I

104TH CONGRESS

2D SESSION H. R. 4151

To establish a National Indian Bonding Authority Pilot Project to oversee

the issuance of bonds to provide funding for the construction of schools

of the Bureau of Indian Affairs of the Department of the Interior,

and for other purposes.

IN THE HOUSE OF REPRESENTATIVES

SEPTEMBER 24, 1996

Mr. JOHNSON of South Dakota (for himself, Mr. FALEOMAVAEGA, Mr. KILDEE, Mr. MILLER of California, and Mr. RICHARDSON) introduced the

following bill; which was referred to the Committee on Economic and

Educational Opportunities

A BILL

To establish a National Indian Bonding Authority Pilot

Project to oversee the issuance of bonds to provide funding for the construction of schools of the Bureau of

Indian Affairs of the Department of the Interior, and

for other purposes.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. SHORT TITLE.

4 This Act may be cited as the ‘‘National Indian Bond5 ing Authority Pilot Project Act of 1996’’.
2

•HR 4151 IH

1 SEC. 2. FINDINGS.

2 The Congress finds that:

3 (1) There exists a unique political and legal re4 lationship between the Government of the United

5 States and governments of Indian tribes. Indian

6 tribes have a legal relationship with the United

7 States Government which is set forth in the Con8 stitution of the United States, treaties, Federal stat9 utes, and judicial decisions.

10 (2) The Constitution of the United States gives

11 the Congress plenary power over Indian affairs; and

12 through treaties, statutes, executive orders, course of

13 dealing, and custom, the United States has under14 taken a trust obligation to protect Indian tribes and

15 tribal resources.

16 (3) The trust responsibility includes the duty to

17 protect, preserve, and enhance tribal assets and re18 sources, and to assist Indian tribes in improving the

19 socioeconomic status of tribes and their members in

20 an effort to encourage economic development and

21 strengthen powers of self-government.

22 (4) By fostering the development of accom23 modative financial markets and tribal access to cap24 ital, the Federal Government can assist in providing

25 fundamental tools to greater economic development

26 and powers of self government.
3

•HR 4151 IH

1 (5) The need for financial capital by Indian

2 tribal governments is acute, and the Federal Govern3 ment should work to facilitate capital creation and

4 those mechanisms that will permit the Federal Gov5 ernment to issue debt instruments as a means of fi6 nancing tribal government needs.

7 (6) For the benefit of Indian people across the

8 United States, to increase their commerce welfare

9 and prosperity, and the improvement of their health

10 and living conditions, it is essential that this and fu11 ture generations of youth be given the fullest oppor12 tunity to learn and to develop their intellectual and

13 mental capacities.

14 (7) It is essential that institutions of education

15 be provided with appropriate additional means to as16 sist such youth in achieving the required levels of

17 learning and development of their intellectual and

18 mental capacities.

19 (8) Institutions should be enabled to refinance

20 outstanding indebtedness incurred to provide exist21 ing facilities and to preserve and enhance the facili22 ties for the purposes of education.

23 (9) There are approximately 16,600,000 square

24 feet of space in Indian schools nationwide.
4

•HR 4151 IH

1 (10) There exists a backlog in Grant School

2 and Bureau School facility improvement, repair, and

3 new construction needs of $850,000,000. Assuming

4 a 3 percent inflation rate, the cost of the

5 $850,000,000 in deferred maintenance grows by

6 $25,500,000 per year due to inflation, and approxi7 mately $55,000,000 per year due to natural aging

8 and deterioration for a total of $80,000,000 per

9 year.

10 (11) The replacement value of these facilities is

11 $1,830,000,000.

12 (12) The magnitude of the dollars and number

13 of projects has risen to a level where these projects

14 cannot be funded by current facility improvement

15 and repair and new construction program funds.

16 (13) With the physical condition of grant and

17 bureau schools deteriorating, and with the popu18 lation within these schools increasing, there is an

19 immediate need for funding of these projects.

20 (14) The schools propose, through actions taken

21 by Congress, to be allowed to bond for project need

22 using existing education program money sources and

23 reserve funds as the repayment source and security

24 for the bonds.
5

•HR 4151 IH

1 (15) The program would establish a national

2 pilot project with the power to issue bonds, utilizing

3 the municipal finance market established to serve

4 school districts and local governments.

