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[Senate Report 116-34]
[From the U.S. Government Publishing Office]

                                                       Calendar No. 73
116th Congress     }                                     {      Report
                                 SENATE
 1st Session       }                                     {      116-34

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

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

                                _______
                                

                 April 29, 2019.--Ordered to be printed

                                _______
                                

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

                              R E P O R T

                         [To accompany S. 209]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Indian Affairs, to which was referred the 
bill (S. 209) to amend the Indian Self-Determination and 
Education Assistance Act to provide further self-governance by 
Indian tribes, and for other purposes, having considered the 
same, reports favorably thereon without amendment and 
recommends that the bill do pass.

                                PURPOSE

    The purpose of S. 209 is to amend the Indian Self-
Determination and Education Assistance Act of 1975 (Act) to 
streamline the Department of the Interior's process for 
approving self-governance compacts and annual funding 
agreements. The bill would align the process used by the 
Department of the Interior to be similar to the processes used 
by the Indian Health Service.

                          NEED FOR LEGISLATION

    This legislation, S. 209, is needed to correct the 
bureaucratic processes and procedures that the Department of 
the Interior Self-Governance program has imposed which have 
either discouraged, to some degree, the further compacting of 
Indian programs within the Department of the Interior 
(Department) by Indian tribes or hindered negotiations between 
the Department and Indian tribes for renewing compacts or 
annual funding agreements. The provisions included in S. 209 
provide greater certainty and more guidance from Congress on 
issues relating to decision-making timeframes, re-assumption of 
programs by the Department, construction projects, and timing 
of funding transfers.

                               BACKGROUND

    The Indian Self-Determination and Education Assistance Act 
of 1975 (Act) is one of the most important legislative acts 
affecting Indian country of the last four decades. This Act has 
been a key driver in improving communities throughout Indian 
country.
    The Act originally authorized Indian tribes to enter into 
contracts with the Bureau of Indian Affairs (BIA) within the 
Department of the Interior, and the Indian Health Service (IHS) 
within the Department of Health and Human Services, to receive 
Federal funds and manage programs that would otherwise be 
managed by the Federal agencies. These contracts are commonly 
referred to as ``638 contracts'' after the Pub. L. No. 93-638 
for the Act.
    Expansion of this tribal administration approach has taken 
separate paths at these agencies. The Act was amended in 1988 
to establish the Department of the Interior Self-Governance 
Demonstration Program. For the first time, tribes were 
authorized to plan, administer, and consolidate multiple 
programs and services that had always been administered by the 
Department of the Interior.
    Indian tribes can administer these programs through 
compacts after demonstrating a higher level of accountability 
and fiscal responsibility, including three years of 
administering 638 contracts without material audit problems. 
Each 638 contract or self-governance compact identifies 
functions and activities to be carried out by the tribe, as 
well as any administrative, reporting, or other requirements 
that must be followed. However, these self-governance 
agreements allow tribal management of programs pursuant to one 
compact instead of requiring different contracts for each 
individual program.
    In 1992, the Act was amended to establish a self-governance 
demonstration program within the IHS as well. In 1994, the Act 
was again amended to make the Department of the Interior Self-
Governance Demonstration Program permanent. The 1994 amendments 
also made certain non-BIA programs within the Department of the 
Interior eligible for contracting or compacting.\1\
---------------------------------------------------------------------------
    \1\Title IV of the Act mandates that all BIA programs are eligible 
for inclusion in self-governance compacts, but allows certain non-BIA 
programs in DOI to be subject to compacting under certain limited 
circumstances.
---------------------------------------------------------------------------
    When Congress made the IHS self-governance program 
permanent in 2000, several detailed improvements were enacted, 
such as adding specific definitions and identifying mandatory 
and prohibited terms and conditions of compacts, funding 
agreements, and construction projects. Tribes wanted to 
incorporate those improvements into the Department of the 
Interior self-governance program, in part, to gain consistency 
in the administration of their self-governance programs.
    In addition, Indian tribes contend that the Department 
bureaucracy has for many years resisted efforts by the tribes 
to further streamline compacting processes, and that, without 
additional reforms, the success of the Act's policy of tribal 
self-determination may not reach the full potential.

