```

[Senate Report 106-406]
[From the U.S. Government Publishing Office]

                                                       Calendar No. 796
106th Congress                                                   Report
                                 SENATE
 2d Session                                                     106-406

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

 
             AMENDING THE INDIAN RESERVATION ROADS PROGRAM

                                _______
                                

               September 11, 2000.--Ordered to be printed

                                _______
                                

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

                              R E P O R T

                         [To accompany S. 2283]

    The Committee on Indian Affairs, to which was referred the 
bill (S. 2283) to provide amendments to the Indian Reservation 
Roads (IRR) program, and for other purposes, having considered 
the same, reports favorably thereon with an amendment in the 
nature of a substitute and recommends that the bill (as 
amended) do pass.

                                Purposes

    The purpose of S. 2283, the Indian Tribal Surface 
Transportation Act of 2000, is to provide technical amendments 
to the IRR program that is administered pursuant to the 
Transportation Equity Act for the 21st Century (TEA-21, or 
``the Act''), P.L. 105-178 (codified at 23 U.S.C.) to improve 
the delivery of road and bridge assistance to Indian tribes in 
a manner that recognizes the right of tribal self-determination 
and self-governance, and for other purposes.

                               Background

    On June 9, 1998, Congress enacted TEA-21 to authorize 
Federal surface transportation programs for highways, highway 
safety, transit and other surface transportation programs. TEA-
21 authorizes Federal surface transportation for the six-year 
period of October 1, 1997 through September 20, 2003, and 
builds upon the programs and policies of the Intermodal Surface 
Transportation Efficiency Act of 1991 (ISTEA), P.L. 102-240 
(codified in various sections of 23 U.S.C., 49 U.S.C., and 
other titles of U.S.C.).
    Moreover, the Act expands ISTEA's emphasis on flexibility 
and local decisionmaking in surface transportation planning and 
development.\1\ Over its six-year period, the Act dedicates 
$218 billion in investment for surface transportation. The 
goals of TEA-21 are to improve highways, increase highway 
safety, protect the environment, and increase economic growth.
---------------------------------------------------------------------------
    \1\ S. Rep. No. 106-226, at 1 (2000).
---------------------------------------------------------------------------
    In 1997, Indian specific amendments to the Act were offered 
by Chairman Campbell and Vice-Chairman Inouye to authorize 
Indian tribes to contract for ``all funds'' made available 
under the Act, and to require the Secretary of Interior to 
institute negotiated rule-making procedures to implement key 
elements of the Act, including the development of a new funding 
formula.
    Under Sec. 1115 of the Act, the IRR program is incorporated 
under the Federal Land Highways Program (FLHP). The FLHP 
provides funding for public roads and transit facilities 
serving Federal and Indian lands. There are two components of 
the FLHP that significantly impact Indian lands, including 
Alaska Native lands. First, Indian tribes are eligible to 
receive benefits from the IRR program for the survey, 
improvement, construction, and maintenance of roads that 
provide access to and from Indian lands. Second, the Indian 
Reservation Road Bridge Program (IRRBP) designates a minimum of 
$13 million a year for the rehabilitation and replacement of 
deficient bridges on Indian lands.\2\ Under IRR, tribes may 
choose to administer their IRR programs pursuant to the Indian 
Self-Determination and Education Assistance Act (ISDEAA), P.L. 
93-638 (25 U.S.C. Sec. Sec. 450 et seq).\3\
---------------------------------------------------------------------------
    \2\ Previously, the IRRBP was a separate set-aside from outside the 
IRR program funding. Under TEA-21, the IRRBP now sets aside a minimum 
of $13 million annually from the IRR budget.
    \3\ According to the Bureau of Indian Affairs (BIA), anywhere from 
\1/3\ to \1/2\ of the IRR programs are administered under P.L. 93-638 
contracts.
---------------------------------------------------------------------------
    The IRR program, including the IRRBP, is jointly 
administered by both the Bureau of Indian Affairs (BIA) and the 
Federal Highway Administration (FHWA). In Native communities, 
the IRR program is intended to provide safe and adequate 
transportation and public road access to and within Indian 
reservations, Indian lands and communities for Native American 
visitors, recreationists, resource users and others while 
contributing to economic development, self-determination, and 
employment of Native Americans. Under the Act, the authorized 
level of funding for the IRR program was $225 million in 1998 
and $275 million for each year from 1999-2003 for a six-year 
total of $1.6 billion for the IRR program.

                The Need for Improved Reservation Roads

    There are 561 Federally recognized Indian tribes with 
Indian land representing roughly 56 million acres within the 
United States in the lower 48 states and 44 million acres in 
the State of Alaska. The IRR transportation system provides 
access to and from Indian lands and communities. Due to the 
geographic remoteness and often difficult terrain of Indian 
lands, the IRR system represents one of the most rudimentary 
transportation systems in the United States. Despite the fact 
that much of the IRR system is unpaved and in poor condition, 
more than 2 billion vehicle miles are traveled annually on this 
transportation network.