5 (16) Instead of funding the project directly, a

6 portion of Tribal Education Construction funds cur7 rently appropriated for these types of projects would

8 be leveraged through the bonds to fund substantially

9 more projects.

10 (17) The use of funds in this manner will allow

11 the appropriations to go much further to alleviate

12 the construction problems facing the schools and will

13 reduce the deficit by building the schools faster and

14 decreasing the inflation buildup currently estimated

15 at $80,000,000 per year.

16 (18) It is the purpose of this Act to provide a

17 measure of assistance and an alternative method of

18 financing to enable tribal institutions of education to

19 provide the facilities and structure which are sorely

20 needed to accomplish the purposes of this Act.

21 (19) True self-determination in any society of

22 people is dependent upon an educational process

23 which will ensure the development of qualified people

24 to fulfill meaningful leadership roles. This Act will

25 incorporate the commitment and support of tribal
6

•HR 4151 IH

1 self-determination by utilizing section 102 of Public

2 Law 93–638 and Public Law 100–297 to allow

3 tribes to manage their own construction projects.

4 SEC. 3. DEFINITIONS.

5 As used in this Act:

6 (1) AUTHORITY.—The term ‘‘Authority’’ means

7 the National Indian Bonding Pilot Project Authority

8 established by section 101 of this Act.

9 (2) CERTIFICATES OF PARTICIPATION.—The

10 term ‘‘certificates of participation’’ means revenue

11 bonds of the Authority issued under title II of this

12 Act.

13 (3) COST.—The term ‘‘cost’’ as applied to a

14 project or any portion thereof financed under the

15 provisions of the Act means all or any part of the

16 cost of construction, acquisition, alteration, enlarge17 ment, reconstruction, and remodeling of a project in18 cluding all lands, structures, real or personal prop19 erty, rights, rights-of-way, franchises, easements,

20 and interests acquired or used for or in connection

21 with a project, the cost of demolishing or removing

22 any buildings or structures on land so acquired; the

23 cost of all machinery and equipment, financing

24 charges, interest prior to, during, and for a period

25 after completion of such construction and acquisi-
7

•HR 4151 IH

1 tion, provisions for reserves for principal and inter2 est, and for extensions, enlargements, additions, and

3 improvements, the cost of architectural, engineering,

4 financial, and legal services, plans, specifications,

5 studies, surveys, estimates of cost and of revenues,

6 administrative expenses, necessary or incident to de7 termining the feasibility or practicability of con8 structing the project and such other expenses as

9 may be necessary or incident to the construction and

10 acquisition of the project.

11 (4) PROJECT.—The term ‘‘project’’ means a

12 structure or structures available for use as an ad13 ministration building, academic building, library,

14 classroom, athletic facility, dormitory, or other stu15 dent housing facility, maintenance, storage, em16 ployee housing, or utility facility, and other struc17 tures or facilities related thereto or required or use18 ful for the instruction of students whether proposed,

19 under construction, or completed. Parking and other

20 facilities or structures essential or convenient for the

21 orderly conduct of such institution, including land22 scaping and site preparation, shall also be included.

23 (5) SECRETARY.—The term ‘‘Secretary’’ means

24 the Secretary of the Interior.
8

•HR 4151 IH

1 (6) TRIBAL SCHOOL.—The term ‘‘tribal school’’

2 means a school that is operated by a tribal organiza3 tion for the education of Indian children with finan4 cial assistance under a Public Law 100–297 grant

5 or Public Law 93–638 contract with the Bureau of

6 Indian Affairs.

7 TITLE I—ESTABLISHMENT OF

8 NATIONAL INDIAN BONDING

9 PILOT PROJECT AUTHORITY

10 SEC. 101. ESTABLISHMENT.

11 (a) IN GENERAL.—There is established a commission

12 to be known as the National Indian Bonding Pilot Project

13 Authority.

14 (b) MEMBERSHIP.—

15 (1) COMPOSITION.—The Authority shall be

16 composed of 7 members appointed by the Secretary

17 of the Interior as follows:

18 (A) One member shall be designated by the

19 Authority as chairperson of the Authority.

20 (B) One member shall be designated by

21 the Authority as the vice chairperson of the Au22 thority.

