79–006

106TH CONGRESS REPORT " ! HOUSE OF REPRESENTATIVES 2d Session 106–837

TRIBAL CONTRACT SUPPORT COST TECHNICAL

AMENDMENTS OF 2000

SEPTEMBER 12, 2000.—Committed to the Committee of the Whole House on the

State of the Union and ordered to be printed

Mr. YOUNG of Alaska, from the Committee on Resources,

submitted the following

R E P O R T

[To accompany H.R. 4148]

[Including cost estimate of the Congressional Budget Office]

The Committee on Resources, to whom was referred the bill

(H.R. 4148) to make technical amendments to the provisions of the

Indian Self-Determination and Education Assistance Act relating to

contract support costs, and for other purposes, having considered

the same, report favorably thereon with an amendment and recommend that the bill as amended do pass.

The amendment is as follows:

Strike out all after the enacting clause and insert in lieu thereof

the following:

SECTION 1. SHORT TITLE.

This Act may be cited as the ‘‘Tribal Contract Support Cost Technical Amendments of 2000’’.

SEC. 2. AMENDMENT DETAILING CALCULATION AND PAYMENT OF CONTRACT SUPPORT

COSTS.

The Indian Self-Determination and Education Assistance Act is amended by adding after section 106 the following new section:

‘‘SEC. 106A. CONTRACT SUPPORT COSTS.

‘‘(a) OTHER FEDERAL AGENCIES.—Except as otherwise provided by statute, an Indian tribe or tribal organization administering a contract or compact under this Act

shall be entitled to recover its full indirect costs associated with any other Federal

funding received by such tribe or tribal organization (other than funds paid under

this Act), consistent with the tribe’s or tribal organization’s indirect cost rate agreement with its cognizant Federal agency. This subsection shall not independently entitle such tribe or tribal organization to be paid additional amounts associated with

such other Federal funding.

‘‘(b) ALLOWABLE USES OF FUNDS.—Notwithstanding any other provision of law (including regulation or circular), an Indian tribe or tribal organization (1) administering a contract or compact under this Act and (2) employing an indirect cost pool

that includes both funds paid under this Act and other Federal funds, shall be enti-
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tled to use or expend all Federal funds in such tribe’s or tribal organization’s indirect cost pool in the same manner as permitted in section 106(j) (relating to allowable uses of funds without approval of the Secretary), and for such purposes only

the term ‘Secretary’ means the Secretary of any Federal agency providing funds to

such tribe or tribal organization.

‘‘(c) CONSOLIDATED CONTRACT AMOUNT.— ‘‘(1) CONDITIONS FOR CONSOLIDATION.—Commencing in fiscal year 2003, the

Secretary shall consolidate all funds paid to a tribe or tribal organization pursuant to paragraphs (1) and (2) of section 106(a) into a single consolidated contract or compact amount if the following conditions have been met:

‘‘(A) The tribe or tribal organization qualifies to carry out a mature contract under this title or is operating a self-governance agreement under any

other title of this Act.

‘‘(B) The tribe’s or tribal organization’s indirect cost rate has not varied

more than 10 percent over the prior year’s rate for the preceding 3 years

(for tribes or tribal organizations that have no indirect rate, this criterion

shall be satisfied if the ratio of the tribe’s or tribal organization’s contract

support requirement to its direct cost base has not varied more than 10 percent over the ratio for the preceding 3 years).

‘‘(C) At the time of the consolidation the tribe or tribal organization is receiving its full contract support cost requirement as determined under section 106(a)(2).

‘‘(2) MEDICAL INFLATION RATE ADJUSTMENTS.—Each year following the consolidation required by paragraph (1), the Secretary of Health and Human Services

shall increase the amount of contract support costs paid as part of the consolidated amount by an amount equal to—

‘‘(A) the adjustment in the medical care component of the national consumer price index over the preceding year, multiplied by

‘‘(B) the contract support cost amount paid in the preceding year as part

of the consolidated amount.

‘‘(3) CONSUMER PRICE INDEX ADJUSTMENTS.—Each year following the consolidation required by paragraph (1), the Secretary of the Interior shall increase

the amount of contract support costs paid as part of the consolidated amount

by an amount equal to—

‘‘(A) the adjustment in the national consumer price index over the preceding year, multiplied by

‘‘(B) the contract support cost amount paid in the preceding year as part

of the consolidated amount.

‘‘(4) EMPLOYMENT ADJUSTMENTS.—A tribe or tribal organization shall be entitled to receive additional contract support costs associated with the transfer of

employees from Federal employment to tribal employment. Such additional contract support costs shall be added to the consolidated amount determined and

adjusted under paragraphs (1), (2), and (3), and shall thereafter become a part

of the consolidated amount.

‘‘(5) ADDITIONAL CONTRACT SUPPORT COSTS.—Notwithstanding any other provision of this Act, and except as provided in paragraphs (4) and (8), the tribe

or tribal organization shall not be entitled to receive any contract support costs

additional to those contained within the consolidated amount determined and

adjusted under paragraphs (1), (2), and (3).

‘‘(6) REBUDGETING AUTHORITY UNAFFECTED.—The tribe or tribal organization

may rebudget all contract or compact funds as specified in section 106(n).

