[House Report 106-837]
[From the U.S. Government Publishing Office]



106th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES
 2d Session                                                     106-837

======================================================================



 
       TRIBAL CONTRACT SUPPORT COST TECHNICAL AMENDMENTS OF 2000

                                _______
                                

 September 12, 2000.--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

                        [To accompany H.R. 4148]

      [Including cost estimate of the Congressional Budget Office]

  The Committee on Resources, to whom was referred the bill 
(H.R. 4148) to make technical amendments to the provisions of 
the Indian Self-Determination and Education Assistance Act 
relating to contract support costs, 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 Contract Support Cost Technical 
Amendments of 2000''.

SEC. 2. AMENDMENT DETAILING CALCULATION AND PAYMENT OF CONTRACT SUPPORT 
                    COSTS.

  The Indian Self-Determination and Education Assistance Act is amended 
by adding after section 106 the following new section:

``SEC. 106A. CONTRACT SUPPORT COSTS.

  ``(a) Other Federal Agencies.--Except as otherwise provided by 
statute, an Indian tribe or tribal organization administering a 
contract or compact under this Act shall be entitled to recover its 
full indirect costs associated with any other Federal funding received 
by such tribe or tribal organization (other than funds paid under this 
Act), consistent with the tribe's or tribal organization's indirect 
cost rate agreement with its cognizant Federal agency. This subsection 
shall not independently entitle such tribe or tribal organization to be 
paid additional amounts associated with such other Federal funding.
  ``(b) Allowable Uses of Funds.--Notwithstanding any other provision 
of law (including regulation or circular), an Indian tribe or tribal 
organization (1) administering a contract or compact under this Act and 
(2) employing an indirect cost pool that includes both funds paid under 
this Act and other Federal funds, shall be entitled to use or expend 
all Federal funds in such tribe's or tribal organization's indirect 
cost pool in the same manner as permitted in section 106(j) (relating 
to allowable uses of funds without approval of the Secretary), and for 
such purposes only the term `Secretary' means the Secretary of any 
Federal agency providing funds to such tribe or tribal organization.
  ``(c) Consolidated Contract Amount.--
          ``(1) Conditions for consolidation.--Commencing in fiscal 
        year 2003, the Secretary shall consolidate all funds paid to a 
        tribe or tribal organization pursuant to paragraphs (1) and (2) 
        of section 106(a) into a single consolidated contract or 
        compact amount if the following conditions have been met:
                  ``(A) The tribe or tribal organization qualifies to 
                carry out a mature contract under this title or is 
                operating a self-governance agreement under any other 
                title of this Act.
                  ``(B) The tribe's or tribal organization's indirect 
                cost rate has not varied more than 10 percent over the 
                prior year's rate for the preceding 3 years (for tribes 
                or tribal organizations that have no indirect rate, 
                this criterion shall be satisfied if the ratio of the 
                tribe's or tribal organization's contract support 
                requirement to its direct cost base has not varied more 
                than 10 percent over the ratio for the preceding 3 
                years).
                  ``(C) At the time of the consolidation the tribe or 
                tribal organization is receiving its full contract 
                support cost requirement as determined under section 
                106(a)(2).
          ``(2) Medical inflation rate adjustments.--Each year 
        following the consolidation required by paragraph (1), the 
        Secretary of Health and Human Services shall increase the 
        amount of contract support costs paid as part of the 
        consolidated amount by an amount equal to--
                  ``(A) the adjustment in the medical care component of 
                the national consumer price index over the preceding 
                year, multiplied by
                  ``(B) the contract support cost amount paid in the 
                preceding year as part of the consolidated amount.
          ``(3) Consumer price index adjustments.--Each year following 
        the consolidation required by paragraph (1), the Secretary of 
        the Interior shall increase the amount of contract support 
        costs paid as part of the consolidated amount by an amount 
        equal to--
                  ``(A) the adjustment in the national consumer price 
                index over the preceding year, multiplied by
                  ``(B) the contract support cost amount paid in the 
                preceding year as part of the consolidated amount.
          ``(4) Employment adjustments.--A tribe or tribal organization 
        shall be entitled to receive additional contract support costs 
        associated with the transfer of employees from Federal 
        employment to tribal employment. Such additional contract 
        support costs shall be added to the consolidated amount 
        determined and adjusted under paragraphs (1), (2), and (3), and 
        shall thereafter become a part of the consolidated amount.
          ``(5) Additional contract support costs.--Notwithstanding any 
        other provision of this Act, and except as provided in 
        paragraphs (4) and (8), the tribe or tribal organization shall 
        not be entitled to receive any contract support costs 
        additional to those contained within the consolidated amount 
        determined and adjusted under paragraphs (1), (2), and (3).
          ``(6) Rebudgeting authority unaffected.--The tribe or tribal 
        organization may rebudget all contract or compact funds as 
        specified in section 106(n).
          ``(7) Deconsolidation.--Except as provided in paragraph (8), 
        in the event--
                  ``(A) the amount of program funds paid under section 
                106(a)(1) as part of the consolidated amount, when 
                combined with other program funds paid to the tribe or 
                tribal organization from other funding sources, 
                increases or decreases by more than--
                          ``(i) 20 percent over the amount paid in the 
                        preceding year; or
                          ``(ii) 40 percent over the amount paid in the 
                        preceding three years; or
                  ``(B) the Secretary for good cause shown agrees,
        the amounts paid by the Secretary under this section shall be 
        deconsolidated, and such amounts shall be recalculated and paid 
        as specified elsewhere in this Act. Upon such recalculation, 
        the recalculated amounts shall be reconsolidated into a single 
        amount as otherwise described in this subsection.
          ``(8) Contracting additional programs.--Nothing in this 
        subsection shall affect the right of a tribe or tribal 
        organization to contract or compact for the operation of new or 
        expanded programs, services, functions, or activities not 
        included in the consolidated amount paid under paragraph (1), 
        or to be paid the full amount of contract support costs 
        associated with such additional contracted or compacted 
        programs, as provided in section 106(a)(1) and other provisions 
        of this Act. Any such additional programs and associated 
        contract support costs shall be added to the consolidated 
        amount determined and adjusted under paragraphs (1), (2), and 
        (3).
          ``(9) Separate contracts and compacts.--Nothing in this 
        subsection shall require a tribe or tribal organization to 
        consolidate separate contracts or compacts administered under 
        this Act into a single contract or compact.
  ``(d) Negotiation of Contract Support Cost Amounts.--Within the 
Indian Health Service of the Department of Health and Human Services, 
the negotiation, review, and approval of tribal contract support cost 
entitlements shall be the responsibility of the Office of Tribal 
Programs, subject to the tribe's or tribal organization's indirect cost 
rate agreement with the tribe's or tribal organization's cognizant 
Federal agency.
  ``(e) Direct Contract Support Costs and Federal Employees.--The 
contract support costs that are eligible costs for the purposes of 
receiving funding under this Act shall include direct contract support 
costs associated with all Federal employees employed in connection with 
the program, service, function, or activity that is the subject of the 
contract, including all Federal employees paid with funds generated 
from third-party collections.
  ``(f) Regulations.--The Secretary of the Interior and the Secretary 
of Health and Human Services are authorized to promulgate joint 
regulations relating to the allowability of costs expended under this 
Act, including all pooled indirect costs and direct contract support 
costs. In promulgating such regulations the Secretaries shall follow 
the procedures set forth in sections 107(a)(2)(A), 107(d)(1), 
107(d)(2)(A), 107(d)(2)(B), 107(d)(2)(D), and 107(d)(2)(E), and shall 
publish proposed regulations in the Federal Register to carry out this 
subsection not later than 180 days after the date of enactment of the 
Tribal Contract Support Cost Technical Amendments of 2000. The 
authority to promulgate regulations under this subsection shall expire 
if final regulations are not promulgated within 18 months after the 
date of enactment of the Tribal Contract Support Cost Technical 
Amendments of 2000. In the event of a conflict between such regulations 
and any Office of Management and Budget circular, the provision of such 
regulations shall control. The Secretary may, with respect to a 
contract or compact entered into under this Act, make exceptions in the 
regulations promulgated to carry out this subsection, or waive such 
regulations, if the Secretary finds that such exception or waiver is 
consistent with the policies of this Act, and is not contrary to 
statutory law. In reviewing each request, the Secretary shall follow 
the timeline, findings, assistance, hearing, and appeal procedures set 
forth in section 102.''.

