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                                                       Calendar No. 804
108th Congress                                                   Report
                                 SENATE
 2d Session                                                     108-413

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



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

                                _______
                                

               November 16, 2004.--Ordered to be printed

                                _______
                                

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

                              R E P O R T

                         [To accompany S. 1715]

    The Committee on Indian Affairs, to which was referred the 
bill (S. 1715) to amend the Indian Self-Determination and 
Education Assistance Act to provide for further self-governance 
by Indian tribes, having considered the same, reports favorably 
thereon with amendments and recommends that the bill as amended 
do pass.

                                Purpose

    The primary purpose of S. 1715, the Department of the 
Interior Tribal Self-Governance Act of 2004, is to clarify and 
expand the provisions of the Indian Self-Determination and 
Education Assistance Act of 1975, Pub. L. 93-638 (the 
``ISDEAA''), applicable to the Department of the Interior 
(``DoI''). This legislation is necessary to make amendments to 
the ISDEAA so that participating Indian tribes may better 
govern themselves and serve their members.

                               Background


A. History of Tribal Self-Governance

    In 1970 President Nixon issued his famous ``Special Message 
to Congress on Indian Affairs'', July 8, 1970, and laid out the 
rationales for a new, more enlightened Federal Indian policy: 
Indian Self-Determination. He stated in part that:

          This, then, must be the goal of any new national 
        policy toward the Indian people: to strengthen the 
        Indian's sense of autonomy without threatening his 
        sense of community. We must assure the Indian that he 
        can assume control of his own life without being 
        separated involuntarily from the tribal group. And we 
        must make it clear that Indians can become independent 
        of Federal control without being cut off from Federal 
        concern and Federal support. * * *

          In my judgment, it should be up to the Indian tribe 
        to determine whether it is willing and able to assume 
        administrative responsibility for a service program 
        which is presently administered by a Federal agency.

    With the passage of the ISDEAA in 1975, Congress reaffirmed 
President Nixon's policy shift and began the transition from 
the Federal domination of programs and services for the benefit 
of Indians and for the first time authorized the Indian tribes 
to design and implement these programs and services in a manner 
that is more responsive to the specific needs of their members. 
In the 30 years since the enactment of the ISDEAA, every 
succeeding Congress and Administration have sought to 
strengthen and expand Indian Self Determination.
    In 1984 Congress significantly strengthened the ISDEAA when 
it enacted Pub. L. 98-250, which provided, in part, for an 
exemption from the Federal Grant and Cooperative Agreement Act 
of 1977, Pub. L. 95-224, for contracts and cooperative 
agreements under the ISDEAA. Significant amendments were made 
again in 1988, when Congress enacted Pub. L. 100-472, which 
amended the ISDEAA and created a Self-Governance Demonstration 
Project within the Department of Health and Human Services.
    In 1994 Congress enacted the Tribal Self-Governance Act, 
Pub. L. 103-413, building on the success of the original ISDEAA 
and made Self-Governance compacts permanent for the Department 
of Interior. The Tribal Self-Governance Act provides compacting 
tribes the flexibility to re-design programs and re-allocate 
funds among the various DoI programs they choose to operate.
    The hallmarks of Self Governance are tribal-specific 
program design, implementation flexibility and expansion of 
services by compacting tribes and the Act has enabled these 
tribes to achieve significant benefits in terms of service 
quality enhancement and development of administrative acumen.

B. S. 1715, The Department of Interior Tribal Self Governance Act of 
        2004

    The Department of Interior Tribal Self Governance Act of 
2004, (S. 1715) will expand the provisions of the Tribal Self 
Governance Act that are applicable to the DoI. The legislation 
is integral to the steady progress and success of Self 
Governance for Indian tribes, as there are many Bureau of 
Indian Affairs (``BIA'') and non-BIA programs within the DoI 
that affect the ability of Indian tribes to better serve their 
members.
    It is the Committee's intention in amending the ISDEAA 
through S. 1715 to address identified statutory obstacles 
hindering the efforts of Self Governance tribes seeking to 
compact programs and services provided by agencies other than 
the BIA. It is also the Committee's intention to ensure that 
the provisions of Title IV--including construction and 
transportation projects--are comparable and consistent with the 
provisions of Title V, as amended by Pub. L. 106-260.
    The process of developing amendments to Title IV of the 
ISDEAA began shortly after passage of Pub. L. 106-260 in 2000. 
For over three years, a team of tribal leaders and technical 
advisors developed and refined proposed amendments. The team 
consulted with the BIA to the maximum extent possible to derive 
solutions to existing problems acceptable to the agency, and 
consistent with that agency's statutory and trust 
responsibilities to Indian tribes. The product of these 
discussions and consultations were presented to the Committee 
for consideration to resolve existing statutory problems within 
Title IV of the ISDEAA.
    On October 3, 2003, Senator Campbell, for himself and for 
Senator Inouye, introduced S. 1715 to address the identified 
statutory problems in implementing Title IV of the ISDEAA. The 
bill, as introduced, reflected in substantial part the multi-
year consultations between the BIA and tribes with regard to 
ways to improve the ISDEAA as it applies to the DoI.
    On May 12, 2004, the Committee held a legislative hearing 
on S. 1715. Witnesses at the hearing included the Assistant 
Secretary-Indian Affairs, on behalf of the DoI, various Indian 
tribes and tribal organizations, and a recognized Indian Tribal 
Self Governance expert.
    All of the witnesses concurred that the basic purposes of 
S. 1715 were desirable. The Assistant Secretary-Indian Affairs 
indicated specific concerns of the DoI regarding re-assumption 
standards, the definition of ``inherent Federal function'', and 
limits placed on the Secretary's discretion to decide on the 
eligibility of programs. These concerns prevented the DoI from 
supporting the bill at the time of the hearing. The tribal 
witnesses were uniformly supportive of the bill as introduced.
    On June 16, at a business meeting duly noticed, the 
Committee adopted amendments to S. 1715, and, as amended, 
reported the bill to the full Senate, with a favorable 
recommendation that the bill do pass.

                      Summary of Major Provisions


1. Overview

    The purpose in amending Pub. L. 93-638 through S. 1715 is 
to reaffirm the original intent of the ISDEAA, and strengthen 
and expand the Federal policy of Tribal Self Governance. S. 
1715 extends the benefits realized by tribes and the Federal 
government from ``Indian-only'' programs and services to 
include non-BIA programs within the DoI for which, in the 
Secretary's discretion, a compacting or contracting tribe has a 
special geographic, historical or cultural interest. The bill 
also amends Title IV of the ISDEAA to make it more consistent 
with current Title V of the ISDEAA. It is the Committee's 
intent that S. 1715 be broadly interpreted to accomplish these 
purposes.

2. Definitions

    S. 1715 adds new definitions to the ISDEAA, such as 
``construction project,'' ``tribal share,'' ``inherent Federal 
functions,'' and ``gross mismanagement''.
    Construction Project: S. 1715 adds a new definition of 
``construction project'', which refers to a specific project or 
undertaking pursuant to a construction program compacted under 
Title IV.
    Gross Mismanagement: The term ``gross mismanagement'' is 
defined to provide a legal standard for re-assumption by the 
Secretary under new Section 407(b). ``Gross mismanagewment'' is 
defined as a significant, clear, and convincing violation of 
compact, funding agreement, regulatory or statutory 
requirements related to the transfer of Self-Governance funds 
to the tribe that results in a significant reduction of funds 
to the tribe's Self-Governance program.
    The Committee believes that the inclusion of a definition 
of ``gross mismanagement'' is an appropriate performance 
standard, and failure to meet that standard is appropriate 
ground for re-assumption. This definition is narrowly tailored 
and is intended by the Committee to require a high degree of 
proof by the Secretary. The Committee is well aware of tribal 
concerns and agrees that the inclusion of this performance 
standard must not be utilized by the Secretary in such a manner 
as to needlessly impose monitoring and auditing requirements 
that hinder the efficient operation of tribal programs. 
Requiring intrusive and over-burdensome monitoring and auditing 
activities are antithetical to the goals of Self-Governance and 
the intent of the Committee.
    Inherent Federal Function: S. 1715 adds a new definition 
for ``inherent Federal function'', and defines such to be 
functions which cannot be legally delegated to Indian tribes. 
``Inherent Federal functions'' are those which the Executive 
Branch cannot by law delegate to other branches of governments, 
or non-governmental entities. The Committee's definition is 
consistent with the Department of the Interior Solicitor's 
Memorandum of May 17, 1996 entitled ``Inherently Federal 
Functions under the Tribal Self-Governance Act of 1994.''
    At the May 12 hearing, the DoI requested that the Committee 
provide further clarification to the DoI and tribes by defining 
exactly which Federal functions are ``inherent'' and thus 
subject to the United States' ``trust responsibility.'' The 
Committee declined to further specify what DoI functions and 
responsibilities are inherent or trigger the trust 
responsibility and, instead, the Committee's definition is 
expressly intended to provide flexibility so as to allow the 
Secretary and the tribes to come to agreement on which 
functions are inherently Federal on a case-by-case basis.
    Tribal Share: S. 1715 adds a new definition for ``Tribal 
Share'', which are defined as residual funds ``that support 
secretarial included programs that are not required by the 
Secretary for the performance of inherent Federal functions.'' 
All funds appropriated under the Indian Self Determination and 
Education Assistance Act are either tribal shares or agency 
residual funds necessary for the performance of inherent 
Federal functions.

3. Removal of Annual Cap on New Tribes Eligible for Compacts

    One of the most important provisions in S. 1715 is 
contained in new section 403 which removes the annual cap on 
new tribes entering Self Governance compacts. Instead, any 
tribe meeting the eligibility requirements can participate. It 
the Committee's belief that this provision is both 
substantively and symbolically important as a benchmark in the 
Federal and tribal relationship. Removing artificial barriers, 
such as annual caps on the number of new tribes that can enter 
Self Governance compacts, is indicative of the joint maturation 
and mutual capacity of the DoI and tribes to enter into 
government-to-government agreements under the Act.

4. Funding Agreements Expanded

    Current section 403 is renumbered section 405 and is 
amended to expand authority for a tribe to include within 
annual funding agreements programs within or outside of the BIA 
or Office of Special Trustee that are provided for in the Act 
of April 16, 1934, the Johnson-O'Malley Act (25 U.S.C. 452, et 
seq.), the Act of November 2, 1921, the Snyder Act (25 U.S.C. 
13), or that the Secretary administers for the benefit of 
Indians with appropriations made to agencies other than the 
DoI, or are provided for the benefit of Indians because of 
their status as Indians.
    These programs specifically include all programs with 
respect to which Indians are the primary or significant 
beneficiaries. The Committee believes, and expressly intends, 
that the DoI should, in keeping with its trust 
responsibilities, give special consideration to including these 
programs within annual funding agreements.
    New section 405 also contains new authority whereby a 
funding agreement may, in the Secretary's discretion, contain 
programs within any agency of DoI that are of a special 
geographic, historical, or cultural significance to the Indian 
tribes. It is the specific intent of the Committee that the DoI 
give special consideration, appropriate under the 
circumstances, including the Secretary's trust responsibility 
and in keeping with the significance to the requesting tribe, 
to including these programs within annual funding agreements.
    These two provisions are central to S. 1715 and the 
continued advancement of Tribal Self Governance. The Committee 
believes that Federal programs of which Indians are the primary 
or significant beneficiary, substantially impact the daily 
lives of Indian tribes and Indian peoples, regardless of 
whether the word ``Indian'' appears in the program title or 
mission statement. Therefore, it is the intent of the Committee 
that these provisions be broadly and liberally interpreted to 
fully effectuate the policy of Tribal Self Governance. The 
Committee further strongly urges the Secretary to work with the 
tribes to develop funding agreements that fully implement this 
policy.
    To allay concerns that these new authorities given to the 
DoI may conflict with other statutory provisions, section 405 
contains a disclaimer which provides that nothing in the 
section is to be construed as overriding any express statutory 
requirement for competitive bidding, or as prohibiting the 
inclusion in a funding agreement of a program in which non-
Indians have an incidental or legally identifiable interest. In 
addition, certain programs are specifically ineligible for 
inclusion in funding agreements.
    The last provision in section 405 is intended to improve 
the effectiveness of existing and subsequent funding agreements 
by providing that funding agreements remain in full force and 
effect until a new funding agreement is executed, and further 
providing for the negotiation of multi-year funding agreements.

