[Federal Register Volume 85, Number 37 (Tuesday, February 25, 2020)]
[Rules and Regulations]
[Pages 10938-10958]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-02883]



[[Page 10937]]

Vol. 85

Tuesday,

No. 37

February 25, 2020

Part V





Department of the Interior





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Bureau of Indian Affairs





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25 CFR Part 273





Education Contracts Under Johnson-O'Malley Act; Final Rule

  Federal Register / Vol. 85 , No. 37 / Tuesday, February 25, 2020 / 
Rules and Regulations  

[[Page 10938]]


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DEPARTMENT OF THE INTERIOR

Bureau of Indian Affairs

25 CFR Part 273

[201D0102DB/DS5A300000/DR.5A311.IA000520]
RIN 1076-AF24


Education Contracts Under Johnson-O'Malley Act

AGENCY: Bureau of Indian Affairs, Interior.

ACTION: Final rule.

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SUMMARY: Under the Johnson-O'Malley (JOM) Act, the Bureau of Indian 
Education (BIE) provides assistance, through contracts, for Indian 
students attending public schools and nonsectarian private schools. 
This rule implements the JOM Act, as amended by the JOM Supplemental 
Indian Education Program Modernization Act (JOM Modernization Act), to 
clarify the eligibility requirements for Indian students to receive the 
benefits of a JOM contract, clarify the funding formula and process to 
ensure full participation of contracting parties, and to otherwise 
reconcile and modernize the regulations to comport with the activities 
of contracting parties under the JOM Modernization Act.

DATES: This rule is effective on March 26, 2020.

FOR FURTHER INFORMATION CONTACT: Elizabeth Appel, Director, Office of 
Regulatory Affairs & Collaborative Action, (202) 273-4680; 
[email protected].

SUPPLEMENTARY INFORMATION:
I. Background
II. Overview of the Final Rule
III. Comments on the Proposed Rule and Responses to Comments
    A. Terminology
    B. Comments Regarding ``Eligible Indian Student''
    1. One-Fourth Degree Indian Blood
    2. Documentation of Eligibility
    3. Other Comments Regarding Eligibility of Indian Students
    C. Indian Education Committee
    D. Education Plan
    E. Priority to Contracts Serving Indian Students On or Near 
Reservations
    F. Comments on Funding and the Funding Formula
    1. Funding Formula
    2. ``Hold Harmless'' Provision
    3. Availability of Funds
    4. Use of Funds
    G. Comments on Reporting Requirements
    H. Agency Administration of JOM
    I. Participation in Rulemaking and Implementation
    J. Miscellaneous Comments
IV. Summary of Final Rule and Changes from Proposed Rule to Final 
Rule
    A. General Provisions and Definitions (Subpart A)
    B. Program Eligibility & Applicability (Subpart B)
    C. Indian Education Committee (Subpart C)
    D. Education Plan (Subpart D)
    E. Contract Proposal, Review, and Approval (Subpart E)
    F. Funding Provisions (Subpart F)
    G. Annual Reporting Requirements (Subpart G)
    H. General Contract Requirements (Subpart H)
    I. Contract Renewal, Revisions, and Cancellations (Subpart I)
    J. Responsibility and Accountability (Subpart J)
    K. Appeals (Subpart K)
V. Procedural Requirements
    A. Regulatory Planning and Review (E.O. 12866 and 13563)
    B. Reducing Regulation and Controlling Regulatory Costs (E.O. 
13771)
    C. Regulatory Flexibility Act
    D. Small Business Regulatory Enforcement Fairness Act
    E. Unfunded Mandates Reform Act
    F. Takings (E.O. 12630)
    G. Federalism (E.O. 13132)
    H. Civil Justice Reform (E.O. 12988)
    I. Consultation with Indian Tribes (E.O. 13175)
    J. Paperwork Reduction Act
    K. National Environmental Policy Act
    L. Effects on the Energy Supply (E.O. 13211)

I. Background

    The JOM Act authorizes the Secretary of the Interior (Secretary), 
in his or her discretion, to enter into contracts with States, schools, 
and private nonsectarian organizations, and to expend appropriated 
funds in support of Indian students under such contracts. See, 25 
U.S.C. 5341 et seq. Federally recognized Indian Tribes and Tribal 
organizations are also eligible to apply for JOM contracts. Contracts 
under JOM contain educational objectives that adequately address the 
educational needs of the Indian students who are to be beneficiaries of 
the contract and assures that the contract is capable of meeting such 
objectives. See, 25 U.S.C. 5345. The regulations at 25 CFR part 273 
that implement this authority became effective in 1975 and the rule has 
been in effect over 40 years without substantial changes. In 2018, 
Congress updated the JOM Act with the JOM Modernization Act. The rule 
being finalized today updates 25 CFR part 273 to implement the JOM 
Modernization Act and make other changes necessary to update the rule, 
as described below.
    The proposed rule was published on June 27, 2019. See 84 FR 30647. 
During the 60-day public comment period, BIE held four consultations 
sessions directly with the Tribes and four consultation sessions with 
eligible entities and interested parties: July 16, 2019, in Tahlequah, 
OK; July 19, 2019, in Bismarck, ND; July 23, 2019, via webinar; and 
July 25, 2019, via webinar. See 84 FR 30647. The public comment period 
on the proposed rule ended on August 26, 2019.

II. Overview of the Final Rule

    The JOM Modernization Act requires the BIE to revise the existing 
regulations at 25 CFR part 273, to:
    1. Determine how the regulatory definition of ``eligible Indian 
student'' may be revised to clarify eligibility requirements for 
contracting parties under the Act;
    2. Determine, as necessary, how the funding formula may be 
clarified and revised to ensure full participation of contracting 
parties and provide clarity on the funding process under the Act; and
    3. Reconcile and modernize the rule to comport with the activities 
of the contracting parties under the Act.
    The final rule includes changes to meet these requirements, by:
     Clarifying who is an eligible Indian student;
     Specifying how funds can be used;
     Describing how a new contracting party can enter into 
contracts and clarifying the process for existing contracting parties 
to renew contracts;
     Clarifying what requirements do not apply to Tribal 
organizations;
     Revising the funding formula to reflect how it is 
currently calculated;
     Clarifying the annual reporting requirements;
     Adding a new subpart J--Responsibility and Accountability, 
to address the Secretary's reporting requirements and compliance with 
Paperwork Reduction Act; and
     Clarifying the appeals processes.
    The rule also makes other technical edits to improve clarity and 
readability.

III. Comments on the Proposed Rule and Responses to Comments

    The BIE sought public comment on the proposed rule, as well as 
Tribal input through a series of consultation sessions. Overall, BIE 
heard from a wide variety of stakeholders including Tribal leaders, 
existing JOM contractors, potential JOM contracts, public school 
districts, tribal organizations, Indian corporations, JOM Indian 
Education Committee members, employees of public schools serving 
American Indian students, and parents. In total, BIE received 54 
written comment submissions, including a few submissions that included 
11 to 145 signatures each. All public comments received in response to 
the proposed

[[Page 10939]]

rule are available for public inspection. To view all comments, search 
by Docket Number ``BIA-2018-0002'' in https://www.regulations.gov. The 
BIE has decided to proceed to the final rule stage after careful 
consideration of all comments. The BIE's responses to such comments are 
detailed below.

A. Terminology

    Comment: Change the term ``student'' to ``child'' to include 
children who are homeschooled and in foster care.
    Response: The regulation uses the term ``student'' because the 
statutory authority uses that term; however, there is nothing 
preventing a non-traditional student, such as a homeschooled student, 
or child in foster care from meeting the eligibility requirements set 
out for Indian students in Sec.  273.112.
    Comment: The proposed definition of ``Tribal organization'' is too 
broad because it combines sovereign Tribes with others. If ``Tribal 
organization'' includes others, there should be a requirement for 
specific support from the Tribe or Tribes who will receive services.
    Response: The final rule adds to the definition of ``Tribal 
organization'' a requirement for the approval of the Tribe or Tribes. 
This language is adapted from the Indian Self-Determination and 
Education Assistance Act, 25 U.S.C. 5304.

B. Comments Regarding ``Eligible Indian Student''

    Many commenters requested changes to restrict, broaden, or clarify 
who an ``eligible Indian student'' is. BIE weighed these concerns, 
looked to Congress's intent to provide for the education of Indian 
students, and also considered that there should be a connection to a 
federally recognized Tribe (i.e., a Tribe with whom the U.S. Government 
has a government-to-government relationship). As a result, the 
substance of the final rule is the same as the proposed rule regarding 
who qualifies as an eligible Indian student, requiring that the student 
either: (1) Be a Tribal member; or (2) have a link to a Tribal member 
(through descendancy) that is within a certain proximity (through \1/4\ 
degree blood quantum). BIE acknowledges the concerns expressed by some 
of the comments that any reliance on blood quantum is antiquated and 
distasteful; therefore, BIE may revisit this standard in the future. 
For the purposes of this rule, however, BIE has chosen to retain the 
standard to ensure consistency with the Indian Student Equalization 
Program (ISEP) standard, as explained below. Pending any comprehensive 
review of the standard used for both JOM and ISEP eligibility, the 
Department believes the proposed eligibility standard establishes 
guidelines sufficient to identify who the population of eligible Indian 
students is, while allowing for some discretion in implementation to 
ensure that Congress' intent is met on a case-by-case basis, as further 
described in the responses to comments, below.
1. One-Fourth Degree Indian Blood
    Comment: Does a student have to be a descendant of someone who has 
\1/4\ degree of Indian blood?
    Response: The rule provides that, if the Indian student is not a 
Tribal member, then the Indian student himself or herself must have \1/
4\ degree of Indian blood, as a descendent of a member of a federally 
recognized Tribe, in order to be eligible.
    Comment: Explain where the requirement for \1/4\ degree of Indian 
blood came from and how long it has been used.
    Response: The regulatory requirement requiring \1/4\ or more degree 
Indian blood for eligibility for JOM contracts dates back to 1957. See 
22 FR 10533 (December 24, 1957). For additional history, see the 
discussion in the preamble to the proposed rule at 84 FR 30648 (June 
27, 2019). However, the rule no longer contains a \1/4\ degree or more 
Indian blood requirement as a prerequisite for student eligibility in 
the JOM program. The rule instead provides an option for eligibility if 
the student is \1/4\ degree Indian blood descendant of a member of a 
Tribe.
    Comment: Remove mention of \1/4\ degree of Indian blood and instead 
require descendancy back to the Tribe's base roll or historical roll, 
to open the door for more descendants who may not be eligible as Tribal 
members due to enrollment practices, etc. Our ancestors who signed the 
Tribe's roll agreed to have all their descendants eligible for future 
assistance and did not specify any degree of blood, so the Federal 
Government should not withhold assistance for any descendants.
    Response: The final rule retains the requirement for \1/4\ degree 
of Indian blood in one of the two options for eligibility to ensure 
consistency with the ISEP standard. Consistency between the ISEP and 
JOM programs is important because an eligible Indian student may move 
between a JOM contractor school and Bureau-funded school and should be 
equally eligible for both. Should BIE consider changing the blood 
quantum standard in the future, it will propose to do so for both JOM 
and ISEP simultaneously to ensure consistency.
    Comment: Using blood quantum is a racist practice and is tantamount 
to telling a child that they are not ``Indian enough.'' It is becoming 
a discriminatory issue to include a child with \1/4\ Indian blood 
quantum as eligible and exclude another student with \1/8\ Indian blood 
quantum. A \1/4\ blood quantum limit will decrease the number of Native 
American children that will be educated about their heritage, decrease 
the number of future Native American leaders, and begin to deplete 
Native American culture. Many have more Native blood than they can 
prove because their ancestors did not want to be recognized as Native 
or because of mistakes made in the records.
    Response: The final rule codifies the practice that has been in 
place since 1991, which aligns with the eligibility criteria with ISEP, 
so this final rule is not expected to cause a decrease in current 
student eligibility.
    Comment: Remove mention of \1/4\ degree of Indian blood to get out 
of the business of defining which Tribal members qualify, and instead 
defer to Tribes' determinations.
    Response: Tribes have the sovereign right to determine their 
membership and Tribes are free to limit membership according to blood 
quantum or not. This rule is determining who is an ``eligible Indian 
student'' for the purposes of a Federal program and does not affect 
Tribes' right to determine their own memberships. The rule defers to 
Tribes' determinations of their members by making Tribal members 
eligible regardless of blood quantum, as long as the Tribe has 
determined the student is a member.
    Comment: Remove mention of \1/4\ degree of Indian blood and instead 
allow only Tribal members to be eligible, to defer to Tribes' sovereign 
right to decide Tribal membership.
    Response: BIE has determined that restricting eligibility to 
students who are themselves Tribal members is more restrictive than 
Congress intended in the Act. As the National Indian Education 
Association (NIEA) pointed out in response to the 2018 proposed rule, 
restricting eligibility to only those students who are Tribal members 
may exclude thousands of Native students who are at least \1/4\ Indian 
blood descendant of a member of a Tribe and currently participate in 
JOM programs, but who are not Tribal members due to enrollment 
requirements. For example, a Tribe may not formally enroll a student 
until he or she reaches a certain age, or the student's application for 
enrollment may be pending review with the Tribe.