‘‘(7) DECONSOLIDATION.—Except as provided in paragraph (8), in the event—

‘‘(A) the amount of program funds paid under section 106(a)(1) as part of

the consolidated amount, when combined with other program funds paid to

the tribe or tribal organization from other funding sources, increases or decreases by more than—

‘‘(i) 20 percent over the amount paid in the preceding year; or

‘‘(ii) 40 percent over the amount paid in the preceding three years;

or

‘‘(B) the Secretary for good cause shown agrees,

the amounts paid by the Secretary under this section shall be deconsolidated,

and such amounts shall be recalculated and paid as specified elsewhere in this

Act. Upon such recalculation, the recalculated amounts shall be reconsolidated

into a single amount as otherwise described in this subsection.

‘‘(8) CONTRACTING ADDITIONAL PROGRAMS.—Nothing in this subsection shall

affect the right of a tribe or tribal organization to contract or compact for the

operation of new or expanded programs, services, functions, or activities not included in the consolidated amount paid under paragraph (1), or to be paid the

full amount of contract support costs associated with such additional contracted
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or compacted programs, as provided in section 106(a)(1) and other provisions of

this Act. Any such additional programs and associated contract support costs

shall be added to the consolidated amount determined and adjusted under paragraphs (1), (2), and (3).

‘‘(9) SEPARATE CONTRACTS AND COMPACTS.—Nothing in this subsection shall

require a tribe or tribal organization to consolidate separate contracts or compacts administered under this Act into a single contract or compact.

‘‘(d) NEGOTIATION OF CONTRACT SUPPORT COST AMOUNTS.—Within the Indian

Health Service of the Department of Health and Human Services, the negotiation,

review, and approval of tribal contract support cost entitlements shall be the responsibility of the Office of Tribal Programs, subject to the tribe’s or tribal organization’s

indirect cost rate agreement with the tribe’s or tribal organization’s cognizant Federal agency.

‘‘(e) DIRECT CONTRACT SUPPORT COSTS AND FEDERAL EMPLOYEES.—The contract

support costs that are eligible costs for the purposes of receiving funding under this

Act shall include direct contract support costs associated with all Federal employees

employed in connection with the program, service, function, or activity that is the

subject of the contract, including all Federal employees paid with funds generated

from third-party collections.

‘‘(f) REGULATIONS.—The Secretary of the Interior and the Secretary of Health and

Human Services are authorized to promulgate joint regulations relating to the allowability of costs expended under this Act, including all pooled indirect costs and

direct contract support costs. In promulgating such regulations the Secretaries shall

follow the procedures set forth in sections 107(a)(2)(A), 107(d)(1), 107(d)(2)(A),

107(d)(2)(B), 107(d)(2)(D), and 107(d)(2)(E), and shall publish proposed regulations

in the Federal Register to carry out this subsection not later than 180 days after

the date of enactment of the Tribal Contract Support Cost Technical Amendments

of 2000. The authority to promulgate regulations under this subsection shall expire

if final regulations are not promulgated within 18 months after the date of enactment of the Tribal Contract Support Cost Technical Amendments of 2000. In the

event of a conflict between such regulations and any Office of Management and

Budget circular, the provision of such regulations shall control. The Secretary may,

with respect to a contract or compact entered into under this Act, make exceptions

in the regulations promulgated to carry out this subsection, or waive such regulations, if the Secretary finds that such exception or waiver is consistent with the policies of this Act, and is not contrary to statutory law. In reviewing each request, the

Secretary shall follow the timeline, findings, assistance, hearing, and appeal procedures set forth in section 102.’’.

SEC. 3. AMENDMENTS CLARIFYING CONTRACT SUPPORT COST ENTITLEMENT.

The Indian Self-Determination and Education Assistance Act is amended—

(1) in section 105(c)(1), by striking the last flush sentence;

(2) in section 106(b)—

(A) by striking ‘‘the provision of funds under this Act is subject to the

availability of appropriations and’’; and

(B) by adding at the end thereof the following flush sentence:

‘‘Necessary amounts are appropriated to pay contract support costs when not otherwise provided for.’’;

(3) in section 1(b)(4) of the model contract set forth in section 108(c), by striking ‘‘Subject to the availability of appropriations, the’’ and inserting ‘‘The’’; and

(4) in section 106(a)(5) by adding at the end thereof the following flush sentence:

‘‘Notwithstanding any other provision of law, the Secretary shall fully pay preaward

and startup costs without regard to the year in which such costs were incurred or

will be incurred, including such costs payable to tribes and tribal organizations identified by the Indian Health Service as ‘ISD Queue Tribes’ in its September 17, 1999,

report entitled ‘FY 1999 IHS CSC Shortfall Data’.’’.

SEC. 4. AMENDMENT ENLARGING CONTRACT PROPOSAL REVIEW PERIOD.

Section 102(a)(2) of the Indian Self-Determination and Education Assistance Act

is amended—

(1) by striking ‘‘ninety’’ in the second sentence and inserting ‘‘180’’; and

(2) by striking ‘‘90-day’’ in the third sentence and inserting ‘‘180-day’’.