SEC. 3. AMENDMENTS CLARIFYING CONTRACT SUPPORT COST ENTITLEMENT.

  The Indian Self-Determination and Education Assistance Act is 
amended--
          (1) in section 105(c)(1), by striking the last flush 
        sentence;
          (2) in section 106(b)--
                  (A) by striking ``the provision of funds under this 
                Act is subject to the availability of appropriations 
                and''; and
                  (B) by adding at the end thereof the following flush 
                sentence:
``Necessary amounts are appropriated to pay contract support costs when 
not otherwise provided for.'';
          (3) in section 1(b)(4) of the model contract set forth in 
        section 108(c), by striking ``Subject to the availability of 
        appropriations, the'' and inserting ``The''; and
          (4) in section 106(a)(5) by adding at the end thereof the 
        following flush sentence:
``Notwithstanding any other provision of law, the Secretary shall fully 
pay preaward and startup costs without regard to the year in which such 
costs were incurred or will be incurred, including such costs payable 
to tribes and tribal organizations identified by the Indian Health 
Service as `ISD Queue Tribes' in its September 17, 1999, report 
entitled `FY 1999 IHS CSC Shortfall Data'.''.

SEC. 4. AMENDMENT ENLARGING CONTRACT PROPOSAL REVIEW PERIOD.

  Section 102(a)(2) of the Indian Self-Determination and Education 
Assistance Act is amended--
          (1) by striking ``ninety'' in the second sentence and 
        inserting ``180''; and
          (2) by striking ``90-day'' in the third sentence and 
        inserting ``180-day''.

SEC. 5. AMENDMENTS REGARDING JUDICIAL REMEDIES.