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    Comment: Require both \1/4\ degree Indian blood descendancy and 
Tribal membership.
    Response: BIE has determined, in accordance with Federal district 
court precedent, that requiring both \1/4\ degree Indian blood 
descendancy and Tribal membership for eligibility is too restrictive.
    Comment: Remove the \1/4\ degree Indian blood requirement if the 
Federal district court said it was too restrictive.
    Response: The Federal district court ruled that requiring both a 
\1/4\ degree Indian blood descendancy and Tribal membership is too 
restrictive. Deleting the requirement for \1/4\ degree Indian blood 
descendancy from a member of a Tribe as one of the two options for 
eligibility would be more restrictive than the proposed rule, which 
allows for either \1/4\ degree Indian blood descendancy from a member 
of a Tribe or Tribal membership.
    Comment: Allow students who are either a member of a federally 
recognized Tribe or at least \1/4\ degree Indian blood descendant of a 
member of a federally recognized Tribe to be eligible.
    Response: This comment reflects what was in the proposed rule and 
is included in the final rule.
    Comment: Allow a student who is a Tribal member, but who does not 
have \1/4\ degree Indian blood of the Tribe in which the student is 
enrolled, to be eligible.
    Response: This comment reflects what was in the proposed rule and 
is included in the final rule; a student that is a Tribal member is 
eligible regardless of the student's Indian blood quantum.
    Comment: Requiring the student be either a Tribal member or \1/4\ 
degree Indian blood descendant of a member would exclude several 
children who rely on JOM and value the programs, resources, and 
connections it offers.
    Response: The final rule codifies the practice that has been in 
place since 1991, so this final rule will not affect current student 
eligibility.
    Comment: Add a definition of ``descendant'' to clarify.
    Response: A descendant is one who follows in lineage, such as a 
child or grandchild (i.e., offspring). The final rule does not add a 
definition because the rule uses the term ``descendant'' only once and 
the meaning of the term is the plain, dictionary meaning of the term.
    Comment: Clarify whether students who are \1/4\ degree Indian blood 
from more than one member of an Indian Tribe meet the requirement for 
being \1/4\ degree Indian blood descendant of ``a member of a federally 
recognized Tribe.'' In other words, clarify that the \1/4\ Indian blood 
quantum can be from more than one Tribe (i.e., a combination of 
Tribes).
    Response: A strict reading of the proposed rule would exclude a 
student who is \1/4\ degree Indian blood descendant of more than one 
member of a Tribe. As one Tribal commenter stated, in keeping with the 
intent of the JOM program, Indian students should have eligibility 
verified using the most inclusive interpretation possible; therefore, 
BIE interprets the regulation to allow for blood quantum calculations 
to include blood from different federally recognized Tribes. This 
interpretation is also consistent with the interpretation for ISEP 
eligibility.
    Comment: A student may not be eligible for membership in a Tribe 
because he or she does not meet the Tribe's blood quantum requirement 
for membership, but a student could be full-blood Native from eight 
different Tribes. The JOM eligibility criteria should allow for blood 
quantum to be measured from multiple Tribes, to be more inclusive than 
Tribes are for membership.
    Response: As explained above, BIE interprets the regulation to 
allow for blood quantum calculations to include blood from different 
federally recognized Tribes.
    Comment: Allow anyone who has a Certificate of Degree of Indian 
Blood (CDIB) to qualify as an eligible Indian student.
    Response: If the CDIB or other documentation shows that the child 
is a member of a federally recognized Tribe, then no further 
documentation is necessary. Otherwise, a CDIB alone is sufficient to 
show eligibility as an Indian student only if it shows that the student 
has \1/4\ degree blood quantum from a federally recognized Tribe. Or, 
as explained above, multiple CDIBs showing the student has blood 
quantum from more than one federally recognized Tribe are sufficient to 
show eligibility as an Indian student if the blood quantum from 
federally recognized Tribes add up to \1/4\ degree or more.
    Comment: If you do not allow anyone with a CDIB to be eligible, 
then children who are waiting for their Tribal enrollment to be 
processed by their Tribe will be penalized.
    Response: If a child is not yet a Tribal member and the CDIB does 
not show \1/4\ blood quantum from a federally recognized Tribe, then 
the CDIB alone would not be sufficient to show eligibility, but the 
student could show eligibility by providing a letter or other 
documentation from the Tribe explaining the circumstances (e.g., that 
the Tribe is still processing the enrollment paperwork but the child 
meets Tribal membership requirements).
    Comment: Is a waiver permissible where the student is not yet 
formally enrolled with the Tribe but we can verify that the enrollment 
paperwork is pending with the Tribe and that the student meets the 
enrollment criteria?
    Response: As explained in the above response, BIE may consider 
other documentation if the enrollment paperwork is pending with the 
Tribe.
    Comment: Include as eligible any student who can provide any 
documentation that shows he or she is ``eligible for the special 
programs and services provided by the United States to Indians because 
of their status as Indians.'' This change would ensure that all Alaska 
Native and American Indian students would be ``eligible Indian 
students'' regardless of their Tribal membership status or Indian blood 
quantum.
    Response: There may be documentation showing eligibility for a 
special program or service provided by another Federal agency; to the 
extent that documentation supports eligibility under this rule, BIE may 
consider that documentation.
2. Documentation Showing Eligibility
    Comment: Accept Indian Health Service (IHS) documents such as an 
IHS card, health records showing vaccinations, or birth certificates, 
because that documentation may be more readily available given that the 
student must have vaccinations to enroll in public school and would 
prove eligibility because the IHS will administer vaccinations to only 
Tribal members or individuals with a CDIB.
    Response: In some cases, IHS documentation may be sufficient, if it 
includes information showing that the student is a Tribal member or \1/
4\ degree blood quantum of a federally recognized Tribe.
    Comment: Some students are in foster care or other child custody or 
are in an institution away from home but do not have their Tribal 
paperwork available because they are not living at home.
    Response: BIE will examine these situations on a case-by-case basis 
to determine whether other documentation can verify that the child is 
an eligible Indian student.
    Comment: Accept the following documents as evidence of eligibility: 
Student Tribal documentation, such as Tribal enrollment cards, Tribal 
citizenship cards, documentation from Tribal enrollment offices; 
Student CDIBs; and parent Tribal enrollment documentation with a 
child's birth

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certificate. Accept documentation showing ANCSA descendancy. Accept 
Title VI or Title VII forms indicating the child is part of a Tribe as 
documentation to support that the child is a member, even if not 
enrolled.
    Response: BIE accepts Tribal enrollment cards and other official 
documentation from Tribal enrollment offices as evidence of Tribal 
membership and will examine other documentation on a case-by-case basis 
to determine whether it verifies that the child is an eligible Indian 
student.
3. Other Comments Regarding Eligibility of Indian Students
    Comment: Several commenters referred to specific membership 
requirements in their Tribes.
    Response: Tribes, as sovereigns, have the right to determine their 
own qualifications for membership.
    Comment: Change references to Tribal ``membership'' to Tribal 
``citizenship'' to differentiate from other non-sovereign groups.
    Response: The Act uses the term Tribal ``member,'' so the 
regulations use that term for consistency.
    Comment: Clarify whether Indian students are eligible for JOM if 
they reside in a boarding school.
    Response: An Indian student is eligible for JOM services if he or 
she resides in a ``previously private'' Bureau-funded boarding school, 
or in a Bureau-funded boarding facility for the purpose of attending 
public school within the school district.
    Comment: Why does the age range first refer to age (``age three 
years''), then to grade (``grade 12'')?
    Response: The age range begins at age 3 to capture pre-K, and ends 
at grade 12 to include all who are enrolled in grade 12 regardless of 
age.
    Comment: Allow students who are on an Indian Education Plan until 
age 21, or who have special needs, disabilities, or other challenges 
that may need to stay in school until they are age 21, to be included 
as eligible Indian students.
    Response: Under the rule, any student who is an eligible Indian 
student remains so through grade 12, regardless of age.

C. Indian Education Committee

    Comment: The proposed rule grants Indian Education Committees too 
much authority. When a Tribe compacts JOM or includes it in a 477 plan, 
Committees should no longer have programmatic or budgetary authority 
over that program. A Committee should not have the power to recommend 
termination of a contract with a Tribe; Tribes should not have to fret 
about potential loss of services to Indian children because of 
Committee politics.
    Response: Congress requires establishment of an Indian Education 
Committee to participate fully in the development of programs to be 
conducted under a JOM contract, approve or disapprove programs to be 
conducted under those contracts, and carry out other duties as Interior 
provides by regulation. See 25 U.S.C. 5346(a). The full participation 
in development and authority to approve or disapprove of programs 
requires programmatic and budgetary authority. While an IEC may 
recommend cancellation or suspension of a contract with a Tribe under 
the specific circumstance that the Tribal contractor fails to permit 
the Committee to exercise its powers and duties, the final decision 
rests with the awarding official, who is certified under the Awarding 
Official Certification System. See Sec.  273.117.
    Comment: Indian Education Committees should not be formed for every 
school district, but instead should be a single body that serves all 
school districts that receive JOM funds within a Tribal jurisdiction.
    Response: The composition of the Indian Education Committee is 
directed by the statute requires establishment of an Indian Education 
Committee for school districts and refers to whether the local school 
board is composed of a majority of Indians. Because the composition of 
the Committee depends upon the local school board composition, a 
Committee must necessarily be established for each school district. See 
25 U.S.C. 5346(a).
    Comment: Employees of the school district, regardless of whether 
they are Indian or have a child enrolled at the school, have a conflict 
of interest. They should be made ex-officio non-voting members or 
technical advisors of the Committee, excluded, or be required to 
disclose their conflict of interest for the Committee to address.
    Response: The composition of the Indian Education Committee is 
directed by the statute.
    Comment: Having family members serve on an Indian Education 
Committee may create issues in covertly or overtly wresting control of 
the Committee.
    Response: The composition of the Indian Education Committee is 
directed by the statute.
    Comment: Legal guardians should be entitled to vote with parents on 
the Indian Education Committee.
    Response: The final rule defines ``parent'' to include legal 
guardians. See Sec.  273.106.
    Comment: Tribes, instead of parents, should have authority to 
determine who serves on the Indian Education Committee.
    Response: The composition of the Indian Education Committee is 
directed by the statute. See 25 U.S.C. 5346.
    Comment: Allow the Tribe, rather than the Indian Education 
Committee, the authority to cancel a contract.
    Response: The Indian Education Committee may recommend 
cancellation, but does not have the authority to cancel. See Sec.  
273.117.
    Comment: Education directors should have no decision-making ability 
over parents as to what funding is spent on; the directors should have 
administrative power only over implementing the programs and disbursing 
the funds. Also, local education agencies and Tribes that run and 
disburse programs have attempted to control what the Indian Education 
Committee can do in public schools. The Indian Education Committee 
keeps schools from misusing funding and using JOM funding for what is 
already in the general budget for the public school.
    Response: The Indian Education Committee may bring to the attention 
of the awarding official if the contractor fails to permit the 
Committee to exercise their powers. See Sec.  273.117.
    Comment: The Indian Education Committee should consult the Tribe 
when it adopts a grievance policy, as the Tribe has a say over their 
citizens receiving the JOM benefits.
    Response: The Indian Education Committee is encouraged to work with 
the Tribe when developing a grievance policy.
    Comment: The sections addressing the Indian Education Committee are 
geared toward the Committee working with contractors that are public 
school districts, rather than self-governance Tribes or Tribal 
contractors under the 477 program.
    Response: The Indian Education Committee is a component of all JOM 
contracts that is required by Congress. See 25 U.S.C. 5346.

D. Education Plan

    Comment: Clarify whether ``prospective contractor'' in Sec.  
273.119 refers to a new contractor.
    Response: ``Prospective contractor'' in Sec.  273.119 refers to a 
new contractor. For contract renewals, see Sec.  273.192.
    Comment: Clarify why costs that parents normally are expected to 
pay for each school must be included in the budget estimates and 
financial information that is part of the Education Plan; Native 
American parents normally cannot pay for their children's

[[Page 10942]]

additional education costs and rely on JOM services and resources for 
their children.
    Response: The requirement for this information is included in the 
current regulation and carried forward to the final rule. It is 
required to provide estimates for justifying the need for JOM funds to 
support the unique educational needs of eligible Indian students.
    Comment: The Tribe(s) should have the opportunity to review the 
education plan to ensure it properly uses funds to benefit the 
children.
    Response: If the Tribe is the contractor, the Tribe will formulate 
an education plan in consultation with the Indian Education Committee. 
See Sec.  273.119.
    Comment: Can we continue to use the same format we have been using 
for the Education Plan?
    Response: Yes, there is no prescribed form for the Education Plan, 
as long as it meets the requirements of subpart D.

E. Priority to Contracts Serving Indian Students On or Near 
Reservations

    Comment: Clarify what the contracts are being prioritized for in 
Sec.  273.128.
    Response: This section prioritizes how new contracts will be 
awarded if BIE receives more funding.
    Comment: The Fiscal Year 2020 budget justification states that 
priority is given to programs that are on or adjacent to Indian 
reservations located in Oklahoma and Alaska. We disagree with this 
priority because the funding should be for all Indian students who have 
specialized and unique needs.
    Response: The definition of ``eligible Indian student'' does not 
include a requirement to live on or near a reservation. Section 273.128 
establishes a mechanism for prioritization of new programs where there 
may be limited funding available. This prioritization does not limit 
contracts only to eligible entities located on or near reservations.
    Comment: Because of the importance of the JOM program to Tribes, 
BIE should prioritize Tribes in JOM funding even as it seeks to expand 
the geographic reach of the program. Under no circumstances should 
contracts to non-Tribal entities, such as States or public schools, 
reduce the funds that are available to Tribes to support their 
children. Tribes should never have to compete with States or other 
entities for funds, and Tribes should always have priority when seeking 
or renewing JOM contracts.
    Response: The final rule adds a provision, which exists in the 
current regulation, that gives the Tribe the first opportunity to 
contract, by notifying the BIE by February 1 preceding the school year 
to be covered by the contract. If the Tribe does not notify the BIE by 
this date, then BIE may contract with the State, public school 
district, or Indian corporation. See Sec.  273.131(a)-(b).
    Comment: Proposed Sec.  273.128 states that priority will be given 
to contracts that serve Indian students on or near reservations. Revise 
this section to include Alaska Native villages, to account for the fact 
that there is only one reservation in Alaska.
    Response: The definition of ``reservation'' at Sec.  273.106 
accounts for Alaska Native villages by including ``Alaska Native 
regions established pursuant to the Alaska Native Claims Settlement 
Act.''
    Comment: Indian students should be considered a priority no matter 
where they reside. Many eligible Indian students live in urban areas 
far from their reservations and rely on the JOM program. Delete 
reference to ``on or near'' a reservation because Tribal reservations 
were assigned arbitrarily and the large majority of our Tribal members 
live off-reservation and far from the reservation.
    Response: The definition of ``eligible Indian student'' does not 
include a requirement to live on or near a reservation. Section 273.128 
establishes a mechanism for prioritization of new programs where there 
may be limited funding available. This prioritization does not limit 
contracts only to eligible entities located on or near reservations.
    Comment: Clarify how many miles from a reservation is considered 
``near'' a reservation. We have public schools that are near the 
reservation and would like to apply if possible.
    Response: The rule does not intend to establish a distance from a 
reservation for eligibility; rather, Sec.  273.128(a) establishes a 
mechanism for prioritization of new programs where there may be limited 
funding available.

F. Comments on Funding and the Funding Formula

    The proposed rule set out the funding formula for distribution of 
JOM funds to contractors. The formula includes a ``weight factor'' that 
is multiplied by the number of eligible Indian students.
1. Funding Formula
    Comment: The national average cost per pupil that is used in the 
formula should be broken down to national average cost per Native pupil 
and national average cost per non-Native pupil.
    Response: The U.S. Department of Education does not currently 
provide a breakdown of data on average cost per pupil by Native versus 
non-Native.
    Comment: The weight factor does not benefit our Tribe; it reduces 
the amount of funds allocated to us.
    Response: The new formula based on the 1.3 weight factor was 
implemented in 1988 at the direction of Congress as a more realistic 
weight factor given the level of appropriations.
    Comment: Funding should not be based on the State average cost per 
pupil for States that poorly fund their education programs because 
children are then at the whim of the politics of that State. Instead, 
use a blended rate or the medium of all States.
    Response: The weight factor provides a lower boundary to help 
equalize among States. Specifically, if the State average divided by 
the national average is less than the weight factor (1.3), then the 
weight factor is used.
    Comment: Explain how the per pupil amount is determined.
    Response: The cost per pupil is based upon U.S. Department of 
Education public data.
    Comment: The national average cost per pupil does not accurately 
reflect the average cost per pupil in Tribal communities where we lack 
infrastructure. For example, in Alaska, we have kindergarten and high 
school students in the same facility, being taught by the same teacher.
    Response: The national average cost per pupil is used as the 
denominator in calculating the weight factor, so if the national 
average cost per pupil is significantly higher than the State average 
cost per pupil, then calculated weight factor will be lower than 1.3, 
and the minimum weight factor of 1.3 will be used instead. The minimum 
weight factor is an equalizer for communities where the State average 
cost per pupil is low.
    Comment: If the schools that receive JOM funds are required to meet 
State standards, then JOM funding is treated like general funding for 
students, and not specialized and unique funding as intended to meet 
the needs of eligible Indian students.
    Response: JOM funding may be used only to provide educational 
benefits to eligible Indian students for the programs, activities, and 
equipment set out in Sec.  273.113; it is not general funding.
    Comment: Although we fully support the attempt to not reduce funds 
for contracting parties, BIE should be engaged in extensive Tribal 
consultation on how best to update the formula while holding Tribes 
harmless.
    Response: BIE has conducted six webinars and two full-day, in-
person consultation sessions on this topic.

