516 
•HR 1 RH1&2 
dent’s home or domicile is outside of the geographical at-
tendance area established for that school under this section. 
No funding shall be made available without tribal author-
ization to enable a school to provide transportation for any 
student to or from the school and a location outside the ap-
proved attendance area of the school. 
‘‘(e) RESERVATION AS BOUNDARY.—In any case where 
there is only one Bureau funded program located on an In-
dian reservation, the attendance area for the program shall 
be the boundaries (established by treaty, agreement, legisla-
tion, court decisions, or executive decisions and as accepted 
by the tribe) of the reservation served, and those students 
residing near the reservation shall also receive services from 
such program. 
‘‘(f) OFF-RESERVATION HOME-LIVING (DORMITORY) 
SCHOOLS.—Notwithstanding any geographical attendance 
areas, attendance at off-reservation home-living (dormitory) 
schools shall include students requiring special emphasis 
programs to be implemented at each off-reservation home- 
living (dormitory) school. Such attendance shall be coordi-
nated between education line officers, the family, and the 
referring and receiving programs. 
‘‘SEC. 1125. FACILITIES CONSTRUCTION. 
‘‘(a) COMPLIANCE WITH HEALTH AND SAFETY STAND-
ARDS.—The Secretary shall immediately begin to bring all 
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schools, dormitories, and other Indian education-related fa-
cilities operated by the Bureau or under contract or grant 
with the Bureau into compliance with all applicable tribal, 
Federal, or State health and safety standards, whichever 
provides greater protection (except that the tribal standards 
to be applied shall be no greater than any otherwise appli-
cable Federal or State standards), with section 504 of the 
Rehabilitation Act of 1973, and with the Americans with 
Disabilities Act of 1990. Nothing in this section shall re-
quire termination of the operations of any facility which 
does not comply with such provisions and which is in use 
on the date of the enactment of the No Child Left Behind 
Act of 2001. 
‘‘(b) COMPLIANCE PLAN.—At the time that the annual 
budget request for Bureau educational services is presented, 
the Secretary shall submit to the appropriate committees 
of Congress a detailed plan to bring all facilities covered 
under subsection (a) of this section into compliance with 
the standards referred to in subsection (a). Such plan shall 
include detailed information on the status of each facility’s 
compliance with such standards, specific cost estimates for 
meeting such standards at each school, and specific 
timelines for bringing each school into compliance with 
such standards. 
‘‘(c) CONSTRUCTION PRIORITIES.— 
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‘‘(1) SYSTEM
TO
ESTABLISH
PRIORITIES.—On 
an annual basis the Secretary shall submit to the ap-
propriate committees of Congress and cause to be pub-
lished in the Federal Register, the system used to es-
tablish priorities for replacement and construction 
projects for Bureau funded schools and home-living 
schools, including boarding schools and dormitories. 
At the time any budget request for education is pre-
sented, the Secretary shall publish in the Federal Reg-
ister and submit with the budget request the current 
list of all Bureau funded school construction prior-
ities. 
‘‘(2) LONG-TERM CONSTRUCTION AND REPLACE-
MENT LIST.—In addition to the plan submitted under 
subsection (b), the Secretary shall— 
‘‘(A) not later than 18 months after the date 
of the enactment of the No Child Left Behind Act 
of 2001, establish a long-term construction and 
replacement list for all Bureau funded schools; 
‘‘(B) using the list prepared under subpara-
graph (A), propose a list for the orderly replace-
ment of all Bureau funded education-related fa-
cilities over a period of 40 years to enable plan-
ning and scheduling of budget requests; 
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‘‘(C) cause the list prepared under sub-
section (B) to be published in the Federal Reg-
ister and allow a period of not less than 120 
days for public comment; 
‘‘(D) make such revisions to the list pre-
pared under subparagraph (B) as are appro-
priate based on the comments received; and 
‘‘(E) cause the final list to be published in 
the Federal Register. 
‘‘(3) EFFECT ON OTHER LIST.—Nothing in this 
section shall be construed as interfering with or 
changing in any way the construction priority list as 
it exists on the date of the enactment of the No Child 
Left Behind Act of 2001. 
‘‘(d) HAZARDOUS CONDITION AT BUREAU SCHOOL.— 
‘‘(1) CLOSURE OR CONSOLIDATION.—A Bureau 
funded school may be closed or consolidated, and the 
programs of a Bureau funded school may be substan-
tially curtailed by reason of plant conditions that 
constitute an immediate hazard to health and safety 
only if a health and safety officer of the Bureau deter-
mines that such conditions exist at the Bureau funded 
school. 