5. Expanded Accountability

    Section 406 provides for expanded accountability 
provisions, including development of measures for conflict of 
interest, greater specificity in application of the Federal 
Single Agency Audit Act, application of cost principles, and 
maintenance of more detailed record-keeping systems. It is the 
Committee's belief that the extraordinary success of the Tribal 
Self Governance policy is largely based on principles of good 
governance, and that these provisions are in keeping with those 
principles. It is the intent of the Committee that these 
provisions be interpreted by the DoI in a manner that continues 
to encourage good governance practices by the tribes and the 
Federal government, and that will continue to foster a mutually 
respectful government to government relationship. The Committee 
specifically disavows any intent or interpretation of these 
provisions that would impose unnecessary bureaucratic burdens 
on Self Governance tribes.

6. Duties of the Secretary Specified

    Section 407 specifies the duties of the Secretary in more 
detail than under the current law. Included within these duties 
is an expansion of the procedures and standards for re-
assumption of a program by the Secretary. Important among those 
procedures, is the inclusion of new language providing tribes 
an opportunity to take corrective action and obviate the need 
for re-assumption.
    During the May 12, 2004, hearing, the Assistant Secretary-
Indian Affairs testified that the language of S. 1715, as 
introduced, for ``immediate re-assumption'' placed too high a 
hurdle for the DoI to fulfill its trust responsibilities. 
Therefore, at the business meeting at which S. 1715 was 
approved, an amendment was offered which provided that 
``immediate re-assumption'' is appropriate in cases of 
``imminent, substantial and irreparable harm'' to a physical 
trust asset, natural resource or public health and safety. The 
DoI also indicated at the May 12, 2004, hearing that such 
amended language would satisfy the DoI's concerns regarding its 
trust responsibilities.
    Section 407 also contains new provisions detailing 
procedures for resolution of non-agreement between a tribe and 
the Secretary on compacts or funding agreements. The grounds 
for denial of a compact or funding agreement are strictly 
circumscribed to those listed in paragraph (c)(4) of section 
407. Additionally, due to the significant impact of these 
programs on the tribal communities served, strict time lines 
are provided so that decisions can be made in a timely manner.
    The role of the Secretary is central to the successful 
implementation of the Tribal Self Governance policy. It is the 
Committee's intent that all of the provisions of section 407 be 
interpreted liberally by the Secretary, consistent with the 
trust responsibility, to most effectively implement the overall 
purposes of the Tribal Self Governance policy.

7. Compact Requirements Detailed

    Construction projects are currently addressed in Section 
403(e). New section 408 provides significantly greater detail 
than the current provisions, as to the requirements of compacts 
involving construction programs, and the constructions projects 
developed pursuant to those programs. This section authorizes 
construction programs, and the associated projects, to be 
compacted similar to any other program or service eligible 
under Title IV.
    Section 408 elaborates and clarifies the responsibilities 
and procedures for tribes undertaking construction projects 
under Title IV. Specifically, provision is made for the 
Secretary and a tribe to negotiate in detail the duties of the 
tribe with regard to construction projects and the standards 
and laws applicable to construction projects and agreements.
    As part of the tribal construction program, Federal 
responsibilities under the National Environmental Protection 
Act, 42 U.S.C. 4321 et seq., and the National Historic 
Preservation Act, 16 U.S.C. Sec. 470 et seq., except for 
inherent Federal functions, are eligible for inclusion in 
annual funding agreements.

8. Payment Procedures

    New section 409 describes in more detail the payment 
procedures for funding a compact or funding agreement, such as 
new time limitations on apportionment of funds to tribes. 
Limitations are also placed on the Secretary for transferring, 
withholding, and reducing payment of funds, and for payment of 
Federal functions.
    Section 409 provides additional authority for the Secretary 
to approve multi-year funding agreements. It also provides that 
tribes may carry over unexpended funds into subsequent fiscal 
years, without diminishing the entitlement for funding in that 
or any subsequent year.
    It is the Committee's intent that all of the provisions of 
section 409 be interpreted liberally by the Secretary, 
consistent with the trust responsibility, to most effectively 
implement the overall purposes of the Tribal Self Governance 
policy.

9. Amendments Made to S. 1715 as Introduced

    During the business meeting at which S. 1715 was approved 
by the Committee, several amendments to the bill as introduced 
were adopted. The primary amendments are as follows:
    1. Section 1, setting forth the name of the bill as 
enacted, ``the Department of Interior Tribal Self Governance 
Act of 2003'', was amended to read ``the Department of Interior 
Tribal Self-Governance Act of 2004''. Further amendments were 
made throughout the bill to conform to this change.
    2. Subsection 415(c) provides for a report to be submitted 
to Congress on ``January 1, 2004''. This date was amended to 
read ``January 1, 2005''. Similarly, subsection 415(d) provides 
for the development of a report by the Secretary not later than 
``January 1, 2004''. That date was amended to read ``January 1, 
2005''.
    3. Subparagraph (3) of subsection 407(b), dealing with 
standards for ``immediate re-assumption'' of programs or 
services by the Secretary, originally required that the 
Secretary find both ``imminent and substantial jeopardy'' and 
``irreparable harm'' before ``immediate re-assumption''.
    In the Secretary's opinion, this drafting error would not 
have afforded the Department the ability to fulfill its trust 
responsibility to protect tribal trust assets or the public 
health and safety. The provision was amended to provide that 
``immediate re-assumption'' is appropriate in cases of 
``imminent, substantial and irreparable harm'' to a physical 
trust asset, natural resource or public health and safety.

                          Legislative History

    S. 1715 was introduced on October 3, 2003, by Senator 
Campbell for himself and for Senator Inouye, and was referred 
to the Committee on Indian Affairs.
    On May 12, 2004, the Committee held a legislative hearing 
on S. 1715. Witnesses at the hearing included the Assistant 
Secretary-Indian Affairs, on behalf of the DoI, various Indian 
tribes and tribal organizations, and a recognized Indian Tribal 
Self Governance expert. All of the tribes and tribal 
organizations, and the Self Governance expert testified 
strongly in favor of S. 1715. The DoI expressed some minor 
concerns with the bill, which prevented it from fully 
supporting the bill at that time. These concerns were partially 
addressed in amendments to the bill.
    On June 16, at a business meeting duly noticed, the 
Committee adopted amendments to S. 1715, and, as amended, 
passed the bill for consideration by the full Senate, with a 
favorable recommendation that the Senate pass the bill.

                      Section-by-Section Analysis


Sec. 401. Definitions

     Definitions are added, such as ``construction project,'' 
``tribal share,'' ``inherent Federal functions,'' and ``gross 
mismanagement''.

Sec. 402. Establishment

    Authorizes the Secretary of the Interior (DoI) to establish 
a ``Tribal Self Governance Program''.

Sec. 403. Selection of Participating Indian Tribes

    Section 403 expands the number of tribes eligible to 
participate in self-governance. Tribal withdrawal procedures 
from a consortium have been added and tribes are made eligible 
for planning grants.

Sec. 404. Compacts

    Section 404 requires the Secretary to negotiate and enter 
compacts with participating tribes, and authorizes tribes with 
existing compacts to retain the current compact, in whole or in 
part, or to negotiate a new compact.

Sec. 405. Funding Agreements

    Section 405 expands the DoI programs which tribes may 
include in Funding Agreements (FA) to encompass non-BIA 
programs, services, functions and activities. The new authority 
to compact does not override any statutory requirement for 
competitive bidding. Each FA specifies the services, functions, 
and responsibilities of each of the parties. Each FA may, at 
the tribe's option, provide for a stable budget specifying 
recurring funds. The section also provides tribes with existing 
FAs more options with subsequent FAs, and allows for the 
negotiation of multi-year FAs.

Sec. 406. General Provisions

    This section would require compacting tribes to have 
measures in place to avoid conflicts of interest, to have audit 
reports and makes it easier for tribes to consolidate or 
redesign programs and reallocate funds by eliminating the need 
for joint agreement with Secretary for such reconfiguration. 
Tribal records also would not be subject to the Freedom of 
Information Act or the Administrative Procedures Act.

Sec. 407. Provisions Related to the Secretary

    Section 407 would (1) provide tribes with notice and 
opportunity to correct problems before the Secretary can 
reassume a program, (2) limit the grounds on which the 
Secretary can reject a tribe's final offer, (3) place the 
burden of proof on the Secretary to show the validity of 
rejecting an offer or re-assumption of a program, and (4) 
require liberal interpretation of compacts and FAs for the 
benefit of tribes.

Sec. 408. Construction Programs and Projects

    This section clarifies responsibilities and procedures for 
tribes undertaking construction projects under Title IV, 
including compliance with building codes, reporting 
requirements, prevailing wage laws, the National Environmental 
Policy Act, and other applicable federal laws.

Sec. 409. Payment

    Section 409 clarifies a number of payment issues, 
authorizes multi-year FAs, and allows tribes to carry over 
unexpended funds without reducing their entitlement in the next 
year.

Sec. 410. Civil Actions

    This section includes FAs within the definition of 
``contract'', and provides that tribes do not have to obtain 
Secretarial approval to hire attorneys or other professionals.

Sec. 411. Facilitation

    This section requires the Secretary to interpret Federal 
laws in a manner that facilitates inclusion of programs and 
implementation of FAs. It also provides for waivers of 
regulations, unless such a waiver would be prohibited by 
statute.

Sec. 412. Disclaimers

    Section 412 provides that nothing in Title IV will be 
construed to authorize the Secretary to enter into a FA with 
respect to inherent Federal functions, if a statute prohibits 
participation in a program by a non-federal entity, or 
negatively impacts another tribe.

Sec. 413. Application of Other Sections of the Act

    Section 413 would provide tribes with the option of 
incorporating into Title IV compacts any provisions of Title I 
or V.

Sec. 414. Budget Request

    This section would revise the budget request process so 
that the President identifies all funds necessary to fully fund 
FAs authorized by Title IV, and Secretary must ensure the 
request includes funds for planning and negotiation grants and 
identified shortfalls.

Sec. 415. Reports

    This section makes more specific the required contents of 
the Secretary's annual Title IV report, including unmet needs, 
methodologies and amount spent on inherent federal functions, 
and requires an annual report on non-BIA programs, services, 
and funding agreements eligible for compacting. Reporting would 
occur with tribal consultation.

Sec. 416. Regulations

    This section repeals the current 25 C.F.R. Part 1000, 
requires publication of proposed rules in Federal Register, and 
specifies negotiated rule-making to be conducted by Federal and 
tribal representatives. The Office of Self-Governance shall be 
lead agency for DoI.

Sec. 417. Effect of Circulars, Policies, Manuals, Guidances, and Rules

    This section provides that, unless expressly agreed to by 
the tribe, it is not bound by any internal agency policies, 
except for the eligibility provision of Sec. 105(g) and 
regulations promulgated under Sec. 416.

Sec. 418. Appeals

    This section provides that on any appeal, the Secretary 
must show proof, by clear and convincing evidence, the validity 
of the grounds for a decision made and to show that decision is 
consistent with the policies of this title.

Sec. 419. Authorization of Appropriations

    This section authorizes appropriations to carry out this 
title.

            Committee Recommendation and Tabulation of Vote

    On June 16, 2004, the Committee, in an open business 
session, considered S. 1715 and approved amendments to the 
bill, and ordered S. 1715, as amended, favorably reported to 
the full Senate with a recommendation that the bill do pass.