SEC. 5. AMENDMENTS REGARDING JUDICIAL REMEDIES.

Section 110 of the Indian Self-Determination and Education Assistance Act is

amended—

(1) in subsection (c), by inserting after ‘‘administrative appeals’’ the following:

‘‘, and section 2412(d)(2)(A) of title 28, United States Code, shall apply to appeals filed with administrative appeals boards, in appeals’’; and
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(2) by adding at the end the following new subsections:

‘‘(f) REIMBURSEMENT OF PAYMENTS.—None of the funds appropriated to the Secretary to carry out programs, functions, services, or activities that are contractible

under this Act shall be available to reimburse payments made in satisfaction of

judgments awarded under subsections (a) and (d).’’.

PURPOSE OF THE BILL

The purpose of H.R. 4148 is to make technical amendments to

the provisions of the Indian Self-Determination and Education Assistance Act relating to contract support costs, and for other purposes.

BACKGROUND AND NEED FOR LEGISLATION

Under section 106(a)(2) of Public Law 93–638, the Indian SelfDetermination and Education Assistance Act, American Indian and

Alaska Native tribes are authorized to enter into contracts or compacts with the Indian Health Service (IHS) and the Bureau of Indian Affairs (BIA) to directly administer health care and BIA programs previously administered by the two agencies. Congress

strongly advocated this change to allow tribes to provide direct and

improved services to their members.

Contract support costs are directly associated with administering

these programs and are based on three cost categories: start up

costs, indirect costs and direct costs. Start-up costs are one-time

costs incurred in planning and assuming management of the programs. Examples include buying computers and training staff. Indirect costs are on-going overhead expenses, which are often divided into three groups—management and administration, facilities

and equipment, and general services and expenses. Management

and administration includes financial and personnel management,

procurement, property and records management, data processing,

and office services. Facility and equipment includes buildings, utilities, housekeeping, repair and maintenance, and equipment. General services include insurance and legal services, audit, general

expenses, interest and depreciation. Direct costs include unemployment taxes and workers compensation insurance for direct program

salaries.

However, the consistent failure of the IHS and BIA to fully fund

contract support costs has resulted in financial management problems for tribes as they struggle to pay for federally-mandated annual single-agency audits, liability insurance, financial management systems, personnel salaries, property management and other

administrative costs. Congress must remember that tribes are operating federal programs and are carrying out federal responsibilities when they operate self-determination contracts. Tribes, in

some instances, have had to resort to using their own financial resources to subsidize contract support costs. The Committee believes

that tribes should not be forced to use their own financial resources

to subsidize federal contract support costs.

The Committee on Resources held two hearings in 1999 (February 24 and August 3) to accept testimony from the Administration and tribes to provide a proposed resolution to the problems associated with contract support costs.

The General Accounting Office (GAO) was asked to submit a report to Congress on the shortfalls of contract support costs. In its
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June 1999 report entitled Indian Self-Determination Act: Shortfalls

in Indian Contract Support Costs Need to be Addressed, the GAO

recommended that the Secretaries of the Interior and Health and

Human Services work together to develop a standard policy on

funding contract support costs, and ensure that the BIA and IHS

correctly adjust funding when tribes use provisional-final rates.

GAO provided four alternatives for Congress to consider: (1) fully

fund contract support costs each year; (2) amend the Indian SelfDetermination and Education Assistance Act to eliminate the provision requiring that contract support costs be fully funded at 100

percent of the allowable costs identified by BIA and IHS; (3) amend

the Act to limit indirect costs by imposing either a flat rate or

capped rate; and (4) amend the Act to eliminate the provision for

funding contract support costs over and above the program base

and provide for consolidated support costs.

Additionally, the National Congress of American Indians Policy

Work Group on Contract Support Costs also directed the tribal

leadership to work with the Administration to submit recommendations to resolve the shortfalls in contract support costs.

H.R. 4148 is the result of the National Congress of American Indians National Policy Work Group and the Administration’s efforts

to resolve contract support costs problems. H.R. 4148 also incorporates GAO recommendations.

COMMITTEE ACTION

H.R. 4148 was introduced March 30, 2000, by Congressman Don

Young (R–AK). The bill was referred to the Committee on Resources. On May 16, 2000, the Committee held a hearing on the

bill. On June 28, 2000, the Committee met to consider the bill.

Congressman Young offered an amendment in the nature of a substitute which was adopted by voice vote. The bill, as amended, as

then ordered favorably reported to the House of Representatives by

voice vote.

SECTION-BY-SECTION ANALYSIS

Section 1. Short title

This section provides the bill’s short title, the ‘‘Tribal Contract

Support Cost Technical Amendments of 2000.’’

Section 2. Amendment detailing calculation and payment of contract support costs

This section adds a new section 106A to the Indian Self-Determination and Education Assistance Act (referred to in this section

as ‘‘the Act’’). This section is devoted exclusively to contract support

cost matters.

