[Senate Report 113-285]
[From the U.S. Government Publishing Office]


                                                       Calendar No. 533
113th Congress  }                                           {    Report
                                 SENATE
 2d Session     }                                           {   113-285

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

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

                                _______
                                

                December 4, 2014.--Ordered to be printed

                                _______
                                

Mr. Tester, from the Senate Committee on Indian Affairs, submitted the 
                               following

                              R E P O R T

                         [To accompany S. 919]

    The Committee on Indian Affairs, to which was referred the 
bill (S. 919) to amend the Indian Self-Determination and 
Education Assistance Act to provide further self-governance by 
Indian tribes, and for other purposes, having considered the 
same, reports favorably thereon with an amendment and 
recommends that the bill, as amended, do pass.

                                PURPOSE

    The purpose of S. 919 is to amend the Indian Self-
Determination and Education Assistance Act to streamline the 
Department of the Interior's process for approving self-
governance compacts and annual funding agreements. The bill 
would align the process used by the Department of the Interior 
to be similar to the processes used by the Indian Health 
Service.

                          NEED FOR LEGISLATION

    S. 919 is needed to correct the bureaucratic processes and 
procedures that the Department of the Interior Self-Governance 
program has imposed which have discouraged the further 
compacting of Interior programs by tribes. The provisions 
included in S. 919 also provide greater certainty and more 
guidance from Congress on issues relating to decision-making 
timeframes, re-assumption of programs by the Department, 
construction projects, and timing of funding transfers.

                               BACKGROUND

    The Indian Self-Determination and Education Assistance Act 
of 1975 is one of the most important legislative acts affecting 
Indian country of the last four decades and it has been the key 
driver in improving communities throughout Indian country. The 
Act authorizes tribes to enter into contracts with the Bureau 
of Indian Affairs (BIA), U.S. Department of the Interior, and 
the Indian Health Service (IHS), U.S. Department of Health and 
Human Services, to receive federal funds and manage programs 
that would otherwise be managed by the federal agencies.
    The Act was amended in 1988 to establish the Department of 
the Interior Self-Governance Demonstration Program. For the 
first time, tribes were authorized to plan, administer, and 
consolidate multiple programs and services that had always been 
administered by the Department of the Interior. These self-
governance agreements allow tribal management of programs 
pursuant to one compact instead of requiring different 
contracts for each individual program. In 1992, the law was 
amended to establish a self-governance demonstration program 
within the IHS as well.
    In 1994, the law was amended to make the Interior Self-
Governance program permanent. The 1994 amendments also made 
certain non-BIA programs within the Department of the Interior 
eligible for contracting or compacting.
    S. 919 would amend the Indian Self-Determination Act to 
streamline the Department of the Interior's process for 
approving self-governance compacts and annual funding 
agreements. The bill would also align the process used by the 
Department of the Interior to be similar to the processes used 
by the IHS. Currently tribes must use two negotiation 
processes.
    S. 919 contains two titles. The first title would change 
the P.L. 93-638 contract negotiation process under Title I 
(i.e., the non-self-governance title) of the Indian Self-
Determination and Education Assistance Act and add more 
flexibility in administering those contracts for tribes that 
either have not qualified for self-governance or have chosen to 
administer only a few BIA programs.
    The second title includes amendments to the self-governance 
provisions of Title IV of the Indian Self-Determination and 
Education Assistance Act that would clarify procedures, and 
limit the Secretary's ability to delay compacting or release of 
funding. These changes are meant to mirror the provisions that 
the tribes have found beneficial in the IHS compacting process.
    Section 202 of this legislation makes clear that nothing in 
the bill expands or limits which programs are eligible for 
inclusion in self-governance compacts beyond those already 
authorized to be included by current law. The section also 
clarifies that provisions of water settlements and their 
authorizing legislation are not affected by the self-governance 
amendments.
    While section 202 makes clear that the bill is not 
expanding the scope of federal programs eligible for inclusion 
in self-governance agreements, current law does provide the 
Secretary with the discretion to include certain non-BIA 
programs in self-governance agreements as negotiated with 
tribes. These programs include those which have a special 
geographic, historical, or cultural significance to a 
petitioning tribe. This authority, in existence for the past 20 
years, has been used sparingly by the Secretary. The Committee 
commends the Department for its past efforts to include 
programs such as the National Bison Range Complex in Montana 
and the Yukon Flats National Wildlife Refuge in Alaska, which 
satisfy the requirements as eligible programs under existing 
law.