                   Cost and Budgetary Considerations

    The cost estimate for S. 1715 as calculated by the 
Congressional Budget Office, is set forth below:

                                     U.S. Congress,
                               Congressional Budget Office,
                                 Washington, DC, November 10, 2004.
Hon. Ben Nighthorse Campbell,
Chairman, Committee on Indian Affairs,
U.S. Senate, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for S. 1715, the Department 
of the Interior Tribal Self-Governance Act of 2004.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Mike Waters.
            Sincerely,
                                      Elizabeth M. Robinson
                               (For Douglas Holtz-Eakin, Director).
    Enclosure.

S. 1715--Department of the Interior Tribal Self-Governance Act of 2004

    Summary: S. 1715 would amend title IV of the Indian Self-
Determination and Education Assistance Act (ISDEA) to make it 
more consistent with the provisions of title V of the act. 
Under ISDEA, tribes enter into agreements with federal agencies 
to administer federal programs that benefit the tribes. Title 
IV of ISDEA generally is concerned with agreements between 
tribes and agencies of the Department of the Interior, while 
title V of the act governs agreements between tribes and the 
Department of Health and Human Services. Significant provisions 
would:
           Remove the current program participation 
        limit of 50 new tribes per year;
           Expand self-governance funding agreements to 
        include non-BIA programs;
           Clarify the circumstances under which the 
        Secretary of the Interior may resume administration of 
        programs; and
           Establish a rulemaking committee of federal 
        and tribal representatives to replace existing 
        regulations implementing title IV.
    Based on information from the Bureau of Indian Affairs 
(BIA), CBO expects that implementing most provisions of the 
bill would have no significant budgetary impact. One provision, 
however, would require that funds retained by BIA for project 
management and oversight of highway construction projects that 
are carried out by tribes under self-governance agreements be 
used for project costs. Based on information from BIA, CBO 
estimates that the agency would need about $15 million a year 
to continue its management responsibilities for the highway 
program. Assuming appropriation of the necessary funds, CBO 
estimates that implementing the bill would cost $73 million 
over the 2005-2009 period. Enacting S. 1715 would not affect 
direct spending or revenues.
    S. 1715 contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates reform Act (UMRA) 
and would impose no costs on state, local, or tribal 
governments. Many of the changes made by this legislation would 
benefit tribes that participate in self-governance compacts 
with the Department of the Interior.
    Estimated cost to the Federal Government: The estimated 
budgetary impact of S. 1715 is shown in the following table. 
The costs of this legislation fall within budget function 450 
(community and regional development).

----------------------------------------------------------------------------------------------------------------
                                                                        By fiscal year, in millions of dollars
                                                                    --------------------------------------------
                                                                       2005     2006     2007     2008     2009
----------------------------------------------------------------------------------------------------------------
                                  CHANGES IN SPENDING SUBJECT TO APPROPRIATION

Program Management & Oversight for Indian Reservation Roads
 Program:
Estimated Authorization Level......................................       14       15       15       15       16
Estimated Outlays..................................................       13       15       15       15       16
----------------------------------------------------------------------------------------------------------------

    Basis of estimate: CBO estimates that implementing S. 1715 
would cost $73 million over the five-year period, subject to 
the appropriation of the necessary amounts. For this estimate, 
CBO assumes that S. 1715 will be enacted near the beginning of 
fiscal year 2005 and that outlays will follow historical 
patterns of similar programs.
    Annual appropriation acts for the Department of the 
Interior have authorized the BIA to withhold up to 6 percent of 
the amounts available for road construction under the Indian 
Reservation Roads (IRR) program for management and oversight 
activities. Section 408 of S. 1715 would authorize all funds 
available to the IRR program to be used for road projects. 
Based on information from BIA, CBO estimates that the agency 
would need about $15 million a year to continue its management 
and oversight responsibilities under the bill to fill the gap 
that would be created by devoting all IRR construction funds to 
road projects.
    Intergovernmental and private-section impact: S. 1715 
contains no intergovernmental or private-sector mandates as 
defined in UMRA and would impose no costs on state, local, or 
tribal governments. Many of the changes made by this 
legislation would benefit tribes that participate in self-
governance compacts with the Department of the Interior.
    Estimate prepared by: Federal Costs: Mike Waters. Impact on 
State, Local, and Tribal Governments: Marjorie Miller. Impact 
on the Private Sector: Karen Raupp.
    Estimate approved by: Peter H. Fontaine, Deputy Assistant 
Director for Budget Analysis.

               Regulatory and Paperwork Impact Statement

    Paragraph 11(b) of rule XXVI of the Standing Rules of the 
Senate requires that each report accompanying a bill to 
evaluate the regulatory and paperwork impact that would be 
incurred in carrying out the bill. The Committee has concluded 
that S. 1715 will reduce regulatory or paperwork requirements 
and impacts.

                        Executive Communications

    The Committee has received no communications from the 
Executive Branch regarding S. 1715.

                        Changes in Existing Law

    In compliance with subsection 12 of rule XXVI of the 
Standing Rules of the Senate, changes in existing law made by 
the bill S. 1715, as ordered reported, are shown as follows 
(existing law proposed to be omitted is enclosed in black 
brackets, new matter is printed in italic, existing law in 
which no change is proposed is shown in roman):

                           Public Law 93-638


 AN ACT To provide maximum Indian participation in the Government and 
 education of the Indian People; to provide for the full participation 
  of Indian Tribes in programs and services conducted by the Federal 
   Government for Indians and to encourage the development of human 
resources of the Indian people; to establish a program of assistance to 
 upgrade Indian education; to support the right of Indian citizens to 
     control their own education activities; and for other purposes

    Be it enacted by the Senate and House of Representatives of 
the United States in Congress assembled,

           *       *       *       *       *       *       *


                    TITLE IV--TRIBAL SELF-GOVERNANCE

SEC. 401. [ESTABLISHMENT] DEFINITIONS.

    [The Secretary of the Interior (hereinafter in this title 
referred to as the ``Secretary'') shall establish and carry out 
a program within the Department of the Interior to be known as 
Tribal Self-Governance (hereinafter in this title referred to 
as ``Self-Governance'') in accordance with this title.]
    In this title:
          (1) Compact.--The term ``compact'' means a compact 
        under section 404.
          (2) Construction program.--The term ``construction 
        program'' means a tribal undertaking to complete any or 
        all included programs relating to the administration, 
        planning, environmental determination, design, 
        construction, repair, improvement, or expansion of 
        roads, bridges, buildings, structures, systems, or 
        other facilities for purposes of housing, law 
        enforcement, detention, sanitation, water supply, 
        education, administration, community health, 
        irrigation, agriculture, conservation, flood control, 
        transportation, or port facilities or for other tribal 
        purposes.
          (3) Construction project.--The term ``construction 
        project'' means a tribal undertaking that constructs 1 
        or more roads, bridges, buildings, structures, systems, 
        or other facilities for purposes of housing, law 
        enforcement, detention, sanitation, water supply, 
        education, administration, community health, 
        irrigation, agriculture, conservation, flood control, 
        transportation, or port facilities or for other tribal 
        purposes.
          (4) Department.--The term ``Department'' means the 
        Department of the Interior.
          (5) Funding agreement.--The term ``funding 
        agreement'' means a funding agreement under section 
        405(b).
          (6) Gross mismanagement.--The term ``gross 
        mismanagement'' means a significant violation, shown by 
        clear and convincing evidence, of a compact, funding 
        agreement, or statutory or regulatory requirement 
        applicable to Federal funds transferred to an Indian 
        tribe by a compact or funding agreement that results in 
        a significant reduction of funds being made available 
        for the included programs assumed by an Indian tribe.
          (7) Included program.--The term ``included program'' 
        means a program that is eligible for inclusion under a 
        funding agreement (including any portion of such a 
        program and any function, service, or activity 
        performed under such a program).
          (8) Indian tribe.--The term ``Indian tribe'', in a 
        case in which an Indian tribe authorizes another Indian 
        tribe, an inter-tribal consortium, or a tribal 
        organization to plan for or carry out an included 
        program on its behalf in accordance with section 
        403(a)(3), includes the other authorized Indian tribe, 
        inter-tribal consortium, or tribal organization.
          (9) Inherent federal function.--The term ``inherent 
        Federal function'' means a Federal function that cannot 
        legally be delegated to an Indian tribe.
          (10) Inter-tribal consortium.--
                  (A) In general.--The term ``inter-tribal 
                consortium'' means a coalition of 2 more 
                separate Indian tribes that join together for 
                the purpose of participating in self-
                governance.
                  (B) Inclusion.--The term ``inter-tribal 
                organization'' includes a tribal organization.
          (11) Secretary.--The term ``Secretary'' means the 
        Secretary of the Interior.
          (12) Self-governance.--The term ``self-governance'' 
        means the program of self-governance established under 
        section 402.
          (13) Tribal share.--The term ``tribal share'' means 
        an Indian tribe's portion of all funds and resources 
        that support secretarial included programs that are not 
        required by the Secretary for the performance of 
        inherent Federal functions.

SEC. 402. [SELECTION OF PARTICIPATING INDIAN TRIBES] ESTABLISHMENT.

    [(a) Continuing Participation.--Each Indian tribe that is 
participating in the Tribal Self-Governance Demonstration 
Project at the Department of the Interior under title III on 
the date of enactment of this title shall thereafter 
participate in Self-Governance under this title and cease 
participation in the Tribal Self-Governance Demonstration 
Project under title III with respect to the Department of the 
Interior.
    [(b) Additional Participants.--
          [(1) In addition to those Indian tribes participating 
        in self-governance under subsection (a) of this 
        section, the Secretary, acting through the Director of 
        the Office of Self-Governance, may select up to 50 new 
        tribes per year from the applicant pool described in 
        subsection (c) of this section to participate in self-
        governance.
          [(2) If each tribe requests, two or more otherwise 
        eligible Indian tribes may be treated as a single 
        Indian tribe for the purpose of participating in Self-
        Governance as a consortium.
    [(c) Applicant Pool.--The qualified applicant pool for 
Self-Governance shall consist of each tribe that--
          [(1) successfully completes the planning phase 
        described in subsection (d);
          [(2) has requested participation in Self-Governance 
        by resolution or other official action by the tribal 
        governing body; and
          [(3) has demonstrated, for the previous three fiscal 
        years, financial stability and financial management 
        capability as evidenced by the tribe having no material 
        audit exceptions in the required annual audit of the 
        self-determination contracts of the tribe.
    [(d) Planning Phase.--Each Indian tribe seeking to begin 
participation in Self-Governance shall complete a planning 
phase in accordance with this subsection. The tribe shall be 
eligible for a grant to plan and negotiate participation in 
Self-Governance. The planning phase shall include--
          [(1) legal and budgetary research; and
          [(2) internal tribal government planning and 
        organizational preparation.]
The Secretary shall carry out a program within the Department 
to be known as the ``Tribal Self-Governance Program''.

SEC. 403. [FUNDING AGREEMENTS] SELECTION OF PARTICIPATING INDIAN 
                    TRIBES.