                          LEGISLATIVE HISTORY

    In the 108th Congress, Senators Campbell and Inouye 
introduced the ``Department of the Interior Tribal Self-
Governance Act of 2004'', S. 1715. The Committee held a hearing 
on the bill on May 12, 2004. The Committee met to consider the 
bill on June 16, 2014. The Committee favorably ordered the bill 
to be reported, as amended, to the Senate. The bill did not 
pass the Senate.
    In the 109th and 110th Congresses, the Committee held 
oversight hearings relative to tribal self-governance, but no 
bill was introduced. In the 109th Congress on September 20, 
2006, the Committee held an oversight hearing on ``Tribal Self 
Governance.'' During the 110th Congress, the Committee held an 
oversight hearing on the ``Successes and Shortfalls of Title IV 
of the Indian Self-Determination and Education Assistance Act: 
Twenty Years of Self-Governance'' on May 13, 2008.
    Even though no Senate bill was introduced in the 111th 
Congress, the Committee held a hearing on November 18, 2010 on 
a bill the House of Representatives passed, H.R. 4347, the 
``Department of the Interior Tribal Self-Governance Act of 
2010'' at which the Department of the Interior testified 
against the bill. While considerable work to address the 
Department's issues was undertaken by Congressional staff and 
tribal representatives, no further Committee action was taken 
on the bill.
    In the 112th Congress, Representative Boren introduced H.R. 
2444, the ``Department of the Interior Tribal Self-Governance 
Act of 2011.'' This bill contained several revisions to prior 
bills based on discussions between Congressional staff, the 
Department officials, and tribal representatives. The 
Subcommittee on Indian and Insular Affairs of the Committee on 
Natural Resources of the House of Representatives held a 
hearing on this bill on September 22, 2011. No further action 
was taken on this bill.
    Also in the 112th Congress, the Committee on Indian Affairs 
held an oversight hearing, ``Advancing the Federal-Tribal 
Relationship through Self-Governance and Self-Determination'', 
on September 20, 2012. On December 17, 2012, Senators Akaka and 
Barrasso introduced S. 3685, but no further action was taken by 
the Committee on the bill.
    In the 113th Congress, Senator Cantwell introduced S. 919, 
the ``Department of the Interior Tribal Self-Governance Act of 
2014'' on May 9, 2013. Senators Barrasso, Baucus, Crapo, 
Heinrich, Murray, Schatz, Tester, Udall (NM) and Wyden were 
original co-sponsors. Senators Murkowski, Begich, Warren and 
Walsh were later added as cosponsors. The Committee held a 
hearing on S. 919 on January 29, 2014. On June 11, 2014, the 
Committee met to consider the bill. One substitute amendment 
was offered and adopted, and the Committee then ordered the 
bill, as amended, to be reported favorably to the Senate by 
voice vote.
    The House companion bill, H.R. 4546 was sponsored by 
Representative DeFazio with six cosponsors. That bill was 
referred to the Committee on Natural Resources of the House of 
Representatives on May 1, 2014, with referrals to both 
Subcommittees on Indian and Alaska Native Affairs and on Water 
and Power. The Subcommittee on Indian and Alaska Native Affairs 
held a hearing on the bill on July 15, 2014. No further action 
was taken on this bill.
    In the 114th Congress, Senator Barrasso introduced S. 286 
on January 18, 2015. Senators Tester, Crapo, Franken, 
Murkowski, and Schatz co-sponsored the bill. No legislative 
hearing was held on this bill. On February 4, 2015, the 
Committee met to consider the bill. The Committee ordered the 
bill, without amendments, to be reported favorably to the 
Senate by voice vote.
    During the 115th Congress, Senator Hoeven introduced S. 
2515 on March 7, 2018. Senators Barrasso, Murkowski, and Udall 
were original co-sponsors. Senator Cantwell joined as a co-
sponsor on March 20, 2018 and Senator Sullivan joined on April 
10, 2018. Senator McCain joined as a co-sponsor on August 21, 
2018.
    No legislative hearing was held on this bill. However, on 
April 18, 2018, the Committee held an oversight hearing on 
``The 30th Anniversary of Tribal Self-Governance: Successes in 
Self-governance and an Outlook for the Next 30 Years'' where 
the Committee received testimony in support of the bill.
    On April 11, 2018, the Committee held a duly called 
business meeting at which S. 2515 was considered. The Committee 
ordered the bill, without amendments, to be reported favorably 
to the Senate by voice vote.
    During this Congress, Senators Hoeven, Udall, Barrasso, and 
Smith, introduced S. 209 on January 24, 2019. Senator Cantwell 
was added as a co-sponsor on January 29, 2019. No legislative 
hearing was held on this bill. On January 29, 2019, the 
Committee held a duly called business meeting at which S. 209 
was considered. The Committee ordered the bill, without 
amendments, to be reported favorably to the Senate by voice 
vote.