  Section 110 of the Indian Self-Determination and Education Assistance 
Act is amended--
          (1) in subsection (c), by inserting after ``administrative 
        appeals'' the following: ``, and section 2412(d)(2)(A) of title 
        28, United States Code, shall apply to appeals filed with 
        administrative appeals boards, in appeals''; and
          (2) by adding at the end the following new subsections:
  ``(f) Reimbursement of Payments.--None of the funds appropriated to 
the Secretary to carry out programs, functions, services, or activities 
that are contractible under this Act shall be available to reimburse 
payments made in satisfaction of judgments awarded under subsections 
(a) and (d).''.

                          Purpose of the Bill

    The purpose of H.R. 4148 is to make technical amendments to 
the provisions of the Indian Self-Determination and Education 
Assistance Act relating to contract support costs, and for 
other purposes.

                  Background and Need for Legislation

    Under section 106(a)(2) of Public Law 93-638, the Indian 
Self-Determination and Education Assistance Act, American 
Indian and Alaska Native tribes are authorized to enter into 
contracts or compacts with the Indian Health Service (IHS) and 
the Bureau of Indian Affairs (BIA) to directly administer 
health care and BIA programs previously administered by the two 
agencies. Congress strongly advocated this change to allow 
tribes to provide direct and improved services to their 
members.
    Contract support costs are directly associated with 
administering these programs and are based on three cost 
categories: start up costs, indirect costs and direct costs. 
Start-up costs are one-time costs incurred in planning and 
assuming management of the programs. Examples include buying 
computers and training staff. Indirect costs are on-going 
overhead expenses, which are often divided into three groups--
management and administration, facilities and equipment, and 
general services and expenses. Management and administration 
includes financial and personnel management, procurement, 
property and records management, data processing, and office 
services. Facility and equipment includes buildings, utilities, 
housekeeping, repair and maintenance, and equipment. General 
services include insurance and legal services, audit, general 
expenses, interest and depreciation. Direct costs include 
unemployment taxes and workers compensation insurance for 
direct program salaries.
    However, the consistent failure of the IHS and BIA to fully 
fund contract support costs has resulted in financial 
management problems for tribes as they struggle to pay for 
federally-mandated annual single-agency audits, liability 
insurance, financial management systems, personnel salaries, 
property management and other administrative costs. Congress 
must remember that tribes are operating federal programs and 
are carrying out federal responsibilities when they operate 
self-determination contracts. Tribes, in some instances, have 
had to resort to using their own financial resources to 
subsidize contract support costs. The Committee believes that 
tribes should not be forced to use their own financial 
resources to subsidize federal contract support costs.
    The Committee on Resources held two hearings in 1999 
(February 24 and August 3) to accept testimony from the 
Administration and tribes to provide a proposed resolution to 
the problems associated with contract support costs.
    The General Accounting Office (GAO) was asked to submit a 
report to Congress on the shortfalls of contract support costs. 
In its June 1999 report entitled Indian Self-Determination Act: 
Shortfalls in Indian Contract Support Costs Need to be 
Addressed, the GAO recommended that the Secretaries of the 
Interior and Health and Human Services work together to develop 
a standard policy on funding contract support costs, and ensure 
that the BIA and IHS correctly adjust funding when tribes use 
provisional-final rates. GAO provided four alternatives for 
Congress to consider: (1) fully fund contract support costs 
each year; (2) amend the Indian Self-Determination and 
Education Assistance Act to eliminate the provision requiring 
that contract support costs be fully funded at 100 percent of 
the allowable costs identified by BIA and IHS; (3) amend the 
Act to limit indirect costs by imposing either a flat rate or 
capped rate; and (4) amend the Act to eliminate the provision 
for funding contract support costs over and above the program 
base and provide for consolidated support costs.
    Additionally, the National Congress of American Indians 
Policy Work Group on Contract Support Costs also directed the 
tribal leadership to work with the Administration to submit 
recommendations to resolve the shortfalls in contract support 
costs.
    H.R. 4148 is the result of the National Congress of 
American Indians National Policy Work Group and the 
Administration's efforts to resolve contract support costs 
problems. H.R. 4148 also incorporates GAO recommendations.

                            Committee Action

    H.R. 4148 was introduced March 30, 2000, by Congressman Don 
Young (R-AK). The bill was referred to the Committee on 
Resources. On May 16, 2000, the Committee held a hearing on the 
bill. On June 28, 2000, the Committee met to consider the bill. 
Congressman Young offered an amendment in the nature of a 
substitute which was adopted by voice vote. The bill, as 
amended, as then ordered favorably reported to the House of 
Representatives by voice vote.

                      Section-by-Section Analysis


Section 1. Short title

    This section provides the bill's short title, the ``Tribal 
Contract Support Cost Technical Amendments of 2000.''