[[Page 10943]]

2. ``Hold Harmless'' Provision
    Comment: How does the hold harmless provision affect schools with 
50 percent or more Native students?
    Response: The hold harmless provision does not depend upon the 
percentage of eligible Indian students a contractor has.
    Comment: Clarify how the funding formula will impact smaller Tribes 
once the four-year ``hold harmless'' period expires.
    Response: Depending on Congressional appropriations, Tribal 
organizations who contract under JOM to meet the specialized and unique 
educational needs of eligible Indian students may see a change in the 
amount of JOM funding received once the four-year ``hold harmless'' 
period expires. The funding formula requires multiplication of the 
number of eligible Indian students by a weight factor so, to some 
extent, the number of eligible Indian students a Tribal organization 
serves will affect how much funding is allocated to that Tribal 
organization.
    Comment: After the four-year ``hold harmless'' period expires, 
funding may decrease and smaller Tribes may be at a significant 
disadvantage. Consider closely any plan that would result in less money 
for small Tribal communities or smaller eligible Indian student counts.
    Response: Congress decides the level at which JOM is funded. The 
funding formula affects allocation of that funding. The funding formula 
reflects the formula used since 1988.
3. Availability of Funding
    Comment: Many commented on the need for the JOM program to be fully 
funded or requested an increase in JOM funding, including:
     The Tribe's JOM program has always been underfunded, and 
has never received funding to recover from the additional decreases 
made during sequestration. Adequate funding is needed.
     We should be expanding the program to provide more 
services, so the formula should not result in less funding. Revisit the 
funding formula to make sure equal or greater funding is available for 
eligible Indian students. Funding must follow the students.
     Any reductions to already meager JOM funding is 
categorically unacceptable. The updated count required by the Act will 
demonstrate an explosion of funding need in FY20 and beyond. Before the 
increased student count begins reducing funds per-awardee below the 
FY17 level, overall JOM program funding increases must be in place.
     Tribes should receive no reductions in funding; if the 
treaty and trust obligations were fully honored, Tribes would be fully 
funded. Decreasing funds to Tribal JOM contractors is inconsistent with 
fulfillment of trust and treaty obligations to provide for Indian 
education.
     The current weight factor (1.3) should be increased to an 
amount that is consistent with the needs of Native students and funding 
per students should be increased at least to the level established in 
1994.
     Public schools should receive no reductions in funding if 
they consult with area Tribes for their consent on use of funds for 
academic, social, and cultural enrichment.
     BIE has a responsibility to determine the amount necessary 
to fully serve this need, and then passionately advocate for it during 
the federal budget development cycle, ensuring Federal appropriators 
are aware of the negative consequences for Indian Country.
     BIE plays a critical role in ensuring the availability of 
funds. It is incumbent on BIE to request the funds needed to adequately 
support the JOM program.
    Response: Congress decides the level at which JOM is funded, but 
BIE will consider this comment in preparing its annual report to 
Congress. As stated in Sec.  273.201, BIE will recommend appropriate 
funding levels for the program based on the most recent determination 
of the number of eligible Indian students served by each contracting 
party.
    Comment: If a contractor fails to submit their student count, they 
may not receive funds for the next school year, but will that failure 
affect appropriations? Are appropriations tied to the annual student 
count reported?
    Response: Congress determines the amount of appropriations. BIE is 
unable to speculate on whether Congress considers the annual student 
count.
    Comment: If additional schools apply for JOM funds, there is no 
assurance the funding will increase to accommodate the programs. 
Funding to existing programs could decrease. Without funding, we cannot 
meet the specialized and unique needs of eligible Indian students.
    Response: The rule provides that ``subject to the availability of 
appropriations,'' eligible entities who have not previously entered 
into a contract for JOM may submit a proposal. See Sec.  273.125.
4. Use of JOM Funding
    Comment: In the past, JOM funding has been used to support culture 
and language programs, but the proposed reference in Sec.  273.113(b) 
to ``culturally sensitive dropout prevention activities'' does not 
appear to encompass those. Revise to include cultural activities.
    Response: The final rule deletes proposed Sec.  273.113(b) because 
the language at Sec.  273.113(a)(1), allowing for cultural programs, is 
more encompassing and would include language programs.
    Comment: JOM has historically funded more than academics, to 
include social services. Retain social services as a component of JOM, 
as social emotional learning is gaining popularity in schools and the 
trauma index of our children is skyrocketing.
    Response: JOM funds are to be used to provide educational benefits 
only and the final rule clarifies that any counseling funded through 
JOM is limited to academic, career and college-readiness counseling. 
See Sec.  273.113.
    Comment: Keep community-based programs, as they are best able to 
meet the needs of their children.
    Response: The Indian Education Committee may choose to develop 
community-based programs to meet the unique educational needs of 
eligible Indian students. See Sec. Sec.  273.115 and 273.117.
    Comment: Ensure that JOM funding can continue to be used for food 
for children who go without unless school is in session and for Tribal 
cultural gatherings.
    Response: As in the current rule, the final rule provides that 
education plans may provide for free school lunches for eligible Indian 
students who do not qualify for free U.S. Department of Agriculture 
lunches. See Sec.  273.143(c).
    Comment: Ensure that JOM funding can be used for school supplies, 
sports equipment, and similar items that boost self-esteem, increase 
participation, and contribute to school spirit, as well as dues, fees, 
registration, summer school, shoes, clothes, eyeglasses, technology, 
facility rentals, academic incentives, parental involvement incentives, 
student direct services, sports fees, leadership camps, sports camps, 
substance abuse, hygiene items.
    Response: The final rule allows JOM funds to be used for important 
needs, such as school supplies and items that enable recipients to 
participate in curricular and extra-curricular activities. See Sec.  
273.113(a)(3).
    Comment: JOM funding should be available to train members of the 
Indian Education Committee so that members understand their duties, 
roles, and responsibilities, and to allow stipend and travel costs 
where internet is not available to meet remotely.

[[Page 10944]]

    Response: As in the current regulation, the final rule allows a JOM 
contract to include funding to support the duties of the Indian 
Education Committee, including members' attendance at meetings (such as 
stipend and travel costs) and training sessions, as the Committee deems 
appropriate. See Sec.  273.127.

G. Comments on Reporting Requirements

    Comment: When are reports due and who do we send them to?
    Response: The final rule provides that the annual report is due on 
or before September 15 (see Sec.  273.152) and should be sent to the 
awarding official, Indian Education Committee(s) and Tribe(s) (see 
Sec.  273.153).
    Comment: Consider that May and June are busy for schools when 
setting reporting deadlines.
    Response: The final rule provides that the annual report is due on 
or before September 15, to allow sufficient time following schools' 
busy seasons to prepare. See Sec.  273.152.
    Comment: If a contractor fails to meet the reporting requirements, 
what will BIE do with the funds it withholds?
    Response: Funds that are withheld for failure to meet reporting 
requirements will be allocated among the other JOM contractors.
    Comment: Have you modernized the application and reporting process?
    Response: BIE accepts applications and reports electronically 
through email and is open to suggestions as to how to further modernize 
these processes.
    Comment: Clarify what reporting requirements apply to self-
governance compact Tribes.
    Response: The final rule adds a provision to Sec.  273.111 to 
clarify what reporting requirements self-governance compact Tribes are 
subject to.
    Comment: Add an exception to the annual reporting requirements in 
subpart G to follow the 477 reporting requirements when applicable 
because the reporting requirements in Sec. Sec.  273.151 and 273.152, 
to report by a certain date and to include specific data, conflict with 
existing law under P.L. 102-477.
    Response: BIE has not added the requested exception because the JOM 
Modernization Act establishes a reporting framework that requires all 
JOM contractors to report on the same schedule. Specifically, the Act 
requires each contracting party to submit a report for each academic 
year, and provides that a failure to report will result in the 
contracting party receiving no amounts for the following academic year. 
BIE is also required to submit an annual report with the most recent 
determination of the number of eligible Indian students served by each 
contracting party. 25 U.S.C. 5348(c).
    Comment: Make reporting and eligibility requirements consistent and 
uniform for all JOM contracts, whether the contractor is a Tribe, a 
public school, or other contractor, to place them in the same calendar 
year and be more uniform with other programs or contracts.
    Response: The final rule provides for a consistent schedule for 
reporting: annual reports are due September 15 of each year, regardless 
of who the contracting party is or the vehicle through which they 
receive their funds (e.g., 477 plan, self-determination contract, or 
self-governance contract or compact). See Sec.  273.152. Eligibility 
requirements are consistent for all Indian students, as specified in 
Sec.  273.112.
    Comment: I oppose withholding funds for the next school year if a 
contractor fails to comply with the reporting requirements.
    Response: Under Sec.  273.156, BIE will provide technical 
assistance and training to assist existing contractors in complying 
with the reporting requirements.

H. Agency Administration of JOM

    Comment: Clarify who the Regional Director is. We believe it should 
be someone in BIE, as most BIA Regional Directors are not experts in 
education matters.
    Response: The final rule replaces the term ``Regional Director'' 
with ``BIE Director'' to reflect that BIE is administering JOM.
    Comment: Allow the Regional Office to receive funding to provide 
technical assistance because Regional Offices are closer to Tribes.
    Response: BIE is responsible for providing technical assistance and 
will work with BIA Regions to provide the technical assistance to 
Tribes.
    Comment: As part of the current proposed rule, the BIE requested 
comment on a proposal to shift responsibility for approving JOM program 
contracts from the BIA to the BIE. Due to budgetary processes and 
capacity, the BIA has historically processed JOM contracts on behalf of 
the BIE. In early 2019, the BIE took an unprecedented step toward 
managing its own budget and contracting processes. As the BIE builds 
capacity for to support its own budgetary systems, management of 
contracts for education programs and services should be shifted to the 
BIE for administration and approval. Streamlining administration 
education programs under BIE authority provides greater flexibility for 
those with the most knowledge of education programs and avoids 
bureaucratic delays that inevitably occur when both the BIE and BIA are 
required to sign off on routine contracts. For this reason, we support 
the proposal to shift JOM contract administration from the BIA to the 
BIE.
    Response: BIE is continuing to build capacity and is exploring 
options to streamline the management of education contracts.
    Comment: We request that administration of contracts remain with 
BIA instead of BIE because there is no BIE presence in Alaska, and that 
could negatively affect efficiency here. Additionally, because many 
Tribal organizations operate their JOM through a 477 plan, retaining 
administration with BIA will better align the programs.
    Response: BIE is working with BIA to ensure management of education 
contacts is as efficient as possible.

I. Participation in Rulemaking and Implementation

    Comment: We request that BIE not move forward with JOM 
modernization without better engaging program participants to enhance 
the rulemaking process with a working group including Tribal 
representatives.
    Response: BIE engaged in Tribal consultation and reached out to 
stakeholders in developing this regulation and will continue to engage 
with JOM contractors and Tribes as it implements the JOM program.
    Comment: Update the JOM guideline booklet to set out what Tribal 
contractors can do versus public school contractors.
    Response: BIE will be updating the JOM handbook to reflect the 
changes made by this final rule.
    Comment: Some Tribes and contractors would have participated in the 
meetings and consultation sessions on the proposed rule but were off 
for the summer.
    Response: BIE scheduled the meetings in order to allow it to meet 
the statutory deadline for a final rule and so as not to interfere with 
scheduled school activities. BIE offered webinars to allow for easier 
access regardless of location.
    Comment: In implementing these changes, BIE should regularly meet 
with Tribal stakeholders to evaluate opportunities to improve the rule 
and the program.
    Response: BIE welcomes Tribal input on best practices and other 
improvements in implementing the JOM program.
    Comment: Insert regulatory text that requires formal Tribal 
consultation to

[[Page 10945]]

expand geographic coverage and enhance Tribal participation.
    Response: The final rule adds that BIE will consult with Tribes in 
implementing Sec.  273.104.
    Comment: Require BIE to conduct consultation with area Tribes prior 
to any cancellation to allow the Tribes to take over administration of 
the funds.
    Response: If a contract is cancelled for cause, the Bureau will 
attempt to perform the work by another contract, which may be the 
Tribe. See Sec.  273.195(d).
    Comment: Parents are the second most important key stakeholder 
after children in this process.
    Response: The public meetings on the proposed rule included 
parents.

J. Miscellaneous Comments

    Comment: Will existing contractors need to reapply?
    Response: Existing contractors will not need to reapply.
    Comment: Proposed Sec.  273.126 refers to minimum State standards 
or requirements, but some schools work with standards set by their 
accrediting agency, rather than the State.
    Response: The final rule addresses this comment by changing ``State 
standards or requirements'' to ``State or other applicable standards or 
requirements.''
    Comment: Requiring a public school district to establish in its 
proposal to contract that it has at least 70 percent eligible Indian 
students enrolled is unreasonable. Lower the figure to 50 percent.
    Response: The final rule changes the required percentage to 50 
percent because 50 percent more accurately reflects the enrollment 
numbers at public school districts that meet the remaining requirements 
of Sec.  273.126.
    Comment: We support having payments be made in advance for schools.
    Response: As in the current rule, the final rule allows for advance 
payments. See Sec.  273.142.
    Comment: Clarify in section 273.192(a) whether the new Tribal 
resolution that is required if the current one has expired or its terms 
do not address renewal is required annually on some other time 
schedule.
    Response: Section 273.192(a) requires the new Tribal resolution 
only upon renewal of the contract.

IV. Summary of Final Rule and Changes From Proposed Rule to Final Rule

    This final rule amends part 273 as a whole to implement the JOM 
Modernization Act and make other changes necessary to update the rule 
as described below. An edit made throughout the rule was to replace 
``Regional Director'' with ``BIE Director'' to reflect that BIE, rather 
than BIA, will be primarily implementing part 273.

A. General Provisions and Definitions (Subpart A)

    Final subpart A updates each of the existing sections (purpose and 
scope, definitions, revision or amendment of regulations, and policy of 
maximum Indian participation). For example, the final rule splits the 
purpose and scope section into several sections; adds, revises, and 
removes definitions; and changes requirements for revising or amending 
the regulations to provide that the Bureau will follow the 
Administrative Procedure Act. The final rule adds a section on how the 
Secretary will ensure full geographic coverage and full participation 
to address a requirement in the JOM Modernization Act that the 
Secretary consult with eligible entities that have not previously 
participated in the JOM program.
    Changes from the proposed rule to final rule in this subpart 
include:
     Adding a sentence to indicate that the Secretary will 
consult with Tribes (and contact State educational agencies, local 
educational agencies, and Alaska Native organizations that have not 
previously entered into a contract) in ensuring geographic coverage and 
the full participation of all federally recognized Tribes and school 
districts to better reflect the statutory requirement for consultation. 
See Sec.  273.104.
     Adding a definition for ``BIE Director'' as this term 
replaced the proposal to include ``Regional Director.'' See Sec.  
273.106.
     Adding a definition for ``Bureau-funded school'' to 
clarify what schools are included, as this term is used in the 
description of who is an ``eligible Indian student.'' See Sec.  
273.106.
     Adding clarification in the definition of ``contract'' to 
distinguish JOM contracts from Indian Self-Determination and Education 
Assistance Act contracts and compacts. See Sec.  273.106.
     Deleting reference to BIA in the definition of 
``Director.'' See Sec.  273.106.
     Adding a definition of ``parent,'' as this term is used 
throughout the part. See Sec.  273.106.
     Adding a definition of ``sectarian school,'' as this term 
is used in the description of who is an ``eligible Indian student.'' 
See Sec.  273.106.
     Adding to the definition of ``Tribal organization'' the 
statutory requirement for each Tribe's approval of a contract to 
perform services benefitting more than one Tribe. See Sec.  273.106.