                          OVERVIEW OF THE BILL

    This legislation, S. 209, would amend the Act to streamline 
the Department of the Interior's process for approving self-
governance compacts and annual funding agreements for Indian 
programs. The bill would also align the process used by the 
Department of the Interior to be similar to the processes used 
by the IHS. Currently each tribe seeking a new compact or 
renewal of a compact (or annual funding agreement) must use two 
different negotiation processes.
    The bill, S. 209, contains two titles. The first title 
includes amendments to the self-governance provisions of Title 
IV of the Indian Self-Determination and Education Assistance 
Act of 1975 that would clarify procedures and limit the 
Secretary's ability to delay compacting or release of funding. 
These changes are meant to mirror the provisions that the 
tribes have found beneficial in the IHS compacting process.
    Section 101 of this legislation also makes clear that 
nothing in the bill expands or limits which non-BIA programs 
are eligible for inclusion in self-governance compacts beyond 
those already authorized to be included by current law. The 
section also clarifies that provisions of water settlements and 
their authorizing legislation, state authority to regulate fish 
and wildlife under state law, applicability of federal law 
related to management of fish and wildlife (except for the 
authority described in subparagraph (A) of this Section), and 
any tribal treaty-reserved or other rights are not affected by 
the self-governance amendments.
    While the bill is not expanding the scope of Federal 
programs eligible for inclusion in self-governance agreements, 
current law does provide the Secretary with the discretion to 
include certain non-BIA programs in self-governance agreements 
as negotiated with tribes. These programs include those which 
have a special geographic, historical, or cultural significance 
to a petitioning tribe.
    Even though it has been in the Act for over twenty years, 
this authority has been used sparingly by the Secretary. The 
bill leaves this discretionary authority unchanged. The 
Committee commends the Department for its past efforts to 
include programs such as the National Bison Range Complex in 
Montana and the Yukon Flats National Wildlife Refuge in Alaska, 
both of which satisfy the requirements as eligible programs 
under existing law.
    The second title would amend the Pub. L. No. 93-638 
contract negotiation process under Title I (i.e., the non-self-
governance title) of the Indian Self-Determination and 
Education Assistance Act of 1975 and adds more flexibility in 
administering those contracts for tribes that either have not 
qualified for self-governance or have chosen to administer only 
a few BIA programs.

