[Federal Register Volume 85, Number 105 (Monday, June 1, 2020)]
[Rules and Regulations]
[Pages 33494-33525]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-11618]



[[Page 33493]]

Vol. 85

Monday,

No. 105

June 1, 2020

Part V





Department of Transportation





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49 CFR Part 29





Tribal Transportation Self-Governance Program; Final Rule

  Federal Register / Vol. 85, No. 105 / Monday, June 1, 2020 / Rules 
and Regulations  

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DEPARTMENT OF TRANSPORTATION

Office of the Secretary

49 CFR Part 29

[Docket No. DOT-OST-2018-0104]
RIN 2105-AE71


Tribal Transportation Self-Governance Program

AGENCY: Office of the Secretary (OST), DOT.

ACTION: Final rule.

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SUMMARY: The U.S. Department of Transportation (DOT or Department) is 
issuing this final rule to establish and implement the Tribal 
Transportation Self-Governance Program (TTSGP or Program) pursuant to 
section 1121 of the Fixing America's Surface Transportation (FAST) Act. 
Representatives of Tribes and the Federal Government negotiated the 
rule in accordance with the Negotiated Rulemaking Act. The Program will 
afford Tribes participating in the Program greater control and 
decision-making authority over their use of certain DOT funding for 
which they are eligible recipients while reducing administrative 
burdens. These regulations include eligibility criteria, describe the 
contents of and process for negotiating self-governance compacts and 
funding agreements with the Department, and set forth the roles and 
responsibilities of and limitations on the Department and Tribes that 
participate in the Program.

DATES: This rule is effective October 1, 2020.

FOR FURTHER INFORMATION CONTACT: Mr. Sean Poole, Director of 
Intergovernmental Affairs, Office of the Secretary, (202) 366-4573 or 
via email at [email protected], or Ms. Krystyna Bednarczyk, Office of 
the General Counsel, (202) 366-5283, or via email at 
[email protected]. Office hours are from 8:30 a.m. to 5 p.m., 
EST, Monday through Friday, except Federal holidays.

SUPPLEMENTARY INFORMATION: 

I. Background

A. Authority for This Rulemaking

    These regulations implement section 1121 of the Fixing America's 
Surface Transportation (FAST) Act, Public Law (Pub. L.) 114-94, which 
was enacted on December 4, 2015, and is codified at 23 U.S.C. 207 
(Section 207). This section directs the Secretary of Transportation 
(Secretary) to establish and carry out the TTSGP at the Department. It 
also directs the Department to develop regulations to implement the 
Program pursuant to the Negotiated Rulemaking Act, 5 U.S.C. 561 et 
seq., adapting the negotiated rulemaking procedures to the unique 
context of self-governance and the government-to-government 
relationship between the United States and Tribes. The purposes of 
Section 207 are to establish the TTSGP to transfer eligible Federal 
funding for transportation-related programs to participating Tribes and 
to facilitate Tribal control over the delivery of Tribal transportation 
programs, services, functions and activities (PSFAs). Section 207 
incorporates by reference select provisions of the Indian Self-
Determination and Education Assistance Act of 1975, Public Law 93-638, 
as amended, 25 U.S.C. 5301 et seq. (ISDEAA).\1\ Congress enacted ISDEAA 
to promote effective and meaningful participation by Tribes in the 
planning, conduct, and administration of Federal programs and services 
for Tribes. ISDEAA authorizes Tribes to enter into self-determination 
contracts and self-governance compacts with the Departments of the 
Interior and Health and Human Services to assume operation of direct 
services for Tribes and administrative functions that support the 
delivery of these services by these Departments without regard to the 
agency or office within which the activity is performed.
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    \1\ Following enactment of the FAST Act, Congress transferred 
the ISDEAA provisions within title 25 of the U.S. Code. The docket 
contains a table that provides the relevant provisions and their 
current citations.
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    Implementation of the TTSGP through this rule will maintain and 
improve the Federal Government's unique and continuing relationship 
with and responsibility to Tribes, without diminishing the trust 
responsibility of the United States to Indian Tribes and individual 
Indians that exists under treaties, Executive orders, laws, and court 
decisions, and permit each eligible Tribe to choose the extent of its 
participation in the TTSGP. It will implement a process for Tribes to 
establish eligibility and negotiate an alternative funding mechanism by 
executing a compact and funding agreement with the Department, provide 
Tribes with control over the implementation of Tribal PSFAs, and, where 
permitted by Section 207 and consistent with other statutory 
authorities, authorize Tribes to plan, conduct, redesign, and 
administer PSFAs that meet the needs of the individual Tribal 
communities. Finally, the TTSGP will reduce administrative burdens on 
Tribes carrying out PSFAs.

B. Negotiated Rulemaking Process

1. Development of the Proposed Rule
    Section 207(n) directs the Secretary to develop the regulations 
consistent with the Negotiated Rulemaking Act and to adapt the 
negotiated rulemaking procedures to the unique context of self-
governance and the government-to-government relationship between the 
United States and Indian Tribes. Section 207(n) restricts membership of 
the TTSGP negotiated rulemaking committee (``Committee'') to Federal 
and Tribal government representatives. The Federal Highway 
Administration (FHWA), on behalf of the Department, published a Federal 
Register notice (81 FR 24158) on April 25, 2016, announcing the intent 
to establish the Committee and soliciting nominations for membership on 
the Committee. The Department published a Federal Register notice (81 
FR 49193) on July 27, 2016, announcing the formation of the Committee, 
and identifying 23 Tribal representatives and 7 Federal 
representatives.
    The first Committee meeting was held in Sterling, VA on August 16-
18, 2016, during which the Committee negotiated protocols, a set of 
written procedures under which the Committee would operate.\2\ The 
Committee held a total of 12 meetings in different locations throughout 
the country, including meetings hosted by the Sac and Fox Nation, 
Citizen Potawatomi Nation, Absentee Shawnee Tribe, Poarch Band of Creek 
Indians, Salt-River Pima Maricopa Indian Community, and the Morongo 
Band of Mission Indians.\3\ The Committee members and technical 
advisors organized themselves into two work groups and used the 
Committee meetings to develop draft materials and exchange information. 
The Committee's meeting minutes and any materials approved by the 
Committee were made a part of the record.
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    \2\ Documents adopted by the Committee, including the Protocols 
and meeting minutes, are available at https://www.transportation.gov/self-governance/committee.
    \3\ The December 2016 meeting did not achieve a quorum of 
Committee members due to inclement weather and subsequent flight 
cancellations. Those present participated in the established work 
groups to continue to develop and review proposed regulatory 
language, and the Committee adopted that work product at the January 
2018 meeting.
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    There were no Committee meetings between December 2016 and January 
2018, during which time, the Office of the Secretary assumed 
responsibility for the rulemaking. The Department published a Federal 
Register notice (82 FR 60571) on December 21, 2017, announcing a 
Committee meeting in January 2018. The Committee

[[Page 33495]]

reconvened in Sterling, VA on January 8-12, 2018. The Committee 
discussed a draft document that consolidated the products of the 
Committee work groups. A one-day Committee meeting followed in February 
2018. These meetings were intended to gather information from the 
Committee to clarify areas of disagreement, identify the issues that 
the Committee had yet to discuss or propose text, and ensure the 
Federal members understood how the negotiated provisions on which the 
Committee previously reached consensus reflected statutory mandates.
    Next, the Committee met in Washington, DC at Department 
headquarters on June 18-19, 2018. In advance of the meeting, the 
Department distributed a revised discussion draft, and a crosswalk 
comparison of the January and June 2018 drafts, for consideration by 
the Committee. The Tribal representatives attended the June 2018 
Committee meeting but raised several objections. They asserted that the 
draft submitted to the Committee had not been prepared mutually through 
a negotiated process involving both the Department and Tribal 
representatives. On June 19, 2018, the Tribal representatives suspended 
negotiations based on their objections. Therefore, the Committee did 
not approve any meeting minutes or documents.
    Concurrent with its decision to suspend negotiations, the Tribal 
representatives submitted a letter \4\ to the Department proposing new 
timelines to conclude negotiations and setting forth a number of 
requests and conditions that must be met before the Tribal 
representatives would agree to resume negotiations. To meet the 
statutory time frame for publication of a draft and final rule, the 
Department declined the request of Tribal representatives to delay 
publication of the draft rule. However, Committee negotiations resumed 
after enactment, on August 14, 2018, of Public Law 115-235, which 
extended the statutory deadline for the Department to issue the 
proposed rule and final rule.
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    \4\ The letter is available in the docket.
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    At the request of the Tribal representatives, the Department 
retained the services of the Federal Mediation and Conciliation Service 
(FMCS), a neutral third party, to facilitate subsequent negotiations. 
The Department and the Tribal representatives subsequently worked 
through their differences with the assistance of FMCS, including the 
disagreement issues.
    In October 2018, the Tribal representatives submitted to the 
Department a revised discussion draft for the Committee's 
consideration. With assistance from FMCS, the Committee resumed 
negotiations in Washington, DC on October 29-November 3, 2018. At the 
recommendation of FMCS, the Committee appointed a drafting 
subcommittee, composed of nominated Committee members and technical 
advisors, to develop recommendations and draft regulatory text for 
consideration by the Committee. The Committee directed the work of the 
drafting subcommittee.
    Between November 2018 and February 2019, FMCS convened the drafting 
subcommittee virtually and in-person in Washington, DC to develop 
recommendations and proposed regulatory text for the Committee's 
negotiation. After consulting with the Designated Federal Officer (DFO) 
and the Tribal Co-Chairs, FMCS convened the Committee in Shawnee, OK on 
March 18-19, 2019, followed by a two-day drafting subcommittee meeting 
on March 20-21, 2019. During the Committee meeting, the Committee 
reached tentative agreement on several proposed regulatory sections and 
provided additional direction to the drafting subcommittee. Finally, 
the Committee authorized FMCS and the drafting subcommittee to continue 
to negotiate additional recommendations and to propose regulatory text 
addressing the remaining topics.
    FMCS convened the drafting subcommittee in Washington, DC on April 
1-4, April 23-26, and May 20-23, 2019, to develop the remaining 
provisions of the draft rule for the Committee's consideration. After 
consulting with the DFO and the Tribal Co-Chairs, FMCS convened the 
Committee in Scottsdale, AZ on June 3-6, 2019. At the meeting, the 
drafting subcommittee presented the proposed regulatory text to the 
Committee, identified a limited number of areas of disagreement that 
remained outstanding, and provided recommendations and preferred 
language addressing these areas of disagreement, whether in regulatory 
text or in draft preamble text for the proposed rule. The Committee 
reached tentative agreement on most of the rule and provided additional 
direction to the drafting subcommittee on the outstanding provisions. 
The Committee authorized the drafting subcommittee to complete the 
draft rule for the Committee's review and agreement.
    The drafting subcommittee met in Washington, DC on June 25-26, 
2019, to complete its work. On June 26, 2019, FMCS facilitated the 
subcommittee's briefing of the Committee on the draft rule. The 
Committee reached consensus on the draft rule, including the 
description of the disagreement items discussed in this section. The 
Tribal Co-Chairs and the DFO confirmed the Committee's consensus 
determination to submit the draft rule to the Department.
2. Public Comment and Tribal Consultation
    The Department published the notice of proposed rulemaking (NPRM) 
in the Federal Register on October 2, 2019 for a 60-day comment period. 
84 FR 52706. In the NPRM, the Department announced three Tribal 
consultations and a virtual listening session, consistent with 
Executive Order 13175, Consultation and Coordination with Indian Tribal 
Governments. The Department held four public information, education, 
and consultation meetings during the public comment period to explain 
the rule, answer questions, and take oral testimony. The first took 
place on October 21, 2019, during the National Congress of American 
Indians' Annual Convention in Albuquerque, NM. The second was held on 
November 5, 2019, at the United South and Eastern Tribes Annual Meeting 
in Choctaw, MS. The third meeting occurred on November 19, 2019, at a 
Federal Aviation Administration facility in Des Moines, WA. At all 
three consultations, the Department presented on the proposed rule, 
answered questions, and took comments. Transcripts of each of these 
consultations are posted in the docket. On November 21, 2019, the 
Department held a virtual listening session via webinar. The closed 
captioning record of the virtual listening session is posted in the 
docket. Finally, after the comment period closed, on December 5, 2019, 
a Department representative held an information listening session at 
the 29th Annual Bureau of Indian Affairs (BIA) Tribal Providers 
Conference in Anchorage, AK.
3. Development of the Final Rule
    At the direction of the Committee, the drafting subcommittee 
reconvened on February 3-6, 2020, in Washington, DC. The drafters 
reviewed the public comments and developed recommended changes to the 
proposed rule for consideration by the Committee. The Committee 
reconvened in Cabazon, CA on March 3-5, 2020. The drafting subcommittee 
presented the proposed final rule for the Committee's review, and the 
Committee reached consensus on the final rule.

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II. Summary of Comments on the Proposed Regulations and the Final Rule

    This section summarizes each subpart of the Department's 
regulations to implement the TTSGP, and describes the comments received 
on the proposed rule and the Department's response to those comments. 
The Department received written and oral comments from 14 Tribes, a 
consortium of 19 Tribes, and several individual Tribal members; a non-
profit organization representing small and independent business 
members; 3 intertribal organizations, representing many Tribes across 
the United States; 2 law firms that represent Tribes nationwide; a 
consortium of 5 State departments of transportation; and a transit 
agency. The Department reviewed and carefully considered all public 
comments received, including those received after the comment period 
closed.
    Except for four areas of disagreement discussed in this section, 
the proposed regulations are the product of consensus developed by the 
Committee through interest-based negotiations.
    The Tribes, Tribal organizations, and law firms expressed general 
support for the rule and the Tribal views on the areas of disagreement. 
Comments on specific sections or topics are summarized and responded to 
in this section. Additionally, the Department received several 
questions in the Tribal consultations that were outside the scope of 
this rulemaking.
    The Department made minor edits, including consistency changes, 
throughout the final rule to improve clarity. The Department aligned 
the questions in the section titles and the answers in the regulatory 
text. When referencing funds in a funding agreement, the proposed rule 
used two phrases inconsistently. The final rule uniformly uses the 
phrase ``included in a funding agreement.'' The final rule changes the 
term ``parties'' to ``the Department and the Tribe.'' Finally, the 
Department revised regulatory statements from passive voice to active 
voice.

A. Subpart A--General Provisions

    This subpart sets forth the purpose and authority of these 
regulations, Departmental policy, effect of these regulations on 
existing Tribal rights, the Department's obligation to consult with 
self-governance Tribes, and definitions. It states the prospective 
effect of these regulations and addresses the relationship between a 
participating Tribe's existing Tribal Transportation Program (TTP) 
agreement entered into under the authority of 23 U.S.C. 202, and a 
compact and funding agreement. Finally, it addresses the effect of 23 
U.S.C. 207 on requirements contained in Departmental regulations, 
program guidelines, manuals, or policy directives.
    The Department received one comment from a non-profit organization 
requesting the addition of a new paragraph to Sec.  29.1, which 
addresses the purpose and authority for part 29, to impose a limitation 
on cross-border Tribes' use of funds based on geography. The commenter 
noted that 23 U.S.C. 207 is silent on the issue of extraterritorial 
application, and the Department declines to adopt the proposed 
revisions because limitations on the use of specific funds under the 
Program, including for cross-border Tribes, are addressed by the 
statutes specific to the funding source.
    The Department edits Sec.  29.1 for clarity in the final rule, 
striking the last sentence in proposed Sec.  29.1(a) regarding funds 
that may be included in a funding agreement since this is addressed in 
Sec.  29.400. The Department also revises paragraph (b) to clarify the 
source of the negotiated rulemaking procedures by referencing the 
Negotiated Rulemaking Act.
    The Department makes minor revisions in the final rule to Sec.  
29.2 regarding Departmental policy. Specifically, the final rule 
reflects the statutory language in paragraph (d) and rephrases 
paragraph (f) to active voice.
    A commenter and a Tribal consultation attendee inquired whether a 
Tribe could participate in the Program at any time or whether there was 
an expiration date for participation. The Department revises in the 
final rule Sec.  29.3(a) to clarify that a Tribe may apply at any time. 
The Department received comments from three Tribes and a law firm 
expressing support for including in the final rule the Tribal rights 
set forth in Sec.  29.3(b) and the applicability of Departmental 
circulars, policies, manuals, guidance or rules other than those in 
part 29, as set forth in Sec.  29.4. The commenters encouraged the 
Department to reduce regulatory burdens to Tribes through a liberal 
interpretation of this rule, citing the general lack of Tribal 
resources and staff. The Department acknowledges the comment and did 
not make any changes in the final rule.
    The Department received comments from three Tribes and a law firm 
encouraging the Department to retain Sec.  29.7 in the final rule. This 
provision addresses existing TTP agreements, clarifying that the TTSGP 
has no effect on existing or future TTP agreements, but that a Tribe 
cannot have both a TTP agreement and TTP funds included in a funding 
agreement under the Program. The Department retains this provision with 
no changes in the final rule.
    The Department revises in the final rule Sec.  29.8 regarding 
situations where more than one party purports to be the authorized 
representative of a Tribe to add ``if necessary.'' This change 
clarifies that the Department may not need to defer negotiations or 
execution of documents in all cases.
    Section 29.9 sets forth the definitions applicable to part 29. The 
Department received comments from three Tribes, a Tribal organization, 
and a law firm supporting the use of terms with which Tribes operating 
under ISDEAA are familiar. They and a Tribal member also urged the 
Department to use an alternative term for ``Chief'' in the title 
``Chief Self-Governance Official.'' The Department agrees with the 
recommendation and removes ``Chief'' from the title in the final rule.
    The Department received several questions regarding eligibility for 
the Program. Section 207 and this final rule make clear that Indian 
Tribes, including Tribal organizations, and Tribal consortia are 
eligible to participate in the Program on behalf of their member 
Tribes. As set forth in the definition of Indian Tribe or Tribe in 
Sec.  29.9, when a Tribe has authorized a consortium to carry out 
Tribal PSFAs on its behalf, the consortium has the same rights and 
responsibilities as the authorizing Tribe.
    The Department revises the definitions of ``compact'' and ``funding 
agreement'' in the final rule to clarify that they are entered into 
pursuant to ``this part'' as well as 23 U.S.C. 207. The proposed rule 
sometimes, but not consistently, referred to compacts and funding 
agreements ``under this part'' or ``under the Program.'' The Department 
removes these inconsistent references in the final rule. The Department 
revises the definition of ``discretionary or competitive grant'' to 
clarify the term as used in part 29.
    The Department received comments from three Tribes, a Tribal 
organization, and a law firm supporting the definition of ``programs, 
services, functions, and activities'' or ``PSFAs.'' One Tribe requested 
that the Department clearly define the term PSFAs, but did not make any 
suggestions on how to revise the definition. The Department does not 
make any revisions to the PSFA definition in the final rule. This 
definition clarifies that the Department does not deliver PSFAs on 
behalf of Tribes; rather, Tribes carry out PSFAs using the six 
categories of funding eligible to be included in a funding

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agreement between the Department and the Tribe.

B. Subpart B--Eligibility and the Negotiation Process

    This subpart sets forth the eligibility requirements for a Tribe, 
Tribal organization, or Tribal consortium (collectively ``Tribe'' in 
the final rule) to participate in the Program. Consistent with Section 
207, Sec.  29.100 requires Tribes to demonstrate financial stability 
and financial management capability, and transportation program 
management capability to be eligible to participate in the TTSGP. The 
Department revises paragraphs (a)(2), (b), and (c) in the final rule to 
clarify that the Department's determination is based on the evidence 
submitted by the Tribe.
    Consistent with the proposed rule, Sec.  29.100(b) provides three 
standards by which Tribes may demonstrate financial stability and 
financial management capacity. First, the regulation sets forth Section 
207's conclusive evidence standard. Second, Sec.  29.100(b)(2) provides 
a sufficient evidence standard for Tribes subject to the Single Audit 
Act that currently carry out transportation projects, programs, or 
services through the TTP or a DOT grant award and have no uncorrected 
significant and material audit exceptions in their required single 
audits. Tribes that meet the sufficient evidence standard are well 
placed to participate in the DOT self-governance program--they conduct 
audits under the Single Audit Act, demonstrate that they do not have 
material and significant audit exceptions, and demonstrate 
transportation experience. While TTP agreements are ``in accordance 
with the ISDEAA,'' Tribes are subject to Federal oversight when they 
administer TTP funds. Tribes plan, budget, prioritize, and otherwise 
manage their Tribal transportation programs. The sufficient evidence 
standard recognizes that Tribes that successfully implement TTP 
agreements and successfully manage grants for the maintenance, 
rehabilitation, and construction of transportation facilities should 
receive the benefits Congress intended in enacting the TTSGP.
    The Department received comments from two Tribes and two law firms 
expressing support for the Department's inclusion of a sufficient 
evidence standard and requesting clarification that the Department 
intends to implement the sufficient evidence standard in the same 
manner as the conclusive evidence standard. The Department makes edits 
to paragraph (b)(2) to clarify that this is the case.
    Third, the regulation provides a means for Tribes without a mandate 
to comply with the Single Audit Act that currently conduct business 
with DOT to demonstrate financial stability and financial management 
capability. Unlike the other two standards, this is a discretionary 
determination made by the Department. This option is consistent with 
FHWA practice in administering the TTP, provided the Tribe demonstrates 
financial capacity. FHWA has long permitted Tribes not subject to the 
Single Audit Act to enter into a TTP agreement, provided they undergo 
an independent audit and provide evidence demonstrating no uncorrected 
significant and material audit exceptions. DOT has determined that some 
smaller-funded Tribes have worked well with DOT under TTP agreements, 
as well as under the Federal Transit Administration's (FTA's) Tribal 
Transit Program. The Department does not want to compel those Tribes to 
join a consortium to be eligible for the TTSGP, and there is no 
requirement in the final rule for such Tribes to do so. In the final 
rule, the Department clarifies the meaning of independent audit to be 
one that is consistent with 2 CFR 200.514, reorganizes the 
subparagraphs to be sequential, and moves the provision on technical 
assistance to paragraph (e) since it is inapplicable to the evidence 
for demonstrating financial stability and financial management 
capability.
    Several Tribes and the commenting law firms expressed support for 
the Department's approach to the financial stability and financial 
management capability criterion, in particular the inclusion of the 
sufficient evidence standard and discretionary standard. One Tribe 
asked that the Department clarify that, if a Tribe meets the sufficient 
evidence standard, it has met the financial stability and financial 
management capability criterion. The Department makes edits to 
paragraph (b)(2) to make clearer that this is the case.
    Paragraph (c) of Sec.  29.100 describes the evidence the Department 
would consider in making the discretionary determination that a Tribe 
has demonstrated transportation program management capability to be 
eligible to participate in the Program. As noted in the proposed rule, 
the Department will evaluate the totality of the evidence presented in 
support of the eligibility application. The Department makes clarifying 
edits to paragraph (c) to state this explicitly in the final rule.
    One Tribal commenter requested that the Department accept as 
eligible Tribes that already participate in self-governance programs 
with the U.S. Department of the Interior (DOI) or Indian Health Service 
(IHS). The Department acknowledges the commenter's concern. However, 
this approach is inconsistent with Section 207, which sets forth the 
specific eligibility criteria. Section 207 does not provide an 
automatic entry into the Program for self-governance Tribes that 
participate in programs with other Federal agencies. However, many 
existing self-governance Tribes likely would satisfy the financial 
stability and financial management capability criterion under the 
conclusive evidence standard with three years of clean audits, and 
evidence of their successful management of their transportation 
programs. Another commenter asked whether a Tribe demonstrates 
transportation program management capability if it uses a consultant to 
assist it in carrying out transportation services. Under Sec.  
29.100(c), the Department will examine evidence of a Tribe's 
transportation program management capability on a case-by-case basis, 
considering the totality of the evidence a Tribe submits. The 
Department recognizes that Tribes have a right to choose how they 
structure their programs and personnel.
    Paragraph (d) of Sec.  29.100 sets forth the time frames related to 
eligibility determinations. The final rule changes the time frame for 
the Department to notify the Tribe that it received the submission and 
whether any additional evidence is necessary from 15 to 30 days, 
because the Department determined it needs more time to assess whether 
any additional evidence is necessary. The final rule also eliminates 
the duplicate reference to the time frame for the Department to notify 
a Tribe regarding the sufficiency of their systems and standards, as 
this is addressed in paragraph (b)(3)(ii).
    Paragraph (e) of Sec.  29.100 provides for technical assistance, to 
the extent the Department has the resources and expertise, to Tribes 
that do not meet the financial stability and financial management 
capacity criterion due to uncorrected significant and material audit 
exceptions. Where the audit exceptions relate to a contract, agreement, 
grant, or other funding mechanism between the Tribe and another Federal 
agency, the Tribe will resolve those exceptions with that agency. The 
Department revises paragraph (c) in the final rule to make this clear.
    The Department notes that DOI operates the DOI Tribal Self-
Governance Program pursuant to title IV of ISDEAA, as amended (codified 
at 25 U.S.C. 5301

[[Page 33498]]

et seq.), and jointly administers the TTP with FHWA. This subpart does 
not alter, affect, modify or otherwise change the eligibility 
requirements under 25 U.S.C. 5362, or implementing regulations at 25 
CFR part 1000, for a Tribe or Tribal consortium seeking to participate 
in the DOI Tribal Self-Governance Program. Nothing in this final rule 
shall be construed to diminish or otherwise affect the authority of the 
Secretary of the Interior to carry out and administer the DOI Tribal 
Self-Governance Program. Additionally, this subpart does not alter or 
otherwise effect existing TTP contracting options available to Tribes 
with DOI.
    Finally, this subpart describes the negotiation process a Tribe 
must follow to enter into a compact and funding agreement with the 
Department to participate in the TTSGP. Some Tribes and the law firms 
supported the simple and flexible process and the clear time frames in 
their comments. The final rule clarifies the timing for negotiating an 
amendment in Sec.  29.101 and for negotiating compacts, funding 
agreements, or amendments in Sec.  29.102. It also clarifies in Sec.  
29.107 that the Department and a Tribe should resolve negotiation 
disagreements informally.