B. Program Eligibility & Applicability (Subpart B)

    Final subpart B addresses the same topics of eligible applicants 
(but updates the term to refer to ``eligible entities'' to reflect the 
language of the JOM Modernization Act) and eligible students as the 
current subpart B, but moves the other subpart B topics to subparts C, 
D and E. Subpart B also addresses what funds may be used under JOM 
contracts and what programs may be contracted under the JOM Act. The 
final rule revises the criteria for ``eligible Indian students'' and 
adds examples of how JOM contract funds can be used. The final rule 
also clarifies which provisions Tribal organizations are subject to 
(see proposed Sec.  273.111).
    Changes from the proposed rule to final rule in this subpart 
include:
     Revising Sec.  273.111 to provide that Tribal 
organizations are subject to the Sec.  273.113 restrictions on what JOM 
funds may be used for.
     Clarifying in Sec.  273.111 that Tribal organizations are 
subject to reporting requirements for JOM. See Sec.  273.111.
     Clarifying that the Indian Education Committee has the 
authority only to recommend cancellation or suspension of contracts, 
rather than authority to revoke them. See Sec.  273.111(b)(8).
     Adding reference to self-governance regulations at 25 CFR 
1000 for contract proposals, clarifying that education plans must be 
submitted to the BIE Director, and clarifying that redesign and 
reallocation under Title I contracts or Title IV compacts must comply 
with another regulatory provision. See Sec.  273.111(c).
     Clarifying an exception for students enrolled in 
previously private schools that may be eligible Indian students. See 
Sec.  273.112(b).
     Referring to the definition of ``Indian Tribe'' rather 
than repeating ``federally recognized.'' See Sec.  273.112(c).
     Clarifying that ``counseling'' refers to academic, career 
and college-readiness counseling. See Sec.  273.113(a)(1).
     Deleting reference to culturally sensitive dropout 
prevention activities and instead add ``establish'' to the broader 
description of programs. See Sec.  273.113(a).
     Changing the recipient of annual reports from the awarding 
official to the BIE Director. See Sec.  273.152, Sec.  273.153.

C. Indian Education Committee (Subpart C)

    Final subpart C addresses the Indian Education Committee, which is 
in

[[Page 10946]]

current subpart B. The final rule revises the description of ``Indian 
Education Committee'' to include a preference in committee membership 
for parents and guardians of children enrolled in a school. The rule 
also removes a requirement to report to the Bureau regarding who will 
serve on the Indian Education Committee. The rule adds that 
organizational papers and by-laws of the Indian Education Committee may 
include additional powers and duties that would permit the Committee 
to, among other things, establish policy and procedures for hearing 
grievances.
    Changes from the proposed rule to final rule in this subpart 
include:
     Adding the statutory allowance for the Tribe(s) to specify 
the Local Indian Committee(s) or Indian Advisory School Board(s) as the 
Indian Education Committee if the Indian Education Committee was 
established prior to 1975. See Sec.  273.115.
     Adding a cross-reference in the list of powers and duties 
of the Indian Education Committee to Sec.  273.194, which more fully 
sets out how an Indian Education Committee could recommend cancellation 
or suspension of a contract. See Sec.  273.117(d).

D. Education Plan (Subpart D)

    Final subpart D addresses the contents of the education plan 
(currently addressed in subpart B) and adds a section specifying that 
an education plan will be approved by a the BIE Director, under 25 
U.S.C. 5345.
    No substantive changes from the proposed rule to final rule, beyond 
changing ``Regional Director'' references to ``BIE Director'' were made 
in this subpart.

E. Contract Proposal, Review, and Approval (Subpart E)

    The final rule moves provisions that are in the current subpart B 
regarding applications and requests to contract, contract review, and 
approval, to a new subpart E. This new subpart includes a section 
regarding how eligible entities who have not participated in the 
program in the past should submit a contract proposal. The final rule 
changes the contract approval period from 60 days to 90 days. The 
change from 60 to 90 days aligns JOM contract approval with the 
statutory 90-day approval period for both Public Law 93-638 contracts 
and Public Law 102-477 plans. The subpart also includes updates to 
outdated statutory and regulatory citations. Since the BIE is 
responsible for administering Indian education programming for the 
Department, the final rule reflects that BIE is the primary agency 
administering JOM.
    Changes from the proposed rule to final rule in this subpart 
include:
     Revising two requirements for a public school district to 
establish to contract for operational support: that the funds are 
needed to meet ``other applicable standards'' if State standards do not 
apply; and lowering the percentage of eligible Indian enrollment in the 
school district from 70 to 50. See Sec.  273.126(b)(1).
     Adding that a Tribal resolution is needed in support of a 
contract proposal if the contractor is a Tribal organization. See Sec.  
273.130.
     Adding in the option of first refusal that is in the 
current regulation for Tribes who would like to enter into a contract 
to notify the BIE no later than February 1 preceding the school year 
for the contract, and only after that date will the BIE Director seek 
to contract with the State, public school district, or Indian 
corporation. See Sec.  273.131(b).

F. Funding Provisions (Subpart F)

    Final subpart F includes provisions that are in current subpart C. 
This new subpart F revises the funding formula to reflect current 
practice, with the four-year ``hold harmless'' and phased decrease 
approach provided by the JOM Modernization Act. This subpart also moves 
the section on advance payments from current subpart D and revises the 
section on advance payments to comply with 25 U.S.C. 5324(b).
    No substantive changes were made to this subpart from the proposed 
rule to final rule, beyond changing ``Regional Director'' references to 
``BIE Director'' and updating the fiscal year references from 2017 to 
2018.

G. Annual Reporting Requirements (Subpart G)

    Final subpart G revises reporting requirements to reflect the 
annual student count reporting requirements of the JOM Modernization 
Act. As such, this subpart adds sections requiring an annual report, 
describing what must be included in the annual report, describing what 
will happen if a contractor fails to submit an annual report, and 
identifying who will notify a contractor that they have failed to 
submit an annual report. This subpart also includes a section 
explaining that the Bureau is required to provide technical assistance 
and training, and describing the process to request assistance to meet 
annual reporting requirements. An additional new section describes how 
a decrease in the reported student count will affect future funding. 
The subpart includes language reflective of the JOM Modernization Act 
defining a ``contracting party'' as an entity that has a contract 
through a program authorized under this Act.
    No substantive changes were made in this subpart from the proposed 
rule to final rule, beyond changing ``Regional Director'' references to 
``BIE Director'' and, in Sec.  273.155, changing ``awarding official'' 
to ``BIE Director.''

H. General Contract Requirements (Subpart H)

    Final subpart H addresses many of the same topics as current 
subpart D. In addition to updating outdated statutory and regulatory 
citations, this subpart updates records requirements now that contract 
files are to be filed under the Department Records Schedule. This 
subpart also revises a contractor's responsibility for penalties under 
the Privacy Act requirements, and revises who will investigate a 
complaint received of a Civil Rights Act violation in State school 
districts and provides that such investigations will be performed by 
the Department of Education and removes references to the Department of 
Justice.
    Changes to this subpart from the proposed rule to final rule 
included changing ``Regional Director'' references to ``BIE Director'' 
and adding a new paragraph (d) to Sec.  273.170 to address requirements 
for Self-Governance Tribes to submit their education plans to the BIE 
Director.

I. Contract Renewal, Revisions, and Cancellations (Subpart I)

    Final subpart I addresses the topics in current subpart E, and also 
includes new provisions adding a contract renewal process.
    No substantive changes from the proposed rule to final rule, beyond 
changing ``Regional Director'' references to ``BIE Director'' were made 
in this subpart.

J. Responsibility and Accountability (Subpart J)

    This final subpart addresses requirements in the JOM Modernization 
Act which, among other things, requires the Secretary to provide an 
annual report to Congressional committees and subcommittees to include 
a determination on the number of eligible students served by each 
contracting party, recommendations on appropriate funding levels for 
the program based upon such determination, and an assessment of the 
contracts under JOM.
    No changes from the proposed rule to final rule were made in this 
subpart.

[[Page 10947]]

K. Appeals (Subpart K)

    Final subpart K includes provisions that are currently at subpart F 
and encourages the use of an Alternate Dispute Resolution (ADR) process 
that has been established by the Department of the Interior prior to 
filling a formal appeal. The subpart would also refers to the Contracts 
Dispute Act of 1978, 41 U.S.C. 7101--7109, which created the Civilian 
Board of Contract Appeals (CBCA). The CBCA is an independent tribunal 
with its own formal appeal process. Additional information on the CBCA 
can be found at: https://www.dbca.gov/index.html. Tribes and Tribal 
organizations may bring appeals involving Self-Determination Act 
contracts before the CBCA under 25 U.S.C. 5331(d)-(e).
    The only change from the proposed rule to final rule in this 
subpart was to add a reference to 25 CFR part 1000 as an avenue to 
request an appeal, as applicable.

V. Procedural Requirements

A. Regulatory Planning and Review (E.O. 12866 and 13563)

    Executive Order (E.O.) 12866 provides that the Office of 
Information and Regulatory Affairs (OIRA) at the Office of Management 
and Budget (OMB) will review all significant rules. OIRA has determined 
that this rule is not significant.
    E.O. 13563 reaffirms the principles of E.O. 12866 while calling for 
improvements in the Nation's regulatory system to promote 
predictability, to reduce uncertainty, and to use the best, most 
innovative, and least burdensome tools for achieving regulatory ends. 
The E.O. directs agencies to consider regulatory approaches that reduce 
burdens and maintain flexibility and freedom of choice for the public 
where these approaches are relevant, feasible, and consistent with 
regulatory objectives. E.O. 13563 emphasizes further that regulations 
must be based on the best available science and that the rulemaking 
process must allow for public participation and an open exchange of 
ideas. The BIE has developed this rule in a manner consistent with 
these requirements. This rule is also part of the Department's 
commitment under the Executive Order to reduce the number and burden of 
regulations.

B. Reducing Regulations and Controlling Regulatory Costs (E.O. 13771)

    E.O. 13771 of January 30, 2017, directs Federal agencies to reduce 
the regulatory burden on regulated entities and control regulatory 
costs. E.O. 13771, however, applies only to significant regulatory 
actions, as defined in Section 3(f) of E.O. 12866. Therefore, E.O. 
13771 does not apply to this rule.

C. Regulatory Flexibility Act

    The Department of the Interior certifies that this rule will not 
have a significant economic effect on a substantial number of small 
entities under the Regulatory Flexibility Act (5 U.S.C. 601 et seq.).

D. Small Business Regulatory Enforcement Fairness Act

    This rule is not a major rule under 5 U.S.C. 804(2), the Small 
Business Regulatory Enforcement Fairness Act. This rule:
    (a) Does not have an annual effect on the economy of $100 million 
or more because the funding available through JOM does not approach 
this amount.
    (b) Will not cause a major increase in costs or prices for 
consumers, individual industries, Federal, State, Tribal or local 
government agencies, or geographic regions because this rule affects 
only certain education contracts.
    (c) Does not have significant adverse effects on competition, 
employment, investment, productivity, innovation, or the ability of 
U.S.-based enterprises to compete with foreign-based enterprises 
because this rule affects only certain education contracts.

E. Unfunded Mandates Reform Act

    This rule does not impose an unfunded mandate on State, local, or 
Tribal governments or the private sector of more than $100 million per 
year. The rule does not have a significant or unique effect on State, 
local, or Tribal governments or the private sector. A statement 
containing the information required by the Unfunded Mandates Reform Act 
(2 U.S.C. 1531 et seq.) is not required.

F. Takings (E.O. 12630)

    This rule does not affect a taking of private property or otherwise 
have taking implications under Executive Order 12630 because this rule 
does not affect individual property rights protected by the Fifth 
Amendment or involve a compensable ``taking.'' A takings implication 
assessment is not required.

G. Federalism (E.O. 13132)

    Under the criteria in section 1 of Executive Order 13132, this rule 
does not have sufficient federalism implications to warrant the 
preparation of a federalism summary impact statement because the rule 
affects only individuals' eligibility under certain education 
contracts. A federalism summary impact statement is not required.

H. Civil Justice Reform (E.O. 12988)

    This rule complies with the requirements of Executive Order 12988. 
Specifically, this rule:
    (a) Meets the criteria of section 3(a) requiring that all 
regulations be reviewed to eliminate errors and ambiguity and be 
written to minimize litigation; and
    (b) Meets the criteria of section 3(b)(2) requiring that all 
regulations be written in clear language and contain clear legal 
standards.

I. Consultation With Indian Tribes (E.O. 13175)

    The Department of the Interior strives to strengthen its 
government-to-government relationship with Indian Tribes through a 
commitment to consultation with Indian Tribes and recognition of their 
right to self-governance and Tribal sovereignty. We have evaluated this 
rule under the Department's consultation policy and under the criteria 
in Executive Order 13175 and have determined that it has substantial 
direct effects on federally recognized Indian Tribes because one 
portion of the criteria for eligibility of Indian students is Tribal 
membership. The proposed rule was published on June 27, 2019. See 84 FR 
30647. During the 60-day public comment period, BIE held four 
consultations sessions directly with the Tribes and four consultation 
sessions with eligible entities and interested parties: July 16, 2019, 
in Tahlequah, OK; July 19, 2019, in Bismarck, ND; July 23, 2019, via 
webinar; and July 25, 2019, via webinar. See 84 FR 30647. The public 
comment period on the proposed rule ended on August 26, 2019.

J. Paperwork Reduction Act

    This rule contains information collections requiring approval under 
the Paperwork Reduction Act of 1995 (PRA), 44 U.S.C. 3501 et seq. The 
Department is seeking approval for a new OMB Control Number.
    OMB Control Number: 1076-0193.
    Brief Description of Collection: The regulations at 25 CFR 273, 
Subpart E, implement in section 7(c) Contracting Party Student Count 
Reporting Compliance, of the Johnson-O'Malley Supplemental Indian 
Education Program Modernization Act (Pub. L. 115-404), enacted December 
31, 2018. These regulations require the BIE to implement an annual 
reporting requirement for existing JOM

[[Page 10948]]

contractors to report a student count served by each contracting party, 
and an accounting of the amounts and purposes for which the contract 
funds were expended. The information received from the annual reporting 
requirements of the contractor will allow the Secretary to provide an 
annual report, including the most recent determination of the number of 
eligible Indian students served by each contracting party, 
recommendation on appropriate funding levels, and an assessment of the 
contracts receiving JOM contracts, to the appropriate Committee and 
Subcommittees in the Senate and of the House of Representatives. The 
JOM Modernization Act indicates a ``contracting party'' is an entity 
that has a contract through a program authorized under this Act. It 
does not exclude Tribal organizations from the annual reporting 
requirements. The Department is seeking approval for a new OMB Control 
Number.
    Title of Collection: Johnson O'Malley Student Count Annual Report.
    Type of Review: New collection.
    Respondents/Affected Public: Tribal organizations, States, public 
school districts, Indian corporations.
    Total Estimated Number of Annual Respondents: 312.
    Total Estimated Number of Annual Responses: 1,197.
    Estimated Completion Time per Response: Ranges from 2 to 80 hours.
    Total Estimated Number of Annual Burden Hours: 11,450.
    Respondent's Obligation: Required to Obtain a Benefit.
    Frequency of Collection: Annually.
    Total Estimated Annual Non-hour Burden Cost: $0.

