[Senate Report 106-221]
[From the U.S. Government Publishing Office]



                                                       Calendar No. 412
106th Congress                                                   Report
                                 SENATE
 1st Session                                                    106-221

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



 
AMENDING THE INDIAN SELF-DETERMINATION AND EDUCATION ASSISTANCE ACT TO 
  PROVIDE FOR FURTHER SELF-GOVERNANCE BY INDIAN TRIBES, AND FOR OTHER 
                                PURPOSES

                                _______
                                

                November 9, 1999.--Ordered to be printed

                                _______
                                

   Mr. Campbell, from the Committee on Indian Affairs, submitted the 
                               following

                              R E P O R T

                         [To accompany S. 979]

    The Committee on Indian Affairs, to which was referred the 
bill, S. 979, 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, reports favorably thereon with an amendment in the nature 
of a substitute and recommends that the bill as amended do 
pass.

                                Purpose

    The purpose of S. 979, the Tribal Self-Governance 
Amendments of 1999, is to create two new titles in the 1975 
Self-Determination and Education Assistance Act (``ISDEA'' or 
``the Act''), in order to make permanent the Self-Governance 
Demonstration Project for Indian Health Service (IHS) programs 
with the Department of Health and Human Services (HHS), and to 
establish a demonstration project for non-IHS services within 
the HHS after a feasibility study has been undertaken to 
identify which, if any, non-IHS programs within the HHS should 
be subject to self-governance.

                               Background

    In 1970, President Nixon delivered his now-famous ``Message 
to Congress on Indian Affairs'' in which he laid the foundation 
for a change in federal Indian policy for termination and 
assimilation to Indian self-determination. The ISDEA was 
enacted in 1975 as an outgrowth of this policy and continues to 
be one of the guiding tenets of federal Indian policy.
    As enacted, the ISDEA authorizes the Secretary of the 
Department of the Interior to contract with Indian tribes for 
the provision of various services and programs that would 
otherwise be performed by the Department with the tribes acting 
as end-line service providers to their citizens.
    Building on the successes of the original Act, in 1988 
Congress amended the Act and created the Self-Governance 
Demonstration Project in the DHHS. The Demonstration Project 
authorizes tribes to administer health care programs and 
enables participating tribes to redesign programs and 
reallocate funds among the different programs they operate. 
Program design and implementation flexibility provide some of 
the major benefits to participating tribes.
    In 1994, Congress enacted the Tribal Self-Governance Act, 
Pub. L. 103-413, which made Self-Governance permanent with 
regard to the Interior Department. The IHS Self-Governance 
Project continues to operate as a demonstration project. S. 979 
would make the Demonstration Project in the HHS permanent and 
expand the program to other, non-IHS programs within the HHS, 
but only after a feasibility study is conducted to determine 
whether other non-IHS programs should be brought into the Act's 
scope.

               health care delivery in native communities

    As of FY1999 there were 557 federally recognized Indian 
tribes in the United States. Of those, 146 tribes were provided 
health care services directly by the Indian Health Service 
(IHS); and 431 were either contracting or compacting tribes 
under the ISDEA. Tribal participation in contracting or 
compacting is strictly voluntary and is carried out through a 
negotiation conducted between a federal agency and tribal 
representatives.
    Charged with delivering health care to 1.3 million American 
Indians and Alaska Natives (AI/AN), in FY1999, the IHS budget 
was $2.24 billion. The IHS delivered these services through 150 
service units composed of 543 direct health care delivery 
facilities, 49 hospitals, 209 health centers, 6 school health 
centers, and 279 health stations, satellite clinics, and Alaska 
village clinics.
    1. Self-Governance Compacting. In FY1999, the IHS 
negotiated 42 self-governance compacts with 254 tribes 
involving the transfer of $508 million to 213 tribes in Alaska 
and 41 tribes in the lower 48 states. In FY2000, it is 
projected that $564 million will be transferred to tribes 
pursuant to 57 compacts. Self-governance tribes receive 42% of 
the IHS budget in 12 hospitals, 149 health centers, 3 school 
health centers, and 233 health stations and Alaska Native 
village clinics.
    Since 1993, there has been a reduction in IHS Headquarters 
Staff (-57% to 406) and IHS Area Office Staff (-55% to 1,213), 
but there has also been an increase in IHS Service Unit Staff 
(+10% to 12,963). In addition to staff reassignments and 
reductions due to cuts in administrative funding, the transfer 
of Area Office functions and funding to tribes under Self-
Governance has helped re-shape health care delivery in Indian 
country.
    2. IHS-Provided Health Care. Participation under the Act is 
voluntary and tribes that have elected to retain federal 
administration of their health services collectively receive 
some 58% of the IHS budget in 37 hospitals, 60 health centers, 
3 school health centers and 46 health stations.
    3. Urban Indian Care. Various health care and referral 
services are provided to Native people in off-reservation 
settings through 34 urban Indian health care programs 
authorized by the Indian Health Care Improvement Act (Pub. L. 
94-437). Approximately 150,000 American Indians utilize urban 
Indian health care program services because they are not able 
to access hospitals, health clinics or contract health services 
administered by the IHS or tribal providers either because they 
fail to meet IHS eligibility criteria or reside outside IHS or 
tribal service areas.
    4. The Impact of Self-Governance on Indian Health Care. 
Because self-governance transfers programming and budgeting 
authority for health programs from the federal government to 
tribal governments, participating tribes have benefitted from 
the flexibility inherent in the program that enables them to 
tailor the programs to local needs. Participating tribes report 
that self-governance has had a significant and positive impact 
on the health and well-being of their members.
    Significant improvements are reported in program 
administration as well as in the quality, quantity and 
accessibility of services provided to health care recipients 
resulting in a more efficient use of federal funds. A 1998 
study by the National Indian Health Board (NIHB) \1\ reported 
that improved health goes hand in hand with tribal contracting 
and compacting for health care services.
---------------------------------------------------------------------------
    \1\ See attached Tribal Perspectives on Indian Self-Determination 
and Self-Governance in Health Care Management, 1998.
---------------------------------------------------------------------------
    The ISDEA authorizes Indian tribes and tribal organizations 
to contract for the administration and operation of certain 
federal programs which provide services to Indian tribes and 
their members. Subsequent amendments to the ISDEA 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 V created by S. 979 would make this 
contracting by tribes permanent authority for programs 
contracted for within the Indian Health Service (IHS). Thus, 
Indian tribes and tribal organizations would be able to 
contract for the operation, control, and redesign of various 
IHS activities on a permanent basis. In short, what was a 
demonstration project would become a permanent IHS Self-
Governance program.
    Under the terms of S. 979, Indian tribes or tribal 
organizations which have already contracted for IHS activities 
would have the option of continuing under the provisions of 
their existing contracts or, alternatively, could negotiate 
under the authority provided by S. 979. Mirroring existing law, 
the bill authorizes an additional 50 new tribes each year to 
enter into self governance compacts.
    The amendments contained in S. 979 continue the 
requirements of the existing Self-Governance law which requires 
that before any tribe or organization can enter the Self-
Governance program they must fulfill certain criteria--that the 
tribe have experience in government contracting, a record of 
clean audits, and a demonstrated management capability--in 
order to exercise the right to compact for the operation of IHS 
functions, including the funds necessary to run them.
    S. 979 also adds a new title VI to the Act which authorizes 
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 on a demonstration project basis.
    The Self-Governance program 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.

                          Legislative History

    S. 979, the Tribal Self Governance Amendments of 1999, was 
introduced on May 6, 1999 by Chairman Campbell, for himself and 
for Senator McCain. Senator Inhofe was added as cosponsor on 
July 19, 1999. S. 979 was referred to the Committee on Indian 
Affairs, where a hearing was held on July 19, 1999.

            Committee Recommendation and Tabulation of Vote

    On October 27, 1999 the Committee on Indian Affairs, in an 
open business session, adopted an amendment in the nature of a 
substitute to S. 979 by a unanimous vote of the members present 
and ordered the substitute amendment reported favorably to the 
Senate.

                      Section-by-Section Analysis


Section 1. Short title

    This section sets forth the short title, ``The Tribal Self-
Governance Amendments of 1999.''

Section 2. Findings

    This section sets forth the findings of Congress which 
reaffirm the inherent sovereignty of Indian tribes and the 
unique government-to-government relationship between the United 
States and Indian tribes. The findings make clear that while 
progress has been made, the federal bureaucracy has eroded 
tribal self-governance. The findings state that the federal 
government has failed to fully meet its trust responsibility 
and to satisfy its obligations under treaties and other laws. 
The findings explain that Congress has reviewed the tribal 
self-governance demonstration project and 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.

Section 3. Declaration of policy

    This section provides that it is Congress' policy to 
permanently establish and implement tribal self-governance 
within the Department of Health and Human Services 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) encourage and 
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 within the Indian Health Service and 
authorizes a feasibility study of the applicability of Self-
Governance to other HHS agencies by adding Titles V and VI to 
the Indian Self-Determination and Education Assistance Act of 
1975, as amended.

Section 501. Establishment

    This section directs the Secretary of HHS to establish a 
permanent Tribal Self-Governance Program in the Indian Health 
Service.