    [(a) Authorization.--The Secretary shall negotiate and 
enter into an annual written funding agreement with the 
governing body of each participating tribal government in a 
manner consistent with the Federal Government's laws and trust 
relationship to and responsibility for the Indian people.
    [(b) Contents.--Each funding agreement shall--
          [(1) authorize the tribe to plan, conduct, 
        consolidate, and administer programs, services, 
        functions, and activities, or portions thereof, 
        administered by the Department of the Interior through 
        the Bureau of Indian Affairs, without regard to the 
        agency or office of the Bureau of Indian Affairs within 
        which the program, service, function, and activity, or 
        portion thereof, is performed, including funding for 
        agency, area, and central office functions in 
        accordance with subsection (g)(3), and including any 
        program, service, function, and activity, or portion 
        thereof, administered under the authority of--
                  [(A) the Act of April 16, 1934 (25 U.S.C. 452 
                et seq.);
                  [(B) the Act of November 2, 1921 (25 U.S.C. 
                13); and
                  [(C) programs, services, functions, and 
                activities or portions thereof administered by 
                the Secretary of the Interior that are 
                otherwise available to Indian tribes or Indians 
                for which appropriations are made to agencies 
                other than the Department of the Interior;
          [(2) subject to such terms as may be negotiated, 
        authorize the tribe to plan, conduct, consolidate, and 
        administer programs, services, functions, and 
        activities, or portions thereof, administered by the 
        Department of the Interior, other than through the 
        Bureau of Indian Affairs, that are otherwise available 
        to Indian tribes or Indians, as identified in section 
        405(c), except that nothing in this subsection may be 
        construed to provide any tribe with a preference with 
        respect to the opportunity of the tribe to administer 
        programs, services, functions, and activities, or 
        portions thereof, unless such preference is otherwise 
        provided for by law;
          [(3) subject to the terms of the agreement, authorize 
        the tribe to redesign or consolidate programs, 
        services, functions, and activities, or portions 
        thereof, and reallocate funds for such programs, 
        services, functions, and activities, or portions 
        thereof, except that, with respect to the reallocation, 
        consolidation, and redesign of programs described in 
        paragraph (2), a joint agreement between the Secretary 
        and the tribe shall be required;
          [(4) prohibit the inclusion of funds provided--
                  [(A) pursuant to the Tribally Controlled 
                Community College Assistance Act of 1978 1 (25 
                U.S.C. 1801 et seq.);
                  [(B) for elementary and secondary schools 
                under the formula developed pursuant to section 
                1128 of the Education Amendments of 1978 (25 
                U.S.C. 2008); and
                  [(C) the Flathead Agency Irrigation Division 
                or the Flathead Agency Power Division, except 
                that nothing in this section shall affect the 
                contract authority of such divisions under 
                section 102;
          [(5) specify the services to be provided, the 
        functions to be performed, and the responsibilities of 
        the tribe and the Secretary pursuant to the agreement;
          [(6) authorize the tribe and the Secretary to 
        reallocate funds or modify budget allocations within 
        any year, and specify the procedures to be used;
          [(7) allow for retrocession of programs or portions 
        of programs pursuant to section 105(e);
          [(8) provide that, for the year for which, and to the 
        extent to which, funding is provided to a tribe under 
        this section, the tribe--
                  [(A) shall not be entitled to contract with 
                the Secretary for such funds under section 102, 
                except that such tribe shall be eligible for 
                new programs on the same basis as other tribes; 
                and
                  [(B) shall be responsible for the 
                administration of programs, services, 
                functions, and activities pursuant to 
                agreements entered into under this section; and
          [(9) prohibit the Secretary from waiving, modifying, 
        or diminishing in any way the trust responsibility of 
        the United States with respect to Indian tribes and 
        individual Indians that exists under treaties, 
        Executive orders, and other laws.
    [(c) Additional Activities.--Each funding agreement 
negotiated pursuant to subsections (a) and (b) may, in 
accordance to such additional terms as the parties deem 
appropriate, also include other programs, services, functions, 
and activities, or portions thereof, administered by the 
Secretary of the Interior which are of special geographic, 
historical, or cultural significance to the participating 
Indian tribe requesting a compact.
    [(d) Provisions Relating to the Secretary.--Funding 
agreements negotiated between the Secretary and an Indian tribe 
shall include provisions--
          [(1) to monitor the performance of trust functions by 
        the tribe through the annual trust evaluation, and
          [(2) for the Secretary to reassume a program, 
        service, function, or activity, or portions thereof, if 
        there is a finding of imminent jeopardy to a physical 
        trust asset, natural resources, or public health and 
        safety.
    [(e) Construction Projects.--(1) Regarding construction 
programs or projects, the Secretary and Indian tribes may 
negotiate for the inclusion of specific provisions of the 
Office of Federal Procurement and Policy Act and Federal 
acquisition regulations in any funding agreement entered into 
under this Act. Absent a negotiated agreement, such provisions 
and regulatory requirements shall not apply.
    [(2) In all construction projects performed pursuant to 
this title, the Secretary shall ensure that proper health and 
safety standards are provided for in the funding agreements.
    [(f) Submission for Review.--Not later than 90 days before 
the proposed effective date of an agreement entered into under 
this section, the Secretary shall submit a copy of such 
agreement to--
          [(1) each Indian tribe that is served by the Agency 
        that is serving the tribe that is a party to the 
        funding agreement;
          [(2) the Committee on Indian Affairs of the Senate; 
        and
          [(3) the Subcommittee on Native American Affairs of 
        the Committee on Natural Resources of the House of 
        Representatives.
    [(g) Payment.--(1) At the request of the governing body of 
the tribe and under the terms of an agreement entered into 
under this section, the Secretary shall provide funding to the 
tribe to carry out the agreement.
    [(2) The funding agreements authorized by this title and 
title III of this Act shall provide for advance payments to the 
tribes in the form of annual or semi-annual installments at the 
discretion of the tribes.
    [(3) Subject to paragraph (4) of this subsection and 
paragraphs (1) through (3) of subsection (b), the Secretary 
shall provide funds to the tribe under an agreement under this 
title for programs, services, functions, and activities, or 
portions thereof, in an amount equal to the amount that the 
tribe would have been eligible to receive under contracts and 
grants under this Act, including amounts for direct program and 
contract support costs and, in addition, any funds that are 
specifically or functionally related to the provision by the 
Secretary of services and benefits to the tribe or its members, 
without regard to the organization level within the Department 
where such functions are carried out.
    [(4) Funds for trust services to individual Indians shall 
be available under an agreement entered into under this section 
only to the extent that the same services that would have been 
provided by the Secretary are provided to individual Indians by 
the tribe.
    [(h) Civil Actions.--(1) Except as provided in paragraph 
(2), for the purposes of section 110, the term ``contract'' 
shall include agreements entered into under this title.
    [(2) For the period that an agreement entered into under 
this title is in effect, the provisions of section 2103 of the 
Revised Statutes of the United States (25 U.S.C. 81), and 
section 16 of the Act of June 18, 1934 (25 U.S.C. 476), shall 
not apply to attorney and other professional contracts by 
Indian tribal governments participating in Self Governance 
under this title.
    [(i) Facilitation.--(1) Except as otherwise provided by 
law, the Secretary shall interpret each Federal law and 
regulation in a manner that will facilitate--
          [(A) the inclusion of programs, services, functions, 
        and activities in the agreements entered into under 
        this section; and
          [(B) the implementation of agreements entered into 
        under this section.
    [(2)(A) A tribe may submit a written request for a waiver 
to the Secretary identifying the regulation sought to be waived 
and the basis for the request.
    [(B) Not later than 60 days after receipt by the Secretary 
of a written request by a tribe to waive application of a 
Federal regulation for an agreement entered into under this 
section, the Secretary shall either approve or deny the 
requested waiver in writing to the tribe. A denial may be made 
only upon a specific finding by the Secretary that identified 
language in the regulation may not be waived because such 
waiver is prohibited by Federal law. The Secretary's decision 
shall be final for the Department.
    [(j) Funds.--All funds provided under funding agreements 
entered into pursuant to this Act, and all funds provided under 
contracts or grants made pursuant to this Act, shall be treated 
as non-Federal funds for purposes of meeting matching 
requirements under any other Federal law.
    [(k) Disclaimer.--Nothing in this section is intended or 
shall be construed to expand or alter existing statutory 
authorities in the Secretary so as to authorize the Secretary 
to enter into any agreement under sections 403(b)(2) and 
405(c)(1) with respect to functions that are inherently Federal 
or where the statute establishing the existing program does not 
authorize the type of participation sought by the tribe: 
Provided, however an Indian tribe or tribes need not be 
identified in the authorizing statute in order for a program or 
element of a program to be included in a compact under section 
403(b)(2).
    [(l) Incorporate Self-Determination Provisions.--At the 
option of a participating tribe or tribes, any or all 
provisions of title I of this Act shall be made part of an 
agreement entered into under title III of this Act or this 
title. The Secretary is obligated to include such provisions at 
the option of the participating tribe or tribes. If such 
provision is incorporated it shall have the same force and 
effect as if set out in full in title III or this title.]
    [(a) In General.--
          [(1) Continuing participation.--An Indian tribe that 
        was participating in the Tribal Self-Governance 
        Demonstration Project at the Department under title III 
        on October 25, 1994, may elect to participate in self-
        governance under this title.
          (2) Additional participants.--
                  (A) In general.--In addition to Indian tribes 
                participating in self-governance under 
                paragraph (1), an Indian tribe that meets the 
                eligibility criteria specified in subsection 
                (b) shall be entitled to participate in self-
                governance.
                  (B) No limitation.--The Secretary shall not 
                limit the number of additional Indian tribes to 
                be selected each year from among Indian tribes 
                that are eligible under subsection 1(b).
          (3) Other authorized indian tribe, inter-tribal 
        consortium, or tribal government.--If an Indian tribe 
        authorizes another Indian tribe, an inter-tribal 
        consortium, or a tribal organization to plan for or 
        carry out an included program on its behalf under this 
        title, the authorized Indian tribe, inter-tribal 
        consortium, or tribal organization shall have the 
        rights and responsibilities of the authorizing Indian 
        tribe (except as otherwise provided in the authorizing 
        resolution).
          (4) Joint participation.--Two or more Indian tribes 
        that are not otherwise eligible under subsection (b) 
        may be treated as a single Indian tribe for the purpose 
        of participating in self-governance as a consortium 
        if--
                  (A) if each Indian tribe so requests; and
                  (B) the consortium itself is eligible under 
                subsection (b).
          (5) Tribal withdrawal from a consortium.--
                  (A) In general.--An Indian tribe that 
                withdraws from participation in an inter-tribal 
                consortium or tribal organization, in whole or 
                in part, shall be entitled to participate in 
                self-governance if the Indian tribe is eligible 
                under subsection (b).
                  (B) Effect of withdrawal.--If an Indian tribe 
                withdraws from participation in an inter-tribal 
                consortium or tribal organization, the Indian 
                tribe shall be entitled to its tribal share of 
                funds and resources supporting the included 
                programs that the Indian tribe will be carrying 
                out under the compact and funding agreement of 
                the Indian tribe.
                  (C) Participation in self-governance.--The 
                withdrawal of an Indian tribe from an inter-
                tribal consortium or tribal organization shall 
                not affect the eligibility of the inter-tribal 
                consortium or tribal organization to 
                participate in self-governance on behalf of 1 
                or more other Indian tribes.
                  (D) Withdrawal process.--
                          (i) In general.--An Indian tribe may 
                        fully or partially withdraw from a 
                        participating inter-tribal consortium 
                        or tribal organization its tribal share 
                        of any included program that is 
                        included in a compact or funding 
                        agreement.
                          (ii) Effective date.--
                                  (I) In general.--A withdrawal 
                                under clause (I) shall become 
                                effective on the date specified 
                                in the resolution that 
                                authorizes transfer to the 
                                participating tribal 
                                organization or inter-tribal 
                                consortium.
                                  (II) No specified date.--In 
                                the absence of a date specified 
                                in the resolution, the 
                                withdrawal shall become 
                                effective on--
                                          (aa) the earlier of--
                                                  (AA) 1 year 
                                                after the date 
                                                of submission 
                                                of the request; 
                                                or
                                                  (BB) the date 
                                                on which the 
                                                funding 
                                                agreement 
                                                expires; or
                                          (bb) such date as may 
                                        be agreed on by the 
                                        Secretary, the 
                                        withdrawing Indian 
                                        tribe, and the tribal 
                                        organization or inter-
                                        tribal consortium that 
                                        signed the compact or 
                                        funding agreement on 
                                        behalf of the 
                                        withdrawing Indian 
                                        tribe, inter-tribal 
                                        consortium, or tribal 
                                        organization.
                  (E) Distribution of funds.--If an Indian 
                tribe or tribal organization eligible to enter 
                into a self-determination contract under title 
                I or a compact or funding agreement under this 
                title fully or partially withdraws from a 
                participating inter-tribal consortium or tribal 
                organization, the withdrawing Indian tribe--
                          (i) may elect to enter into a self-
                        determination contract or compact, in 
                        which case--
                                  (I) the withdrawing Indian 
                                tribe or tribal organization 
                                shall be entitled to its tribal 
                                share of funds and resources 
                                supporting the included 
                                programs that the Indian tribe 
                                will be carrying out under its 
                                own self-determination contract 
                                or compact and funding 
                                agreement (calculated on the 
                                same basis as the funds were 
                                initially allocated to the 
                                funding agreement of the inter-
                                tribal consortium or tribal 
                                organization); and
                                  (II) the funds referred to in 
                                subclause (I) shall be 
                                withdrawn by the Secretary from 
                                the funding agreement of the 
                                inter-tribal consortium or 
                                tribal organization and 
                                transferred to the withdrawing 
                                Indian tribe, on the condition 
                                that sections 102 and 105(I), 
                                as appropriate, shall apply to 
                                the withdrawing Indian tribe; 
                                or
                          (ii) may elect not to enter into a 
                        self-determination contract or compact, 
                        in which case all funds not obligated 
                        by the inter-tribal consortium 
                        associated with the withdrawing Indian 
                        tribe's returned included programs, 
                        less closeout costs, shall be returned 
                        by the inter-tribal consortium to the 
                        Secretary for operation of the included 
                        programs included in the withdrawal.
                  (F) Return to mature contract status.--If an 
                Indian tribe elects to operate all or some 
                included programs carried out under a compact 
                or funding agreement under this title through a 
                self-determination contract under title I, at 
                the option of the Indian tribe, the resulting 
                self-determination contract shall be a mature 
                self-determination contract.
    (b) Eligibility.--To be eligible to participate in self-
governance, an Indian tribe shall--
          (1) complete the planning phase described in 
        subsection (c);
          (2) request participation in self-governance by 
        resolution or other official action by the tribal 
        governing body; and
          (3) demonstrate, for the 3 fiscal years preceding the 
        date on which the Indian tribe requests participation, 
        financial stability and financial management capability 
        as evidenced by the Indian tribe's having no 
        uncorrected significant and material audit exceptions 
        in the required annual audit of its self-determination 
        or self-governance agreements with any Federal agency.
    (c) Planning Phase.--
          (1) In general.--An Indian tribe seeking to 
        participate in self-governance shall complete a 
        planning phase in accordance with this subsection.
          (2) Activities.--The planning phase--
                  (A) shall be conducted to the satisfaction of 
                the Indian tribe; and
                  (B) shall include--
                          (i) legal and budgetary research; and
                          (ii) internal tribal government 
                        planning and organizational 
                        preparation.
    (d) Grants.--
          (1) In general.--Subject to the availability of 
        appropriations, an Indian tribe that meets the 
        requirements of paragraphs (2) and (3) of subsection 
        (b) shall be eligible for grants--
                  (A) to plan for participation in self-
                governance; and
                  (B) to negotiate the terms of participation 
                by the Indian tribe or tribal organization in 
                self-governance, as set forth in a compact and 
                a funding agreement.
          (2) Receipt of grant not required.--Receipt of a 
        grant under paragraph (1) shall not be a requirement of 
        participation in self-governance.