K. National Environmental Policy Act

    This rule does not constitute a major Federal action significantly 
affecting the quality of the human environment. A detailed statement 
under the National Environmental Policy Act of 1969 (NEPA) is not 
required because these are ``regulations . . . whose environmental 
effects are too broad, speculative, or conjectural to lend themselves 
to meaningful analysis and will later be subject to the NEPA process, 
either collectively or case-by-case.'' 43 CFR 46.210(i). The BIE has 
also determined that the rule does not involve any of the extraordinary 
circumstances listed in 43 CFR 46.215 that would require further 
analysis under NEPA.

L. Effects on the Energy Supply (E.O. 13211)

    This rule is not a significant energy action under the definition 
in Executive Order 13211. A Statement of Energy Effects is not 
required.

List of Subjects in 25 CFR Part 273

    Elementary and secondary education, Grant programs-Indians, 
Indians-education, Schools.

    For the reasons set forth in the preamble, the Department of the 
Interior, Bureau of Indian Affairs, revises 25 CFR part 273 to read as 
follows:

PART 273--EDUCATION CONTRACTS UNDER JOHNSON-O'MALLEY ACT

Subpart A--General Provisions and Definitions
Sec.
273.101 What is the purpose and scope of this part?
273.102 How will revisions or amendments be made to this part?
273.103 What is the Secretary's policy of maximum Indian 
participation?
273.104 How will the Secretary extend geographic coverage and 
enhance participation under the Johnson-O'Malley Act?
273.105 How do these regulations affect existing Tribal rights?
273.106 What key terms do I need to know?
Subpart B--Program Eligibility & Applicability
273.110 Who is eligible to request contracts under the Johnson-
O'Malley Act?
273.111 How do the requirements for Tribal organizations differ from 
those for other eligible entities?
273.112 Who is an eligible Indian student under the Johnson-O'Malley 
Act?
273.113 How can the funds be used under the Johnson-O'Malley Act?
273.114 What programs may be contracted under the Johnson-O'Malley 
Act?
Subpart C--Indian Education Committee
273.115 Who determines the unique educational needs of eligible 
Indian students?
273.116 Does an Indian Education Committee need to establish 
procedures and report to the BIE Director?
273.117 What are the powers and duties of the Indian Education 
Committee?
273.118 Are there additional authorities an Indian Education 
Committee can exercise?
Subpart D--Education Plan
273.119 What is an education plan and what must it include?
273.120 Does an education plan need to be approved by the BIE 
Director?
273.121 When does the BIE Director approve the education plan?
Subpart E--Contract Proposal, Review, and Approval
273.125 How may a new contracting party request a contract under the 
Johnson-O'Malley Act?
273.126 What proposals are eligible for contracts under the Johnson-
O'Malley Act?
273.127 Can a contract include funds to support the duties of an 
Indian Education Committee?
273.128 How are contracts prioritized?
273.129 May the BIE Director reimburse a public school district for 
educating non-resident Indian students?
273.130 What is required in the contract proposal for funding?
273.131 What is required for a Tribal request for a contract?
273.132 Who will review and approve the contract proposal?
273.133 What is the process for review and decision?
273.134 What is the timeframe for contract decision?
273.135 Who will negotiate the contract?
Subpart F--Funding Provisions
273.140 What is the funding formula to distribute funds?
273.141 Will funding be prorated?
273.142 Are advance payments on a contract allowed under the 
Johnson-O'Malley Act?
273.143 Must other Federal, State, and local funds be used?
273.144 Can Johnson-O'Malley funds be used for capital outlay or 
debt retirement?
273.145 How can funds be used for subcontractors?
273.146 Can funds be used outside of schools?
273.147 Are there requirements of equal quality and standard of 
education?
Subpart G--Annual Reporting Requirements
273.150 Does an existing contracting party need to submit any 
reports?
273.151 What information must the existing contracting party provide 
in the annual report?
273.152 When is the annual report due?
273.153 Who else needs a copy of the annual report?
273.154 What will happen if the existing contracting party fails to 
submit an annual report?
273.155 How will the existing contracting party know when reports 
are due?
273.156 Will technical assistance be available to comply with the 
annual reporting requirements?
273.157 What is the process for requesting technical assistance and/
or training?
273.158 When should the existing contracting party request technical 
assistance and/or training?
273.159 If the existing contracting party reported a decrease of 
eligible Indian students, how will funding be reduced?
273.160 Can the Secretary apply a ratable reduction in Johnson-
O'Malley program funding?
273.161 What is the maximum decrease in funding allowed?
Subpart H--General Contract Requirements
273.170 What special program provisions must be included in the 
contract?
273.171 Can a contractor make changes to a program approved by an 
Indian Education Committee?

[[Page 10949]]

273.172 May State employees enter Tribal lands, reservations, or 
allotments?
273.173 What procurement requirements apply to contracts?
273.174 Are there any Indian preference requirements for contracts 
and subcontracts?
273.175 How will a Tribal governing body apply Indian preference 
requirements for contracts and subcontracts?
273.176 May there be a use and transfer of Government property?
273.177 Who will provide liability and motor vehicle insurance?
273.178 Are there contract recordkeeping requirements?
273.179 Are there contract audit and inspection requirements?
273.180 Are there disclosure requirements for contracts?
273.181 Are there Privacy Act requirements for contracts?
273.182 Are there penalties for misusing funds or property?
273.183 Can the Secretary investigate a potential Civil Rights Act 
violation?
Subpart I--Contract Renewal, Revisions, and Cancellations
273.191 How may a contract be renewed for Johnson-O'Malley funding?
273.192 What is required to renew a contract?
273.193 May a contract be revised or amended?
273.194 Does the Indian Education Committee have authority to cancel 
contracts?
273.195 May a contract be cancelled for cause?
Subpart J--Responsibility and Accountability
273.201 What is required for the Secretary to meet his or her 
reporting responsibilities?
273.202 Does this part include an information collection?
Subpart K--Appeals
273.206 May a contract be appealed?
273.207 How does a contractor request dispute resolution?
273.208 How does a Tribal organization request an appeal?
273.209 How does a State, public school district, or an Indian 
corporation request an appeal?

    Authority:  Secs. 201-203, Pub. L. 93-638, 88 Stat. 2203, 2213-
2214 (25 U.S.C. 455-457), unless otherwise noted.

Subpart A--General Provisions and Definitions


Sec.  [thinsp]273.101   What is the purpose and scope of this part?

    The purpose of this part is to set forth the process by which the 
Secretary will enter into contracts for the education of Indian 
students under the Johnson-O'Malley Act. Such contracts are for the 
purpose of financially assisting those efforts designed to meet the 
specialized and unique educational needs of eligible Indian students, 
including supplemental programs and school operational support, where 
such support is necessary to maintain established State educational 
standards.


Sec.  273.102   How will revision or amendments be made to this part?

    Prior to making any substantive revisions or amendments to this 
part, the Secretary will consult with Indian Tribes and national and 
regional Indian organizations to the extent practicable about the need 
for revision or amendment and will consider their views in preparing 
the proposed revision or amendment. Nothing in this section precludes 
Indian Tribes or national or regional Indian organizations from 
initiating a request for revisions or amendments.


Sec.  [thinsp]273.103   What is the Secretary's policy of maximum 
Indian participation?

    The meaningful participation in all aspects of educational program 
development and implementation by those affected by such programs is an 
essential requisite for success. Such participation not only enhances 
program responsiveness to the needs of those served, but also provides 
them with the opportunity to determine and affect the desired level of 
educational achievement and satisfaction which education can and should 
provide. Consistent with this concept, maximum Indian participation in 
the development, approval, and implementation of all programs 
contracted under this part is required.


Sec.  [thinsp]273.104   How will the Secretary extend geographic 
coverage and enhance participation under the Johnson-O'Malley Act?

    The Secretary will, to the extent practicable, and subject to the 
availability of appropriations, ensure full geographic coverage and the 
full participation of all federally recognized Tribes and school 
districts, regardless of whether the school districts or Tribal 
organizations had entered into a contract under the Johnson-O'Malley 
Act before fiscal year 1995. To the maximum extent practicable, the 
Secretary will consult with Indian Tribes and contact State educational 
agencies, local educational agencies, and Alaska Native organizations 
that have not previously entered into a contract in the implementation 
of this section.


Sec.  [thinsp]273.105   How do these regulations affect existing Tribal 
rights?

    Nothing in these regulations may be construed as:
    (a) Affecting, modifying, diminishing, or otherwise impairing the 
sovereign immunity from suit enjoyed by an Indian Tribe;
    (b) Authorizing or requiring the termination, waiving, modifying, 
or reducing of any existing trust responsibility of the United States 
with respect to the Indian people;
    (c) Permitting significant reduction in services to Indian people 
as a result of this part; or
    (d) Mandating an Indian Tribe to request a contract or contracts. 
Such requests are strictly voluntary.


Sec.  [thinsp]273.106   What key terms do I need to know?

    Terms used in this part:
    Academic year means the period of the year during which students 
attend an educational institution.
    Appeal means a request for an administrative review of an adverse 
Agency decision.
    Approving official means the BIE Director, or Agency 
Superintendents (for Tribes assigned under their management), has the 
responsibility and duties to review, approve or decline the contract in 
accordance with the Act.
    Awarding official means any person who by appointment or delegation 
in accordance with applicable regulations has the authority to enter 
into and administer contracts on behalf of the United States of America 
and make determinations and findings with respect thereto. This person 
can be a contracting officer or other authorized Federal official.
    BIE Director means the Bureau of Indian Education Director or his 
or her designee.
    Bureau or BIE means the Bureau of Indian Education.
    Bureau-funded school means a Bureau-operated elementary or 
secondary day or boarding school; or a Bureau-operated dormitory for 
students attending a school other than a Bureau school; or a Tribally 
controlled elementary school, secondary school, or dormitory that 
receives financial assistance for its operation under a contract, 
grant, or agreement with the Bureau under the Indian Self-Determination 
and Education Assistance Act or the Tribally Controlled Schools Act, as 
amended.
    Calendar year means the period of 365 days (or 366 days in leap 
years) starting from January 1.
    Capital outlay means money spent to acquire, maintain, repair, or 
upgrade capital asset. Capital assets, also known as fixed assets, may 
include machinery, land, facilities, or other business necessities that 
are not expended during normal use.

[[Page 10950]]

    Contract means to transfer the funds in support of the efforts 
designed to meet the specialized and unique educational needs of Indian 
students in the Johnson-O'Malley program from the Federal Government to 
the contractor. Tribes availing themselves of Public Law 93-638, the 
Indian Self-Determination and Education Assistance Act, may receive 
funds under Title I contracts or Title IV contracts.
    Contracting party means an entity that has a contract through a 
program authorized under the Johnson-O'Malley Act.
    Contractor means any Tribal organization, State, school district, 
or Indian corporation to which a contract has been awarded.
    Days means calendar days; except where a date specified in these 
regulations falls on a Saturday, Sunday, or a Federal holiday, the 
period will carry over to the next business day.
    Debt retirement means the act of paying off debt completely to a 
lender.
    Director means the Director of the Bureau of Indian Education.
    Economic enterprise means any commercial, industrial, agricultural, 
or business activity that is at least 51 percent Indian owned, 
established or organized for the purpose of profit.
    Education plan means a comprehensive plan for the programmatic and 
fiscal services of and accountability by a contractor for the education 
of eligible Indian students.
    Eligible entity means a Tribal organization, State, public school 
district, or Indian corporation is eligible to request a contract for a 
supplemental or operational support program under this Act. For 
purposes of this part, previously private schools are considered Tribal 
organizations.
    Existing contracting party means a contracting party that has a 
contract under this Act that is in effect on the date of the JOM 
Modernization Act (Pub. L. 115-404), enacted December 31, 2018.
    Fiscal year means the period used by the Bureau for accounting and 
budget purposes. The Bureau's fiscal year begins October 1 and ends 
September 30.
    Indian means a person who is a member of an Indian Tribe.
    Indian Advisory School Board means an Indian advisory school board 
established pursuant to 25 U.S.C. 5342-5347 prior to January 4, 1975.
    Indian corporation means a legally established organization of 
Indians chartered under State or Federal law and which is not included 
within the definition of ``Tribal organization''.
    Indian Education Committee means one of the entities specified by 
Sec.  [thinsp]273.115.
    Indian Tribe means any Indian Tribe, band, nation, rancheria, 
pueblo, colony or community, including any Alaska Native village or 
regional or village corporation as defined in or established pursuant 
to the Alaska Native Claims Settlement Act (85 Stat. 688) which is 
federally recognized as eligible by the U.S. Government through the 
Secretary for the special programs and services provided by the 
Secretary to Indians because of their status as Indians.
    Initial contract proposal and contract proposal means a proposal 
for education contracts under the Johnson-O'Malley Act for the purpose 
of financially assisting those efforts designed to meet the specialized 
and unique educational needs of eligible Indian students, including 
programs supplemental to the regular school program and school 
operational support, where such support is necessary to maintain 
established State educational standards.
    Johnson-O'Malley Act means the Act of April 16, 1934 (48 Stat. 
596), as amended by the Act of June 4, 1936 (49 Stat. 1458, 25 U.S.C. 
452-456), and by the Act of January 4, 1975 (88 Stat. 2203), and 
further amended by the Johnson-O'Malley Supplemental Indian Education 
Program Modernization Act (Pub. L. 115-404), enacted December 31, 2018 
(JOM Modernization Act).
    Local Indian Committee means any committee established pursuant to 
20 U.S.C. 7424(c)(4), which provides that the committee must be 
composed of and selected by parents and family members of Indian 
children; representatives of Indian Tribes on Indian lands located 
within fifty miles; teachers in the schools; and if appropriate, Indian 
students attending secondary schools.
    New contracting party means an entity that enters into a contract 
under this Act after the date of enactment of the JOM Modernization Act 
(Pub. L. 115-404), enacted December 31, 2018.
    Operational support means those expenditures for school operational 
costs in order to meet established State educational standards or 
Statewide requirements and as specified in Sec.  273.126.
    Parent means the lawful father or mother of someone, and may 
include:
    (1) Either the natural father or the natural mother of a child;
    (2) The adoptive father or adoptive mother of a child;
    (3) A child's putative blood parent who has expressly acknowledged 
paternity;
    (4) An individual or agency whose status as guardian has been 
established by judicial decree.
    Previously private school means a school (other than a Federal 
school formerly operated by the Bureau) that is operated primarily for 
Indian students from age 3 years through grades 12; and, which at the 
time of application is controlled, sanctioned, or chartered by the 
government body(s) of an Indian Tribe(s).
    Public school district means a State-funded school district that:
    (1) Serves public elementary schools or public secondary schools; 
and
    (b) Has established or will establish local committees or is using 
a committee or Indian advisory school board to approve supplementary or 
operational support programs beneficial to Indian students.
    Reservation or Indian reservation means any Indian Tribe's 
reservation, pueblo, colony, or rancheria, including former 
reservations in Oklahoma, Alaska Natives regions established pursuant 
to the Alaska Native Claims Settlement Act (85 Stat. 688), and Indian 
allotments.
    School district or local education agency means that subdivision of 
the State which contains the public elementary and secondary 
educational institutions providing educational services and is 
controlled by a duly elected board, commission, or similarly 
constituted assembly.
    Scope of work means a framework document that will outline the work 
that will be performed under a contract and detail the expectations for 
the Johnson-O'Malley program.
    Secretary means the Secretary of the Interior.
    Sectarian school means a school sponsored or supported, at least in 
part, by a religious denomination; also commonly known as a parochial 
school.
    State means each of the 50 States, the District of Columbia, the 
Commonwealth of Puerto Rico and each of the outlying areas, or any 
political subdivision of the 50 States.
    School official or school administrator means a person employed by 
the school in an administration, supervisory, academic, or support 
staff position.
    Supplemental program means a program designed to meet the 
specialized and unique educational needs of eligible Indian students 
that may have resulted from socio-economic conditions of the parents, 
from cultural or language differences or other factors. Programs may 
also provide academic assistance to Indian students for the improvement 
of student learning,

[[Page 10951]]

increase the quality of instruction, and as provided by Sec.  
[thinsp]273.143(b).
    System of record means a system of record that contains information 
that is retrieved by an individual name or other unique identifiers.
    Tribal government, Tribal governing body and Tribal Council means 
the recognized governing body of an Indian Tribe.
    Tribal organization means the recognized governing body of any 
Indian Tribe or any legally established organization of Indians or 
Tribes which is controlled, sanctioned, or chartered by such governing 
body or bodies, or which is democratically elected by the adult members 
of the Indian community to be served by such organization and which 
includes the maximum participation of Indians in all phases of its 
activities; provided that in any case where a contract is let to an 
organization to perform services benefitting more than one Indian 
Tribe, the approval of each such Indian Tribe shall be a prerequisite 
to the letting of the contract.