‘‘(2) INSPECTION.—(A) After making a deter-
mination described in paragraph (1), the Bureau 
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health and safety officer shall conduct an inspection 
of the condition of such plant accompanied by an ap-
propriate tribal, county, municipal, or State health 
and safety officer in order to determine whether con-
ditions at such plant constitute an immediate hazard 
to health and safety. Such inspection shall be com-
pleted by not later than the date that is 30 days after 
the date on which the action described in paragraph 
(1) is taken. No further negative action may be taken 
unless the findings are concurred in by the second, 
non-Bureau of Indian Affairs inspector. 
‘‘(B) If the health and safety officer conducting 
the inspection of a plant required under subpara-
graph (A) determines that conditions at the plant do 
not constitute an immediate hazard to health and 
safety, any consolidation or curtailment that was 
made under paragraph (1) shall immediately cease 
and any school closed by reason of conditions at the 
plant shall be reopened immediately. 
‘‘(C) If a Bureau funded school is temporarily 
closed or consolidated or the programs of a Bureau 
funded school are substantially curtailed under this 
subsection and the Secretary determines that the clo-
sure, consolidation, or curtailment will exceed 1 year, 
the Secretary shall submit to the Congress, by not 
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later than 6 months after the date on which the clo-
sure, consolidation, or curtailment was initiated, a 
report which sets forth the reasons for such temporary 
actions, the actions the Secretary is taking to elimi-
nate the conditions that constitute the hazard, and an 
estimated date by which such actions will be con-
cluded. 
‘‘(e) FUNDING REQUIREMENT.— 
‘‘(1) DISTRIBUTION OF FUNDS.—Beginning with 
the fiscal year following the year of the date of the en-
actment of the No Child Left Behind Act of 2001, all 
funds appropriated for the operations and mainte-
nance of Bureau funded schools shall be distributed by 
formula to the schools. No funds from this account 
may be retained or segregated by the Bureau to pay 
for administrative or other costs of any facilities 
branch or office, at any level of the Bureau. 
‘‘(2) REQUIREMENTS
FOR
CERTAIN
USES.—No 
funds shall be withheld from the distribution to the 
budget of any school operated under contract or grant 
by the Bureau for maintenance or any other facilities 
or road related purpose, unless such school has con-
sented, as a modification to the contract or in writing 
for grants schools, to the withholding of such funds, 
including the amount thereof, the purpose for which 
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the funds will be used, and the timeline for the serv-
ices to be provided. The school may, at the end of any 
fiscal year, cancel an agreement under this paragraph 
upon giving the Bureau 30 days notice of its intent 
to do so. 
‘‘(f) NO REDUCTION IN FEDERAL FUNDING.—Nothing 
in this section shall be construed to diminish any Federal 
funding due to the receipt by the school of funding for facili-
ties improvement or construction from a State or any other 
source. 
‘‘SEC. 1126. BUREAU OF INDIAN AFFAIRS EDUCATION FUNC-
TIONS. 
‘‘(a) FORMULATION AND ESTABLISHMENT OF POLICY 
AND PROCEDURE; SUPERVISION OF PROGRAMS AND EX-
PENDITURES.—The Secretary shall vest in the Assistant 
Secretary for Indian Affairs all functions with respect to 
formulation and establishment of policy and procedure and 
supervision of programs and expenditures of Federal funds 
for the purpose of Indian education administered by the 
Bureau. The Assistant Secretary shall carry out such func-
tions through the Director of the Office of Indian Education 
Programs. 
‘‘(b) DIRECTION AND SUPERVISION OF PERSONNEL 
OPERATIONS.—Not later than 6 months after the date of 
the enactment of the No Child Left Behind Act of 2001, the 
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Director of the Office of Indian Education Programs shall 
direct and supervise the operations of all personnel directly 
and substantially involved in the provision of education 
services by the Bureau, including school or institution cus-
todial or maintenance personnel, facilities management, 
contracting, procurement, and finance personnel. The As-
sistant Secretary for Indian Affairs shall coordinate the 
transfer of functions relating to procurement, contracts, op-
eration, and maintenance of schools and other support func-
tions to the Director. 
‘‘(c) EVALUATION OF PROGRAMS; SERVICES AND SUP-
PORT FUNCTIONS; TECHNICAL AND COORDINATING ASSIST-
ANCE.—Education personnel who are under the direction 
and supervision of the Director of the Office of Indian Edu-
cation Programs in accordance with the first sentence of 
subsection (b) shall— 
‘‘(1) monitor and evaluate Bureau education 
programs; 
‘‘(2) provide all services and support functions 
for education programs with respect to personnel mat-
ters involving staffing actions and functions; and 
‘‘(3) provide technical and coordinating assist-
ance in areas such as procurement, contracting, budg-
eting, personnel, curriculum, and operation and 
maintenance of school facilities. 