SEC. 404. [BUDGET REQUEST] COMPACTS.

    [The Secretary shall identify, in the annual budget request 
of the President to the Congress under section 1105 of title 
31, United States Code, any funds proposed to be included in 
agreements authorized under this title.]
    (a) In General.--The Secretary shall negotiate and enter 
into a written compact with an Indian tribe participating in 
self-governance in a manner that is consistent with the trust 
responsibility of the Federal Government, treaty obligations, 
and the government-to-government relationship between Indian 
tribes and the United States.
    (b) Contents.--A compact under subsection (a) shall--
          (1) specify the general terms of the government-to-
        government relationship between the Indian tribe and 
        the Secretary; and
          (2) include such terms as the parties intend shall 
        control year after year.
    (c) Amendment.--A compact under subsection (a) may be 
amended only by agreement of the parties.
    (d) Effective Date.--The effective date of a compact under 
subsection (a) shall be--
          (1) the date of the execution of the compact by the 
        Indian tribe; or
          (2) another date agreed to by the parties.
    (e) Duration.--A compact under subsection (a) shall remain 
in effect for so long as permitted by Federal law or until 
terminated by written agreement, retrocession, or reassumption.
    (f) Existing Compacts.--An Indian tribe participating in 
self-governance under this title, as in effect on the date of 
enactment of the Department of the Interior Tribal Self-
Governance Act of 2004, shall have the option at any time after 
that date--
          (1) to retain its negotiated compact (in whole or in 
        part) to the extent that the provisions of the compact 
        are not directly contrary to any express provision of 
        this title; or
          (2) to negotiate a new compact in a manner consistent 
        with this title.

SEC. 405. [REPORTS] FUNDING AGREEMNTS.

    [(a) Requirement.--The Secretary shall submit to Congress a 
written report on January 1 of each year following the date of 
enactment of this title regarding the administration of this 
title.
        [(b) Contents.--The report shall--
          [(1) identify the relative costs and benefits of 
        Self-Governance;
          [(2) identify, with particularity, all funds that are 
        specifically or functionally related to the provision 
        by the Secretary of services and benefits to Self-
        Governance tribes and their members;
          [(3) identify the funds transferred to each Self-
        Governance tribe and the corresponding reduction in the 
        Federal bureaucracy;
          [(4) include the separate views of the tribes; and 
        (5) include the funding formula for individual tribal 
        shares of Central Office funds, together with the 
        comments of affected Indian tribes, developed under 
        subsection (d).
    [(c) Report on Non-BIA Programs.--(1) In order to optimize 
opportunities for including non-Bureau of Indian Affairs 
programs, services, functions, and activities, or portions 
thereof, in agreements with tribes participating in Self-
Governance under this title, the Secretary shall
          [(A) review all programs, services, functions, and 
        activities, or portions thereof, administered by the 
        Department of the Interior, other than through the 
        Bureau of Indian Affairs, without regard to the agency 
        or office concerned; and
          [(B) not later than 90 days after the date of 
        enactment of this title, provide to the appropriate 
        committees of Congress a listing of all such programs, 
        services, functions, and activities, or portions 
        thereof, that the Secretary determines, with the 
        concurrence of tribes participating in Self-Governance 
        under this title, are eligible for inclusion in such 
        agreements at the request of a participating Indian 
        tribe.
    [(2) The Secretary shall establish programmatic targets, 
after consultation with tribes participating in Self-Governance 
under this title, to encourage bureaus of the Department to 
assure that a significant portion of such programs, services, 
functions, and activities are actually included in the 
agreements negotiated under section 403.
    [(3) The listing and targets under paragraphs (1) and (2) 
shall be published in the Federal Register and be made 
available to any Indian tribe participating in Self-Governance 
under this title. The list shall be published before January 1, 
1995, and annually thereafter by January 1 preceding the fiscal 
year in which the targets are to be met.
    [(4) Thereafter, the Secretary shall annually review and 
publish in the Federal Register, after consultation with tribes 
participating in Self-Governance under this title, a revised 
listing and programmatic targets.
    [(d) Report on Central Office Funds.--Within 90 days after 
the date of the enactment of this title, the Secretary shall, 
in consultation with Indian tribes, develop a funding formula 
to determine the individual tribal share of funds controlled by 
the Central Office of the Bureau of Indian ffairs for inclusion 
in the Self-Governance compacts. The Secretary shall include 
such formula in the annual report submitted to the Congress 
under subsection (b), together with the views of the affected 
Indian tribes.]
    (a) In General.--The Secretary shall negotiate and enter 
into a written funding agreement with the governing body of an 
Indian tribe in a manner that is consistent with the trust 
responsibility of the Federal Government, treaty obligations, 
and the government-to-government relationship between Indian 
tribes and the United States.
    (b) Included Programs.--
          (1) Bureau of indian affairs and office of special 
        trustee.--
                  (A) In general.--A funding agreement shall, 
                as determined by the Indian tribe, authorize 
                the Indian tribe to plan, conduct, consolidate, 
                administer, and receive full tribal share 
                funding for all programs carried out by the 
                Bureau of Indian Affairs and the Office of 
                Special Trustee, without regard to the agency 
                or office within which the program is performed 
                (including funding for agency, area, and 
                central office functions in accordance with 
                section 409(c)), that--
                          (i) are provided for in the Act of 
                        April 16, 1934 (25 U.S.C. 452 et seq.);
                          (ii) the Secretary administers for 
                        the benefit of Indians under the Act of 
                        November 2, 1921 (25 U.S.C. 13), or any 
                        subsequent Act;
                          (iii) the Secretary administers for 
                        the benefit of Indians with 
                        appropriations made to agencies other 
                        than the Department of the Interior; or
                          (iv) are provided for the benefit of 
                        Indians because of their status as 
                        Indians.
                  (B) Inclusions.--Programs described in 
                subparagraph (A) shall include all programs 
                with respect to which Indian tribes or Indians 
                are primary or significant beneficiaries.
          (2) Other agencies.--A funding agreement under 
        subsection (a) shall, as determined by the Indian 
        tribe, authorize the Indian tribe to plan, conduct, 
        consolidate, administer, and receive full tribal share 
        funding for all programs carried out by the Secretary 
        outside the Bureau of Indian Affairs, without regard to 
        the agency or office within which the program is 
        performed, including funding for agency, area, and 
        central office functions in accordance with subsection 
        409(c), to the extent that the included programs are 
        within the scope of paragraph (1).
          (3) Discretionary programs.--A funding agreement 
        under subsection (a) may, in accordance with such 
        additional terms as the parties consider to be 
        appropriate, include programs administered by the 
        Secretary, in addition to programs described in 
        paragraphs (1) and (2), that are of special 
        geographical, historical, or cultural significance to 
        the Indian tribe.
          (4) Competitive bidding.--Nothing in this section--
                  (A) supersedes any express statutory 
                requirement for competitive bidding; or
                  (B) prohibits the inclusion in a funding 
                agreement of a program in which non-Indians 
                have an incidental or legally identifiable 
                interest.
          (5) Excluded funding.--A funding agreement shall not 
        authorize an Indian tribe to plan, conduct, administer, 
        or receive tribal share funding under any program 
        that--
                  (A) is provided under the Tribally Controlled 
                Community College Assistance Act of 1978 (25 
                U.S.C. 1801 et seq.);
                  (B) is provided for elementary and secondary 
                schools under the formula developed under 
                section 1128 of the Education Amendments of 
                1978 (25 U.S.C. 2008); and
                  (C) is provided for the Flathead Agency 
                Irrigation Division or the Flathead Agency 
                Power Division (except that nothing in this 
                section affects the contract authority of the 
                Flathead Agency Irrigation Division or the 
                Flathead Agency Power Division under section 
                102).
          (6) Services, functions, and responsibilities.--A 
        funding agreement shall specify--
                  (A) the services to be provided under the 
                funding agreement;
                  (B) the functions to be performed under the 
                funding agreement; and
                  (C) the responsibilities of the Indian tribe 
                and the Secretary under the funding agreement.
          (7) Base budget.--A funding agreement shall, at the 
        option of the Indian tribe, provide for a stable base 
        budget specifying the recurring funds (including funds 
        available under section 106(a)) to be transferred to 
        the Indian tribe, for such period as the Indian tribe 
        specifies in the funding agreement, subject to annual 
        adjustment only to reflect changes in congressional 
        appropriations.
          (8) No waiver of trust responsibility.--A funding 
        agreement shall prohibit the Secretary from waiving, 
        modifying, or diminishing in any way the trust 
        responsibility of the United States with respect to 
        Indian tribes and individual Indians that exists under 
        treaties, Executive orders, court decisions, and other 
        laws.
    (c) Amendment.--The Secretary shall not revise, amend, or 
require additional terms in a new or subsequent funding 
agreement without the consent of the Indian tribe.
    (d) Effective Date.--A funding agreement shall become 
effective on the date specified in the funding agreement.
    (e) Existing and Subsequent Funding Agreements.--
          (1) Subsequent funding agreements.--Absent 
        notification from an Indian tribe that is withdrawing 
        or retroceding the operation of 1 or more included 
        programs identified in a funding agreement, or unless 
        otherwise agreed to by the parties to the funding 
        agreement--
                  (A) a funding agreement shall remain in 
                effect until a subsequent funding agreement is 
                executed; and
                  (B) the term of the subsequent funding 
                agreement shall be retroactive to the end of 
                the term of the preceding funding agreement.
          (2) Existing funding agreements.--An Indian tribe 
        that was participating in self-governance under this 
        title on the date of enactment of the Department of the 
        Interior Tribal Self-Governance Act of 2004 shall have 
        the option at any time after that date--
                  (A) to retain its existing funding agreement 
                (in whole or in part) to the extent that the 
                provisions of that funding agreement are not 
                directly contrary to any express provision of 
                this title; or
                  (B) to negotiate a new funding agreement in a 
                manner consistent with this title.
          (3) Multiyear funding agreements.--An Indian tribe 
        may, at the discretion of the Indian tribe, negotiate 
        with the Secretary for a funding agreement with a term 
        that exceeds 1 year.