Subpart B--Program Eligibility & Applicability


Sec.  [thinsp]273.110   Who is eligible to request contracts under the 
Johnson-O'Malley Act?

    The following entities are eligible to enter into an education 
contract under the Johnson-O'Malley Act for the purpose of financially 
assisting efforts designed to meet the specialized and unique 
educational needs of eligible Indian students, including supplemental 
programs and school operational support, where such support is 
necessary to maintain established State educational standards:
    (a) Tribal organizations;
    (b) States;
    (c) Public school districts that:
    (1) Serve public elementary schools or public secondary schools; 
and
    (2) Have a local school board composed of a majority of Indians or 
have established or will establish an Indian Education Committee, as 
described in Sec.  [thinsp]273.115 to approve supplementary or 
operational support programs beneficial to Indian students; and
    (d) Indian corporations.


Sec.  [thinsp]273.111   How do the requirements for Tribal 
organizations differ from those for other eligible entities?

    (a) States, public school districts, or Indian corporations must 
comply with the requirements in this part.
    (b) The requirements of this part apply to Tribal organizations 
(including but not limited to provisions regarding how funds can be 
used under the Johnson-O'Malley Act and reporting requirements), except 
that Tribal organizations do not need to comply with:
    (1) Sections 273.120--273.121, regarding approval of an education 
plan by the Director;
    (2) Section 273.125, regarding entering into a contract as a new 
contracting party;
    (3) Sections 273.132--273.135, regarding review, approval, and 
negotiation of the contract;
    (4) Section 273.142, regarding advance payments;
    (5) Any section in subpart H (other than the following sections, 
which still apply: Sec.  273.170, regarding special program provisions 
to be included in a contract, Sec.  273.172, regarding State employees' 
access to Tribal lands, reservations or allotments, and Sec.  273.182, 
regarding penalties for misusing funds or property);
    (6) Any section in subpart I (other than Sec.  273.194, regarding 
the Indian Education Committee's authority to recommend cancellation or 
suspension of contracts, which still applies);
    (7) Any section in subpart K (other than Sec.  273.208).
    (c) The contract proposal submitted by the Tribal organization must 
meet the requirements in part 900 or 1000 of this chapter, in addition 
to those in Sec.  [thinsp]273.130 except that education plans must be 
submitted to the BIE Director for approval in accordance with Sec.  
273.170. The requirements in part 900 or 1000 of this chapter apply to 
contracts and compacts with Tribal organizations, except for the 
provisions in Sec. Sec.  [thinsp]900.240 through 900.256, 1000.300, and 
1000.330 of this chapter concerning retrocession and reassumption of 
programs. If a Tribal organization retrocedes a contract, the Bureau 
will then contract with a State, public school district, or Indian 
corporation for the supplemental programs or operational support. 
Redesign and reallocation under either Title I contracts or Title IV 
compacts must be done with approval in accordance with Sec.  
900.8(g)(6) of this chapter.


Sec.  [thinsp]273.112   Who is an eligible Indian student under the 
Johnson-O'Malley Act?

    An Indian student is eligible for benefits provided by a Johnson 
O'Malley contract if the student is:
    (a) From age three (3) years through grade(s) twelve (12);
    (b) Not enrolled in a Bureau-funded school or sectarian school 
(except the student is eligible if enrolled in a previously private 
school controlled by an Indian Tribe or Tribal organization); and
    (c) Is either:
    (1) At least one-fourth (\1/4\) degree Indian blood descendant of a 
member of an Indian Tribe as defined in Sec.  273.106; or
    (2) A member of an Indian Tribe as defined in Sec.  273.106.


Sec.  [thinsp]273.113   How can the funds be used under the Johnson-
O'Malley Act?

    An eligible entity may use the funds available under the contract 
to provide educational benefits to eligible Indian students to:
    (a) Establish, carry out programs or expand programs in existence 
before the contract period that provide:
    (1) Remedial instruction, career, academic, and college-readiness 
counseling, and cultural programs;
    (2) Selected courses related to the academic and professional 
disciplines; or
    (3) Important needs, such as school supplies and items that enable 
recipients to participate in curricular and extra-curricular programs; 
and
    (b) Purchase equipment to facilitate training for professional 
trade skills and intensified college preparation programs.


Sec.  [thinsp]273.114   What programs may be contracted under the 
Johnson-O'Malley Act?

    All programs contracted under this part must:
    (a) Be developed and approved in full compliance with the powers 
and duties of the Indian Education Committee and as may be contained in 
the Committee's organizational documents and bylaws.
    (b) Be included as a part of the education plan.

Subpart C--Indian Education Committee


Sec.  [thinsp]273.115   Who determines the unique educational needs of 
eligible Indian students?

    (a) When a school district to be affected by a contract(s) for the 
education of Indians has a local school board composed of a majority of 
Indians, the local school board may act as the Indian Education 
Committee; otherwise, the parents of Indian children may elect an 
Indian Education Committee from among their number or a Tribal 
governing body(ies) of the Indian Tribe(s) affected by the contract(s) 
may specify one of the following entities to serve as the Indian 
Education Committee:
    (1) A Local Indian Committee or Committees; or
    (2) An Indian Advisory School Board or Boards.

[[Page 10952]]

    (b) The Tribal governing body(ies) of the Indian Tribe(s) affected 
by the contract(s) may specify one of the entities in paragraph (a)(1) 
or (2) of this section at its discretion if the Indian Education 
Committee was established prior to January 4, 1975.


Sec.  [thinsp]273.116   Does an Indian Education Committee need to 
establish procedures and report to the BIE Director?

    The Indian Education Committee and its members must establish 
procedures under which the Committee serves. Such procedures must be 
set forth in the Committee's organizational documents and by-laws.
    (a) Each Committee must file a copy of its organizational documents 
and by-laws with the BIE Director, together with a list of its officers 
and members.
    (b) The existence of an Indian Education Committee may not limit 
the continuing participation of the rest of the Indian community in all 
aspects of programs contracted under this part.


Sec.  [thinsp]273.117   What are the powers and duties of the Indian 
Education Committee?

    Consistent with the purpose of the Indian Education Committee, each 
such Committee is vested with the authority to undertake the activities 
in paragraphs (a) through (d) of this section.
    (a) Participate fully in the planning, development, implementation, 
and evaluation of all programs, including both supplemental and 
operational support, conducted under a contract or contracts pursuant 
to this part. Such participation includes further authority to:
    (1) Recommend curricula, including texts, materials, and teaching 
methods to be used in the contracted program or programs;
    (2) Approve budget preparation and execution;
    (3) Recommend criteria for employment in the program;
    (4) Nominate a reasonable number of qualified prospective 
educational programmatic staff members from which the contractor would 
be required to select; and
    (5) Evaluate staff performance and program results and recommend 
appropriate action to the contractor.
    (b) Approve and disapprove all programs to be contracted under this 
part. All programs contracted require the prior approval of the 
appropriate Indian Education Committee.
    (c) Secure a copy of the negotiated contract(s) that includes the 
program(s) approved by the Indian Education Committee.
    (d) Recommend cancellation or suspension of a contract(s) under 
Sec.  273.194.


Sec.  [thinsp]273.118   Are there additional authorities an Indian 
Education Committee can exercise?

    The organizational papers and by-laws of the Indian Education 
Committee may include additional powers and duties that would permit 
the Committee to:
    (a) Participate in negotiations concerning all contracts;
    (b) Make an annual assessment of the learning needs of Indian 
children in the community affected;
    (c) Have access to all reports, evaluations, surveys, and other 
program and budget related documents determined necessary by the 
Committee to carry out its responsibilities, subject only to the 
provisions of Sec.  [thinsp]273.180;
    (d) Request periodic reports and evaluations regarding the Indian 
education program;
    (e) Establish a local grievance policy and procedures related to 
programs in the education plan;
    (f) Meet regularly with the professional staff serving Indian 
children and with the local education agency;
    (g) Hold committee meetings on a regular basis which are open to 
the public; and
    (h) Have such additional powers as are consistent with these 
regulations.

Subpart D--Education Plan


Sec.  [thinsp]273.119   What is an education plan and what must it 
include?

    A prospective contractor in consultation with its Indian Education 
Committee(s) must formulate an education plan that contains educational 
objectives that adequately address the educational needs of the Indian 
students and assures that the contract is capable of meeting such 
objectives. The education plan must contain:
    (a) The education programs developed and approved by the Indian 
Education Committee(s);
    (b) Educational goals and objectives that adequately address the 
educational needs of the Indian students to be served by the contract;
    (c) Procedures for addressing hearing grievances from Indian 
students, parents, guardians, community members, and Tribal 
representatives relating to the program(s) contracted. Such procedures 
must provide for adequate advance notice of the hearing;
    (d) Established State standards and requirements that must be 
maintained in operating the contracted programs and services;
    (e) A description of how the State standards and requirements will 
be maintained;
    (f) A requirement that the contractor comply in full with the 
requirements concerning meaningful participation by the Indian 
Education Committee;
    (g) A requirement that education facilities receiving funds be open 
to visits and consultations by the Indian Education Committee(s), 
Tribal representatives, Indian parents and guardians in the community, 
and by duly authorized representatives of the Federal and State 
Governments;
    (h) An outline of administrative and fiscal management procedures 
to be used by the contractor;
    (i) Justification for requesting funds for operational support. The 
public school district must establish in its justification that it 
meets the requirements given in Sec.  [thinsp]273.126(b). The 
information given should include records of receipt of local, State, 
and Federal funds;
    (j) Budget estimates and financial information needed to determine 
program costs to contract for services. This includes, but is not 
limited to, the following:
    (1) State and district average operational cost per pupil;
    (2) Other sources of Federal funding the applicant is receiving, 
the amount received from each, the programs being funded, and the 
number of eligible Indian students served by such funding;
    (3) Administrative costs involved, total number of employees, and 
total number of Indian employees;
    (4) Costs that parents normally are expected to pay for each 
school;
    (5) Supplemental and operational funds outlined in a separate 
budget, by line item, to facilitate accountability; and
    (6) Total number of employees for each special program and number 
of Indian employees for that program;
    (k) The total enrollment of school or district, by age and grade 
level;
    (l) The eligible Indian enrollment--total and classification by 
Tribal affiliation(s) and by age and grade level;
    (m) The total number of school board members and number of Indian 
school board members;
    (n) Government equipment needed to carry out the contract;
    (o) The period of contract term requested;
    (p) The signature of the authorized representative of applicant; 
and
    (q) Written information regarding:
    (1) Program goals and objectives related to the learning needs of 
potential target students;
    (2) Procedures and methods to be used in achieving program 
objectives, including ways whereby parents, students and communities 
have been

[[Page 10953]]

involved in determining needs and priorities;
    (3) Overall program implementation including staffing practices, 
parental and community involvement, evaluation of program results, and 
dissemination thereof; and
    (4) Determination of staff and program effectiveness in meeting the 
stated needs of target students.


Sec.  [thinsp]273.120   Does an education plan need to be approved by 
the BIE Director?

    The Secretary will not enter into any contract for the education of 
Indians unless:
    (a) The contractor has submitted an education plan to the BIE 
Director; and
    (b) The BIE Director has determined that the education plan 
contains educational objectives that adequately address the educational 
needs of the Indian students who are to be beneficiaries of the 
contract, and that the contract is capable of meeting such objectives.


Sec.  [thinsp]273.121   When does the BIE Director approve the 
education plan?

    The BIE Director approves the education plan when a contractor 
submits a contract proposal for funding.

Subpart E--Contract Proposal, Review, and Approval


Sec.  [thinsp]273.125   How may a new contracting party request a 
contract under the Johnson-O'Malley Act?

    Subject to the availability of appropriations, eligible entities 
who have not previously entered into a contract for the Johnson-
O'Malley program may submit an initial contract proposal.


Sec.  [thinsp]273.126   What proposals are eligible for contracts under 
the Johnson-O'Malley Act?

    (a) Any proposal to contract for funding a supplemental program 
will be considered an eligible proposal.
    (b)(1) To contract for operational support, a public school 
district is required to establish in the proposal that it:
    (i) Cannot meet the minimum State or other applicable standards or 
requirements without such funds;
    (ii) Has made a reasonable tax effort with a mill levy at least 
equal to the State average in support of educational programs;
    (iii) Has fully utilized all other sources of financial aid, 
including all forms of State aid and Public Law 874 payments, and the 
State aid contribution per pupil is at least equal to the State 
average;
    (iv) Has at least 50 percent eligible Indian enrollment;
    (v) Has clearly identified the educational needs of the students 
intended to benefit from the contract;
    (vi) Has made a good faith effort in computing State and local 
contributions without regard to contract funds pursuant to this part; 
and
    (vii) Will not budget or project a deficit by using contract funds 
pursuant to this part.
    (2) The requirements given in paragraph (b)(1) of this section do 
not apply to previously private schools.


Sec.  [thinsp]273.127   Can a contract include funds to support the 
duties of an Indian Education Committee?

    Programs developed or approved by the Indian Education Committee 
may, at the option of such Committee, include funds for the performance 
of Committee duties to include:
    (a) Members' attendance at regular and special meetings, workshops 
and training sessions, as the Committee deems appropriate.
    (b) Other reasonable expenses incurred by the Committee in 
performing its primary duties, including the planning, development, 
implementation and evaluation of the program.


Sec.  [thinsp]273.128   How are contracts prioritized?

    Priority will be given to contracts:
    (a) Which would serve Indian students on or near reservations; and
    (b) Where a majority of the Indian students will be members of the 
Tribe(s) of those reservations.


Sec.  [thinsp]273.129   May the BIE Director reimburse a public school 
district for educating non-resident Indian students?

    The BIE Director may consider a contract proposal to reimburse a 
public school district for the full per capita costs of educating 
Indian students who meet all of the following:
    (a) Are members of recognized Indian Tribes;
    (b) Do not normally reside in the State in which the school 
district is located; and
    (c) Are residing in Federal boarding facilities for the purpose of 
attending public schools within the school district.