C. Subpart C--Final Offer Process

    This subpart sets forth the final offer process that a Tribe may 
invoke during negotiation with the Department of a compact or funding 
agreement if they cannot agree on certain terms and conditions. It is 
the Department's intent that a Tribe should only use the final offer 
process when there is a negotiation impasse and not before the parties 
have fully explored an area of disagreement. This subpart also sets 
forth the Department's responsibilities in processing a final offer, 
the grounds for rejecting the Tribe's final offer, and the Tribe's 
rights to challenge an adverse decision by the Department related to 
the final offer.
    The Department received comments from two Tribes, a Tribal 
organization, and a law firm expressing support for the Department's 
approach in subpart C. The commenters supported the clear time frames, 
final offer process, and clarity in Sec.  29.213 that the Department 
and a Tribe may still execute and implement the non-disputed portions 
of a compact or funding agreement. The Department revises Sec.  29.213 
in the final rule to change ``remaining'' provisions to ``any non-
disputed, severable'' to align with similar language in Sec.  29.911, 
and adds ``not already executed'' to further clarify that there could 
be non-disputed provisions already in place.
    The Department makes some minor edits for clarity throughout the 
provisions in subpart C. The Department revises the timing for transfer 
of funds in Sec.  29.208 to cross reference to the appropriate transfer 
of funds provisions in Sec. Sec.  29.403 through 29.405, rather than 
set forth the timing in this provision. The Department notes that the 
final rule revises the timing for transfer of funds in these provisions 
from 30 to 10 days, as discussed in section II.E. Finally, the 
Department clarifies the response in Sec.  29.211 regarding when the 
Department must provide technical assistance. The NPRM stated 
conflicting timing--upon receipt of the final offer and upon rejection. 
Consistent with 25 U.S.C. 5387(c)(1)(B), which is incorporated by 23 
U.S.C. 207(l)(2), the final rule states that technical assistance is 
provided upon rejection of a final offer.

D. Subpart D--Contents of Compacts and Funding Agreements

    This subpart identifies what is included in compacts, funding 
agreements, and amendments; the duration of such agreements; and the 
rights and responsibilities of the Department and a Tribe. One law firm 
supported the Department's flexible approach, noting, in particular, 
the absence of a model compact and funding agreement.
    Section 29.307 addresses the required terms to include in a funding 
agreement. The Department received questions from attendees at the 
Tribal consultations about the applicability of the TTP implementing 
regulations, 25 CFR part 170. The Department responded that these 
provisions would apply if the funding agreement included TTP funds. 
However, the Department recognizes that there are some provisions of 25 
CFR part 170 that will be inapplicable or overlap with provisions in 
part 29 that are best addressed in the negotiation of the funding 
agreement between the Department and the Tribe. Therefore, the 
Department adds a new paragraph (j) in the final rule, which states 
that if the funding agreement includes TTP funds, the funding agreement 
will include 25 CFR part 170 provisions related to planning, inventory, 
and allowable use of funds necessary for administration of the TTP.
    The Department retains paragraph (i) in the final rule, which 
requires inclusion of Federal health and safety requirements that apply 
to the funds. Notwithstanding the effect of 23 U.S.C. 207(n)(4), the 
compacts and funding agreements must include the requirements related 
to public health and safety that apply to the funds included in the 
funding agreement. Since its establishment in 1966, the Department's 
primary mission has always been safety. Including public health and 
safety requirements that relate to transportation funding ensures that 
this important mission continues for Tribes and other members of the 
traveling public.
    Finally, in response to questions in the Tribal consultations, the 
Department adds some examples to paragraph (k) of the types of 
provisions that the Department and a Tribe might agree to include in a 
compact and funding agreement.
    The Department received comments on Sec.  29.308 from two Tribes, a 
Tribal organization, and a law firm requesting that the Department add 
a reference to title V of ISDEAA stating that the statute provides for 
the inclusion of title I and title V provisions as long as they do not 
conflict with Section 207. The Department does not agree with this 
characterization. Section 207(l) makes certain enumerated provisions of 
title I and title V of ISDEAA applicable to a compact and funding 
agreement under the Program, except to the extent the Secretary 
determines they conflict with section 207. The regulations in part 29 
address the provisions of title V that 23 U.S.C. 207(l) incorporates 
and identifies those provisions that conflict with 23 U.S.C. 207. The 
rule addresses these incorporated title V provisions throughout part 
29. The Department revises the title of Sec.  29.308 to reference title 
I of ISDEAA.
    Finally, as discussed in section II.E, the final rule moves Sec.  
29.310 regarding redesign and consolidation to subpart E, and renumbers 
the two remaining sections in subpart D.

E. Subpart E--Rules and Procedures for Transfer and Use of Funds

    This subpart sets forth the rules regarding transfer and use of 
funds under the Program. This subpart also describes responsibilities 
of the Department with respect to the transfer of such funds, including 
the time to transfer the funds, and other issues related to the funding 
provided to Tribes through their compact and funding agreements, 
including the use of such funds via the funding agreement. This subpart 
also addresses how Tribes may use these funds for matching or cost 
participation purposes and investment standards.
    Section 29.400 sets forth the six categories of Department funds 
that a Tribe may elect to include in its funding agreement and, with 
agreement of a

[[Page 33499]]

State, the transfer of funds.\5\ The Department splits proposed 
paragraph (e), regarding State funds, into two paragraphs in the final 
rule to separate out the two formula programs that allow for such 
transfers. The Department revises paragraph (e) regarding highway funds 
to add a reference to the additional transfer authority set forth in 23 
U.S.C. 207(d)(2)(A)(ii). The Department revises the language regarding 
transit funds in paragraph (f) for further clarity.
---------------------------------------------------------------------------

    \5\ The Department will maintain a list of the funding programs 
eligible for inclusion in a funding agreement under Sec.  29.400 on 
the self-governance website, currently at https://www.transportation.gov/self-governance.
---------------------------------------------------------------------------

    The Department revises in the final rule Sec.  29.401 regarding 
transfer of funds to address all of the potential funds that could be 
transferred in a funding agreement under Sec.  29.400. Specifically, 
paragraph (c)(1) addresses discretionary or competitive grants, and 
paragraph (c)(2) addresses State funds transferred under 23 U.S.C. 
202(a)(9), 23 U.S.C. 207(d)(2)(A)(ii), or 49 U.S.C. 5311. As stated in 
the NPRM, while Sec.  29.401(c)(4) sets forth the requirement from 23 
U.S.C. 207(h)(2) that the Department include in a funding agreement 
amounts equal to the project-related administrative expenses (PRAE) 
incurred by the BIA that the Department would have withheld under the 
TTP, the Department notes that it does not presently provide to the BIA 
any funds for PRAE.
    The Department received 17 comments from Tribes, Tribal members, 
and law firms regarding the timing for transfer of funds set forth in 
Sec. Sec.  29.403, 29.404, and 29.405. Commenters disagreed with the 
30-day time frame for the Department to transfer funds to the Tribes. 
Commenters argued that under ISDEAA, the Department must make fund 
transfers within 10 days, and that the proposed regulation should not 
be inconsistent with ISDEAA. The comments noted that delays would 
negatively impact operations and planned construction or maintenance 
projects. Many of the comments noted the Department's concern about the 
ability to meet the 10-day deadline and encouraged the Department to 
upgrade its financial systems to allow for 10-day disbursements. One 
commenter suggested that FTA should implement the same payment system 
as FHWA and make annual lump sum advance payments.
    The Department agrees that changing Sec. Sec.  29.403, 29.404, and 
29.405 from 30 days to 10 days is appropriate and consistent with 25 
U.S.C. 5388(g), as incorporated by 23 U.S.C. 207(l)(3). While this 
provision only applies to initial annual transfers of funds, the 
Department is applying these timeframes as a matter of policy for 
subsequent transfers in Sec.  29.404 and discretionary and competitive 
grants in Sec.  29.405, unless the funding agreement provides 
otherwise. The final rule also strikes references in Sec. Sec.  29.403 
and 29.404 to distribution methodologies and other decisions because 
these decisions occur prior to the apportionment of the funds by OMB. 
OMB Circular No. A-11 (2016) clarifies that, consistent with 31 U.S.C. 
1513(b) and E.O. 11541, an apportionment is an OMB-approved plan to use 
budgetary resources, which limits the obligations the Department may 
incur for specified time periods, programs, activities, projects, 
objects, or any combination. As such, the apportionment process is not 
complete until the Department receives approval from OMB of its planned 
use of funds. The final rule also revises these provisions to include a 
new sentence referencing the Prompt Payment Act to clarify that there 
is no interest penalty so long as the Department makes the transfer 
within 30 days. Finally, for consistency throughout these three 
provisions, the Department adds the phrase ``unless the funding 
agreement provides otherwise'' in Sec.  29.403 to Sec. Sec.  29.404 and 
29.405.
    The Department revises for clarity in the final rule Sec.  29.407 
addressing discretionary or competitive grant awards and eligibility 
for contract support costs. Specifically, the first sentence states 
that such awards do not entitle a Tribe to contract support costs or 
other amounts under 25 U.S.C. 5325. Additionally, the Department 
strikes as unnecessary the reference to reduction in funds, which 
erroneously cross-referenced to Sec.  29.413(a)(4) in the NPRM (the 
correct reference was Sec.  29.414(d)(4)).
    The Department revises in the final rule Sec.  29.409 regarding 
carry over funds to split into separate paragraphs the periods of 
availability for discretionary or competitive grants and formula funds. 
The final rule also adds an introductory paragraph to reflect the 
question in the regulatory text.
    For clarity in Sec.  29.411 regarding matching or cost 
participation requirements, the Department adds a reference to the 
relevant incorporated provision of ISDEAA because there are two 
incorporated provisions in 23 U.S.C. 207 addressing matching and cost 
participation.
    The Department makes minor edits to Sec.  29.414 regarding 
limitations related to the transfer of funds. The final rule revises 
paragraph (d)(1) to align the language with the statute. In the 
proposed rule, paragraphs (d)(5) and (d)(7) both addressed termination. 
The final rule eliminates proposed Sec.  29.414(d)(5) and renumbers the 
subsequent paragraphs accordingly. The final rule corrects the citation 
to the Prompt Payment Act in Sec.  29.415.
    The Department makes revisions for clarity to Sec.  29.418 
regarding transfers of State funds. The final rule adds a reference to 
the transfer authority set forth in 23 U.S.C. 207(d)(2)(A)(ii). In 
paragraph (c), the final rule clarifies that the language in 23 U.S.C. 
207(d)(2)(A)(ii)(III)(aa) and (bb) ``during the applicable statute of 
limitations period related to the construction of the project'' refers 
to compliance with applicable post-construction requirements. The 
Department revises paragraph (d) to align the language and format with 
the discussion of contract support costs in Sec.  29.419.
    With respect to Sec.  29.419 addressing contract support costs 
(CSCs), the Department received comments on this matter from Tribes, 
Tribal organizations, and law firms, as well as several comments and 
questions at the Tribal consultations. Tribal commenters supported the 
Tribal representatives' objection to this language, and disagreed with 
the Department's preliminary interpretation that the incorporated 
provision of ISDEAA, 25 U.S.C. 5325(a), conflicts with 23 U.S.C. 
207(h)(1). A Tribal consortium further urged the Department to find 
that 25 U.S.C. 5325(a), as well as other title I and title V provisions 
of ISDEAA, should not be found in conflict unless such a provision 
would undermine the effectiveness of the TTSGP. The consortium noted 
that, under 23 U.S.C. 207(j)(1), except as otherwise provided by law, 
the Secretary must interpret Federal laws, orders, and regulations in a 
manner to facilitate the inclusion of PSFAs and funds associated 
therewith, in compacts and funding agreements. Other Tribes referenced 
the ISDEAA definition of CSCs, and stated that CSC activities do not 
duplicate activities of the Department, and CSCs are an integral 
component of the ISDEAA program. Tribal commenters stated that CSCs are 
eligible expenses and are critical financial resources required by 
Tribes to operate and manage Federal programs. The Department 
acknowledges that Tribal commenters and Tribal representatives on the 
Committee disagreed with the Department's position and the Tribes' 
articulation of the critical need to fund Tribal transportation 
infrastructure. The Committee agreed that, under 25 U.S.C. 5325, CSCs 
are not applicable to

[[Page 33500]]

amounts transferred to a Tribe pursuant to a discretionary or 
competitive grant award, or Federal-aid funds transferred under 23 
U.S.C. 202(a)(9).
    Following additional review of this issue and after considering the 
rationale in the Tribal comments regarding the applicability of CSCs to 
formula funding, it is the Department's determination that 25 U.S.C. 
5325(a), as incorporated by 23 U.S.C. 207(l)(8), conflicts with 23 
U.S.C. 207(h) consistent with the Department's analysis in the NPRM. 
See 84 FR 52706, 52710-52712 (Oct. 2, 2019).
    The Department acknowledges that, except to the extent there are 
conflicts, 25 U.S.C. 5325(a) is made applicable to the Program pursuant 
to 23 U.S.C. 207(l)(8). However, pursuant to 23 U.S.C. 207(l), the 
Department has determined that 25 U.S.C. 5325(a) conflicts with 23 
U.S.C. 207(h), which mandates that the Secretary provide funds to 
Tribes in ``an amount equal to'' (1) the sum of funds the Tribes would 
receive under a funding formula or other allocation method established 
under title 23 and chapter 53 of title 49 of the U.S. Code added to 
``(2) such additional amounts as the Secretary determines equal the 
amounts that would have been withheld for the costs of the Bureau of 
Indian Affairs for administration of the program or project.'' \6\ The 
plain language of 23 U.S.C. 207(h) is a funding limitation because the 
provision uses the phrase ``an amount equal to.'' This limitation 
conflicts with two mandates in 25 U.S.C. 5325(a) that otherwise direct 
the Department: (1) To provide to a Tribe funds, pursuant to 25 U.S.C. 
5325(a)(1), in an amount ``not . . . less than'' the agency would have 
provided to operate the program for the contract period, including 
supportive administrative functions;'' and (2) to ``add,'' pursuant to 
25 U.S.C. 5325(a)(2), contract support costs (CSCs) to the amount 
provided under 25 U.S.C. 5325(a)(1). Because the mandates in 25 U.S.C. 
5325(a)(1)-(2), directing the Department to supplement the funding it 
provides to Tribes, are in direct conflict with the limitation on 
funding set forth in 23 U.S.C. 207(h), the Department is not persuaded 
by the comments and maintains that the statutory conflict it identified 
in the NPRM renders 25 U.S.C. 5325(a) inapplicable to the Program.
---------------------------------------------------------------------------

    \6\ The Department does not withhold funds for the costs of the 
Bureau of Indian Affairs for project or program administration, and 
therefore anticipates that this amount will always be zero.
---------------------------------------------------------------------------

    There is additional support for the Department's conclusion. The 
funds set forth in 25 U.S.C. 5325(a)(1), which the ``Secretary would 
have otherwise provided for the operation of the programs or portions 
thereof,'' do not describe any sources of funds eligible to be 
transferred under 23 U.S.C. 207(d)(2)(A) because Congress directed the 
Department to make available in funding agreements only direct 
financial assistance to Tribes. See also Sec.  29.400. The Department 
has never operated a program or portions thereof for the benefit of 
Tribes.\7\ Therefore, Tribes carrying out their Tribal PSFAs with 
Department funding do not risk diminishing their program resources due 
to their participation in the Program because the Department has never 
administered the activities.
---------------------------------------------------------------------------

    \7\ Notably, 23 U.S.C. 207(d)(2)(A)(i) authorizes the Department 
to transfer in a funding agreement funding associated with formula, 
discretionary, or competitive grant programs for which Tribes are 
eligible recipients. It does not, however, transfer programs in 
which the Department carries out inherent Federal functions, such as 
when Federal employees operate the air traffic control program.
---------------------------------------------------------------------------

    The Department administers two programs--the TTP and the Tribal 
Transit Program--that solely benefit Tribes and that allocate funds to 
Tribes under a funding formula. Tribes receive formula funds (and may 
compete to receive other discretionary funds) that a Tribe may direct 
toward constructing, maintaining, refurbishing, or rehabilitating 
infrastructure, transportation facilities, as well as related 
operational costs. As such, Tribes--like States and municipalities--
must make difficult decisions about how to direct Federal funding. 
Tribes may use TTSGP funds to recover direct, indirect, startup, and 
pre-award costs associated with the implementation and operation of 
their transportation programs, subject to applicable requirements 
contained in statutes governing the sources of funds, applicable cost 
principles under 2 CFR part 200, and any applicable caps on indirect 
cost funding. Under these programs, Tribal recipients may use Federal 
funds for eligible planning, operating, and capital expenses. In 
addition, Tribes may use program funds for startup and audit costs, 
including the reimbursement of eligible pre-award costs when authorized 
by agency policy or the TTSGP. This does not mean that additional funds 
have been authorized or appropriated for these expenses, since there 
are no additional funds to provide to Tribes for CSCs. Based on the 
Department's determination, the funding limitation in 23 U.S.C. 207(h) 
does not allow any other outcome.
    Additionally, some commenters acknowledged that there are no 
Department appropriations for CSCs, but proposed the Department add a 
new section for the transfer of CSCs to Tribes if Congress provides 
future appropriations for CSCs. Such a provision would be inconsistent 
with the Department's determination that inclusion of CSCs conflicts 
with 23 U.S.C. 207.
    The Department also received numerous comments supporting the 
Tribal views regarding Sec.  29.420 and noting that, in the absence of 
additional funds being made available for facility lease payments, 
Tribes will have to divert funds from needed infrastructure 
improvements to cover facility support costs. Here too, the comments 
did not present new rationale to overcome the Department's 
determination. As such, the Department declines to change its approach 
regarding the applicability of facility lease and support costs under 
25 U.S.C. 5324(l). The Department acknowledges that Tribal commenters 
and Tribal representatives on the Committee disagreed with the 
Department's position.
    Similar to the Department's analysis regarding CSCs, the Department 
has determined that the funding limitation of 23 U.S.C. 207(h) 
conflicts with the mandate in section 105(l) of ISDEAA, codified at 25 
U.S.C. 5324(l), and incorporated by 23 U.S.C. 207(l)(8), to provide 
additional amounts for facility lease and support costs. A conflict 
exists because the amount of 25 U.S.C. 5324(l) funds and 23 U.S.C. 
207(d)(2)(A) funds would never ``equal'' the amount contemplated by 23 
U.S.C. 207(h). Accordingly, the Department invokes its authority under 
23 U.S.C. 207(l) to determine a conflict makes 25 U.S.C. 5324(l) 
inapplicable to the Program. Finally, the Department understands that 
the two Tribal Transportation programs require Tribes to make difficult 
choices in determining how best to allocate limited Federal funding 
within their Tribal transportation and transit programs.
    In the proposed rule, the Department addressed redesign, 
consolidation, reallocation, or redirection of funds in Sec.  29.310 in 
subpart D, which addresses terms of compacts and funding agreements. 
Upon further consideration, because Sec.  29.310 addresses the use of 
funds, the final rule moves this provision to Sec.  29.421 in subpart E 
because that subpart generally addresses how the Department transfers 
and the Tribes use funds.
    The Department received five comments from Tribes, Tribal members, 
and Tribal organizations regarding proposed Sec.  29.310. Commenters 
noted that seeking the Department's approval to redesign or reprogram 
funds is

[[Page 33501]]

incongruent with the tenets of self-governance and Tribal sovereignty. 
Some commenters noted that proposed Sec.  29.310 provided for redesign, 
reprogramming, and reallocation consistent with Section 207, but 
disagreed with the provision requiring that Tribes reprogram or 
reallocate funds consistent with the transportation improvement program 
(TIP). Some commenters stated that submitting a TIP to the Department 
for approval undermines Tribal self-governance.
    Section 207(e)(1)(A)(ii)(I) requires that Tribes expend the funds 
on projects identified in an approved TIP, and the Department cannot 
waive this statutory requirement. See also 23 U.S.C. 202(b)(4)(B). The 
Department did revise the final rule provision, Sec.  29.421, to 
improve clarity. Specifically, the final rule subdivides the language 
into multiple paragraphs. Additionally, the final rule revises 
paragraph (b) to better respond to the question and clarify that a 
Tribe may not redesign, consolidate, reallocate, or redirect 
discretionary or competitive grant funds, consistent with Section 207.