                  SUMMARY OF KEY PROVISIONS OF S. 209

    This bill, S. 209, reflects the numerous changes that have 
been made over time during the debate on prior bills. Most 
notably, discussions between Congressional staff, tribal, and 
Federal officials led to greater clarity in several provisions 
for negotiating and renewing BIA compacts as well as the 
``savings'' clause set forth in Section 101. The bill was 
reorganized by switching the two titles (Title II became Title 
I and vice versa). It also sets forth additional subsections 
reflecting negotiations between the Indian tribal governments 
and the Association of Fish and Wildlife Agencies.
    Title I. The first title of the bill is intended to mirror 
the IHS self-governance program in several respects by 
codifying several regulations, clarifying procedures, and 
minimizing opportunities for the Secretary to delay compacting 
or funding. These provisions amend Title IV of the Indian Self-
Determination and Education Assistance Act of 1975. A few of 
the key sections (as amended by Section 101(e) of the bill) are 
summarized below.
    Sections 404 and 405 set forth requirements and procedures 
for amendments to compacts, retrocession of programs\2\ and the 
types of programs that may be included in compacts. For the 
most part, many of these provisions are merely codifying 
existing regulations.
---------------------------------------------------------------------------
    \2\Retrocession means to ``return'' a compacted program to the BIA 
to resume Federal management of the program. This retrocession rarely 
happens--but if it does, this section would provide certainty to that 
process.
---------------------------------------------------------------------------
    Section 407 authorizes, for construction contracts for 
buildings, roads, or infrastructure, tribes to assume some 
Federal responsibilities under the National Environmental 
Policy Act and National Historic Preservation Act. It further 
requires tribes to adhere to certain codes (similar to what 
tribes do under Indian housing laws).
    Section 408 sets forth an expedited process for funding 
transfers from the Secretary to the tribe and prohibit the 
Secretary from failing to transfer funds or reducing funding 
unless authorized by Federal law. Current law authorizes lump-
sum funding, but many tribes contend that the transfers have 
been obstructed in various other ways by the Secretary, 
contrary to the Act. They further contend that the Secretary 
has held back funding as leverage in compact negotiations.
    Section 409 requires the Secretary to act on a compacting 
tribe's regulatory waiver request within 120 days or the waiver 
is deemed approved, except for section 403(b)(2) or (c) 
programs (current law provides no alternative for tribes when 
the Secretary fails to act, except to sue for performance).
    Section 412 requires an annual report to Congress regarding 
the needs of, and funding to Indian tribes, funding formula 
methodology, list of non-BIA programs eligible for compacting, 
programmatic targets to encourage compacting, and views of 
tribes on this information. This provision essentially codifies 
existing regulations or imports IHS self-governance 
requirements to the BIA self-governance.
    Section 415 requires that, for judicial review of any 
appeals or administrative actions, the Secretary have the 
burden of proof demonstrating by a preponderance of the 
evidence the validity of the grounds for the decision, except 
for ``final offers'' to compact, which require a higher 
standard of clearly demonstrating the validity of the grounds 
for the decision.
    Section 101 Amendments. One important change in S. 209 
(also included in S. 2515 from the 115th Congress, S. 286 from 
the 114th Congress, and S. 919 from the 113th Congress) from 
the prior bills is a new Section 101(a) that includes a 
``savings clause.'' Section 101(a) states in this ``savings 
clause'' that nothing in the bill expands or limits which 
programs are eligible for inclusion in self-governance compacts 
beyond those already authorized to be included by current law. 
The subsection also clarifies that provisions of water 
settlements and their authorizing legislation are not affected 
by the self-governance amendments in the bill.
    The principal intended purpose of Section 101(a) is to 
clarify and make more succinct that none of the amendments or 
provisions of the bill will affect current law relating to (1) 
contracting or compacting of non-BIA programs under the Act, 
(2) Congressionally approved water settlements, (3) state 
authority to manage fish and wildlife under state law, (4) 
except as in subparagraph (A), the application of federal law 
to fish and wildlife management, and (5) tribal treaty or other 
rights.
    With respect to contracting or compacting non-BIA programs, 
if a non-BIA program or function could not be contracted or 
compacted under the Act on the day before the enactment of the 
bill, that program or function cannot be compacted after the 
enactment of the bill. It also clarifies that the water 
settlements that are relevant are only those which have been 
``expressly ratified or approved by an Act of Congress.''
    Title II. Other technical amendments were made in Title II 
of the bill, including the movement of references to the 
savings clause of the bill, changing dates, and clarifying the 
good faith negotiations requirement provisions.
    Section 201 clarifies that 638 contracts are subject to the 
Act's procurement rules, but remain exempt from other Federal 
procurement rules.
    Section 202 requires the Secretary to negotiate 638 
contracts in good faith.
    Section 204 codifies current Office of Management and 
Budget policy that not less than fifty percent of expenses of a 
tribal governing body for administering these Indian programs 
be deemed reasonable and allowable for determining ``indirect 
cost rates.''\3\
---------------------------------------------------------------------------
    \3\The ``indirect cost rate'' means a negotiated rate for such 
costs as utilities or administrative overhead, agreed to between an 
Indian tribe or tribal organization and the appropriate Federal agency. 
Indirect costs include reasonable and allowable costs of administrative 
or other expense related to the overhead incurred in connection with 
the operation of the Federal program (defined at 25 CFR Sec. 900.6).
---------------------------------------------------------------------------

       SECTION-BY-SECTION ANALYSIS OF S. 209, AS ORDERED REPORTED

Section 1--Short title; Table of contents

    Section 1 states that the Act may be cited as the 
`Practical Reforms and Other Goals To Reinforce the 
Effectiveness of Self-Governance and Self-Determination for 
Indian Tribes Act of 2018' or the `PROGRESS for Indian Tribes 
Act.'