Section 502. Definitions

    Subsection (a)(1) defines the term ``construction 
project''. The Committee does not intend this legislation to 
preclude agreements between self-governance tribes and the 
Indian Health Service for carrying out sanitary facilities 
construction projects pursuant to a ``Project Funding 
Agreement'' or ``Memorandum of Agreement'' executed as an 
addendum of a Title V Annual Funding Agreement as authorized by 
Section 7(a)(3) of Pub. L. 86-121, 73 Stat. 267 (42 U.S.C. 
Sec. 2004(a)).
    Subsection (a)(2) provides that a ``construction project 
agreement'' is one between the Secretary and the Indian tribe 
that, at a minimum, establishes start and completion dates, 
scope of work and standards, identifies party responsibilities, 
addresses environmental considerations, identifies the owner 
and maintenance entity of the proposed work, provides a budget, 
provides a payment process, and establishes a duration of the 
construction project agreement.
    Subsection (a)(3) defines ``inherent federal functions'' as 
those functions which cannot be legally delegated to Indian 
tribes. This definition states the obvious. Inherent federal 
functions are functions which the Executive Branch cannot by 
law delegate to other branches of government, or non-
governmental entities. The Committee's 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.''
    The Committee's definition is expressly intended to provide 
flexibility so as to allow the Secretary and the tribes to come 
to agreement on which functions are inherently federal 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 ``restores'' 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 this restored authority is broader than in the transfer of 
federal governmental powers to private or other governmental 
entities.
    Subsection (a)(4) defines ``inter-tribal consortium''. The 
Committee notes that during the Title III 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 experienced 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, 
Pub.L. No. 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 section 503 (a).
    Subsection (a)(5) defines ``gross mismanagement''. The 
inclusion of this term is intended 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 pose an imminent 
endangerment to 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 is 
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 will 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. Requiring intrusive and over burdensome 
monitoring and auditing activities are antithetical to the 
goals of Self-Governance and the intent of the Committee.
    Subsection (a)(6) defines ``tribal shares''. This 
definition is consistent with the Title IV Rulemaking 
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.'' Fed. Reg. Vol. 63, No. 
29, 7325, (Fed. 12, 1998) (Proposed Rule, 25 CFR Sec. 1000.91). 
All funds appropriated under the Indian Self-Determination and 
Education Assistance Act are either tribal shares or Agency 
residual.
    Subsection (a)(7) defines ``Secretary'' as the Secretary of 
the Department of Health and Human Services.
    Subsection (a)(8) defines ``Self-Governance'' as the 
program established under this title.
    Section (b) defines ``Indian Tribe''. This definition 
enables and 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-consortium or tribal organization may exercise the 
authorizing Indian tribe's rights as specified by Tribe 
resolution.

Section 503. Selection of participating tribes

    This section describes the eligibility criteria that must 
be satisfied by any Indian tribe interested in participating in 
the Self-Governance program.
    (a) Continuing Participation. All tribes presently 
participating in the Tribal Self-Governance Demonstration 
Project under Title III of the Indian Self-Determination Act 
may elect to participate in the permanent Self-Governance 
program. Tribes must do so through tribal resolution. Tribes 
may also choose to ``roll over'' and renegotiate their compacts 
under the authority provided by S. 979.
    (b) Additional Participants. (1) This section allows an 
additional 50 tribes a year to participate in self-governance 
program.
    (2) This section authorizes an Indian tribe that chooses to 
withdraw from an inter-tribal consortium or tribal organization 
to participate in self-governance provided that the tribe 
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 
section 503 (b) (2) and such participation shall not be counted 
against the 50 tribe a year limitation contained in section 503 
(a).
    (c) Applicant Pool. 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 Act. The bill has been 
deliberately crafted to make clear that a tribe's activities in 
other economic endeavors are not to be the subject of the 
Section 503(c) examination. Similarly, the ``budgetary 
research'' referred to in section 503(d)(1) of the bill 
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.
    (d) Planning Phase. Every Indian tribe interested in 
participating in the self-governance program 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.
    (e) Grants. 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.
    (f) Receipt of Grant not Required. This section provides 
that receipt of a grant from HHS is not required to participate 
in the permanent self-governance 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 the Self 
Governance program. The committee believes that compacts serve 
an important and necessary function in establishing government-
to-government relations, which is noted earlier, is the 
keystone of modern federal Indian policy.
    (a) Compact Required. 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.
    (b) Contents. This section 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.
    (c) Existing Compacts. Upon enactment of Title V, Indian 
tribes have the option of retaining their existing compacts, or 
any portion of the compacts that are not inconsistent with the 
provisions of Title V.
    (d) Term and Effective Date. 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.
    (a) Funding Agreement Required. 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.
    (b) Contents. An Indian tribe may include in a funding 
agreement all programs, functions, services, or activities, (or 
portions thereof) that it is authorized to carry out under 
Title I of the 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 portion 
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 
Indian Health Service to include all available federal health 
funding in self governance funding agreements. We note, 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 demonstrating 
the benefits of self governance. In 1998, the National Indian 
Health Board released it's ``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 of 
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 that Agency.
    (c) Inclusion in Compact or Funding Agreement. The 
eligibility of Indian tribes does not need to be specifically 
identified in authorizing legislation for a program to be 
eligible for inclusion in a compact or funding agreement.
    (d) Funding Agreement Terms. 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.
    (e) Subsequent Funding Agreements. 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 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 Indian Health Service on a true 
government-to-government basis. The Committee believes 
theretroactive provision is fair because this assures that no act or 
omission of the federal government endangers the health and welfare of 
tribal members.
    (f) Existing Funding Agreements. Upon enactment of Title V, 
Indian tribes may either retain their existing annual funding 
agreements, or any portion thereof, that do not conflict with 
provisions of Title V, or negotiate new funding agreements that 
conform to Title V.
    (g) Stable Base Funding. 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 Agency 
policy guidance on stable base funding.

Section 506. General provisions

    (a) Applicability. The provisions in this section may, at a 
tribe's option, be included in a Compact or funding agreement 
negotiated under Title V.
    (b) Conflicts of Interest. 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).
    (c) Audits. The single Agency Audit Act applies to title V 
funding agreements. Indian tribes are required to apply cost 
principles set out in applicable 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.
    Records. 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 it minimum 
legal record keeping requirements under the Federal Records 
Act.
    (e) Redesign and Consolidation. 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. Any redesign or 
consolidation, however, must not have the effect of unfairly 
denying eligibility to people otherwise eligible to be served 
under federal law.
    (f) Retrocession. An Indian tribe may fully or partially 
retrocede 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.
    (g) Withdrawal. 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 time frame set out 
in the tribe's authorizing resolution. If a time frame 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.
    (h) Nonduplication. This section provides that a tribe 
operating programs under a Self-Governance compact may not 
contract under Title I (a ``638 contract'') for the same 
programs.

Section 507. Provisions relating to the secretary

    This section sets out mandatory and non-mandatory 
provisions relating to the Secretary's obligations.
    (a) Mandatory Provisions.
    (1) Health Status Reports. 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 the Secretary's annual reports 
to congress. The Secretary is required to provide funding to an 
Indian tribe to compile such data. Reporting requirements can 
only impose minimal burdens on an Indian tribe and may only be 
imposed if they are contained in regulations developed under 
negotiated rulemaking.
    (2) Reassumption. Compacts or funding agreements must 
include a provision authorizing the Secretary to reassume a 
program, function, service, or activity, (or portion thereof) 
if the Secretary 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 and a hearing on the record. 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.
    (b) Final offer. 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.
    (c) Rejection of Final Offers. This provision 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'' to avoid rejections which merely state conclusory 
statements that provide no analysis or 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 of proceeding directly to federal district 
court under section 110 of Title I of the Act in lieu of an 
administrative hearing.
    The Secretary may only reject these 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.
    (d) Burden of Proof. 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 the Department 
is considered a final agency action if it was made by an 
administrative judge or by an official of the Department 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.
    (e) Good Faith. 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.
    (f) Reduction of Secretarial Responsibilities. Any savings 
in the Department's 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 of funding agreements. The 
Committee has 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.
    (g) Trust Responsibility. The Secretary is prohibited from 
waiving, modifying or diminishing the trust responsibilities or 
other responsibilities as established 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. Section 507 (a)(2) (reassumption) with its 
concept of imminent endangerment of the public health provides 
guidance in defining the Secretary trust obligation in the 
health context.
    (h) Decisionmaker. Final agency action is a decision by 
either an official from the Department at any higher 
organizational level than the initial decision maker or an 
administrative law judge. Subparagraph (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 508. Transfer of funds

    (a) In General. The Secretary is required to transfer all 
funds provided for in a funding agreement, pursuant to Section 
509(c) below. Funds are also required to be provided for 
periods covered bycontinuing 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 is to be made within 10 days after the Office of 
Management and Budget apportions the funds, unless the funding 
agreement provides otherwise.
    (b) Multi-Year Funding. The Secretary is authorized to 
negotiate multi-year funding agreements.
    (c) Amount of Funding. The Secretary is required to provide 
an Indian tribe with 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. 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 a 
Self-Governance tribe.
    (d) Prohibitions. 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 twenty-one years of administration 
of the Indian Self-Determination Act, the Department had never 
taken the position that it has the discretion to delay funding 
for any program transferred under the Act absent tribal 
consent. However, a 1996 IHS circular purported to do just 
that. Since this circular was issued, several Area offices have 
refused to turn over substantial program funds to tribal 
operation. In one instance both an Area office and 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 the Indian Health Service's 
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.
    (e) Other Resources. 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.
    (f) Reimbursement to Indian Health Service. The Indian 
Health Service is authorized to provide goods and services to 
tribes on a reimbursable basis. 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.
    (g) Prompt Payment Act. This subsection 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 the Office of Management and Budget apportions the 
appropriations for that fiscal year. Under this section, the 
Secretary is obligated to pay interest to a Self-Governance 
tribe, as calculated under the Prompt Payment Act, for any late 
payment under a funding agreement.
    (h) Interest or Other Income on Transfers. An Indian tribe 
may retain interest earned or other income realized 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'', a commonly utilized fiduciary 
standard, that the Committee believes is sufficiently stringent 
to ensure that funds are invested wisely and safely yet provide 
a reasonable yield on investment.
    Eligible investments under the prudent investment standard 
may include the following: (1) cash and cash equivalents 
(including bank checking accounts, savings accounts, and 
brokerage account free cash balances that carry a quality 
rating A1 P1, or AA or higher), (2) money market accounts with 
an A rating or higher, (3) certificates of deposit where the 
amounts qualify for insurance ($100,000 or less) or where the 
issuing bank has delivered a specific assignment, (4) bank 
repossession certificates where the amounts qualify for 
insurance ($100,000 or less) or where the issuing bank has 
delivered a specific assignment, (5) U.S. Government or Agency 
Securities, (6) commercial paper rated A1 P1 at time of 
purchase and which cannot exceed 10% of portfolio at time of 
purchase with any one issuer (short term paper--under 90 days--
may be treated as a cash equivalent, (7) auction rate preferred 
instruments that are issued by substantial issuers, are rated 
AA or better, and may be utilized with auction maturities of 28 
to 90 days, (8) corporate bonds of U.S. corporations that have 
Moody's, Standard and Poor's, or Fitch's rating of A or 
equivalent and where no more than 10% of the portfolio at time 
of purchase is invested in the securities of any one issuer, 
(9) dollar denominated short term bonds of the G7 Nations or 
World Bank only if the yields exceed those of U.S. instruments 
of equivalent maturity and quality, and where no more than 25% 
of portfolio at time of purchase is invested in this asset 
category, (10) properly registered short term no-load 
government or corporate bond mutual funds with a safety rating 
and average fund quality of A or higher, which demonstrate low 
volatility, and where no more than 25% of portfolio at time of 
purchase is invested in any one fund.
    (i) Carryover of Funds. 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.
    (j) Program Income. All program income (including Medicare/
Medicaid) reimbursements 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.
    (k) Limitation of Costs. 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 509. Construction projects