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‘‘(d) CONSTRUCTION, IMPROVEMENT, OPERATION, AND 
MAINTENANCE OF FACILITIES.— 
‘‘(1) PLAN FOR CONSTRUCTION.—The Assistant 
Secretary shall submit in the annual budget a plan— 
‘‘(A) for school facilities to be constructed 
under section 1125(c); 
‘‘(B) for establishing priorities among 
projects and for the improvement and repair of 
educational facilities, which together shall form 
the basis for the distribution of appropriated 
funds; and 
‘‘(C) for capital improvements to be made 
over the five succeeding years. 
‘‘(2) PROGRAM
FOR
OPERATION
AND
MAINTE-
NANCE.— 
‘‘(A) ESTABLISHMENT.—The Assistant Sec-
retary shall establish a program, including the 
distribution of appropriated funds, for the oper-
ation and maintenance of education facilities. 
Such program shall include— 
‘‘(i) a method of computing the 
amount necessary for each educational facil-
ity; 
‘‘(ii) similar treatment of all Bureau 
funded schools; 
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‘‘(iii) a notice of an allocation of ap-
propriated funds from the Director of the 
Office of Indian Education Programs di-
rectly to the education line officers and ap-
propriate school officials; 
‘‘(iv) a method for determining the 
need for, and priority of, facilities repair 
and maintenance projects, both major and 
minor. In making such determination, the 
Assistant Secretary shall cause to be con-
ducted a series of meetings at the agency 
and area level with representatives of the 
Bureau funded schools in those areas and 
agencies to receive comment on the lists and 
prioritization of such projects; and 
‘‘(v) a system for the conduct of routine 
preventive maintenance. 
‘‘(B) LOCAL
SUPERVISORS.—The appro-
priate education line officers shall make arrange-
ments for the maintenance of education facilities 
with the local supervisors of the Bureau mainte-
nance personnel. The local supervisors of Bureau 
maintenance personnel shall take appropriate 
action to implement the decisions made by the 
appropriate education line officers, except that 
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no funds under this chapter may be authorized 
for expenditure unless such appropriate edu-
cation line officer is assured that the necessary 
maintenance has been, or will be, provided in a 
reasonable manner. 
‘‘(3) IMPLEMENTATION.—The requirements of 
this subsection shall be implemented as soon as prac-
ticable after the date of the enactment of the No Child 
Left Behind Act of 2001. 
‘‘(e) ACCEPTANCE OF GIFTS AND BEQUESTS.—Not-
withstanding any other provision of law, the Director shall 
promulgate guidelines for the establishment of mechanisms 
for the acceptance of gifts and bequests for the use and ben-
efit of particular schools or designated Bureau operated 
education programs, including, where appropriate, the es-
tablishment and administration of trust funds. When a Bu-
reau operated program is the beneficiary of such a gift or 
bequest, the Director shall make provisions for monitoring 
its use and shall report to the appropriate committees of 
Congress the amount and terms of such gift or bequest, the 
manner in which such gift or bequest shall be used, and 
any results achieved by such action. 
‘‘(f) FUNCTIONS CLARIFIED.—For the purpose of this 
section, the term ‘functions’ includes powers and duties. 
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‘‘SEC. 1127. ALLOTMENT FORMULA. 
‘‘(a) FACTORS CONSIDERED; REVISION TO REFLECT 
STANDARDS.— 
‘‘(1) FORMULA.—The Secretary shall establish, 
by regulation adopted in accordance with section 
1138A, a formula for determining the minimum an-
nual amount of funds necessary to sustain each Bu-
reau funded school. In establishing such formula, the 
Secretary shall consider— 
‘‘(A) the number of eligible Indian students 
served and total student population of the school; 
‘‘(B) special cost factors, such as— 
‘‘(i) the isolation of the school; 
‘‘(ii) the need for special staffing, 
transportation, or educational programs; 
‘‘(iii) food and housing costs; 
‘‘(iv) maintenance and repair costs as-
sociated with the physical condition of the 
educational facilities; 
‘‘(v) special transportation and other 
costs of isolated and small schools; 
‘‘(vi) the costs of home-living (dor-
mitory) arrangements, where determined 
necessary by a tribal governing body or des-
ignated school board; 
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‘‘(vii) costs associated with greater 
lengths of service by education personnel; 
‘‘(viii) the costs of therapeutic pro-
grams for students requiring such programs; 
and 
‘‘(ix) special costs for gifted and tal-
ented students; 
‘‘(C) the cost of providing academic services 
which are at least equivalent to those provided 
by public schools in the State in which the school 
is located; and 
‘‘(D) such other relevant factors as the Sec-
retary determines are appropriate. 