Section 2. Amendment detailing calculation and payment of contract 
        support costs

    This section adds a new section 106A to the Indian Self-
Determination and Education Assistance Act (referred to in this 
section as ``the Act''). This section is devoted exclusively to 
contract support cost matters.
    Subsection 106A(a) requires that all federal agencies abide 
by the government-wide negotiated indirect cost agreement 
established by each tribal contractor's cognizant federal 
agency under Office of Management and Budget Circular A-87 
(typically, the Department of the Interior's Office of 
Inspector General). This subsection clarifies that the cost 
recovery accounting provisions do not in and of themselves 
entitle tribes to additional funds from other federal agencies. 
It also limits the subsection to situations where Congress has 
not directly spoken to the issue in other legislation.
    Subsection 106A(b) addresses the fact that the indirect 
costs paid to a tribe under the Indian Self-Determination and 
Education Assistance Act are pooled with other federal funds 
administered by a tribal contractor, and thus are spent 
together out of a single account. Subsection (b) clarifies that 
the self-determination rules regarding expenditure of funds set 
forth in subsections 106(i) and (j) of the Indian Self-
Determination and Education Assistance Act apply to the tribal 
expenditure of all other federal funds received by a tribe 
under any other federal statute. This subsection clarifies that 
this section only applies to pooled ``indirect cost'' funds.
    Subsection 106A(c) of the bill establishes a new initiative 
under which the relevant Secretary is directed to consolidate 
all program funds and contract support cost funds into a single 
amount, as suggested by the General Accounting Office in its 
report referenced above. Under subparagraph (1), the relevant 
Secretary will be required to pay tribes and tribal 
organizations a consolidated amount if: (A) the tribe or tribal 
organization operates a mature contract under Title I of the 
Act (regardless of whether the tribe or tribal organization has 
requested such designation), or is operating a self- governance 
agreement under Titles III or IV of the Act; (B) the tribe or 
tribal organization's indirect cost rate has remained stable 
for a period of three years; and (C) at the time of the 
consolidation the tribe or tribal organization is receiving its 
full contract support cost entitlement as determined pursuant 
to Section 106(a)(2) of the Act. Subparagraphs (2) and (3) 
would require annual adjustments in the contract support cost 
component of the consolidated amount, based upon the medical 
inflation rate (for IHS-paid contract support costs) or the 
consumer price index (for BIA-paid contract support costs). 
Subparagraph (4) would require additional contract support cost 
adjustments from time to time as positions under federal 
employment at the initial time of consolidation thereafter 
transfer to tribal employment. Once added, such additional 
amounts become a part of the recurring consolidated contract 
amount. Under subparagraph (5), tribes and tribal organizations 
would not be entitled to any additional sums for contract 
support costs under other provisions of the Act, regardless of 
changes in a tribe's or tribal organization's base or its 
indirect cost rate (except for the inflationary and direct 
contract support cost adjustments noted in subsections (2) 
through (4)). Subparagraph (6) reiterates that the existing 
tribal rebudgeting authority, including the authority to spend 
``contract support funds'' for ``program'' purposes and vice 
versa, remains unaffected during the period of consolidation. 
Subparagraph (7) provides that in the event a tribe or tribal 
organization's total indirect cost base increases or decreases 
by more than 20 percent over the amount paid to the tribe or 
tribal organization during the preceding year, the relevant 
Secretary is required to deconsolidate the funds. In such 
event, the parties must renegotiate the tribe's or tribal 
organization's contract support cost requirements based upon 
the changed circumstances. This subsection also adds a 
provision triggering deconsolidation in the event a tribe's 
direct cost base cumulatively increases or decreases more than 
40 percent over three years. It also adds a provision 
authorizing the relevant Secretary, for ``good cause'' shown, 
to deconsolidate funds for any other reason such as a fire or 
other catastrophe. Subparagraph (8) makes clear that the 
consolidation of contract funds does not affect the continuing 
right of a tribe or tribal organization to contract or compact 
for the operation of new or expanded agency programs and to be 
paid full contract support costs associated with such programs. 
Subparagraph (8) provides that the program and contract support 
amounts associated with the expanded operations are to be added 
to the consolidated amount. Subparagraph (9) clarifies that 
although contract amounts will be consolidated, a tribe may 
still retain separate contracts for different programs, if that 
is its choice.
    Subsection 106A(d) requires IHS to transfer the 
responsibility for the negotiation, review and approval of 
tribal contract support costs from the Division of Financial 
Management to the Office of Tribal Programs (OTP). This 
subsection clarifies that OTP is not authorized to depart from 
a tribe's or tribal organization's indirect cost agreement with 
its cognizant federal agency.
    Subsection 106A(e) clarifies that direct contract support 
cost entitlements are to be calculated on all federal positions 
transferred to tribal operation at the time a contract, 
compact, or funding agreement is executed, including federal 
employees funded through third-party revenues such as Medicare 
payments, Medicaid payments and payments from third-party 
insurers.
    New section 106A(f) authorizes the issuance of a joint BIA 
and IHS regulation, through negotiated rulemaking, to address 
the allowability of costs expended under the Act, including 
expenditures from a tribe's indirect cost pool and expenditures 
for direct contract support cost purposes. This section 
includes a regulation waiver provision modeled on section 107 
of Title I of the Act.