    There is an enormous and largely unmet need for 
transportation infrastructure on Indian lands throughout the 
country. Available information indicates that there is an 
estimated $6.8 billion backlog of needed transportation 
improvements in Indian country.\4\ Poor transportation 
infrastructure has a devastating impact on Indian emergency 
services, law enforcement capabilities, and economic 
development. Moreover, with roads and bridges in unsafe 
condition, the annual fatality rate on the IRR system is more 
than four times that of the national average.\5\
---------------------------------------------------------------------------
    \4\ 1999 Status of the Nation's Highways, Bridges and Transit: 
Conditions and Performance, Report to Congress, United States 
Department of Transportation, May 2000 (Appendix E-8). The estimated 
backlog of $6.8 billion is somewhat understated, because it only takes 
into account the roads that are in the BIA's inventory. The inventory 
is not completely up-to-date, because some tribes and/or regions have 
not updated their inventory during TEA-21.
    \5\ Id.
---------------------------------------------------------------------------
    Over 66% of the IRR system is unimproved earth and gravel 
while approximately 26% \6\ of the IRR bridges are deficient. 
Approximately 50,000 miles of roads serve Indian reservations 
and lands. Of these BIA roads comprise 23,000 miles, and 
Federal, State and local public roads comprise some 25,600 
miles.
---------------------------------------------------------------------------
    \6\ The average was determined by analyzing that approximately 23 
percent of the 779 bridges owned by the BIA are deemed deficient while 
27% of the 3,006 state and locally owned non-BIA bridges are also 
deemed deficient. Indian Tribal Surface Transportation Act of 2000: 
Legislative Hearing on S. 2283 Before the Senate Committee on Indian 
Affairs, 106th Congress (2000) (statement of Kenneth Wykle, 
Administrator, Federal Highway Administration, Department of 
Transportation).
---------------------------------------------------------------------------
    Of the BIA roads only 34% are paved and rated in ``good 
condition.'' The remaining roads are either paved and in fair 
or poor condition, or unpaved. The result is that unpaved and 
weather-compromised roads regularly become muddy and are 
washed-out in severe weather conditions.
    In the history of the IRR program, reservation roads have 
never received the level of funding needed to bring them on par 
with non-IRR roads and bridges. Although reservation roads 
compose 2.63% of the Federal Aid Highway Program, no less than 
1% of this Federal aid has been allocated to Indian roads. If 
the IRR program were to receive 2.63% of TEA-21 funding, then 
the IRR program would be authorized and fully funded at $4.7 
billion over the 1998-2003 period, as opposed to the current 
authorized amount of $1.6 billion.

                      Section-by-Section Analysis

Section 1. Short title

    The short title of this bill is the Indian Tribal Surface 
Transportation Act of 2000.

Section 2. Amendments relating to Indian tribes

    a. Obligation Limitation. This section would amend TEA-21 
and remove application of obligation limitation from the IRR 
program to ensure the full appropriation of Congress' 
authorized amount. Although the Act authorizes $1.6 billion for 
the IRR program, application of the obligation limitation has 
already deducted approximately $122 million from the IRR 
program for FY 1998-2001. Eventually, the imposition of the 
obligation limitation will result in a loss of over $192 
million to the IRR program.\7\
---------------------------------------------------------------------------
    \7\ Id.
---------------------------------------------------------------------------
    Under section 1102 of TEA-21, there is an automatic 
percentage deducted from the Federal Aid Highway Programs, 
including the IRR program.\8\ The percentage of funds that is 
deducted from the Federal Aid Highway and Highway Safety 
Construction Program acts as a ceiling on the obligation 
contract authority. This ceiling controls highway program 
spending in response to economic and budgetary conditions.
---------------------------------------------------------------------------
    \8\ Because the Federal transportation program requires multiple-
year authorizations and availability of funds, both ISTEA and TEA-21 
have contract authority for multiple years and are not subject to the 
annual appropriations process. To ensure that this multi-year funding 
is consistent with national budget policy, TEA-21 imposes an obligation 
ceiling to withhold a certain percentage of Federal Aid Highway Program 
monies.
---------------------------------------------------------------------------
    The intent of the obligation limitation provision is to 
give states control for some of the designated Federal roads 
that are located within state lands. Although the excess 
percentage of obligated funds is redistributed to certain 
Federal programs and to states, the IRR program is not eligible 
under TEA-21 to benefit from the redistribution of unused 
obligated authority.\9\ Thus, the percentage of funds that are 
withheld from the IRR program by the obligation limitation are 
not reinvested into Indian and Alaska Native communities and 
instead are redistributed to states or other eligible 
recipients. The effects of this obligation limitation are 
harmful to tribes who have limited resources and among the 
worst transportation infrastructure in the nation.
---------------------------------------------------------------------------
    \9\ Under 1102(d), states or programs that are unable to obligate 
their share of the obligation ceiling are able to transfer their unused 
funds to other states and certain Federal programs that are able to 
obligate more than their initial share of the obligation limitation 
funds.
---------------------------------------------------------------------------
    Under ISTEA, Federal aid highways and Indian roads were not 
subject to this obligation limitation. This amendment would 
return the IRR program to the same position it occupied under 
ISTEA.\10\
---------------------------------------------------------------------------
    \10\ This amendment will fully fund the IRR program by assigning it 
to Sec. 1102(c)(1) that sets aside certain programs, such as the 
Highway Use Tax Evasion Program and the Bureau of Transportation 
Statistics, before distribution of the obligation limitation.