F. Subpart F--Program Operations

    This subpart includes information and instructions to Tribes that 
participate in the TTSGP. Topics covered in this subpart include: (1) 
Audits and cost principles; (2) financial, procurement, and property 
management systems and standards; (3) procurement requirements; (4) 
property; (5) recordkeeping requirements; (6) reporting; (7) technical 
assistance; (8) prevailing wages; (9) Tribal preference; (10) 
environmental and cultural resource compliance; (11) Federal Tort 
Claims Act applicability; and (12) waiver of TTSGP regulations. The 
Department received four general comments on Subpart F, supporting the 
inclusion of provisions that impose requirements familiar to Tribes 
participating in self-governance programs with DOI and IHS.
    The proposed rule included near identical provisions addressing 
record retention in proposed Sec. Sec.  29.502 and 29.514. In the final 
rule, the Department eliminates the proposed Sec.  29.502 in favor of a 
consolidated provision in Sec.  29.513. Given the removal of this 
section, the final rule numbering for the subsequent sections in 
subpart F differs by one from the numbering in the proposed rule.
    In the final rule, the Department makes several edits to Sec. Sec.  
29.505, 29.506 and 29.507 (proposed Sec. Sec.  29.506, 29.507, and 
29.508) to make these sections easier to understand and reduce 
overlapping language. Additionally, Sec.  29.507 addresses the minimum 
requirements for a Tribe's financial management system. This provision 
is similar to an existing provision in 25 CFR 900.45, implementing 
title I of ISDEAA, except for paragraphs addressing source 
documentation and cash management. The final rule includes two new 
paragraphs addressing source documentation and cash management based on 
the language in 25 CFR 900.45.
    The Department revises the introductory phrase of paragraph 
(a)(4)(ii) of Sec.  29.515 regarding procurement standards to align 
with the statute. With respect to Sec.  29.517 (proposed Sec.  29.518) 
addressing a Tribe's use of Federal supply sources in the performance 
of a compact and funding agreement, a commenter noted difficulties with 
obtaining approvals for access to the General Services Administration's 
systems and surplus property. Consistent with Sec.  29.517, the 
Department will make reasonable efforts to expedite approvals as 
requested.
    Section 29.523 (proposed Sec.  29.524) addresses technical 
assistance, clarifying that the Department is committed to carrying out 
the principles of self-governance while also ensuring proper 
stewardship and oversight of Federal funds. The Department received 
questions about the specific types of technical assistance that would 
be available. While the Department did not make any changes in the 
final rule, it views technical assistance as part of its commitment to 
self-governance as well as its program management and oversight 
responsibilities. The Department anticipates responding to technical 
assistance requests on a case-by-case basis and recognizes the 
importance to Tribes of building their internal transportation 
capacity.
    The Department received one comment on Sec.  29.527 (proposed Sec.  
29.528) from a Tribal member who asked whether compliance with the 
National Environmental Policy Act of 1969 (NEPA) (42 U.S.C. 4321, et 
seq.) was required to establish a right-of-way on a BIA-owned trust 
property, and whether there was any conflict with 25 CFR part 169 and 
subpart F of this rule. These regulations would not affect the DOI's 
authority over rights-of-way on Tribal lands. DOI will continue to 
exercise its authority relating to the application, review, grant, 
administration, and oversight of rights-of-way on Tribal lands under 25 
U.S.C. 323-328 and 25 CFR part 169.
    The Department received four comments from a Tribe, Tribal member, 
and a law firm on proposed Sec.  29.535 regarding the process and 
criteria for granting waivers from part 29. Two commenters noted that 
proposed Sec.  29.535 implements 23 U.S.C. 207(j)(2), which directs a 
Tribe to submit a written request to the Secretary to waive application 
of a part 29 provision to a compact or funding agreement by 
``identify[ing] the regulation sought to be waived and the basis for 
the request.'' Specifically, commenters stated that the criteria in 
proposed Sec.  29.535 are overly broad, ambiguous, and may make 
granting waivers more difficult or cause inconsistent application. 
Commenters recommended that the Department review the criteria for 
granting a waiver in 49 CFR part 5 and simplify the proposed regulation 
accordingly. Commenters also asked whether failure by the Department to 
respond to a waiver request within 90 days would result in an automatic 
approval of the waiver.
    The Department notes that it substantially revised its rulemaking 
procedures, including those in 49 CFR part 5, in December 2019 and 
eliminated the criteria referenced by the commenters. See 84 FR 71714 
(Dec. 27, 2019). After further consideration of the comments and 
discussion by the drafting subcommittee, the Department is retaining 
the waiver criteria, set forth in Sec.  29.524 in the final rule, but 
updates paragraph (d)(2) to add ``consistent with the principles of 
self-governance.'' The Department notes that paragraph (e) states that 
waiver requests are deemed approved by operation of law if the 
Department does not take action on a request within 90 days of receipt 
of the request.

G. Subpart G--Withdrawal

    Subpart G sets forth the process for a Tribe to withdraw from a 
consortium's compact or funding agreement with the Department, 
including distribution of the Tribe's shares of TTSGP funding. It 
clarifies that the Department is not a party to internal consortia 
disputes and would provide notice to consortia that seek to participate 
in the TTSGP that their agreements should adequately address the 
circumstances under which a member Tribe may withdraw.
    The Department did not receive any comments on the provisions in 
this subpart and only makes minor edits for clarity to these sections 
in the final rule.

H. Subpart H--Retrocession

    This subpart provides that a Tribe may voluntarily discontinue 
performing a portion or all of the PSFAs under its compact and funding 
agreement, and may return remaining funds to the Department in 
accordance with the process set forth in this subpart. It also

[[Page 33502]]

clarifies the effect of a Tribe's retrocession on its eligibility, and 
sets forth how funds must be distributed when the retrocession takes 
effect.
    The Department did not receive any comments on the provisions in 
this subpart and only makes minor edits for clarity to these sections 
in the final rule.

I. Subpart I--Termination and Reassumption

    This subpart sets forth when and under what circumstances the 
Department may terminate a Tribe's compact or funding agreement. The 
Department received one comment regarding determinations of imminent 
jeopardy with respect to trust assets that could trigger a termination 
under this subpart. The commenter noted that such determinations are 
made by the Office of Special Trustee under the regulations applicable 
to the DOI self-governance program.
    The Department notes that 23 U.S.C. 207(f)(2)(B)(i) applies the 
imminent jeopardy standard to ``a trust asset, natural resources, or 
public health and safety.'' Although the Department does not hold trust 
assets or natural resources on behalf of Tribes, the final rule retains 
this phrase in Sec.  29.800 because it is consistent with Section 207. 
The Department does not reference the Office of Special Trustee because 
termination decisions under this standard are made solely at the 
discretion of the Department, consistent with 23 U.S.C. 
207(f)(2)(B)(i).

J. Subpart J--Dispute Resolution and Appeals

    This subpart sets forth procedures, including alternative dispute 
resolution mechanisms, that a Tribe may use to resolve disputes with 
the Department arising before or after execution of a compact or 
funding agreement, as well as the appeal rights and procedures Tribes 
must use to appeal Departmental decisions to terminate a Tribe's 
compact or funding agreement. It establishes the process for filing and 
processing appeals from adverse decisions and the applicable burden of 
proof. This subpart also contains the Department's preferred language 
on Sec.  29.906, reflecting an area of disagreement regarding 
exhaustion of administrative remedies. The Tribal and Departmental 
views regarding this disagreement item are set forth in the NPRM. See 
84 FR 52706, 52712 (Oct. 2, 2019).
    The Department received comments from two Tribes, an intertribal 
organization, and a law firm generally supporting the Department's 
streamlined approach in subpart J. In particular, commenters supported 
the narrow class of determinations that may be appealed in Sec.  
29.903, clear timelines in Sec. Sec.  29.907 and 29.919, and clarity 
with respect to the effect of appeals in Sec. Sec.  29.923 and 29.931. 
However, 15 comments from Tribes, Tribal organizations, and law firms 
adopted the Tribal Committee members' position opposing the proposed 
provision on the exhaustion of administrative remedies, Sec.  29.906. 
Commenters noted that Section 207 does not require exhaustion of 
administrative remedies. They further stated that pursuing 
administrative remedies is an act of self-determination and self-
governance to which the Department should give deference. They reasoned 
that exhaustion, when not mandated by a statute, is an infringement on 
Tribal sovereignty; that the exhaustion requirement is inconsistent 
with DOI and IHS regulations; and that Tribes have limited resources 
with which to pursue administrative or judicial remedies. Therefore, 
the commenters encouraged the Department to interpret the provision in 
favor of Tribes not to require administrative exhaustion.
    The Department has considered the comments it received and is 
retaining the provision in Sec.  29.906 to require exhaustion of 
administrative remedies for pre-award disputes. Section 207 does not 
incorporate by reference 25 U.S.C. 5331 of ISDEAA. The Department 
interprets 25 U.S.C. 5331 to address the proper venue and relief that 
can be granted for civil actions filed pursuant to this section, but it 
does not address timing of when these civil actions may be brought. 
Tribes disagree with this interpretation.
    While Section 207 does not include an express exhaustion 
requirement, the Department interprets the Administrative Procedure Act 
and Supreme Court precedent to grant the Department discretion to 
impose a requirement that Tribes exhaust their administrative remedies 
before proceeding to the U.S. District Courts. The final rule 
establishes a two-step process for pre-award disputes, under which 
initial decisions are made by the Self-Governance Official and appealed 
to a hearing official appointed by the Office of the General Counsel. 
This efficient process will ensure a proper record for certain pre-
award disputes that will benefit both the Department and the Tribe. The 
Department notes that the exhaustion requirement does not apply to 
appeals of the Department's denial of a final offer because Section 207 
provides that a Tribe may proceed directly to the U.S. District Courts, 
in lieu of an administrative appeal.
    Finally, in the final rule, the Department revises Sec.  29.930 and 
adds Sec. Sec.  29.931 and 29.932 to address administrative law judge 
(ALJ) decisions in termination appeals. Because such decisions are not 
final agency actions, the final rule provides a process for review by 
the Secretary, or her designee, if the Department or the Tribe elects 
to appeal the ALJ's decision. Otherwise, the ALJ's decision becomes the 
final decision of the Secretary after 30 days.

K. Other Comments

1. Office of Self-Governance
    The Committee did not reach consensus on the issue of whether to 
create an Office of Self-Governance. The proposed rule set forth the 
Tribal and Departmental positions. See 84 FR 52706, 52710 (Oct. 2, 
2019). The Department received 37 comments from Tribes, Tribal members, 
and law firms regarding the establishment of an Office of Self-
Governance. Commenters supported the creation of an office before the 
rule becomes effective. Commenters stated that without an Office of 
Self-Governance, implementation of the program could be haphazard and 
inefficient. Commenters maintained that without an Office of Self-
Governance, Department personnel might be overwhelmed by the number of 
applications, and staff might lack the proper experience necessary to 
handle Tribal issues resulting in negative impacts to the Tribes. In 
support of establishing an Office of Self-Governance, commenters 
pointed to established offices at DOI and IHS that have helped those 
agencies successfully work with Tribes and implement new programs. 
Additionally, commenters maintained that establishing an Office of 
Self-Governance would provide a point of contact to Tribes regarding 
the Program, coordinate the Department's policies relating to the 
Program, and establish long-term institutional expertise within the 
Department.
    The Department carefully considered the Tribal comments, views, and 
recommendations on this issue, but is not in a position to accept the 
Tribal proposal to establish an Office of Self-Governance through this 
rule. As discussed in the NPRM, Section 207 does not require the 
Department to establish an Office of Self-Governance, and it is not 
Federal agency practice to establish new offices in regulation. The 
Department is not persuaded that it must establish in this regulation a 
new office to ensure that the Department effectively implements the 
Program. The Department has experience implementing programs by 
diverting

[[Page 33503]]

resources and staff to meet program needs and will administer its 
internal operations, as necessary, to implement the TTSGP. The 
regulations provide for a Self-Governance Official, who is charged with 
the responsibility to ensure proper implementation of the Program. In 
addition, the Deputy Assistant Secretary for Tribal Affairs has 
authority to coordinate across the Department to provide Tribal 
representatives with information and technical assistance.
2. Self-Governance Advisory Committee
    The Committee did not reach consensus on the issue of whether to 
create a self-governance advisory committee, similar to those that 
exist within DOI and IHS. Tribal members requested the Department 
establish an advisory committee in the regulations or otherwise, and 
the NPRM set forth the Tribal position, 84 FR 52706, 52710 (Oct. 2, 
2019). Commenters stated that input from Tribal leaders is important 
for the development and implementation of programs, pointing to 
recently proposed rules that were developed with Tribal input. 
Commenters maintained that creating an advisory committee would save 
the Department funds because members of the committee would provide 
better oversight and administration of Tribal programs, promote best 
practices among participating Tribes, and facilitate the Department's 
consultation with Tribes. Commenters noted that established self-
governance advisory committees have been successful in other agencies, 
such as DOI, and noted the success of a recently established advisory 
committee within the Department. Commenters discussed the lack of 
channels available for Tribes to share information about their 
transportation needs with Department officials, stating that this has 
contributed to unsafe Tribal transportation systems. Commenters 
recommended that the Department establish an advisory committee during 
the implementation and transition periods for Tribes entering the 
Program to make recommendations on necessary improvements to the 
Program and provide guidance to the Department. One commenter 
recommended the advisory committee be established by regulation so that 
it is permanent and a change in administrations would not affect its 
duration.
    The Department has carefully considered the Tribal comments, views, 
and recommendations on this issue, but it has decided not to establish 
an advisory committee in this rule. The Department is committed to 
working with Tribal representatives to address the concerns identified 
by Tribal representatives in implementing the Program in a manner that 
is transparent, collaborative, and that furthers and fosters Tribal 
self-governance. The Department also recognizes that other Federal 
agencies have engaged with Tribal governments by establishing advisory 
committees to address implementation, transition, and improvement 
recommendations. The Department will continue to engage with Tribal 
representatives to ensure the Department solicits Tribal views and 
considers them in implementing the program. The Department also 
encourages Tribal representatives to contact the Office of Government 
Affairs with any concerns or suggestions regarding the program.
3. Additional Comments
    The Department received questions from Tribal members about the 
statutory deadline for the final rule. Section 207 provides that the 
authority to promulgate regulations for the Program expires 48 months 
after the date of enactment of the FAST Act, or December 4, 2019, which 
may be extended up to 180 days if the Committee determines it needs 
more time and the Department notifies Congress. 23 U.S.C. 207(n)(1). 
The Committee invoked this extension for the final rule until June 1, 
2020, and the Department notified Congress on November 26, 2019.
    The Department received a comment from a Tribal member encouraging 
the Department to include a provision requiring a negotiated rulemaking 
process for any future rulemakings to amend part 29. The Department 
does not find it necessary or appropriate to include such a provision 
in the regulation itself. The Department would make a process 
determination if and when it engages in a rulemaking to amend part 29 
and would consult with Tribes on the process, consistent with Sec.  
29.6.
    The Department received one comment, addressing use of Department 
facilities, equipment, and property, from a transit agency noting that 
while recipients of FTA funding must report to the National Transit 
Database (NTD), much of the current NTD system is not applicable to 
Tribal governments. The commenter encouraged FTA to develop a module 
specific to Tribal governments. The Department acknowledges the 
comment.

IV. Regulatory Analyses and Notices

A. Executive Order 12866, Regulatory Planning and Review, Executive 
Order 13563, Improving Regulation and Regulatory Review, Executive 
Order 13771, Reducing Regulation and Controlling Regulatory Costs, and 
DOT Regulatory Policies and Procedures

    The Department, in consultation with the Office of Management and 
Budget, has determined that this action does not constitute a 
significant regulatory action within the meaning of Executive Order 
(E.O.) 12866 or within the meaning of DOT regulatory policies and 
procedures. Because this rule is not significant under E.O. 12866, the 
rule is not an E.O. 13771 regulatory action.
    E.O. 12866 and E.O. 13563 require agencies to regulate in the 
``most cost-effective manner,'' to make a ``reasoned determination that 
the benefits of the intended regulation justify its costs,'' and to 
develop regulations that ``impose the least burden on society.'' DOT 
believes that the economic impact of this rule will be minimal. The 
rule establishes the TTSGP, which offers Tribes a new mechanism to 
receive funds from the Department. The Department will incur a minimal 
amount of administrative costs to create and administer the TTSGP, but 
plans to accomplish this work predominantly by reallocating existing 
full-time employees rather than through a net increase in staff levels. 
Thus, the rule will not fundamentally affect funding or resource levels 
within the Department.
    The Department believes that Tribes could experience modest cost 
savings relative to the status quo if they join the TTSGP. These 
savings might arise due to increased efficiencies from streamlined 
contract negotiations, simplified fund transfers, and greater autonomy 
to manage funds. Tribes may incur minimal administrative costs to join 
the TTSGP, such as drafting letters of interest and participating in 
negotiation meetings. Joining is voluntary, however, and Tribes are 
unlikely to join unless they experience cost savings greater than any 
increase in administrative costs.
    The Department also expects that Tribes will experience benefits 
from joining the TTSGP. These benefits include greater legal certainty 
and protections, greater clarity from using consolidated funding 
agreements, more timely delivery of funds, and greater autonomy. These 
benefits will lead to positive outcomes for project planning, 
management, and delivery.

[[Page 33504]]

B. Regulatory Flexibility Act

    In compliance with the Regulatory Flexibility Act (Pub. L. 96-354; 
5 U.S.C. 601-612), DOT has evaluated the effects of this rule on small 
entities, such as local governments and businesses. Based on the 
evaluation, the Department concluded that this action will not have a 
significant economic impact on small entities. The Department 
determined that this rule only has an impact on the Federal Government 
and Tribes, which are not small entities for purposes of this Act. The 
Department certifies that this rule will not have a significant 
economic effect on a substantial number of small entities.

C. Unfunded Mandates Reform Act

    The Department has determined that this rule will not impose 
unfunded mandates as defined by the Unfunded Mandates Reform Act of 
1995 (Pub. L. 104-4, March 22, 1995, 109 Stat. 48). This rule will not 
result in the expenditure by State, local, and Tribal governments, in 
the aggregate, or by the private sector of $151 million or more in any 
one year (when adjusted for inflation) in 2012 dollars. In addition, 
the definition of ``Federal mandate'' in the Unfunded Mandates Reform 
Act excludes financial assistance of the type in which State, local, or 
Tribal governments have the authority to adjust their participation in 
the program in accordance with changes made in the program by the 
Federal Government. The funding programs subject to this rulemaking 
permit this type of flexibility.

D. Executive Order 12630, Governmental Actions and Interference With 
Constitutionally Protected Property Rights

    The Department analyzed this rule under E.O. 12630. The Department 
determined that this rule will not affect taking of private property 
interests or otherwise have taking implications under E.O. 12630.

E. Executive Order 13132, Federalism

    The Department analyzed this rule in accordance with the principles 
and criteria contained in E.O. 13132. This rule will impact Tribal 
governments, but there is no federalism impact on the relationship or 
balance of power between the United States and Tribes affected by this 
rule. The Department determined that this rule will not have sufficient 
federalism implications to warrant the preparation of a federalism 
assessment. The Department has also determined that this rule will not 
preempt any State law or regulation, or affect the States' ability to 
discharge traditional State governmental functions.

F. Executive Order 12988, Civil Justice Reform

    This action meets applicable standards in sections 3(a) and 3(b)(2) 
of E.O. 12988 to minimize litigation, eliminate ambiguity, and reduce 
burden.

G. Paperwork Reduction Act

    Under the Paperwork Reduction Act of 1995 (PRA) (44 U.S.C. 3501, et 
seq.), Federal agencies must obtain approval from the Office of 
Management and Budget for each collection of information they conduct, 
sponsor, or require through regulations. The Department has determined 
that this rule does not contain collection of information requirements 
for the purposes of the PRA.

H. National Environmental Policy Act

    The Department has analyzed the environmental impacts of this final 
rule pursuant to the National Environmental Policy Act of 1969 (NEPA) 
(42 U.S.C. 4321, et seq.) and has determined that it is categorically 
excluded pursuant to DOT Order 5610.1C, Procedures for Considering 
Environmental Impacts (44 FR 56420, Oct. 1, 1979). Categorical 
exclusions are actions identified in an agency's NEPA implementing 
procedures that do not normally have a significant impact on the 
environment and therefore do not require either an environmental 
assessment (EA) or environmental impact statement (EIS). See 40 CFR 
1508.4. In analyzing the applicability of a categorical exclusion, the 
agency must also consider whether extraordinary circumstances are 
present that would warrant the preparation of an EA or EIS. Id. The 
purpose of this rulemaking is to establish a self-governance program at 
the Department, which will not have any environmental impacts, and 
there are no extraordinary circumstances present in connection with 
this rulemaking.

I. Executive Order 13175, Consultation and Coordination With Indian 
Tribal Governments

    The Department analyzed this rule under E.O. 13175 and determined 
that the rule uniquely affects Tribal governments. Therefore, it 
followed departmental and Administration procedures to consult with 
Tribal governments on the proposed rule as described in section I.B.2. 
The Department evaluated this action for potential effects on Tribes 
and determined that the rule will not impose substantial direct 
compliance costs on Tribes, will not preempt Tribal law, will not have 
any potentially adverse effects, economic or otherwise, on the 
viability of Tribes. Rather, this action will reduce the administrative 
burden on Tribes participating in the Program. Therefore, a Tribal 
summary impact statement is not required.
    The Department conducted a negotiated rulemaking with Tribal and 
Federal representatives, including Tribal consultations concerning the 
proposed rule, which the Department asserts fulfills its obligations to 
consult, as appropriate. The results of the negotiated rulemaking 
meetings were periodically reported and discussed in other Federal and 
Tribal fora. The Tribal and Federal representatives reached consensus 
on the final rule, including the characterization of all disagreement 
items.

J. Executive Order 13045, Protection of Children From Environmental 
Health Risks and Safety Risks

    The Department analyzed this rule under E.O. 13045. The Department 
certifies that this rule will not cause an environmental risk to health 
or safety that may disproportionately affect children.

K. Regulation Identifier Number

    A Regulation Identifier Number (RIN) is assigned to each regulatory 
action listed in the Unified Agenda of Federal Regulations. The 
Regulatory Information Service Center publishes the Unified Agenda in 
April and October of each year. The RIN number contained in the heading 
of this document can be used to cross-reference this action with the 
Unified Agenda.

List of Subjects in 49 CFR Part 29

    Grant programs--transportation, Grant programs--Indians, Indians.

Elaine L. Chao,
Secretary of Transportation.