                    TITLE I--TRIBAL SELF-GOVERNANCE

Section 101. Tribal self-governance

    Section 101 amends the Act by revising several provisions 
of Title IV which govern the tribal self-governance program.
    Section 101(a) provides that nothing in the PROGRESS for 
Indian Tribes Act increases, limits, or modifies the 
Secretary's authority regarding including non-BIA programs in 
638 contracts or compacts held the day before the enactment of 
the Act. Further, (1) no tribal water settlement or 
Congressional Act expressly ratifying or approving such water 
settlement, (2) state authority to manage fish and wildlife 
under state law, (3) except as in subparagraph (A), the 
application of Federal law to fish and wildlife management, and 
(4) tribal treaty or other rights are affected by the enactment 
of this Act.
    Section 101(b) provides definitions for key terms included 
in Title IV which, in addition to those in Title I, include 
`compact', `construction program and construction project', 
`Department', `funding agreement', `program', `self-governance' 
and `Secretary'.
    Section 101(c) amends Section 402 of the Act and provides 
for the establishment and eligibility requirements for the 
Tribal Self-Governance Program. It also sets forth procedures 
for a tribe to withdraw from a tribal organization, in whole or 
in part, as well as provisions for distributing funds to a 
withdrawing tribe. To be eligible to participate in self-
governance, a tribe must successfully complete a planning 
phase; request participation in self-governance by resolution 
or other official action by the tribal governing body; and 
demonstrate, for the previous three fiscal years, financial 
stability and financial management capability as evidenced by 
the tribe having no uncorrected significant and material audit 
exceptions in the required annual audit of its agreements with 
any Federal agency. Tribes are eligible to receive grants for 
planning to participate, or negotiating the terms of 
participation, in the Program.
    Section 101(d) amends Section 403 of the Act and directs 
the Secretary to negotiate and enter into a funding agreement 
with the governing body of an Indian tribe or tribal 
organization. It clarifies that a funding agreement authorizes 
a tribe, at its option, to plan, conduct, consolidate, 
administer and receive full tribal share funding for all 
programs, functions, services or activities of the BIA, the 
Office of the Assistant Secretary for Indian Affairs, and the 
Office of the Special Trustee. A funding agreement may include 
programs, functions, services or activities administered by the 
Secretary that are of special geographic, historical, or 
cultural significance to the tribe. However, for discretionary 
programs of special significance, the Secretary has discretion 
with respect to reallocation and consolidation, re-assumption, 
terms and conditions regarding construction, and applicable 
regulations. In addition, this section provides the Secretary 
the discretion to reassume any program and associated funding 
upon certain findings.
    The section also provides that a funding agreement shall 
authorize a tribe, at its option, to plan, conduct, 
consolidate, administer, and receive full tribal share funding 
for any program administered by the Department of the Interior 
other than through the BIA, Office of the Assistant Secretary 
for Indian Affairs, and the Office of the Special Trustee, that 
is otherwise available to tribes or Indians under Section 102 
of Indian Self-Determination and Education Assistance Act. A 
tribe has discretion to include in its funding agreement, a 
stable budget specifying the recurring funds to be transferred 
to the tribe, except for programs described in subsections 
(b)(2) or (c), in that case the Secretary's agreement is 
required. Absent tribal consent, the Secretary cannot amend the 
terms of a funding agreement. This section also provides tribes 
with existing funding agreements more options with respect to 
subsequent funding agreements and negotiating multiyear funding 
agreements.
    Section 101(e) amends Title IV, Sections 404 through 418, 
of the Act by mirroring for the Department of the Interior 
those self-governance provisions found in Title V of the Act 
which governs tribal self-governance within the Indian Health 
Service and clarifying any distinctions that are needed for the 
Department of the Interior differences.
    Section 404 of the Indian Self-Determination and Education 
Assistance Act directs the Secretary to negotiate and enter 
into a written compact with tribes participating in the 
Program. Tribes may retain existing compacts, in whole or in 
part, or negotiate new compacts.
    Section 405 provides for certain provisions that must be 
included in funding agreements. Conflicts of interest, auditing 
principles, tribal redesign, and consolidation authority must 
be addressed. With respect to discretionary programs of special 
significance, however, tribal reallocation, consolidation, and 
redesign are only allowed when the Secretary and the tribe 
enter into a joint agreement.
    The section also provides that tribal records are not 
subject to the Freedom of Information Act, unless a tribe 
specifies otherwise in a funding agreement or a compact. A 
tribe must provide the Secretary with reasonable access to its 
records with at least 30 days' notice.
    Section 406 provides that a funding agreement include a 
provision to monitor the performance of trust functions by the 
Indian tribe. A compact or a funding agreement shall include 
provisions for the Secretary to reassume a program and 
associated funding upon certain findings. It requires the 
Secretary to provide notice, a hearing, and an opportunity for 
a tribe to take corrective action before reassuming a program. 
The Secretary must make a specific finding of imminent jeopardy 
to a trust asset, natural resources, or public health and 
safety; or gross mismanagement (under a preponderance of the 
evidence standard), to reassume a program and associated 
funding. However, the Secretary may, on written notice to the 
tribe, immediately reassume operation of a program if there is 
a finding of imminent and substantial jeopardy and irreparable 