---------------------------------------------------------------------------
    b. Pilot Project. Currently, the IRR program is 
administered by the BIA, the FHWA, and tribal transportation 
departments. With three agencies administering the program, 
inefficiencies and duplicative procedures exist. This section 
provides for development of a pilot program pursuant to the 
ISDEAA model where twelve (12) tribes are authorized to 
directly contract with the FHWA, removing the BIA as an 
intermediary from the IRR process.
    The FHWA's core competency is the administration of the 
Federal highway program. This pilot program promotes efficiency 
in the administration of the IRR program and also encourages 
Indian self-determination. Moreover, the pilot program is 
consistent with the principles of both ISTEA and TEA-21 of 
increased state and local flexibility and decisionmaking. Just 
as local authorities are deemed to know best the needs of their 
communities, so are tribal governments.
    The 12 tribes selected to participate in the pilot program 
will be chosen on a geographical basis representing the various 
regions of the country. The Committee's intent is to have 
broad-based participation in the pilot program. As long as 
there are eligible applicants from each of the BIA's twelve 
regions, at least one tribe and/or consortia from each of the 
BIA's regions should be selected to participate.
    The language in this provision clarifies that funding for 
those tribes participating in the pilot program will be based 
on the national funding formula implemented under TEA-21 
section 1115(b). In addition to the formula monies, all tribes 
participating in this pilot program will receive any monies 
that the BIA may have withdrawn under their 6 percent 
authority.\11\ Because the pilot program tribes are directly 
contracting with the FHWA, the BIA may not deduct any 
administrative or projected-related funds from monies that the 
pilot program tribes are awarded.
---------------------------------------------------------------------------
    \11\ In recent years the annual appropriations acts have provided 
the BIA with authority to absorb up to 6 percent of IRR funding for the 
``administration'' of the IRR program. The FY1999 and FY2000 Omnibus 
Appropriations Acts and the FY2001 Senate Interior appropriations bill 
states, ``that not to exceed 6 percent of the contract authority 
available to the Bureau of Indian Affairs from the Federal Highway 
Trust Fund may be used to cover the road program management costs of 
the Bureau.''
---------------------------------------------------------------------------
    The candidates in the applicant pool must also demonstrate 
financial stability and financial management capability for 3 
years prior to applying to participate in the demonstration 
program. If a tribal consortium has not been in operation for 3 
years, then the consortium must meet the audit requirements for 
the period during its operation, and each member of the 
consortium must also meet the audit requirements for the 
year(s) prior to joining the consortium to equate the required 
3 year period.
    c. Administration. The FY1999 and FY2000 Omnibus 
Appropriations Acts and the FY2001 Senate Interior 
appropriations bill states, ``that not to exceed 6 percent of 
the contract authority available to the Bureau of Indian 
Affairs from the Federal Highway Trust Fund may be used to 
cover the road program management costs of the Bureau.''
    The BIA has taken the position that it may not only 
withhold up to 6 percent of IRR funding for the overall 
administration of the IRR program, but that it may also 
withhold an additional amount of funding to perform project-
related administrative activities. By creating this superficial 
distinction between the 6 percent withholding and ``project-
related'' administrative funds, the BIA has exceeded the 6 
percent authority that Congress provided. Because the BIA has 
not demonstrated that it has or can increase value to the IRR 
program to Congress' satisfaction, the agency's access to and 
use of the IRR funds for administrative and project-related 
purpose must be strictly circumscribed.
    Accordingly, the bill explicitly states that the BIA may 
not exceed 6 percent of TEA-21 funding for administrative costs 
relating to the IRR program and individual projects. This 
language is intended to ensure that the IRR monies are 
distributed to tribes and benefit Indian communities. Testimony 
provided to the Committee suggests that when the BIA withholds 
6 percent for administrative costs and then additional 
percentages for individual project-related costs, the 
administrative activities funded are often duplicative and 
unnecessary. Indian communities are not benefitted when IRR 
money remains at BIA headquarters or even BIA regional offices 
for such functions. Eventually, the BIA's administrative costs 
and project-related costs should be reduced as more tribes 
participate in P.L. 93-638 contracting or self-governance 
compacting in IRR programs.
    The amendment also clarifies that all IRR funds (including 
TEA-21 funding for roads and bridges) are available to Indian 
tribes that are willing and able to assume the administration 
of their IRR program through ISDEAA contracts. TEA-21's section 
1115 clearly states:

          * * * all funds [emphasis added] made available under 
        this title for Indian reservation roads and for highway 
        bridges located on Indian reservation roads * * * shall 
        be made available, upon the request of the Indian 
        tribal government, to the Indian tribal government for 
        contracts and agreements for such planning research, 
        engineering, and construction in accordance with the 
        Indian Self-Determination and Education Assistance Act.

    Despite the lack of ambiguity in TEA-21, the BIA continues 
to stall on tribal requests made under ISDEAA to enlarge the 
pool of tribes who are participating in P.L. 93-638 direct 
contracting or self-governance compacting. Accordingly, the 
amendment reaffirms congressional intent that all funds shall 
be made available to tribes who request and are qualified to 
use P.L. 93-638 contracting and self-governance compacting for 
their IRR program.