SEC. 406. [DISCLAIMERS] GENERAL PROVISIONS.

    [(a) Other Services, Contracts, and Funds.--Nothing in this 
title shall be construed to limit or reduce in any way the 
services, contracts, or funds that any other Indian tribe or 
tribal organization is eligible to receive under section 102 or 
any other applicable Federal law.
    [(b) Federal Trust Responsibilities.--Nothing in this Act 
shall be construed to diminish the Federal trust responsibility 
to Indian tribes, individual Indians, or Indians with trust 
allotments.
    [(c) Application of Other Sections of Act.--All provisions 
of sections 1 6, 102(c), 104, 105(f), 110, and 111 of this Act 
shall apply to agreements provided under this title.]
    (a) Applicability.--An Indian tribe may include in any 
compact or funding agreement provisions that reflect the 
requirements of this title.
    (b) Conflicts of Interest.--An Indian tribe participating 
in self-governance shall ensure that internal measures are in 
place to address, pursuant to tribal law and procedures, 
conflicts of interest in the administration of included 
programs.
    (c) Audits.--
          (1) Single agency audit act.--Chapter 75 of title 31, 
        United States Code, shall apply to a funding agreement 
        under this title.
          (2) Cost principles.--An Indian tribe shall apply 
        cost principles under the applicable office of 
        Management and Budget circular, except as modified by--
                  (A) section 106 of this Act or any other 
                provision of law; or
                  (B) any exemptions to applicable Office of 
                Management and Budget circulars granted by the 
                Office of Management and Budget.
          (3) Federal claims.--Any claim by the Federal 
        Government against an Indian tribe relating to funds 
        received under a funding agreement based on an audit 
        under this subsection shall be subject to section 
        106(f).
    (d) Redesign and Consolidation.--An Indian tribe may 
redesign or consolidate included programs or reallocate funds 
for included programs in any manner that the Indian tribe 
determines to be in the best interest of the Indian community 
being served, so long as the redesign or consolidation does not 
have the effect of denying eligibility for services to 
population groups otherwise eligible to be served under 
applicable Federal law.
    (e) Retrocession.--
          (1) In general.--An Indian tribe may fully or 
        partially retrocede to the Secretary any included 
        program under a compact or funding agreement.
          (2) Effective date.--
                  (A) Agreement.--Unless the Indian tribe 
                rescinds a request for retrocession, the 
                retrocession shall become effective on the date 
                specified by the parties in the compact or 
                funding agreement.
                  (B) No agreement.--In the absence of such a 
                specification, the retrocession shall become 
                effective on--
                          (i) the earlier of--
                                  (I) the date that is 1 year 
                                after the date of submission of 
                                the request; or
                                  (II) the date on which the 
                                funding agreement expires; or
                          (ii) such date as may be agreed on by 
                        the Secretary and the Indian tribe.
    (f) Nonduplication.--A funding agreement shall provide 
that, for the period for which, and to the extent to which, 
funding is provided to an Indian tribe under this title, the 
Indian tribe--
          (1) shall not be entitled to enter into a contract 
        with the Secretary for funds under section 102, except 
        that the Indian tribe shall be eligible for new 
        included programs on the same basis as other Indian 
        tribes; and
          (2) shall be responsible for the administration of 
        included programs in accordance with the compact or 
        funding agreement.
    (g) Records.--
          (1) In general.--Unless an Indian tribe specifies 
        otherwise in the compact or funding agreement, records 
        of an Indian tribe shall not be treated as agency 
        records for purposes of chapter 5 of title 5, United 
        States Code.
          (2) Recordkeeping system.--An Indian tribe shall--
                  (A) maintain a recordkeeping system; and
                  (B) on 30 days' notice, provide the Secretary 
                with reasonable access to the records to enable 
                the Department to meet the requirements of 
                sections 3101 through 3106 of title 44, United 
                States Code.

SEC. 407. [REGULATIONS] PROVISIONS RELATING TO THE SECRETARY.

    [(a) In General.--Not later than 90 days after the date of 
enactment of this title, at the request of a majority of the 
Indian tribes with agreements under this title, the Secretary 
shall initiate procedures under subchapter III of chapter 5 of 
title 5, United States Code, to negotiate and promulgate such 
regulations as are necessary to carry out this title.
    [(b) Committee.--A negotiated rulemaking committee 
established pursuant to section 565 of title 5, United States 
Code, to carry out this section shall have as its members only 
Federal and tribal government representatives, a majority of 
whom shall be representatives of Indian tribes with agreements 
under this title.
    [(c) Adaptation of Procedures.--The Secretary shall adapt 
the negotiated rulemaking procedures to the unique context of 
Self-Governance and the government-to-government relationship 
between the United States and the Indian tribes.
    [(d) Effect.--The lack of promulgated regulations shall not 
limit the effect of this title.]
    (a) Trust Evaluations.--A funding agreement shall include a 
provision to monitor the performance of trust functions by the 
Indian tribe through the annual trust evaluation.
    (b) Reassumption.--
          (1) In general.--A compact or funding agreement shall 
        include provisions for the Secretary to reassume an 
        included program and associated funding if there is a 
        specific finding relating to that included program of--
                  (A) imminent jeopardy to a physical trust 
                asset, natural resource, or public health and 
                safety that--
                          (i) is caused by an act or omission 
                        of the Indian tribe; and
                          (ii) arises out of a failure to carry 
                        out the compact or funding agreement; 
                        or
                  (B) gross mismanagement with respect to funds 
                transferred to an Indian tribe by a compact or 
                funding agreement, as determined by the 
                Secretary in consultation with the Inspector 
                General, as appropriate.
          (2) Prohibition.--The Secretary shall not reassume 
        operation of an included program unless--
                  (A) the Secretary first provides written 
                notice and a hearing on the record to the 
                Indian tribe; and
                  (B) the Indian tribe does not take corrective 
                action to remedy gross mismanagement or the 
                imminent jeopardy to a physical trust asset, 
                natural resource, or public health and safety.
          (3) Exception.--
                  (A) In general.--Notwithstanding subparagraph 
                (2), the Secretary may, on written notice to 
                the Indian tribe, immediately reassume 
                operation of an included program if--
                          (i) the Secretary makes a finding of 
                        imminent, substantial, and irreparable 
                        harm to a physical trust asset, a 
                        natural resource, or the public health 
                        and safety caused by an act or omission 
                        of the Indian tribe; and
                          (ii) the imminent, substantial, and 
                        irreparable harm to the physical trust 
                        asset, natural resource, or public 
                        health and safety arises out of a 
                        failure by the Indian tribe to carry 
                        out its compact or funding agreement.
                  (B) Reassumption.--If the Secretary reassumes 
                operation of an included program under 
                subparagraph (A), the Secretary shall provide 
                the Indian tribe with a hearing on the record 
                not later than 10 days after the date of 
                reassumption.
      (c) Inability To Agree on Compact or Funding Agreement.--
          (1) Final offer.--If the Secretary and a 
        participating Indian tribe are unable to agree, in 
        whole or in part, on the terms of a compact or funding 
        agreement (including funding levels), the Indian tribe 
        may submit a final offer to the Secretary.
          (2) Determination.--Not more than 45 days after the 
        date of submission of a final offer, or as otherwise 
        agreed to by the Indian tribe, the Secretary shall 
        review and make a determination with respect to the 
        final offer.
          (3) No timely determination.--If the Secretary fails 
        to make a determination with respect to a final offer 
        within the time specified in paragraph (2), the 
        Secretary shall be deemed to have agreed to the offer.
          (4) Rejection of final offer.--
                  (A) In general.--If the Secretary rejects a 
                final offer (or 1 or more provisions or funding 
                levels in a final offer), the Secretary shall--
                        (i) provide timely written notification 
                        to the Indian tribe that contains a 
                        specific finding that clearly 
                        demonstrates, or that is supported by a 
                        controlling legal authority, that--
                                  (I) the amount of funds 
                                proposed in the final offer 
                                exceeds the applicable funding 
                                level to which the Indian tribe 
                                is entitled under this title;
                                  (II) the included program 
                                that is the subject of the 
                                final offer is an inherent 
                                Federal function;
                                  (III) the Indian tribe cannot 
                                carry out the included program 
                                in a manner that would not 
                                result in significant danger or 
                                risk to the public health; or
                                  (IV) the Indian tribe is not 
                                eligible to participate in self 
                                governance under section 
                                403(b);
                          (ii) provide technical assistance to 
                        overcome the objections stated in the 
                        notification required by clause (I);
                          (iii) provide the Indian tribe a 
                        hearing on the record with the right to 
                        engage in full discovery relevant to 
                        any issue raised in the matter and the 
                        opportunity for appeal on the 
                        objections raised (except that the 
                        Indian tribe may, in lieu of filing an 
                        appeal, directly proceed to bring a 
                        civil action in United States district 
                        court under section 110(a)); and
                          (iv) provide the Indian tribe the 
                        option of entering into the severable 
                        portions of a final proposed compact or 
                        funding agreement (including a lesser 
                        funding amount, if any), that the 
                        Secretary did not reject, subject to 
                        any additional alterations necessary to 
                        conform the compact or funding 
                        agreement to the severed provisions.
                  (B) Effect of exercising certain option.--If 
                an Indian tribe exercises the option specified 
                in subparagraph (A)(iv)--
                          (i) the Indian tribe shall retain the 
                        right to appeal the rejection by the 
                        Secretary under this section; and
                          (ii) clauses (1), (ii), and (iii) of 
                        that subparagraph shall apply only to 
                        the portion of the proposed final 
                        compact or funding agreement that was 
                        rejected by the Secretary.
    (d) Burden of Proof.--In any administrative hearing or 
appeal or civil action brought under this section, the 
Secretary shall have the burden of demonstrating by clear and 
convincing evidence the validity of the grounds for rejecting a 
final offer made under subsection (c) or the grounds for a 
reassumption under subsection (b).
    (e) Good Faith.--
          (1) In general.--In the negotiation of compacts and 
        funding agreements, the Secretary shall at all times 
        negotiate in good faith to maximize implementation of 
        the self-governance policy.
          (2) Policy.--The Secretary shall carry out this Act 
        in a manner that maximizes the policy of tribal self-
        governance.
    (f) Savings.--To the extent that included programs carried 
out by Indian tribes under this title reduce the administrative 
or other responsibilities of the Secretary with respect to the 
operation of Indian programs and result in savings that have 
not otherwise been included in the amount of tribal shares and 
other funds determined under section 409(c), the Secretary 
shall make such savings available to the Indian tribes, inter-
tribal consortia, or tribal organizations for the provision of 
additional services to program beneficiaries in a manner 
equitable to directly served, contracted, and included 
programs.
    (g) Trust Responsibility.--The Secretary may not waive, 
modify, or diminish in any way the trust responsibility of the 
United States with respect to Indian tribes and individual 
Indians that exists under treaties, Executive orders, other 
laws, or court decisions.
    (h) Decisionmaker.--A decision that constitutes final 
agency action and relates to an appeal within the Department 
brought under subsection (c)(4) may be made--
          (1) by an official of the Department who holds a 
        position at a higher organizational level within the 
        Department than the level of the departmental agency in 
        which the decision that is the subject of the appeal 
        was made; or
          (2) by an administrative law judge.
    (i) Rule of construction.--Each provision of this title and 
each provision of a compact or funding agreement shall be 
liberally construed for the benefit of the Indian tribe 
participating in self-governance, and any ambiguity shall be 
resolved in favor of the Indian tribe.