    (a) In General. Indian tribes are authorized to conduct 
construction projects authorized under this section. The tribes 
are to assume full responsibility for the projects, including 
responsibility for enforcement and compliance with all relevant 
federal laws, including the National Historic Preservation Act 
of 1966 and the National Environmental Policy Act of 1969. A 
tribe undertaking a construction project must designate a 
certifying officer to represent the tribe and accept federal 
court jurisdiction for purposes of the enforcement of federal 
environmental laws.
    (b) Negotiations. This subsection provides that negotiation 
of construction projects are negotiated pursuant to section 
105(m) of the Act and construction project agreements included 
in the funding agreement as an addendum.
    (c) Codes and Standards. The tribe and the IHS must agree 
to standards and codes for the construction project. The 
agreement is to conform with nationally accepted standards for 
comparable projects.
    (d) Responsibility for Completion. This subsection provides 
that the Indian tribe must assume responsibility for the 
successful completion of the project according to the terms of 
the construction project agreement.
    (e) Funding. This subsection provides that funding of 
construction projects will be through advance payments, on 
either an annual or semi-annual basis. Payment amounts will be 
determined by project schedules, work already completed, and 
the amount of funds already expended. Flexibility in payment 
schedules will be maintained by the IHS through contingency 
funds to take account of exigent circumstances such as weather 
and supply.
    (f) Approval. This subsection allows the Secretary to have 
at least one opportunity to approve tribal project planning and 
design documents or significant amendments to the original 
scope of work before construction. The tribe is to provide at 
least semiannual progress and financial reports to the 
Secretary. The Secretary is allowed to conduct semiannual site 
visits or on another basis if agreed to by the tribe.
    (g) Wages. This subsection mirrors section 7(a) of the 
Indian Self-Determination and Education Assistance Act which 
incorporates federal Davis-Bacon Act wage protections for 
workers.
    (h) Application of Other Laws. This subsection provides 
that provisions of the Office of Federal Procurement Policy 
Act, the Federal Acquisition Regulations, and other federal 
procurement laws and regulations do not apply to construction 
projects, unless agreed to by the participating tribe.

Section 510. Federal procurement laws and program regulations

    This section provides that 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 511. Civil actions

    (a) Contract Defined. The Committee intends that Section 
110 of Title I of the Act, which grants tribes access to 
federal district court to challenge a decision by the 
Secretary, shall apply to this title.
    (b) Applicability of Certain Laws. This subsection provides 
that Department of Interior approval of tribal contracts (25 
U.S.C. 81) and section 16 of the Indian Reorganization Act (25 
U.S.C. 476) shall not apply to attorney and other professional 
contracts with Self-Governance tribes.

Section 512. Facilitation

    (a) Secretarial Interpretation. This section 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.
    (b) Regulation Waiver. An Indian tribe participating in the 
Self-governance program under title V may seek a waiver of an 
applicable Indian Self-Determination Act regulation 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 waiverrequest is final for the Department. 
Denials may be made upon a specific finding that the waiver is 
prohibited by federal law.
    (c) Access to Federal Property. This subsection 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 federal 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, but is administering a mental health program 
under other authority 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.
    (d) Matching or Cost-Participation Requirement. 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.
    (e) State Facilitation. This section encourages and 
authorizes States to enter agreements with tribes supplementing 
and facilitating Title V and other federal laws that benefit 
Indians and Indian tribes, for example, 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; and, the Committee wants 
to be sure that states are authorized by the federal government 
to undertake such initiatives, as a delegation 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.
    (f) Rules of Construction. Provisions in this title 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 513. Budget request

    (a) The President is required to annually identify in his/
her budget all funds needed to fully fund all Title V compacts 
and funding agreements. These funds are to be apportioned to 
the Indian Health Service and will then be transferred to the 
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 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 Indian Health Service; expedite the transferal 
of funding to tribal operating units; and, aid in the 
implementation of true government-to-government relations and 
tribal self determination.
    (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 514. Reports

    (a) Annual Report. 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. The Secretary may not impose reporting 
requirements on Indian tribes unless specified in Title V.
    (b) Contents. The Secretary's report must identify: (1) the 
costs and benefits of self-governance; (2) all funds related to 
the Secretary's provision of services and benefits to self-
governance tribes and their members; (3) all funds transferred 
to self-governance tribes and the corresponding reduction in 
the federal bureaucracy; (4) the funding formula for individual 
tribal shares; (5) the amount expended by the Secretary during 
the preceding fiscal year to carry out inherent federal 
functions; and (6) contain a description of the method used to 
determine tribal shares. The Secretary's reportmust be 
distributed to Indian tribes for comment no less than 30 days prior to 
its submission to Congress and include the separate views of Indian 
tribes.
    (c) Report on IHS Funds. This section requires the 
Secretary to consult with Indian tribes and report, within 180 
days after this title 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(d). 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 515. Declaimers

    (a) No Funding Reduction. This provision 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 
agreement violates this section may rely on section 110 of the 
Act to seek judicial review of the allegation.
    (b) Federal Trust and Treaty Responsibilities. This section 
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.
    (c) Tribal Employment. This provision 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 Relations Act.
    (d) Obligations of the United States. 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 
appropriations bills included language that prohibited the 
Indian Health Service, 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 516. Application of other sections of the Act

    (a) This section expressly incorporates a number of 
provisions from other areas of the Indian Self-Determination 
and Education Assistance Act into Title V. These sections 
include: 5(b) (access for three years to tribal records), 6 
(setting out penalties that apply if an individual embezzles or 
otherwise misappropriates funds under Title V); 7 (federal 
Davis-Bacon Act wage and labor standards and Indian preference 
requirements); 102(c) and (d) (relating to Federal Tort Claims 
Act coverage); 104 (relating to the right to use federal 
personnel to carry out responsibilities in a compact or funding 
agreement); 105(k) (access to federal supplies); 111 
(clarifying that Title V shall have no impact on existing 
sovereign immunity and the United States' trust 
responsibility); and section 314 Public Law No. 101-512 
(coverage under the Federal Tort Claims Act).
    (b) At the request of an Indian tribe, other provisions of 
Title I of the Indian Self-Determination 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 517. Regulations

    This section gives the Secretary limited authority to 
promulgate regulations implementing Title V.
    (a) In General. The Secretary is required to initiate 
procedures to negotiate and promulgate regulations necessary to 
carry out Title V within 90 days of enactment of Title V. 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 107(a) 
of the Indian Self-Determination Act, which this section is 
modeled after.
    (b) Committee. This provision requires that a negotiated 
rulemaking committee made up of federal and tribal government 
members be formed in accordance with the Negotiated Rulemaking 
Act. 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.
    (c) Adaptation of Procedures. 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.
    (d) Effect. The effect of Title V shall not be limited if 
regulations are not published.
    (e) Effect of Circulars, Policies, Manuals, Guidances and 
Rules. Unless an Indian tribe agrees otherwise in a Compact or 
funding agreement, no agency circulars, policies, manuals, 
guidances program regulations or rules adopted by the IHS apply 
to the tribe.

Section 518. 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 clearand convincing evidence the validity of the 
grounds for the decision made and that the decision is fully consistent 
with provisions an policies of Title V.

Section 519. Authorization of appropriations

    This section authorizes Congress to appropriate such funds 
as are necessary to carry out Title V.
    The Committee is aware of and concerned with the many 
lawsuits that have been filed against the United States for 
failure to pay full contract support costs to tribal 
contractors under the Act. Amounts appropriated in recent years 
for contract support have failed to keep pace with the demand 
as tribes assume greater responsibility for health care 
services. The result has been the filing of several lawsuits 
with significant liability for the United States.
    At the same time, the Committee is concerned with the 
moratorium that has been placed on any new or expanded 
contracts or compacts--effectively frustrating the purpose of 
the Act and stopping Indian self determination in its tracks. 
Because of these factors, the amendment in the nature of a 
substitute contained a provision that lifts the moratorium for 
new or expanded contracts and compacts, but conditions the 
Secretary's ability to enter such agreements on two 
eventualities: (1) the availability of sufficient 
appropriations for such new agreements; and (2) a determination 
by the IHS that the level of contract support cost funding for 
existing contractors will not be diminished as a result of any 
new or expanded contract or compact.

Section 601. Demonstration project feasibility

    This provision requires an 18 month study to determine the 
feasibility of creating a Tribal Self-Governance Demonstration 
Project for other agencies, programs and services in the 
Department of Health and Human Services.
    (a) Study. This subsection authorizes the feasibility 
study.
    (b) Considerations. This subsection requires the Secretary 
to consider (1) the effects of a Demonstration Project on 
specific programs and beneficiaries, (2) statutory, regulatory 
or other impediments, (3) strategies for implementing the 
Demonstration Project, (4) associated costs or savings, (5) 
methods to assure Demonstration Project quality and 
accountability, and (6) such other issues that may be raised 
during the consultation process.
    Report. This subsection provides that the Secretary is to 
submit a report to Congress on the results of the study, which 
programs and agencies are feasible to be included in a 
Demonstration Project, which programs would not require 
statutory changes or regulatory waivers, a list of legislative 
recommendations for programs that are feasible but which would 
require statutory changes, and any separate views of Indian 
tribes or other entities involved in the consultation process.
    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 
within 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 the 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.