Subsection 106A(a) requires that all federal agencies abide by

the government-wide negotiated indirect cost agreement established by each tribal contractor’s cognizant federal agency under

Office of Management and Budget Circular A–87 (typically, the Department of the Interior’s Office of Inspector General). This subsection clarifies that the cost recovery accounting provisions do not

in and of themselves entitle tribes to additional funds from other

federal agencies. It also limits the subsection to situations where

Congress has not directly spoken to the issue in other legislation.
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Subsection 106A(b) addresses the fact that the indirect costs paid

to a tribe under the Indian Self-Determination and Education Assistance Act are pooled with other federal funds administered by a

tribal contractor, and thus are spent together out of a single account. Subsection (b) clarifies that the self-determination rules regarding expenditure of funds set forth in subsections 106(i) and (j)

of the Indian Self-Determination and Education Assistance Act

apply to the tribal expenditure of all other federal funds received

by a tribe under any other federal statute. This subsection clarifies

that this section only applies to pooled ‘‘indirect cost’’ funds.

Subsection 106A(c) of the bill establishes a new initiative under

which the relevant Secretary is directed to consolidate all program

funds and contract support cost funds into a single amount, as suggested by the General Accounting Office in its report referenced

above. Under subparagraph (1), the relevant Secretary will be required to pay tribes and tribal organizations a consolidated amount

if: (A) the tribe or tribal organization operates a mature contract

under Title I of the Act (regardless of whether the tribe or tribal

organization has requested such designation), or is operating a selfgovernance agreement under Titles III or IV of the Act; (B) the

tribe or tribal organization’s indirect cost rate has remained stable

for a period of three years; and (C) at the time of the consolidation

the tribe or tribal organization is receiving its full contract support

cost entitlement as determined pursuant to Section 106(a)(2) of the

Act. Subparagraphs (2) and (3) would require annual adjustments

in the contract support cost component of the consolidated amount,

based upon the medical inflation rate (for IHS-paid contract support costs) or the consumer price index (for BIA-paid contract support costs). Subparagraph (4) would require additional contract

support cost adjustments from time to time as positions under federal employment at the initial time of consolidation thereafter

transfer to tribal employment. Once added, such additional

amounts become a part of the recurring consolidated contract

amount. Under subparagraph (5), tribes and tribal organizations

would not be entitled to any additional sums for contract support

costs under other provisions of the Act, regardless of changes in a

tribe’s or tribal organization’s base or its indirect cost rate (except

for the inflationary and direct contract support cost adjustments

noted in subsections (2) through (4)). Subparagraph (6) reiterates

that the existing tribal rebudgeting authority, including the authority to spend ‘‘contract support funds’’ for ‘‘program’’ purposes

and vice versa, remains unaffected during the period of consolidation. Subparagraph (7) provides that in the event a tribe or tribal

organization’s total indirect cost base increases or decreases by

more than 20 percent over the amount paid to the tribe or tribal

organization during the preceding year, the relevant Secretary is

required to deconsolidate the funds. In such event, the parties must

renegotiate the tribe’s or tribal organization’s contract support cost

requirements based upon the changed circumstances. This subsection also adds a provision triggering deconsolidation in the event

a tribe’s direct cost base cumulatively increases or decreases more

than 40 percent over three years. It also adds a provision authorizing the relevant Secretary, for ‘‘good cause’’ shown, to

deconsolidate funds for any other reason such as a fire or other catastrophe. Subparagraph (8) makes clear that the consolidation of
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contract funds does not affect the continuing right of a tribe or tribal organization to contract or compact for the operation of new or

expanded agency programs and to be paid full contract support

costs associated with such programs. Subparagraph (8) provides

that the program and contract support amounts associated with the

expanded operations are to be added to the consolidated amount.

Subparagraph (9) clarifies that although contract amounts will be

consolidated, a tribe may still retain separate contracts for different programs, if that is its choice.

Subsection 106A(d) requires IHS to transfer the responsibility for

the negotiation, review and approval of tribal contract support

costs from the Division of Financial Management to the Office of

Tribal Programs (OTP). This subsection clarifies that OTP is not

authorized to depart from a tribe’s or tribal organization’s indirect

cost agreement with its cognizant federal agency.

Subsection 106A(e) clarifies that direct contract support cost entitlements are to be calculated on all federal positions transferred to

tribal operation at the time a contract, compact, or funding agreement is executed, including federal employees funded through

third-party revenues such as Medicare payments, Medicaid payments and payments from third-party insurers.

New section 106A(f) authorizes the issuance of a joint BIA and

IHS regulation, through negotiated rulemaking, to address the allowability of costs expended under the Act, including expenditures

from a tribe’s indirect cost pool and expenditures for direct contract

support cost purposes. This section includes a regulation waiver

provision modeled on section 107 of Title I of the Act.

Section 3. Amendments clarifying contract support cost entitlement

Subsections (1) through (3) clarify that contract support costs are

an entitlement, and specifically removes three provisions from the

Act relied on by the agencies to argue otherwise. This section also

provides that necessary amounts are appropriated to pay contract

support costs. Subsection (4) clarifies that under section 106(a)(5)

of the Act, ‘‘start-up’’ contract support costs that are or have been

incurred in a year prior to the contract year shall be paid on the

same basis as other contract support costs, including costs paid by

a tribe or tribal organization prior to enactment of the bill. This

section also clarifies that the intent of the final clause is to require

IHS to pay all start-up costs identified on the last IHS ‘‘Queue’’

that were either never paid at all or were only partially paid during the transition in IHS policy from fiscal year 1998 to fiscal year

1999.

