts shall 
have original jurisdiction over any civil action or claim 
against the appropriate Secretary arising under this Act and, 
subject to the provisions of subsection (d) of this section and 
concurrent with the United States Court of Claims, over any 
civil action or claim against the Secretary for money damages 
arising under contracts authorized by this Act. In an action 
brought under this paragraph, the district courts may order 
appropriate relief including money damages, injunctive relief 
against any action by an officer of the United States or any 
agency thereof contrary to this Act or regulations promulgated 
thereunder, or mandamus to compel an officer or employee of the 
United States, or any agency thereof, to perform a duty 
provided under this Act or regulations promulgated hereunder 
(including immediate injunctive relief to reverse a declination 
finding under section 102(a)(2) or to compel the Secretary to 
award and fund an approved self-determination contract). In any 
action brought under this subsection, the district courts shall 
conduct a trial de novo with full rights of discovery and 
proceed in accordance with the Federal Rules of Civil 
Procedure.

           *       *       *       *       *       *       *


        [TITLE III--INDIAN SELF-GOVERNANCE DETERMINATION PROJECT

  [Sec. 301. The Secretary of the Interior and the Secretary of 
Health and Human Services (hereafter in this title referred to 
as the ``Secretaries'') each shall, for a period not to exceed 
18 years following enactment of this title, conduct a research 
and demonstration project to be known as the Tribal Self-
Governance Project according to the provisions of this title.
  [Sec. 302. (a) For each fiscal year, the Secretaries shall 
select thirty tribes to participate in the demonstration 
project, as follows:
          [(1) a tribe that successfully completes a Self-
        Governance Planning Grant, authorized by Conference 
        Report 100-498 to accompany H.J.Res. 395, One Hundredth 
        Congress, first session shall be selected to 
        participate in the demonstration project; and
          [(2) the Secretaries shall select, in such a manner 
        as to achieve geographic representation, the remaining 
        tribal participants from the pool of qualified 
        applicants. In order to be in the pool of qualified 
        applicants--
                  [(A) the governing body of the tribe shall 
                request participation in the demonstration 
                project;
                  [(B) such tribe shall have operated two or 
                more mature contracts; and
                  [(C) such tribe shall have demonstrated, for 
                the previous three fiscal years, financial 
                stability and financial management capability 
                as evidenced by such tribe having no 
                significant and material audit exceptions in 
                the required annual audit of such tribe's self-
                determination contracts.
  [Sec. 303. (a) The Secretaries is directed to negotiate, and 
to enter into, an annual written funding agreement with the 
governing body of a participating tribal government that 
successfully completes its Self-Governance Planning Grant. Such 
annual written funding agreement--
          [(1) shall authorize the tribe to plan, conduct, 
        consolidate, and administer programs, services and 
        functions of the Department of the Interior and the 
        Indian Health Service of the Department of Health and 
        Human Services that are otherwise available to Indian 
        tribes or Indians, including but not limited to, the 
        Act of April 16, 1934 (48 Stat. 596), as amended, and 
        the Act of November 2, 1921 (42 Stat. 208);
          [(2) subject to the terms of the written agreement 
        authorized by this title, shall authorized the tribe to 
        redesign programs, activities, functions or services 
        and to reallocate funds for such programs, activities, 
        functions or services;
          [(3) shall not include funds provided pursuant to the 
        Tribally Controlled Community College Assistance Act 
        (Public Law 95-471), for elementary and secondary 
        schools under the Indian School Equalization Formula 
        pursuant to title XI of the Education Amendments of 
        1978 (Public Law 95-561, as amended), or for either the 
        Flathead Agency Irrigation Division or the Flathead 
        Agency Power Division: Provided, That nothing in this 
        section shall affect the contractability of such 
        divisions under section 102 of this Act;
          [(4) shall specify the services to be provided, the 
        functions to be performed, and the responsibilities of 
        the tribe and the Secretaries pursuant to this 
        agreement;
          [(5) shall specify the authority of the tribe and the 
        Secretaries, and the procedures to be used, to 
        reallocate funds or modify budget allocations within 
        any project year;
          [(6) shall, except as provided in paragraphs (1) and 
        (2), provide for payment by the Secretaries to the 
        tribe of funds from one or more programs, services, 
        functions, or activities in an amount equal to that 
        which the tribe would have been eligible to receive 
        under contracts and grants under this Act, including 
        direct program costs and indirect costs, and for any 
        funds which are specifically related to the provision 
        by the Secretaries of services and benefits to the 
        tribe and its members: Provided, however, That funds 
        for trust services to individual Indians are available 
        under this written agreement only to the extent that 
        the same services which would have been provided by the 
        Secretaries are provided to individual Indians by the 
        tribe;
          [(7) shall not allow the Secretaries to waive, modify 
        or diminish in any way the trust responsibility of the 
        United States with respect to Indian tribes and 
        individual Indians which exists under treaties, 
        Executive orders, and Acts of Congress;
          [(8) shall allow for retrocession of programs or 
        portions thereof pursuant to section 105(e) of this 
        Act; and
          [(9) shall be submitted by the Secretaries ninety 
        days in advance of the proposed effective date of the 
        agreement to each tribe which is served by the agency 
        which is serving the tribe which is a party to the 
        funding agreement and to the Congress for review by the 
        Committee on Indian Affairs of the Senate and the 
        Committee on Natural Resources of the House of 
        Representatives.
  [(b) For the year for which, and to the extent to which, 
funding is provided to a tribe pursuant to this title, such 
tribe--
          [(1) shall not be entitled to contract with the 
        Secretaries for such funds under section 102, except 
        that such tribe shall be eligible for new programs on 
        the same basis as other tribes; and
          [(2) shall be responsible for the administration of 
        programs, services and activities pursuant to 
        agreements under this title.
  [(c) At the request of the governing body of the tribe and 
under the terms of an agreement pursuant to subsection (a), the 
Secretaries shall provide funding to such tribe to implement 
the agreement.
  [(d) For the purpose of section 110 of this Act the term 
``contract'' shall also include agreements authorized by this 
title; except that for the term of the authorized agreements 
under this title, the provisions of section 2103 of the Revised 
Statutes of the United States (25 U.S.C. 81), and section 16 of 
the Act of June 18, 1934 (25 U.S.C. 476), shall not apply to 
attorney and other professional contracts by participating 
Indian tribal governments operating under the provisions of 
this title.
  [(e) To the extent feasible, the Secretaries shall interpret 
Federal laws and regulations in a manner that will facilitate 
the agreements authorized by this title.
  [(f) To the extent feasible, the Secretaries shall interpret 
Federal laws and regulations in a manner that will facilitate 
the inclusion of activities, programs, services, and functions 
in the agreements authorized by this title.
  [Sec. 304. The Secretaries shall identify, in the President's 
annual budget request to the Congress, any funds proposed to be 
included in the Tribal Self- Governance Project. The use of 
funds pursuant to this title shall be subject to specific 
directives or limitations as may be included in applicable 
appropriations Acts.
  [Sec. 305. The Secretaries shall submit to the Congress a 
written report on July 1 and January 1 of each of the five 
years following the date of enactment of this title, on the 
relative costs and benefits of the Tribal Self-Governance 
Project. Such report shall be based on mutually determined 
baseline measurements jointly developed by the Secretaries and 
participating tribes, and shall separately include the views of 
the tribes.
  [Sec. 306. Nothing in this title shall be construed to limit 
or reduce in any way the services, contracts or funds that any 
other Indian tribe or tribal organization is eligible to 
receive under section 102 or any other applicable Federal law 
and the provisions of section 110 of this Act shall be 
available to any tribe or Indian organization which alleges 
that a funding agreement is in violation of this section.
  [Sec. 307. For the purpose of providing planning and 
negotiation grants to the ten tribes added by section 3 of the 
Tribal Self-Governance Demonstration Project Act to the number 
of tribes set forth by section 302 of this Act (as in effect 
before the date of enactment of this section), there is 
authorized to be appropriated $700,000.
  [Sec. 308. (a) The Secretary of Health and Human Services, in 
consultation with the Secretary of the Interior and Indian 
tribal governments participating in the demonstration project 
under this title, shall conduct a study for the purpose of 
determining the feasibility of extending the demonstration 
project under this title to the activities, programs, 
functions, and services of the Indian Health Service. The 
Secretary shall report the results of such study, together with 
his recommendations, to the Congress within the 12-month period 
following the date of the enactment of the Tribal Self-
Governance Demonstration Project Act.
  [(b) The Secretary of Health and Human Services may establish 
within the Indian Health Service an office of self-governance 
to be responsible for coordinating the activities necessary to 
carry out the study required under subsection (a).
  [Sec. 309. The Secretary of the Interior shall conduct a 
study for the purpose of determining the feasibility of 
including in the demonstration project under this title those 
programs and activities excluded under section 303(a)(3). The 
Secretary of the Interior shall report the results of such 
study, together with his recommendations, to the Congress 
within the 12-month period following the date of the enactment 
of the Tribal Self-Governance Demonstration Project Act.
  [Sec. 310. For the purposes of providing one year planning 
and negotiations grants to the Indian tribes identified by 
section 302, with respect to the programs, activities, 
functions, or services of the Indian Health Service, there are 
authorized to be appropriated such sums as may be necessary to 
carry out such purposes. Upon completion of an authorized 
planning activity or a comparable planning activity by a tribe, 
the Secretary is authorized tonegotiate and implement a Compact 
of Self-Governance and Annual Funding Agreement with such tribe.]