                          LEGISLATIVE HISTORY

    On May 9, 2013, Senator Maria Cantwell (D-WA) introduced S. 
919, along with Senators John Barrasso (R-WY), Max Baucus (D-
MT), Mike Crapo (R-ID), Martin Heinrich (D-NM), Patty Murray 
(D-WA), Brian Schatz (D-HI), Jon Tester (D-MT), Tom Udall (D-
NM) and Ron Wyden (D-OR). Senators Lisa Murkowski (R-AK), Mark 
Begich (D-AK), Elizabeth Warren (D-MA) and John Walsh (D-MT) 
were later added as cosponsors. The bill was referred to the 
Committee on Indian Affairs. On January 29, 2014, the committee 
held a hearing on the bill. On June 11, 2014, the committee met 
to consider the bill. One substitute amendment was offered and 
adopted, and the Committee then ordered the bill, as amended, 
to be reported favorably to the Senate by voice vote.

                          SUMMARY OF AMENDMENT

    Senator Cantwell filed an amendment in the nature of a 
substitute that reflects further discussion with tribal and 
federal officials since the bill's introduction.
    Since S. 919 was introduced, discussions with tribal and 
federal officials led to language that would amend Title II of 
the bill in an effort to provide more clarity to tribes and the 
Department of the Interior, and other stakeholders that the 
bill does not intend to authorize any future P.L. 93-638 
agreements that would not be already authorized under existing 
law. Other technical amendments were made in Title I of the 
bill, including the movement of references to the savings 
clause of the bill, changing dates, and clarifying the good 
faith negotiations requirement provisions.
    Section 202 Amendments:
    One change the amendment makes is rewording the definition 
of ``tribal water rights settlements.'' The amendment clarifies 
that the water settlements that are relevant are only those 
which have been ``expressly ratified or approved by an Act of 
Congress.''
    Additional changes include collapsing three provisions in 
the savings clause found in section 202(b) into a single 
provision. The intent of all the parties is that S. 919 does 
not expand the scope of programs eligible for tribal 
contracting under Public Law 93-638. The bill as introduced 
contained three provisions that were intended to provide this 
assurance. The amendment provides greater clarity and 
succinctness to the provisions, without altering the overall 
meaning of the savings clause. A final amendment to 202(b)(4) 
makes clear that that S. 919 is not authorizing any tribal 
contracting that would be inconsistent with already finalized 
tribal water rights settlements.

        SECTION-BY-SECTION ANALYSIS OF BILL AS ORDERED REPORTED

Section 1--Short Title; Table of contents

    Section 1 states that the Act may be cited as the 
`Department of the Interior Tribal Self-Governance Act of 
2013.'

                   TITLE I--INDIAN SELF-DETERMINATION

Section 101. Definitions; reporting and audit requirements; application 
        of provisions

    Section 101(a) amends the Indian Self-Determination and 
Education Assistance Act (25 U.S.C. 450) by adding to the 
definition of `self-determination contract.' This section 
revises the definition to say that: (1) no contract shall be 
considered to be a procurement contract, and (2) no contract 
shall be subject to any federal procurement law, including 
regulations. Construction contracts under Section 105(a)(3) are 
excepted because that provision allows the parties to agree to 
make certain procurement provisions applicable.
    Section 101(b) provides for the retention period of records 
for auditing purposes to be defined in regulations.
    Section 101(c) provides that certain sections of Indian 
Self-Determination and Education Assistance Act and the 
Department of the Interior and Related Agencies Appropriations 
Act, 1991 (Public Law 101-512) apply to certain compacts and 
Funding Agreements.

Section 102. Contracts by Secretary of Interior

    Section 102 amends the Indian Self-Determination and 
Education Assistance Act to simplify a reference to the Indian 
Financing Act of 1974. The section further provides that the 
Secretary shall at all times negotiate in good faith, and that 
the provisions of contracts or funding agreements should be 
liberally construed for the benefit of the Indian Tribe.

Section 103. Administrative provisions

    Section 103 makes a minor correction to Section 105 of 
Indian Self-Determination and Education Assistance Act by 
substituting a reference to Sections 102 and 103 (as opposed to 
450f and 450h of Title 25). Further, this section would require 
the Secretary to interpret all federal laws and Executive 
Orders in a manner that benefits tribes and facilitates 
inclusion of programs, functions, services, and activities in 
self-determination contracts and Funding Agreements; 
implementation of self-determination contracts and funding 
agreements; and achievement of tribal objectives.