Section 4. Amendment enlarging contract proposal review period

Section 4 of the bill enlarges from 90 days to 180 days the period

during which the relevant Secretary may review and either approve or decline a contracting proposal.

Section 5. Amendments regarding judicial remedies

This section amends section 110 of the Act to create a new subsection (f) clarifying that IHS and BIA funds providing services to

Indian and Alaska Native tribes are not to be considered ‘‘available’’ to repay any court judgments the agencies may suffer in litigation. This section also adds an amendment to section 110(c) of
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the Act to clarify that administrative law judges may set Equal Access to Justice Act rates within the same parameters as district

courts.

COMMITTEE OVERSIGHT FINDINGS AND RECOMMENDATIONS

Regarding clause 2(b)(1) of rule X and clause 3(c)(1) of rule XIII

of the Rules of the House of Representatives, the Committee on Resources’ oversight findings and recommendations are reflected in

the body of this report.

CONSTITUTIONAL AUTHORITY STATEMENT

Article 1, section 8 of the Constitution of the United States

grants Congress the authority to enact this bill.

COMPLIANCE WITH HOUSE RULE XIII

1. Cost of Legislation. Clause 3(d)(2) of rule XIII of the Rules of

the House of Representatives requires an estimate and a comparison by the Committee of the costs which would be incurred in carrying out this bill. However, clause 3(d)(3)(B) of that rule provides

that this requirement does not apply when the Committee has included in its report a timely submitted cost estimate of the bill prepared by the Director of the Congressional Budget Office under section 402 of the Congressional Budget Act of 1974.

2. Congressional Budget Act. As required by clause 3(c)(2) of rule

XIII of the Rules of the House of Representatives and section

308(a) of the Congressional Budget Act of 1974, this bill does not

contain any new budget authority, credit authority, or an increase

or decrease in revenues or tax expenditures. According to the Congressional Budget Office, enactment of this bill would increase direct spending.

3. Government Reform Oversight Findings. Under clause 3(c)(4)

of rule XIII of the Rules of the House of Representatives, the Committee has received no report of oversight findings and recommendations from the Committee on Government Reform on this

bill.

4. Congressional Budget Office Cost Estimate. Under clause

3(c)(3) of Rule XIII of the Rules of the House of Representatives

and section 403 of the Congressional Budget Act of 1974, the Committee has received the following cost estimate for this bill from the

Director of the Congressional Budget Office:

U.S. CONGRESS,

CONGRESSIONAL BUDGET OFFICE,

Washington, DC, September 7, 2000.

Hon. DON YOUNG, Chairman, Committee on Resources,

House of Representatives, Washington, DC.

DEAR MR. CHAIRMAN: The Congressional Budget Office has prepared the enclosed cost estimate for H.R. 4148, the Tribal Contract

Support Cost Technical Amendments of 2000.
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If you wish further details on this estimate, we will be pleased

to provide them. The CBO staff contact is Lanette J. Keith.

Sincerely,

BARRY B. ANDERSON

(For Dan L. Crippen, Director).

Enclosure.

H.R. 4148—Tribal Contract Support Cost Technical Amendments of

2000

Summary: H.R. 4148 would change the way contracts and contract support costs are funded under the Indian Self Determination

Act. Because such contract costs and contract support costs would

no longer be subject to appropriation, CBO estimates that enacting

the bill would increase direct spending by $11 billion over the

2001–2005 period. This change could reduce the need for appropriated funds for contracts and support costs under the Indian Self

Determination Act. Because the bill would affect direct spending,

pay-as-you-go procedures would apply. H.R. 4148 contains no intergovernmental or private-sector mandates as defined in the Unfunded Mandates Reform Act (UMRA) and would impose no costs

on state, local, or tribal governments.

Estimated cost to the Federal Government: The estimated budgetary impact of H.R. 4148 is shown in the following table. The costs

of this legislation fall within budget function 450 (community and

regional development) and 550 (health).

By fiscal year, in millions of dollars—

2001 2002 2003 2004 2005

CHANGES IN DIRECT SPENDING

Estimated Budget Authority .......................................................................... 2,126 2,252 2,366 2,480 2,602

Estimated Outlays ......................................................................................... 1,594 2,139 2,307 2,445 2,566

Basis of estimate: Under the Indian Self Determination Act, Indian tribes are authorized to enter into contracts with the Indian

Health Service (IHS) and the Bureau of Indian Affairs (BIA) to directly implement federal programs and services that would benefit

Indians. In addition, the agencies provide the tribes with funding

for contract support costs, including the costs of facilities, equipment, legal services, and salaries. All such funding is subject to the

availability of appropriated funds. Based on information from BIA

and IHS, we estimate these agencies will spend about $2 billion in

2000 to fund contracts and contract support costs under the Indian

Self Determination Act. H.R. 4148 would authorize IHS and BIA

to provide funding to tribes for contracts and contract support

under the Indian Self Determination Act without further appropriation action.