Section 602. Consultation

    (a) Study Protocol. This provision requires the Secretary 
to consult with Indian tribes to determine a protocol for 
conducting the study. The protocol shall require that the 
government-to-government relationship between the United States 
and the Indian tribes forms the basis for the study, that 
consultations are jointly conducted by the tribes and the 
Secretary, and that the consultation process allows for input 
from Indian tribes and other entities who wish to comment.
    (b) Conducting Study. This provision requires that when the 
Secretary conducts the study, the Secretary is to consult with 
Indian tribes, states, counties, municipalities, program 
beneficiaries, and interested public interest groups.

Section 603. Definitions

    (a) This subsection is intended to incorporate into Title 
VI the definitions used in Title V.
    (b) This subsection defines ``agency'' to mean any agency 
in the Department of Health and Human Services other than the 
Indian Health Service.

Section 604. Authorization of appropriations

    This section authorizes the appropriation of such sums as 
necessary for fiscal years 2000 and 2001 in order to carry out 
Title VI.

Section 5. Amendments clarifying civil proceedings.

    (a) This provision amends section 102(e)(1) of the Act to 
clarify that the Secretary has the burden of proof in any civil 
action pursuant to section 110(a).
    (b) The provision provides that the amendment to sections 
102(e) (1) set out in subsection (a) shall apply to any 
proceeding commenced after October 25, 1994.

Section 6. Speedy acquisition of goods and services

    This section requires the Secretary to enter into 
agreements for the acquisition of goods and services for 
tribes, including pharmaceuticals at the best price and in as 
fast a manner as is possible, similar to those obtained by 
agreement by the Veterans Administration.

Section 7. Patient records

    This section provides that Indian patient records may be 
deemed to be federal records under the Federal Records Acts in 
order to allow tribes to store patient records in the Federal 
Records Center.

Section 8. Repeals

    This section repeals Title III of the Indian Self-
Determination and Education Assistance Act which authorizes the 
Demonstration Project replaced by this Act.

Section 9. Savings provision

    This section provides that funds already appropriated for 
Title III of the Indian Self-Determination and Education 
Assistance Act shall remain available for use under the new 
Title V.

Section 10. Effective date

    This section provides that the Act shall take effect on the 
date of enactment.

                  Congressional Budget Office Estimate

    The cost estimate for S. 979 as calculated by the 
Congressional Budget Office is set forth below:

                                     U.S. Congress,
                               Congressional Budget Office,
                                  Washington, DC, November 9, 1999.
Hon. Ben Nighthorse Campbell,
Chairman, Committee on Indian Affairs,
U.S. Senate,
Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for S. 979, the Tribal 
Self-Governance Amendments of 1999.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Dorothy 
Rosenbaum.
            Sincerely,
                                          Barry B. Anderson
                                    (For Dan L. Crippen, Director).
    Enclosure.

S. 979--Tribal Self-Governance Amendments of 1999

    CBO estimates that implementing S. 979 would cost less than 
$500,000 in each of fiscal years 2000 through 2004, assuming 
appropriation of the necessary funds. 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 new private-sector mandates as defined in 
the Unfunded Mandates Reform Act and would impose no costs on 
state, local, or tribal governments.
    S. 979 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 a 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 those governing the demonstration 
program, CBO estimates that establishing a permanent program 
would have no federal budgetary impact during fiscal years 2000 
through 2004. Under the existing demonstration program, the IHS 
may select 30 new tribes each year to participate. S. 979 would 
raise that number to 50. Because in recent years fewer than 10 
new tribes each year have become eligible to participate, CBO 
expects that the change in law would have no effect on 
participation.
    S. 979 would authorize appropriations for fiscal years 2000 
and 2001 for the IHS to conduct a study and report to the 
Congress on the feasibility of a demonstration project that 
would expand self-governance compacts to include programs 
operated by other agencies of the Department of Health and 
Human Services (HHS). CBO estimates that this study would cost 
less than $250,000. In addition, the bill would require the 
Secretary of HHS to submit an annual report on the 
implementation of the Indian Self-Determination and Education 
Assistance Act, with an emphasis on contract support costs. 
Because the Secretary already prepares this report each year, 
CBO estimates that the requirement would not result in 
additional costs.
    S. 979 would allow Indian tribes to store their patient 
records at Federal Records Centers. CBO expects that very few 
tribes would take advantage of this option and that increased 
costs to the Federal Records Centers would be less than 
$500,000 in each of fiscal years 2000 through 2004.
    Finally, S. 979 would give Indian tribes carrying out self-
governance contracts the same right as the United States under 
the Medical Care Recovery Act (42 U.S.C. 2651) to recover from 
liable third parties the reasonable value of care the tribe 
provided. The bill also specifies that amounts recovered under 
that authority would be retained by the tribe (an authority 
that exists in current law under section 207(a) of the Indian 
Health Care Improvement Act). CBO assumes that any additional 
amounts the tribes recover and the related spending of these 
amounts would not be considered part of the federal budget.
    The CBO staff contact is Dorothy Rosenbaum. This estimate 
was approved by Robert A. Sunshine, Assistant Director for 
Budget Analysis.

                      Regulatory Impact Statement

    Paragraph 11(b) of rule XXVI of the Standing rules of the 
Senate requires that each report accompanying a bill evaluate 
the regulatory paperwork impact that would be incurred in 
implementing the legislation. The Committee has concluded that 
enactment of S. 979 will create only de minimis regulatory or 
paper work burdens.

                        Executive Communications

    At the hearing on S. 979 on July 19, 1999, Mr. Michael 
Lincoln, Deputy Director of the Indian Health Service (IHS) 
appeared and testified before the Committee in support of S. 
979. The statement of Mr. Lincoln follows:

                 Statement of the Indian Health Service

    Mr. Chairman and Members of the Committee: Good morning. I 
am Michael E. Lincoln, Deputy Director, Indian Health Service 
(IHS). Accompanying me today is Paula K. Williams, Director, 
Office of Tribal Self-Governance, and Douglas Black, Director, 
Office of Tribal Programs. We are pleased to be here today to 
discuss S. 979, the ``Tribal Self-Governance Amendments of 
1999.''
    The IHS goal is to raise the health status of American 
Indians and Alaska Natives (AI/ANs) to the highest possible 
level. The mission is to provide a comprehensive health 
services delivery system for AI/ANs with opportunity for 
maximum Tribal involvement in developing and managing programs 
to meet their health needs. The provision of Federal health 
services to American Indians and Alaska Natives is based upon a 
special government-to-government relationship between Indian 
tribes and the United States, which has been reaffirmed 
throughout the history of this Nation by all three branches of 
this Nation's government. In 1994, the President issued an 
Executive Memorandum directing all Federal Departments and 
Agencies to implement policies and procedures for consulting 
with Indian Tribes on matters that affect Indian people.
    The IHS Self-Governance Demonstration Project (SGDP) was 
authorized in October 1992 pursuant to Public Law 102-573, the 
Indian Health Amendments of 1992. In May 1993, IHS began its 
first compact negotiations with tribes under the demonstration 
authority. Since that time, the Agency has entered into 42 
Self-Governance (SG) Compacts and 59 Annual Funding Agreements 
(AFA) through Fiscal Year (FY) 1998. These compacts transfer 
approximately $549 million to 216 tribes in Alaska and 43 
tribes in the lower 48 states participating in the SGDP. These 
negotiated agreements transfer the funding associated with 
programs, functions, services and activities assumed by the 
tribes, from Area and Headquarters budgets to those tribes.
    The 259 tribes participating in this project constitute 
46.5% of the federally recognized tribes and they collectively 
serve over 32% of the total IHS users. This Project has 
provided Tribal Governments the needed local control of their 
health programs and allows Tribal leadership to implement 
aggressive and successful health promotion and disease 
prevention initiatives which are truly responsive to the health 
needs of their service population. Local control has also 
provided more ownership by local leadership which has resulted 
in significant improvements in the quality and quantity of 
health services. Tribes have been able to increase the number 
of physicians and clinic sites to make health care more 
accessible to the people. Some have implemented special 
services to address the unique needs of the elderly. The 
Mississippi Band of Choctaw Indians Health Center's Radiology 
Department has been awarded the Nashville Area Radiology 
Technologist of the Year Award for two consecutive years. In 
addition, their Health Center's Women's Wellness Center and 
Choctaw Community Integrated Service System has been recognized 
by the Department of Health and Human Services, Maternal and 
Children's Health Bureau, as a ``model'' for State Health 
Departments nationwide. And, most impressive, tribally operated 
health facilities are scoring higher in their accreditation 
reviews than they did under Agency administration. For example, 
the Chippewa Cree Health Center and laboratory each scored a 
perfect 100 points and their Chemical Dependency Center scored 
98 points in the accreditation review conducted by the Joint 
Commission on Accreditation of Health Care Organizations.
    The Self-Governance Demonstration Project has been a 
success. We do need to continue to assess the impact of 
continued transfers of funds upon the Agency's ability to carry 
out its residual functions and to continue providing direct 
health services to tribes who choose not to contract or 
compact. The Agency is taking steps to downsize and reorganize 
in order to free up resources for transfer to tribes, but these 
efforts could be out paced by increased compacting and certain 
provisions of this bill.
    The challenge before the Tribes, Indian health programs, 
the IHS and the Congress is to retain the applied expertise of 
the Indian Health Service in core public health functions that 
are critical to elevating the health status of American 
Indians/Alaska Natives and reducing the disparity in the health 
status of AI/ANs compared with the general population. We, who 
are involved in Indian Health care, must deal with a changing 
external environment with new demands, new needs, and new 
priorities. The Indian Health Service supports the spirit and 
intent of the Tribal Self-Governance Amendments. S. 979 is 
consistent with our goal of providing maximum participation of 
tribes in the development and management of Indian health 
programs.
    In the 105th Congress, the Department closely worked with 
Congress and the tribes on H.R. 1833, the predecessor 
legislation to S. 979 and H.R. 1167. Agreement was reached on 
many points, as was reflected in the version of H.R. 1833 that 
passed the House on October 5, 1998. The Department testified 
favorably on H.R. 1833 before this Committee after it passed 
the House and, with a few exceptions, supported the bill. We 
would like to highlight for you our major concerns with certain 
provisions contained in S. 979. In fact, some were concerns we 
raised with H.R. 1833 last year and again appear in S. 979. 
While these represent our significant concerns, we acknowledge 
that there has been a great deal of hard work and a spirit of 
compromise on the part of all parties that brought us this far. 
In this same manner, we believe that we will continue to move 
forward.
Proposed sec. 512(b)--Facilitation: regulation waiver
    S. 979 appears to have inadvertently dropped the language 
``promulgated under this act,'' from Section 512(b)(1), the 
effect of which is that the applicability of the provision 
becomes overly broad applying to regulations promulgated by HHS 
as well as other Departments thereby creating the potential for 
unforeseen consequences outside of HHS' control. As a result of 
this omission, we have serious concerns with Section 512(b)(1), 
particularly in the context of language found in the next 
paragraph, (b) (2), which specifies that the Secretary shall 
only deny a waiver if it is otherwise prohibited by Federal 
law. Taken together, these two provisions are a significant 
concern.
Title VI, Section 5--Amendments clarifying civil proceedings
    Last year, H.R. 1833 contained a de novo standard of 
judicial review which would have retroactively overruled 
judicial determinations applying the Administrative Procedures 
Act (APA) standard of review in ISDA cases. After negotiations 
with Tribal representatives, the House Committee on Resources 
and Administration Officials, the de novo provision was 
removed. We appreciate that this provision has remained out of 
the current House and Senate bills. However, we continue to 
have concerns about the remaining section concerning judicial 
proceedings. As this provision is currently drafted, its impact 
extends well beyond the scope of self-governance affecting any 
litigation that is currently on-going between tribes and HHS or 
the Department of the Interior. It would change the burden of 
proof in favor of the tribes in the middle of such litigation. 
This change would be in addition to the change effected by 
Section 507(d) of the bill, which already increases the 
Secretary's burden of proof to ``clear and convincing 
evidence'' prospectively for litigation involving self-
governance funding agreements. It is important that the 
legislation remain litigation neutral. The entire Section 6 in 
Title VI contained in S. 979 should be removed.
Title V, Section 516--Application of other sections of the Act
    The proposed section 516 of the new Title V seems to make 
an inadvertent drafting error which makes it unclear whether 
funding is subject to the availability of appropriations or is 
an entitlement irrespective of the funding level of 
appropriations. We believe that this issue is easily resolved 
and we will work with Committee staff to address this error. We 
also will continue to work with the tribes and the Authorizing 
and Appropriations Committee to address the ever-growing 
contract support funding within the annual appropriations. In 
doing so, we will work collectively to ensure that funding for 
contract support costs will not adversely affect funding for 
other IHS programs, including services delivered to non-
contracting and non-compacting tribes.
Title V, Section 505--Funding agreements
    Section 505 establishes the scope of IHS programs, 
services, functions and activities (PFSAs) that are subject to 
self-governance funding agreements. Last year, Title VI was 
added to H.R. 1833 to address the Administration's concerns 
about moving too quickly to include non-IHS PFSAs without first 
determining whether other Department of Health and Human 
Services (HHS) programs should be brought within the scope of 
this self-governance legislation. Hence, Title VI was added to 
H.R. 1833, and also is included in both S. 979 and H.R. 1167 to 
authorize a study to asses the feasibility of expanding the 
scope of this legislation to other HHS programs. We believe 
that the two provisions of Section 505, (F) and (G), would 
expand the scope of the PFSAs subject to funding agreements 
under this legislation to programs outside the IHS, even while 
the Title VI study is underway. We believe that before any 
potential expansion of the scope of self-governance funding 
agreements is authorized, the study authorized in Title VI 
should be completed and the results analyzed. We will work with 
you to make sure that different provisions of the bill work 
together.
    In general, we will be happy to work with the Committee to 
address any of the concerns we have raised as well as any 
others that may arise. We note that other Feral Departments may 
have concerns about S. 979. For example, we have been advised 
by the Department of the Interior that it has serious concerns 
regarding the definition of the term ``inherent Federal 
functions'', and recommends that the term not be defined in the 
bill. It is our understanding that the Department of the 
Interior plans to send a letter to the Committee setting forth 
its concerns in greater detail.
    I want to express my appreciation to the Title V Tribal 
Workgroup and to commend their cooperative spirit in working 
with the IHS and other components of the Department in the 
evolution of S. 979. The version of S. 979 that we are 
discussing today is the result of many in-depth discussions and 
a great deal of analysis.
    We are pleased to note that the IHS and tribal 
representatives have successfully negotiated provisions in the 
bill for tribal assumption of construction projects. The 
negotiated provisions of the bill authorize a specific process 
for tribes to elect to carry out construction of health and 
sanitation facilities as a self-governance activity.
    Competitive grant programs such as the Indian Health 
Professions Scholarships and the Tribal Management Grant 
Program have been established for specific public purposes. 
Likewise, the Department and IHS have agency-wide initiatives 
that address national concerns and are carried out under 
general grant authorities from general agency funds. All 
competitive grant programs, including those that support 
national needs and benefit all Tribes, should be exempted from 
Tribal shares. We believe that this bill sufficiently addresses 
our concerns in this area.
    In conclusion, we support making self-governance authority 
permanent within the IHS so long as these changes continue to 
allow the Department and the IHS to perform its inherent 
functions and to maintain its trust responsibility to all 
Tribes. We also support exploring the expansion of self-
governance demonstration authority to non-IHS programs of the 
Department, but only after consultation with all stakeholders 
and more specific guidance from Congress.
    I commend you for your commitment to rights of the Nation's 
Indian Tribes and to providing them opportunities to administer 
those federal programs affecting the health and welfare of 
their people. The Indian Health Service and the Department of 
Health and Human Services stand ready to work collaboratively 
with this Committee, the Congress, and the Tribes to ensure 
that such efforts are successful.
    Mr. Chairman, this concludes my statement. We will be 
pleased to answer any questions that you may have. Thank you.


                        Changes in Existing Law

    In compliance with subsection 12 of rule XXVI of the 
Standing Rules of the Senate, changes to existing law made by 
the bill are required to be set out in the accompanying 
Committee report. The Committee finds that enactment of S. 979 
will result in the following changes in existing law. The 
matter to be deleted is indicated in brackets [] and bold face 
type. The matter to be inserted is indicated in italic.
    1. Section 102(e)(1) of the Indian Self-Determination and 
Education Assistance Act (25 U.S.C. 450f(e)(1)) is amended as 
follows:
    (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)  of this section, the Secretary 
shall have the burden of proof to establish by clearly 
demonstrating the validity of the grounds for declining the 
contract proposal (or portion thereof).
    2. Section 105 of the Indian Self-Determination and 
Education Assistance Act (25 U.S.C. 450j) is amended as 
follows:
    (k) For purposes of section 201(a) of the Federal Property 
and Administrative Services Act of 1949 (40 U.S.C. 481(a)) 
(relating to Federal sources of supply, including lodging 
providers, airlines and other transportation providers), a 
tribal organization carrying out a contract, grant, or 
cooperative agreement under this subchapter shall be [deemed an 
executive agency] deemed an executive agency and part of the 
Indian Health Service when carrying out such contract, grant, 
or agreement and the employees of the tribal organization shall 
be eligible to have access to such sources of supply on the 
same basis as employees of an executive agency have such 
access. At the request of an Indian tribe, the Secretary shall 
enter into an agreement for the acquisition, on behalf of the 
Indian tribe, of any goods, services, or supplies available to 
the Secretary from the General Services Administration or other 
Federal agencies that are not directly available to the Indian 
tribe under this section or any other Federal law, including 
acquisitions from prime vendors. All such acquisitions shall be 
undertaken through the most efficient and speedy means 
practicable, including electronic ordering arrangements.

           *       *       *       *       *       *       *

    (o) At the option of a tribe or tribal organization, 
patient records may be deemed to be Federal records under the 
Federal Records Act of 1950 for the limited purposes of making 
such records eligible for storage by Federal Records Centers to 
the same extent and in the same manner as other Department of 
Health and Human Services patient records. Patient records that 
are deemed to be Federal records under the Federal Records Act 
of 1950 pursuant to this subsection shall not be considered 
Federal records for the purposes of chapter 5 of title 5, 
United States Code.

           *       *       *       *       *       *       *

    (p)(1) All funds recovered under 42 U.S.C. 2651 associated 
with health care provided by a tribally-administered facility 
or program of the Indian Health Service, whether provided 
before or after the facility's or program's transfer to tribal 
administration, shall be credited to the account of the 
facility or program providing the service and shall be 
available without fiscal year limitation.
    (2) For purposes of 42 U.S.C. 2651, a tribe or tribal 
organization carrying out a contract, compact, grant or 
cooperative agreement pursuant to this Act shall be deemed to 
be the United States and shall have the same right to recover 
as the United States for the reasonable value of past or future 
care and treatment provided under such contract, compact, 
grant, or cooperative agreement. Nothing herein shall be 
construed to affect a tribe's or tribal organization's right to 
recover under any other applicable federal, state or tribal 
law.
    3. Section 106 of the Indian Self-Determination and 
Education Assistance Act (25 U.S.C. Sec. 450j-1) is amended:
    (c) The Secretary shall provide an annual report in writing 
on or before May 15 of each year to the Congress on the 
implementation of this Act. Such report shall include--
          (1) an accounting of the total amounts of funds 
        provided for each program and budget activity for 
        direct program costs and contract support costs of 
        tribal organizations under self-determination;
          (2) an accounting of any deficiency of funds needed 
        to provide required contract support costs to all 
        contractors for the current fiscal year;
          (3) the indirect costs rate and type of rate for each 
        tribal organization negotiated with the appropriate 
        Secretary;
          (4) the direct cost base and type of base from which 
        the indirect cost rate is determined for each tribal 
        organization;
          (5) the indirect cost pool amounts and the types of 
        costs included in the indirect costs pools; and
          (6) an accounting of any deficiency of funds needed 
        to maintain the preexisting level of services to any 
        tribes affected by contracting activities under this 
        Act, and a statement of the amount of funds needed for 
        transitional purposes to enable contractors to convert 
        from a Federal fiscal year accounting cycle, as 
        authorized by section 105(d).