0
For the reasons set out in the preamble, the Department of 
Transportation adds part 29 to title 49 of the Code of Federal 
Regulations to read as follows:

PART 29--TRIBAL TRANSPORTATION SELF-GOVERNANCE PROGRAM

Subpart A--General Provisions
Sec.
29.1 What is the purpose and authority for this part?
29.2 What is the Department's policy for the Program?
29.3 What is the effect of this part on existing Tribal rights?
29.4 How do Departmental circulars, policies, manuals, guidance, or 
rules

[[Page 33505]]

apply to a Tribe's performance under the Program?
29.5 Who is responsible for carrying out the functions connected 
with the Program?
29.6 Must the Department consult with Tribes regarding matters that 
affect the Program?
29.7 What is the effect of this Program on existing Tribal 
Transportation Program agreements?
29.8 What happens if more than one party purports to be the 
authorized representative of a Tribe?
29.9 What definitions apply to this part?
Subpart B--Eligibility and Negotiation Process

Eligibility

29.100 What are the criteria for eligibility to participate in the 
Program?

Negotiations

29.101 How does a Tribe commence negotiations for a compact or 
funding agreement?
29.102 What information should the Tribe provide to the Department 
when it expresses its interest in negotiating a compact, funding 
agreement, or amendment?
29.103 How will the Department respond to the Tribe's written 
request?
29.104 Must the Department and the Tribe follow a specific process 
when negotiating compacts, funding agreements, and amendments?
29.105 Will negotiations commence or conclude within a specified 
time period?
29.106 What are best practices to pursue negotiations?
29.107 What recourse does the Department or the Tribe have if the 
negotiations reach an impasse?
29.108 May the Department and the Tribe continue to negotiate after 
the Tribe submits a final offer?
29.109 Who is responsible for drafting the compact or funding 
agreement?
Subpart C--Final Offer Process
29.200 What is covered by this subpart?
29.201 In what circumstances should a Tribe submit a final offer?
29.202 How does a Tribe submit a final offer?
29.203 What must a final offer contain?
29.204 How many days does the Department have to respond to a final 
offer?
29.205 How does the Department acknowledge receipt of a final offer?
29.206 May the Department request and obtain an extension of time of 
the 45-day review period?
29.207 What happens if the Department takes no action within the 45-
day review period (or any extensions thereof)?
29.208 What happens once the Department accepts the Tribe's final 
offer or the final offer is accepted by operation of law?

Rejection of Final Offers

29.209 On what basis may the Department reject a Tribe's final 
offer?
29.210 How does the Department reject a final offer?
29.211 Is technical assistance available to a Tribe to overcome 
rejection of a final offer?
29.212 May a Tribe appeal the rejection of a final offer?
29.213 If a Tribe appeals a final offer, do the remaining provisions 
of the compact, funding agreement, or amendment not in dispute go 
into effect?
Subpart D--Contents of Compacts and Funding Agreements

Compacts

29.300 What is included in a compact?
29.301 Is a compact required to participate in the Program?
29.302 What is the duration of a compact?
29.303 May more than one Tribe enter into a single compact and 
funding agreement?
29.304 May a compact be amended?

Funding Agreements

29.305 When can a Tribe initiate negotiation of a funding agreement?
29.306 What is the duration of a funding agreement?
29.307 What terms must a funding agreement include?
29.308 May the funding agreement include additional terms from title 
I of the Indian Self-Determination and Education Assistance Act?
29.309 Will a funding agreement include provisions pertaining to 
flexible or innovative financing?
29.310 How is a funding agreement amended?
29.311 Is a subsequent funding agreement retroactive to the end of 
the term of the preceding funding agreement?
Subpart E--Rules and Procedures for Transfer and Use of Funds
29.400 What funds may a Tribe elect to include in a funding 
agreement?
29.401 What funds must the Department transfer to a Tribe in a 
funding agreement?
29.402 Is the Tribe responsible for the funds included in a funding 
agreement?
29.403 When must the Department transfer to a Tribe the funds 
identified in a funding agreement?
29.404 When must the Department transfer funds that were not paid as 
part of the initial lump sum payment (or initial periodic payment)?
29.405 When must the Department transfer funds for a discretionary 
or competitive grant?
29.406 Does the award of funds for a discretionary or competitive 
grant entitle a Tribe to receive the same amount in subsequent 
years?
29.407 Does the award of funds for discretionary or competitive 
grants entitle the Tribe to receive contract support costs?
29.408 How may a Tribe use interest earned on funds included in a 
funding agreement?
29.409 May a Tribe carry over from one fiscal year to the next any 
funds that remain at the end of the funding agreement?
29.410 May a Tribe use remaining funds from a discretionary or 
competitive grant included in a funding agreement?
29.411 Are funds included in a compact and funding agreement non-
Federal funds for purposes of meeting matching or cost participation 
requirements under any other Federal or non-Federal program?
29.412 May the Department increase the funds included in the funding 
agreement if necessary to carry out the Program?
29.413 How will the Department assist a Tribe with its credit 
requests?
29.414 What limitations apply to Department actions related to 
transfer of funds associated with PSFAs?
29.415 Does the Prompt Payment Act apply to funds included in a 
funding agreement?
29.416 What standard applies to a Tribe's management of funds 
included in a funding agreement?
29.417 Must a Tribe continue performance of the Tribal 
Transportation Program or the Tribal Transit Program under a compact 
and funding agreement if the Department does not transfer sufficient 
funds?
29.418 May a funding agreement include transfers of State funds?
29.419 Does the award of formula funds entitle a Tribe to receipt of 
contract support costs?
29.420 Is a Tribe entitled to enter into facility leases from the 
Department and to receive facility support costs?
29.321 May a Tribe redesign, consolidate, reallocate, or redirect 
the funds included in a funding agreement?
SUBPART F--PROGRAM OPERATIONS

Audits and Cost Principles

29.500 Must a Tribe undertake an annual audit?
29.501 Must a Tribe submit any required audits to the Federal Audit 
Clearinghouse and the Department?
29.502 Who is responsible for compiling, copying, and paying for 
materials for any audit or examination?
29.503 How may the Federal Government make a claim against a Tribe 
relating to any disallowance of costs based on an audit conducted 
under this part?
29.504 What cost principles must a Tribe apply in compacts and 
funding agreements?

Standards for Tribal Management Systems

29.505 Must a Tribe carrying out a compact and funding agreement 
develop, implement, and maintain management systems that meet 
financial standards?
29.506 What financial standards apply to a Tribe's management 
systems when carrying out a compact and funding agreement?
29.507 What minimum requirements must a Tribe's management system 
include to meet the financial standards set forth in Sec.  29.506?
29.508 What procurement standards apply to contracts carried out 
using funds included in a funding agreement?
29.509 What property management systems and standards must a Tribe 
maintain?

[[Page 33506]]

Records

29.510 Must a Tribe maintain a recordkeeping system?
29.511 Are Tribal records subject to the Freedom of Information Act 
and Federal Privacy Act?
29.512 Must a Tribe make its records available to the Department?
29.513 How long must a Tribe keep and make available records?

Procurement

29.514 When procuring property or services with funds included in a 
funding agreement, can a Tribe follow its own procurement standards?
29.515 What are the minimum procurement standards that a Tribe must 
follow when procuring property or services with funds included in a 
funding agreement?
29.516 Do Federal laws and regulations apply to a Tribe's 
contractors or subcontractors?
29.517 Can a Tribe use Federal supply sources in the performance of 
a compact and funding agreement?

Reporting

29.518 What reporting must a Tribe provide?

Property

29.519 How may a Tribe use existing Department facilities, 
equipment, or property?
29.520 How may a Tribe acquire surplus or excess Federal property 
for use under the Program?
29.521 How must a Tribe use surplus or excess Federal property 
acquired under the Program?
29.522 If a compact or funding agreement (or portion thereof) is 
retroceded, reassumed, terminated, or expires, may the Department 
reacquire title to property purchased with funds under any compact 
and funding agreement or excess or surplus Federal property that was 
donated to the Tribe under the Program?

Technical Assistance

29.523 What technical assistance is available to a Tribe from the 
Department?

Prevailing Wages

29.524 Do the wage and labor standards in the Davis-Bacon Act apply 
to employees of a Tribe?

Tribal Preference

29.525 Does Indian preference apply to PSFAs under the Program?
29.526 When do Tribal employment law and contract preference laws 
govern?

Environmental and Cultural Resource Compliance

29.527 What compliance with environmental and cultural resource 
statutes is required?

Federal Tort Claims Act

29.528 Is the Federal Tort Claims Act applicable to a Tribe when 
carrying out a compact and funding agreement under the Program?
29.529 What steps should a Tribe take after becoming aware of a 
Federal Tort Claim?
29.530 Is it necessary for a compact or funding agreement to include 
any terms about FTCA coverage?
29.531 Does FTCA cover employees of the Tribe who are paid by the 
Tribe from funds other than those provided through the compact and 
funding agreement?
29.532 May persons who are not Indians assert claims under FTCA?
29.533 Does the year PSFAs are funded affect FTCA coverage?

Waiver of Program Regulations

29.534 What is the process for regulation waivers under this part?
Subpart G--Withdrawal
29.600 May a Tribe withdraw from a consortium?
29.601 When does a withdrawal from a consortium become effective?
29.602 How are funds redistributed when a Tribe fully or partially 
withdraws from a compact and funding agreement administered by a 
consortium serving more than one Tribe and elects to enter into a 
compact and funding agreement with the Department?
29.603 How are funds distributed when a Tribe fully or partially 
withdraws from a compact and funding agreement administered by a 
consortium serving more than one Tribe, and the withdrawing Tribe 
elects not to or is ineligible to enter into a compact and funding 
agreement?
Subpart H--Retrocession
29.700 May a Tribe retrocede a PSFA and the associated funds?
29.701 How does a Tribe notify the Department of its intention to 
retrocede?
29.702 What happens if the Department of the Interior determines 
that it provides the transportation services the Tribe intends to 
retrocede?
29.703 What happens if the Department of the Interior determines 
that it does not provide the transportation services the Tribe 
intends to retrocede?
29.704 When is the retrocession effective?
29.705 What effect will a retrocession have on a Tribe's right to 
compact under the Program?
29.706 Will retrocession adversely affect future funding available 
for the retroceded program?
Subpart I--Termination and Reassumption
29.800 When can the Department reassume a compact or funding 
agreement?
29.801 Can the Department reassume a portion of a compact or funding 
agreement and the associated funds?
29.802 What process must the Department follow before termination of 
a compact or funding agreement (or portion thereof)?
29.803 What happens if the Department determines that the Tribe has 
not corrected the conditions that the Department identified in the 
notice?
29.804 When may the Department reassume?
29.805 When can the Department immediately terminate a compact or 
funding agreement (or portion thereof)?
29.806 Upon termination, what happens to the funds associated with 
the terminated portions of the compact or funding agreement?
Subpart J--Dispute Resolution and Appeals
29.900 What is the purpose of this subpart?
29.901 Can the Department and a Tribe resolve disputes using 
alternative dispute resolution processes?
29.902 Does the Equal Access to Justice Act apply to the Program?
29.903 What determinations may not be appealed under this subpart?

Pre-Award Decisions

29.904 What are pre-award decisions that a Tribe may appeal?
29.905 To whom does a Tribe appeal a pre-award decision?
29.906 Must a Tribe exhaust its administrative remedies before 
initiating a civil action against the Department in the U.S. 
District Courts for a pre-award decision?
29.907 When and how must a Tribe appeal a pre-award decision?
29.908 May a Tribe request an extension of time to file an 
administrative appeal?
29.909 When and how must the hearing official respond to the Tribe's 
appeal?
29.910 What is the Department's burden of proof for appeals of pre-
award decisions?
29.911 What is the effect of a pending appeal on negotiations?

Post-Award Disputes

29.912 What is a post-award dispute?
29.913 What is a claim under the Contract Disputes Act?
29.914 How does a Tribe file a Contract Disputes Act claim?
29.915 Must a Tribe certify a Contract Disputes Act claim?
29.916 Who bears the burden of proof in a Contract Disputes Act 
claim?
29.917 What is the Department's role in processing the Contract 
Disputes Act claim?
29.918 What information must the Self-Governance Official's decision 
contain?
29.919 When must the Self-Governance Official issue a written 
decision on the claim?
29.920 Is a decision of the Self-Governance Official final?
29.921 Where may a Tribe appeal the Self-Governance Official's 
decision on a Contract Disputes Act claim?
29.922 May a party appeal a Civilian Board of Contract Appeals 
decision?
29.923 What is the effect of a pending appeal?

Termination Appeals

29.924 May a Tribe appeal the Department's decision to terminate a 
compact or funding agreement?
29.925 Is a Tribe entitled to a hearing on the record?

[[Page 33507]]

29.926 What rights do the Department and the Tribe have in an appeal 
of a termination decision?
29.927 What notice and service must the Department and the Tribe 
provide?
29.928 What is the Department's burden of proof for a termination 
decision?
29.929 How will the Department communicate its decision following a 
hearing on a termination decision?
29.930 May the Department or the Tribe appeal the decision of an 
administrative law judge?
29.931 How can the Department or the Tribe obtain review of the 
recommended decision of an administrative law judge?
29.932 May a Tribe appeal the decision of the Secretary?
29.933 What is the effect of an appeal on negotiations?

    Authority: 23 U.S.C. 207

Subpart A--General Provisions


Sec.  29.1  What is the purpose and authority for this part?

    (a) The regulations in this part implement the Tribal 
Transportation Self Governance Program established in 23 U.S.C. 207 and 
set forth rules for compacts and funding agreements negotiated between 
the Department and Tribes eligible under the Program.
    (b) The Department prepared and issued these rules pursuant to 23 
U.S.C. 207(n) with the active participation and representation of 
Tribes, Tribal organizations, consortia, and individual Tribal members, 
consistent with the procedures of the Negotiated Rulemaking Act.


Sec.  29.2  What is the Department's policy for the Program?

    It is the Department's policy to:
    (a) Recognize the unique government-to-government relationship with 
Tribes, including the right of Tribes to self-government, and to 
support Tribal sovereignty and self-determination;
    (b) Encourage Tribes to participate in the Program;
    (c) Affirm and enable the United States to fulfill its obligations 
to Tribes under treaties and other laws, and to ensure the continuation 
of the trust responsibility of the United States to Tribes and Indians 
that exist under treaties, other laws, and Executive orders;
    (d) Interpret Federal laws and regulations in a manner that will 
facilitate the inclusion of eligible funds in funding agreements under 
the Program to carry out Tribal PSFAs, except as otherwise provided by 
law;
    (e) Consult with Tribes directly and meaningfully on policies that 
have Tribal implications and affect the Program;
    (f) Acknowledge that Tribes perform PSFAs as an exercise of Tribal 
self-determination and self-governance; are responsible for day-to-day 
operation of PSFAs carried out under the Program; and accept 
responsibility and accountability for the use of funds and satisfactory 
performance consistent with the terms of funding agreements; and
    (g) Liberally construe this part to effectuate 23 U.S.C. 207 for 
the benefit of Tribes participating in the Program.


Sec.  29.3  What is the effect of this part on existing Tribal rights?

    (a) A Tribe may apply for the Program at any time, but nothing in 
this part requires a Tribe to do so.
    (b) A Tribe's decision to participate in the Program does not:
    (1) Affect, modify, diminish, or otherwise impair the sovereign 
immunity from suit enjoyed by the Tribe;
    (2) Terminate, waive, modify, or reduce the trust responsibility of 
the United States to the Tribe or individual Indians; or
    (3) Reduce the amount of the Tribe's formula or discretionary 
funding from the Department or impair the Tribe's ability to obtain 
funding from another Federal program.


Sec.  29.4  How do Departmental circulars, policies, manuals, guidance, 
or rules apply to a Tribe's performance under the Program?

    A Tribe's performance under the Program is not subject to any 
Departmental circular, policy, manual, guidance, or rule, except for 
this part, unless the Department and the Tribe otherwise negotiate and 
agree in the compact or funding agreement.


Sec.  29.5  Who is responsible for carrying out the functions connected 
with the Program?

    The Department will carry out the Program, including making 
eligibility determinations; negotiating compacts and funding agreements 
with Tribes; overseeing compliance with Department requirements; and 
otherwise administering and implementing the Program consistent with 
this part. As provided in Sec.  29.402, a Tribe is responsible for day-
to-day management of the Tribe's PSFAs consistent with the compact and 
funding agreement.


Sec.  29.6  Must the Department consult with Tribes regarding matters 
that affect the Program?

    The Department must consult with Tribes on matters relating to the 
Program. The Department will carry out consultations in accordance with 
Executive Order 13175 and applicable Department policies, including the 
Department's Tribal Consultation Plan.


Sec.  29.7  What is the effect of this Program on existing Tribal 
Transportation Program agreements?

    This Program does not terminate existing authority for a Tribe to 
enter into agreements with the Federal Highway Administration, or 
contracts or agreements with the Department of the Interior, for the 
Tribal Transportation Program. A Tribe may maintain its current 
contracts or agreements, or include Tribal Transportation Program funds 
in a funding agreement under this Program. A Tribe may only have one 
agreement at a time for the same funds.


Sec.  29.8  What happens if more than one party purports to be the 
authorized representative of a Tribe?

    If more than one party purports to be the authorized representative 
of a Tribe during the negotiation of a compact, funding agreement, or 
amendment, the Department will notify the parties, consult with the 
Department of the Interior, defer negotiation or execution of any 
documents, if necessary, until such authority is clarified, and provide 
written notice to the parties of the Department's decision to defer.


Sec.  29.9  What definitions apply to this part?

    Unless otherwise provided, the following definitions apply to this 
part:
    Appeal means a request by a Tribe for an administrative or judicial 
review of a decision by the Department.
    Self-Governance Official means a Department official responsible 
for overseeing the Program and carrying out the responsibilities set 
forth in this part.
    Compact means a legally binding and mutually enforceable written 
agreement between the Department and a Tribe entered into pursuant to 
23 U.S.C. 207(c) and this part that sets forth the general terms that 
will govern the Tribe's participation in the Program and affirms the 
government-to-government relationship.
    Consortium means an organization or association of Tribes that is 
authorized by those Tribes to participate in the Program under this 
part and is responsible for negotiating, executing, and implementing 
compacts and funding agreements on behalf of its member Tribes.
    Consultation means the process by which the Department and Tribes 
engage in timely, substantive, and meaningful government-to-government 
communication, collaboration and participation, and exchange views in 
furtherance of the Federal trust responsibility and the principles of 
self-governance, before any action is taken that will have Tribal 
implications as defined by Executive Order 13175, in

[[Page 33508]]

accordance with the Department's Tribal Consultation Plan, Executive 
Order 13175, all subsequent Presidential Memoranda regarding Tribal 
consultation, and applicable Federal law.
    Contractor means a third party who has entered into a legally 
binding agreement with a Tribe to provide goods or services.
    Days means calendar days. When the last day of any time period 
specified in this part falls on a Saturday, Sunday, or Federal holiday, 
the period shall carry over to the next business day unless otherwise 
prohibited by law.
    Department means the U.S. Department of Transportation.
    Discretionary or competitive grant means funds provided by the 
Department where it selects the award amount and recipients from among 
all eligible applicants consistent with the legislative and regulatory 
requirements and selection criteria established for a program.
    Excess property means real or personal property under the control 
of a Federal agency that is not required for the agency's needs and the 
discharge of its responsibilities.
    Funding agreement means a legally binding and mutually enforceable 
written agreement between the Department and a Tribe entered into 
pursuant to 23 U.S.C. 207(d) and this part that identifies the funds 
the Tribe will use to carry out its PSFAs, and sets forth the terms and 
conditions under which the Tribe will receive the funds.
    Gross mismanagement means a significant, clear, and convincing 
violation of a compact, funding agreement, or regulatory or statutory 
requirements applicable to Federal funds included in a compact and 
funding agreement that results in a significant reduction of funds 
available for a PSFA carried out by a Tribe.
    Imminent jeopardy means an immediate threat to a trust asset, 
natural resource, or public health and safety that is caused by the act 
or omission of a Tribe and that arises out of a failure by the Tribe to 
carry out the compact or funding agreement.
    Indian means a person who is a member or citizen of a Tribe.
    Indian Tribe or Tribe means any Indian or Alaska Native tribe, 
band, nation, pueblo, village, or community (including colonies and 
rancherias) that is recognized as eligible for the special programs and 
services provided by the United States to Indians because of their 
status as Indians. In any case in which an Indian Tribe has authorized 
another Indian Tribe, an intertribal consortium, or a Tribal 
organization to plan for or carry out PSFAs on its behalf under this 
part, the authorized Indian Tribe, intertribal consortium, or Tribal 
organization shall have the rights and responsibilities of the 
authorizing Indian Tribe (except as otherwise provided in the 
authorizing resolution or in title 23 of the U.S. Code). In such event, 
the term Indian Tribe or Tribe as used in this part shall include such 
other authorized Indian Tribe, intertribal consortium, or Tribal 
organization.
    Inherent Federal functions means those Federal functions that 
cannot legally be delegated to a non-Federal entity, including a Tribe.
    Operating Administration means a component administration of the 
U.S. Department of Transportation.
    Program means the Tribal Transportation Self-Governance Program 
established by 23 U.S.C. 207.
    Project means any activity determined as being eligible under the 
U.S. Code title and program for which funds are being provided.
    Programs, services, functions, and activities or PSFAs means 
programs, services, functions, and activities, or portions thereof, 
that a Tribe carries out using funds included in a funding agreement 
under the Program.
    Real property means any interest in land together with the 
improvements, structures, and fixtures and appurtenances.
    Reassumption means the termination, in whole or part, of a funding 
agreement and assuming or reassuming the remaining funds included in 
the compact and funding agreement pursuant to 23 U.S.C. 207(f)(2)(A).
    Receipt means the actual date on which a submission is received. 
With respect to receipt by the Department, receipt is the date on which 
the Department official specified in this part receives the submission. 
Demonstration of receipt includes a postal return receipt, express 
delivery service receipt, or any other method that demonstrates actual 
receipt by the Departmental official specified in this part, including 
via electronic mail.
    Retrocession means the voluntary return of a Tribe's PSFA and 
associated remaining funds for any reason before or on the expiration 
of the term of the funding agreement.
    Secretary means the Secretary of Transportation.
    Self-Determination Contract means a contract (or grant or 
cooperative agreement) entered into pursuant to title I of the Indian 
Self-Determination and Education Assistance Act (25 U.S.C. 5321) 
between a Tribe and the appropriate Federal agency for the planning, 
conducting and administration of programs or services that are 
otherwise provided to Tribes.
    Self-governance means the Federal policy of Indian self-
determination and self-government rooted in the inherent sovereignty of 
Tribes, reflected in the government-to-government relationship between 
the United States and Tribes, and expressed in the Indian Self-
Determination and Education Assistance Act, Public Law 93-638, as 
amended, and the policy of Tribal self-determination established under 
the Program.
    State means any of the 50 States, the District of Columbia, or 
Puerto Rico.
    Surplus government property means excess real or personal property 
that is not required for the needs of and the discharge of the 
responsibilities of all Federal agencies that has been declared surplus 
by the General Services Administration.
    Technical assistance means the process by which the Department 
provides targeted support to a Tribe with a development need or 
problem.
    Transit means regular, continuing shared ride surface 
transportation services that are open to the general public or open to 
a segment of the general public defined by age, disability, or low 
income, excluding the transportation services set forth in 49 U.S.C. 
5302(14)(B).
    Tribal Transportation Program (TTP) means a program established in 
section 1119 of Moving Ahead for Progress in the 21st Century (MAP-21), 
Public Law 112-141 (July 6, 2012), and codified in 23 U.S.C. 201 and 
202. The Fixing America's Surface Transportation Act (FAST Act), Public 
Law 114-94 (December 4, 2015) reauthorized this program.
    TTP Agreement means an agreement between a Tribe and either the 
Federal Highway Administration or the Bureau of Indian Affairs pursuant 
to 23 U.S.C. 202 that authorizes a Tribe to carry out all but the 
inherently Federal functions of the TTP.
    Tribal Organization means the recognized governing body of any 
Tribe, any legally established organization of Indians that is 
controlled, sanctioned, or chartered by such governing body or is 
democratically elected by the adult members of the Indian community to 
be served by such organization, and includes the maximum participation 
of Indians in all phases of its activities.