    Moreover, the language clearly states that if a tribe 
assumes responsibility for the administration of their IRR 
programs under P.L. 93-638 or the self-governance pilot 
program, the BIA cannot withhold 6 percent of the funding or 
any percentage for project-related costs for road programs, 
functions, services, or activities that the Indian tribe has 
now assumed. Tribes that are operating IRR programs under P.L. 
93-638 contracting or the self-governance pilot program do not 
need the BIA's ``administrative services.'' This amendment is 
needed to remedy the current situation where the BIA no longer 
administers IRR programs for contracting tribes, yet continues 
to deduct both 6 percent and project-related funds for 
administrative costs. If a tribe is administering the IRR 
program, then the tribe should receive all of the funds which 
the BIA previously used to perform the same functions.
    Health and Safety. Finally, the bill allows tribes the 
option to independently meet the statutorily required Health 
and Safety Standards without the additional requirements of BIA 
oversight but only if the tribe: (1) agrees in its contract to 
meet industry standards, (2) has had a licensed engineer review 
and certify the plans and specifications, and (3) has sent a 
copy of the certification to the BIA.
    Currently, the BIA will not permit an Indian tribe to begin 
construction on an IRR project until after the BIA has reviewed 
and approved the plans, specifications and estimates 
(PS&E's)for the project to ensure that construction of the project will 
not jeopardize public health and safety. However, providing tribes 
flexibility in meeting health and safety standards will not limit the 
ability of the BIA or FHWA to ensure that the IRR roads and bridges are 
built safely and efficiently. The BIA will retain its monitoring and 
final inspection authorities as currently permitted under law.\12\ 
Finally, the requirements of the Single Audit Act (31 U.S.C. Sec. 7501 
et seq.) will provide additional means to ensure compliance and subject 
the non-complaint tribe to the usual single audit penalties.\13\
---------------------------------------------------------------------------
    \12\ See 25 U.S.C. Sec. 458cc(e)(1); 25 C.F.R. Sec. 900.131.
    \13\ Under the Single Audit Act, an auditor spot checks contractual 
commitments, such as an Indian tribe's commitment to adhere to industry 
standards. By reviewing and analyzing the construction documents and 
other supportive work papers, the auditor will ensure that the tribe is 
in compliance with the contract.
---------------------------------------------------------------------------
    The amendment is needed because the current BIA review 
process creates substantial delay, with tribes often forced to 
wait an entire construction period for the BIA to review the 
PS&E's that were submitted by tribes who have either a licensed 
engineer on staff or retained on contract. Retaining a 
bureaucratic check on every detail of IRR planning and 
construction is unnecessary and creates redundancy and 
inefficiency. Moreover, this amendment is consistent with ISTEA 
and TEA-21's policies of increasing local and state flexibility 
and decision-making by authorizing tribes to begin their 
construction projects without unreasonable delay that exists 
from bureaucratic delay. By promoting efficiency, limited IRR 
funding can be better managed and budgeted.

                          Legislative History

    The Indian Tribal Surface Transportation Act of 2000 (S. 
2283) was introduced on March 23, 2000, by Senator Campbell, 
for himself, and for Senator Inouye and Senator Johnson. S. 
2283 was referred to the Committee on Indian Affairs and a 
legislative hearing was held on the bill on June 28, 2000. On 
July 26, 2000, the Committee on Indian Affairs convened a 
business meeting to consider S. 2283 and other measures that 
had been referred to it, and on that date, the Committee 
unanimously reported a substitute amendment to S. 2283.

            Committee Recommendation and Tabulation of Vote

    On July 26, 2000, the Committee on Indian Affairs, in an 
open business session, adopted an amendment-in-the-nature of a 
substitute to S. 2283 by voice vote and ordered the bill, as 
amended, reported favorably to the full Senate.

                    Cost and Budgetary Consideration

    The cost estimate for S. 2283 as calculated by the 
Congressional Budget Office, is set forth below:

                                     U.S. Congress,
                               Congressional Budget Office,
                                   Washington, DC, August 31, 2000.
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. 2283, the Indian 
Tribal Surface Transportation Act of 2000.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is James 
O'Keeffe.
            Sincerely,
                                          Barry B. Anderson
                                    (For Dan L. Crippen, Director).
    Enclosure.

S. 2283--Indian Tribal Surface Transportation Act of 2000

    S. 2283 would modify the Indian Reservation Roads (IRR) 
program within the Department of Transportation's (DOT's) 
Federal-Aid Highways program. CBO estimates that implementing 
the bill would not have a significant impact on the federal 
budget. The bill would not affect direct spending or receipts; 
therefore, pay-as-you-go procedures would not apply. S. 2283 
contains no intergovernmental or private-sector mandates as 
defined in the Unfunded Mandates Reform Act and would impose no 
costs on state, local, or tribal governments.
    S. 2283 would set the obligation limitation for the IRR 
program equal to the contract authority available for this 
program. (Contract authority is a mandatory form of budget 
authority, its use under the federal-aid program is generally 
controlled by obligation limitations contained in appropriation 
acts.) Under current law, the obligation limitation for the IRR 
program would be lower than the contract authority for this 
program. For 2000, the IRR contract authority is $289 million 
and the obligation limitation for this program is $254 million. 
S. 2283 would not change the total amount of contract 
authority, or the overall obligation limitation for the 
federal-aid program. Consequently, any increase in spending for 
the IRR program under this bill would be offset by reduced 
spending on other federal-aid activities.