Direct spending

Because the costs for Indian Self Determination contracts would

not be constrained by the availability of appropriated funds, CBO

expects that tribes would have a greater incentive to contract with

the agencies than they do under current law. Therefore, CBO expects that under the bill the number of tribes that contract with

BIA and IHS for Indian services would increase and that tribes

would be more likely to enter into multiple contracts with the agen-
10

cies. CBO estimates that enacting the bill would increase direct

spending by about $9 million over the five-year period for the cost

of the contracts between the tribes and the agencies.

Historically, the Congress has appropriated about 85 percent of

the amounts necessary to fully fund contract support costs. H.R.

4148 would require IHS and BIA to fund contract support costs at

100 percent of the rate negotiated by the tribes and the agencies.

The bill also would require BIA to provide tribes with certain contract support that the agency does not currently provide. Based on

information from IHS and BIA, CBO estimates that it would cost

$2 billion over the 2001–2005 period to provide the required level

of contract support.

Spending subject to appropriation

Based on historical data from IHS and BIA, CBO estimates that

contracts under the Indian Self Determination Act will cost nearly

$1.6 billion in fiscal year 2000 and that the agencies’ budget requests are likely to increase, under current law, by about 3 percent

each year. In addition, we estimate that contract support costs are

currently funded at about $350 million a year, or about 22 percent

of the total contract costs. Because H.R. 4148 would reduce or

eliminate the need for appropriations to support these programs,

CBO expects that enactment of the bill would lead to a significant

reduction in appropriated funds to BIA and IHS. Any such savings,

however, would be subject to future appropriation acts.

Pay-as-you-go considerations: The Balanced Budget and Emergency Deficit Control Act sets up pay-as-you-go procedures for legislation affecting direct spending or receipts. The net changes in

outlays that are subject to pay-as-you-go procedures are shown in

the following table. For the purposes of enforcing pay-as-you-go

procedures, only the effects in the current year, the budget year,

and the succeeding four years are counted.

By fiscal year, in millions of dollars—

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Changes in outlays .............................. 0 1,594 2,139 2,307 2,445 2,566 2,693 2,828 2,969 3,113 3,268

Changes in receipts ............................. Not applicable

Intergovernmental and private-sector impact: H.R. 4148 contains

no intergovernmental or private-sector mandates as defined in

UMRA and would impose no costs on state, local, or tribal governments.

Estimate prepared by: Federal Costs: Lanette J. Keith and Eric

Rollins. Impact on State, Local, and Tribal Governments: Marjorie

Miller. Impact on the Private Sector: Sarah Sitarek.

Estimate approved by: Peter H. Fontaine, Deputy Assistant Director for Budget Analysis.

COMPLIANCE WITH PUBLIC LAW 104–4

This bill contains no unfunded mandates.

PREEMPTION OF STATE, LOCAL OR TRIBAL LAW

This bill is not intended to preempt any State, local or tribal law.
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CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED

In compliance with clause 3(e) of rule XIII of the Rules of the

House of Representatives, changes in existing law made by the bill,

as reported, are shown as follows (existing law proposed to be omitted is enclosed in black brackets, new matter is printed in italic,

existing law in which no change is proposed is shown in roman):

INDIAN SELF-DETERMINATION AND EDUCATION

ASSISTANCE ACT

* * * * * * *

TITLE I—INDIAN SELF-DETERMINATION ACT

* * * * * * *

CONTRACTS BY THE SECRETARY OF THE INTERIOR

SEC. 102. (a)(1) * * *

* * * * * * *

(2) If so authorized by an Indian tribe under paragraph (1) of

this subsection, a tribal organization may submit a proposal for a

self-determination contract, or a proposal to amend or renew a selfdetermination contract, to the Secretary for review. Subject to the

provisions of paragraph (4), the Secretary shall, within øninety¿

180 days after receipt of the proposal, approve the proposal and

award the contract unless the Secretary provides written notification to the applicant that contains a specific finding that clearly

demonstrates that, or that is supported by a controlling legal authority that—

(A) * * *

* * * * * * *

Notwithstanding any other provision of law, the Secretary may extend or otherwise alter the ø90-day¿ 180-day period specified in the

second sentence of this subsection, if before the expiration of such

period, the Secretary obtains the voluntary and express written

consent of the tribe or tribal organization to extend or otherwise

alter such period. The contractor shall include in the proposal of

the contractor the standards under which the tribal organization

will operate the contracted program, service, function, or activity,

including in the area of construction, provisions regarding the use

of licensed and qualified architects, applicable health and safety

standards, adherence to applicable Federal, State, local, or tribal

building codes and engineering standards. The standards referred

to in the preceding sentence shall ensure structural integrity, accountability of funds, adequate competition for subcontracting

under tribal or other applicable law, the commencement, performance, and completion of the contract, adherence to project plans

and specifications (including any applicable Federal construction

guidelines and manuals), the use of proper materials and workmanship, necessary inspection and testing, and changes, modifications, stop work, and termination of the work when warranted.