23 (C) At least 1 member shall be a person

24 having a favorable reputation for skill, knowl-
9

•HR 4151 IH

1 edge, and experience in the field of public fi2 nance.

3 (D) At least 1 member shall be a person

4 having a favorable reputation for skill, knowl5 edge, and experience in the building construc6 tion field.

7 (E) At least 2 of the members shall be a

8 trustee, director, officer, or employee of a tribal

9 school.

10 The members may be from the public or private sec11 tor, and may include Federal or tribal officers or

12 employees, members of academia, nonprofit organi13 zations, or other interested individuals.

14 (2) DATE.—The appointments of the members

15 of the Authority shall be made no later than 3

16 months after the date of enactment of this Act.

17 (c) PERIOD OF APPOINTMENT; VACANCIES.—Two of

18 the initial members shall be appointed for a 2-year term,

19 3 of the initial members shall be appointed for a 4-year

20 term, and 2 of the initial members shall be appointed for

21 a 6-year term. Thereafter, all members shall be appointed

22 for a 6-year term. Any vacancy in the Authority shall not

23 affect its powers, but shall be filled in the same manner

24 as the original appointment.
10

•HR 4151 IH

1 (d) INITIAL MEETING.—No later than 30 days after

2 the date on which all members of the Authority have been

3 appointed, the Authority shall hold its first meeting.

4 (e) MEETINGS.—The Authority shall meet at the call

5 of the Chairperson.

6 (f) QUORUM.—A majority of the members of the Au7 thority shall constitute a quorum, but a lesser number of

8 members may hold hearings. Each member of the Author9 ity shall have 1 vote, and the vote of each member shall

10 be accorded the same weight.

11 SEC. 102. DUTIES OF THE AUTHORITY.

12 The Authority shall—

13 (1) enter into an agreement with a private un14 derwriter to provide for the issuance of certificates

15 of participation in accordance with title II; and

16 (2) promulgate regulations to carry out para17 graph (1).

18 SEC. 103. POWERS OF THE AUTHORITY.

19 (a) Purpose.—The purpose of the Authority shall be

20 to assist institutions in the construction, financing, and

21 refinancing of projects.

22 (b) RULES.—The Authority is authorized and em23 powered to adopt rules for the conduct of its business.

24 (c) LOCATION AND CHOICE OF PROJECTS.—The Au25 thority is authorized and empowered to determine the lo-
11

•HR 4151 IH

1 cation and character of any project to be financed under

2 the provisions of this Act. The Authority shall work with

3 the Department of the Interior to determine those schools

4 that are in critical need and eligible for the program out5 lined in this Act.

6 (d) INFORMATION FROM FEDERAL AGENCIES.—The

7 Authority may secure directly from the Department of the

8 Interior such information as the Authority considers nec9 essary to carry out the duties specified in section 102.

10 Upon request of the chairperson of the Authority, the head

11 of such department or agency shall furnish such informa12 tion to the Authority.

13 (e) POSTAL SERVICES.—The Authority may use the

14 United States mails in the same manner and under the

15 same conditions as other departments and agencies of the

16 Federal Government.

17 (f) ISSUE BONDS.—The Authority is authorized and

18 empowered to issue revenue bonds whose aggregate prin19 cipal amount at any time shall not exceed $200,000,000

20 and to issue notes, bond anticipation notes, and revenue

21 refunding bonds of the authority under the provisions of

22 this Act to provide funds for acquiring, constructing, re23 constructing, enlarging, remodeling, renovating, improv24 ing, furnishing, or equipping 1 or more projects or parts

25 thereof.
12

•HR 4151 IH

1 (g) CONTRACTS.—The Authority is authorized and

2 empowered to enter into contracts and execute all instru3 ments necessary or appropriate to carry out the purposes

4 of this Act.