Sec.  [thinsp]273.130   What is required in the contract proposal for 
funding?

    A contract proposal must be in writing and contain the following:
    (a) Name, address, and telephone number of the proposed contractor;
    (b) Name, address, and telephone number of the Tribe(s) to be 
served by the contract;
    (c) Descriptive narrative of the contract proposal;
    (d) The education plan approved by the Indian Education Committee;
    (e) A separate budget outlining the Johnson-O'Malley funds for 
operational support and/or supplemental programs, by line item, to 
facilitate accountability;
    (f) A clear identification of what educational needs the Johnson-
O'Malley funds requested for operational support will address; and
    (g) Documentation of the requirements for operational support in 
Sec.  [thinsp]273.126(b)(1).


Sec.  [thinsp]273.131   What is required for a Tribal request for a 
contract?

    (a) An Indian Tribal governing body that desires that a contract be 
entered into with a Tribal organization must notify the BIE Director no 
later than February 1 preceding the school year for the contract.
    (b) If the BIE Director does not receive the Tribal governing 
body's notice by the date in paragraph (a) of this section, the BIE 
Director may contract with the State, public school district, or Indian 
corporation under this part.
    (c) The Tribal governing body has the option to contract with the 
State, public school district, or Indian corporation.


Sec.  [thinsp]273.132   Who will review and approve the contract 
proposal?

    Each approving official within each Bureau Region is authorized to 
approve the contract(s) submitted by the State, public school district, 
or Indian corporation to provide services to Indian children within 
that approving official's region.


Sec.  [thinsp]273.133   What is the process for review and decision?

    Upon receiving a contract proposal, the approving official will:
    (a) Notify the applicant in writing that the contract proposal has 
been received, within 14 days after receiving the contract proposal.
    (b) Review the contract proposal for completeness and request, 
within 20 days after receiving the contract proposal, any additional 
information from the applicant which will be needed to reach a 
decision.
    (c) On receiving the contract proposal for operational support, 
make a formal written determination and findings supporting the need 
for such funds. In arriving at such a determination, the approving 
official must be assured that each local education agency has made a 
good faith effort in computing State and local contributions without 
regard to funds requested.
    (d) Assess the completed contract proposal to determine if the 
proposal is feasible and if the proposal complies

[[Page 10954]]

with the appropriate requirements of the Johnson-O'Malley Act and this 
part.
    (e) Approve or disapprove the contract proposal after fully 
reviewing and assessing the application and any additional information 
submitted by the applicant.
    (f) Promptly notify the applicant in writing of the decision to 
approve or disapprove the contract proposal.
    (g) If the contract proposal is disapproved, the notice will give 
the reasons for disapproval and the applicant's right to appeal 
pursuant to subpart K of this part.


Sec.  [thinsp]273.134   What is the timeframe for contract decision?

    The approving official will approve or disapprove the contract 
proposal within 90 days after the approving official receives the 
contract proposal and any additional information requested. The 
approving official may extend the 90-day deadline after obtaining the 
written consent of the applicant.


Sec.  [thinsp]273.135   Who will negotiate the contract?

    After the approving official has approved the contract proposal, 
the awarding official, assisted by Bureau education personnel, will 
negotiate the contract.

Subpart F--Funding Provisions


Sec.  [thinsp]273.140   What is the funding formula to distribute 
funds?

    Funds will be distributed to contractors based upon a funding 
formula. The funding formula is calculated using data obtained by the 
Department of Education from the previous year.
    (a) The funding formula to determine the funding to be distributed 
to each contractor is the Weight Factor multiplied by the number of 
eligible Indian students, where the Weight Factor is:
    (1) The State average cost per pupil count divided by the national 
average cost per pupil count; or
    (2) A default weight factor of 1.3, if the calculation in paragraph 
(a)(1) of this section results in a weight factor of less than 1.3.
    (b) Notwithstanding any other provisions of the law, Federal funds 
appropriated for the purpose will be allotted pro rata in accordance 
with the distribution method outlined in this formula.
    (c) For four fiscal years following the date of enactment of the 
JOM Modernization Act (December 31, 2018):
    (1) Existing contractors will not receive an amount that is less 
than the amount received for Fiscal Year 2018 (the fiscal year 
preceding the date of enactment of the JOM Modernization Act), unless:
    (i) The existing contractor fails to submit a complete annual 
report;
    (ii) The Secretary has found that the existing contractor has 
violated the terms of a contract under this part; or
    (iii) The number of eligible Indian students reported in the annual 
report has decreased below the number of eligible Indian students 
served by the existing contractor in Fiscal Year 2018 (the fiscal year 
preceding the date of enactment of the JOM Modernization Act).
    (2) Paragraph (c)(1)(iii) of this section notwithstanding, no 
existing contractor will receive an amount of funding per eligible 
Indian student that is less than the amount of funding per eligible 
Indian student that the existing contractor received for Fiscal Year 
2018 (the fiscal year preceding the enactment of the JOM Modernization 
Act).
    (d) Beginning December 31, 2022 (4 years after the December 31, 
2018, date of enactment of the JOM Modernization Act), no contracting 
party will receive for a fiscal year more than a 10 percent decrease in 
funding per eligible Indian student from the previous year.


Sec.  [thinsp]273.141   Will funding be prorated?

    All monies provided by a contract may be expended only for the 
benefit of eligible Indian students. Where students other than eligible 
Indian students participate in programs contracted, money expended 
under the contract will be prorated to cover the participation of only 
the eligible Indian students, except where the participation of non-
eligible students is so incidental as to be de minimis. Such de minimis 
participation must be approved by the Indian Education Committee.


Sec.  [thinsp]273.142   Are advance payments on a contract allowed 
under the Johnson-O'Malley Act?

    Payments to States, public school districts and Indian corporations 
will be made in advance or by way of reimbursement and in such 
installments and on such conditions as the BIE Director deems necessary 
to carry out the purposes of the Act.


Sec.  [thinsp]273.143   Must other Federal, State, and local funds be 
used?

    (a) Contract funds under this part supplement, and do not supplant, 
Federal, State and local funds. Each contract must require that the use 
of these contract funds will not result in a decrease in State, local, 
or Federal funds that would be made available for Indian students if 
there were no funds under this part.
    (b) State, local and other Federal funds must be used to provide 
comparable services to non-Indian and Indian students prior to the use 
of contract funds.
    (c) Except as hereinafter provided, the school lunch program of the 
United States Department of Agriculture (USDA) constitutes the only 
federally funded school lunch program for Indian students in public 
schools. Where Indian students do not qualify to receive free lunches 
under the National School Lunch Program of USDA because such students 
are non-needy and do not meet the family size and income guidelines for 
free USDA lunches, plans prepared pursuant to Sec.  [thinsp]273.119 may 
provide, to the extent of funding available for Johnson-O'Malley 
programs, for free school lunches for those students who do not qualify 
for free USDA lunches but who are eligible Indian students under Sec.  
[thinsp]273.112.


Sec.  [thinsp]273.144   Can Johnson-O'Malley funds be used for capital 
outlay or debt retirement?

    In no instance may contract funds provided under this part be used 
as payment for capital outlay or debt retirement expenses; except that, 
such costs are allowable if they are considered to be a part of the 
full per capita cost of educating eligible Indian students who reside 
in Federal boarding facilities for the purpose of attending public 
schools.


Sec.  [thinsp]273.145   How can funds be used for subcontractors?

    The Bureau may make contract funds under the Johnson-O'Malley Act 
available directly only to Tribal organizations, States, public school 
districts, and Indian corporations. However, Tribal organizations, 
States, public school districts, and Indian corporations receiving 
funds may use the funds to subcontract for necessary services with any 
appropriate individual, organization, or corporation.


Sec.  [thinsp]273.146   Can funds be used outside of schools?

    Nothing in this part prevents the BIE Director from contracting 
with Indian corporations who will expend all or part of the funds in 
places other than the public or private schools in the community 
affected.


Sec.  [thinsp]273.147   Are there requirements of equal quality and 
standard of education?

    Contracts with State education agencies or public school districts 
receiving funds must provide educational opportunities to all Indian 
children within that school district on the same terms and under the 
same conditions that apply to all other

[[Page 10955]]

students as long as it will not affect the rights of eligible Indian 
children to receive benefits from the supplemental programs. Public 
school districts receiving funds must ensure that Indian children 
receive all aid from the State, and proper sources other than the 
Johnson-O'Malley contract, which other schools in the district and 
other school districts similarly situated in the State are entitled to 
receive. In no instance may there be discrimination against Indians or 
the schools enrolling Indians.

Subpart G--Annual Reporting Requirements


Sec.  [thinsp]273.150   Does an existing contracting party need to 
submit any reports?

    Each existing contracting party must submit an annual report based 
on the JOM funding received and other contract-related reports as 
required by the BIE Director.


Sec.  [thinsp]273.151   What information must the existing contracting 
party provide in the annual report?

    Existing contracting parties who receive Johnson-O'Malley funding 
must submit the following information in the annual report:
    (a) General information about the contractor;
    (b) General information about the number and names of the schools;
    (c) The number of eligible Indian students who were served using 
amounts allocated under the contract during the previous fiscal year;
    (d) An accounting of the amounts and purposes for which the 
contract funds were expended;
    (e) Information on the conduct of the program;
    (f) A quantitative evaluation of the effectiveness of the contract 
program in meeting the stated objectives contained in the educational 
plans; and
    (g) A complete accounting of actual receipts at the end of the 
fiscal year for which the contract funds were expended.


Sec.  [thinsp]273.152   When is the annual report due?

    All existing contracting parties must submit the annual report to 
the BIE Director on or before September 15 of each year and covering 
the previous academic year.


Sec.  [thinsp]273.153   Who else needs a copy of the annual report?

    All existing contracting parties must send copies of the annual 
reports to the Indian Education Committee(s) and to the Tribe(s) under 
the contract at the same time as the reports are sent to the BIE 
Director.


Sec.  [thinsp]273.154   What will happen if the existing contracting 
party fails to submit an annual report?

    Any existing contracting party that fails to submit the annual 
report will receive no amounts under this Act for the fiscal year 
following the academic year for which the annual report should have 
been submitted.


Sec.  [thinsp]273.155   How will the existing contracting party know 
when reports are due?

    The BIE Director will provide existing contracting parties with 
timely information relating to:
    (a) Initial and final reporting deadlines; and
    (b) The consequences of failure to comply.


Sec.  [thinsp]273.156   Will technical assistance be available to 
comply with the annual reporting requirements?

    The Bureau will provide technical assistance and training on 
compliance with the reporting requirements to existing contracting 
parties. The Bureau will provide such technical assistance and training 
on an ongoing and timely basis.


Sec.  [thinsp]273.157   What is the process for requesting technical 
assistance and/or training?

    (a) Existing contracting parties may request technical assistance 
and/or training by addressing the request in writing to the BIE 
Director.
    (b) The BIE Director, or designee, will acknowledge receipt of a 
request for technical assistance and/or training.
    (c) No later than 30 days after receiving the original request, the 
BIE Director will identify a point of contact and begin the process of 
providing technical assistance and/or training. The BIE Director and 
requesting contracting party will work together to identify the form, 
substance, and timeline for the assistance.


Sec.  [thinsp]273.158   When should the existing contracting party 
request technical assistance and/or training?

    The existing contracting party is encouraged to request technical 
assistance and/or training before annual reporting requirements are due 
in order to avoid the consequences for failure to comply.


Sec.  [thinsp]273.159   If the existing contracting party reported a 
decrease of eligible Indian students, how will funding be reduced?

    Except as provided in Sec.  273.140(c) and (d) of this part, for 
four fiscal years following the date of enactment of the JOM 
Modernization Act (December 31, 2018) an existing contracting party's 
funding will not be reduced to a level that is less than the amount of 
funding per eligible Indian student that the existing contracting party 
received for Fiscal Year 2017 (the fiscal year preceding the date of 
enactment of the Johnson-O'Malley Modernization Act).


Sec.  [thinsp]273.160   Can the Secretary apply a ratable reduction in 
Johnson-O'Malley program funding?

    If the funds available under the Johnson-O'Malley Act for a fiscal 
year are insufficient to pay the full amounts that all existing 
contracting parties are eligible to receive under for the fiscal year, 
the Secretary will ratably reduce those amounts for the fiscal year.


Sec.  [thinsp]273.161   What is the maximum decrease in funding 
allowed?

    Beginning December 31, 2022 (4 years after the December 31, 2018, 
date of enactment of the JOM Modernization Act), no contracting party 
may receive for a fiscal year more than a 10 percent decrease in 
funding per eligible Indian student from the previous fiscal year.

Subpart H--General Contract Requirements


Sec.  [thinsp]273.170   What special program provisions must be 
included in the contract?

    All contracts must contain the following:
    (a) The education plan containing the education programs approved 
by the Indian Education Committee(s);
    (b) Any formal written determination and findings made by the BIE 
Director supporting the need for operational support as required by 
Sec.  [thinsp]273.133(c); and
    (c) A provision that State, local, and other Federal Funds will be 
used to provide comparable services to non-Indian and Indian students 
prior to the use of Johnson-O'Malley funds for the provision of 
supplementary program services to Indian children, as required in Sec.  
[thinsp]273.143(b).
    (d) Public Laws 102-477 and 93-638 Self-Governance Tribes must 
submit their education plan as required by paragraph (a) of this 
section to the BIE Director for review. The BIE Director will forward 
copies of the education plans to the 477 office or the Office of Tribal 
Self-Governance, as appropriate.


Sec.  [thinsp]273.171   Can a contractor make changes to a program 
approved by an Indian Education Committee?

    No program contracted may be changed from the time of its original 
approval by the Indian Education Committee to the end of the contract 
period without the prior approval, in writing, of the Indian Education 
Committee.

[[Page 10956]]

Sec.  [thinsp]273.172   May State employees enter Tribal lands, 
reservations, or allotments?

    In those States where Public Law 83-280 (18 U.S.C. 1162 and 28 
U.S.C. 1360) do not confer civil jurisdiction, State employees may be 
permitted to enter upon Indian Tribal lands, reservations, or 
allotments in an official capacity in connection with a contract under 
this part if the duly constituted governing body of the Tribe adopts a 
resolution of consent for the following purposes:
    (a) Inspecting school conditions in the public schools located on 
Indian Tribal lands, reservations, or allotments; or
    (b) Enforcing State compulsory school attendance laws against 
Indian children, parents or persons standing in loco parentis.


Sec.  [thinsp]273.173   What procurement requirements apply to 
contracts?

    States, public school districts, or Indian corporations wanting to 
contract with the Bureau must comply with the applicable requirements 
in the Federal Acquisition Regulations at 48 CFR part 1.


Sec.  [thinsp]273.174   Are there any Indian preference requirements 
for contracts and subcontracts?

    (a) Any contract made with a State, public school district, or 
Indian corporation for the benefit of Indian students must require that 
the contractor, to the greatest extent feasible:
    (1) Give preference in and opportunities for employment and 
training to Indians in connection with the administration of such 
contract(s); and
    (2) Give preference in the award of subcontracts to Indian 
organizations and Indian-owned economic enterprises.
    (b) All subcontractors employed by the contractor must, to the 
extent possible, give preference to Indians for employment and training 
and must include in their bid submission a plan to achieve maximum use 
of Indian personnel.


Sec.  [thinsp]273.175   How will a Tribal governing body apply Indian 
preference requirements for contracts and subcontracts?