harm to a trust asset, a natural resource, or the public health 
and safety caused by an act or omission of the tribe.
    This section further provides that, if the Secretary and a 
participating Indian tribe are unable to agree on the terms of 
a compact or funding agreement, the Indian tribe may submit a 
final offer to the Secretary. It further provides the 
Secretary's criteria and procedures for considering a tribe's 
final offer. The Secretary bears the burden to prove, by a 
preponderance of the evidence, the validity of the grounds for 
reassuming a program and by clearly demonstrating the validity 
of the grounds for rejecting a final offer.
    In addition, this section provides that the Secretary shall 
negotiate in good faith and may not waive, modify, or diminish 
the trust responsibility. Further, the Secretary must make 
savings available to a tribe for the provision of additional 
services to tribal beneficiaries. Finally, this section 
requires that Title IV compacts and funding agreements be 
construed for the benefit of tribes and any ambiguities be 
resolved in favor of tribes.
    Section 407 provides that Indian tribes participating in 
tribal self-governance may carry out construction projects 
under Title IV and sets forth the responsibilities and 
procedures of tribes undertaking these construction projects. 
Tribes may, subject to the Secretary's agreement, choose to 
carry out certain federal responsibilities under the National 
Environmental Policy Act, the National Historic Preservation 
Act, and related Federal laws that are applicable if the 
Secretary undertakes a construction project.
    Further, tribes must adhere to building codes and standards 
in carrying out a construction project, and must be accountable 
for successful completion of a project. This section provides 
that funding for construction projects must be included in 
funding agreements as annual or semi-annual advance payments. 
Section 407 provides the Secretary with at least one 
opportunity to review and approve a tribe's project planning 
and design documents. Finally, Federal laws pertaining to 
procurement do not apply to a construction program or project 
absent tribal consent.
    Section 408 authorizes multi-year funding agreements. It 
directs the Secretary to transfer tribal shares and resources 
to a tribe in a timely fashion. The Secretary may not reduce 
funding from year-to-year unless one of five narrowly defined 
exceptions applies. A tribe may carry over funding, interest, 
or income from year to year without diminishing its future 
entitlements. A tribe need not continue to perform a compact or 
a funding agreement with insufficient funds and may suspend its 
performance (after providing reasonable notice of such 
insufficiency to the Secretary) until funds are adequate.
    Section 409 requires the Secretary to interpret Federal 
laws in a manner that facilitates the implementation of, and 
the inclusion of programs in, funding agreements. It provides 
that an Indian tribe may submit a written request for a waiver 
of Federal regulations to the Secretary. The Secretary must 
approve a tribe's request for a waiver if the waiver is not 
prohibited by statute. In addition, if the request is not 
approved or denied within 120 days, the waiver request is 
deemed approved, except for programs described in Sections 
403(b)(2) or (c), then the request is deemed denied.
    Section 410 provides a tribe with the discretion to 
incorporate any provision of Title I into a compact or a 
funding agreement, except as provided in Section 201(d) and to 
the extent that such inclusions do not conflict with Section 
101(a) of the PROGRESS for Indian Tribes Act.
    Section 411 requires the Secretary to identify in a report 
to accompany the annual budget request submitted to Congress 
any funds proposed to be included in funding agreements 
authorized under this Act.
    Section 412 requires the Secretary to submit an annual 
report to Congress regarding the administration of Title IV. 
Tribes may submit to the Office of Self-Governance and Congress 
an analysis of unmet tribal needs, whether the tribe is served 
directly by the Secretary or under compacts and funding 
agreements. It provides that the reports be compiled from 
certain documents and identifies particular areas of interest. 
It further requires that reports include a description of 
methodologies used to determine individual tribal shares. 
Reports must be distributed to tribes for comment prior to 
submission.
    This section also requires the Secretary to submit an 
annual report to Congress on non-BIA and non-Office of Special 
Trustee programs. Section 412 requires that the Secretary, in 
consultation with tribes, develop a funding formula to 
determine the individual tribal share of funds controlled by 
the Central Office of the BIA and the Office of the Special 
Trustee for inclusion in compacts.
    Section 413 requires negotiated rulemaking and, within 21 
months of the enactment of this legislation, the publication of 
proposed implementing regulations in the Federal Register. It 
sets forth the membership criteria for the negotiated 
rulemaking committee. This section further authorizes the 
Secretary to repeal any regulation inconsistent with the 
provisions of the PROGRESS for Indian Tribes Act. Finally, it 
provides that the lack of promulgated regulations shall not 
limit the effect or implementation of this title.
    Section 414 provides that except for the eligibility 
provisions of section 105(g) and regulations of section 413 of 
the Indian Self-Determination and Education Assistance Act, a 
tribe is not subject to any agency circular, policy, manual, or 
guidance absent the tribe's consent.
    Section 415 provides that, except as provided Section 
406(d), the Secretary has the burden to prove by a 
preponderance of the evidence the validity of grounds for his 
decisions, as well as their consistency with Title IV 
requirements and policies.
    Section 416 clarifies that `Section 413 of the Department 
of the Interior and Related Agencies Appropriations Act, 1991' 
shall apply to self-governance compacts and funding agreements.
    Section 417 authorizes the appropriation of such sums as 
may be necessary to carry out Title IV--Tribal Self-Governance.