           *       *       *       *       *       *       *


                    TITLE V--TRIBAL SELF-GOVERNANCE

SEC. 501. ESTABLISHMENT.

  The Secretary of Health and Human Services shall establish 
and carry out a program within the Department of Health and 
Human Services to be known as the ``Tribal Self-Governance 
Program'' in accordance with this title.

SEC. 502. DEFINITIONS.

  (a) In General.--For purposes of this title--
          (1) the term ``inherent Federal functions'' means 
        those Federal functions which cannot legally be 
        delegated to Indian tribes;
          (2) the term ``inter-tribal consortium'' means a 
        coalition of two or more separate Indian tribes that 
        join together for the purpose of participating in Self-
        Governance, including, but not limited to, a tribal 
        organization;
          (3) the term ``tribal shares'' means an Indian 
        tribe's portion of all funds and resources that support 
        secretarial programs, services, functions, and 
        activities (or portions thereof) that are not required 
        by the Secretary for performance of inherent Federal 
        functions;
          (4) the term ``Secretary'' means the Secretary of 
        Health and Human Services; and
          (5) the term ``Self-Governance'' means the program 
        established pursuant to section 501.
  (b) Indian Tribe.--Where an Indian tribe has authorized 
another Indian tribe, an inter-tribal consortium, or a tribal 
organization to plan for or carry out programs, services, 
functions, or activities (or portions thereof) on its behalf 
under this title, the authorized Indian tribe, inter-tribal 
consortium, or tribal organization shall have the rights and 
responsibilities of the authorizing Indian tribe (except as 
otherwise provided in the authorizing resolution or in this 
title). In such event, the term ``Indian tribe'' as used in 
this title shall include such other authorized Indian tribe, 
inter-tribal consortium, or tribal organization.

SEC. 503. SELECTION OF PARTICIPATING INDIAN TRIBES.

  (a) Continuing Participation.--Each Indian tribe that is 
participating in the Tribal Self-Governance Demonstration 
Project under title III on the date of enactment of this title 
may elect to participate in Self-Governance under this title 
under existing authority as reflected in tribal resolution.
  (b) Additional Participants.--
          (1) In addition to those Indian tribes participating 
        in Self-Governance under subsection (a), each year an 
        additional 50 Indian tribes that meet the eligibility 
        criteria specified in subsection (c) shall be entitled 
        to participate in Self-Governance.
          (2)(A) An Indian tribe that has withdrawn from 
        participation in an inter-tribal consortium or tribal 
        organization, in whole or in part, shall be entitled to 
        participate in Self-Governance provided the Indian 
        tribe meets the eligibility criteria specified in 
        subsection (c).
          (B) If an Indian tribe has withdrawn from 
        participation in an inter-tribal consortium or tribal 
        organization, it shall be entitled to its tribal share 
        of funds supporting those programs, services, 
        functions, and activities (or portions thereof) that it 
        will be carrying out under its compact and funding 
        agreement.
          (C) In no event shall the withdrawal of an Indian 
        tribe from an inter-tribal consortium or tribal 
        organization affect the eligibility of the inter-tribal 
        consortium or tribal organization to participate in 
        Self-Governance.
  (c) Applicant Pool.--The qualified applicant pool for Self-
Governance shall consist of each Indian tribe that--
          (1) successfully completes the planning phase 
        described in subsection (d);
          (2) has requested participation in Self-Governance by 
        resolution or other official action by the governing 
        body (or bodies) of the Indian tribe or tribes to be 
        served; and
          (3) has demonstrated, for the previous 3 fiscal 
        years, financial stability and financial management 
        capability.
Evidence that during such years the Indian tribe had no 
uncorrected significant and material audit exceptions in the 
required annual audit of the Indian tribe's self-determination 
contracts or Self-Governance funding agreements with any 
Federal agency shall be conclusive evidence of the required 
stability and capability for the purposes of this subsection.
  (d) Planning Phase.--Each Indian tribe seeking participation 
in Self-Governance shall complete a planning phase. The 
planning phase shall be conducted to the satisfaction of the 
Indian tribe and shall include--
          (1) legal and budgetary research; and
          (2) internal tribal government planning and 
        organizational preparation relating to the 
        administration of health care programs.
  (e) Grants.--Subject to the availability of appropriations, 
any Indian tribe meeting the requirements of subsections (c)(2) 
and (3) shall be eligible for grants--
          (1) to plan for participation in Self-Governance; and
          (2) to negotiate the terms of participation by the 
        Indian tribe or tribal organization in Self-Governance, 
        as set forth in a compact and a funding agreement.
  (f) Receipt of Grant Not Required.--Receipt of a grant under 
subsection (e) shall not be a requirement of participation in 
Self-Governance.

SEC. 504. COMPACTS.

  (a) Compact Required.--The Secretary shall negotiate and 
enter into a written compact with each Indian tribe 
participating in Self-Governance in a manner consistent with 
the Federal Government's trust responsibility, treaty 
obligations, and the government-to-government relationship 
between Indian tribes and the United States.
  (b) Contents.--Each compact required under subsection (a) 
shall set forth the general terms of the government-to-
government relationship between the Indian tribe and the 
Secretary, including such terms as the parties intend shall 
control year after year. Such compacts may only be amended by 
mutual agreement of the parties.
  (c) Existing Compacts.--An Indian tribe participating in the 
tribal Self-Governance on the date of enactment of this title 
shall have the option at any time thereafter to--
          (1) retain its Tribal Self-Governance Project compact 
        (in whole or in part) to the extent the provisions of 
        such compact are not directly contrary to any express 
        provision of this title, or
          (2) negotiate in lieu thereof (in whole or in part) a 
        new compact in conformity with this title.
  (d) Term and Effective Date.--The effective date of a compact 
shall be the date of the approval and execution by the Indian 
tribe or another date agreed upon by the parties, and shall 
remain in effect for so long as permitted by Federal law or 
until terminated by mutual written agreement, retrocession, or 
reassumption.

SEC. 505. FUNDING AGREEMENTS.

  (a) Funding Agreement Required.--The Secretary shall 
negotiate and enter into a written funding agreement with each 
Indian tribe participating in Self-Governance in a manner 
consistent with the Federal Government's trust responsibility, 
treaty obligations, and the government-to-government 
relationship between Indian tribes and the United States.
  (b) Contents.--Each funding agreement required under 
subsection (a) shall, as determined by the Indian tribe, 
authorize the Indian tribe to plan, conduct, consolidate, 
administer, and receive full tribal share funding for all 
programs, services, functions, and activities (or portions 
thereof), including tribal shares of discretionary Indian 
Health Service competitive grants (excluding congressionally 
earmarked competitive grants), that are carried out for the 
benefit of Indians because of their status as Indians 
(including all programs, services, functions, or activities (or 
portions thereof) where Indian tribes or Indians are primary or 
significant beneficiaries, administered by the Department of 
Health and Human Services through the Indian Health Service and 
grants (which may be added to a funding agreement after award 
of such grants)) without regard to the agency or office of the 
Indian Health Service (or of such other agency) within which 
the program, service, function, or activity (or portion 
thereof) is performed, including tribal share funding for all 
local, field, service unit, area, regional, and central 
headquarters or national office functions administered under 
the authority of--
          (1) the Act of November 2, 1921 (25 U.S.C. 13);
          (2) the Act of April 16, 1934 (25 U.S.C. 452 et 
        seq.);
          (3) the Act of August 5, 1954 (68 Stat. 674);
          (4) the Indian Health Care Improvement Act (25 U.S.C. 
        1601 et seq.);
          (5) the Indian Alcohol and Substance Abuse Prevention 
        and Treatment Act of 1986 (25 U.S.C. 2401 et seq.);
          (6) any other act of Congress authorizing agencies of 
        the Department of Health and Human Services to 
        administer, carry out or provide financial assistance 
        to such programs, services,functions or activities (or 
portions thereof) described in this section; or
          (7) any other act of Congress authorizing such 
        programs, services, functions or activities (or 
        portions thereof) under which appropriations are made 
        to agencies other than agencies within the Department 
        of Health and Human Services, when the Secretary 
        administers such programs, services, functions or 
        activities (or portions thereof).
  (c) Inclusion in Compact or Funding Agreement.--Indian tribes 
or Indians need not be identified in the authorizing statute 
for a program or element of a program to be eligible for 
inclusion in a compact or funding agreement under this title.
  (d) Funding Agreement Terms.--Each funding agreement shall 
set forth terms that generally identify the programs, services, 
functions, and activities (or portions thereof) to be performed 
or administered, the general budget category assigned, the 
funds to be provided, including those to be provided on a 
recurring basis, the time and method of transfer of the funds, 
the responsibilities of the Secretary, and any other provisions 
to which the Indian tribe and the Secretary agree.
  (e) Subsequent Funding Agreements.--Absent notification from 
an Indian tribe that is withdrawing or retroceding the 
operation of one or more programs, services, functions, or 
activities (or portions thereof) identified in a funding 
agreement, or unless otherwise agreed to by the parties, each 
funding agreement shall remain in full force and effect until a 
subsequent funding agreement is executed, and the terms of the 
subsequent funding agreement shall be retroactive to the end of 
the term of the preceding funding agreement.
  (f) Existing Funding Agreements.--Each Indian tribe 
participating in the Tribal Self-Governance Project established 
under title III, as in force before the enactment of the Tribal 
Self-Governance Amendments of 1998, on the date of enactment of 
this title shall have the option at any time thereafter to--
          (1) retain its Tribal Self-Governance Project funding 
        agreement (in whole or in part) to the extent the 
        provisions of such funding agreement are not directly 
        contrary to any express provision of this title, or
          (2) adopt in lieu thereof (in whole or in part) a new 
        funding agreement in conformity with this title.
  (g) Stable Base Funding.--At the option of an Indian tribe, a 
funding agreement may provide for a stable base budget 
specifying the recurring funds (including, for purposes of this 
provision, funds available under section 106(a) of the Act) to 
be transferred to such Indian tribe, for such period as may be 
specified in the funding agreement, subject to annual 
adjustment only to reflect changes in congressional 
appropriations by sub-sub activity excluding earmarks.