Section 3. Amendments clarifying contract support cost entitlement

    Subsections (1) through (3) clarify that contract support 
costs are an entitlement, and specifically removes three 
provisions from the Act relied on by the agencies to argue 
otherwise. This section also provides that necessary amounts 
are appropriated to pay contract support costs. Subsection (4) 
clarifies that under section 106(a)(5) of the Act, ``start-up'' 
contract support costs that are or have been incurred in a year 
prior to the contract year shall be paid on the same basis as 
other contract support costs, including costs paid by a tribe 
or tribal organization prior to enactment of the bill. This 
section also clarifies that the intent of the final clause is 
to require IHS to pay all start-up costs identified on the last 
IHS ``Queue'' that were either never paid at all or were only 
partially paid during the transition in IHS policy from fiscal 
year 1998 to fiscal year 1999.

Section 4. Amendment enlarging contract proposal review period

    Section 4 of the bill enlarges from 90 days to 180 days the 
period during which the relevant Secretary may review and 
either approve or decline a contracting proposal.

Section 5. Amendments regarding judicial remedies

    This section amends section 110 of the Act to create a new 
subsection (f) clarifying that IHS and BIA funds providing 
services to Indian and Alaska Native tribes are not to be 
considered ``available'' to repay any court judgments the 
agencies may suffer in litigation. This section also adds an 
amendment to section 110(c) of the Act to clarify that 
administrative law judges may set Equal Access to Justice Act 
rates within the same parameters as district courts.

            Committee Oversight Findings and Recommendations

    Regarding clause 2(b)(1) of rule X and clause 3(c)(1) of 
rule XIII 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 1, section 8 of the Constitution of the United 
States grants Congress the authority to enact this bill.

                    Compliance With House Rule XIII

    1. Cost of Legislation. Clause 3(d)(2) 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 this bill. However, clause 3(d)(3)(B) 
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 402 of the 
Congressional Budget Act of 1974.
    2. Congressional Budget Act. As required by clause 3(c)(2) 
of rule XIII of the Rules of the House of Representatives and 
section 308(a) of the Congressional Budget Act of 1974, this 
bill does not contain any new budget authority, credit 
authority, or an increase or decrease in revenues or tax 
expenditures. According to the Congressional Budget Office, 
enactment of this bill would increase direct spending.
    3. Government Reform Oversight Findings. Under clause 
3(c)(4) of rule XIII 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 on this bill.
    4. Congressional Budget Office Cost Estimate. Under clause 
3(c)(3) of Rule XIII 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:

                                     U.S. Congress,
                               Congressional Budget Office,
                                 Washington, DC, September 7, 2000.
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. 4148, the Tribal 
Contract Support Cost Technical Amendments of 2000.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Lanette J. 
Keith.
            Sincerely,
                                          Barry B. Anderson
                                    (For Dan L. Crippen, Director).
    Enclosure.

H.R. 4148--Tribal Contract Support Cost Technical Amendments of 2000

    Summary: H.R. 4148 would change the way contracts and 
contract support costs are funded under the Indian Self 
Determination Act. Because such contract costs and contract 
support costs would no longer be subject to appropriation, CBO 
estimates that enacting the bill would increase direct spending 
by $11 billion over the 2001-2005 period. This change could 
reduce the need for appropriated funds for contracts and 
support costs under the Indian Self Determination Act. Because 
the bill would affect direct spending, pay-as-you-go procedures 
would apply. H.R. 4148 contains no intergovernmental or 
private-sector mandates as defined in the Unfunded Mandates 
Reform Act (UMRA) and would impose no costs on state, local, or 
tribal governments.
    Estimated cost to the Federal Government: The estimated 
budgetary impact of H.R. 4148 is shown in the following table. 
The costs of this legislation fall within budget function 450 
(community and regional development) and 550 (health).

----------------------------------------------------------------------------------------------------------------
                                                                       By fiscal year, in millions of dollars--
                                                                    --------------------------------------------
                                                                       2001     2002     2003     2004     2005
----------------------------------------------------------------------------------------------------------------
                                           CHANGES IN DIRECT SPENDING

Estimated Budget Authority.........................................    2,126    2,252    2,366    2,480    2,602
Estimated Outlays..................................................    1,594    2,139    2,307    2,445    2,566
----------------------------------------------------------------------------------------------------------------

    Basis of estimate: Under the Indian Self Determination Act, 
Indian tribes are authorized to enter into contracts with the 
Indian Health Service (IHS) and the Bureau of Indian Affairs 
(BIA) to directly implement federal programs and services that 
would benefit Indians. In addition, the agencies provide the 
tribes with funding for contract support costs, including the 
costs of facilities, equipment, legal services, and salaries. 
All such funding is subject to the availability of appropriated 
funds. Based on information from BIA and IHS, we estimate these 
agencies will spend about $2 billion in 2000 to fund contracts 
and contract support costs under the Indian Self Determination 
Act. H.R. 4148 would authorize IHS and BIA to provide funding 
to tribes for contracts and contract support under the Indian 
Self Determination Act without further appropriation action.