           *       *       *       *       *       *       *

    (d)[(c)] Treatment in shortfalls in indirect cost 
recoveries.

           *       *       *       *       *       *       *

    (e)[(d)] Liability for indebtedness incurred before fiscal 
year 1992.

           *       *       *       *       *       *       *

    (f)[(e)] Limitation on remedies relating to cost 
disallowances.

           *       *       *       *       *       *       *

    (g)[(f)] Addition to contract of full amount contractor 
entitled.

           *       *       *       *       *       *       *

    (h)[(g)] Indirect costs for contracts for construction 
projects.

           *       *       *       *       *       *       *

    (i)[(h)] Indian Health Service and Bureau of Indian Affairs 
budget consultations.

           *       *       *       *       *       *       *

    (j)[(i)] Use of funds for matching or cost participation 
requirements.

           *       *       *       *       *       *       *

    (k)[(j)] Allowable uses of funds without approval of 
Secretary.

           *       *       *       *       *       *       *

    (l)[(k)] Suspension, withholding, or delay in payment of 
funds.

           *       *       *       *       *       *       *

    (m)[(l)] Use of program income earned.

           *       *       *       *       *       *       *

    (n)[(m)] Reduction of administrative and other 
responsibilities of Secretary; use of savings.

           *       *       *       *       *       *       *

    (o)[(n)] Rebudgeting by tribal organization.
    4. Title III of the Indian Self-Determination and Education 
Assistance Act (25 U.S.C. 450f note) is hereby repealed.

        [TITLE III--TRIBAL SELF-GOVERNANCE DEMONSTRATION 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 (Oct. 5, 
1988), 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 (Pub. L. 100-202) 
        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 (sic) 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) (25 U.S.C. 452 et 
        seq.), as amended, and the Act of November 2, 1921 (42 
        Stat. 208) (25 U.S.C. 13).
          (2) subject to the terms of the written agreement 
        authorized by this title, shall authorize 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) (25 U.S.C. 1801 et seq.), 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) (25 U.S.C. 2001 et seq.), 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 (25 U.S.C. 
        450f);
          (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 (Pub. L. 93-
        638, see Short Title note under section 450 of this 
        title), 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 
        (25 U.S.C. 450j(e)); 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 (now Committee on 
        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 (25 U.S.C. 
        450f), 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 subsectoin (a), the 
Secretaries shall provide funding to such tribe to implement 
the agreement.
    (d) For the purpose of section 110 of this Act (25 U.S.C. 
450m-1) the term ``contract'' shall also include agreements 
authorized by this title; except that for the term of the 
authorized agreements under this title; the provisionsof 
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 (Oct. 5, 
1988) 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 (25 U.S.C. 450f) or any other 
applicable Federal law and the provisions of section 110 of 
this Act (25 U.S.C. 450m-1) 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 the Act (as in effect 
before the date of enactment of this section (Dec. 4, 1991)), 
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 (Dec. 4, 1991).
    (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 (Dec. 
4, 1991).
    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 to negotiate and implement a 
Compact of Self-Governance and Annual Funding Agreement with 
such tribe.]
    5. The Indian Self-Determination and Education Assistance 
Act (25 U.S.C. 450 et seq.) is amended by adding at the end:

                    TITLE V--TRIBAL SELF-GOVERNANCE

SEC. 501. DEFINITIONS.

    (a) In General.--In this title:
      (1) Construction project.--The term ``construction 
project''--
                  (A) means an organized noncontinuous 
                undertaking to complete a specific set of 
                predetermined objectives for the planning, 
                environmental determination, design, 
                construction, repair, improvement, or expansion 
                of buildings or facilities, as described in a 
                construction project agreement; and
                  (B) does not include construction program 
                administration and activities described in 
                paragraphs (1) through (3) of section 4(m), 
                that may otherwise be included in a funding 
                agreement under this title.
          (2) Construction project agreement.--The term 
        ``construction project agreement'' means a negotiated 
        agreement between the Secretary and an Indian tribe, 
        that at a minimum--
                  (A) establishes project phase start and 
                completion dates;
                  (B) defines a specific scope of work and 
                standards by which it will be accomplished;
                  (C) identifies the responsibilities of the 
                Indian tribe and the Secretary;
                  (D) addresses environmental considerations;
                  (E) identifies the owner and operations and 
                maintenance entity of the proposed work;
                  (F) provides a budget;
                  (G) provides a payment process; and
                  (H) establishes the duration of the agreement 
                based on the time necessary to complete the 
                specified scope of work, which may be 1 or more 
                years.
          (3) Gross mismanagement.--The term ``gross 
        mismanagement'' means a significant, clear, and 
        convincing violation of a compact, funding agreement, 
        or regulatory, or statutory requirements applicable to 
        Federal funds transferred to an Indian tribe by a 
        compact or funding agreement that results in a 
        significant reduction of funds available for the 
        programs, services, functions, or activities (or 
        portions thereof) assumed by an Indian tribe
          (4) Inherent federal functions.--The term ``inherent 
        Federal functions' means those Federal functions which 
        cannot legally be delegated to Indian tribes.
          (5) Inter-tribal consortium.--The term ``inter-tribal 
        consortium'' means a coalition of 2 or more separate 
        Indian tribes that join together for the purpose of 
        participating in self-governance, including tribal 
        organizations.
          (6) Secretary.--The term ``Secretary'' means the 
        Secretary of Health and Human Services.
          (7) Self-Governance.--The term ``self-governance'' 
        means the program of self-governance established under 
        section 502.
          (8) Tribal share.--The term ``tribal share'' 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.
      (b) Indian tribe.--In any case in which 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. 502. ESTABLISHMENT.