Section 104. Contract funding and indirect costs

    Section 104 adds a category of expenses that are eligible 
costs for the purposes of receiving funding and would codify a 
recent decision by the Office of Management and Budget and the 
Department of the Interior regarding documentation 
requirements. Under the change, eligible costs would include 
not less than 50% of the expenses incurred by the governing 
body of a tribe or tribal organization relating to a program, 
function, service or activity pursuant to the contract. 
Furthermore, such expenses of a tribal governing body shall be 
treated as reasonable and allowable without burdensome 
documentation requirements, because they are presumed to be 
related to the administration of federal responsibilities 
assumed by the tribal governing body.

Section 105. Contract or grant specifications

    Section 105 clarifies that provisions in the model 
statutory agreement allowing the parties to agree to additional 
contract and funding agreement terms do not make inapplicable 
the provisions in Section 102 of the Indian Self-Determination 
and Education Assistance Act requiring proposals and 
declinations.

                                TITLE II

Section 201. Tribal self-governance

    Section 201 amends the Indian Self-Determination and 
Education Assistance Act by revising much of Title IV--Tribal 
Self-Governance.
    Section 201(a) provides definitions for key terms included 
in Title IV--Tribal Self-Governance.
    Section 201(b) amends Section 402 of the Indian Self-
Determination and Education Assistance Act to provide for the 
establishment and eligibility requirements for the Tribal Self-
Governance Program. It also sets forth procedures for a tribe 
to withdraw from a tribal organization, in whole or in part, as 
well as provisions for distributing funds to a withdrawing 
tribe. To be eligible to participate in self-governance, a 
tribe must successfully complete a planning phase; request 
participation in self-governance by resolution or other 
official action by the tribal governing body; and demonstrate, 
for the previous three fiscal years, financial stability and 
financial management capability as evidenced by the tribe 
having no uncorrected significant and material audit exceptions 
in the required annual audit of its agreements with any federal 
agency. Tribes are eligible to receive grants for planning to 
participate, or negotiating the terms of participation, in the 
Program.
    Section 201(c) amends Section 403 of the Indian Self-
Determination and Education Assistance Act and directs the 
Secretary to negotiate and enter into a funding agreement with 
the governing body of an Indian tribe or tribal organization. 
It clarifies that a funding agreement authorizes a tribe, at 
its option, to plan, conduct, consolidate, administer and 
receive full tribal share funding for all programs, functions, 
services or activities of the BIA, the Office of the Assistant 
Secretary for Indian Affairs, and the Office of the Special 
Trustee. A funding agreement may include programs, functions, 
services or activities administered by the Secretary that are 
of special geographic, historical, or cultural significance to 
the tribe. However, for discretionary programs of special 
significance, the Secretary has discretion with respect to 
reallocation and consolidation, reassumption, terms and 
conditions regarding construction, and applicable regulations. 
In addition, this section provides the Secretary the discretion 
to reassume any program and associated funding upon certain 
findings.
    The section also provides that a funding agreement shall 
authorize a tribe, at its option, to plan, conduct, 
consolidate, administer, and receive full tribal share funding 
for any program administered by the Department of the Interior 
other than through the BIA, Office of the Assistant-Secretary 
for Indian Affairs, and the Office of the Special Trustee, that 
is otherwise available to tribes or Indians under Section 102 
of Indian Self-Determination and Education Assistance Act. A 
tribe has discretion to include in its funding agreement, a 
stable budget specifying the recurring funds to be transferred 
to the tribe. Absent tribal consent, the Secretary cannot amend 
the terms of a funding agreement. This section also provides 
tribes with existing funding agreements more options with 
respect to subsequent funding agreements and negotiating multi-
year funding agreements.
    Section 201(d) amends Title IV of the Indian Self-
Determination and Education Assistance Act by mirroring for the 
Department of the Interior those self-governance provisions 
found in Title V--Tribal Self-Governance-Indian Health Service, 
and clarifying any distinctions that are needed for Department 
of the Interior differences.
    The new ``Section 404'' of the Indian Self-Determination 
and Education Assistance Act directs the Secretary to negotiate 
and enter into a written compact with tribes participating in 
the Program. Tribes may retain existing compacts, in whole or 
in part, or negotiate new compacts.
    ``Section 405'' provides for certain provisions that must 
be included in funding agreements. Conflicts of interest, 
auditing principles, tribal redesign and consolidation 
authority must be addressed. With respect to discretionary 
programs of special significance, however, tribal reallocation, 
consolidation, and redesign are only allowed when the Secretary 
and the tribe enter into a joint agreement.
    The section also provides that tribal records are not 
subject to the Freedom of Information Act, unless a tribe 
specifies otherwise in a funding agreement or a compact. A 
tribe must provide the Secretary with reasonable access to its 
records with at least 30 days notice.
    ``Section 406'' provides that a funding agreement include a 
provision to monitor the performance of trust functions by the 
Indian tribe. A compact or a funding agreement shall include 
provisions for the Secretary to reassume a program and 
associated funding upon certain findings. It requires the 
Secretary to provide notice, a hearing, and an opportunity for 
a tribe to take corrective action before reassuming a program. 
The Secretary must make a specific finding of imminent jeopardy 
to a trust asset, natural resources, or public health and 
safety; or gross mismanagement (under a preponderance of the 
evidence standard), to reassume a program and associated 
funding. However, the Secretary may, on written notice to the 
tribe, immediately reassume operation of a program if there is 
a finding of imminent and substantial jeopardy and irreparable 