    The CBO staff contact is James O'Keeffe. This estimate was 
approved by Peter H. Fontaine, Deputy Director for Budget 
Analysis.

                      Regulatory Impact Statement

    Paragraph 11(b) of rule XXVI of the Standing Rules of the 
Senate requires that each report accompanying a bill to 
evaluate the regulatory paperwork impact that would be incurred 
in implementing the legislation. The Committee has concluded 
that enactment of S. 2283 will create only de minimis 
regulatory or paperwork burdens.

                        Executive Communications

    The Committee has received a letter from the Department of 
Interior commenting on S. 2283, dated July 11, 2000. This 
letter is set forth below.

                   U.S. Department of the Interior,
                                   Office of the Secretary,
                                     Washington, DC, July 11, 2000.
Hon. Ben Nighthorse Campbell,
Chairman, Committee on Indian Affairs,
U.S. Senate, Washington, DC.
    Dear Mr. Chairman: This letter sets forth the views of the 
Department of the Interior on S. 2283, the ``Indian Tribal 
Surface Transportation Act of 2000'' and its impact on the 
current Indian Reservation Roads (IRR) program as jointly 
administered by the Bureau of Indian Affairs (BIA) and the 
Federal Highway Administration (FHWA). The Department opposes 
S. 2283.
    The IRR program was established on May 26, 1928, by Public 
Law 520, 25 U.S.C. 318(a). The partnership with the BIA and the 
FHWA began in 1930 when the Secretary of Agriculture was 
authorized to cooperate with the state highway agencies and the 
Department of the Interior (Interior) in the survey, 
construction, reconstruction, and maintenance of Indian 
reservation roads serving Indian lands.
    The first Memorandum of Agreement between the BIA and the 
FHWA was executed in 1948. In 1958, the laws relative to 
highways were revised, codified, and reenacted as Title 23, 
U.S.C. by Public Law 85-767. The new title contained a 
definition of IRR and bridges and a section devoted to Indian 
reservation roads.
    Since the passage of the Surface Transportation Assistance 
Act of 1982 (Public Law 97-424), which incorporated the Indian 
Reservation Roads program into the Federal Lands Highway 
Program (FLHP) and provided funding from the Highway Trust 
Fund, the IRR program has enjoyed an expanded partnership with 
the FHWA and increased transportation opportunities for Indian 
tribal governments.
    With the enactment of the TEA-21, the program changed to 
include a Nationwide Priority Program for improving IRR 
deficient bridges, and negotiated rulemaking with Indian tribal 
governments required for IRR program procedures and the 
``relative need'' funding formula.
    The IRR program is authorized under the FLHP, 23 U.S.C. 
204. The use of IRR funds is also defined in 23 U.S.C. 204. The 
authorized funding level by TEA-21 was $225 million in 1998 and 
$275 million for each of fiscal years 1999 through 2003. The 
program is jointly administered by the BIA Division of 
Transportation (BIADOT) and the Federal Lands Highway (FLH) of 
the FHWA.
    The purpose of the IRR program is to provide safe and 
adequate transportation and public road access to and within 
Indian reservations, Indian lands and communities for Native 
Americans, visitors, recreationists, resource users and others 
while contributing to economic development, self-determination, 
and employment of Native Americans.
    Currently, the IRR system consists of approximately 41,430 
kilometers (25,700 miles) of BIA and tribally owned roads and 
41,270 kilometers (25,600 miles) of state, county and local 
government public roads with one (1) ferry boat operation 
(Inchelium-Gifford Ferry of Washington).
    From the year authorization, the FHWA reserves up to 1.5 
percent for their administration of the funds. The BIADOT and 
the FLH develop a plan for using the remaining funds. This plan 
includes operating expenses for the Federal Lands Highway 
Coordinated Technology Implementation Program (CTIP); the Local 
Technical Assistance Program (LTAP) centers for tribal 
governments; and BIA administration (not to exceed 6 percent, 
as authorized in the annual Interior Appropriations Act since 
1984). The BIADOT administers transportation planning studies 
for the reservations, bridge inspections, and the updating of 
the road inventory. In addition, activities such as public 
outreach to tribes and the negotiated rulemaking are funded and 
managed by the BIA. An additional 2 percent of the IRR funds 
are set-aside for transportation planning by tribal 
governments.
    Beginning in March 1999, the Secretary of the Interior 
(Secretary) established a negotiated rulemakng committee to 
begin developing procedures and a funding formula for the IRR 
program. To date, approximately 14 meetings have been held at 
various locations around the country. The committee is composed 
of 29 tribal representatives and 13 representatives of the 
Federal government. In addition to completing work on the 
regulations and the formula, the committee is also tasked with 
providing a mechanism to distribute funding in FY 2000.