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

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 general.--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) Treatment of certain indian tribes.--
                  (A) In general.--An Indian tribe that has 
                withdraw 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) Effect of withdrawal.--If an Indian tribe 
                has withdrawn from participation in an inter-
                tribal consortium or tribal organization, that 
                Indian tribe shall be entitled to its tribal 
                share of funds supporting those programs, 
                services, functions, and activities (or 
                portions thereof) that the Indian tribe will be 
                carrying out under the compact and funding 
                agreement of the Indian tribe.
                  (C) Participation in self-governance.--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.--
          (1) In general.--The qualified applicant pool for 
        self-governance shall consist of each Indian tribe 
        that--
                  (A) successfully completes the planning phase 
                described in subsection (d);
                  (b) has requested participation in self-
                governance by resolution or other official 
                action by the governing body of each Indian 
                tribe to be served; and
                  (C) has demonstrated, for 3 fiscal years, 
                financial stability and financial management 
                capability.
          (2) Criteria for determining financial stability and 
        financial management capacity.--For purposes of this 
        subsection, evidence that, during the 3-year period 
        referred to in paragraph (1)(C), an 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.
    (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 paragraphs (1)(B) 
and (C) of subsection (c) shall be eligible for grants--
          (1) to plan for participating 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 Demonstration Project under title 
III on the date of enactment of this title shall have the 
option at any time after the date of enactment of this title 
to--
          (1) retain the Tribal Self-Governance Demonstration 
        Project compact of that Indian tribe (in whole or in 
        part) to the extent that the provisions of that compact 
        are not directly contrary to any express provision of 
        this title; or
          (2) instead of retaining a compact or portion thereof 
        under paragraph (1), negotiate a new compact in a 
        manner consistent with the requirements of 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.--
          (1) In General.--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, including tribal shares of discretionary 
        Indian Health Service competitive grants (excluding 
        congressionally earmarked competitive grants) for all 
        programs, services, functions, and activities (or 
        portions thereof), that are carried out for the benefit 
        of Indians because of their status as Indians 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.
          (2) Inclusion of Certain Programs, Services, 
        Functions, and Activities.--Such programs, services, 
        functions, or activities (or portions thereof) include 
        all programs, services, functions, activities (or 
        portions thereof), including grants (which may be added 
        to a funding agreement after award of such grants), 
        with respect to which 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) and all 
        local, field, service unit, area, regional, and central 
        headquarters or national office functions administered 
        under the authority of--
                  (A) the Act of November 2, 1921 (42 Stat. 
                208, chapter 115; 25 U.S.C. 13);
                  (B) the Act of April 16, 1934 (48 Stat. 596, 
                chapter 147; 25 U.S.C. 452 et seq.);
                  (C) the Act of August 5, 1954 (68 Stat. 674, 
                chapter 658);
                  (D) the Indian Health Care Improvement Act 
                (25 U.S.C. 1601 et seq.);
                  (E) The Indian Alcohol and Substance Abuse 
                Prevention and Treatment Act of 1986 (25 U.S.C. 
                2401 et seq.);
                  (F) any other Act of Congress authorizing any 
                agency of the Department of Health and Human 
                Services to administer, carry out, or provide 
                financial assistance to such a program, 
                service, function or activity (or portions 
                thereof) described in this section that is 
                carried out for the benefit of Indians because 
                of their status as Indians; or
                  (G) any other Act of Congress authorizing 
                such a program, service, function, or activity 
                (or portions thereof) carried out for 
                the benefit of Indians under which appropriations 
                are made available to any agency other than an agency 
                within the Department of Health and Human Services, 
                in any case in which the Secretary administers that 
                program, service, function, or activity (or portion 
                thereof).
    (c) Inclusion in Compact or Funding Agreement.--It shall 
not be a requirement that an Indian tribe or Indians 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 under 
this title shall set forth--
          (1) terms that generally identify the programs, 
        services, functions, and activities (or portions 
        thereof) to be performed or administered; and
          (2) for the items identified in paragraph (1)--
                  (A) the general budget category assigned;
                  (B) the funds to be provided, including those 
                funds to be provided on a recurring basis;
                  (C) the time and method of transfer of the 
                funds;
                  (D) the responsibilities of the Secretary; 
                and
                  (E) any other provision with respect 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 1 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 Demonstration 
Project established under title III on the date of enactment of 
this title shall have the option at any time thereafter to--
          (1) retain the Tribal Self-Governance Demonstration 
        Project funding agreement of that Indian tribe (in 
        whole or in part) to the extent that the provisions of 
        that funding agreement are not directly contrary to any 
        express provision of this title; or
          (2) instead of retaining a funding agreement or 
        portion thereof under paragraph (1), negotiate a new 
        funding agreement in a manner consistent with the 
        requirements of 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)) 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. 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 the 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 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 under Federal 
law.
    (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 timeframespecified by the parties in the compact of 
funding agreement. In the absence of such a specification, such 
retrocession shall become effective on--
          (1) the earlier of--
                  (A) 1 year after 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 upon by the 
        Secretary and the Indian tribe.
    (g) Withdrawal.--
          (1) Process.--
                  (A) In general.--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 of funding agreement.
                  (B) Effective date.--The withdrawal referred 
                to in subparagraph (A) shall become effective 
                within the timeframe specified in the 
                resolution which authorizes transfer to the 
                participating tribal organization or inter-
                tribal consortium. In the absence of a specific 
                timeframe set forth in the resolution, such 
                withdrawal shall become effective on--
                          (i) the earlier of--
                                  (I) 1 year after the date of 
                                submission of such request; or
                                  (II) the date on which the 
                                funding agreement expires; or
                          (ii) 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--
                  (A) 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) that the Indian tribe 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
                  (B) the funds referred to in subparagraph (A) 
                shall be transferred from the funding agreement 
                of the inter-tribal consortium or tribal 
                organization, on the condition that the 
                provisions of sections 102 and 105(i), as 
                appropriate, shall apply to that 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 of 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. 507. 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 
                517.
          (2) Reassumption.--
                  (A) In general.--Compacts 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) and associated funding if 
                there is a specific funding relative to that 
                program, service, function, or activity (or 
                portion thereof) of--
                          (i) 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; or
                          (ii) gross mismanagement with respect 
                        to funds transferred to a tribe by a 
                        compact or funding agreement, as 
                        determined by the Secretary in 
                        consultation with the Inspector 
                        General, as appropriate.
                  (B) Prohibition.--The Secretary shall not 
                reassume operation of a program, service, 
                function, or activity (or portions thereof) 
                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 
                        or gross mismanagement.
                  (C) Exception.--
                          (i) In general.--Notwithstanding 
                        subparagraph (B), the Secretary may, 
                        upon written notification to the Indian 
                        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.
                          (ii) Reassumption.--If the Secretary 
                        reassumes operation of a program, 
                        service, function, or activity (or 
                        portion thereof) under this 
                        subparagraph, the Secretary shall 
                        provide the Indian tribe with a hearing 
                        on the record not later than 10 days 
                        after such reassumption.
                  (D) Hearings.--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. Not more than 45 days after such submission, or 
within a longer time agreed upon by the Indian tribe, the 
Secretary shall 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.--
          (1) In general.--If the Secretary rejects an offer 
        made under subsection (b)(or 1 or more provisions or 
        funding levels in such offer), the Secretary shall 
        provide--
                  (A) 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--
                          (i) the amount of funds proposed in 
                        the final offer exceeds the applicable 
                        funding level to which the Indian tribe 
                        is entitled under this title;
                          (ii) 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;
                          (iii) the Indian tribe cannot carry 
                        out the program, function, service, or 
                        activity (or portion thereof) in a 
                        manner that would not result in 
                        significant danger or risk to the 
                        public health; or
                          (iv) the Indian tribe is not eligible 
                        to participate in self-governance under 
                        section 503;
                  (B) technical assistance to overcome the 
                objections stated in the notification required 
                by subparagraph (A);
                  (C) 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, except 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
                  (D) the Indian tribe with the option of 
                entering into the severable portions of a final 
                proposed compact of funding agreement, or 
                provision thereof, (including a 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.
          (2) Effect of exercising certain option.--If an 
        Indian tribe exercises the option specified in 
        paragraph (1)(D), that Indian tribe shall retain the 
        right to appeal the Secretary's rejection under this 
        section, and subparagraphs (A), (B), and (C) of that 
        paragraph 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, in a manner 
consistent with the purposes specified in section 3 of the 
Tribal Self-Governance Amendments of 1999.
    (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 508(c), the Secretary 
shall make such savings available to the Indian tribes, inter-
tribalconsortia, 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 
waving, modifying, or diminishing in any way the trust 
responsibility of the United States with respect to Indian 
tribes and individual Indians that exists under treaties, 
Executive orders, other laws, 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. 508. 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 (c), 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 semiannual 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) Multiyear Funding.--The Secretary is authorized and may 
employ, upon tribal request, multiyear funding agreements. 
References in this title to funding agreements shall include 
such multiyear funding agreements.
    (c) 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 section 106(a)(2), (3), (5), and (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.
    (d) Prohibitions.--
          (1) In general.--Except as provided in paragraph (2), 
        the Secretary is expressly prohibited from--
                  (A) failing or refusing to transfer to an 
                Indian tribe is full share of any central, 
                headquarters, regional, area, or service unit 
                office or other funds due under this Act, 
                except as required by Federal law;
                  (B) withholding portions of such funds for 
                transfer over a period of years; and
                  (C) reducing the amount of funds required 
                herein--
                          (i) to make funding available for 
                        self-governance monitoring or 
                        administration by the Secretary;
                          (ii) 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;
                          (iii) 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
                          (iv) to pay for costs of Federal 
                        personnel displaced by self-
                        determination contracts under this Act 
                        or self-governance;
          (2) Exception.--The funds described in paragraph 
        (1)(C) may be increased by the Secretary if necessary 
        to carry out this Act or as provided in section 
        105(c)(2).
    (e) 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 shall acquire and transfer such 
personnel, supplies, or resources to the Indian tribe.
    (f) 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. The reimbursements received from those 
goods and services, along with the funds received from the 
Indian tribe pursuant to this title, may be credited to the 
same orsubsequent appropriation account which provided the 
funding, such amounts to remain available until expended.
    (g) 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.
    (h) 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 title 
shall be managed using the prudent investment standard.
    (i) Carryover of 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 1 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.
    (j) 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. 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 medicare and 
medicaid receipts. 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.
    (k) Limitation of Costs.--All 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. 509. CONSTRUCTION PROJECTS.

    (a) In General.--Indian tribes participating in tribal 
self-governance may carry out construction projects under this 
title if they elect to assume all Federal responsibilities 
under the National Environmental Policy Act of 1969 (42 U.S.C. 
4321 et seq.), the National Historic Preservation Act (16 
U.S.C. 470 et seq.), and related provisions of law that would 
apply if the Secretary were to undertake a construction 
project, by adopting a resolution--
          (1) designating or certifying officer to represent 
        the Indian tribe and to assume the status of a 
        responsible Federal official under such laws; and
          (2) accepting the jurisdiction of the Federal court 
        for the purposes of enforcement of the responsibilities 
        of the responsible Federal official under such 
        environmental laws.
    (b) Negotiations.--Construction project proposals shall be 
negotiated pursuant to the statutory process in section 105(m) 
and resulting construction project agreements shall be 
incorporated into funding agreements as addenda.
    (c) Codes and Standards.--The Indian tribe and the 
Secretary shall agree upon and specify appropriate building 
codes and architectural and engineering standards (including 
health and safety) which shall be in conformity with nationally 
recognized standards for comparable projects.
    (d) Responsibility for Completion.--the Indian tribe shall 
assume responsibility for the successful completion of the 
construction project in accordance with the negotiated 
construction project agreement.
    (e) Funding.--Funding for construction projects carried out 
under this title shall be included in funding agreements as 
annual advance payments, with semiannual payments at the option 
of the Indian tribe. Annual advance and semiannual payment 
amounts shall be determined based on mutually agreeable project 
schedules reflecting work to be accomplished within the advance 
payment period, work accomplished and funds expended in 
previous payment periods, and the total prior payments. The 
Secretary shall include associated project contingency funds 
with each advance payment installment. The Indian tribe shall 
be responsible for the management of the contingency funds 
included in funding agreements.
    (f) Approval.--The Secretary shall have at least 1 
opportunity to approve project planning and design documents 
prepared by the Indian tribe in advance of construction of the 
facilities specified in the scope of work for each negotiated 
construction project agreement or amendment thereof which 
results in a significant change in the original scope of work. 
The Indian tribe shall provide the Secretary with project 
progress and financial reports not less than semiannually. The 
Secretary may conduct onsite project oversight visits 
semiannually or on an alternate schedule agreed to by the 
Secretary and the Indian tribe.
    (g) Wages.--All laborers and mechanics employed by 
contractors and subcontractors in the construction, alteration, 
or repair, including painting or decorating of a building or 
other facilities in connection with construction projects 
undertaken by self-governance Indian tribes under this Act, 
shall be paid wages at not less than those prevailing wages on 
similar construction in the locality as determined by the 
Indian tribe.
    (h) Application of Other Law.--Unless otherwise agreed to 
by the Indian tribe, no provision of the Office of Federal 
Procurement Policy Act, the Federal Acquisition Regulations 
issued pursuant thereto, or any other law or regulation 
pertaining to Federal procurement (including Executive orders) 
shall apply to any construction project conducted under this 
title.