SEC. 506. SELF-GOVERNANCE FEASIBILITY STUDY.

  (a) In General.--The Secretary shall conduct a study, in 
consultation with Indian tribes and other entities specified in 
subsection (b), to determine the feasibility of including in 
Self-Governance, on a demonstration project basis, programs of 
the Department of Health and Human Services, other than the 
Indian Health Service, that benefit Indian tribes or their 
members, and to identify the programs suitable for inclusion in 
such demonstration.
  (b) Entities To Be Consulted.--In conducting the study 
required under this section, the Secretary shall consult with 
Indian tribes, States, counties and municipalities, program 
beneficiaries, and concerned public interest groups, and may 
consult with other entities as the Secretary finds appropriate.
  (c) Issues.--The study under this section shall consider the 
following issues with respect to the feasibility and design of 
a Self-Governance demonstration:
          (1) The probable effects on specific programs and 
        program beneficiaries.
          (2) Statutory, regulatory, or operational impediments 
        to implementation.
          (3) Strategies for facilitating Self-Governance.
          (4) Probable costs associated with Self-Governance.
          (5) Methods to ensure quality and accountability in 
        Self-Governance demonstrations.
          (6) Such other issues as may be identified by the 
        Secretary.
  (d) Report to Congress.--Not later than 18 months after the 
date of the enactment of this Act, the Secretary shall report 
to the Congress the findings and conclusions of the study under 
this section and any separate or dissenting views of the 
entities consulted pursuant to subsection (b).
  (e) Authorization of Appropriations.--There are authorized to 
be appropriated for fiscal years 1999 and 2000 such sums as 
necessary to carry out the purposes of this section, to remain 
available until expended.

SEC. 507. GENERAL PROVISIONS.

  (a) Applicability.--The provisions of this section shall 
apply to compacts and funding agreements negotiated under this 
title and an Indian tribe may, at its option, include 
provisions that reflect such requirements in a compact or 
funding agreement.
  (b) Conflicts of Interest.--Indian tribes participating in 
Self-Governance under this title shall ensure that internal 
measures are in place to address conflicts of interest in the 
administration of Self-Governance programs, services, 
functions, or activities (or portions thereof).
  (c) Audits.--
          (1) Single agency audit act.--The provisions of 
        chapter 75 of title 31, United States Code requiring a 
        single agency audit report shall apply to funding 
        agreements under this title.
          (2) Cost principles.--An Indian tribe shall apply 
        cost principles under the applicable Office of 
        Management and Budget Circular, except as modified by 
        section 106, or by any exemptions to applicable Office 
        of Management and Budget Circulars subsequently granted 
        by Office of Management and Budget. No other audit or 
        accounting standards shall be required by the 
        Secretary. Any claim by the Federal Government against 
        the Indian tribe relating to funds received under a 
        funding agreement based on any audit under this 
        subsection shall be subject to the provisions of 
        section 106(f).
  (d) Records.--
          (1) In general.--Unless an Indian tribe specifies 
        otherwise in the compact or funding agreement, records 
        of the Indian tribe shall not be considered Federal 
        records for purposes of chapter 5 of title 5, United 
        States Code.
          (2) Recordkeeping system.--The Indian tribe shall 
        maintain a recordkeeping system, and, after 30 days 
        advance notice, provide the Secretary with reasonable 
        access to such records to enable the Department of 
        Health and Human Services to meet its minimum legal 
        recordkeeping system requirements under the sections 
        3101 through 3106 of title 44, United States Code.
  (e) Redesign and Consolidation.--An Indian tribe may redesign 
or consolidate programs, services, functions, and activities 
(or portions thereof) included in a funding agreement under 
section 505 and reallocate or redirect funds for such programs, 
services, functions, and activities (or portions thereof) in 
any manner which the Indian tribe deems to be in the best 
interest of the health and welfare of the Indian community 
being served, only if the redesign or consolidation does not 
have the effect of denying eligibility for services to 
population groups otherwise eligible to be served.
  (f) Retrocession.--An Indian tribe may retrocede, fully or 
partially, to the Secretary programs, services, functions, or 
activities (or portions thereof) included in the compact or 
funding agreement. Unless the Indian tribe rescinds the request 
for retrocession, such retrocession will become effective 
within the time frame specified by the parties in the compact 
or funding agreement. In the absence of such a specification, 
such retrocession shall become effective on--
          (1) the earlier of--
                  (A) one year from the date of submission of 
                such request; or
                  (B) the date on which the funding agreement 
                expires; or
          (2) such date as may be mutually agreed by the 
        Secretary and the Indian tribe.
  (g) Withdrawal.--
          (1) Process.--An Indian tribe may fully or partially 
        withdraw from a participating inter-tribal consortium 
        or tribal organization its share of any program, 
        function, service, or activity (or portions thereof) 
        included in a compact or funding agreement. Such 
        withdrawal shall become effective within the time frame 
        specified in the resolution which authorizes transfer 
        to the participating tribal organization or inter-
        tribal consortium. In the absence of a specific time 
        frame set forth in the resolution, such withdrawal 
        shall become effective on--
                  (A) the earlier of--
                          (i) one year from the date of 
                        submission of such request; or
                          (ii) the date on which the funding 
                        agreement expires; or
                  (B) such date as may be mutually agreed upon 
                by the Secretary, the withdrawing Indian tribe 
                and the participating tribal organization or 
                inter-tribal consortium that has signed the 
                compact or funding agreement on behalf of the 
                withdrawing Indian tribe, inter-tribal 
                consortium, or tribal organization.
          (2) Distribution of funds.--When an Indian tribe or 
        tribal organization eligible to enter into a self-
        determination contract under title I or a compact or 
        funding agreement under this title fully or partially 
        withdraws from a participating inter-tribal consortium 
        or tribal organization, the withdrawing Indian tribe or 
        tribal organization shall be entitled to its tribal 
        share of funds supporting those programs, services, 
        functions, or activities (or portions thereof) which it 
        will be carrying out under its own self-determination 
        contract or compact and funding agreement (calculated 
        on the same basis as the funds were initially allocated 
        in the funding agreement of the inter-tribal consortium 
        or tribal organization), and such funds shall be 
        transferred from the funding agreement of the inter-
        tribal consortium or tribal organization, provided that 
        the provisions of sections 102, 105(i), and 506, as 
        appropriate, shall apply to such withdrawing Indian 
        tribe.
          (3) Regaining mature contract status.--If an Indian 
        tribe elects to operate all or some programs, services, 
        functions, or activities (or portions thereof) carried 
        out under a compact or funding agreement under this 
        title through a self-determination contract under title 
        I, at the option of the Indian tribe, the resulting 
        self-determination contract shall be a mature self-
        determination contract.
  (h) Nonduplication.--For the period for which, and to the 
extent to which, funding is provided under this title or under 
the compact or funding agreement, the Indian tribe shall not be 
entitled to contract with the Secretary for such funds under 
section 102, except that such Indian tribe shall be eligible 
for new programs on the same basis as other Indian tribes.