5 (h) USE OF REVENUES.—The Authority is author6 ized and empowered to pledge, assign, or otherwise encum7 ber as security for the bonds, the rentals, revenues, and

8 other income, charges, and moneys realized from the use,

9 lease, sale or other disposition of 1 or more projects or

10 parts thereof as may be designated in the bond proceed11 ings, and enter into trust agreements for the benefit of

12 bondholders.

13 (i) USE OF CONSULTANTS.—The Authority is au14 thorized and empowered to employ consulting engineers,

15 architects, attorneys, accountants, construction and finan16 cial experts, superintendents, managers, and such other

17 employees and agents as may be necessary in its judg18 ment, and to fix their compensation.

19 (j) RECEIPT OF GRANTS.—The Authority is author20 ized and empowered to receive and accept from any public

21 agency loans or grants for or in aid of the acquisition,

22 construction, or refinancing of a project or any portion

23 thereof, and to receive and accept loans, grants, aid, or

24 contributions from any source of either money, property,

25 labor, or other things of value to be held, used and applied
13

•HR 4151 IH

1 only for the purposes for which such loans, grants, aid,

2 and contributions are made.

3 (k) STATE AND LOCAL AGREEMENTS.—The Author4 ity is authorized and empowered to enter into appropriate

5 arrangements with any Federal or State department or

6 agency, county, township, municipal corporation, or other

7 political subdivision, taxing district, or public body or

8 agency for the planning and installation of streets, roads,

9 alleys, water supply and distribution facilities, storm and

10 sanitary sewage collection and disposal facilities, and other

11 necessary appurtenances to a project.

12 (l) INSURANCE.—The Authority is authorized and

13 empowered to purchase fire and extended coverage and li14 ability insurance for a project, and any other insurance

15 the Authority may agree to provide under the bond pro16 ceedings.

17 SEC. 104. AUTHORITY PERSONNEL MATTERS.

18 (a) COMPENSATION OF MEMBERS.—Each member of

19 the Authority who is not an officer or employee of the Fed20 eral Government shall be compensated at a rate equal to

21 the daily equivalent of the annual rate of basic pay pre22 scribed for level IV of the Executive Schedule under sec23 tion 5315 of title 5, United States Code, for each day (in24 cluding travel time) during which such member is engaged

25 in the performance of the duties of the Authority. All
14

•HR 4151 IH

1 members of the Authority who are officers or employees

2 of the United States shall serve without compensation in

3 addition to that received for their services as officers or

4 employees of the United States.

5 (b) TRAVEL EXPENSES.—The members of the Au6 thority shall be allowed travel expenses, including per diem

7 in lieu of subsistence, at rates authorized for employees

8 of agencies under subchapter I of chapter 57 of title 5,

9 United States Code, while away from their homes or regu10 lar places of business in the performance of services for

11 the Authority.

12 (c) STAFF.—

13 (1) IN GENERAL.—The chairperson of the Au14 thority may, without regard to the civil service laws

15 and regulations, appoint and terminate an executive

16 director and such other additional personnel as may

17 be necessary to enable the Authority to perform its

18 duties. The employment and termination of an exec19 utive director shall be subject to confirmation by the

20 Authority.

21 (2) COMPENSATION.—The chairperson of the

22 Authority may fix the compensation of the executive

23 director and other personnel without regard to the

24 provisions of chapter 51 and subchapter III of chap25 ter 53 of title 5, United Stated Code, relating to
15

•HR 4151 IH

1 classification of positions and General Schedule pay

2 rates, except that the rate of pay for such personnel

3 may not exceed the rate payable for level V of the

4 Executive Schedule under section 5316 of such title.

5 (d) DETAIL OF GOVERNMENT EMPLOYEES.—Any

6 Federal Government employee may be detailed to the Au7 thority without reimbursement, and such detail shall be

8 without interruption or loss of civil service status or privi9 lege.