    TEA-21 funding in FY 2000 could not be distributed without 
an authorized funding formula. In addition, approximately $18.3 
million were provided by the FY 2000 Department of 
Transportation Appropriations Act. As part of this committee 
consensus to distribute the critically needed funding to 
projects and awaiting tribal transportation needs, the 
committee made recommendations to the Secretary on the 
distribution of FY 2000 funding. They recommended a mechanism 
to distribute the additional $18.4 million to the tribes with 
inadequate transportation planning and to reservations with 
deficient IRR bridges. Following this direction the Secretary 
published a Notice for public comment recommending that the FY 
2000 IRR funding be distributed in accordance with the Relative 
Needs allocation formula. As an emergency measure, one half of 
the FY 2000 funds were distributed upon publication of the 
temporary rule of February 15, 2000. After receiving and 
reviewing comments from this first notice the Secretary 
published a second temporary rule on June 16, 2000, to 
distribute the remaining FY 2000 IRR funds. The second rule 
also addressed and corrected the distribution data affecting 
two states in which no data was provided.
    The goal of the committee is to publish a Notice of 
Proposed Rulemaking by the end of this calendar year. 
Adjustments will need to be made on the implementation of the 
rules and the funding formula. The committee has made 
noticeable progress in the last 6 months.
    S. 2283 proposes the following additions and changes to 
Title 23 Highways. First, the bill proposes to make the IRR 
program an exception to the obligation ceiling. In fiscal years 
1998, 1999 and 2000, approximately $91 million of the IRR 
contract authority was affected by the obligation limitation 
and was not available for the IRR program. The BIA is in favor 
of a provision that will provide 100 percent obligation 
limitation for the IRR program, as was the case between fiscal 
years 1983 and 1987 when the IRR program became part of the 
Federal Land Highway program until the enactment of TEA-21. The 
FY 2001 President's Budget proposed to provide the IRR program 
with 100 percent obligation limitation. However, we oppose 
making this program mandatory. The impact to the program has 
been such that since the enactment of TEA-21, approximately 341 
more miles of improved earth roads or 270 more miles of paved 
surface roads could have been constructed based on the approved 
Transportation Improvement Program (TIP). The impact upon 
tribal projects is that approximately 169 more tribes could 
have had their projects funded through the end of FY 1999.
    Second, S. 2283 proposes to establish a pilot program 
within the FHWA-FLH program. We currently have to pilot 
projects initiated under the Office of Self-Governance. These 
demonstration projects were advanced as pilots to assist the 
participating tribes in fully implementing provisions of the 
law in the abundance of revised regulations for the IRR program 
(25 CFR 70) which are currently being addressed in the 
negotiated rulemaking. We have participated with the FHWA in 
the negotiations of these pilots. The establishment of direct 
pilots, as proposed by S. 2283, with FHWA does not address the 
involvement of the facility owner. In the case of the IRR, 
approximately one half of the IRR system is ``owned'' by the 
United States. As the facility owner, the responsibility for 
these systems remains with the BIA, not the FHWA or the tribes. 
For non-BIA systems on the IR, a similar condition exists 
wherein the local public authority will be responsible for 
those roads. As the responsible ``facility owner'', it is 
necessary for the BIA to review and approve the performance of 
functions such as the environmental and historic preservation 
activities as well as approval of the plans, specifications and 
the engineer's estimate.
    The use of these roads is not exclusive to tribes, they are 
public roads. As a local public authority, tribes can plan, 
participate and prioritize projects with the other public 
authorities, but the final approval of road improvements 
remains with the facility owner. This view of project 
involvement and the approval of improvements is shared by the 
FHWA. It is not clear what the Secretary's Trust Responsibility 
is in the FHWA pilots.
    Third, S. 2283 proposes to limit the amount of funding 
available for the BIA to perform all program management and 
project functions within the amount available as ``not to 
exceed 6 percent of the contract authority available from the 
Highway Trust Fund''. During the debate regarding TEA-21, the 
states argued that they should be given the flexibility to 
spend some of thetrust fund money for management costs. The 
states argued that in 1994 they spent an amount comparable to about 5.5 
percent of their own state funds managing all Highway Trust funded 
programs. In response to arguments, when Congress enacted TEA-21, it 
decided to go beyond the appropriations process and create a permanent 
fix in Section 302 of Title 23 which addresses management costs for 
states and agencies.
    To limit the BIA or any highway agency to a fixed amount, 
such as 6 percent, will impact the delivery of services 
provided by the program management arm as well as the 
engineering (preconstruction and construction) arm of the BIA 
to projects not contracted by tribes under the Indian Self-
Determination and Education Assistance Act, as amended. The 
recent passage of TEA-21 also repealed the long standing 
provision in 23 U.S.C. 106(c) which limited the amount of 
construction engineering to 15 percent of the construction 
costs. Since 1994, we have found that the average cost per year 
of engineering alone on both contracted functions as well as 
within the BIA transportation workforce, was about 20.5 percent 
combined (13 percent for PE and 7.5 percent for CE). We are 
opposed to any provision that limits the amount of funding for 
program management and project related preconstruction and 
construction engineering costs to a fixed amount of 6 percent.
    Our final concern with S. 2283 is language within Section 
2(c) which proposes that an Indian tribe or tribal organization 
may advance a project to construction if the tribe provides 
assurances that the construction will meet or exceed proper 
health and safety standards. Under Section 403(e)(2) of the Act 
it states, ``In all construction projects performed pursuant to 
this title, the Secretary shall ensure that proper health and 
safety standards are provided in the funding agreement''.