[[Page 33509]]

Subpart B--Eligibility and Negotiation Process

Eligibility


Sec.  29.100   What are the criteria for eligibility to participate in 
the Program?

    (a) Eligibility. A Tribe is eligible to participate in the Program 
if--
    (1) The Tribe requests participation in the Program by resolution 
or other official action by the governing body of the Tribe; and
    (2) The Department determines, based on the evidence submitted by 
the Tribe, that, over the 3 most recent fiscal years, the Tribe has 
demonstrated financial stability and financial management capability, 
and transportation program management capability in accordance with the 
criteria specified in 23 U.S.C. 207(b) and this section.
    (b) Financial stability and financial management capability. In 
making the eligibility determination under 23 U.S.C. 207(b), the 
Department must determine that a Tribe demonstrates financial stability 
and financial management capability. To assist the Department in 
determining whether a Tribe meets the financial stability and financial 
management capability criterion, a Tribe must satisfy one of the 
following evidence standards:
    (1) Conclusive evidence. A Tribe subject to the Single Audit Act 
demonstrates financial stability and financial management capability by 
providing evidence establishing that, during the preceding 3 fiscal 
years, the Tribe had no uncorrected significant and material audit 
exceptions in the required annual audit of the Tribe's self-
determination contracts or self-governance funding agreements with any 
Federal agency. This will be conclusive evidence that the Tribe has 
satisfied the financial stability and financial management capability 
criterion.
    (2) Sufficient evidence. A Tribe subject to the Single Audit Act 
that has a TTP Agreement, or a grant award provided by the Department 
may provide evidence establishing that, during the preceding 3 fiscal 
years, the Tribe had no uncorrected significant and material audit 
exceptions in its required single audit of the Tribe's Federal award 
programs. This will be sufficient evidence that the Tribe has satisfied 
the financial stability and financial management capability criterion.
    (3) Evidence without a mandate to comply with the Single Audit Act. 
If a Tribe is not subject to the Single Audit Act, a Tribe may provide 
evidence of the following for the Department's determination of whether 
the Tribe satisfies the financial stability and financial management 
capability criterion:
    (i) An independent audit, consistent with 2 CFR 200.514, containing 
no uncorrected significant and material audit exceptions that covers 
the preceding 3 fiscal years of the Tribe's self-determination 
contracts or self-governance funding agreements with any Federal 
agency, TTP Agreements, or a grant award from the Department; and
    (ii) Evidence demonstrating that the Tribe has financial management 
systems and standards that meet or exceed the standards set forth in 
Sec. Sec.  29.505 through 29.511 and 29.515 of this part. The 
Department will confirm in writing within 90 days of receipt of any 
such submission by the Tribe whether the Tribe's management systems 
meet the required standards.
    (c) Transportation program management capability. In making the 
eligibility determination under 23 U.S.C. 207(b), the Department also 
must determine that a Tribe demonstrates transportation program 
management capability, including the capability to manage and complete 
projects eligible under title 23 and chapter 53 of title 49 of the U.S. 
Code, based on the totality of the evidence that a Tribe submits to the 
Department.
    (1) Evidence of transportation management capability. To assist the 
Department in determining whether a Tribe meets the transportation 
program management capability criterion, a Tribe may submit evidence 
including:
    (i) Documentation showing that the Tribe has previously or is 
currently directing or carrying out transportation services, projects, 
or programs under a self-determination contract, self-governance 
compact, a TTP Agreement, or a grant award with the Department.
    (ii) Documentation showing the extent to which the Tribe previously 
received Federal funding and carried out management responsibilities 
relating to the planning, design, delivery, construction, maintenance, 
or operation of transportation-related projects, and whether they were 
completed;
    (iii) Documentation that the Tribe has established and maintains, 
as appropriate, a staffed and operational transportation or transit 
program, department, commission, board, or official of any Tribal 
government charged by its laws with the responsibility for 
transportation-related responsibilities, including administration, 
planning, maintenance, and construction activities. This documentation 
should identify the Tribal personnel, job descriptions, and expertise 
necessary to administer or implement PSFAs that the Tribe proposes to 
assume under the Program. The documentation may also include 
resolutions, other authorizations, or proposed budgets demonstrating 
that the Tribe has taken steps to organize a Tribal office or 
department to address the transportation-related needs of the Tribe and 
how that entity has or will demonstrate transportation program 
management capacity; and
    (iv) Documentation showing the completion of one or more 
transportation projects or operation of a program that is related to or 
similar to the PSFA the Tribe requests to include in a funding 
agreement negotiated between the Department and the Tribe. The 
Department will consider the number, complexity, and type of projects 
or programs that the Tribe has carried out and describes as part of 
this determination. This documentation should address the substantive 
involvement of the Tribe in operating a transportation program, which 
may be demonstrated by:
    (A) Involvement in the development of a completed and approved 
highway safety plan;
    (B) Involvement in the development of completed and approved plans, 
specifications, and estimates design package for one or more 
transportation projects to be carried out with available funding;
    (C) Involvement in the delivery of a completed and approved 
transportation construction project using Federal or non-Federal funds;
    (D) Oversight or operation of a public transit project or public 
transit system;
    (E) Oversight or operation of a transportation maintenance system; 
or
    (F) Other information that evidences the transportation program 
management capabilities of the Tribe.
    (2) Other indicia of program management capability. In determining 
transportation program management capability, the Department will 
consider any other evidence that a Tribe may submit, including the 
operation by the Tribe of non-transportation programs of similar 
complexity, size, administrative need, staffing requirement, or budget.
    (d) Program eligibility determination. The Department will make its 
determination of a Tribe's eligibility according to the following time 
frames:
    (1) Within 30 days of receipt of a Tribe's submission seeking an 
eligibility determination under this section to participate in the 
Program, the Department will notify the Tribe in writing to confirm 
that it has received the submission and notify the Tribe

[[Page 33510]]

whether any evidence necessary to make the determination is missing.
    (3) Within 120 days of receipt of an initial submission, the 
Department will issue its determination of a Tribe's eligibility to 
participate in the Program. If the Tribe provides additional evidence 
to complete the application, the Department will have up to an 
additional 45 days after such submittal to issue its determination of 
the Tribe's eligibility to participate in the Program. The 
determination will constitute final agency action, which the Tribe may 
appeal in accordance with Sec. Sec.  29.904 through 29.911.
    (e) Technical assistance. A Tribe with one or more uncorrected 
significant and material audit exceptions may request technical 
assistance from the Department through the Self-Governance Official. To 
the extent feasible, the Department will provide technical assistance, 
such as feedback on management systems and standards or review of 
internal controls, with the goal of assisting the Tribe to establish 
eligibility for the Program. Where audit exceptions involve funding 
administered by another Federal agency, the Tribe will resolve those 
exceptions with that agency.

Negotiations


Sec.  29.101   How does a Tribe commence negotiations for a compact, 
funding agreement, or amendment?

    After the Department notifies a Tribe in writing that it is 
eligible to participate in the Program pursuant to Sec.  29.100, the 
Tribe must submit a written request to the Self-Governance Official to 
begin negotiating a compact and funding agreement. A Tribe 
participating in the Program may submit a written request to the Self-
Governance Official at any time to begin negotiating an amendment. A 
Tribe may send the request to [email protected] or use any other method 
that provides receipt.


Sec.  29.102   What information should a Tribe provide to the 
Department when it expresses its interest in negotiating a compact, 
funding agreement, or amendment?

    After the Department notifies a Tribe in writing that it is 
eligible to participate in the Program pursuant to Sec.  29.100, the 
Tribe may express its interest in negotiating a compact, funding 
agreement, or amendment by written request. Such request need only 
request that the Department enter into negotiations for a compact, 
funding agreement, or amendment. To the degree the Tribe has the 
following information available to it, the request may include, as 
appropriate:
    (a) Whether the Tribe wants to negotiate a compact, funding 
agreement, or amendment;
    (b) The funding programs that the Tribe wants to include in the 
funding agreement or amendment;
    (c) The terms the Tribe wants to include in the compact, funding 
agreement, or amendment;
    (d) Any information or technical assistance the Tribe needs from 
the Department to assist in pursuing the negotiation process; and
    (e) The Tribal official with authority to negotiate on behalf of 
the Tribe, the designated Tribal contact, relevant contact information, 
and, if applicable, the name and contact information of an attorney 
authorized to represent the interests of the Tribe in the negotiation.


Sec.  29.103   How will the Department respond to a Tribe's written 
request?

    Within 15 days of receipt of a Tribe's written request, the 
Department will notify the Tribe in writing of the identity of the 
designated representative(s) of the Department who will conduct the 
negotiation and, to the extent feasible, will provide to the Tribe the 
information requested by the Tribe consistent with Sec.  29.102(d).


Sec.  29.104   Must the Department and a Tribe follow a specific 
process when negotiating compacts, funding agreements, and amendments?

    The Department and a Tribe do not have to follow a specific process 
when negotiating compacts, funding agreements, and amendments. The 
Department and the Tribe should cooperate to develop a plan to address 
each issue subject to negotiation and provide the representatives an 
opportunity to address the Tribal proposals, legal or program issues of 
concern, the time needed to complete the negotiations, and the 
development of a term sheet.


Sec.  29.105   Will negotiations commence or conclude within a 
specified time period?

    Unless the Department and the Tribe agree otherwise, negotiations 
will commence within 60 days of the Department's receipt of the Tribe's 
written request to negotiate a compact, funding agreement, or 
amendment. The Department and the Tribe should make every effort to 
conclude negotiations within 90 days from the date on which 
negotiations commence, unless they agree to extend the time period for 
negotiations. Negotiations may proceed by electronic mail, 
teleconferences, or in-person meetings.


Sec.  29.106  What are best practices to pursue negotiations?

    (a) The Department and the Tribe should collaborate and provide a 
clear explanation of their positions and interests. Each party should 
provide timely and specific responses to proposals presented during 
negotiations in order to conclude negotiations as soon as possible 
within the period provided in Sec.  29.105.
    (b) In negotiating the applicable construction, design, monitoring, 
or health and safety requirements that apply to the PSFAs the Tribe 
carries out using funds included in a funding agreement, along with the 
other terms set forth in Sec.  29.307, the Department and the Tribe 
should cooperate and the Department will prioritize the reduction of 
administrative requirements on the Tribe when negotiating the terms of 
the compact, funding agreement, or amendment to effectuate Tribal self-
governance.
    (c) The Department and the Tribe should conduct the negotiations in 
order to reach agreement on as many items as possible, and to refine 
unresolved issues in order to avoid disputed terms. The negotiations 
should conclude with mutually agreed upon terms and conditions. If any 
unresolved issues remain, the Tribe may submit a final offer to the 
Department under subpart C of this part.


Sec.  29.107  What recourse does the Department or the Tribe have if 
the negotiations reach an impasse?

    The Department and the Tribe should resolve disagreements 
informally and by mutual agreement whenever possible. If the Department 
and the Tribe are unable to reach agreement by the agreed upon date for 
completing negotiations, the Tribe may request to participate in an 
alternative dispute resolution process pursuant to Sec.  29.901, or it 
may submit a final offer to the Self-Governance Official in accordance 
with subpart C of this part.


Sec.  29.108  May the Department and the Tribe continue to negotiate 
after the Tribe submits a final offer?

    The Department and the Tribe may continue negotiations after the 
Tribe submits a final offer by mutual agreement, and may execute the 
remaining terms of the compact, funding agreement, or amendment not 
subject to the final offer, consistent with Sec.  29.213.


Sec.  29.109  Who is responsible for drafting the compact or funding 
agreement?

    It is the mutual obligation of the Department and the Tribe to 
draft the compact, funding agreement, or

[[Page 33511]]

amendment. Either the Department or the Tribe may prepare the initial 
draft for the other party's review.

Subpart C--Final Offer Process


Sec.  29.200  What is covered by this subpart?

    This subpart explains the final offer process for resolving, within 
a specific time frame, disputes that may develop in negotiation of a 
compact, funding agreement, or amendment.


Sec.  29.201  In what circumstances should a Tribe submit a final 
offer?

    If the Department and a Tribe are unable to agree, in whole or in 
part, on the terms of a compact, funding agreement, or amendment, the 
Tribe may submit a final offer to the Department.


Sec.  29.202  How does a Tribe submit a final offer?

    (a) A Tribe must submit a written final offer to the Self-
Governance Official to [email protected] or send the final offer using any 
other method that provides receipt to: Self-Governance Official, U.S. 
Department of Transportation, Office of the Secretary, Office of the 
Assistant Secretary for Governmental Affairs (I-10), 1200 New Jersey 
Avenue SE, Washington, DC 20590.
    (b) The final offer should be a separate document from the compact, 
funding agreement, or amendment and clearly identified as a ``Final 
Offer--Response due within 45 days of receipt.''


Sec.  29.203  What must a final offer contain?

    A final offer must contain a description of the disagreement 
between the Department and the Tribe, the Tribe's final proposal to 
resolve the disagreement, including any draft proposed terms to be 
included in a compact, funding agreement, or amendment, and the name 
and contact information for the person authorized to act on behalf of 
the Tribe. If the final offer is insufficient for the Department to 
make a decision, the Department will notify the Tribe and request 
additional information. A request for more information has no effect on 
deadlines for response.


Sec.  29.204  How many days does the Department have to respond to a 
final offer?

    The Department has 45 days to respond to the final offer. The 45-
day review period begins on the date the Self-Governance Official 
receives the final offer.


Sec.  29.205  How does the Department acknowledge receipt of a final 
offer?

    Within 10 days of the Self-Governance Official receiving the final 
offer, the Department will send the Tribe an acknowledgement of the 
final offer, together with documentation that indicates the date on 
which the Self-Governance Official received the final offer. The 
Department's failure to send the acknowledgement does not constitute 
approval of the final offer.


Sec.  29.206  May the Department request and obtain an extension of 
time of the 45-day review period?

    The Department may request an extension of time before the 
expiration of the 45-day review period. The Tribe may either grant or 
deny the Department's request for an extension. Any grant of extension 
of time must be in writing and signed by a person authorized by the 
Tribe to grant the extension before the expiration of the 45-day review 
period.


Sec.  29.207  What happens if the Department takes no action within the 
45-day review period (or any extensions thereof)?

    The final offer is accepted by operation of law if the Department 
takes no action within the 45-day review period (or any extensions 
thereof).


Sec.  29.208  What happens once the Department accepts the Tribe's 
final offer or the final offer is accepted by operation of law?

    Once the Department accepts the Tribe's final offer or the final 
offer is accepted by operation of law, the Department must add the 
terms of the Tribe's accepted final offer to the compact, funding 
agreement, or amendment, and transfer funds consistent with Sec. Sec.  
29.403 through 29.405.

Rejection of Final Offers


Sec.  29.209  On what basis may the Department reject a Tribe's final 
offer?

    The Department may reject a Tribe's final offer for any of the 
following reasons:
    (a) The amount of funds proposed in the final offer exceeds the 
applicable funding level to which the Tribe is entitled;
    (b) The subject of the final offer is an inherent Federal function 
that cannot legally be delegated to the Tribe;
    (c) Carrying out the PSFA would result in significant danger or 
risk to public health or safety; or
    (d) The Tribe is not eligible to participate in self-governance 
under section 23 U.S.C. 207(b).


Sec.  29.210  How does the Department reject a final offer?

    The Department must reject a final offer by providing written 
notice to the Tribe based on the criteria in Sec.  29.209 no more than 
45 days after receipt of a final offer by the Self-Governance Official, 
or within a longer time period as agreed to by the Department and the 
Tribe consistent with this subpart. The notice must explain the basis 
for the rejection of the final offer.


Sec.  29.211  Is technical assistance available to a Tribe to overcome 
rejection of a final offer?

    The Department must provide technical assistance to overcome the 
objections stated in the Department's rejection of a final offer.


Sec.  29.212  May a Tribe appeal the rejection of a final offer?

    A Tribe may appeal the rejection of a final offer in accordance 
with Sec. Sec.  29.904 through 29.911.


Sec.  29.213  If a Tribe appeals a final offer, do the remaining 
provisions of the compact, funding agreement, or amendment not in 
dispute go into effect?

    If a Tribe appeals the rejection of a final offer, the Department 
and the Tribe may execute and make effective any non-disputed, 
severable provisions of the compact, funding agreement, or amendment 
that are not already executed and are not subject to appeal.

Subpart D--Contents of Compacts and Funding Agreements

Compacts


Sec.  29.300  What is included in a compact?

    A compact only includes the general terms that govern a Tribe's 
participation in the Program and such other terms as the Department and 
the Tribe mutually agree that will continue to apply from year to year, 
and affirms the government-to-government relationship between the 
Department and the Tribe. Such terms include the authority, purpose, 
and obligations of the Department and the Tribe. The written compact 
memorializes matters on which the Department and the Tribe agree. The 
compact will not include language not agreed to by the Department and 
the Tribe.


Sec.  29.301  Is a compact required to participate in the Program?

    A Tribe must have a compact in place to participate in the Program. 
A compact must be in effect between the Department and the Tribe before 
the Tribe may enter into a funding agreement with the Department. The 
Tribe may negotiate a compact at the

[[Page 33512]]

same time it is negotiating a funding agreement, so long as the compact 
is executed prior to or concurrent with the funding agreement.


Sec.  29.302  What is the duration of a compact?

    A compact remains in effect until it is terminated by mutual 
written agreement, retrocession, or reassumption under this part.


Sec.  29.303  May more than one Tribe enter into a single compact and 
funding agreement?

    A consortium of two or more Tribes may participate in the Program 
by entering into a single compact and funding agreement on the same 
basis as an individual Tribe. A consortium may comprise a combination 
of one or more Tribes that may or may not be independently eligible 
under Sec.  29.100, so long as the consortium is eligible.


Sec.  29.304  May a compact be amended?

    A compact may be amended at any time by the mutual written 
agreement of the Department and the Tribe.

Funding Agreements


Sec.  29.305  When can a Tribe initiate negotiation of a funding 
agreement?

    Concurrent with or after a Tribe has entered into a compact with 
the Department, the Department and the Tribe will negotiate a funding 
agreement, consistent with Sec. Sec.  29.101 through 29.109. The 
funding agreement is the legally binding written agreement that 
identifies the funds the Tribe will use to carry out its PSFAs, and 
sets forth the terms and conditions under which the Tribe will receive 
the funds.


Sec.  29.306  What is the duration of a funding agreement?

    (a) The duration of a funding agreement is one year unless the 
Department and a Tribe negotiate a multi-year funding agreement or, for 
an initial funding agreement, a partial-year agreement.
    (b) Each funding agreement will remain in full force and effect 
until the Department and the Tribe execute a subsequent funding 
agreement, except when:
    (1) The Tribe provides notice to the Department that it is 
withdrawing or retroceding funds for the operation of one or more PSFAs 
(or portions thereof) identified in the funding agreement;
    (2) The Department terminates the funding agreement under 23 U.S.C. 
207(f)(2); or
    (3) The Department and the Tribe agree otherwise.


Sec.  29.307  What terms must a funding agreement include?

    A funding agreement must set forth the following:
    (a) The funds the Department will provide, including those funds 
provided on a recurring basis;
    (b) The PSFAs the Tribe intends to carry out using the funds;
    (c) The general budget category assigned to the funds;
    (d) The time and method of transfer of funds;
    (e) The responsibilities of the Department and the Tribe;
    (f) Any applicable statutory limitations on the use of funds;
    (g) Any statutory or negotiated reporting requirements;
    (h) Any applicable Federal or federally approved design, 
construction, and monitoring standards, or the Tribe's design, 
construction, and monitoring standards, if they are consistent with or 
exceed the Federal or federally approved standards;
    (i) Other Federal health and safety requirements that apply to the 
funds included in the funding agreement, or the Tribe provides adequate 
assurance that its relevant health and safety requirements are 
consistent with or exceed such requirements;
    (j) If the funding agreement includes TTP funds under 23 U.S.C. 202 
and Sec.  29.400(a), provisions related to planning, inventory, and 
allowable use of funds in 25 CFR part 170 necessary for administration 
of the TTP, consistent with the Program's goal to reduce administrative 
burdens on the Tribe, or Tribal provisions that meet or exceed those 
standards;
    (k) Any other provision agreed to by the Department and the Tribe, 
such as program oversight, accountability, annual reporting on 
expenditure of Federal funds, and technical assistance; and
    (l) Provisions authorizing the Department to terminate the funding 
agreement (in whole or in part) and reassume the remaining funding for 
transfer, as appropriate.


Sec.  29.308  May the funding agreement include additional terms from 
title I of the Indian Self-Determination and Education Assistance Act?

    At a Tribe's request, the Department and the Tribe may incorporate 
into a compact or funding agreement any other provision of title I of 
the Indian Self-Determination and Education Assistance Act, unless the 
Department determines there is a conflict between the provision and 23 
U.S.C. 207. The Department will make the determination consistent with 
23 U.S.C. 207(j).


Sec.  29.309  Will a funding agreement include provisions pertaining to 
flexible or innovative financing?

    If the Department and a Tribe agree, a funding agreement will 
include provisions pertaining to flexible financing and innovative 
financing. In that event, the Department and the Tribe will establish 
terms and conditions relating to the flexible and innovative financing 
provisions that are consistent with 23 U.S.C. 207(d)(2)(C).


Sec.  29.310  How is a funding agreement amended?

    A funding agreement may be amended by the mutual written agreement 
of the Department and the Tribe as provided for in the funding 
agreement. The Department will not revise, amend, or require additional 
terms in a new or subsequent funding agreement without the consent of 
the Tribe, unless such terms are required by Federal law.


Sec.  29.311  Is a subsequent funding agreement retroactive to the end 
of the term of the preceding funding agreement?

    When the Department and a Tribe execute a subsequent funding 
agreement, the provisions of such a funding agreement are retroactive 
to the end of the term of the preceding funding agreement.

Subpart E--Rules and Procedures for Transfer and Use of Funds


Sec.  29.400  What funds may a Tribe elect to include in a funding 
agreement?

    A Tribe may elect to include in a funding agreement the following 
funds:
    (a) Funds provided to the Tribe under the Tribal Transportation 
Program identified in 23 U.S.C. 202 in accordance with the statutory 
formula set forth in 23 U.S.C. 202(b);
    (b) Any transit funds provided to the Tribe under 49 U.S.C. 5311;
    (c) Funds for any discretionary or competitive grant administered 
by the Department awarded to the Tribe for a transportation program 
under title 23 of the U.S. Code or chapter 53 of title 49 of the U.S. 
Code;
    (d) Funds for any other discretionary or competitive grant for a 
transportation-related purpose administered by the Department otherwise 
available to the Tribe;
    (e) Federal-aid funds apportioned to a State under chapter 1 of 
title 23 of the U.S. Code if the State elects to transfer, pursuant to 
23 U.S.C. 207(d)(2)(A)(ii) or 23 U.S.C. 202(a)(9), a portion of such 
funds to the Tribe for an eligible project; and
    (f) Formula funds awarded to a State under 49 U.S.C. 5311 that the 
State

[[Page 33513]]

elects to award to the Tribe, where the Tribe and State agree that the 
Department will award the funds directly to the Tribe.


Sec.  29.401  What funds must the Department transfer to a Tribe in a 
funding agreement?