‘‘(2) REVISION OF FORMULA.—Upon the estab-
lishment of the standards required in sections 1121 
and 1122, the Secretary shall revise the formula es-
tablished under this subsection to reflect the cost of 
funding such standards. Not later than January 1, 
2003, the Secretary shall review the formula estab-
lished under this section and shall take such steps as 
are necessary to increase the availability of coun-
seling and therapeutic programs for students in off- 
reservation home-living (dormitory) schools and other 
Bureau operated residential facilities. Concurrent 
with such action, the Secretary shall review the stand-
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•HR 1 RH1&2 
ards established under section 1122 to be certain that 
adequate provision is made for parental notification 
regarding, and consent for, such counseling and 
therapeutic programs. 
‘‘(b) PRO RATA ALLOTMENT.—Notwithstanding any 
other provision of law, Federal funds appropriated for the 
general local operation of Bureau funded schools shall be 
allotted pro rata in accordance with the formula established 
under subsection (a). 
‘‘(c) ANNUAL ADJUSTMENT; RESERVATION OF AMOUNT 
FOR SCHOOL BOARD ACTIVITIES.— 
‘‘(1) ANNUAL
ADJUSTMENT.—For fiscal year 
2003, and for each subsequent fiscal year, the Sec-
retary shall adjust the formula established under sub-
section (a) to ensure that the formula does the fol-
lowing: 
‘‘(A) Uses a weighted unit of 1.2 for each el-
igible Indian student enrolled in the seventh and 
eighth grades of the school in considering the 
number of eligible Indian students served by the 
school. 
‘‘(B) Considers a school with an enrollment 
of less than 50 eligible Indian students as having 
an average daily attendance of 50 eligible Indian 
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•HR 1 RH1&2 
students for purposes of implementing the adjust-
ment factor for small schools. 
‘‘(C) Takes into account the provision of 
residential services on less than a 9-month basis 
at a school when the school board and supervisor 
of the school determine that a less than 9-month 
basis will be implemented for the school year in-
volved. 
‘‘(D) Uses a weighted unit of 2.0 for each 
eligible Indian student that— 
‘‘(i) is gifted and talented; and 
‘‘(ii) is enrolled in the school on a full- 
time basis, 
in considering the number of eligible Indian stu-
dents served by the school. 
‘‘(E) Uses a weighted unit of 0.25 for each 
eligible Indian student who is enrolled in a year-
long credit course in an Indian or Native lan-
guage as part of the regular curriculum of a 
school, in considering the number of eligible In-
dian students served by such school. The adjust-
ment required under this subparagraph shall be 
used for such school after— 
‘‘(i) the certification of the Indian or 
Native language curriculum by the school 
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•HR 1 RH1&2 
board of such school to the Secretary, to-
gether with an estimate of the number of 
full-time students expected to be enrolled in 
the curriculum in the second school year for 
which the certification is made; and 
(ii) the funds appropriated for allot-
ment under this section are designated by 
the appropriations Act appropriating such 
funds as the amount necessary to implement 
such adjustment at such school without re-
ducing allotments made under this section 
to any school by virtue of such adjustment. 
‘‘(2) RESERVATION OF AMOUNT.— 
‘‘(A) IN GENERAL.—From the funds allotted 
in accordance with the formula established under 
subsection (a) for each Bureau school, the local 
school board of such school may reserve an 
amount which does not exceed the greater of— 
‘‘(i) $8,000; or 
‘‘(ii) the lesser of— 
‘‘(I) $15,000; or 
‘‘(II) 1 percent of such allotted 
funds, 
for school board activities for such school, includ-
ing (notwithstanding any other provision of law) 
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meeting expenses and the cost of membership in, 
and support of, organizations engaged in activi-
ties on behalf of Indian education. 
‘‘(B) TRAINING.—Each school board shall 
see that each new member of the school board re-
ceives, within 12 months of the individual’s as-
suming a position on the school board, 40 hours 
of training relevant to that individual’s service 
on the board. Such training may include legal 
issues pertaining to schools funded by the Bu-
reau, legal issues pertaining to school boards, 
ethics, and other topics deemed appropriate by 
the school board. 