SEC. 508. PROVISIONS RELATING TO THE SECRETARY.

  (a) Mandatory Provisions.--
          (1) Health status reports.--Compacts or funding 
        agreements negotiated between the Secretary and an 
        Indian tribe shall include a provision that requires 
        the Indian tribe to report on health status and service 
        delivery--
                  (A) to the extent such data is not otherwise 
                available to the Secretary and specific funds 
                for this purpose are provided by the Secretary 
                under the funding agreement; and
                  (B) if such reporting shall impose minimal 
                burdens on the participating Indian tribe and 
                such requirements are promulgated under section 
                518 of this title.
          (2) Reassumption--(A) Contracts or funding agreements 
        negotiated between the Secretary and an Indian tribe 
        shall include a provision authorizing the Secretary to 
        reassume operation of a program, service, function, or 
        activity (or portions thereof) if there is a finding of 
        imminent endangerment of the public health caused by an 
        act or omission of the Indian tribe, and the imminent 
        endangerment arises out of a failure to carry out the 
        compact or funding agreement.
          (B) The Secretary shall not reassume operation of a 
        program, service, function, or activity unless (i) the 
        Secretary has first provided written notice and a 
        hearing on the record to the Indian tribe; and (ii) the 
        Indian tribe has not taken corrective action to remedy 
        the imminent endangerment to public health.
          (C) Notwithstanding subparagraph (B), the Secretary 
        may, upon written notification to the tribe, 
        immediately reassume operation of a program, service, 
        function, or activity (or portion thereof) if (i) the 
        Secretary makes a finding of imminent substantial and 
        irreparable endangerment of the public health caused by 
        an act or omission of the Indian tribe; and (ii) the 
        endangerment arises out of a failure to carry out the 
        compact or funding agreement. If the Secretary 
        reassumes operation of a program, service, function, or 
        activity (or portion thereof) under this subparagraph, 
        the Secretary shall provide the tribe with a hearing on 
        the record not later than 10 days after such 
        reassumption.
          (D) In any hearing or appeal involving a decision to 
        reassume operation of a program, service, function, or 
        activity (or portion thereof), the Secretary shall have 
        the burden of proof of demonstrating by clear and 
        convincing evidence the validity of the grounds for the 
        reassumption.
  (b) Final Offer.--In the event the Secretary and a 
participating Indian tribe are unable to agree, in whole or in 
part, on the terms of a compact or funding agreement (including 
funding levels), the Indian tribe may submit a final offer to 
the Secretary. The Secretary shall have no more than 45 days 
after such submission, or within a longer time agreed upon by 
the Indian tribe made in compliance to review and make a 
determination with respect to such offer. In the absence of a 
timely rejection of the offer, in whole or in part, made in 
compliance with subsection (c), the offer shall be deemed 
agreed to by the Secretary.
  (c) Rejection of Final Offers.--If the Secretary rejects an 
offer, made under subsection (b) (or one or more provisions or 
funding levels in such offer), the Secretary shall provide--
          (1) a timely written notification to the Indian tribe 
        that contains a specific finding that clearly 
        demonstrates, or that is supported by a controlling 
        legal authority, that--
                  (A) the amount of funds proposed in the final 
                offer exceeds the applicable funding level to 
                which the Indian tribe is entitled under this 
                title;
                  (B) the program, function, service, or 
                activity (or portion thereof) that is the 
                subject of the final offer is an inherent 
                Federal function that cannot legally be 
                delegated to an Indian tribe;
                  (C) the Indian tribe cannot carry out the 
                program, function, service, or activity (or 
                portion thereof) in a manner that would not 
                result in imminent danger to the public health; 
                or
                  (D) the tribe is not eligible to participate 
                in Self-Governance under section 503 of this 
                title;
          (2) technical assistance to overcome the objections 
        stated in the notification required by paragraph (1);
          (3) the Indian tribe with a hearing on the record 
        with the right to engage in full discovery relevant to 
        any issue raised in the matter and the opportunity for 
        appeal on the objections raised, provided that the 
        Indian tribe may, in lieu of filing such appeal, 
        directly proceed to initiate an action in a Federal 
        district court pursuant to section 110(a); and
          (4) the Indian tribe with the option of entering into 
        the severable portions of a final proposed compact or 
        funding agreement, or provision thereof, (including 
        lesser funding amount, if any), that the Secretary did 
        not reject, subject to any additional alterations 
        necessary to conform the compact or funding agreement 
        to the severed provisions. If an Indian tribe exercises 
        the option specified herein, it shall retain the right 
        to appeal the Secretary's rejection under this section, 
        and paragraphs (1), (2), and (3) shall only apply to 
        that portion of the proposed final compact, funding 
        agreement or provision thereof that was rejected by the 
        Secretary.
  (d) Burden of Proof.--With respect to any hearing or appeal 
or civil action conducted pursuant to this section, the 
Secretary shall have the burden of demonstrating by clear and 
convincing evidence the validity of the grounds for rejecting 
the offer (or a provision thereof) made under subsection (b).
  (e) Good Faith.--In the negotiation of compacts and funding 
agreements the Secretary shall at all times negotiate in good 
faith to maximize implementation of the Self-Governance policy. 
The Secretary shall carry out this title in a manner that 
maximizes the policy of tribal Self-Governance, consistent with 
section 3.
  (f) Savings.--To the extent that programs, functions, 
services, or activities (or portions thereof) carried out by 
Indian tribes under this title reduce the administrative or 
other responsibilities of the Secretary with respect to the 
operation of Indian programs and result in savings that have 
not otherwise been included in the amount of tribal shares and 
other funds determined under section 509(d), the Secretary 
shall make such savings available to the Indian tribes, inter-
tribal consortia, or tribal organizations for the provision of 
additional services to program beneficiaries in a manner 
equitable to directly served, contracted, and compacted 
programs.
  (g) Trust Responsibility.--The Secretary is prohibited from 
waiving, modifying or diminishing in any way the trust 
responsibility of the United States with respect to Indian 
tribes and individual Indians that exist under treaties, 
Executive orders, other laws, and/or court decisions.
  (h) Decisionmaker.--A decision that constitutes final agency 
action and relates to an appeal within the Department of Health 
and Human Services conducted under subsection (c) shall be made 
either--
          (1) by an official of the Department who holds a 
        position at a higher organizational level within the 
        Department than the level of the departmental agency in 
        which the decision that is the subject of the appeal 
        was made; or
          (2) by an administrative judge.

SEC. 509. TRANSFER OF FUNDS.