* * * * * * *
12

ADMINISTRATIVE PROVISIONS

SEC. 105. (a) * * *

* * * * * * *

(c)(1) A self-determination contract shall be—

(A) * * *

* * * * * * *

øThe amounts of such contracts shall be subject to the availability

of appropriations.¿

* * * * * * *

SEC. 106. (a)(1) * * *

* * * * * * *

(5) Subject to paragraph (6), during the initial year that a selfdetermination contract is in effect, the amount required to be paid

under paragraph (2) shall include startup costs consisting of the

reasonable costs that have been incurred or will be incurred on a

one-time basis pursuant to the contract necessary—

(A) * * *

* * * * * * *

Notwithstanding any other provision of law, the Secretary shall

fully pay preaward and startup costs without regard to the year in

which such costs were incurred or will be incurred, including such

costs payable to tribes and tribal organizations identified by the Indian Health Service as ‘‘ISD Queue Tribes’’ in its September 17,

1999, report entitled ‘‘FY 1999 IHS CSC Shortfall Data’’.

* * * * * * *

(b) The amount of funds required by subsection (a)—

(1) * * *

* * * * * * *

Notwithstanding any other provision in this Act, øthe provision of

funds under this Act is subject to the availability of appropriations

and¿ the Secretary is not required to reduce funding for programs,

projects, or activities serving a tribe to make funds available to another tribe or tribal organization under this Act.

Necessary amounts are appropriated to pay contract support costs

when not otherwise provided for.

* * * * * * *

SEC. 106A. CONTRACT SUPPORT COSTS.

(a) OTHER FEDERAL AGENCIES.—Except as otherwise provided by

statute, an Indian tribe or tribal organization administering a contract or compact under this Act shall be entitled to recover its full

indirect costs associated with any other Federal funding received by

such tribe or tribal organization (other than funds paid under this

Act), consistent with the tribe’s or tribal organization’s indirect cost

rate agreement with its cognizant Federal agency. This subsection

shall not independently entitle such tribe or tribal organization to

be paid additional amounts associated with such other Federal

funding.

(b) ALLOWABLE USES OF FUNDS.—Notwithstanding any other provision of law (including regulation or circular), an Indian tribe or

tribal organization (1) administering a contract or compact under
13

this Act and (2) employing an indirect cost pool that includes both

funds paid under this Act and other Federal funds, shall be entitled

to use or expend all Federal funds in such tribe’s or tribal organization’s indirect cost pool in the same manner as permitted in section

106(j) (relating to allowable uses of funds without approval of the

Secretary), and for such purposes only the term ‘‘Secretary’’ means

the Secretary of any Federal agency providing funds to such tribe

or tribal organization.

(c) CONSOLIDATED CONTRACT AMOUNT.—

(1) CONDITIONS FOR CONSOLIDATION.—Commencing in fiscal

year 2003, the Secretary shall consolidate all funds paid to a

tribe or tribal organization pursuant to paragraphs (1) and (2)

of section 106(a) into a single consolidated contract or compact

amount if the following conditions have been met:

(A) The tribe or tribal organization qualifies to carry out

a mature contract under this title or is operating a self-governance agreement under any other title of this Act.

(B) The tribe’s or tribal organization’s indirect cost rate

has not varied more than 10 percent over the prior year’s

rate for the preceding 3 years (for tribes or tribal organizations that have no indirect rate, this criterion shall be satisfied if the ratio of the tribe’s or tribal organization’s contract support requirement to its direct cost base has not

varied more than 10 percent over the ratio for the preceding

3 years).

(C) At the time of the consolidation the tribe or tribal organization is receiving its full contract support cost requirement as determined under section 106(a)(2).

(2) MEDICAL INFLATION RATE ADJUSTMENTS.—Each year following the consolidation required by paragraph (1), the Secretary of Health and Human Services shall increase the amount

of contract support costs paid as part of the consolidated

amount by an amount equal to—

(A) the adjustment in the medical care component of the

national consumer price index over the preceding year,

multiplied by

(B) the contract support cost amount paid in the preceding year as part of the consolidated amount.

(3) CONSUMER PRICE INDEX ADJUSTMENTS.—Each year following the consolidation required by paragraph (1), the Secretary of the Interior shall increase the amount of contract support costs paid as part of the consolidated amount by an

amount equal to—

(A) the adjustment in the national consumer price index

over the preceding year, multiplied by

(B) the contract support cost amount paid in the preceding year as part of the consolidated amount.

(4) EMPLOYMENT ADJUSTMENTS.—A tribe or tribal organization shall be entitled to receive additional contract support costs

associated with the transfer of employees from Federal employment to tribal employment. Such additional contract support

costs shall be added to the consolidated amount determined

and adjusted under paragraphs (1), (2), and (3), and shall

thereafter become a part of the consolidated amount.
14

(5) ADDITIONAL CONTRACT SUPPORT COSTS.—Notwithstanding

any other provision of this Act, and except as provided in paragraphs (4) and (8), the tribe or tribal organization shall not be

entitled to receive any contract support costs additional to those

contained within the consolidated amount determined and adjusted under paragraphs (1), (2), and (3).

(6) REBUDGETING AUTHORITY UNAFFECTED.—The tribe or tribal organization may rebudget all contract or compact funds as

specified in section 106(n).