Direct spending

    Because the costs for Indian Self Determination contracts 
would not be constrained by the availability of appropriated 
funds, CBO expects that tribes would have a greater incentive 
to contract with the agencies than they do under current law. 
Therefore, CBO expects that under the bill the number of tribes 
that contract with BIA and IHS for Indian services would 
increase and that tribes would be more likely to enter into 
multiple contracts with the agencies. CBO estimates that 
enacting the bill would increase direct spending by about $9 
million over the five-year period for the cost of the contracts 
between the tribes and the agencies.
    Historically, the Congress has appropriated about 85 
percent of the amounts necessary to fully fund contract support 
costs. H.R. 4148 would require IHS and BIA to fund contract 
support costs at 100 percent of the rate negotiated by the 
tribes and the agencies. The bill also would require BIA to 
provide tribes with certain contract support that the agency 
does not currently provide. Based on information from IHS and 
BIA, CBO estimates that it would cost $2 billion over the 2001-
2005 period to provide the required level of contract support.

Spending subject to appropriation

    Based on historical data from IHS and BIA, CBO estimates 
that contracts under the Indian Self Determination Act will 
cost nearly $1.6 billion in fiscal year 2000 and that the 
agencies' budget requests are likely to increase, under current 
law, by about 3 percent each year. In addition, we estimate 
that contract support costs are currently funded at about $350 
million a year, or about 22 percent of the total contract 
costs. Because H.R. 4148 would reduce or eliminate the need for 
appropriations to support these programs, CBO expects that 
enactmentof the bill would lead to a significant reduction in 
appropriated funds to BIA and IHS. Any such savings, however, would be 
subject to future appropriation acts.
    Pay-as-you-go considerations: The Balanced Budget and 
Emergency Deficit Control Act sets up pay-as-you-go procedures 
for legislation affecting direct spending or receipts. The net 
changes in outlays that are subject to pay-as-you-go procedures 
are shown in the following table. For the purposes of enforcing 
pay-as-you-go procedures, only the effects in the current year, 
the budget year, and the succeeding four years are counted.

--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                          By fiscal year, in millions of dollars--
                                                                  --------------------------------------------------------------------------------------
                                                                    2000   2001    2002    2003    2004    2005    2006    2007    2008    2009    2010
--------------------------------------------------------------------------------------------------------------------------------------------------------
Changes in outlays...............................................      0   1,594   2,139   2,307   2,445   2,566   2,693   2,828   2,969   3,113   3,268
Changes in receipts..............................................                                      Not applicable
--------------------------------------------------------------------------------------------------------------------------------------------------------

    Intergovernmental and private-sector impact: H.R. 4148 
contains no intergovernmental or private-sector mandates as 
defined in UMRA and would impose no costs on state, local, or 
tribal governments.
    Estimate prepared by: Federal Costs: Lanette J. Keith and 
Eric Rollins. Impact on State, Local, and Tribal Governments: 
Marjorie Miller. Impact on the Private Sector: Sarah Sitarek.
    Estimate approved by: Peter H. Fontaine, Deputy Assistant 
Director for Budget Analysis.

                    Compliance With Public Law 104-4

    This bill contains no unfunded mandates.

                Preemption of State, Local or Tribal Law

    This bill is not intended to preempt any State, local or 
tribal law.

         Changes in Existing Law Made by the Bill, as Reported

  In compliance with clause 3(e) 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 AND EDUCATION ASSISTANCE ACT

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TITLE I--INDIAN SELF-DETERMINATION ACT

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               contracts by the secretary of the interior

    Sec. 102. (a)(1) * * *

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    (2) If so authorized by an Indian tribe under paragraph (1) 
of this subsection, a tribal organization may submit a proposal 
for a self-determination contract, or a proposal to amend or 
renew a self-determination contract, to the Secretary for 
review. Subject to the provisions of paragraph (4), the 
Secretary shall, within [ninety] 180 days after receipt of the 
proposal, approve the proposal and award the contract unless 
the Secretary provides written notification to the applicant 
that contains a specific finding that clearly demonstrates 
that, or that is supported by a controlling legal authority 
that--
          (A) * * *

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Notwithstanding any other provision of law, the Secretary may 
extend or otherwise alter the [90-day] 180-day period specified 
in the second sentence of this subsection, if before the 
expiration of such period, the Secretary obtains the voluntary 
and express written consent of the tribe or tribal organization 
to extend or otherwise alter such period. The contractor shall 
include in the proposal of the contractor the standards under 
which the tribal organization will operate the contracted 
program, service, function, or activity, including in the area 
of construction, provisions regarding the use of licensed and 
qualified architects, applicable health and safety standards, 
adherence to applicable Federal, State, local, or tribal 
building codes and engineering standards. The standards 
referred to in the preceding sentence shall ensure structural 
integrity, accountability of funds, adequate competition for 
subcontracting under tribal or other applicable law, the 
commencement, performance, and completion of the contract, 
adherence to project plans and specifications (including any 
applicable Federal construction guidelines and manuals), the 
use of proper materials and workmanship, necessary inspection 
and testing, and changes, modifications, stop work, and 
termination of the work when warranted.

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                       ADMINISTRATIVE PROVISIONS

    Sec. 105. (a) * * *

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    (c)(1) A self-determination contract shall be--
          (A) * * *

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[The amounts of such contracts shall be subject to the 
availability of appropriations.]