SEC. 408. [AUTHORIZATION OF APPROPRIATIONS] CONSTRUCTION PROGRAMS AND 
                    CONSTRUCTION PROJECTS.

    [There are authorized to be appropriated such sums as may 
be necessary to carry out this title.]
    (a) In General.--An Indian tribe participating in self-
governance may carry out a construction program or construction 
project under this title in the same manner as the Indian tribe 
carries out other included programs under this title, 
consistent with the provisions of all applicable Federal laws.
    (b) Federal Functions.--An Indian tribe participating in 
self-governance may, in carrying out construction projects 
under this title, elect to assume all Federal responsibilities 
under the National Environmental Policy Act of 1969 (42 U.S.C. 
4321 et seq.), the National Historic Preservation Act (16 
U.S.C. 470 et seq.), and related provisions of law that would 
apply if the Secretary were to carry out a construction 
project, by adopting a resolution--
          (1) designating a certifying officer to represent the 
        Indian tribe and to assume the status of a responsible 
        Federal official under those laws; and
          (2) accepting the jurisdiction of the Federal courts 
        for the purpose of enforcement of the responsibilities 
        of the responsible Federal official under applicable 
        environmental law.
    (c) Negotiations.--
          (1) In general.--In accordance with all applicable 
        Federal laws, a construction program or construction 
        project shall be treated in the same manner and be 
        subject to all provisions of this Act as are all other 
        tribal assumptions of included programs under this Act.
          (2) Construction projects.--A provision shall be 
        included in the funding agreement that, for each 
        construction project--
                  (A) states the approximate start and 
                completion dates of the construction project, 
                which may extend for 1 or more years;
                  (B) provides a general description of the 
                construction project;
                  (C) states the responsibilities of the Indian 
                tribe and the Secretary with respect to the 
                construction project;
                  (D) describes--
                          (i) the ways in which the Indian 
                        tribe will address project-related 
                        environmental considerations; and
                          (ii) the standards by which the 
                        Indian tribe will accomplish the 
                        construction project; and
                  (E) the amount of funds provided for the 
                construction project.
    (d) Codes and Standards; Tribal Assurances.--A funding 
agreement shall contain a certification by the Indian tribe 
that the Indian tribe will establish and enforce procedures 
designed to ensure that all construction-related included 
programs carried out through the funding agreement adhere to 
building codes and other codes and architectural and 
engineering standards (including public health and safety 
standards) identified by the Indian tribe in the funding 
agreement, which codes and standards shall be in conformity 
with nationally recognized standards for comparable projects in 
comparable locations.
    (e) Responsibility for Completion.--The Indian tribe shall 
assume responsibility for the successful completion of a 
construction project in accordance with the funding agreement.
    (f) Funding.--
          (1) In general.--At the option of an Indian tribe, 
        full funding for a construction program or construction 
        project carried out under this title shall be included 
        in a funding agreement as an annual advance payment.
          (2) Entitlement.--Notwithstanding the annual advance 
        payment provisions or any other provision of law, an 
        Indian tribe shall be entitled to receive in its 
        initial funding agreement all funds made available to 
        the Secretary for multiyear construction programs and 
        projects carried out under this title.
          (3) Contingency funds.--The Secretary shall include 
        associated project contingency funds in an advance 
        payment described in paragraph (1), and the Indian 
        tribe shall be responsible for the management of the 
        contingency funds included in the funding agreement.
          (4) Reallocation of savings.--
                  (A) In general.--Notwithstanding any other 
                provision of an annual Act of appropriation or 
                other Federal law, an Indian tribe may 
                reallocate any financial savings realized by 
                the Indian tribe arising from efficiencies in 
                the design, construction, or any other aspect 
                of a construction program or construction 
                project.
                  (B) Purposes.--A reallocation under 
                subparagraph (A) shall be for construction-
                related activity purposes generally similar to 
                those for which the funds were appropriated and 
                distributed to the Indian tribe under the 
                funding agreement.
    (g) Approval.--
          (1) In general.--If the planning and design documents 
        for a construction project are prepared by an Indian 
        tribe in a manner that is consistent with the 
        certification given by the Indian tribe as required 
        under subsection (d), approval by the Secretary of a 
        funding agreement providing for the assumption of the 
        construction project shall be deemed to be an approval 
        by the Secretary of the construction project planning 
        and design documents.
          (2) Reports.--The Indian tribe shall provide the 
        Secretary with construction project progress and 
        financial reports not less than semiannually.
          (3) Inspections.--The Secretary may conduct onsite 
        project inspections at a construction project 
        semiannually or on an alternate schedule agreed to by 
        the Secretary and the Indian tribe.
    (h) Wages.--
          (1) In general.--All laborers and mechanics employed 
        by a contractor or subcontractor in the construction, 
        alteration, or repair (including painting and 
        decorating) of a building or other facility in 
        connection with a construction project funded by the 
        United States under this title shall be paid wages at 
        not less than the amounts of wages prevailing on 
        similar construction in the locality as determined by 
        the Secretary of Labor in accordance with subchapter IV 
        of chapter 31 of title 40, United States Code.
          (2) Authority.--With respect to construction, 
        alteration, or repair work to which that subchapter is 
        applicable under this subsection, the Secretary of 
        Labor shall have the authority and functions specified 
        in the Reorganization Plan numbered 14, of 1950.
          (3) Applicability of subsection.--Notwithstanding any 
        other provision of law, this subsection does not apply 
        to any portion of a construction project carried out 
        under this Act--
                  (A) that is funded from a non-Federal source, 
                regardless of whether the non-Federal funds are 
                included with Federal funds for administrative 
                convenience; or
                  (B) that is performed by a laborer or 
                mechanic employed directly by an Indian tribe 
                or tribal organization.
          (4) Applicability of tribal law.--This subsection 
        does not apply to a compact or funding agreement if the 
        compact, self-determination contract, or funding 
        agreement is otherwise covered by a law (including a 
        regulation) adopted by an Indian tribe that requires 
        the payment of not less than prevailing wages, as 
        determined by the Indian tribe.
    (i) Applicability of Other Law.--Unless otherwise agreed to 
by the Indian tribe, no provision of the Office of Federal 
Procurement Policy Act (41 U.S.C. 401 21 et seq.), the Federal 
Acquisition Regulation, or any other law or regulation 
pertaining to Federal procurement (including Executive orders) 
shall apply to any construction program or project conducted 
under this title.

SEC. 409. PAYMENT.

    (a) In General.--At the request of the governing body of 
the Indian tribe and under the terms of a funding agreement, 
the Secretary shall provide funding to the Indian tribe to 
carry out the funding agreement.
    (b) Advance Annual Payment.--At the option of the Indian 
tribe, a funding agreement shall provide for an advance annual 
payment to an Indian tribe.
    (c) Amount.--Subject to subsection (e) and sections 405 and 
406 of this title, the Secretary shall provide funds to the 
Indian tribe under a funding agreement for included programs in 
the amount that is equal to the amount that the Indian tribe 
would have been entitled to receive under contracts and grants 
under this Act (including amounts for direct program and 
contract support costs and, in addition, any funds that are 
specifically or functionally related to the provision by the 
Secretary of services and benefits to the Indian tribe or its 
members) without regard to the organization level within the 
Federal agency in which the included programs are carried out.
    (d) Timing.--Unless the funding agreement provides 
otherwise, the transfer of funds shall be made not later than 
10 days after the apportionment of funds by the Office of 
Management and Budget to the Department.
    (e) Availability.--Funds for trust services to individual 
Indians shall be available under a funding agreement only to 
the extent that the same services that would have been provided 
by the Secretary are provided to individual Indians by the 
Indian tribe.
    (f) Multiyear Funding.--A funding agreement may provide for 
mul tiyear funding.
    (g) Limitation on Authority of the Secretary.--The 
Secretary shall not--
          (1) fail to transfer to an Indian tribe its full 
        share of any central, headquarters, regional, area, or 
        service unit office or other funds due under this Act, 
        except as required by Federal law;
          (2) withhold any portion of such funds for transfer 
        over a period of years; or
          (3) reduce the amount of funds required under this 
        Act--
                  (A) to make funding available for self-
                governance monitoring or administration by the 
                Secretary;
                  (B) in subsequent years, except as necessary 
                as a result of--
                          (i) a reduction in appropriations 
                        from the previous fiscal year for the 
                        program to be included in a compact or 
                        funding agreement;
                          (ii) a congressional directive in 
                        legislation or an accompanying report;
                          (iii) a tribal authorization;
                          (iv) a change in the amount of pass-
                        through funds subject to the terms of 
                        the funding agreement; or
                          (v) completion of an activity under 
                        an included program for which the funds 
                        were provided;
                  (C) to pay for Federal functions, including--
                          (i) Federal pay costs;
                          (ii) Federal employee retirement 
                        benefits;
                          (iii) automated data processing;
                          (iv) technical assistance; and
                          (v) monitoring of activities under 
                        this Act; or
                  (D) to pay for costs of Federal personnel 
                displaced by self-determination contracts under 
                this Act or self-governance.
    (h) Federal Resources.--If an Indian tribe elects to carry 
out a compact or funding agreement with the use of Federal 
personnel, Federal supplies (including supplies available from 
Federal warehouse facilities), Federal supply sources 
(including lodging, airline transportation, and other means of 
transportation including the use of interagency motor pool 
vehicles), or other Federal resources (including supplies, 
services, and resources available to the Secretary under any 
procurement contracts in which the Department is eligible to 
participate), the Secretary shall acquire and transfer such 
personnel, supplies, or resources to the Indian tribe.
    (i) Prompt Payment Act.--Chapter 39 of title 31, United 
States Code, shall apply to the transfer of funds due under a 
compact or funding agreement authorized under this Act.
    (j) Interest or Other Income.--
          (1) In general.--An Indian tribe may retain interest 
        or income earned on any funds paid under a compact or 
        funding agreement to carry out governmental purposes.
          (2) No effect on other amounts.--The retention of 
        interest or income under paragraph (1) shall not 
        diminish the amount of funds that an Indian tribe is 
        entitled to receive under a funding agreement in the 
        year in which the interest or income is earned or in 
        any subsequent fiscal year.
          (3) Investment standard.--Funds transferred under 
        this title shall be managed using the prudent 
        investment standard.
    (k) Carryover of Funds.--
          (1) In general.--Notwithstanding any provision of an 
        Act of appropriation, all funds paid to an Indian tribe 
        in accordance with a compact or funding agreement shall 
        remain available until expended.
          (2) Effect of carryover.--If an Indian tribe elects 
        to carry over funding from 1 year to the next, the 
        carryover shall not diminish the amount of funds that 
        the Indian tribe is entitled to receive under a funding 
        agreement in that fiscal year or any subsequent fiscal 
        year.
    (l) Limitation of Costs.--
          (1) In general.--An Indian tribe shall not be 
        obligated to continue performance that requires an 
        expenditure of funds in excess of the amount of funds 
        transferred under a compact or funding agreement.
          (2) Notice of insufficiency.--If at any time an 
        Indian tribe has reason to believe that the total 
        amount provided for a specific activity under a compact 
        or funding agreement is insufficient, the Indian tribe 
        shall provide reasonable notice of the insufficiency to 
        the Secretary.
          (3) Suspension of performance--If the Secretary does 
        not increase the amount of funds transferred under the 
        funding agreement, the Indian tribe may suspend 
        performance of the activity until such time as 
        additional funds are transferred.