(7) DECONSOLIDATION.—Except as provided in paragraph (8),

in the event—

(A) the amount of program funds paid under section

106(a)(1) as part of the consolidated amount, when combined with other program funds paid to the tribe or tribal

organization from other funding sources, increases or decreases by more than—

(i) 20 percent over the amount paid in the preceding

year; or

(ii) 40 percent over the amount paid in the preceding

three years; or

(B) the Secretary for good cause shown agrees,

the amounts paid by the Secretary under this section shall be

deconsolidated, and such amounts shall be recalculated and

paid as specified elsewhere in this Act. Upon such recalculation,

the recalculated amounts shall be reconsolidated into a single

amount as otherwise described in this subsection.

(8) CONTRACTING ADDITIONAL PROGRAMS.—Nothing in this

subsection shall affect the right of a tribe or tribal organization

to contract or compact for the operation of new or expanded programs, services, functions, or activities not included in the consolidated amount paid under paragraph (1), or to be paid the

full amount of contract support costs associated with such additional contracted or compacted programs, as provided in section

106(a)(1) and other provisions of this Act. Any such additional

programs and associated contract support costs shall be added

to the consolidated amount determined and adjusted under

paragraphs (1), (2), and (3).

(9) SEPARATE CONTRACTS AND COMPACTS.—Nothing in this

subsection shall require a tribe or tribal organization to consolidate separate contracts or compacts administered under this

Act into a single contract or compact.

(d) NEGOTIATION OF CONTRACT SUPPORT COST AMOUNTS.—Within the Indian Health Service of the Department of Health and

Human Services, the negotiation, review, and approval of tribal contract support cost entitlements shall be the responsibility of the Office of Tribal Programs, subject to the tribe’s or tribal organization’s

indirect cost rate agreement with the tribe’s or tribal organization’s

cognizant Federal agency.

(e) DIRECT CONTRACT SUPPORT COSTS AND FEDERAL EMPLOYEES.—The contract support costs that are eligible costs for the purposes of receiving funding under this Act shall include direct contract support costs associated with all Federal employees employed

in connection with the program, service, function, or activity that is

the subject of the contract, including all Federal employees paid

with funds generated from third-party collections.
15

(f) REGULATIONS.—The Secretary of the Interior and the Secretary

of Health and Human Services are authorized to promulgate joint

regulations relating to the allowability of costs expended under this

Act, including all pooled indirect costs and direct contract support

costs. In promulgating such regulations the Secretaries shall follow

the procedures set forth in sections 107(a)(2)(A), 107(d)(1),

107(d)(2)(A), 107(d)(2)(B), 107(d)(2)(D), and 107(d)(2)(E), and shall

publish proposed regulations in the Federal Register to carry out

this subsection not later than 180 days after the date of enactment

of the Tribal Contract Support Cost Technical Amendments of 2000.

The authority to promulgate regulations under this subsection shall

expire if final regulations are not promulgated within 18 months

after the date of enactment of the Tribal Contract Support Cost

Technical Amendments of 2000. In the event of a conflict between

such regulations and any Office of Management and Budget circular, the provision of such regulations shall control. The Secretary

may, with respect to a contract or compact entered into under this

Act, make exceptions in the regulations promulgated to carry out

this subsection, or waive such regulations, if the Secretary finds

that such exception or waiver is consistent with the policies of this

Act, and is not contrary to statutory law. In reviewing each request,

the Secretary shall follow the timeline, findings, assistance, hearing,

and appeal procedures set forth in section 102.

* * * * * * *

SEC. 108. CONTRACT OR GRANT SPECIFICATIONS.

(a) * * *

* * * * * * *

(c) The model agreement referred to in subsection (a)(1) reads as

follows:

‘‘SECTION 1. AGREEMENT BETWEEN THE SECRETARY AND THE ll

TRIBAL GOVERNMENT.

‘‘(a) * * *

* * * * * * *

‘‘(b) TERMS, PROVISIONS, AND CONDITIONS.— ‘‘(1) * * *

* * * * * * *

‘‘(4) FUNDING AMOUNT.—øSubject to the availability of appropriations, the¿ The Secretary shall make available to the

Contractor the total amount specified in the annual funding

agreement incorporated by reference in subsection (f)(2). Such

amount shall not be less than the applicable amount determined pursuant to section 106(a) of the Indian Self-Determination and Education Assistance Act (25 U.S.C. 450j–1).

* * * * * * *

SEC. 110. (a) * * *

* * * * * * *

(c) The Equal Access to Justice Act (Publc Law 96–481, Act of

October 1, 1980; 92 Stat. 2325, as amended), section 504 of title 5,

United States Code, and section 2412 of title 28, United States

Code shall apply to administrative appeals, and section

2412(d)(2)(A) of title 28, United States Code, shall apply to appeals
16

filed with administrative appeals boards, in appeals pending on or

filed after the date of enactment of the Indian Self-Determination

and Education Assistance Act Amendments of 1988 by tribal organizations regarding self-determination contracts.

* * * * * * *

(f) REIMBURSEMENT OF PAYMENTS.—None of the funds appropriated to the Secretary to carry out programs, functions, services,

or activities that are contractible under this Act shall be available

to reimburse payments made in satisfaction of judgments awarded

under subsections (a) and (d).

* * * * * * *

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