    (a) Subject to the terms of a funding agreement, the Department 
must transfer to a Tribe all the funds provided for in the funding 
agreement.
    (b) The Department must provide funds for periods covered by a 
joint resolution adopted by Congress making continuing appropriations 
and authorization extensions, to the extent permitted by such 
resolutions. The Department will defer payment of funds to the Tribe if 
the period of continuing appropriations is less than 35 days.
    (c) To the extent a Tribe elects to include the following funds in 
its funding agreement, the Department will include the amount equal to:
    (1) The amount awarded to the Tribe for any discretionary or 
competitive grant;
    (2) The amount transferred to the Tribe by a State;
    (3) The sum of the funds that the Tribe would otherwise receive in 
accordance with a funding formula or other allocation method set forth 
in title 23 of the U.S. Code or chapter 53 of title 49 of the U.S. 
Code; and
    (4) Such additional amounts as the Department determines equal the 
amounts that would have been withheld, if any, for the costs of the 
Bureau of Indian Affairs to administer the program or project on behalf 
of the Tribe.


Sec.  29.402  Is the Tribe responsible for the funds included in a 
funding agreement?

    The Tribe is responsible for implementing the Tribe's PSFAs using 
the funds included in a funding agreement and for administering the 
funds in accordance with this part. In addition, the Tribe must carry 
out its PSFAs in accordance with the funding agreement, and all 
applicable statutes and regulations identified in the funding 
agreement.


Sec.  29.403  When must the Department transfer to a Tribe the funds 
identified in a funding agreement?

    When a funding agreement requires an annual transfer of funds to be 
made by the Department at the beginning of a fiscal year, or requires 
semiannual or other periodic transfers of funds to be made to a Tribe, 
the Department will make the first transfer no later than 10 days after 
the apportionment of such funds by the Office of Management and Budget 
to the Department, unless the funding agreement provides otherwise. 
Consistent with the Prompt Payment Act, the Department is not 
responsible for any interest penalty if the Department makes the 
transfer within 30 days.


Sec.  29.404  When must the Department transfer funds that were not 
paid as part of the initial lump sum payment (or initial periodic 
payment)?

    The Department must transfer any funds that were not paid in the 
initial lump sum payment (or initial periodic payment) within 10 days 
after the apportionment of such funds by the Office of Management and 
Budget to the Department, unless the funding agreement provides 
otherwise. Consistent with the Prompt Payment Act, the Department is 
not responsible for any interest penalty if the Department makes the 
transfer within 30 days.


Sec.  29.405  When must the Department transfer funds for a 
discretionary or competitive grant?

    If the Department selects a Tribe for a discretionary or 
competitive grant, and the Tribe elects to include the grant funds in 
its funding agreement, the Department will transfer the funds to the 
Tribe in accordance with the terms of the Notice of Funding Opportunity 
or as the Department and the Tribe may otherwise agree. The Department 
will transfer these funds no later than 10 days after the Department 
and the Tribe execute a funding agreement or an amendment covering the 
grant, unless the funding agreement provides otherwise. Consistent with 
the Prompt Payment Act, the Department is not responsible for any 
interest penalty if the Department makes the transfer within 30 days.


Sec.  29.406  Does the award of funds for a discretionary or 
competitive grant entitle a Tribe to receive the same amount in 
subsequent years?

    The award of funds for a discretionary or competitive grant does 
not entitle a Tribe to receive the same amount of funds in subsequent 
years.


Sec.  29.407  Does the award of funds for discretionary or competitive 
grants entitle the Tribe to receive contract support costs?

    Receipt of discretionary or competitive grant awards does not 
entitle the Tribe to receive contract support costs or any other 
amounts identified in 25 U.S.C. 5325. However, a Tribe may use grant 
awards to cover overhead and administrative expenses associated with 
operation of the grant, as provided in the grant award.


Sec.  29.408  How may a Tribe use interest earned on funds included in 
a funding agreement?

    A Tribe may retain interest earned on funds included in a funding 
agreement to carry out transportation or governmental functions.


Sec.  29.409  May a Tribe carry over from one fiscal year to the next 
any funds that remain at the end of the funding agreement?

    A Tribe may carry over from one fiscal year to the next any funds 
that remain at the end of the funding agreement, consistent with the 
following:
    (a) The period of availability for formula funds included in a 
funding agreement does not lapse. After transfer to the Tribe, such 
funds will remain available until expended. If a Tribe elects to carry 
over funds from one fiscal year to the next, such carryover funds will 
not diminish the amount of formula funds the Tribe is authorized to 
receive under its funding agreement in that or any subsequent fiscal 
year.
    (b) The period of availability for discretionary or competitive 
grants are specific to the funding source and will be set forth in the 
funding agreement.


Sec.  29.410  May a Tribe use remaining funds from a discretionary or 
competitive grant included in a funding agreement?

    A Tribe may use remaining funds from a discretionary or competitive 
grant included in a funding agreement, but only with written approval 
from the Department. The Department must determine that the use of such 
funds is consistent with the statutory requirements of the grant 
program, including purpose and time, and is for the project for which 
the grant was provided.


Sec.  29.411  Are funds included in a compact and funding agreement 
non-Federal funds for purposes of meeting matching or cost 
participation requirements under any other Federal or non-Federal 
program?

    Notwithstanding any other provision of law, pursuant to 25 U.S.C. 
5325(j), funds included in a compact and funding agreement are 
considered non-Federal funds for purposes of meeting matching or cost 
participation requirements under any other Federal or non-Federal 
program.


Sec.  29.412  May the Department increase the funds included in the 
funding agreement if necessary to carry out the Program?

    The Department may increase the funds included in the funding 
agreement if necessary to carry out the Program. However, the 
Department and the Tribe must agree to any transfer of funds to the 
Tribe unless otherwise provided for in the funding agreement.

[[Page 33514]]

Sec.  29.413  How will the Department assist a Tribe with its credit 
requests?

    At the request of a Tribe that has applied for a loan or other 
credit assistance from a State infrastructure bank or other financial 
institution to complete an eligible transportation-related project with 
funds included in a funding agreement, the Department will provide 
documentation in its possession or control to assist the Tribe.


Sec.  29.414  What limitations apply to Department actions related to 
transfer of funds associated with PSFAs?

    The Department will not:
    (a) Fail or refuse to transfer to a Tribe its full share of funds 
due under the Program, except as required by Federal law;
    (b) Withhold portions of such funds for transfer over a period of 
years;
    (c) Reduce the amount of funds identified for transfer in a funding 
agreement to make funding available for self-governance monitoring or 
administration by the Department;
    (d) Reduce the amount of funds included in a funding agreement in 
subsequent years, except pursuant to:
    (1) A reduction in appropriations from the previous fiscal year or 
a change in the funding formula;
    (2) A congressional directive in legislation or accompanying 
report;
    (3) A Tribal authorization;
    (4) A change in the amount of pass-through funds;
    (5) Completion of a project, activity, or program for which 
discretionary or competitive grant funds were provided;
    (6) Expenditure of all discretionary or competitive grant funds 
authorized by the Department under separate statutory authorities for 
an eligible project, activity, or program; or
    (7) A final decision by the Department pursuant to subpart I to 
terminate a compact or funding agreement (or portions thereof) due to a 
finding of gross mismanagement or imminent jeopardy.
    (e) Reduce the amount of funds identified in a funding agreement to 
pay for Federal functions, including Federal pay costs, Federal 
employee retirement benefits, automated data processing, technical 
assistance, and monitoring of activities under the Program, except that 
such prohibition is inapplicable when Congress authorizes the 
Department to set aside a portion of the funds for Department project 
monitoring and oversight related functions; or
    (f) Reduce the amount of funds required under the Program to pay 
for costs of Federal personnel displaced by compacts and funding 
agreements.


Sec.  29.415  Does the Prompt Payment Act apply to funds included in a 
funding agreement?

    The Prompt Payment Act, 31 U.S.C. 3901 et seq., applies to the 
transfer of funds under the Program.


Sec.  29.416  What standard applies to a Tribe's management of funds 
included in a funding agreement?

    (a) A Tribe must invest and manage funds included in a funding 
agreement as a prudent investor would, in light of the purpose, terms, 
distribution requirements, and applicable provisions, in the compact 
and funding agreement. This duty requires the exercise of reasonable 
care, skill, and caution, and is to be applied to investments not in 
isolation, but in the context of the investment portfolio and as a part 
of an overall investment strategy, which should incorporate risk and 
return objectives reasonably suited to the Tribe. In making and 
implementing investment decisions, the Tribe has a duty to diversify 
the investments unless, under the circumstances, it is prudent not to 
do so.
    (b) A Tribe must:
    (1) Conform to fundamental fiduciary duties of loyalty and 
impartiality;
    (2) Act with prudence in deciding whether and how to delegate 
authority and in the selection and supervision of agents; and
    (3) Incur only costs that are reasonable in amount and appropriate 
to the investment responsibilities of the Tribe.


Sec.  29.417  Must a Tribe continue performance of the Tribal 
Transportation Program or the Tribal Transit Program under a compact 
and funding agreement if the Department does not transfer sufficient 
funds?

    A Tribe does not have to continue performance of the Tribal 
Transportation Program (23 U.S.C. 202(b)) or the Tribal Transit Program 
(49 U.S.C. 5311(c)(1)) that requires an expenditure of funds in excess 
of the amount of funds included in a funding agreement. If at any time 
the Tribe has reason to believe that the total amount included in a 
funding agreement is insufficient, the Tribe must provide reasonable 
notice of such insufficiency to the Self-Governance Official. If the 
Department does not increase the amount of funds included in the 
funding agreement for the Tribal Transportation Program or Tribal 
Transit Program, the Tribe may suspend performance of the program 
activity until such time as the Department transfers additional funds.


Sec.  29.418  May a funding agreement include transfers of State funds?

    (a) A State may elect to provide a portion of Federal-aid funds 
apportioned to the State under chapter 1 of title 23 of the U.S. Code 
to an eligible Tribe for a project eligible under 23 U.S.C. 202(a).
    (b) If a State provides such funds, the transfer may occur in 
accordance with 23 U.S.C. 202(a)(9), 23 U.S.C. 207(d)(2)(A)(ii), or the 
State may transfer the funds to the Department, and the Department will 
transfer the funds to the participating Tribe through the Tribe's 
funding agreement.
    (c) If a State provides such funds, the Tribe (and not the State) 
will be responsible for:
    (1) Constructing and maintaining any projects carried out using the 
funds;
    (2) Administering and supervising the projects and funds in 
accordance with 23 U.S.C. 207;
    (3) Complying with applicable post-construction requirements.
    (d) The receipt of any State funds transferred at the election of a 
State to the Tribe pursuant to 23 U.S.C. 202(a)(9), 23 U.S.C. 
207(d)(2)(A)(ii), or funds awarded to a State pursuant to 49 U.S.C. 
5311 that are transferred at the election of a State to the Federal 
Transit Administration for the benefit of a Tribe does not entitle the 
Tribe to receive contract support costs under 25 U.S.C. 5325(a). While 
a Tribe is not entitled to additional funds for contract supports 
costs, a Tribe may use a portion of such State funds for overhead and 
administrative expenses if such costs are reasonable, allowable, and 
allocable in accordance with 2 CFR part 200 and the statutory and 
regulatory requirements applicable to the funding source.


Sec.  29.419  Does the award of formula funds entitle a Tribe to 
receipt of contract support costs?

    The award of formula funds does not entitle a Tribe to receive 
contract support costs under 25 U.S.C. 5325(a). A funding agreement 
will not provide additional funds for contract support costs to carry 
out PSFAs. While a Tribe is not entitled to additional funds for 
contract support costs, a Tribe may use a portion of its formula funds 
(Sec.  29.400(a) and (b)) for overhead and administrative expenses if 
such costs are reasonable, allowable, and allocable in accordance with 
2 CFR part 200 and the statutory and regulatory requirements applicable 
to the funding source.

[[Page 33515]]

Sec.  29.420  Is a Tribe entitled to enter into facility leases from 
the Department and to receive facility support costs?

    A Tribe is not entitled to enter into facility leases with the 
Department and receive facility support costs. A funding agreement will 
not provide additional funds for facility leases and facility support 
costs to carry out PSFAs. However, facility leases and facility support 
costs may be an eligible and allowable use of funds a Tribe receives 
under a funding agreement.


Sec.  29.421   May a Tribe redesign, consolidate, reallocate, or 
redirect the funds included in a funding agreement?

    (a) A Tribe may redesign, consolidate, reallocate, or redirect 
funds included in a funding agreement in any manner it considers to be 
in the best interest of the Indian community being served, provided 
that:
    (1) The funds are expended on projects identified in a 
transportation improvement program approved by the Department, where 
statutorily required; and
    (2) The funds are used in accordance with the requirements in 
appropriations acts, title 23 of the U.S. Code, chapter 53 of title 49 
of the U.S. Code, and any other applicable law.
    (b) Consistent with 23 U.S.C. 207(e)(1)(B), a Tribe may not 
redesign, consolidate, reallocate, or redirect any discretionary or 
competitive grant funds or State transfers of funds that are included 
in the funding agreement. A Tribe may use remaining funds from a 
discretionary or competitive grant in accordance with Sec.  29.410.

Subpart F--Program Operations

Audits and Cost Principles


Sec.  29.500   Must a Tribe undertake an annual audit?

    A Tribe that meets the applicable thresholds under 2 CFR 200.501 
must undertake an annual audit pursuant to the regulations set forth in 
2 CFR part 200, Uniform Administrative Requirements, Cost Principles, 
and Audit Requirements for Federal Awards, except to the extent that 
part 200 exempts a Tribe from complying with the audit requirements.


Sec.  29.501   Must a Tribe submit any required audits to the Federal 
Audit Clearinghouse and the Department?

    A Tribe must submit any required audits to the Federal Audit 
Clearinghouse pursuant to the Office of Management and Budget 
procedures and provide prompt notice to the Department it has done so.


Sec.  29.502   Who is responsible for compiling, copying, and paying 
for materials for any audit or examination?

    The agency or entity undertaking the examination or audit will be 
responsible for all costs associated with an audit or examination of 
Tribal records. A Tribe is responsible for making records available 
during regular business hours, and may prevent removal of the records 
from Tribal offices. If an agency or entity undertaking the examination 
or audit requests that the Tribe make copies of records for its use, 
the Tribe must do so, but may charge the examining agency reasonable 
per-page fees for photocopying or scanning of documents and records.


Sec.  29.503  How may the Federal Government make a claim against a 
Tribe relating to any disallowance of costs based on an audit conducted 
under this part?

    (a) Disallowance of costs. Any claim by the Federal Government 
against a Tribe relating to funds included in a funding agreement based 
on any audit conducted pursuant to this part is subject to 25 U.S.C. 
5325(f).
    (1) Any right of action or other remedy (other than those relating 
to a criminal offense) relating to any disallowance of costs is barred 
unless the Department provides notice of such a disallowance within 365 
days from receiving any required annual audit report. The notice must 
set forth the Tribe's appeal and hearing rights in accordance with 
Sec. Sec.  29.912 through 29.923.
    (2) To calculate the 365-day period, an audit report is deemed 
received by the Department on the date of electronic submission to the 
Federal Audit Clearinghouse. The Department has 60 days after receiving 
the audit report to give notice to the Tribe of its determination to 
reject an audit report as insufficient due to non-compliance with the 
applicable provisions of 2 CFR part 200 or any applicable statute.
    (b) Criminal penalties. Any person, officer, director, agent, 
employee, or person otherwise connected with a recipient of a contract, 
subcontract, grant, or sub-grant under a compact or funding agreement 
who embezzles, willfully misapplies, steals, or obtains by fraud any of 
the money, funds, assets, or property provided to the recipient will be 
fined not more than $10,000 or imprisoned for not more than 2 years, or 
both. If the amount of funds in question does not exceed $100, then the 
fine will be no more than $1,000 and imprisonment not more than 1 year, 
or both.


Sec.  29.504   What cost principles must a Tribe apply in compacts and 
funding agreements?

    (a) A Tribe must apply the applicable cost principles of the Office 
of Management and Budget's Uniform Administrative Requirements, Cost 
Principles, and Audit Requirements for Federal Awards, 2 CFR part 200, 
except as modified by:
    (1) 25 U.S.C. 5325(k), which sets forth certain categories of 
allowable uses of funds that a Tribe may include in a funding agreement 
provided that such use supports implementation of a PSFA;
    (2) Other provisions of Federal law; or
    (3) Any subsequent exemptions granted by the Office of Management 
and Budget.
    (b) The Department may not require a Tribe to apply other audit or 
accounting standards.

Standards for Tribal Management Systems


Sec.  29.505   What are the financial management systems that a Tribe 
carrying out a compact and funding agreement must develop, implement, 
and maintain to ensure the proper expenditure and accounting of Federal 
funds?

    (a) Generally. To ensure the proper expenditure and accounting of 
Federal funds, a Tribe carrying out a compact and funding agreement 
must develop, implement, and maintain financial management systems that 
meet the financial standards and minimum requirements set forth in 
Sec. Sec.  29.506 and 29.507, unless the Department waives, in whole or 
in part, one or more of the standards.
    (b) Applicability to Tribal contractors. A Tribe may require that 
its contractors comply with some or all of the standards and 
requirements in Sec. Sec.  29.506 and 29.507 when the Tribe retains 
contractors to assist in carrying out the requirements of a funding 
agreement.
    (c) Evaluation. When required under 2 CFR part 200, an independent 
auditor retained by a Tribe must evaluate the financial management 
systems of the Tribe through an annual audit report in accordance with 
the Single Agency Audit Act, 31 U.S.C. 7501-7506.


Sec.  29.506   What standards apply to a Tribe's financial management 
systems when carrying out a compact and funding agreement?

    The following standards apply to a Tribe's financial management 
systems when carrying out a compact and funding agreement:
    (a) The system must expend and account for funds included in a 
funding agreement in accordance with:
    (1) The compact and funding agreement;

[[Page 33516]]

    (2) All statutory requirements applicable to the funding source; 
and
    (3) Applicable provisions of 2 CFR part 200.
    (b) The fiscal control and accounting procedures of a Tribe's 
financial management system must be sufficient to:
    (1) Permit the preparation of reports required by applicable 
Federal law, the compact, funding agreement, and this part; and
    (2) Permit the tracing of program or project funds to a level of 
expenditure adequate to establish that the funds have not been used in 
violation of any restrictions or prohibitions contained in any statute 
or provision of 2 CFR part 200 that applies to the funds included in 
the compact and funding agreement.


Sec.  29.507  What minimum requirements must a Tribe's financial 
management system include to meet the standards set forth in Sec.  
29.506?

    To meet the standards set forth in Sec.  29.506, a Tribe's 
financial management system must include the following minimum 
requirements:
    (a) Financial reports. The financial management system must provide 
for accurate, current, and complete disclosure of the financial results 
of activities carried out by a Tribe under a compact and funding 
agreement;
    (b) Accounting records. The financial management system must 
maintain records sufficiently detailed to identify the source and 
application of funds transferred to a Tribe in a funding agreement. The 
system must contain sufficient information to identify awards, 
obligations and unobligated balances, assets, liabilities, outlays, or 
expenditures and income;
    (c) Internal controls. The financial management system must 
maintain effective control and accountability for all funds included in 
a funding agreement and for all Federal real property, personal 
property, and other assets furnished for use by a Tribe under its 
compact and funding agreement;
    (d) Budget controls. The financial management system must permit 
the comparison of actual expenditures or outlays with the amounts 
budgeted by a Tribe for each funding agreement;
    (e) Allowable costs. The financial management system must be 
sufficient to determine that the expenditure of funds is reasonable, 
allowable, and allocable based upon the terms of the compact and 
funding agreement and applicable provisions of 2 CFR part 200;
    (f) Source documentation. The financial management system must 
contain accounting records that are supported by source documentation, 
such as canceled checks, paid bills, payroll records, time and 
attendance records, contract award documents, purchase orders, and 
other primary records that support expenditures; and
    (g) Cash management. The financial management system must provide 
for accurate, current, and complete disclosure of cash revenues 
disbursements, cash-on-hand balances, and obligations by source and 
application for a Tribe so that complete and accurate cash transactions 
may be prepared by the Tribe.


Sec.  29.508  What procurement standards apply to contracts carried out 
using funds included in a funding agreement?

    (a) Each contract carried out using funds included in a funding 
agreement must, at a minimum:
    (1) Be in writing;
    (2) Identify the interested parties, their respective roles and 
responsibilities, and the purposes of the contract;
    (3) State the work to be performed under the contract;
    (4) State the process for making any claim, the payments to be 
made, and the terms of the contract; and
    (5) State that it is subject to 25 U.S.C. 5307(b) consistent with 
Sec.  29.524.
    (b) A Tribe that chooses to use a procurement method that is not 
provided for in its established procurement management standards in the 
delivery of a Tribal transportation project must submit the request to 
deviate from these standards to the Department for review and approval 
in accordance with Sec.  29.515. The deviation request must specify the 
procurement method that the Tribe proposes to use and the project to 
which such method will be applied.


Sec.  29.509  What property management systems and standards must a 
Tribe maintain?

    (a) Property management system. A Tribe must maintain a property 
management system to account for all property acquired with funds 
included in a funding agreement, acquired with Federal funds awarded by 
the Department or the Department of the Interior, or obtained as excess 
or surplus Federal property to be used for activities under the 
Program. The property management system must address the use, care, 
maintenance, and disposition of such property as follows:
    (1) Where title vests in the Tribe, in accordance with Tribal law 
and procedures; or
    (2) In the case of a consortium, according to the internal property 
procedures of the consortium.
    (b) Transit asset management. In addition to the property 
management system and standards in this section, property acquired with 
transit funds (chapter 53 of title 49 of the U.S. Code) is subject to 
the property management requirements set forth in 49 U.S.C. 5326 
concerning the transit asset management plan, performance targets, and 
reports.
    (c) Tracking requirements under a property management system. The 
property management system of a Tribe relating to property used under 
the Program must track:
    (1) Personal property and rolling stock with an acquisition value 
in excess of $5,000 per item;
    (2) Sensitive personal property, which is all personal property 
that is subject to theft and pilferage, as defined by the Tribe; and
    (3) Real property.
    (d) Records. The property management system must maintain records 
that accurately describe the property, including any serial number, 
vehicle identification number, or other identification number. These 
records should contain current information such as the source, 
titleholder, acquisition date, acquisition cost, share of Federal 
participation in the cost, location, use and current condition of the 
property, and the date of disposal and sale price, if any.
    (e) Internal controls. The property management system must maintain 
effective internal controls that include, at a minimum, procedures for 
a Tribe to:
    (1) Conduct periodic, physical inventories at least once every 2 
years and reconcile such inventories with the Tribal internal property 
and accounting records;
    (2) Prevent loss or damage to property; and
    (3) Ensure that property is used by the Tribe to carry out 
activities under a funding agreement until the Tribe declares the 
property excess to the needs of the PSFAs carried out by the Tribe 
under the funding agreement, consistent with the property management 
system of the Tribe.
    (f) Maintenance requirements. Required maintenance includes the 
performance of actions necessary to keep the property in good working 
condition, the procedures recommended by equipment manufacturers, and 
steps necessary to protect the interests of the Department and the 
Tribe in any express warranties or guarantees covering the property.
    (g) Disposition of personal property acquired under a funding 
agreement. Prior to disposition of any personal property acquired under 
a funding agreement, including rolling stock, a

[[Page 33517]]

Tribe must report to the Self-Governance Official in writing on the 
property's status (e.g., worn out, lost, stolen, damaged beyond repair, 
or no longer needed to carry out activities under a funding agreement). 
The Department will provide disposition instructions in accordance with 
2 CFR 200.313. A Tribe may retain, sell, or otherwise dispose of 
personal property with a current per unit fair market value of $5,000 
or less with no further obligation to the Department.
    (h) Disposition of real property acquired under a funding 
agreement. Prior to disposition of any real property acquired under a 
funding agreement, a Tribe must report to the Self-Governance Official, 
who will ensure the Department provides disposition instructions in 
accordance with 2 CFR 200.311.