SEC. 410. CIVIL ACTIONS.

 (a) Inclusion as Contract.--Except as provided in subsection (b), for 
   the purposes of section 110, the term `contract' shall include a 
                           funding agreement.

    (b) Contracts With Professionals.--For the period during 
which a funding agreement is in effect, section 2103 of the 
Revised Statutes (25 U.S.C. 81), and section 16 of the Act of 
June 18, 1934 (25 U.S.C. 476) shall not apply to a contract 
between an attorney or other professional and an Indian tribe.

SEC. 411. FACILITATION.

    (a) In General.--Except as otherwise provided by law, the 
Secretary shall interpret each Federal law (including a 
regulation) in a manner that facilitates--
          (1) the inclusion of included programs in funding 
        agreements; and
          (2) the implementation of funding agreements.
    (b) Regulation Waiver.--
          (1) Request.--An Indian tribe may submit a written 
        request for a waiver to the Secretary identifying the 
        specific text in regulation sought to be waived and the 
        basis for the request.
          (2) Determination by the secretary.-- Not later than 
        60 days after the date of receipt by the Secretary of a 
        request under paragraph (1), the Secretary shall 
        approve or deny the requested waiver in writing to the 
        Indian tribe.
          (3) Ground for denial.--The Secretary may deny a 
        request for a waiver only on a specific finding by the 
        Secretary that the identified text in the regulation 
        may not be waived because such a waiver is prohibited 
        by Federal law.
          (4) Failure to make determination.--If the Secretary 
        fails to approve or deny a waiver request within the 
        time required under paragraph (2), the Secretary shall 
        be deemed to have approved the request.
          (5) Finality.--The Secretary's decision shall be 
        final for the Department.

SEC. 412. DISCLAIMERS.

    Nothing in this title expands or alters any statutory 
authority of the Secretary so as to authorize the Secretary to 
enter into any funding agreement under section 405(b)(2) or 415 
(c)(1)--
          (1) with respect to an inherent Federal function;
          (2) in a case in which the statute establishing a 
        program does not authorize the type of participation 
        sought by the Indian tribe (without regard to whether 1 
        or more Indian tribes are identified in the authorizing 
        statute); or
          (3) limits or reduces in any way the services, 
        contracts, or funds that any other Indian tribe or 
        tribal organization is eligible to receive under 
        section 102 or any other applicable Federal law.

SEC. 413. APPLICABILITY OF OTHER PROVISIONS.

    (a) Mandatory Application.--Sections 5(d), 6, 102(c), 104, 
105(f), 110, and 111 apply to compacts and funding agreements 
under this title.
    (b) Discretionary Application.--
          (1) In general.--At the option of a participating 
        Indian tribe, any or all of the provisions of title I 
        or title V shall be incorporated in a compact or 
        funding agreement.
          (2) Effect.--Each incorporated provision--
                  (A) shall have the same effect as if the 
                provision were set out in full in this title; 
                and
                  (B) shall be deemed to supplement or replace 
                any related provision in this title and to 
                apply to any agency otherwise governed by this 
                title.
          (3) Effective date.--If an Indian tribe requests 
        incorporation at the negotiation stage of a compact or 
        funding agreement, the incorporation--
                  (A) shall be effective immediately; and
                  (B) shall control the negotiation and 
                resulting compact and funding agreement.

SEC. 414. BUDGET REQUEST.

    (a) Requirement of Annual Budget Request.--
          (1) In general--The President shall identify in the 
        annual budget request submitted to Congress under 
        section 1105 of title 31, United States Code, all funds 
        necessary to fully fund all funding agreements 
        authorized under this title.
          (2) Duty of secretary.--The Secretary shall ensure 
        that there are included, in each budget request, 
        requests for funds in amounts that are sufficient for 
        planning and negotiation grants and sufficient to cover 
        any shortfall in funding identified under subsection 
        (b).
          (3) Timing.--All funds included within funding 
        agreements shall be provided to the Office of Self-
        Governance not later than 15 days after the date on 
        which funds are apportioned to the Department.
          (4) Distribution of funds.--The Office of Self-
        Governance shall be responsible for distribution of all 
        funds provided under this title.
          (5) Rule of construction.--Nothing in this subsection 
        authorizes the Secretary to reduce the amount of funds 
        that an Indian tribe is otherwise entitled to receive 
        under a funding agreement or other applicable law.
    (b) Present Funding; Shortfalls.--In all budget requests, 
the President shall identify the level of need presently funded 
and any shortfall in funding (including direct program costs, 
tribal shares and contract support costs) for each Indian 
tribe, either directly by the Secretary of Interior, under 
self-determination contracts, or under compacts and funding 
agreements.

SEC. 415. REPORTS.

    (a) In General.--
          (1) Requirement.--On January 1 of each year, the 
        Secretary shall submit to Congress a report regarding 
        the administration of this title.
          (2) Analysis.--A report under paragraph (1) shall 
        include a detailed analysis of tribal unmet need for 
        each Indian tribe, either directly by the Secretary, 
        under self-determination contracts under title I, or 
        under compacts and funding agreements authorized under 
        this subchapter.
          (3) No additional reporting requirements.--In 
        preparing reports under paragraph (1), the Secretary 
        may not impose any reporting requirement on 
        participating Indian tribes not otherwise provided for 
        by this Act.
    (b) Contents.--A report under subsection (a) shall--
          (1) be compiled from information contained in funding 
        agreements, annual audit reports, and data of the 
        Secretary regarding the disposition of Federal funds;
          (2) identify--
                  (A) the relative costs and benefits of self-
                governance;
                  (B) with particularity, all funds that are 
                specifically or functionally related to the 
                provision by the Secretary of services and 
                benefits to self-governance Indian tribes and 
                members of Indian tribes;
                  (C) the funds transferred to each Indian 
                tribe and the corresponding reduction in the 
                Federal bureaucracy;
                  (D) the funding formula for individual tribal 
                shares of all Central Office funds, with the 
                comments of affected Indian tribes, developed 
                under subsection (d); and
                  (E) amounts expended in the preceding fiscal 
                year to carry out inherent Federal functions, 
                including an identification of inherent Federal 
                functions by type and location;
          (3) contain a description of the methods used to 
        determine the individual tribal share of funds 
        controlled by all components of the Department 
        (including funds assessed by any other Federal agency) 
        for inclusion in compacts or funding agreements;
          (4) before being submitted to Congress, be 
        distributed to the Indian tribes for comment (with a 
        comment period of not less than 30 days); and
          (5) include the separate views and Indian tribe or 
        tribal organization.
    (c) Report on Non-BIA Programs.--
          (1) In general.--In order to optimize comments of 
        each opportunities for -52 including non-Bureau of 
        Indian Affairs included programs in agreements with 
        Indian tribes participating in self governance under 
        this title, the Secretary shall--
                  (A) review all included programs administered 
                by the Department, other than through the 
                Bureau of Indian Affairs, without regard to the 
                agency or office concerned;
                  (B) not later than January 1, 2005, submit to 
                Congress--
                          (i) a list of all such included 
                        programs that the Secretary determines, 
                        with the concurrence of Indian tribes 
                        participating in self-governance, are 
                        eligible to be included in a funding 
                        agreement at the request of a 
                        participating Indian tribe; and
                          (ii) a list of all such included 
                        programs for which Indian tribes have 
                        requested to include in a funding 
                        agreement under section 405(b)(3) due 
                        to the special geographic, historical, 
                        or cultural significance to the Indian 
                        tribe, indicating whether each request 
                        was granted or denied and stating the 
                        grounds for any denial.
          (2) Programmatic targets.--The Secretary shall 
        establish programmatic targets, after consultation with 
        Indian tribes participating in self-governance, to 
        encourage bureaus of the Department to ensure that a 
        significant portion of those included programs are 
        included in funding agreements.
          (3) Publication.--The lists and targets under 
        paragraphs (1) and (2) shall be published in the 
        Federal Register and be made available to any Indian 
        tribe participating in self governance.
          (4) Annual review.--
                  (A) In general.--The Secretary shall annually 
                review and publish in the Federal Register, 
                after consultation with Indian tribes 
                participating in self governance, revised lists 
                and programmatic targets.
                  (B) Contents.--The revised lists and 
                programmatic targets shall include all included 
                programs that were eligible for contracting in 
                the original list published in the Federal 
                Register in 1995, except for included programs 
                specifically determined not to be contractible 
                as a matter of law.
    (d) Report on Central Office Funds.--Not later than January 
1, 2005, the Secretary shall, in consultation with Indian 
tribes, develop a funding formula to determine the individual 
tribal share of funds controlled by the Central Office of the 
Bureau of Indian Affairs for inclusion in the self-governance 
compacts.

SEC. 416. REGULATIONS.

    (a) In General.--
          (1) Promulgation.--Not later than 90 days after the 
        date of the enactment of the Department of the Interior 
        Tribal Self-Governance Act of 2004, the Secretary shall 
        initiate procedures under subchapter III of chapter 5, 
        of title 5, United States Code, to negotiate and 
        promulgate such regulations as are necessary to carry 
        out the amendments made by that Act.
          (2) Publication of proposed regulations.--Proposed 
        regulations to implement the amendments shall be 
        published in the Federal Register not later than 1 year 
        after the date of enactment of that Act.
          (3) Expiration of authority.--The authority to 
        promulgate regulations under paragraph (1) shall expire 
        on the date that is 18 months after the date of 
        enactment of that Act.
    (b) Committee.--
          (1) Membership.--A negotiated rulemaking committee 
        established under section 565 of title 5, United States 
        Code, to carry out this section shall have as its 
        members only Federal and tribal government 
        representatives.
          (2) Lead agency.--Among the Federal representatives, 
        the Office of Self-Governance shall be the lead agency 
        for the Department of the Interior.
    (c) Adaptation of Procedures.--The Secretary shall 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.
    (d) Effect.--
          (1) Repeal.--All regulatory provisions under part 
        1000 of title 25, Code of Federal Regulations, are 
        repealed on the date of enactment of the Department of 
        the Interior Tribal Self-Governance Act of 2004.
          (2) Effectiveness without regard to regulations.--The 
        lack of promulgated regulations shall not limit the 
        effect of this Act.
          (3) Interim provision.-- Notwithstanding this 
        subsection, any regulation under part 1000 of title 25, 
        Code of Federal Regulations, shall remain in effect, at 
        an Indian tribe's option, in implementing compacts 
        until regulations are promulgated.

SEC. 417. EFFECT OF CIRCULARS, POLICIES, MANUALS, GUIDANCES, AND RULES.

    Unless expressly agreed to by a participating Indian tribe 
in a compact or funding agreement, the participating Indian 
tribe shall not be subject to any agency circular, policy, 
manual, guidance, or rule adopted by the Department, except 
for--
         (1) the eligibility provisions of section 105(g); and
         (2) regulations promulgated under section 416.11.

SEC. 418. APPEALS.

    In any administrative appeal or civil action for judicial 
review of any decision made by the Secretary under this title, 
the Secretary shall have the burden of proof of demonstrating 
by clear and convincing evidence--
          (1) the validity of the grounds for the decision; and
          (2) the consistency of the decision with the 
        provisions and policies of this title.

SEC. 419. AUTHORIZATION OF APPROPRIATIONS.

    There are authorized to be appropriated such sums as are 
necessary to carry out this title.