  (a) In General.--Pursuant to the terms of any compact or 
funding agreement entered into under this title, the Secretary 
shall transfer to the Indian tribe all funds provided for in 
the funding agreement, pursuant to subsection (d), and provide 
funding for periods covered by joint resolution adopted by 
Congress making continuing appropriations, to the extent 
permitted by such resolutions. In any instance where a funding 
agreement requires an annual transfer of funding to be made at 
the beginning of a fiscal year, orrequires semi-annual or other 
periodic transfers of funding to be made commencing at the beginning of 
a fiscal year, the first such transfer shall be made not later than 10 
days after the apportionment of such funds by the Office of Management 
and Budget to the Department, unless the funding agreement provides 
otherwise.
  (b) Multi-Year Funding.--The Secretary is hereby authorized 
to employ, upon tribal request, multi-year funding agreements 
for construction or other multi-year activities, and references 
in this title to funding agreements shall include such multi-
year agreements.
  (c) Funding for Construction Programs.--Compacts or funding 
agreements authorized by this title, including agreements 
encompassing construction programs, shall provide for advance 
transfers of funding to the Indian tribe in the form of full 
funding or annual or semi-annual installments, at the 
discretion of the Indian tribe.
  (d) Amount of Funding.--The Secretary shall provide funds 
under a funding agreement under this title in an amount equal 
to the amount that the Indian tribe would have been entitled to 
receive under self-determination contracts under this Act, 
including amounts for direct program costs specified under 
section 106(a)(1) and amounts for contract support costs 
specified under sections 106(a)(2), (a)(3), (a)(5), and (a)(6), 
including any funds that are specifically or functionally 
related to the provision by the Secretary of services and 
benefits to the Indian tribe or its members, all without regard 
to the organizational level within the Department where such 
functions are carried out.
  (e) Prohibitions.--The Secretary is expressly prohibited 
from--
          (1) failing or refusing to transfer to an Indian 
        tribe its full share of any central, headquarters, 
        regional, area, or service unit office or other funds 
        due under this Act, except as required by other Federal 
        law;
          (2) withholding portions of such funds for transfer 
        over a period of years; and
          (3) reducing the amount of funds required herein--
                  (A) to make funding available for Self-
                Governance monitoring or administration by the 
                Secretary;
                  (B) in subsequent years, except pursuant to--
                          (i) a reduction in appropriations 
                        from the previous fiscal year for the 
                        program or function to be included in a 
                        compact or funding agreement;
                          (ii) a congressional directive in 
                        legislation or accompanying report;
                          (iii) a tribal authorization;
                          (iv) a change in the amount of pass-
                        through funds subject to the terms of 
                        the funding agreement; or
                          (v) completion of a project, 
                        activity, or program for which such 
                        funds were provided;
                  (C) to pay for Federal functions, including 
                Federal pay costs, Federal employee retirement 
                benefits, automated data processing, technical 
                assistance, and monitoring of activities under 
                this Act; or
                  (D) to pay for costs of Federal personnel 
                displaced by self-determination contracts under 
                this Act or Self-Governance;
except that such funds may be increased by the Secretary if 
necessary to carry out this Act or as provided in section 
105(c)(2).
  (f) Other Resources.--In the event an Indian tribe elects to 
carry out a compact or funding agreement with the use of 
Federal personnel, Federal supplies (including supplies 
available from Federal warehouse facilities), Federal supply 
sources (including lodging, airline transportation, and other 
means of transportation including the use of Interagency Motor 
Pool vehicles) or other Federal resources (including supplies, 
services, and resources available to the Secretary under any 
procurement contracts in which the Department is eligible to 
participate), the Secretary is authorized to and shall acquire 
and transfer such personnel, supplies, or resources to the 
Indian tribe.
  (g) Reimbursement to Indian Health Service.--With respect to 
functions transferred by the Indian Health Service to an Indian 
tribe, the Indian Health Service is authorized to provide goods 
and services to the Indian tribe, on a reimbursable basis, 
including payment in advance with subsequent adjustment, and 
the reimbursements received therefrom, along with the funds 
received from the Indian tribe pursuant to this title, may be 
credited to the same or subsequent appropriation account which 
provided the funding, such amounts to remain available until 
expended.
  (h) Prompt Payment Act.--Chapter 39 of title 31, United 
States Code, shall apply to the transfer of funds due under a 
compact or funding agreement authorized under this title.
  (i) Interest or Other Income on Transfers.--An Indian tribe 
is entitled to retain interest earned on any funds paid under a 
compact or funding agreement to carry out governmental or 
health purposes and such interest shall not diminish the amount 
of funds the Indian tribe is authorized to receive under its 
funding agreement in the year the interest is earned or in any 
subsequent fiscal year. Funds transferred under this Act shall 
be managed using the prudent investment standard.
  (j) Carryover Funds.--All funds paid to an Indian tribe in 
accordance with a compact or funding agreement shall remain 
available until expended. In the event that an Indian tribe 
elects to carry over funding from one year to the next, such 
carryover shall not diminish the amount of funds the Indian 
tribe is authorized to receive under its funding agreement in 
that or any subsequent fiscal year.
  (k) Program Income.--All Medicare, medicaid, or other program 
income earned by an Indian tribe shall be treated as 
supplemental funding to that negotiated in the funding 
agreement and the Indian tribe may retain all such income and 
expend such funds in the current year or in future years except 
to the extent that the Indian Health Care Improvement Act (25 
U.S.C. 1601 et seq.) provides otherwise for medicaid and 
Medicare receipts, and such funds shall not result in any 
offset or reduction in the amount of funds the Indian tribe is 
authorized to receive under its funding agreement in the year 
the program income is received or for any subsequent fiscal 
year.
  (l) Limitation of Costs.--An Indian tribe shall not be 
obligated to continue performance that requires an expenditure 
of funds in excess of the amount of funds transferred under a 
compact or funding agreement. If at any time the Indian tribe 
has reason to believe that the total amount provided for a 
specific activity in the compact or funding agreement is 
insufficient the Indian tribe shall provide reasonable notice 
of such insufficiency to the Secretary. If the Secretary does 
not increase the amount of funds transferred under the funding 
agreement, the Indian tribe may suspend performance of the 
activity until such time as additional funds are transferred.

SEC. 510. CONSTRUCTION PROJECTS.

  (a) In General.--Unless agreed to by the participating Indian 
tribe, no provision of the Office of Federal Procurement Policy 
Act or the Federal acquisition regulations or any other general 
law or regulation pertaining to Federal procurement (including 
executive orders), shall apply to any construction activity 
included in a compact or funding agreement.
  (b) Health and Safety Standards.--In all construction 
projects performed pursuant to this title, the parties shall 
specify appropriate health and safety standards relevant to the 
construction activity which shall be in conformity with 
nationally recognized standards for comparable projects.

SEC. 511. FEDERAL PROCUREMENT LAWS AND REGULATIONS.

  Notwithstanding any other provision of law, unless expressly 
agreed to by the participating Indian tribe, the compacts and 
funding agreements entered into under this title shall not be 
subject to Federal contracting or cooperative agreement laws 
and regulations (including executive orders and the Secretary's 
procurement regulations), except to the extent that such laws 
expressly apply to Indian tribes.

SEC. 512. CIVIL ACTIONS.

  (a) Contract Defined.--For the purposes of section 110, the 
term ``contract'' shall include compacts and funding agreements 
entered into under this title.
  (b) Applicability of Certain Laws.--Section 2103 of the 
Revised Statutes of the United States Code (25 U.S.C. 81) and 
section 16 of the Act of June 18, 1934 (25 U.S.C. 476), shall 
not apply to attorney and other professional contracts entered 
into by Indian tribes participating in Self-Governance under 
this title.

SEC. 513. FACILITATION.

  (a) Secretarial Interpretation.--Except as otherwise provided 
by law, the Secretary shall interpret all Federal laws, 
Executive orders and regulations in a manner that will 
facilitate--
          (1) the inclusion of programs, services, functions, 
        and activities (or portions thereof) and funds 
        associated therewith, in the agreements entered into 
        under this section;
          (2) the implementation of compacts and funding 
        agreements entered into under this title; and
          (3) the achievement of tribal health goals and 
        objectives.
  (b) Regulation Waiver.--
          (1) An Indian tribe may submit a written request to 
        waive application of a regulation for a compact or 
        funding agreement entered into with the Indian Health 
        Service under this title, to the Secretary identifying 
        the applicable Federal regulation sought to be waived 
        and the basis for the request.
          (2) Not later than 90 days after receipt by the 
        Secretary of a written request by an Indian tribe to 
        waive application of a regulation for a compact or 
        funding agreement entered into under this title, the 
        Secretary shall either approve or deny the requested 
        waiver in writing. A denial may be made only upon a 
        specific finding by the Secretary that identified 
        language in the regulation may not be waived because 
        such waiver is prohibited by Federal law. A failure to 
        approve or deny a waiver request not later than 90 days 
        after receipt shall be deemed an approval of such 
        request. The Secretary's decision shall be final for 
        the Department.
  (c) Access to Federal Property.--In connection with any 
compact or funding agreement executed pursuant to this title or 
an agreement negotiated under the Tribal Self-Governance 
Project established under title III, as in effect before the 
enactment of the Tribal Self-Governance Amendments of 1998, 
upon the request of an Indian tribe, the Secretary--
          (1) shall permit an Indian tribe to use existing 
        school buildings, hospitals, and other facilities and 
        all equipment therein or appertaining thereto and other 
        personal property owned by the Government within the 
        Secretary's jurisdiction under such terms and 
        conditions as may be agreed upon by the Secretary and 
        the tribe for their use and maintenance;
          (2) may donate to an Indian tribe title to any 
        personal or real property found to be excess to the 
        needs of any agency of the Department, or the General 
        Services Administration, except that--
                  (A) subject to the provisions of subparagraph 
                (B), title to property and equipment furnished 
                by the Federal Government for use in the 
                performance of the compact or funding agreement 
                or purchased with funds under any compact or 
                funding agreement shall, unless otherwise 
                requested by the Indian tribe, vest in the 
                appropriate Indian tribe;
                  (B) if property described in subparagraph (A) 
                has a value in excess of $5,000 at the time of 
                retrocession, withdrawal, or reassumption, at 
                the option of the Secretary upon the 
                retrocession, withdrawal, or reassumption, 
                title to such property and equipment shall 
                revert to the Department of Health and Human 
                Services; and
                  (C) all property referred to in subparagraph 
                (A) shall remain eligible for replacement, 
                maintenance, and improvement on the same basis 
                as if title to such property were vested in the 
                United States; and
          (3) shall acquire excess or surplus Government 
        personal or real property for donation to an Indian 
        tribe if the Secretary determines the property is 
        appropriate for use by the entity for any purpose for 
        which a compact or funding agreement is authorized 
        under this title.
  (d) Matching or Cost-Participation Requirement.--All funds 
provided under compacts, funding agreements, or grants made 
pursuant to this Act, shall be treated as non-Federal funds for 
purposes of meeting matching or cost participation requirements 
under any other Federal or non-Federal program.
  (e) State Facilitation.--States are hereby authorized and 
encouraged to enact legislation, and to enter into agreements 
with Indian tribes to facilitate and supplement the 
initiatives, programs, and policies authorized by this title 
and other Federal laws benefiting Indians and Indian tribes.
  (f) Rules of Construction.--Each provision of this title and 
each provision of a compact or funding agreement shall be 
liberally construed for the benefit of the Indian tribe 
participating in Self-Governance and any ambiguity shall be 
resolved in favor of the Indian tribe.