10 (e) PROCUREMENT OF TEMPORARY AND INTERMIT11 TENT SERVICES.—The chairperson of the Authority may

12 procure temporary and intermittent services under section

13 3109(b) of title 5, United States Code, at rates for individ14 ual which do not exceed the daily equivalent of the annual

15 rate of basic pay prescribed for level V of the Executive

16 Schedule under section 5316 of such title.

17 SEC. 105. AUTHORIZATION OF APPROPRIATIONS.

18 (a) IN GENERAL.—There are authorized to be appro19 priated to the Authority to carry out the purposes of this

20 Act, $13,500,000 for fiscal years 1998 through 2000 to

21 begin the pilot project. The rate at which the amount shall

22 be appropriated is $2,250,000 for fiscal year 1998,

23 $4,500,000 for fiscal year 1999, and $6,750,000 for fiscal

24 year 2000. These funds shall be used to supplement the
16

•HR 4151 IH

1 security pool and to make annual debt service payments.

2 The funds shall also be used to operate the Commission.

3 (b) AVAILABILITY.—Any sums appropriated under

4 this section shall remain available, without fiscal year limi5 tation, until expended.

6 TITLE II—PRIVATE BONDS

7 SEC. 201. ISSUANCE OF BONDS.

8 (a) IN GENERAL.—The Authority shall, by regula9 tion, establish a program to provide for the issuance of

10 certificates of participation and other debt instruments

11 pursuant to an agreement that the Authority shall enter

12 into with a private underwriter to provide funding for fa13 cility improvement, repair, and new construction of schools

14 of the Bureau of Indian Affairs under part B of title XI

15 of the Education Amendments Act of 1978 (25 U.S.C.

16 2001 et seq.) including section 1126(d) of that Act (25

17 U.S.C. 2005 and 2006(d)).

18 (b) TRANSFER OF FUNDS.—

19 (1) IN GENERAL.—Notwithstanding any other

20 provision of law, for each fiscal year, the Secretary

21 of the Interior shall transfer to the Secretary of the

22 Treasury $10,000,000 of unobligated funds made

23 available to the Secretary of the Interior by appro24 priations for advanced planning and design, facility

25 improvement and repair, employee housing construc-
17

•HR 4151 IH

1 tion, and new construction of schools of the Bureau

2 of Indian Affairs pursuant to the authorities speci3 fied in subsection (a), including any such funds in

4 the accounts of the Bureau of Indian Affairs com5 monly known as the ‘‘X’’ accounts.

6 (2) DEBT SERVICE PAYMENTS.—The Secretary

7 of the Treasury shall use any amounts transferred

8 pursuant to paragraph (1) as well as additional fu9 ture appropriations to make debt service payments

10 to the Authority with respect to the certificates of

11 participation issued under this section. The Author12 ity shall deposit any amount of debt service payment

13 made by the Secretary of the Treasury in an account

14 established by the trustee appointed under sub15 section (d).

16 (c) ISSUANCE OF CERTIFICATES OF PARTICIPA17 TION.—

18 (1) IN GENERAL.—Notwithstanding any other

19 provision of law, the Authority shall, subject to the

20 availability of funds referred to in subsection (b),

21 enter into an agreement with a private underwriter

22 to sell certificates of participation issued by the Au23 thority in such forms and denominations, bearing

24 such maturities, and subject to such terms and con25 ditions as may be prescribed by the Authority.
18

•HR 4151 IH

1 (2) SUBJECT TO TAXES.—Any Certificate of

2 Participation issued under this section shall be sub3 ject to Federal taxes under the Internal Revenue

4 Code of 1986.

5 (3) CERTIFICATES OF PARTICIPATION ARE NOT

6 FEDERAL OBLIGATIONS; MORAL OBLIGATIONS.—

7 (A) Certificates of participation issued pur8 suant to this Act do not—

9 (i) represent or constitute a debt or

10 pledge of the faith and credit of the Fed11 eral Government; or

12 (ii) grant to the owners or holders

13 thereof any right to have the Federal Gov14 ernment levy any taxes or appropriate any

15 funds for the payment of the principal

16 thereof or interest thereon.

17 (B) Certificates of participation are pay18 able solely from such funds as are pledged for

19 the payment of the certificates in accordance

20 with certificate proceedings.