    The Department would like to relate some Tribal views we 
have heard from several negotiated rulemaking meetings. One 
view is that the Secretary may carry out his existing 
responsibility under Section 403(e)(2) of the Act by delegating 
this health and safety responsibility to the tribes. The 
difficulty with this view is that the Secretary cannot ensure 
health and safety since the tribe is performing the health and 
safety function and the Secretary is not monitoring performance 
during the design and construction process. Thus, under this 
scenario, the Secretary has no responsibility for the outcome 
of the construction project involved during the design and 
construction process.
    A second view, as reflected in S. 2283, is that the tribe 
will provide health and safety assurances for the construction 
in the plans and specifications and that the plans are approved 
by a licensed professional engineer. However, this only covers 
health and safety prior to actual construction. It also appears 
to eliminate the Secretary's health and safety responsibility 
during the actual construction process and does not provide 
authority for the Secretary to (1) monitor the construction 
process to ensure that health and safety standards are met; (2) 
ensure before construction begins the adequacy of the tribal 
inspection system, including license engineers; (3) review 
major change orders to ensure that a safe facility is 
constructed; (4) if necessary, decline proposals that are 
unsafe or suspend construction that does not meet health and 
safety standards until corrective measures are proposed; and 
(5) if necessary, decline major change orders that do not meet 
health and safety requirements.
    Either of these views assumes that the Secretary can ensure 
health and safety without any authoritative involvement in the 
design and construction of the project. It would be unfair and 
unreasonable to assume that the Secretary has a trust or any 
other responsibility for safe construction under either of 
these approaches. We are also concerned that the Secretary 
would not have the ability to (1) identify construction that 
does not meet the plan or specification requirements, which may 
result in an unsafe or poorly constructed facility that would 
require removal (demolition) or major reconstruction, and (2) 
to identify hazards that could subject construction workers and 
the traveling public to unsafe conditions during actual 
construction.
    Another view is that the ability to ensuring health and 
safety is covered under the government's trust responsibility. 
Any statutory amendment giving total control of construction to 
the tribes, as in S. 2283, should clearly provide that the 
United States has no trust or any other responsibility for the 
outcome of the construction. Otherwise, S. 2283 should be 
amended to allow the Secretary authority to monitor 
construction, similar to Section 403(e)(2) of the Act.
    Furthermore, the health and safety provisions of S. 2283 
appear to change Title I, which applies to hospital 
construction for the Indian Health Service, irrigation projects 
for the Bureau of Reclamation, school construction for the BIA 
and dam safety construction, among others. This would appear to 
remove Secretarial monitoring for health and safety for all 
Title I and Title IV construction, as well.
    In conclusion, the Department can and does support 
providing 100 percent obligation limitation to the IRR program 
as was proposed in the President's FY 2001 budget. However, the 
Department does not support the first provision that would make 
the program mandatory. We do not support the three provisions 
of S. 2283 that would limit the ability of the BIA to meet its 
responsibility adequately for the proper management, design and 
construction of Indian reservation roads.
    The Office of Management and Budget has advised that there 
is no objection to the presentation of this report from the 
standpoint of the Administration's program.
            Sincerely,
                                               Kevin Gover,
                            Assistant Secretary for Indian Affairs.

                        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 are required to be set out in the accompanying 
Committee report. The Committee finds that enactment of S. 2283 
will result in the following changes to 23 U.S.C. Sec. Sec. 101 
et seq., with existing language which is to be deleted in 
bolded brackets and new language to be added in italic:

                         23 U.S.C. 104 (notes)

                           obligation ceiling

    (c) Distribution of Obligation Authority.--For each of 
fiscal years 1998 through 2003, the Secretary shall--
          (1) not distribute obligation authority provided by 
        subsection (a) [of this note] for such fiscal year for 
        amounts authorized for administrative expenses and 
        programs funded from the administrative takedown 
        authorized by section 104(a) of title 23, United States 
        [Code] [subsec. (a) of this section], [and] Code, 
        amounts authorized for the highway use tax evasion 
        program and the Bureau of Transportation Statistics, 
        and for each of fiscal years 2001 through 2003, amounts 
        authorized for Indian reservation roads under section 
        204 of title 23, United States Code;

                          23 U.S.C. 202(d)(3)

    (d)(3) Contracts and Agreements With Indian Tribes.--
          (A) In general.--Notwithstanding any other provision 
        of law or any interagency agreement, program guideline, 
        manual, or policy directive, all funds made available 
        under this title for Indian reservation roads and for 
        highway bridges located on Indian reservation roads to 
        pay for the costs of programs, services, functions, and 
        activities, or portions thereof, that are specifically 
        or functionally related to the cost of planning, 
        research, engineering, and construction of any highway, 
        road, bridge, parkway, or transit facility that 
        provides access to or is located within the reservation 
        or community of an Indian tribe shall be made 
        available, upon request of the Indian tribal 
        government, to the Indian tribal government for 
        contracts and agreements for such planning, research, 
        engineering, and construction in accordance with the 
        Indian Self-Determination and Education Assistance Act.
          (B) Exclusion of agency participation.--Funds for 
        programs, functions, services, or activities, or 
        portions thereof, including supportive administrative 
        functions that are otherwise contractible to which 
        subparagraph (A) applies, shall be paid in accordance 
        with subparagraph (A) without regard to the 
        organizational level at which the Department of the 
        Interior that has previously carried out such programs, 
        functions, services, or activities.