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    Sec. 106. (a)(1) * * *

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  (5) Subject to paragraph (6), during the initial year that a 
self-determination contract is in effect, the amount required 
to be paid under paragraph (2) shall include startup costs 
consisting of the reasonable costs that have been incurred or 
will be incurred on a one-time basis pursuant to the contract 
necessary--
          (A) * * *

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Notwithstanding any other provision of law, the Secretary shall 
fully pay preaward and startup costs without regard to the year 
in which such costs were incurred or will be incurred, 
including such costs payable to tribes and tribal organizations 
identified by the Indian Health Service as ``ISD Queue Tribes'' 
in its September 17, 1999, report entitled ``FY 1999 IHS CSC 
Shortfall Data''.

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    (b) The amount of funds required by subsection (a)--
          (1) * * *

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Notwithstanding any other provision in this Act, [the provision 
of funds under this Act is subject to the availability of 
appropriations and] the Secretary is not required to reduce 
funding for programs, projects, or activities serving a tribe 
to make funds available to another tribe or tribal organization 
under this Act.
Necessary amounts are appropriated to pay contract support 
costs when not otherwise provided for.

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SEC. 106A. CONTRACT SUPPORT COSTS.

  (a) Other Federal Agencies.--Except as otherwise provided by 
statute, an Indian tribe or tribal organization administering a 
contract or compact under this Act shall be entitled to recover 
its full indirect costs associated with any other Federal 
funding received by such tribe or tribal organization (other 
than funds paid under this Act), consistent with the tribe's or 
tribal organization's indirect cost rate agreement with its 
cognizant Federal agency. Thissubsection shall not 
independently entitle such tribe or tribal organization to be paid 
additional amounts associated with such other Federal funding.
  (b) Allowable Uses of Funds.--Notwithstanding any other 
provision of law (including regulation or circular), an Indian 
tribe or tribal organization (1) administering a contract or 
compact under this Act and (2) employing an indirect cost pool 
that includes both funds paid under this Act and other Federal 
funds, shall be entitled to use or expend all Federal funds in 
such tribe's or tribal organization's indirect cost pool in the 
same manner as permitted in section 106(j) (relating to 
allowable uses of funds without approval of the Secretary), and 
for such purposes only the term ``Secretary'' means the 
Secretary of any Federal agency providing funds to such tribe 
or tribal organization.
  (c) Consolidated Contract Amount.--
          (1) Conditions for consolidation.--Commencing in 
        fiscal year 2003, the Secretary shall consolidate all 
        funds paid to a tribe or tribal organization pursuant 
        to paragraphs (1) and (2) of section 106(a) into a 
        single consolidated contract or compact amount if the 
        following conditions have been met:
                  (A) The tribe or tribal organization 
                qualifies to carry out a mature contract under 
                this title or is operating a self-governance 
                agreement under any other title of this Act.
                  (B) The tribe's or tribal organization's 
                indirect cost rate has not varied more than 10 
                percent over the prior year's rate for the 
                preceding 3 years (for tribes or tribal 
                organizations that have no indirect rate, this 
                criterion shall be satisfied if the ratio of 
                the tribe's or tribal organization's contract 
                support requirement to its direct cost base has 
                not varied more than 10 percent over the ratio 
                for the preceding 3 years).
                  (C) At the time of the consolidation the 
                tribe or tribal organization is receiving its 
                full contract support cost requirement as 
                determined under section 106(a)(2).
          (2) Medical inflation rate adjustments.--Each year 
        following the consolidation required by paragraph (1), 
        the Secretary of Health and Human Services shall 
        increase the amount of contract support costs paid as 
        part of the consolidated amount by an amount equal to--
                  (A) the adjustment in the medical care 
                component of the national consumer price index 
                over the preceding year, multiplied by
                  (B) the contract support cost amount paid in 
                the preceding year as part of the consolidated 
                amount.
          (3) Consumer price index adjustments.--Each year 
        following the consolidation required by paragraph (1), 
        the Secretary of the Interior shall increase the amount 
        of contract support costs paid as part of the 
        consolidated amount by an amount equal to--
                  (A) the adjustment in the national consumer 
                price index over the preceding year, multiplied 
                by
                  (B) the contract support cost amount paid in 
                the preceding year as part of the consolidated 
                amount.
          (4) Employment adjustments.--A tribe or tribal 
        organization shall be entitled to receive additional 
        contract support costs associated with the transfer of 
        employees from Federal employment to tribal employment. 
        Such additional contract support costs shall be added 
        to the consolidated amount determined and adjusted 
        under paragraphs (1), (2), and (3), and shall 
        thereafter become a part of the consolidated amount.
          (5) Additional contract support costs.--
        Notwithstanding any other provision of this Act, and 
        except as provided in paragraphs (4) and (8), the tribe 
        or tribal organization shall not be entitled to receive 
        any contract support costs additional to those 
        contained within the consolidated amount determined and 
        adjusted under paragraphs (1), (2), and (3).
          (6) Rebudgeting authority unaffected.--The tribe or 
        tribal organization may rebudget all contract or 
        compact funds as specified in section 106(n).
          (7) Deconsolidation.--Except as provided in paragraph 
        (8), in the event--
                  (A) the amount of program funds paid under 
                section 106(a)(1) as part of the consolidated 
                amount, when combined with other program funds 
                paid to the tribe or tribal organization from 
                other funding sources, increases or decreases 
                by more than--
                          (i) 20 percent over the amount paid 
                        in the preceding year; or
                          (ii) 40 percent over the amount paid 
                        in the preceding three years; or
                  (B) the Secretary for good cause shown 
                agrees,
        the amounts paid by the Secretary under this section 
        shall be deconsolidated, and such amounts shall be 
        recalculated and paid as specified elsewhere in this 
        Act. Upon such recalculation, the recalculated amounts 
        shall be reconsolidated into a single amount as 
        otherwise described in this subsection.
          (8) Contracting additional programs.--Nothing in this 
        subsection shall affect the right of a tribe or tribal 
        organization to contract or compact for the operation 
        of new or expanded programs, services, functions, or 
        activities not included in the consolidated amount paid 
        under paragraph (1), or to be paid the full amount of 
        contract support costs associated with such additional 
        contracted or compacted programs, as provided in 
        section 106(a)(1) and other provisions of this Act. Any 
        such additional programs and associated contract 
        support costs shall be added to the consolidated amount 
        determined and adjusted under paragraphs (1), (2), and 
        (3).
          (9) Separate contracts and compacts.--Nothing in this 
        subsection shall require a tribe or tribal organization 
        to consolidate separate contracts or compacts 
        administered under this Act into a single contract or 
        compact.
  (d) Negotiation of Contract Support Cost Amounts.--Within the 
Indian Health Service of the Department of Health and Human 
Services, the negotiation, review, and approval of tribal 
contract support cost entitlements shall be the responsibility 
of the Office of Tribal Programs, subject to the tribe's or 
tribal organization'sindirect cost rate agreement with the 
tribe's or tribal organization's cognizant Federal agency.
  (e) Direct Contract Support Costs and Federal Employees.--The 
contract support costs that are eligible costs for the purposes 
of receiving funding under this Act shall include direct 
contract support costs associated with all Federal employees 
employed in connection with the program, service, function, or 
activity that is the subject of the contract, including all 
Federal employees paid with funds generated from third-party 
collections.
  (f) Regulations.--The Secretary of the Interior and the 
Secretary of Health and Human Services are authorized to 
promulgate joint regulations relating to the allowability of 
costs expended under this Act, including all pooled indirect 
costs and direct contract support costs. In promulgating such 
regulations the Secretaries shall follow the procedures set 
forth in sections 107(a)(2)(A), 107(d)(1), 107(d)(2)(A), 
107(d)(2)(B), 107(d)(2)(D), and 107(d)(2)(E), and shall publish 
proposed regulations in the Federal Register to carry out this 
subsection not later than 180 days after the date of enactment 
of the Tribal Contract Support Cost Technical Amendments of 
2000. The authority to promulgate regulations under this 
subsection shall expire if final regulations are not 
promulgated within 18 months after the date of enactment of the 
Tribal Contract Support Cost Technical Amendments of 2000. In 
the event of a conflict between such regulations and any Office 
of Management and Budget circular, the provision of such 
regulations shall control. The Secretary may, with respect to a 
contract or compact entered into under this Act, make 
exceptions in the regulations promulgated to carry out this 
subsection, or waive such regulations, if the Secretary finds 
that such exception or waiver is consistent with the policies 
of this Act, and is not contrary to statutory law. In reviewing 
each request, the Secretary shall follow the timeline, 
findings, assistance, hearing, and appeal procedures set forth 
in section 102.