Records


Sec.  29.510  Must a Tribe maintain a recordkeeping system?

    A Tribe must maintain records and provide Federal agency access to 
those records as provided in 25 U.S.C. 5386(d) and the statutory 
requirements of the funds included in a funding agreement.


Sec.  29.511  Are Tribal records subject to the Freedom of Information 
Act and Federal Privacy Act?

    (a) Except to the extent that a Tribe specifies otherwise in its 
compact or funding agreement, the records of the Tribe retained by the 
Tribe will not be considered Federal records for purposes of chapter 5 
of title 5 of the U.S. Code.
    (b) Tribal records submitted to the Department are considered 
Federal records for the purposes of the Freedom of Information Act 
(FOIA) and Federal Privacy Act. If a Tribe provides information to the 
Department that the Tribe considers to be trade secret, or confidential 
commercial or financial information, the Tribe must identify it as 
such. The Department will not disclose the information to the public, 
except to the extent required by law. In the event the Department 
receives a FOIA request for such information, the Department will 
follow the procedures described in its FOIA regulations at 49 CFR part 
7.


Sec.  29.512  Must a Tribe make its records available to the 
Department?

    After 30 days advance written notice from the Department, a Tribe 
must provide the Department with reasonable access to such records to 
enable the Department to meet its minimum legal recordkeeping system 
and audit requirements.


Sec.  29.513  How long must a Tribe keep and make available records?

    A Tribe must keep books, documents, papers, and records of funding, 
grants, and State-provided funds for 3 years from the date of 
submission of the Single Audit Act audit report and provide the 
Department or the Comptroller General access to such records for audit 
and examination related to compacts, funding agreements, grants, 
contracts, subcontracts, sub-grants, or other arrangements under the 
Program.

Procurement


Sec.  29.514  When procuring property or services with funds included 
in a funding agreement, can a Tribe follow its own procurement 
standards?

    When procuring property or services with funds included in a 
funding agreement, a Tribe must have standards that conform to the 
procurement standards in this subpart. If a Tribe relies upon 
procurement standards different than those described in Sec.  29.515, 
it must identify the standards it will use in in the initial 
negotiation of a funding agreement or as a waiver request to an 
existing funding agreement. The Tribe must submit the request to the 
Department in accordance with Sec.  29.534.


Sec.  29.515  What are the minimum procurement standards that a Tribe 
must follow when procuring property or services with funds included in 
a funding agreement?

    A Tribe must follow the minimum procurement standards set forth in 
this section when procuring property or services with funds included in 
a funding agreement.
    (a) Minimum procurement standards. (1) A Tribe must ensure that its 
vendors and contractors perform in accordance with the terms, 
conditions, and specifications of their contracts or purchase 
agreements or orders.
    (2) A Tribe must maintain written standards of conduct governing 
the performance of its employees who award and administer contracts 
paid for using funds included in a funding agreement.
    (i) An employee, officer, elected official, or agent of a Tribe 
must not participate in the selection, award, or administration of a 
procurement supported by Federal funds if a conflict of interest, real 
or apparent, as defined in the conflict of interest policies of the 
Tribe, would be involved.
    (ii) Employees, officers, elected officials, or agents of a Tribe, 
or of a subcontractor of the Tribe, must not solicit or accept 
gratuities, favors, or anything of monetary value from contractors, 
potential contractors, or parties to sub-agreements, except that the 
Tribe may exempt a financial interest that is not substantial or a gift 
that is an unsolicited item of nominal value.
    (iii) The standards must also provide for penalties, sanctions, or 
other disciplinary actions for violations of the procurement standards.
    (3) A Tribe must review proposed procurements to avoid buying 
unnecessary or duplicative items and ensure the reasonableness of the 
price. The Tribe should consider consolidating or separating out 
procurement to obtain more economical purchases. Tribes are encouraged 
to realize economies of scale in the procurement of goods, services, 
and supplies under this part, including the negotiation of cooperative 
agreements with other public authorities. Where appropriate, the Tribe 
must compare leasing and purchasing alternatives to determine which is 
more economical.
    (4) A Tribe must conduct all major procurement transactions that 
exceed the simplified acquisition threshold set forth in 2 CFR 200.88 
by providing full and open competition to the extent necessary to 
assure efficient expenditure of contract funds and to the extent 
feasible in the local area.
    (i) Consistent with 2 CFR 200.88, a Tribe may develop its own 
definition for a simplified acquisition threshold.
    (ii) To the greatest extent feasible, a Tribe must apply to any 
procurement award the Indian preference requirements for wages and 
grants contained in 25 U.S.C. 5307(b).
    (5) A Tribe must make procurement awards only to responsible 
entities with the ability to perform successfully under the terms and 
conditions of the proposed procurement. In making this judgment, the 
Tribe will consider such matters as the contractor's integrity, its 
compliance with public policy, its record of past performance, and its 
financial and technical resources.
    (6) A Tribe must maintain records on the significant history of all 
major procurement transactions. These records must include, but are not 
limited to, the rationale for the method of procurement, the selection 
of contract type, the contract selection or rejection, and the basis 
for the contract price.
    (7) A Tribe is solely responsible, using good administrative 
practice and sound business judgment, for processing and settling all 
contractual and administrative issues arising out of a procurement. 
These issues include, but are not limited to, source evaluation, 
protests, disputes, and claims.

[[Page 33518]]

    (i) The settlement of any protest, dispute, or claim will not 
relieve the Tribe of any obligations under a funding agreement.
    (ii) Violations of law must be referred to the Tribal or Federal 
authority having proper jurisdiction.
    (b) Conflicts of interest. A Tribe participating in the program 
must ensure that internal measures and controls are in place to address 
conflicts of interest in the administration of compacts and funding 
agreements.


Sec.  29.516  Do Federal laws and regulations apply to a Tribe's 
contractors or subcontractors?

    A Tribe's contractors or subcontractors are responsible for 
complying with Federal laws and regulations. Contracts between a Tribe 
and its contractors should inform contractors that the contract is 
carried out using funds included in a funding agreement, and that the 
contractors and its subcontractors are responsible for identifying and 
ensuring compliance with applicable Federal laws and regulations. The 
Department and the Tribe may, through negotiation, identify all or a 
portion of such requirements in the funding agreement and, if so 
identified, these requirements should be identified in the contracts 
the Tribe awards using funds included in a funding agreement.


Sec.  29.517  Can a Tribe use Federal supply sources in the performance 
of a compact and funding agreement?

    A Tribe and its employees may use Federal supply sources (including 
lodging, airline, interagency motor pool vehicles, and other means of 
transportation) in the performance of a compact and funding agreement 
to the same extent as if the Tribe were a Federal agency. The 
Department will assist the Tribes, to the extent feasible, to resolve 
any barriers to full implementation.

Reporting


Sec.  29.518  What reporting must a Tribe provide?

    (a) A Tribe must provide reports mandated by statute associated 
with the funds included in the funding agreement. In accordance with 
Sec.  29.307, the funding agreement will list these reporting 
requirements. The Tribe will cooperate with the Department to assist 
the Department in complying with its statutory reporting requirements. 
No additional reporting will be required of the Tribe.
    (b) Notwithstanding paragraph (a) of this section, if the Tribe 
includes funds for a discretionary or competitive grant in a funding 
agreement, the Department and the Tribe will negotiate the appropriate 
reporting requirements to include in the funding agreement.

Property


Sec.  29.519  How may a Tribe use existing Department facilities, 
equipment, or property?

    At the request of a Tribe, the Department will permit the Tribe to 
use and maintain existing facilities, equipment therein or appertaining 
thereto, and other personal property, if applicable, owned by the 
Government within the Department's jurisdiction, subject to terms and 
conditions agreed to by the Department and the Tribe. The requested 
facilities, equipment, or property must be used to carry out the 
Tribe's PSFAs under the compact and funding agreement. Such facilities, 
equipment, or other personal property will be eligible for replacement, 
maintenance, and improvement using funds included in a funding 
agreement, or the Tribe may expend its own funds. The Department does 
not have any additional funding sources for replacement, maintenance, 
or improvement of such facilities, equipment, other personal property. 
The Department will exercise discretion in a way that gives the maximum 
effect to the request of the Tribe to use such facilities, equipment, 
or property.


Sec.  29.520  How may a Tribe acquire surplus or excess Federal 
property for use under the Program?

    A Tribe may acquire any surplus or excess property for use in the 
performance of the compact and funding agreement consistent with the 
procedures established by the General Services Administration. The 
Tribe must notify the Self-Governance Official of the surplus or excess 
property it proposes to acquire and the purpose for which it will be 
used in the performance of the compact or funding agreement. If the 
Department participates in the acquisition by the Tribe of any excess 
or surplus Federal property, the Department will expeditiously process 
the request and assist the Tribe in its acquisition to the extent 
feasible and exercise discretion in a way that gives maximum effect to 
the Tribe's request for donation of the excess or surplus Federal 
property. When the Department's participation is required, the 
Department should expeditiously request acquisition of the property 
from the General Services Administration or the holding agency, as 
appropriate, by submitting the necessary documentation prior to the 
expiration of any ``freeze'' placed on the property by the Tribe or the 
Department on the Tribe's behalf. The Tribe must take title to any 
property acquired pursuant to this section. Such surplus or excess 
property will be eligible for replacement, maintenance, and improvement 
using funds included in a funding agreement, or the Tribe may expend 
its own funds. The Department does not have any additional funding 
sources for replacement, maintenance, or improvement of such surplus or 
excess property.


Sec.  29.521  How must a Tribe use surplus or excess Federal property 
acquired under the Program?

    A Tribe must use any property acquired under this section in a 
manner consistent with the justification submitted at acquisition. The 
Tribe should notify the Self-Governance Official whenever use of the 
property changes significantly and upon disposal or sale.


Sec.  29.522  If a compact or funding agreement (or portion thereof) is 
retroceded, reassumed, terminated, or expires, may the Department 
reacquire title to property purchased with funds under any compact and 
funding agreement or excess or surplus Federal property that was 
donated to the Tribe under the Program?

    If a compact or funding agreement (or portion thereof) is 
retroceded, reassumed, terminated, or expires, the Tribe retains title 
to the property purchased with funds under any compact and funding 
agreement or excess or surplus Federal property donated under the 
Program if it is valued at $5,000 or less. If the value of the property 
is over $5,000 at the time of retrocession, withdrawal, or 
reassumption, title to such property may revert to the Department at 
the Department's discretion.

Technical Assistance


Sec.  29.523  What technical assistance is available to a Tribe from 
the Department?

    Upon the written request of a Tribe, and to the extent feasible, 
the Department will provide technical assistance, including periodic 
program reviews, to assist a Tribe improve its performance in carrying 
out the Program.

Prevailing Wages


Sec.  29.524  Do the wage and labor standards in the Davis-Bacon Act 
apply to employees of a Tribe?

    Wage and labor standards of the Davis-Bacon Act do not apply to 
employees of a Tribe. However, Davis-Bacon wage rates apply to all 
Tribal contractors and subcontractors.

[[Page 33519]]

Tribal Preference


Sec.  29.525  Does Indian preference apply to PSFAs under the Program?

    To the greatest extent feasible, any contract, subcontract, grant, 
or sub-grant under a compact and funding agreement must give preference 
for employment and training, and the award of subcontracts and sub-
grants, to Indians, Indian organizations, and Indian-owned economic 
enterprises, as defined in 25 U.S.C. 1452.


Sec.  29.526  When do Tribal employment law and contract preference 
laws govern?

    To the extent provided in applicable Federal law, Tribal law 
governs Indian preference policies in the performance of a compact and 
funding agreement. When a compact or funding agreement is intended to 
benefit one Tribe, the Tribal employment or contract preference laws 
adopted by such Tribe will govern with respect to the administration of 
the compact and funding agreement.

Environmental and Cultural Resource Compliance


Sec.  29.527  What compliance with environmental and cultural resource 
statutes is required?

    (a) The Department must meet the requirements of applicable Federal 
environmental and cultural resource laws, such as the National 
Environmental Policy Act (NEPA) and the National Historic Preservation 
Act, for a proposed project under the Program.
    (b) The Secretary has delegated environmental and cultural resource 
compliance responsibilities to the Operating Administrations, as 
appropriate. As such, an Operating Administration will serve as the 
lead agency responsible for final review and approval of environmental 
documents, and any associated environmental determinations and findings 
for a proposed project under the Program. The Secretary, as delegated 
to the Operating Administrations, is also responsible for making 
determinations and issuing approvals in accordance with 23 U.S.C. 138 
and 49 U.S.C. 303 (Section 4(f)), as applicable. Tribes may consult 
with the Self-Governance Official to determine which Operating 
Administration should serve as the lead agency.
    (c) If the Department is conducting the environmental review 
process for a proposed project under the Program, the Tribe must assist 
the Department to satisfy the requirements of applicable Federal 
environmental and cultural resource laws.
    (d) A Tribe may manage or conduct the environmental review process 
for a proposed project under the Program and may prepare drafts of the 
appropriate environmental review documents for submission to the 
Department.
    (1) A Tribe may follow its own environmental review procedures if 
the procedures and documentation also satisfy the Federal environmental 
review requirements applicable to the project. A Tribe should work with 
the Operating Administration serving as lead agency to ensure the 
Tribal process will satisfy all applicable Federal environmental review 
requirements.
    (2) The Operating Administration serving as lead agency must 
determine that the Tribe's process and documentation satisfy the 
applicable Federal environmental review requirements.
    (e) As resources permit and at the request of a Tribe, the 
Department will provide advice and technical assistance to the Tribe to 
assist in the management of the Federal environmental review process 
and preparation of environmental documents.
    (f) Unless prohibited by law, a Tribe may use funds included in a 
funding agreement to pay for environmental review activities.

Federal Tort Claims Act


Sec.  29.528  Is the Federal Tort Claims Act applicable to a Tribe when 
carrying out a compact and funding agreement?

    (a) Section 314 of Public Law 101-512 and 25 U.S.C. 5396(a) 
incorporated by 23 U.S.C. 207(l)(8) make the Federal Tort Claims Act 
(FTCA), 28 U.S.C. 1346(b), 2401, 2671-2680, applicable to a Tribe 
carrying out a compact and funding agreement.
    (b) Contractors, subcontractors, or sub-recipients of a Tribe are 
not subject to the terms and conditions of the FTCA. The Tribe may use 
the regulations set forth in 25 CFR part 900, subpart M, as guidance on 
the Tribe's rights and responsibilities under the FTCA. Accordingly, 
the Tribe must include, in any contract entered into with funds 
provided under a compact and funding agreement, a requirement that 
contractors, sub-contractors, or sub-recipients maintain applicable 
insurance coverage, such as workers compensation, auto, and general 
liability insurance, consistent with statutory minimums and local 
industry standards.


Sec.  29.529  What steps should a Tribe take after becoming aware of a 
Federal Tort Claim?

    (a) Immediately after receiving a claim or a summons and complaint 
filed under the FTCA, the Tribe must notify the Self-Governance 
Official at [email protected] or use any other method that provides 
receipt.
    (b) The Tribe, through a designated tort claims liaison assigned by 
the Tribe, must assist the Department in preparing a comprehensive and 
factually based report, which will inform the Department's report to 
the U.S. Department of Justice.
    (c) The Tribe's designated tort claims liaison must immediately 
provide the following significant details of the event and include, as 
appropriate and to the extent within their knowledge, possession, or 
control:
    (1) The date, time, and exact place of the accident or incident;
    (2) A concise and complete statement of the circumstances of the 
accident or incident;
    (3) The names and addresses of Tribal or Federal employees involved 
as participants or witnesses;
    (4) The names and addresses of all other eyewitnesses;
    (5) An accurate description of all Federal, Tribal, and privately 
owned property involved, and the nature and amount of damage, if any;
    (6) A statement as to whether any person involved was cited for 
violating a Federal, State, or Tribal law, ordinance, or regulation;
    (7) The Tribe's determination as to whether any of its employees 
(including Federal employees assigned to the Tribe) involved in the 
incident giving rise to the tort claim were acting within the scope of 
their employment in carrying out the funding agreement at the time the 
incident occurred;
    (8) Copies of all relevant documentation, including available 
police reports, statements of witnesses, newspaper accounts, weather 
reports, plats, and photographs of the site or damaged property, that 
may be necessary or useful for the Department to determine the claim; 
and
    (9) Insurance coverage information, copies of medical bills, and 
relevant employment records.
    (d) The Tribe must cooperate with and provide all necessary 
assistance to the U.S. Department of Justice and the Department's 
attorneys assigned to defend the tort claim including case preparation, 
discovery, and trial.
    (e) If requested by the Department, the Tribe must make an 
assignment and subrogation of all the Tribe's rights and claims (except 
those against the Federal Government) arising out of a tort claim 
against the Tribe.
    (f) If requested by the Department, the Tribe must authorize 
representatives of the Department to settle or defend any

[[Page 33520]]

claim and to represent the Tribe in or take charge of any action. If 
the Federal Government undertakes the settlement or defense of any 
claim or action, the Tribe must provide all reasonable additional 
assistance in reaching a settlement or asserting a defense.


Sec.  29.530  Is it necessary for a compact or funding agreement to 
include any terms about FTCA coverage?

    Terms about FTCA coverage are optional in a compact or funding 
agreement, and the FTCA applies even if terms regarding FTCA are not 
included in a compact or funding agreement.


Sec.  29.531  Does FTCA cover employees of the Tribe who are paid by 
the Tribe from funds other than those provided through the compact and 
funding agreement?

    Subject to FTCA limitations, the FTCA covers employees of the Tribe 
who are not paid from compact and funding agreement funds as long as 
the services out of which the claim arose were performed in carrying 
out a compact and funding agreement.


Sec.  29.532  May persons who are not Indians assert claims under FTCA?

    Any aggrieved person may assert claims for alleged torts arising 
from activities performed in carrying out compacts and funding 
agreements.


Sec.  29.533  Does the year PSFAs are funded affect FTCA coverage?

    The year the funding was provided has no effect on the application 
of the FTCA.

Waiver of Program Regulations


Sec.  29.534  What is the process for regulation waivers under this 
part?

    (a) A Tribe may request a waiver of a regulation in this part with 
respect to a compact or funding agreement. The Tribe must submit the 
request in writing to the Self-Governance Official to [email protected] or 
use any other method that provides receipt, at the following address: 
Self-Governance Official, U.S. Department of Transportation, Office of 
the Secretary [INSERT MAIL CODE], 1200 New Jersey Avenue SE, 
Washington, DC 20590. The request must be marked with the words 
``REQUEST TO WAIVE REGULATIONS'' on the first page of the request and 
on the envelope enclosing the request (or in the subject line if by 
electronic mail). The request must identify the regulation subject to 
the waiver request, the language the Tribe seeks to waive, and the 
basis for the request.
    (b) Within 10 days of receipt of the waiver request, the Self-
Governance Official will send the Tribe an acknowledgement of the 
waiver request, together with a date-stamped cover sheet that indicates 
the date on which the Department received the waiver request.
    (c) No later than 90 days after the date of receipt of a written 
request under paragraph (a) of this section, the Department must 
approve or deny the request in writing. If the application for a waiver 
is denied, the Department must provide the Tribe with the reasons for 
the denial as part of the written response.
    (d) The Department will consider the following factors in making 
its decision on a waiver request:
    (1) Whether the waiver is contrary to Federal law;
    (2) The extent to which the waiver provides flexibility to 
facilitate the implementation of the Program at the Tribal level 
consistent with the principles of self-governance;
    (3) The extent to which the Tribe will benefit from the waiver; and
    (4) Whether the waiver is consistent with Federal transportation 
policy.
    (e) If the Department does not approve or deny a request submitted 
under paragraph (a) of this section on or before the last day of the 
90-day period, the request will be deemed approved by operation of law.
    (f) A decision by the Department on a waiver request is a final 
agency action subject to judicial review under the Administrative 
Procedure Act.

Subpart G--Withdrawal


Sec.  29.600  May a Tribe withdraw from a consortium?

    A Tribe may fully or partially withdraw from a consortium in 
accordance with any applicable terms and conditions of a consortium 
agreement with the Tribe. The withdrawing Tribe must provide written 
notification to the consortium and the Department of its decision to 
withdraw.


Sec.  29.601  When does a withdrawal from a consortium become 
effective?

    A withdrawal from a consortium becomes effective within the time 
frame specified in the resolution that authorizes the Tribe to withdraw 
from the consortium. In the absence of a specific time frame set forth 
in the resolution, such withdrawal becomes effective on:
    (a) The earlier of 1 year after the date of submission of such 
request, or the date on which the funding agreement expires; or
    (b) Such date as may be mutually agreed upon by the Department, the 
withdrawing Tribe, and the consortium that has executed the compact and 
funding agreement.


Sec.  29.602  How are funds redistributed when a Tribe fully or 
partially withdraws from a compact and funding agreement administered 
by a consortium serving more than one Tribe and elects to enter into a 
compact and funding agreement with the Department?

    A withdrawing Tribe that is eligible for the Program under 23 
U.S.C. 207(b) and Sec.  29.100 may negotiate and enter into a compact 
and funding agreement for its share of funds supporting those PSFAs 
that the Tribe will carry out. The share of funds is calculated on the 
same basis as the funds were initially allocated in the funding 
agreement of the consortium, unless otherwise agreed to by the 
consortium and the Tribe.


Sec.  29.603  How are funds distributed when a Tribe fully or partially 
withdraws from a compact and funding agreement administered by a 
consortium serving more than one Tribe, and the withdrawing Tribe 
elects not to or is ineligible to enter into a compact and funding 
agreement?

    Unless otherwise agreed to by the consortium and the withdrawing 
Tribe, the consortium must return to the Department all funds not 
obligated and expended by the consortium associated with the 
withdrawing Tribe when the withdrawing Tribe elects not to or is 
ineligible to enter into a compact and funding agreement.

Subpart H--Retrocession


Sec.  29.700  May a Tribe retrocede a PSFA and the associated funds?

    A Tribe may voluntarily retrocede (fully or partially) its PSFA and 
the associated funds under a compact and funding agreement. A Tribe may 
retrocede for any reason.


Sec.  29.701  How does a Tribe notify the Department of its intention 
to retrocede?

    (a) Notice to the Department. A Tribe must submit a written notice 
of its intent to retrocede to the Self-Governance Official to 
[email protected] or by any other method that provides receipt. The notice 
must specifically identify those PSFAs the Tribe intends to retrocede.
    (b) Notice to the Department of the Interior. The Department will 
send the Tribe's notice of its intention to retrocede to the Department 
of the Interior and request that the Department of the Interior 
determine whether the PSFA is associated with transportation services 
provided by the Department of the Interior.

[[Page 33521]]

Sec.  29.702  What happens if the Department of the Interior determines 
that it provides the transportation services the Tribe intends to 
retrocede?