          (C) Federal lands highway program demonstration 
        project.--
                  (i) In general.--The Secretary shall 
                establish a demonstration project under which 
                all funds made available under this title for 
                Indian reservation roads and for highway 
                bridges located on Indian reservation roads are 
                provided for in subparagraph (A), shall be made 
                available, upon request of the Indian tribal 
                government involved, to the Indian tribal 
                government for contracts and agreements for the 
                planning, research, engineering, and 
                construction described in such subparagraph in 
                accordance with the Indian Self-Determination 
                and Education Assistance Act.
                  (ii) Exclusion of agency participation.--In 
                accordance with subparagraph (B), all funds for 
                Indian reservation roads and for highway 
                bridges located on Indian reservation roads to 
                which clause (I) applies, shall be paid without 
                regard to the organizational level at which the 
                Federal lands highway program has previously 
                carried out the programs, functions, services, 
                or activities involved.
                  (iii) Selection of participating tribes.--
                          (I) Participants.--
                                  (aa) In general.--The 
                                Secretary shall select 12 
                                geographically diverse Indian 
                                tribes in each fiscal year from 
                                the applicant pool described in 
                                subclause (II) to participate 
                                in the demonstration project 
                                carried out under clause (I).
                                  (bb) Consortia.--Two or more 
                                Indian tribes that are 
                                otherwise eligible to 
                                participate in a program or 
                                activity to which this title 
                                applies may form a consortium 
                                to be considered as a single 
                                tribe for purposes of becoming 
                                part of the applicant pool 
                                under subclause (II).
                                  (cc) Funding.--An Indian 
                                tribe participating in the 
                                pilot program under this 
                                subparagraph shall receive 
                                funding in an amount equivalent 
                                to the funding that such tribe 
                                would otherwise receive 
                                pursuant to the funding formula 
                                established under section 
                                1115(b) of the Transportation 
                                Equity Act for the 21st 
                                Century, plus an additional 
                                percentage of such amount, such 
                                additional percentage to be 
                                equivalent to the percentage of 
                                funds withheld during the fiscal 
                                year involved for the road program 
                                management costs of the Bureau of 
                                Indian Affairs under section 202(f)(1) 
                                of title 23, United States Code.
                          (II) Applicant pool.--The applicant 
                        pool described in this subclause shall 
                        consist of each Indian tribe (or 
                        consortium) that--
                                  (aa) has successfully 
                                completed the planning phase 
                                described in subclause (III);
                                  (bb) has requested 
                                participation in the 
                                demonstration project under 
                                this subparagraph through the 
                                adoption of a resolution and 
                                other official action by the 
                                tribal governing body; and
                                  (cc) has, during the 3-fiscal 
                                year period immediately 
                                preceding the fiscal year for 
                                which participation under this 
                                subparagraph is being 
                                requested, demonstrated 
                                financial stability and 
                                financial management capability 
                                through a showing of no 
                                material audit exceptions by 
                                the Indian tribe during such 
                                period.
                          (III) Criteria for determining 
                        financial stability and financial 
                        management capacity.--For purposes of 
                        this subparagraph, evidence that, 
                        during the 3-year period referred to in 
                        subclause (II)(cc), an Indian tribe had 
                        no uncorrected significant and material 
                        audit exceptions in the required annual 
                        audit of the Indian tribe's self-
                        determination contracts or self-
                        governance funding agreements with any 
                        Federal agency shall be conclusive 
                        evidence of the required stability and 
                        capability.
                          (IV) Planning phase.--An Indian tribe 
                        (or consortium) requesting 
                        participation in the project under this 
                        subparagraph shall complete a planning 
                        phase that shall include legal and 
                        budgetary research and internal tribal 
                        government and organization 
                        preparation. The tribe (or consortium) 
                        shall be eligible to receive a grant 
                        under this subclause to plan and 
                        negotiate participation in such 
                        project.

                             23 U.S.C. 202

    (f) Indian Reservation Road, Administration.--
         (1) In general.--Notwithstanding any other provision 
        of law, not to exceed 6 percent of the contract 
        authority amounts made available from the Highway Trust 
        Fund to the Bureau of Indian Affairs shall be used to 
        pay the administrative expenses of the Bureau for the 
        Indian reservation roads program and the administrative 
        expenses related to individual projects that are 
        associated with such program. Such administrative funds 
        shall be made available to an Indian tribal government, 
        upon the request of the government, to be used for the 
        associated administrative functions assumed by the 
        Indian tribe under contracts and agreements entered 
        into pursuant to the Indian Self-Determination and 
        Education Assistance Act.
          (2) Health and safety assurances.--Notwithstanding 
        any other provision of law, an Indian tribe or tribal 
        organization may commence road and bridge construction 
        that under the Transportation Equity Act for the 21st 
        Century (25 U.S.C. 104) that is funded through a 
        contract or agreement under the Indian Self-
        Determination and Education Assistance Act so long as 
        the Indian tribe or tribal organization has--
                  (A) provided assurances in the contract or 
                agreement that the construction will meet or 
                exceed proper health and safety standards;
                  (B) obtained the advance review of the plans 
                and specifications from a licensed professional 
                who has certified that the plans and 
                specifications meet or exceed the proper health 
                and safety standards; and
                  (C) provided a copy of the certification 
                under subparagraph (B) to the Bureau of Indian 
                Affairs.

                                  

```