harm to a trust asset, a natural resource, or the public health 
and safety caused by an act or omission of the tribe.
    This section further provides that if the Secretary and a 
participating Indian tribe are unable to agree on the terms of 
a compact or funding agreement, the Indian tribe may submit a 
final offer to the Secretary. It further provides the 
Secretary's criteria and procedures for considering a tribe's 
final offer. The Secretary bears the burden to prove by a 
preponderance of the evidence the validity of the grounds for 
reassuming a program and by clearly demonstrating the validity 
of the grounds for rejecting a final offer.
    In addition, this section provides that the Secretary shall 
negotiate in good faith and may not waive, modify, or diminish 
the trust responsibility. Further, the Secretary must make 
savings available to a tribe for the provision of additional 
services to tribal beneficiaries. Finally, Section 407 requires 
that Title IV compacts and funding agreements be construed for 
the benefit of tribes and any ambiguities be resolved in favor 
of tribes.
    ``Section 407'' provides that Indian tribes participating 
in tribal self-governance may carry out construction projects 
under Title IV and sets forth the responsibilities and 
procedures of tribes undertaking these construction projects. 
Tribes may, subject to the Secretary's agreement, choose to 
carry out certain federal responsibilities under the National 
Environmental Policy Act, the National Historic Preservation 
Act, and related federal laws that are applicable if the 
Secretary undertakes a construction project. Further, tribes 
must adhere to building codes and standards in carrying out a 
construction project, and must be accountable for successful 
completion of a project. This section provides that funding for 
construction projects must be included in funding agreements as 
annual or semi-annual advance payments. Section 407 provides 
the Secretary with at least one opportunity to review and 
approve a tribe's project planning and design documents. 
Finally, federal laws pertaining to procurement do not apply to 
a construction program or project absent tribal consent.
    ``Section 408'' authorizes multi-year funding agreements. 
It directs the Secretary to transfer tribal shares and 
resources to a tribe in a timely fashion. The Secretary may not 
reduce funding from year to year unless one of five narrowly 
defined exceptions applies. A tribe may carry over funding, 
interest, or income from year to year without diminishing its 
future entitlements. A tribe need not continue to perform a 
compact or a funding agreement with insufficient funds and may 
suspend its performance (after providing reasonable notice of 
such insufficiency to the Secretary) until funds are adequate.
    ``Section 409'' requires the Secretary to interpret federal 
laws in a manner that facilitates the implementation of, and 
the inclusion of programs in, funding agreements. It provides 
that an Indian tribe may submit a written request for a waiver 
of federal regulations to the Secretary. The Secretary must 
approve a tribe's request for a waiver if the waiver is not 
prohibited by statute. In addition, if the request is not 
approved or denied within 120 days, the waiver request is 
deemed approved.
    ``Section 410'' provides that Title IV neither expands nor 
alters the Secretary's statutory authority to enter into any 
funding agreement with respect to an inherent federal function, 
in instances where a statute prohibits a tribe's participation 
in a program, or when the funding agreement would limit or 
reduce services, contracts, or funds that any other tribe is 
eligible to receive under federal law.
    ``Section 411'' provides a tribe with the discretion to 
incorporate any provision of Title I into a compact or a 
funding agreement.
    ``Section 412'' requires the President to identify in a 
report to accompany the annual budget request submitted to 
Congress all amounts necessary to fully fund all funding 
agreements entered into under this Act.
    ``Section 413'' requires the Secretary to submit an annual 
report to Congress regarding the administration of Title IV. 
This report is to include an analysis of unmet tribal needs, 
whether the tribe is served directly by the Secretary or under 
compacts and funding agreements. In addition, the Secretary may 
not impose any reporting requirements on participating tribes 
other than those provided for in Title IV. It provides that the 
reports be compiled from certain documents and identifies 
particular areas of interest. It further requires that reports 
include a description of methodologies used to determine 
individual tribal shares. Reports must be distributed to tribes 
for comment prior to submission.
    This section also requires the Secretary to submit an 
annual report to Congress on non-BIA and non-Office of Special 
Trustee programs. Section 413 requires that the Secretary, in 
consultation with tribes, develop a funding formula to 
determine the individual tribal share of funds controlled by 
the Central Office of the BIA, the Office of the Special 
Trustee, and the Office of the Assistant Secretary for Indian 
Affairs for inclusion in compacts.
    ``Section 414'' requires negotiated rulemaking and the 
publication of proposed implementing regulations in the Federal 
Register. It sets forth the membership criteria for the 
negotiated rulemaking committee. This section further 
authorizes the Secretary to repeal any regulation inconsistent 
with the provisions of this Act. Finally, it provides that the 
lack of promulgated regulations shall not limit the effect or 
implementation of this title.
    ``Section 415'' provides that except for the eligibility 
provisions of section 105(g) and regulations of section 414 of 
the Indian Self-Determination and Education Assistance Act, a 
tribe is not subject to any agency circular, policy, manual, or 
guidance absent the tribe's consent.
    ``Section 416'' provides that, except as described in the 
provisions in section 406, the Secretary has the burden to 
prove by a preponderance of the evidence the validity of 
grounds for his decisions, as well as their consistency with 
Title IV requirements and policies.
    ``Section 417'' clarifies that ``Section 413 of the 
Department of the Interior and Relates Agencies Appropriations 
Act, 1991'' shall apply to self-governance compacts and funding 
agreements.
    ``Section 418'' authorizes the appropriation of such sums 
as may be necessary to carry out Title IV--Tribal Self-
Governance.