                  TITLE II--INDIAN SELF-DETERMINATION

Section 201. Definitions; reporting and audit requirements; application 
        of provisions

    Section 201(a) amends the Indian Self-Determination and 
Education Assistance Act of 1975 (25 U.S.C. 450) by adding to 
the definition of `self-determination contract. This section 
revises the definition to state that, except as provided in: 
(1) section 105(a)(3) of the Act, no contract shall be 
considered to be a procurement contract, and (2) section 
107(a)(1) of the Act, no contract shall be subject to any 
Federal procurement law, including regulations (e.g., the 
Federal Acquisition Regulations).
    Section 105(a)(3) of the Act governs construction contracts 
and allows the Secretary and respective tribe to agree to make 
certain procurement provisions applicable to those contracts. 
Section 107(a)(1) of the Act authorizes the Secretary to 
promulgate regulations governing procurement (and other 
matters) applicable to these contracts under this Act in 
accordance the rulemaking procedures under 5 U.S.C. 552, 553, 
and subchapter III.
    Section 201(b) provides for the retention period of records 
for auditing purposes to be defined in regulations promulgated 
by the Secretary.
    Section 201(c) provides that certain sections of Indian 
Self-Determination and Education Assistance Act relating to the 
definitions, reporting and auditing requirements, criminal 
penalties, wage and labor standards, liability insurance, 
retention of Federal employees, application of Federal 
contracting laws, and the use and acquisition of Federal 
property apply to compacts and funding agreements under Title 
IV of this Act.
    In addition, Section 314 of the Department of the Interior 
and Related Agencies Appropriations Act, 1991 (Pub. L. No. 101-
512) relating to Federal Tort Claim Act coverage also applies 
to compacts and funding agreements under Title IV of this Act.

Section 202. Contracts by the Secretary of Interior

    Section 202(1) amends the Act to simplify a reference to 
the Indian Financing Act of 1974. Section 202(2) provides that 
the Secretary shall at all times negotiate in good faith and, 
subject to section 101(a) of the PROGRESS for Indian Tribes 
Act, that the provisions of contracts or funding agreements 
should be liberally construed for the benefit of the Indian 
tribe.

Section 203. Administrative provisions

    Section 203 makes a minor technical correction to Section 
105 of the Act by substituting a corrected reference to 
sections 102 and 103 (instead of referencing sections 450f and 
450h) of the Act. Further, this section would require, except 
as otherwise provided by law, the Secretary to interpret all 
Federal laws and Executive Orders in a manner that benefits 
tribes and facilitates inclusion of programs, functions, 
services, and activities in self-determination contracts and 
funding agreements; implementation of self-determination 
contracts and funding agreements; and achievement of tribal 
health objectives. This section also requires the Secretary, in 
considering proposals or amendments to contracts, to provide 
technical assistance to a tribe that lacks adequate internal 
controls.