    If the Department of the Interior determines that it provides the 
transportation services the Tribe intends to retrocede, the Department 
will notify the Tribe. The Tribe must return all remaining funds, less 
closeout costs, associated with those transportation services to the 
Department for transfer to the Department of the Interior.


Sec.  29.703  What happens if the Department of the Interior determines 
that it does not provide the transportation services the Tribe intends 
to retrocede?

    If the Department of the Interior determines that it does not 
provide the transportation services the Tribe intends to retrocede, the 
Tribe may withdraw its notice to retrocede or return all remaining 
funds, less closeout costs, associated with the retroceded PSFA, and 
the Department will distribute those funds in accordance with 
applicable law.


Sec.  29.704  When is the retrocession effective?

    The retrocession is effective within the time frame specified in 
the funding agreement. In the absence of a specified date, the 
retrocession becomes effective:
    (a) On the earlier of 1 year after the date of the Tribe's 
submission of the request, or the date on which the funding agreement 
expires; or
    (b) Such date mutually agreed upon by the Departments and the 
retroceding Tribe when the Department of the Interior has agreed to 
assume a retroceded PSFA.


Sec.  29.705  What effect will a retrocession have on a Tribe's right 
to compact under the Program?

    Provided that a Tribe is eligible under Sec.  29.100, retrocession 
will not adversely affect any future request by the Tribe to include 
funds from the same program in a compact or funding agreement.


Sec.  29.706  Will retrocession adversely affect future funding 
available for the retroceded program?

    Retrocession will not adversely affect future funding for the 
retroceded program. Future funding will be available to the Tribe at 
the same level of funding as if there had been no retrocession.

Subpart I--Termination and Reassumption


Sec.  29.800  When can the Department reassume a compact or funding 
agreement?

    The Department may terminate and reassume a compact or funding 
agreement (or portion thereof) when the Department makes a specific 
finding, in writing, to a Tribe, that the Department has found that 
there is:
    (a) Imminent jeopardy to a trust asset, natural resources, or 
public health and safety that is caused by an act or omission of the 
Tribe and that arises out of a failure by the Tribe to carry out the 
compact or funding agreement; or
    (b) Gross mismanagement with respect to funds included in a funding 
agreement, as determined by the Department in consultation with the 
Office of the Inspector General, as appropriate. Gross mismanagement 
means a significant, clear, and convincing violation of compact, 
funding agreement, or regulatory or statutory requirements applicable 
to Federal funds included in a compact and funding agreement that 
results in a significant reduction of funds available for the PSFA 
carried out by the Tribe.


Sec.  29.801  Can the Department reassume a portion of a compact or 
funding agreement and the associated funds?

    The Department may reassume a portion of a compact or funding 
agreement and the associated funds if the Department has sufficient 
grounds to do so. The Department must identify the narrowest portion of 
the compact or funding agreement for reassumption.


Sec.  29.802  What process must the Department follow before 
termination of a compact or funding agreement (or portion thereof)?

    Except as provided in Sec.  29.805, prior to a termination becoming 
effective, the Department must:
    (a) Notify the Tribe in writing by any method that provides receipt 
of the findings required under Sec.  29.800;
    (b) Request specific corrective action within a reasonable period, 
no less than 45 days, to correct the conditions that may result in the 
Department's termination of a compact or funding agreement (or portion 
thereof);
    (c) To the extent feasible and if requested, provide technical 
assistance to assist the Tribe in overcoming the conditions that led to 
the findings described under paragraph (a) of this section. Technical 
assistance may take the form of feedback, review, and other assistance 
requested, as appropriate; and
    (d) Provide an opportunity for a hearing on the record in 
accordance with Subpart J of this part.


Sec.  29.803  What happens if the Department determines that the Tribe 
has not corrected the conditions that the Department identified in the 
notice?

    (a) If the Department determines that the Tribe has not corrected 
the conditions that the Department identified in the notice, the 
Department must provide a second written notice by any method that 
provides receipt to the Tribe notifying it that the Department will 
terminate the compact or funding agreement, in whole or in part.
    (b) The second notice must include:
    (1) The effective date of the termination;
    (2) The details and facts supporting the termination; and
    (3) Instructions that explain the Tribe's right to a hearing 
pursuant to Sec.  29.925.


Sec.  29.804  When may the Department reassume?

    Except as provided in Sec.  29.805, the Department may not reassume 
until 30 days after receipt of the notice, the final resolution of the 
hearing, or the resolution of any appeals, whichever is latest, to 
provide the Tribe with an opportunity to take corrective action in 
response to any adverse final ruling.


Sec.  29.805   When can the Department immediately terminate a compact 
or funding agreement (or portion thereof)?

    (a) The Department may immediately terminate a compact or funding 
agreement (or a portion thereof) if:
    (1) The Department makes a finding of imminent substantial and 
irreparable jeopardy to a trust asset, natural resource, or public 
health and safety; and
    (2) The jeopardy arises out of a failure to carry out the compact 
or funding agreement.
    (b) The Department must provide notice of immediate termination by 
any method that provides receipt. The notice must set forth the 
findings that support the Department's determination, advise the Tribe 
whether it will be reimbursed for any closeout costs incurred after the 
termination, request the return of any property, and advise the Tribe 
of its right to a hearing pursuant to Sec.  29.925. Concurrently, the 
Department must notify the Office of Hearings that the Department 
intends to immediately terminate a compact or funding agreement. 
Pursuant to 23 U.S.C. 207(f)(2)(E) and Sec.  29.928, the Department has 
the burden of proof in any hearing or appeal of an immediate 
termination.

[[Page 33522]]

Sec.  29.806   Upon termination, what happens to the funds associated 
with the terminated portions of the compact or funding agreement?

    Upon termination, the Department will reassume the remaining funds 
associated with the terminated portions of the compact or funding 
agreement. The Department may:
    (a) Transfer funds associated with transportation services provided 
by the Department of the Interior to the Department of the Interior; or
    (b) Distribute any funds not transmitted to the Department of the 
Interior in accordance with applicable law.

Subpart J--Dispute Resolution and Appeals


Sec.  29.900   What is the purpose of this subpart?

    This subpart sets forth procedures that a Tribe may use to resolve 
disputes with the Department arising before or after the execution of a 
compact or funding agreement. It also sets forth the process for filing 
and processing administrative appeals under this part.


Sec.  29.901   Can the Department and a Tribe resolve disputes using 
alternative dispute resolution processes?

    At any time, the Department or a Tribe may request an informal 
process or an alternate dispute resolution procedure, such as 
mediation, conciliation, or arbitration, to resolve disputes. The goal 
of any such process (which may involve a third party) is to provide an 
inexpensive and expeditious mechanism to resolve disputes by mutual 
agreement instead of an administrative or judicial proceeding. The 
Department and the Tribe should resolve disputes at the lowest possible 
organizational level whenever possible.


Sec.  29.902   Does the Equal Access to Justice Act apply to the 
Program?

    The Equal Access to Justice Act (EAJA), 5 U.S.C. 504 and 28 U.S.C. 
2414, and the relevant implementing regulations (48 CFR 6101.30 and 
6101.31; 49 CFR part 6) will apply if the Tribe's compact or funding 
agreement make these provisions applicable.


Sec.  29.903   What determinations may not be appealed under this 
subpart?

    A Tribe may not appeal the following determinations under this 
subpart:
    (a) Waiver determination. A waiver determination made pursuant to 
Sec.  29.534 is a final agency action subject to judicial review under 
the Administrative Procedure Act.
    (b) Disputes or appeals arising under other Federal laws. Decisions 
made under other Federal statutes, such as the Freedom of Information 
Act and the Privacy Act. Such decisions may be appealable under those 
statutes and their implementing regulations.
    (c) Selection and award decisions for discretionary or competitive 
grants. The Department's selection and level of funding decisions for 
discretionary or competitive grants are not subject to appeal.

Pre-Award Decisions


Sec.  29.904   What are pre-award decisions that a Tribe may appeal?

    A Tribe may appeal pre-award decisions, which include:
    (a) A decision whether to include a Department program in a funding 
agreement;
    (b) A decision whether an activity is an inherent Federal function;
    (c) A decision on a final offer before the Department and the Tribe 
enter into a compact or funding agreement;
    (d) A decision on a final offer before the Department and the Tribe 
execute an amendment modifying the terms of an existing compact or 
funding agreement; and
    (e) An eligibility determination.


Sec.  29.905   To whom does a Tribe appeal a pre-award decision?

    A Tribe appeals a pre-award decision in accordance with the process 
in Sec.  29.907 to a hearing official who was not involved in the 
initial decision and is appointed by the General Counsel of the 
Department.


Sec.  29.906  Must a Tribe exhaust its administrative remedies before 
initiating a civil action against the Department in the U.S. District 
Courts for a pre-award decision?

    A Tribe must exhaust its administrative remedies before initiating 
a civil action against the Department in the U.S. District Courts, 
except a Tribe may appeal the rejection of a final offer directly to 
the U.S. District Courts in lieu of an administrative appeal.


Sec.  29.907  When and how must a Tribe appeal a pre-award decision?

    (a) Unless a Tribe appeals, a pre-award decision becomes final 30 
days after receipt by the Tribe. To appeal the pre-award decision, a 
Tribe must submit a written request to the Office of the General 
Counsel and the Self-Governance Official within 30 days of receiving 
the pre-award decision. The request must include a statement describing 
the reasons for appeal and any supporting documentation.
    (b) The Tribe may request to resolve the dispute using an 
alternative dispute resolution process before the hearing official 
issues a decision.


Sec.  29.908  May a Tribe request an extension of time to file an 
administrative appeal?

    If a Tribe needs additional time, it may request an extension of 
time to file an appeal of a pre-award decision. Within 30 days of 
receiving a decision, a Tribe must request the extension from the 
Office of the General Counsel, which has the discretion to grant the 
extension, and notify the Self-Governance Official of the request. The 
request must be in writing and give a reason for not filing its 
administrative appeal within the 30-day period. The Department may 
accept an appeal after the 30-day period for good cause.


Sec.  29.909  When and how must the hearing official respond to the 
Tribe's appeal?

    (a) The hearing official must issue a decision in writing within 60 
days of the receipt of the appeal. If the Tribe requests an informal 
hearing, the hearing official must issue a decision within 60 days of 
the hearing.
    (b) All decisions issued by the hearing official must include a 
statement describing the rights of a Tribe to appeal the decision to 
the U.S. District Courts. The Department must provide the decision to 
the Tribe by any method that provides a receipt.


Sec.  29.910  What is the Department's burden of proof for appeals of 
pre-award decisions?

    The Department must demonstrate by clear and convincing evidence 
the validity of a pre-award decision, and that the decision is 
consistent with 23 U.S.C. 207.


Sec.  29.911  What is the effect of a pending appeal on negotiations?

    A pending appeal of a pre-award decision will not prevent the 
Department from negotiating and executing the non-disputed, severable 
provisions of a compact or funding agreement or prevent the Department 
from awarding funds to the Tribe that may be included in a funding 
agreement.

Post-Award Disputes


Sec.  29.912  What is a post-award dispute?

    A post-award dispute is a claim that arises under the Contract 
Disputes Act of 1978 (CDA), 41 U.S.C. 7101-7109. Such disputes arise 
once a compact or funding agreement is executed. Post-award disputes 
include:
    (a) Disputed interpretation of a provision of an executed compact 
or funding agreement;
    (b) Disallowance of costs under a funding agreement;

[[Page 33523]]

    (c) Suspension of payments under a funding agreement;
    (d) Allocation, distribution, or reduction of funds when a dispute 
arises between a consortium and a withdrawing Tribe;
    (e) Failure to comply with the terms of a funding agreement; and
    (f) Any other claim arising out of a compact or funding agreement.


Sec.  29.913  What is a claim under the Contract Disputes Act?

    A Contract Disputes Act claim is a written demand filed by a Tribe 
that seeks one or more of the following:
    (a) Payment of a specific sum of money under the funding agreement;
    (b) Adjustment or interpretation of terms in a funding agreement;
    (c) Payment that is disputed as to liability or amount;
    (d) Payment that the Department has not acted upon in a reasonable 
time following a demand for payment; or
    (e) Any other claim relating to the terms of the compact or funding 
agreement.


Sec.  29.914  How does a Tribe file a Contract Disputes Act claim?

    A Tribe must submit its claim in writing to the Self-Governance 
Official, who serves as the Department's awarding official for the 
purposes of Contract Disputes Act claims. The Self-Governance Official 
will document the receipt of the claim.


Sec.  29.915  Must a Tribe certify a Contract Disputes Act claim?

    A Tribe must certify a claim for more than $100,000 in accordance 
with the Contract Disputes Act. The Tribe must certify that:
    (a) The claim is made in good faith;
    (b) Documents or data supporting the claim are accurate and 
complete to the best of the Tribe's knowledge and belief;
    (c) The amount claimed accurately reflects the amount the Tribe 
believes is owed; and
    (d) The individual making the certification is authorized to make 
the claim on behalf of the Tribe and bind the Tribe with respect to the 
claim.


Sec.  29.916  Who bears the burden of proof in a Contract Disputes Act 
claim?

    The Tribe bears the burden of proof to demonstrate, by a 
preponderance of the evidence, the validity of a Contract Disputes Act 
claim.


Sec.  29.917  What is the Department's role in processing a Contract 
Disputes Act claim?

    (a) The Department must document the date that the Self-Governance 
Official received the claim.
    (b) The Self-Governance Official must provide the Tribe with an 
opportunity to resolve the claim informally with assistance from 
Department officials who have not substantially participated in the 
disputed matter. Such informal mechanisms may include participating in 
dispute resolution pursuant to Sec.  29.901.
    (c) If the Department and the Tribe do not agree on a settlement, 
the Self-Governance Official must issue a written decision on the claim 
by any method that provides a receipt.


Sec.  29.918  What information must the Self-Governance Official's 
decision contain?

    (a) The Self-Governance Official's decision must:
    (1) Describe the claim or dispute;
    (2) Reference the relevant terms of the compact or funding 
agreement;
    (3) Set forth the factual areas of agreement and disagreement; and
    (4) Set forth the Self-Governance Official's decision, and provide 
the facts and reasons that support the decision.
    (b) The Self-Governance Official must provide the decision to the 
Tribe and describe the Tribe's appeal rights in language similar to the 
following:
    This is a final decision. You may appeal this decision to the 
Civilian Board of Contract Appeals (CBCA), 1800 F Street NW, 
Washington, DC 20245. If you decide to appeal, you must provide written 
notice within 90 days of receipt of this decision to the CBCA and 
provide a copy to the Self-Governance Official. The notice must 
indicate that an appeal is intended, and refer to the decision and 
contract number. Instead of appealing to the CBCA, you may bring an 
action in the U.S. Court of Federal Claims or U.S. District Courts 
within 12 months of the date you receive this notice. If you do not 
appeal a decision within one of these time periods, it is not subject 
to further review.


Sec.  29.919  When must the Self-Governance Official issue a written 
decision on the claim?

    (a) If the claim is for less than $100,000, the Tribe may request 
that the Self-Governance Official issue a decision within 60 days of 
the date of receipt of the claim. If the Tribe does not request that 
the Self-Governance Official issue a decision within 60 days of the 
date of receipt of the claim, the Self-Governance Official must issue a 
decision within a reasonable time, which will depend on the size and 
complexity of the claim and the adequacy of the information provided in 
support of the claim. The Tribe must request a decision by the Self-
Governance Official before seeking an appeal in accordance with 
paragraph (c) of this section.
    (b) If the claim is for more than $100,000, the Self-Governance 
Official must issue a decision within 60 days of the date of receipt of 
the claim or notify the Tribe of the time within which the Self-
Governance Official will issue a decision. Such time frame must be 
reasonable, which will depend on the size and complexity of the claim 
and the adequacy of the information provided in support of the claim.
    (c) If the Self-Governance Official does not issue a decision 
within these time frames, a Tribe may treat the delay as a denial of 
its claim and appeal the decision in accordance with Sec.  29.921.


Sec.  29.920  Is a decision of the Self-Governance Official final?

    (a) A decision of the Self-Governance Official is final and 
conclusive, and not subject to review, unless the Tribe timely 
commences an appeal or suit pursuant to the Contract Disputes Act.
    (b) Once the Self-Governance Official issues a decision, the 
decision may not be changed except by agreement of the Department and 
the Tribe or under the following limited circumstances:
    (1) Evidence is discovered that could not have been discovered 
through due diligence before the Self-Governance Official issued the 
decision;
    (2) The Self-Governance Official learns that there has been fraud, 
misrepresentation, or other misconduct by a party;
    (3) The decision is beyond the scope of the Self-Governance 
Official's authority;
    (4) The claim has been satisfied, released, or discharged; or
    (5) Any other reason justifying relief from the decision.
    (c) If the Self-Governance Official withdraws a decision and issues 
a new decision, the Tribe may appeal the new decision in accordance 
with Sec.  29.921. If the Self-Governance Official does not issue a new 
decision, the Tribe may proceed under Sec.  29.919(c).
    (d) If a Tribe files an appeal or suit, the Self-Governance 
Official may modify or withdraw the final decision before a decision is 
issued in the pending appeal.


Sec.  29.921  Where may the Tribe appeal the Self-Governance Official's 
decision on a Contract Disputes Act claim?

    The Tribe may appeal the Self-Governance Official's decision on a 
Contract Disputes Act claim in one of the following forums:
    (a) The Civilian Board of Contract Appeals. The appeal must be in 
accordance with the Board's implementing regulations in 48 CFR part 
6101;

[[Page 33524]]

    (b) The U.S. Court of Federal Claims; or
    (c) The U.S. District Courts.


Sec.  29.922  May a party appeal a Civilian Board of Contract Appeals 
decision?

    A party may appeal a decision of the Civilian Board of Contract 
Appeals within 120 days to the U.S. Court of Appeals for the Federal 
Circuit.


Sec.  29.923  What is the effect of a pending appeal?

    (a) The Tribe must continue performance in accordance with the 
compact and funding agreement during the appeal of any claims to the 
same extent the Tribe would have performed had there been no dispute.
    (b) A pending dispute will not affect or prevent the negotiation or 
award of any subsequent compact or funding agreement between the 
Department and the Tribe.

Termination Appeals


Sec.  29.924  May a Tribe appeal the Department's decision to terminate 
a compact or funding agreement?

    A Tribe may appeal the Department's decision to terminate a compact 
or funding agreement to the Department's Office of Hearings.


Sec.  29.925  Is a Tribe entitled to a hearing on the record?

    (a) The Department must provide a Tribe with a hearing on the 
record for a non-immediate termination prior to or in lieu of the 
corrective action period set forth in the termination notice as 
described in Sec.  29.802.
    (b) The Department must provide a Tribe with a hearing on the 
record for an immediate termination. The Department and the Tribe will 
work together to determine a mutually acceptable time and place for the 
hearing. The hearing on the record must commence no later than 10 days 
after the date of such termination or a later date upon mutual 
agreement. If feasible, the hearing may occur virtually or 
telephonically. If requested by the Tribe, the Department may arrange 
for an in-person hearing.
    (c) A Tribe may decline a hearing in writing.


Sec.  29.926  What rights do the Department and a Tribe have in an 
appeal of a termination decision?

    (a) During the appeal of a termination decision, the Department and 
a Tribe have the right to:
    (1) A designated representative;
    (2) Present the testimony of witnesses, orally or in writing, who 
have knowledge of the relevant issues;
    (3) Cross-examine witnesses;
    (4) Introduce oral or documentary evidence, or both;
    (5) Receive, upon request and payment of reasonable costs, a copy 
of the transcript of the hearing, and copies of all documentary 
evidence that is introduced at the hearing;
    (6) Take depositions, request the production of documents, serve 
interrogatories on other parties, and request admissions; and
    (7) Any other procedural rights established under the 
Administrative Procedure Act.
    (b) An administrative law judge assigned by the chief 
administrative law judge of the Department's Office of Hearings must 
conduct hearings on the record for a termination decision unless the 
Tribe waives the hearing.


Sec.  29.927  What notice and service must the Department and the Tribe 
provide?

    (a) The Department and the Tribe must file each document with U.S. 
Department of Transportation, Docket Operations, M-30, West Building 
Ground Floor, Room W12-140, 1200 New Jersey Avenue SE, Washington, DC 
20590.
    (b) The Department and the Tribe must serve copies of each document 
with:
    (1) The Self-Governance Official; and
    (2) The authorized Tribal representative.


Sec.  29.928  What is the Department's burden of proof for a 
termination decision?

    The Department must demonstrate by clear and convincing evidence 
the validity of the grounds for the termination.


Sec.  29.929  How will the Department communicate its decision 
following a hearing on a termination decision?

    After the hearing or any post-hearing briefing schedule established 
by the Department's Office of Hearings, the administrative law judge 
must send the Department and the Tribe the decision by any method that 
provides a receipt. The decision must contain the administrative law 
judge's findings of fact and conclusions of law on all the issues.


Sec.  29.930  May the Department or the Tribe appeal the decision of an 
administrative law judge?

    (a) The decision of an administrative law judge is a recommended 
decision that the Department or the Tribe may appeal to the Secretary.
    (b) The decision of an administrative law judge becomes the final 
decision of the Secretary 60 days after it is served on the Department 
and the Tribe unless a petition for review is filed in accordance with 
Sec.  29.931. The decision of the Secretary is a final agency action 
that the Tribe may appeal to the U.S. District Courts.


Sec.  29.931  How can the Department or the Tribe obtain review of the 
recommended decision of an administrative law judge?

    (a) Time for filing. Within 30 days after service of any 
recommended decision of an administrative law judge, the Department or 
the Tribe may file a petition for review of the recommended decision 
with the Secretary. A copy must be served on the opposing party.
    (b) Service. Each document filed with or by the Secretary must be 
accompanied by a certificate of service specifying the manner in which 
and the date on which service was made with the Secretary and the 
opposing party.
    (c) Form and content of objections. The petition for review must 
set out separately and in detail each objection to the recommended 
decision, and the basis and reasons supporting such objection. The 
petition for review must state whether such objections are related to 
alleged errors of law or fact. The petition for review must also 
identify the relief requested.
    (d) Introduction of new information on review. If the Department or 
the Tribe fail to object to any errors in the recommended decision, the 
party waives the right to allege such error in subsequent proceedings. 
The petition for review may not set forth for the first time on brief 
to the Secretary any matters of law or fact that were not argued before 
the administrative law judge.
    (e) Reply briefs. An opposing party has 30 days from the date of 
service of the petition for review to file its reply brief.
    (f) Failure to file timely and adequate objections. Late filed 
petitions for review are not permitted, and incomplete objections will 
not be reviewed.


Sec.  29.932  May a Tribe appeal the decision of the Secretary?

    The decision of the Secretary on the merits of a petition for 
review constitutes final agency action. A Tribe may appeal the decision 
to the U.S. District Courts.


Sec.  29.933  What is the effect of an appeal on negotiations?

    A pending appeal of a termination decision will not affect or 
prevent the award of another funding agreement or TTP Agreement.

[[Page 33525]]


However, if the Department terminates all or a portion of a compact or 
funding agreement due to a finding of gross mismanagement or imminent 
jeopardy that is sustained on appeal, and the Tribe has not corrected 
the adverse findings, the Department has discretion to reject a 
proposal to award the Tribe a new funding agreement or provide new 
funds in an existing funding agreement.

[FR Doc. 2020-11618 Filed 5-29-20; 8:45 am]
BILLING CODE 4910-9X-P