Section 202. Effect of certain provisions

    This section provides that nothing in the Department of the 
Interior Tribal Self-Governance Act of 2013 increases, limits, 
or modifies the Secretary's authority held the day before the 
enactment of the Act. No program, function, service or activity 
that was not eligible to be included in a compact or funding 
agreement the day before the enactment of this Act becomes 
eligible due to its enactment. Further, no tribal water 
settlement or Congressional Act expressly ratifying or 
approving such water settlement is affected by the enactment of 
this Act.

                   COST AND BUDGETARY CONSIDERATIONS

    The following cost estimate, as provided by the 
Congressional Budget Office, dated November 13, 2014, was 
prepared for S. 919:

                                                 November 13, 2014.
Hon. Jon Tester,
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. 919, the Department 
of the Interior Tribal Self-Governance Act of 2014.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Martin von 
Gnechten.
            Sincerely,
                                              Douglas W. Elmendorf.
    Enclosure.

S. 919--Department of the Interior Tribal Self-Governance Act of 2014

    S. 919 would amend certain provisions of the Indian Self-
Determination and Education Assistance Act related to the 
Tribal Self-Governance Program. That program authorizes Indian 
tribes to assume responsibility for certain programs, 
functions, and services or activities that would otherwise be 
carried out by the federal government. The bill would amend how 
contracts are negotiated between the tribes and the Department 
of the Interior (DOI) and would establish new guidelines for 
administering the program. Based on information provided by 
DOI, CBO estimates that implementing the legislation would have 
no significant effect on the federal budget over the 2015-2019 
period. Enacting S. 919 would not affect direct spending or 
revenues; therefore, pay-as-you-go procedures do not apply.
    S. 919 contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act.
    The CBO staff contact for this estimate is Martin von 
Gnechten. The estimate was approved by Theresa Gullo, Deputy 
Assistant Director for Budget Analysis.

                        EXECUTIVE COMMUNICATIONS

    The Committee has received no communications from the 
Executive Branch regarding S. 919.

               REGULATORY AND PAPERWORK IMPACT STATEMENT

    Paragraph 11(b) of rule XXVI of the Standing Rules of the 
Senate requires each report accompanying a bill to evaluate the 
regulatory and paperwork impact that would be incurred in 
carrying out the bill. The Committee believes that S. 919 will 
have a minimal impact on regulatory or paperwork requirements.

                 CHANGES IN EXISTING LAW (CORDON RULE)

    On June 11, 2014, the Committee on Indian Affairs 
unanimously approved a motion by Chairman Tester to waive the 
Cordon rule. Thus, in the opinion of the committee, it is 
necessary to dispense with subsection 12 of rule XXVI of the 
Standing Rules of the Senate in order to expedite the business 
of the Senate.

                                  [all]