SEC. 510. 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 regulations relating to procurement issued by the 
Secretary), except to the extent that such laws expressly apply 
to Indian tribes.

SEC. 511. 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 (25 U.S.C. 81) and section 16 of the Act of 
June 18, 1934 (48 Stat. 987; chapter 576; 25 U.S.C. 476), shall 
not apply to attorney and other professional contracts entered 
into by Indian tribes participating in self-governance under 
this title.
    (c) References.--All references in this Act to section 1 of 
the Act of June 26, 1936 (49 Stat. 1967; chapter 831) are 
hereby deemed to include the first section of the Act of July 
3, 1952 (66 Stat. 323, chapter 549; 25 U.S.C. 82a).

SEC. 512. 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) In general.--An Indian tribe may submit a written 
        request to waive application of a regulation 
        promulgated under section 517 or the authorities 
        specified in section 505(b) 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) Approval.--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 
Demonstration Project established under title III, as in effect 
before the enactment of the Tribal Self-Governance Amendments 
of 1999, 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 Indian 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 Indian tribe 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 benefitting 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. 513. BUDGET REQUEST.

    (a) In General.--
          (1) In general.--The President shall identify in the 
        annual budget request submitted to 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 appropriated shall be apportioned to the 
        Indian Health Service. Such funds shall be provided to 
        the Office of Tribal Self-Governance which shall be 
        responsible for distribution of all funds provided 
        under section 505.
          (2) Rule of construction.--Nothing in this subsection 
        shall be construed to authorize the Indian Health 
        Service 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, either directly 
by the Secretary of Health and Human Services, under self-
determination contracts, or under compacts and funding 
agreements authorized under this title.

SEC. 514. REPORTS.

    (a) Annual Report.--
          (1) In general.--Not later than January 1 of each 
        year after the date of enactment of the Tribal Self-
        Governance Amendments of 1999, the Secretary shall 
        submit to the Committee on Indian Affairs of the Senate 
        and the Committee on Resources of the House of 
        Representatives a written report regarding the 
        administration of this title.
          (2) Analysis.--The report under paragraph (1) shall 
        include a detailed analysis of the level of need being 
        presently funded or unfunded for each Indian tribe, 
        either directly by the Secretary, under self-
        determination contracts under title I, or under compact 
        the level of need by being presently funded or unfunded 
        for each Indian tribe, either directly by the 
        Secretary, under self-determination contract under 
        title I, or under compacts and funding agreements 
        authorized under this Act. In compiling reports 
        pursuant to this section, the Secretary may not impose 
        any reporting requirements on participating Indian 
        tribes or tribal organizations, not otherwise provided 
        in this Act.
    (b) Contents.--The report under subsection (a) shall--
          (1) be compiled from information contained in funding 
        agreements, annual audit reports, and data of the 
        Secretary regarding the disposition of Federal funds; 
        and
          (2) identify--
                  (A) the relative costs and benefits of self-
                governance;
                  (B) 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;
                  (C) the funds transferred to each self-
                governance Indian tribe and the corresponding 
                reduction in the Federal bureaucracy;
                  (D) the funding formula for individual tribal 
                shares of all headquarters funds, together with 
                the comments of affected Indian tribes or 
                tribal organizations, developed under 
                subsection (c); and
                  (E) amounts expended in the preceding fiscal 
                year to carry out inherent Federal functions, 
                including an identification of those functions 
                by type and location;
          (3) contain a description of the method or methods 
        (or any revisions thereof) 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;
          (4) before being submitted to Congress, be 
        distributed to the Indian tribes for comment (with a 
        comment period of no less than 30 days, beginning on 
        the date of distribution); and
          (5) include the separate views and comments of the 
        Indian tribes or tribal organizations.
    (c) Report on Fund Distribution Method.--Not later than 180 
days after the date of enactment of the Tribal Self-Governance 
Amendments of 1999, the Secretary shall, after consultation 
with Indian tribes, submit a written report to the Committee on 
Resources of the House of Representatives and the Committee on 
Indian Affairs of the Senate which describes the method or 
methods 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.

SEC. 515. 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 exists 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 under this Act 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. 516. APPLICATION OF OTHER SECTIONS OF THE ACT.

    (a) Mandatory Application.--All provisions of sections 
5(b), 6, 7, 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 chapter 171 of title 28, United States 
Code, commonly known as 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. 517. REGULATIONS.

    (a) In General.--
          (1) Promulgation.--Not later than 90 days after the 
        date of enactment of the Tribal Self-Governance 
        Amendments of 1999, 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) Publication of Proposed Regulations.--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 the Tribal Self-
        Governance Amendments of 1999.
          (3) Expiration of authority.--The authority to 
        promulgate regulations under paragraph (1) shall expire 
        21 months after the date of enactment of the Tribal 
        Self-Governance Amendments of 1999.
    (b) Committee.--
          (1) In general.--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 Act.
          (2) Requirements.--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 of Health and 
Human Services shall adopt 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, program regulation or rule adopted by 
the Indian Health Service, except for the eligibility 
provisions of section 105(g) and regulations promulgated under 
section 517.

SEC. 518. 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) that the decision is fully consistent with 
        provisions and policies of this title.

SEC. 519. AUTHORIZATION OF APPROPRIATIONS.

    (a) In General.--There are authorized to be appropriated 
such sums as may be necessary to carry out this title.
    (b) Assumption of New or Expanded Programs.--
          (1) In general.--Notwithstanding any other provision 
        of law, in fiscal year 2000 the Secretary may enter 
        into contracts, compacts or annual funding agreements 
        with an Indian tribe or tribal organization to operate 
        a new or expanded program, service, function or 
        activity of the Indian Health Service pursuant to the 
        Indian Self-Determination and Education Assistance Act, 
        P.L. 93-638, as amended (25 U.S.C. 450 et seq.) only 
        if--
                  (A) and to the extent sufficient contract 
                support costs are appropriated and are 
                specifically earmarked for the assumption of 
                new or expanded programs, functions, services 
                or activities; and
                  (B) the Indian Health Service determines that 
                the percentage of contract support costs 
                provided to existing contractors will not be 
                reduced as a result of the assumption of any 
                new or expanded programs, functions, services 
                or activities under this title.
          (2) Nothing in this section shall be construed to 
        affect the allocation of funds other than contract 
        support cost funds.
    2. The Indian Self-Determination and Education Assistance 
Act (25 U.S.C. 450 et seq.) is amended by adding at the end the 
following:

   TITLE VI--TRIBAL SELF-GOVERNANCE--DEPARTMENT OF HEALTH AND HUMAN 
                                SERVICES

SEC. 601. DEFINITIONS.

    (a) In General.--In this title, the Secretary may apply the 
definitions contained in title V.
    (b) Other Definitions.--In this title:
          (1) Agency.--The term ``agency'' means any agency or 
        other organizational unit of the Department of Health 
        and Human Services, other than the Indian Health 
        Service.
          (2) Secretary.--The term ``Secretary'' means the 
        Secretary of Health and Human Services.

SEC. 602. DEMONSTRATION PROJECT FEASIBILITY.

    (a) Study.--The Secretary shall conduct a study to 
determine the feasibility of a tribal self-governance 
demonstration project for appropriate programs, services, 
functions, and activities (or portions thereof) of the agency.
    (b) Considerations.--In conducting the study, the Secretary 
shall consider--
          (1) the probable effects on specific programs and 
        program beneficiaries of such a demonstration project;
          (2) statutory, regulatory, or other impediments to 
        implementation of such a demonstration project;
          (3) strategies for implementing such a demonstration 
        project;
          (4) probable costs or savings associated with such a 
        demonstration project;
          (5) methods to assure quality and accountability in 
        such a demonstration project; and
          (6) such other issues that may be determined by the 
        Secretary or developed through consultation pursuant to 
        section 603.
    (c) Report.--Not later than 18 months after the date of 
enactment of this title, the Secretary shall submit a report to 
the Committee on Indian Affairs of the Senate an the Committee 
on Resources of the House of Representatives. The report shall 
contain--
          (1) the results of the study under this section;
          (2) a list of programs, services, functions, and 
        activities (or portions thereof) within each agency 
        with respect to which it would be feasible to include 
        in a tribal self-governance demonstration project;
          (3) a list of programs, services, functions, and 
        activities (or portions thereof) included in the list 
        provided pursuant to paragraph (2) that could be 
        included in a tribal self-governance demonstration 
        project without amending statutes, or waiving 
        regulations that the Secretary may not waive;
          (4) a list of legislative actions required in order 
        to include those programs, services, functions, and 
        activities (or portions thereof) included in the list 
        provided pursuant to paragraph (2) but not included in 
        the list provided pursuant to paragraph (3) in a tribal 
        self-governance demonstration project; and
          (5) any separate views of tribes and other entities 
        consulted pursuant to section 603 related to the 
        information provided pursuant to paragraphs (1) through 
        (4).

SEC. 603. CONSULTATION.

    (a) Study Protocol.--
          (1) Consultation with Indian Tribes.--The Secretary 
        shall consult with Indian tribes to determine a 
        protocol for consultation under subsection (b) prior to 
        consultation under such subsection with the other 
        entities described in such subsection.
          (2) Requirements for protocol.--The protocol shall 
        require, at a minimum, that--
                  (A) the government-to-government relationship 
                with Indian tribes forms the basis for the 
                consultation process;
                  (B) the Indian tribes and the Secretary 
                jointly conduct the consultations required by 
                this section; and
                  (C) the consultation process allows for 
                separate and direct recommendations from the 
                Indian tribes and other entities described in 
                subsection (b).
    (b) Conducting Study.--In conducting the study under this 
title, the Secretary shall consult with Indian tribes, State, 
counties, municipalities, program beneficiaries, and interested 
public interest groups, and may consult with other entities as 
appropriate.

SEC. 604 AUTHORIZATION OF APPROPRIATIONS.

    There are authorized to be appropriated for fiscal years 
2000 and 2001 such sums as may be necessary to carry out this 
title. Such sums shall remain available until expended.


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