SEC. 514. BUDGET REQUEST.

  (a) In General.--The President shall identify in the annual 
budget request submitted to the Congress under section 1105 of 
title 31, United States Code, all funds necessary to fully fund 
all funding agreements authorized under this title, including 
funds specifically identified to fund tribal base budgets. All 
funds so identified shall be apportioned to the Indian Health 
Service, Office of Tribal Self-Governance. The Office shall be 
responsible for distribution of all funds provided under 
section 505. Nothing in this provision shall be construed to 
authorize the IHS to reduce the amount of funds that a Self-
Governance tribe is otherwise entitled to receive under its 
funding agreement or other applicable law, whether or not such 
funds are apportioned to the Office of Tribal Self-Governance 
under this section.
  (b) Present Funding; Shortfalls.--In such budget request, the 
President shall identify the level of need presently funded and 
any shortfall in funding (including direct program and contract 
support costs) for each Indian tribe in the United States, 
either directly by the Secretary, under self-determination 
contracts, or under compacts and funding agreements authorized 
under this title.

SEC. 515. REPORTS.

  (a) Annual Report.--The Secretary shall submit to Congress on 
January 1 of each year following the date of enactment of this 
title a written report regarding the administration of this 
title. Such report shall include a detailed report on the level 
of need being presently funded or unfunded for each Indian 
tribe in the United States, either directly by the Secretary, 
under self-determination contracts under this Act, or under 
compacts and funding agreements authorized under this Act.
  (b) Contents.--The report shall be compiled from information 
contained in funding agreements, annual audit reports, and 
Secretarial data regarding the disposition of Federal funds and 
shall--
          (1) identify the relative costs and benefits of Self-
        Governance;
          (2) identify, with particularity, all funds that are 
        specifically or functionally related to the provision 
        by the Secretary of services and benefits to Self-
        Governance Indian tribes and their members;
          (3) identify the funds transferred to each Self-
        Governance Indian tribe and the corresponding reduction 
        in the Federal bureaucracy;
          (4) identify the funding formula for individual 
        tribal shares of all central and headquarters funds, 
        together with the comments of affected Indian tribes or 
        tribal organizations, developed under subsection (c);
          (5) identify amounts expended in the preceding fiscal 
        year to carry out inherent Federal functions, including 
        an identification of those functions by type and 
        location;
          (6) include the separate views and comments of the 
        Indian tribes or tribal organizations; and
          (7) prior to being submitted to Congress, be 
        distributed to the Indian tribes for comment, such 
        comment period to be for no less than 30 days.
In compiling this report the Secretary shall not impose any 
reporting requirements on participating Indian tribes or tribal 
organizations, not otherwise provided in this Act.
  (c) Report on IHS Funds.--Not later than 180 days after the 
date of enactment of this title, the Secretary shall, in 
consultation with Indian tribes, report on funding formula or 
formulas used to determine the individual tribal share of funds 
controlled by all components of the Indian Health Service 
(including funds assessed by any other Federal agency) for 
inclusion in Self-Governance compacts or funding agreements. 
The Secretary shall include such formula or formulas (or any 
revisions thereof) in the annual report submitted to the 
Congress under subsection (b), together with the views of the 
affected Indian tribes and tribal organizations.

SEC. 516. DISCLAIMERS.

  (a) No Funding Reduction.--Nothing in this title shall be 
construed to limit or reduce in any way the funding for any 
program, project, or activity serving an Indian tribe under 
this or other applicable Federal law. Any Indian tribe that 
alleges that a compact or funding agreement is in violation of 
this section may apply the provisions of section 110.
  (b) Federal Trust and Treaty Responsibilities.--Nothing in 
this Act shall be construed to diminish in any way the trust 
responsibility of the United States to Indian tribes and 
individual Indians that exist under treaties, Executive orders, 
or other laws and court decisions.
  (c) Tribal Employment.--For purposes of section 2(2) of the 
Act of July 5, 1935 (49 Stat. 450, chapter 372) (commonly known 
as the National Labor Relations Act), an Indian tribe carrying 
out a self-determination contract, compact, annual funding 
agreement, grant, or cooperative agreement under this Act shall 
not be considered an employer.
  (d) Obligations of the United States.--The Indian Health 
Service shall neither bill nor charge those Indians who may 
have the economic means to pay for services, nor require any 
Indian tribe to do so.

SEC. 517. APPLICATION OF OTHER SECTIONS OF THE ACT.

  (a) Mandatory Application.--All provisions of sections 6, 7, 
8, 102(c) and (d), 104, 105(k) and (l), 106(a) through (k), and 
111 ofthis Act and section 314 of Public Law 101-512 (coverage 
under the Federal Tort Claims Act), to the extent not in conflict with 
this title, shall apply to compacts and funding agreements authorized 
by this title.
  (b) Discretionary Application.--At the request of a 
participating Indian tribe, any other provision of title I, to 
the extent such provision is not in conflict with this title, 
shall be made a part of a funding agreement or compact entered 
into under this title. The Secretary is obligated to include 
such provision at the option of the participating Indian tribe 
or tribes. If such provision is incorporated it shall have the 
same force and effect as if it were set out in full in this 
title. In the event an Indian tribe requests such incorporation 
at the negotiation stage of a compact or funding agreement, 
such incorporation shall be deemed effective immediately and 
shall control the negotiation and resulting compact and funding 
agreement.

SEC. 518. REGULATIONS.

  (a) In General.--
          (1) Not later than 90 days after the date of 
        enactment of this title, the Secretary shall initiate 
        procedures under subchapter III of chapter 5 of title 
        5, United States Code, to negotiate and promulgate such 
        regulations as are necessary to carry out this title.
          (2) Proposed regulations to implement this title 
        shall be published in the Federal Register by the 
        Secretary no later than 1 year after the date of 
        enactment of this title.
          (3) No regulations to implement this title may be 
        published unless they are recommended by the committee 
        formed under subsection (b).
          (4) The authority to promulgate regulations under 
        this title shall expire 21 months after the date of 
        enactment of this title.
  (b) Committee.--A negotiated rulemaking committee established 
pursuant to section 565 of title 5, United States Code, to 
carry out this section shall have as its members only Federal 
and tribal government representatives, a majority of whom shall 
be nominated by and be representatives of Indian tribes with 
funding agreements under this title, and the Committee shall 
confer with, and accommodate participation by, representatives 
of Indian tribes, inter-tribal consortia, tribal organizations, 
and individual tribal members.
  (c) Adaptation of Procedures.--The Secretary shall adapt the 
negotiated rulemaking procedures to the unique context of Self-
Governance and the government-to-government relationship 
between the United States and Indian tribes.
  (d) Effect.--The lack of promulgated regulations shall not 
limit the effect of this title.
  (e) Effect of Circulars, Policies, Manuals, Guidances, and 
Rules.--Unless expressly agreed to by the participating Indian 
tribe in the compact or funding agreement, the participating 
Indian tribe shall not be subject to any agency circular, 
policy, manual, guidance, or rule adopted by the Indian Health 
Service, except as provided in section 105(g) and 510.

SEC. 519. APPEALS.

  In any appeal (including civil actions) involving decisions 
made by the Secretary under this title, the Secretary shall 
have the burden of proof of demonstrating by clear and 
convincing evidence--
          (1) the validity of the grounds for the decision 
        made; and
          (2) the decision is fully consistent with provisions 
        and policies of this title.

SEC. 520. AUTHORIZATION OF APPROPRIATIONS.

  There are authorized to be appropriated such sums as may be 
necessary to carry out this title.