    A Tribal governing body may develop its own Indian preference 
requirements for its contracts and subcontracts.


Sec.  [thinsp]273.176   May there be a use and transfer of Government 
property?

    (a) The use of Government-owned facilities for school purposes may 
be authorized when not needed for Government activities. Transfer of 
title to such facilities (except land) may be arranged under the 
provisions of the Act of June 4, 1953 (67 Stat. 41) subject to the 
approval of the Tribal government if such property is located on a 
reservation.
    (b) In carrying out a contract, the BIE Director may, with the 
approval of the Tribal government, permit a contractor to use existing 
buildings, facilities, and related equipment and other personal 
property owned by the Bureau within its jurisdiction under terms and 
conditions agreed upon for their use and maintenance. The property at 
the time of transfer must conform to the minimum standards established 
by the Occupational Safety and Health Act of 1970 (84 Stat. 1590), as 
amended (29 U.S.C. 651). Use of Government property is subject to the 
following conditions:
    (1) When nonexpendable Government property is turned over to public 
school authorities or Indian corporations under a use permit, the 
permittee must insure such property against damage by flood, fire, 
rain, windstorm, vandalism, snow, and tornado in amounts and with 
companies satisfactory to the Federal officer in charge of the 
property. In case of damage or destruction of the property by flood, 
fire, rain, windstorm, vandalism, snow, or tornado, the insurance money 
collected may be expended only for repair or replacement of property. 
Otherwise, insurance proceeds must be paid to the Bureau.
    (2) If the public school authority is self-insured and can present 
evidence of that fact to the BIE Director, insurance for lost or 
damaged property will not be required. However, the public school 
authority will be responsible for replacement of such lost or damaged 
property at no cost to the Government or for paying the Government 
enough to replace the property.
    (3) The permittee will maintain the property in a reasonable state 
of repair consistent with the intended use and educational purposes.
    (c) The contractor may have access to existing Bureau records 
needed to carry out a contract under this part, as follows:
    (1) The Bureau will make the records available subject to the 
provisions of the Freedom of Information Act (5 U.S.C. 552), as amended 
by the Act of November 21, 1974 (Pub. L. 93-502, 88 Stat. 1561).
    (2) The contractor may have access to needed Bureau records at the 
appropriate Bureau office for review and making copies of selected 
records.
    (3) If the contractor needs a small volume of identifiable Bureau 
records, the Bureau will furnish the copies to the contractor.


Sec.  [thinsp]273.177   Who will provide liability and motor vehicle 
insurance?

    (a) States, school districts, and Indian corporations must obtain 
public liability insurance under contracts entered into with the 
Bureau, unless the Bureau approving official determines that the risk 
of death, personal injury or property damage under the contract is 
small and that the time and cost of procuring the insurance is great in 
relation to the risk.
    (b) Notwithstanding paragraph (a) of this section, any contract 
which requires or authorizes, either expressly or by implication, the 
use of motor vehicles must contain a provision requiring the State, 
school district, or Indian corporation to provide liability insurance, 
regardless of how small the risk.
    (c) If the public school authority is self-insured and can present 
evidence of that fact to the approving official, liability and motor 
vehicle insurance will not be required.


Sec.  [thinsp]273.178   Are there contract recordkeeping requirements?

    A contractor will be required to maintain a recordkeeping system 
that allows the Bureau to meet its legal records program requirements 
under the Federal Records Act (44 U.S.C. 3101 et seq.). Such a record 
system must:
    (a) Fully reflect all financial transactions involving the receipt 
and expenditure of funds provided under the contract in a manner that 
will provide accurate, current and complete disclosure of financial 
status; correlation with budget or allowable cost schedules; and clear 
audit facilitating data;
    (b) Reflect the amounts and sources of funds other than Bureau 
contract funds that may be included in the operation of the contract;
    (c) Provide for the creation, maintenance, and safeguarding of 
records of lasting value, including those involving individual rights, 
such as permanent records and transcripts; and
    (d) Provide for the orderly retirement of permanent records in 
accordance with Department Records Schedule (Bureau of Indian Affairs 
(075)), when there is no established system set up by the State, public 
school district, or Indian corporation.


Sec.  [thinsp]273.179   Are there contract audit and inspection 
requirements?

    (a) During the term of a contract and for three (3) years after the 
project or undertaking is completed, the BIE Director, or any duly 
authorized representative, must have access, for audit and examination 
purposes, to any

[[Page 10957]]

of the contractor's books, documents, papers, and records that, in the 
BIE Director's or representative's opinion, may be related or pertinent 
to the contract or any subcontract.
    (b) The contractor is responsible for maintaining invoices, 
purchase orders, canceled checks, balance sheets and all other 
documents relating to financial transactions in a manner that will 
facilitate auditing. The contractor is responsible for maintaining 
files of correspondence and other documents relating to the 
administration of the contract, properly separated from general records 
or cross-referenced to general files.
    (c) The contractor receiving funds is responsible for contract 
compliance.
    (d) The records involved in any claim or expenditure that has been 
questioned must be further maintained until a final determination is 
made on the questioned expenditures.
    (e) The contractor and local school officials must make available 
to each member of the Indian Education Committee and to members of the 
public upon request: all contracts, non-confidential records concerning 
students served by the program, reports, budgets, budget estimates, 
plans, and other documents pertaining to administration of the contract 
program in the preceding and current years. The contractor or local 
school official must provide, free of charge, single copies of such 
documents upon request.


Sec.  [thinsp]273.180   Are there disclosure requirements for 
contracts?

    (a) Unless otherwise required by law, the Bureau may not place 
restrictions on contractors that will limit public access to the 
contractor's records except when records must remain confidential.
    (b) A contractor must make all reports and information concerning 
the contract available to the Indian people that the contract affects. 
Reports and information may be withheld from disclosure only when both 
of the following conditions exist:
    (1) The reports and information fall within one of the following 
exempt categories:
    (i) Specifically required by statute or Executive Order to be kept 
secret;
    (ii) Commercial or financial information obtained from a person or 
firm on a privileged or confidential basis; or
    (iii) Personnel, medical, social, psychological, academic 
achievement and similar files where disclosure would be a clearly 
unwarranted invasion of personal privacy; and
    (2) Disclosure is prohibited by statute or Executive Order or sound 
grounds exist for using the exemption given in paragraph (b)(1) of this 
section.
    (c) A request to inspect or copy reports and information must be in 
writing and reasonably describe the reports and information requested. 
The request may be delivered or mailed to the contractor. Within 10 
working days after receiving the request, the contractor must determine 
whether to grant or deny the request and immediately notify the request 
of the determination.
    (d) The time limit for making a determination may be extended up to 
an additional 10 working days for good reason. The requester must be 
notified in writing of the extension, reasons for the extension, and 
date on which the determination is expected to be made.


Sec.  [thinsp]273.181   Are there Privacy Act requirements for 
contracts?

    (a) When a contractor operates a system of records to accomplish a 
Bureau function, the contractor must comply with subpart K of 43 CFR 
part 2 which implements the Privacy Act (5 U.S.C. 552a). Examples of 
the contractor's responsibilities are:
    (1) To continue maintaining systems of records declared by the 
Bureau to be subject to the Privacy Act;
    (2) To make such records available to individuals involved;
    (3) To disclose an individual's record to third parties only after 
receiving permission from the individual to whom the record pertains, 
and in accordance with the exceptions listed in 43 CFR 2.231;
    (4) To establish a procedure to account for access, disclosures, 
denials, and amendments to records; and
    (5) To provide safeguards for the protection of the records.
    (b) The contractor may not, without prior approval of the Bureau:
    (1) Discontinue or alter any established systems of records;
    (2) Deny requests for notification or access of records; or
    (3) Approve or deny requests for amendments of records.
    (c) The contractor may not establish a new system of records 
without prior approval of the Department of Interior and the Office of 
Management and Budget.
    (d) The contractor may not collect information about an individual 
unless it is relevant or necessary to accomplish a purpose of the 
Bureau as required by statute or Executive Order.
    (e) The contractor is subject to 5 U.S.C. 552a(i)(1), which imposes 
criminal penalties for knowingly and willfully disclosing a record 
about an individual without the written request or consent of that 
individual unless disclosure is permitted under one of the exceptions.


Sec.  [thinsp]273.182   Are there penalties for misusing funds or 
property?

    If any officer, director, agent, or employee of, or connected with, 
any contractor or subcontractor under this part embezzles, willfully 
misapplies, steals, or obtains by fraud any of the funds or property 
connected with the contract or subcontract, he or she will be subject 
to the following penalties:
    (a) If the amount involved does not exceed $100, person(s) will be 
fined not more than $1,000 or imprisoned not more than one (1) year, or 
both.
    (b) If the amount involved exceeds $100, person(s) will be fined 
not more than $10,000 or imprisoned for not more than two (2) years, or 
both.


Sec.  [thinsp]273.183   Can the Secretary investigate a potential Civil 
Rights Act violation?

    In no instance may there be discrimination against Indians or 
schools enrolling Indians. When informed by a complainant or through 
its own discovery that a possible violation of title VI of the Civil 
Rights Act of 1964 exists within a State school district receiving 
funds, the Secretary will, in accordance with Federal requirements, 
notify the Department of Education of the possible violation. The 
Department Education will conduct an investigation into the matters 
alleged. If the report of the investigation conducted by the Department 
of Education discloses a failure or threatened failure to comply with 
this part, and if the non-compliance cannot be corrected by informal 
means, compliance with this part may be effected by the suspension or 
termination of or refusal to contract or to continue financial 
assistance under the Johnson-O'Malley Act or by any other means 
authorized by law.

Subpart I--Contract Renewal, Revisions, and Cancellations


Sec.  273.191   How may a contract be renewed for Johnson-O'Malley 
funding?

    An awarding official will notify the existing contracting party in 
advance of the contract's expiration and ask if the existing 
contracting party wants to renew the contract. The renewal must be in 
writing from the existing contracting party and the awarding official.


Sec.  273.192   What is required to renew a contract?

    (a) The existing contracting party seeking to renew a contract will 
submit to the awarding official:

[[Page 10958]]

    (1) A written request to renew;
    (2) The current education plan approved by the Indian Education 
Committee, if expired;
    (3) A scope of work; and
    (4) A budget outlining the Johnson-O'Malley funds for operational 
support and/or supplemental programs, by line item, to facilitate 
accountability.
    (b) The awarding official will send the existing contracting party 
an acknowledgment letter and specify if any information is required to 
complete renewal package.
    (c) The approving official will approve or disapprove a renewal 
within 90 days after the approving official receives the renewal and 
any additional information requested. The approving official may extend 
the 90-day deadline after obtaining the written consent of the existing 
contracting party.


Sec.  [thinsp]273.193   May a contract be revised or amended?

    Any contract may be revised or amended as deemed necessary to carry 
out the purposes of the program being contracted.
    (a) A contractor may submit a written request for a revision or 
amendment of a contract to the awarding official.
    (b) The written approval of the Indian Education Committee is 
required if the contract revision or amendment will alter a program 
that has been approved by the Indian Education Committee.


Sec.  [thinsp]273.194   Does the Indian Education Committee have 
authority to cancel contracts?

    The Indian Education Committee may recommend to the BIE Director, 
through the appropriate awarding official, cancellation or suspension 
of a contract(s) that contains the program(s) approved by the Indian 
Education Committee, if the contractor fails to permit such Committee 
to exercise its powers and duties.


Sec.  [thinsp]273.195   May a contract be cancelled for cause?

    (a) Any contract may be cancelled for cause when the contractor 
fails to perform the work called for under the contract or fails to 
permit an Indian Education Committee to perform its duties.
    (b) Before cancelling the contract, the BIE Director will provide 
the contractor with written notice, including:
    (1) The reasons why the Bureau is considering cancelling the 
contract; and
    (2) The contractor will be given an opportunity to bring its work 
up to an acceptable level.
    (c) If the contractor does not overcome the deficiencies in its 
contract performance, the Bureau will cancel the contract for cause. 
The Bureau will notify the contractor, in writing, of the cancellation. 
The notice will give the reasons for the cancellation and the right of 
the contractor to appeal under subpart K of this part.
    (d) When a contract is cancelled for cause, the Bureau will attempt 
to perform the work by another contract.
    (e) Any contractor that has a contract cancelled for cause must 
demonstrate that the cause(s) that led to the cancellation have been 
remedied before it will be considered for another contract.

Subpart J--Responsibility and Accountability


Sec.  [thinsp]273.201   What is required for the Secretary to meet his 
or her reporting responsibilities?

    (a) The Secretary has the following reporting responsibilities to 
the Committee on Indian Affairs in the Senate; the Subcommittee on 
Interior, Environment, and Related Agencies of the Committee on 
Appropriations of the Senate; the Subcommittee on Indian, Insular, and 
Alaska Native Affairs of the Committee on Natural Resources of the 
House of Representatives; and the Subcommittee on Interior, 
Environment, and Related Agencies of the Committee on Appropriations of 
the House of Representatives:
    (1) In order to provide information about the Johnson-O'Malley 
Program, the Bureau must obtain from all existing contracting parties 
the most recent determination of the number of eligible Indian students 
served by each contracting party.
    (2) The Bureau will make recommendations on appropriate funding 
levels for the program based on such determination.
    (3) The Bureau will make an assessment of the contracts under this 
Act.
    (b) The Bureau will make such reports as described in paragraph (a) 
of this section publically available.


Sec.  [thinsp]273.202   Does this part include an information 
collection?

    The collections of information in this part have been approved by 
the Office of Management and Budget under 44 U.S.C. 3501 et seq. and 
assigned OMB Control Number 1076-0193. Responses is required to obtain 
a benefit. A Federal agency may not conduct or sponsor, and you are not 
required to respond to, a collection of information unless it displays 
a currently valid OMB Control Number.

Subpart K--Appeals


Sec.  [thinsp]273.206   May a contract be appealed?

    (a) A contractor may appeal:
    (1) An adverse decision or action of the Bureau regarding a 
contract; or
    (2) A decision to cancel a contract for cause.
    (b) The Secretary encourages contractors to seek all means of 
dispute resolution before a formal appeal.


Sec.  273.207   How does a contractor request dispute resolution?

    The contractor may request dispute resolution in writing to the BIE 
Director.
    (a) The Bureau has in place an alternative dispute resolution (ADR) 
process.
    (1) The ADR process is intended to be a supplement to, and not a 
replacement for, the normal appeal process.
    (2) Participation as a complainant in the ADR process is voluntary.
    (3) Should a contractor participate in an ADR process, the pre-
complaint process may extend to 90 days.
    (b) The ADR process may result in an informal resolution of the 
complaint;
    (c) If the ADR process does not result in an informal resolution of 
the complaint, the contractor still has the right to continue to pursue 
an appeal.


Sec.  273.208   How does a Tribal organization request an appeal?

    A Tribal organization may request an appeal pursuant to part 900 or 
1000 of this chapter, as applicable.


Sec.  273.209   How does a State, public school district, or an Indian 
corporation request an appeal?

    The State, public school district, or an Indian corporation may 
request an appeal by filing an appeal with the Civilian Board of 
Contract Appeals under the Contract Disputes Act, 41 U.S.C. 7101-7109, 
no later than 90 calendar days after the date the contractor receives 
the decision.

    Dated: December 12, 2019.
Tara Sweeney,
Assistant Secretary--Indian Affairs.
[FR Doc. 2020-02883 Filed 2-24-20; 8:45 am]
 BILLING CODE 4337-15-P