Section 204. Contract funding and indirect costs

    Section 204 adds a category of expenses that are eligible 
costs for the purposes of receiving funding and would codify a 
decision by the Office of Management and Budget and the 
Department of the Interior regarding documentation 
requirements. Under this section, eligible costs would include 
not less than fifty percent of the expenses incurred by the 
governing body of a tribe or tribal organization relating to a 
program, function, service or activity pursuant to the 
contract. Furthermore, such expenses of a tribal governing body 
shall be treated as reasonable and allowable without burdensome 
documentation requirements because these costs are presumed to 
be related to the administration of Federal responsibilities 
assumed by the tribal governing body.

Section 205. Contract or grant specifications

    Section 205 clarifies that provisions in the model 
statutory agreement allowing the parties to agree to additional 
contract and funding agreement terms are subject to the 
provisions in section 102 of the Act governing the negotiation 
process and declinations.

                   COST AND BUDGETARY CONSIDERATIONS

                                     U.S. Congress,
                               Congressional Budget Office,
                                    Washington, DC, March 25, 2019.
Hon. John Hoeven,
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. 209, the PROGRESS 
for Indian Tribes Act.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Jon Sperl.
            Sincerely,
                                                Keith Hall,
                                                          Director.
    Enclosure.

S. 209--PROGRESS for Indian Tribes Act

    Summary: S. 209 would modify eligibility requirements for 
tribes participating in the Tribal Self-Governance (SG) 
program, which authorizes Indian tribes to assume 
responsibility for certain programs, functions, and services or 
activities that would otherwise be carried out by the federal 
government for the benefit of tribal governments. The bill also 
would amend the process for negotiating agreements between the 
tribes and the Bureau of Indian Affairs (BIA) and would 
establish new guidelines for how to administer the program. In 
particular, the bill would allow tribes to correct significant 
errors (known as material exceptions) in annual financial 
audits when they apply to participate in the program. Under 
current law, a tribe must achieve three consecutive years of 
audits with no material exceptions in order to be eligible to 
enter into an SG contract with the federal government.
    Under the bill, CBO expects, the number of tribes that 
enter into SG agreements with the federal government would 
increase by about 25 each year, beginning in 2021. (Currently, 
285 tribes participate.) Using information from BIA, CBO 
estimates that the Office of Self Governance (OSG) would 
require additional employees over the 2020-2024 period to work 
on audits, contracts, and negotiations with tribes. At the same 
time, CBO expects that the workload under BIA's Self 
Determination (SD) program would result in a decrease of a 
comparable number of employees because tribes would exit SD 
agreements and enter into SG agreements.\4\ On balance, CBO 
estimates, the increased personnel and benefits costs under the 
SG program would be offset by reduced costs to operate the SD 
program.
---------------------------------------------------------------------------
    \4\Under the Indian Self-Determination and Education Assistance 
Act, tribal governments may enter into either SD contracts or SG 
contracts with BIA to implement federal programs that provide services 
to tribal communities. Under SG contracts, tribes receive annual 
funding in the form of block grants that allow tribes greater autonomy 
in making decisions over how to use funds. SD contracts govern 
individual programs and entail greater federal oversight.
---------------------------------------------------------------------------
    In addition, CBO estimates that OSG would need $500,000 
over two years to upgrade computers and software for the 
increased administrative activities required under the bill. 
CBO also estimates that a rulemaking required in the bill would 
cost $1 million over two years, primarily to cover the costs of 
travel to meet with the different tribes involved in the 
rulemaking.
    The CBO staff contact for this estimate is Jon Sperl. The 
estimate was reviewed by H. Samuel Papenfuss, Deputy Assistant 
Director for Budget Analysis.

                        EXECUTIVE COMMUNICATIONS

    The Committee has received no communications from the 
Executive Branch regarding S. 209.

               REGULATORY AND PAPERWORK IMPACT STATEMENT

    Paragraph 11(b) of rule XXVI of the Standing Rules of the 
Senate requires each report accompanying a bill to evaluate the 
regulatory and paperwork impact that would be incurred in 
carrying out the bill. The Committee believes that S. 209 will 
have a minimal impact on regulatory or paperwork requirements.

                        CHANGES IN EXISTING LAW

    In accordance with Committee Rules, subsection 12 of rule 
XXVI of the Standing Rules of the Senate is waived. In the 
opinion of the Committee, it is necessary to dispense with 
subsection 12 of rule XXVI of the Standing Rules of the Senate 
to expedite the business of the Senate.

                                  [all]
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