21 (C)(i) Certificates of participation are con22 sidered moral obligations of the Federal Gov23 ernment in that the Federal Government has a

24 trust responsibility to continue to fund tribal

25 education.
19

•HR 4151 IH

1 (ii) In the event Congress fails to appro2 priate sufficient money to pay the annual debt

3 service on the certificates of participation, and

4 there is a need to deplete the security pool to

5 pay the annual debt service, the Secretary of

6 the Interior shall request in the next year’s

7 budget request funds equal to the amount of

8 the depletion.

9 (d) BOND TRUSTEE.—

10 (1) IN GENERAL.—Notwithstanding any other

11 provision of law, any certificate of participation is12 sued by the Authority shall be secured by a trust

13 agreement between the Authority and a trustee.

14 (2) TRUSTEE.—Any bank or trust company

15 that meets requirements established by the Author16 ity by regulation may be designated as a trustee

17 under paragraph (1).

18 (3) CONTENT OF TRUST AGREEMENT.—A trust

19 agreement entered into by the Authority under this

20 subsection shall specify that the trustee, with respect

21 to bonds issued under this section shall—

22 (A) act as a repository for the proceeds of

23 the certificates of participation sold pursuant to

24 this section;

25 (B) make payments to certificate holders;
20

•HR 4151 IH

1 (C) invest such amounts of the proceeds as

2 the trustee determines not to be necessary to

3 make payments under subparagraph (A); and

4 (D) from any amounts in excess of the

5 amounts necessary to make payments to bond6 holders, in accordance with the requirements of

7 paragraph (4), make direct payments to con8 tractors with the Secretary, the governing body

9 of an Indian tribe, or the appropriate official of

10 a school of the Bureau of Indian Affairs for fa11 cility improvement, repair, or new construction

12 pursuant to an authority specified in subsection

13 (a).

14 (4) REQUIREMENTS FOR MAKING DIRECT PAY15 MENTS.—

16 (A) IN GENERAL.—Notwithstanding any

17 other provision of law, only the trustee shall

18 make the direct payments referred to in para19 graph (3)(D) in accordance with requirements

20 that the Authority shall prescribe in the agree21 ment entered into under paragraph (3). The

22 Authority shall require the trustee, prior to

23 making a payment to a contractor under para24 graph (3)(D), to inspect the project that is the

25 subject of the contract, or provide for an in-
21

•HR 4151 IH

1 spection of that project by a local financial in2 stitution to ensure the completion of the

3 project.

4 (B) CONTRACTS.—Each contract referred

5 to in paragraph (3)(D) shall specify, or be re6 negotiated to specify, that payments under the

7 contract shall be made in accordance with this

8 subsection.

9 TITLE III—MISCELLANEOUS

10 PROVISIONS

11 SEC. 301. ANNUAL REPORT.

12 The Authority shall keep an accurate account of all

13 of its activities and all of its receipts and expenditures and

14 shall annually make a report thereof to the Secretary of

15 the Interior. The Secretary of the Interior shall review and

16 comment upon the report and make such recommenda17 tions as the Secretary deems necessary to the Congress

18 of the United States and Indian nations.

19 SEC. 302. SOVEREIGN IMMUNITY.

20 This Act shall not be construed so as to impact, limit,

21 or affect the current sovereign immunity of the tribal,

22 State or Federal governments.
22

•HR 4151 IH

1 SEC. 303. COORDINATION WITH BUREAU OF INDIAN AF2 FAIRS.

3 This pilot project shall coordinate with the Bureau

4 of Indian Affairs by utilizing Public Law 93–638, section

5 102 authority, or Public Law 100–297 which allow tribes

6 to assume direct management over school construction

7 projects. The funding package developed in this Act shall

8 be used for all projects within the National Indian Bond9 ing Pilot Project. The pilot project will focus on critical

10 need projects within the grant and contract schools across

11 the country. Nothing in these regulations shall be con12 strued to:

13 (1) Mandate a tribe to apply for a contract or

14 contract with the Bureau of Indian Affairs to plan,

15 conduct, and administer all or parts of any Bureau

16 program. Such applications under these regulations

17 are strictly voluntary.

18 (2) Authorize or require the termination of any

19 trust responsibility of the United States with respect

20 to the Indian people.

21 (3) Permit significant reduction in services to

22 Indian people as a result of this Act.

Æ