                            ADDITIONAL VIEWS

                            1. introduction

    The nature of Self-Governance is rooted in the inherent 
sovereignty of American Indian and Alaska Native tribes. From 
the founding of this nation, Indian tribes and Alaska Native 
villages have been recognized as ``distinct, independent, 
political communities'' exercising powers of self-government, 
not by virtue of any delegation of powers from the federal 
government, but rather by virtue of their own innate 
sovereignty. See Worcester v. Georgia, 31 U.S. (6 Pet.) 515, 
559 (1832). See also Santa Clara Pueblo v. Martinez, 436 U.S. 
49, 55 (1978). The tribes' sovereignty predates the founding of 
the United States and its Constitution and forms the backdrop 
against which the United States has continually entered into 
relations with Indian tribes and Native villages.
    The present model of tribal Self-Governance arose out of 
the federal policy of Indian Self-Determination. The modern 
Self-Determination era began as Congress and contemporary 
Administrations ended the dubious experiment of Termination 
which was intended to end the federal trust responsibility to 
Native Americans.
    The centerpiece of the Termination policy, House Concurrent 
Resolution 108, stated that ``Indian Tribes and individual 
members thereof, should be freed from Federal supervision and 
control and from all disabilities and limitations specially 
applicable to Indians.'' H. Con. Res. 108, 83rd Cong., 1st 
Sess. (1953). While the intent of this legislation was to free 
the Indians from federal rule, it also destroyed all protection 
and benefits they received from the government. The same year, 
Congress enacted Public Law 280 which further eroded tribal 
sovereignty by transferring criminal jurisdiction from the 
federal government and the tribes to the state governments.
    As a policy, Termination was a disaster. Recognizing this, 
President Kennedy campaigned in 1960 promising the Indian 
tribes that:

          There would be no change in treaty or contractual 
        relationships without the consent of the tribes 
        concerned. There would be protection of the Indian land 
        base, credit assistance, and encouragement of tribal 
        planning for economic development.

Francis Paul Prucha, ``The Great Father,'' 1087 (1984). 
Reservations were also included in many of the ``Great 
Society'' programs of the late 1960s, bringing a much-needed 
infusion of federal dollars onto many reservations. In 1968, 
President Lyndon B. Johnson delivered a message to Congress 
that stressed:

          [A] policy of maximum choice for the American Indian: 
        a policy expressed in programs of self-help, self-
        development, self-determination. * * * The greatest 
        hope for Indian progress lies in the emergence of 
        Indian leadership and initiative in solving Indian 
        problems. Indians must have a voice in making the plans 
        and decisions in programs which are important to their 
        daily life.

Message from the President, March 6, 1968, Weekly Compilation 
of Presidential Documents, vol. IV, No. 10, Wash. D.C., U.S. 
Gov. Printing Office.
    President Richard Nixon's 1970 ``Special Message on Indian 
Affairs'' also called for increased tribal self-determination:

          This, then, must be the goal of any new national 
        policy toward the Indian people: to strengthen the 
        Indian's sense of autonomy without threatening his 
        sense of community. We must assure the Indian that he 
        can assume control of his own life without being 
        separated involuntarily from the tribal group. And we 
        must make it clear that Indians can become independent 
        of Federal control without being cut off from Federal 
        concern and Federal support * * *.

Special Message to the Congress, Pub. Papers, 564, 567 (1970). 
Together, these messages sparked Congress to work on 
legislation that laid the foundation for modern federal Indian 
policy for the remainder of this century. ANd so, five years 
later, Congress enacted one of the most profound and powerful 
pieces of Indian legislation in this Nation's history.

                         2. self-determination

    In 1975, Congress passed the Indian Self-Determination and 
Education Assistance Act, Pub. L. No. 93-638. This legislation 
gave Indian tribes and Alaska Native villages the right to 
assume responsibility for the administration of federal 
programs which benefitted Indians. In addition to assuming the 
authority to make operating and administrative decisions 
regarding the way these federal programs would be run, tribes 
that chose to enter into Indian Self-Determination Act (or 
``638'') contracts were given the right to receive the federal 
funds that the agencies--generally the Bureau of Indian Affairs 
(BIA) and the Indian Health Service (IHS)--would have 
ordinarily received for those programs. Unlike former policy, 
the Indian Self-Determination Act did not relieve the 
government of their trust responsibilities to the tribes.
    Congress enacted the Indian Self-Determination Act believed 
it that (1) Indian tribes, having greater knowledge about and a 
greater stake in the outcome of these federal programs, would 
run BIA and IHS programs better and thus provide better 
services to their members, (2) the direct responsibility of 
running these programs would enhance and strengthen tribal 
governments, and (3) Indian tribes could make more efficient 
use of federal dollars than the existing federal bureaucracy, 
thus delivering more services than in the past.
    However, Indian Self-Determination Act or ``638'' contracts 
required volumes of paperwork to be filed as a means to 
supervise the tribes' activities. If a tribe wanted to operate 
more than one program, it would have to exercise an additional 
638 contract which required a separate approval process. Though 
the Act was intended to decrease Federal involvement in the 
daily lives of reservation Indians, its specific performance 
and reporting requirements allowed BIA staffers to remain a 
pervasive force in Indian affairs.
    At the time of its enactment, the 638 contract program did 
not allow tribes to move funds between programs to adapt to 
changing and unforeseen circumstances during a funding period. 
Thus, the tribes' powers to design or adapt programs according 
to tribal needs remained restricted.
    The inflexibility of 638 contracts also created problems 
with cash flow. Payments were made to tribes on a cost-
reimbursement basis, often many months after the tribe might 
have incurred major expenses. Some tribes chose not to divert 
money from a program that was over-funded in order to deal with 
this problem. If a tribe failed to expend all of the 638 
contract funding by the end of the fiscal year, the funds 
carried over only within program-specific budgets.
    The tribes' main complaint, however, was that the 638 
contract process made tribal staff primarily accountable to and 
measured by, not their own tribal councils but BIA employees at 
the Agency, Area and Central Offices. They had to follow strict 
federal laws, rules and regulations that were often of little 
relevance to day-to-day existence on an Indian reservation. If 
trust assets were involved, the BIA had to concur in any 
decisions made.
    Thus, while the Indian Self-Determination Act was and is 
still acknowledged as a watershed moment in the history of 
tribal self-governance, by the mid-1980s many tribal leaders 
agreed that it was time for even greater change. They felt that 
the federal bureaucracy devoted to 638 program oversight had 
simply grown out of control and the percentage of federal 
dollars allocated for Indian programs actually spent on the 
reservations was still far too small.

                           3. self-governance

    To address these concerns, the Indian tribes asked Congress 
to consider amendments to the Self-Determination Act. At the 
same time, a group of tribal representatives began meeting to 
discuss proposals for trimming the BIA bureaucracy and amending 
the Act as well.
    But during the fall of 1987, a series of articles appeared 
in the Arizona Republic entitled ``Fraud in Indian Country,'' 
that detailed an egregious history of waste and mismanagement 
within the BIA. These articles spurred House Appropriations 
Subcommittee on Interior and Related Agencies Chairman Sidney 
Yates (D-IL) to conduct an oversight hearing on these alleged 
abuses.
    At the hearing, Department of Interior officials proposed 
that funds appropriated to the Bureau of Indian Affairs be 
turned over to the tribes to let them manage their own affairs 
in an attempt to address these charges. But, the officials 
testified, by accepting the federal funds, the tribes would 
release the federal government from its trust responsibility. 
Alliance leaders disagreed with this quid pro quo, but 
supported the concept of removing BIA middlemen from the 
funding process. With Chairman Yates' encouragement, tribal 
representatives met with the Secretary of the Interior and 
other Department officials the very next day to further hash 
out this concept. By mid-December of 1987, ten tribes had 
agreed to test the Department's proposal.
    It was out of this proposal that the Tribal Self-Governance 
Demonstration Project was born.
    In 1988 Congress enacted Pub. L. No. 100-472 which created 
Title III of the Indian Self-Determination Act which authorized 
the Secretary of Interior to negotiate Self-Governance compacts 
with up to twenty tribes. These tribes, for the first time, 
would be able to ``plan, conduct, consolidate, and administer 
programs, services, and functions'' heretofore performed by 
Interior officials. The Act required that these programs be 
``otherwise available to Indian tribes or Indians,'' but within 
these parameters the tribes were authorized to redesign 
programs and reallocated funding according to terms negotiated 
in the compacts. Tribes would be able to prioritize spending on 
a systemic level, dramatically reducing the Federal role in the 
tribal decision-making process. But perhaps the biggest 
difference between the ``638'' contract process and the Self-
Governance program is that instead of funds coming from 
multiple contracts there would be one grant with a single 
Annual Funding Agreement.
    The original ten tribes that agreed to participate in the 
demonstration project were the Confederated Salish and Kootenai 
Tribes, Hoppa Tribe, Jamestown S'Klallam Tribe, Lummi Nation, 
Mescalero Apache Tribe, Mille Lacs Band of Ojibew, Quinualt 
Indian Nation, Red Lake Chippewa Tribe, Rosebud Sioux Tribe, 
and Tlingit and Haida Central Council.
    Negotiations between the tribes and the Interior 
Department, however, bogged down and the tribes sought an 
additional extension of the demonstration project. In 1991 
President Bush signed into law ``The Tribal Self-Governance 
Demonstration Project Act'', Pub. L. No. 102-184, which 
extended the Project for three more years and increased the 
number of Tribes participating from twenty to thirty. The bill 
required the new tribes participating to complete a one-year 
planning period before they could negotiate a Compact and 
Annual Funding Agreement. In 1991, the Interior Department 
established the Office of Self-Governance within the Office of 
the Assistant Secretary, Indian Affairs.
    The 1991 law also directed the IHS to conduct a feasibility 
study to examine the expansion of the Self-Governance project 
to IHS programs and services. The law also authorized the 
Secretary of Health and Human Services to establish an Office 
of Self-Governance in the IHS.
    In 1992, Congress amended section 314 of the Indian Health 
Care Improvement Act to allow the Secretary of Health and Human 
Services to negotiate Self-Governance compacts and annual 
funding agreements under Title III of the Indian Self-
Determination Act with Indian tribes. Pub. L. No. 102-573, sec. 
814. The Self-Governance Demonstration Project proved to be a 
success both in the Interior Department and the Department of 
Health and Human Services. Thus, tribes approached Congress 
requesting that it make the Department of Interior portion of 
the Demonstration Project permanent.
    In 1994, Congress responded by passing the ``Tribal Self-
Governance Act of 1994'' as part of the Indian Self-
Determination Act Amendments, Pub. L. No. 103-413. The Tribal 
Self-Governance Act, contained in Title IV of the Indian Self-
Determination Act, permanently established the Self-Governance 
program within the Department of Interior and thus solidified 
the Federal government goals of negotiating with Indian Tribes 
and Alaska Native villages on a government-to-government basis 
while retaining the federal trust relationship. The Tribal 
Self-Governance Act allowed Self-Governance tribes to compact 
all programs and services that tribes couldcontract under Title 
I of the Indian Self-Determination Act. The Act demanded an ``orderly 
transition from Federal domination of programs and services to provide 
Indian tribes with meaningful authority to plan, conduct, redesign, and 
administer programs, services, functions, and activities that meet the 
needs of the individual tribal communities.'' The Act also clarified 
the requirements and obligations of tribes entering the Self-Governance 
process.
    Tribes entering the Self-Governance program had to meet 
four eligibility requirements. First, the tribe (or tribes in 
the case of a consortium) must be federally recognized. Second, 
the tribe must document, with an official action of the tribal 
governing body, a formal request to enter negotiations with the 
Department of Interior. In the case of a consortium of tribes, 
the governing body of each participating tribe must authorize 
participation by an official action of the tribal governing 
body. Third, the tribe must demonstrate financial stability and 
financial management capability as evidenced by the tribe 
having no material audit exceptions in the required annual 
audit of the tribe's 638 contracts. Fourth, the tribe must have 
successfully completed a planning phase, requiring the 
submission of a final planning report which demonstrates that 
the tribe has conducted legal and budgetary research and 
internal tribal government and organizational planning.
    The 1994 Act then authorized the Secretary of the Interior 
to negotiate annual funding agreements with eligible tribes in 
a manner consistent with the federal trust responsibility. The 
agreements authorize a tribe to:

          * * * plan, conduct, consolidate, and administer 
        programs, services, functions, and activities, or 
        portions thereof, administered by the Department of 
        Interior through the Bureau of Indian Affairs, without 
        regard to the agency or office of the Bureau of Indian 
        Affairs within which the program, service, function, 
        and activity, or portion thereof, is performed, 
        including funding for agency, area, and central office 
        functions. * * *

    The 1994 Act's inclusion of ``agency, area, and central 
office functions,'' in contrast to Title III, means that with 
each new Self-Governance tribe, the resources of the various 
branches of the BIA delivering services to that tribe will 
shrink. To facilitate this transfer, the Act specifically lists 
all applicable activities for which tribes and the BIA receive 
corresponding funding.
    Under the 1994 Act, annual funding agreements include what 
the tribe would have received if the sum total of its 638 
contracts were added up, in addition to Area and Central Office 
funds and other Interior Programs. The process for review and 
award of Self-Governance compacts and annual funding agreements 
is streamlined when compared to 638 contracts. Once an 
agreement is negotiated, the Secretary submits it to the other 
Indian tribes served by the BIA and the two Congressional 
Committees of jurisdiction. Tribes may obtain their funding in 
either annual or semi-annual installments.
    The 1994 Act, however, did not make changes to the 
demonstration project status of the Self-Governance program 
within the Indian Health Service. The IHS authority remained on 
a demonstration project basis within Title III of the Indian 
Self-Determination Act.
    The Indian tribes and the Administration agree that it is 
now time to take the next logical step forward in the Self-
Governance process and make the Self-Governance program 
permanent within the Department of Health and Human Services.

                         4. the 1998 amendments

    The Tribal Self-Governance Amendments of 1998 establish a 
permanent Self-Governance Program within the Department of 
Health and Human Services under which American Indian and 
Alaska Native tribes may enter into compacts with the Secretary 
for the direct operation, control, and redesign of Indian 
Health Service (IHS) activities. A limited number of Indian 
tribes have had a similar right on a demonstration project 
basis since 1992 under Title III of the Indian Self-
Determination and Education Assistance Act. All Indian tribes 
have enjoyed a similar but lesser right to contract and operate 
individual IHS programs and functions under Title I of the 
Indian Self-Determination Act since 1975 (so-called ``638 
contracting'').
    In brief, the legislation would expand the number of tribes 
eligible to participate in Self-Governance, make it a permanent 
within the IHS and authorize the Secretary of Health and Human 
Services to conduct a feasibility study for the execution of 
Self-Governance compacts with Indian tribes for programs 
outside of the IHS. The 1998 amendments incorporate a number of 
federal contracting laws and regulations that have worked well 
for Indian tribes and the Department in the past.
    The legislation is modeled on the existing permanent Self-
Governance legislation for Interior Department programs 
contained in Title IV of the Indian Self-Determination Act. The 
legislation reflects years of planning by Indian tribes, Alaska 
Native villages, and consultation by the Department of Health 
and Human Services.
    The 1998 amendments give Indian tribes who meet certain 
criteria--generally speaking, they have to have experience in 
government contracting, have clean audits, and demonstrate 
management capability--the right to take over the operation of 
IHS functions, including the funds necessary to run them. The 
1998 amendments continue the principle focus of the Self-
Governance program: to remove needless and sometimes harmful 
layers of federal bureaucracy that dictate Indian affairs. By 
giving tribes direct control over federal programs run for 
their benefit and making them directly accountable to their 
members, Congress has enabled Indian tribes to run programs 
more efficiently and more innovatively than federal officials 
have in the past. And, allowing tribes to run these programs 
furthers the Congressional policy of strengthening and 
promoting tribal governments.
    Self-Governance recognizes that Indian tribes care for the 
health, safety, and welfare of their own members as well as 
that of non-Indians who either live on their reservations or 
conduct business with the tribes and are thus committed to safe 
and fair working conditions and practices.

                             5. Conclusion

    Sometimes we need to look to the past in order to 
understand our proper relationship with Indian tribes. More 
than two centuries ago, Congress set forth what should be our 
guiding principles. In 1789, Congress passed the Northwest 
Ordinance, a set of seven articles intended to govern the 
addition of new states to the Union. These articles served as a 
compact between the people and the States, and were ``to 
forever remain unalterable, unless by common consent.'' Act of 
Aug. 7, 1789, ch. 13, 1 Stat. 50, 52. Article Three set forth 
the Nation's policy towards Indian tribes:

          The utmost good faith shall always be observed 
        towards the Indians; their land and property shall 
        never be taken away from them without their consent * * 
        * but laws founded in justice and humanity shall from 
        time to time be made, for preventing wrongs being done 
        to them * * *.

Id. The Founders carefully and wisely chose these principles to 
govern the conduct of this Nation in its dealing with American 
Indian tribes. Over the years, these principles have often been 
forgotten. Self-Government is but one of many ways to honor 
these principles.
    Just over two hundred years later, Justice Thurgood 
Marshall delivered a unanimous Supreme Court in 1983 stating 
that,

          Moreover, both the tribes and the Federal Government 
        are firmly committed to the goal of promoting tribal 
        self-government, a goal embodied in numerous federal 
        statutes. We have stressed that Congress' objective of 
        furthering tribal self-government encompasses far more 
        than encouraging tribal management of disputes between 
        members, but includes Congress' overriding goal of 
        encouraging tribal self-sufficiency and economic 
        development.

New Mexico v. Mescalero Apache Tribe, 462 U.S. 324, 334-35, 
quoting White Mountain Apache Tribe v. Bracker, 448 U.S. 136, 
143 (1980). See also National Farmers Union Insurance Co. v. 
Crow Tribe of Indians, 471 U.S. 845, 856 (1985) (concluding 
that ``[o]ur cases have often recognized that Congress is 
committed to a policy of supporting tribal self-government and 
self-determination.'').
    If we are to adhere and remain faithful to the principles 
that our Founders set forth--the principles of good faith, 
consent, justice and humanity--then we must continue to promote 
tribal self-government.
                                                     George Miller.

                                
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