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SEC. 108. CONTRACT OR GRANT SPECIFICATIONS.

  (a) * * *

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  (c) The model agreement referred to in subsection (a)(1) 
reads as follows:

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

  ``(a) * * *

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  ``(b) Terms, Provisions, and Conditions.--
          ``(1) * * *

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          ``(4) Funding amount.--[Subject to the availability 
        of appropriations, the] The Secretary shall make 
        available to the Contractor the total amount specified 
        in the annual funding agreement incorporated by 
        reference in subsection (f)(2). Such amount shall not 
        be less than the applicable amount determined pursuant 
        to section 106(a) of the Indian Self-Determination and 
        Education Assistance Act (25 U.S.C. 450j-1).

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    Sec. 110. (a) * * *

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    (c) The Equal Access to Justice Act (Publc Law 96-481, Act 
of October 1, 1980; 92 Stat. 2325, as amended), section 504 of 
title 5, United States Code, and section 2412 of title 28, 
United States Code shall apply to administrative appeals, and 
section 2412(d)(2)(A) of title 28, United States Code, shall 
apply to appeals filed with administrative appeals boards, in 
appeals pending on or filed after the date of enactment of the 
Indian Self-Determination and Education Assistance Act 
Amendments of 1988 by tribal organizations regarding self-
determination contracts.

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  (f) Reimbursement of Payments.--None of the funds 
appropriated to the Secretary to carry out programs, functions, 
services, or activities that are contractible under this Act 
shall be available to reimburse payments made in satisfaction 
of judgments awarded under subsections (a) and (d).

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