‘‘(d) RESERVATION OF AMOUNT FOR EMERGENCIES.— 
The Secretary shall reserve from the funds available for dis-
tribution for each fiscal year under this section an amount 
which, in the aggregate, shall equal 1 percent of the funds 
available for such purpose for that fiscal year. Such funds 
shall be used, at the discretion of the Director of the Office 
of Indian Education Programs, to meet emergencies and 
unforeseen contingencies affecting the education programs 
funded under this section. Funds reserved under this sub-
section may only be expended for education services or pro-
grams, including emergency repairs of educational facili-
ties, at a schoolsite (as defined by section 5204(c)(2) of the 
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•HR 1 RH1&2 
Tribally Controlled Schools Act of 1988). Funds reserved 
under this subsection shall remain available without fiscal 
year limitation until expended. However, the aggregate 
amount available from all fiscal years may not exceed 1 
percent of the current year funds. Whenever, the Secretary 
makes funds available under this subsection, the Secretary 
shall report such action to the appropriate committees of 
Congress within the annual budget submission. 
‘‘(e) 
SUPPLEMENTAL
APPROPRIATIONS.—Supple-
mental appropriations enacted to meet increased pay costs 
attributable to school level personnel shall be distributed 
under this section. 
‘‘(f) ELIGIBLE INDIAN STUDENT DEFINED.—For the 
purpose of this section, the term ‘eligible Indian student’ 
means a student who— 
‘‘(1) is a member of or is at least one-fourth de-
gree Indian blood descendant of a member of an In-
dian tribe which is eligible for the special programs 
and services provided by the United States through 
the Bureau because of their status as Indians; and 
‘‘(2) resides on or near an Indian reservation or 
meets the criteria for attendance at a Bureau off-res-
ervation home-living (dormitory) school. 
‘‘(g) TUITION.— 
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‘‘(1) IN GENERAL.—An eligible Indian student 
may not be charged tuition for attendance at a Bu-
reau school or contract or grant school. A student at-
tending a Bureau school under paragraph (2)(C) may 
not be charged tuition for attendance at such a school. 
‘‘(2) ATTENDANCE OF NON-INDIAN STUDENTS AT 
BUREAU SCHOOLS.—The Secretary may permit the 
attendance at a Bureau school of a student who is not 
an eligible Indian student if— 
‘‘(A) the Secretary determines that the stu-
dent’s attendance will not adversely affect the 
school’s program for eligible Indian students be-
cause of cost, overcrowding, or violation of stand-
ards or accreditation; 
‘‘(B) the school board consents; 
‘‘(C) the student is a dependent of a Bu-
reau, Indian Health Service, or tribal govern-
ment employee who lives on or near the 
schoolsite; or 
‘‘(D) a tuition is paid for the student that 
is not more than that charged by the nearest 
public school district for out-of-district students, 
and shall be in addition to the school’s allocation 
under this section. 
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‘‘(3) ATTENDANCE OF NON-INDIAN STUDENTS AT 
CONTRACT AND GRANT SCHOOLS.—The school board of 
a contract or grant school may permit students who 
are not eligible Indian students under this subsection 
to attend its contract school or grant school and any 
tuition collected for those students shall be in addition 
to funding received under this section. 
‘‘(h) FUNDS AVAILABLE WITHOUT FISCAL YEAR LIMI-
TATION.—Notwithstanding any other provision of law, at 
the election of the school board of a Bureau school made 
at any time during the fiscal year, a portion equal to not 
more than 15 percent of the funds allocated with respect 
to a school under this section for any fiscal year shall re-
main available to the school for expenditure without fiscal 
year limitation. The Assistant Secretary shall take steps as 
may be necessary to implement this provision. 
‘‘(i) STUDENTS
AT RICHFIELD DORMITORY, RICH-
FIELD, UTAH.—Tuition for out-of-State Indian students in 
home-living (dormitory) arrangements at the Richfield dor-
mitory in Richfield, Utah, who attend Sevier County high 
schools in Richfield, Utah, shall be paid from the Indian 
school equalization program funds authorized in this sec-
tion and section 1130 at a rate not to exceed the amounts 
per weighted student unit for that year for the instruction 
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of such students. No additional administrative cost funds 
shall be added to the grant. 
‘‘SEC. 1128. ADMINISTRATIVE COST GRANTS. 
‘‘(a) 
GRANTS; 
EFFECT
UPON
APPROPRIATED 
AMOUNTS.— 
‘‘(1) GRANTS.—Subject to the availability of ap-
propriated funds, the Secretary shall provide grants 
to each tribe or tribal organization operating a con-
tract school or grant school in the amount determined 
under this section with respect to the tribe or tribal 
organization for the purpose of paying the adminis-
trative and indirect costs incurred in operating con-
tract or grant schools, provided that no school oper-
ated as a stand-alone institution shall receive less 
than $200,000 per year for these purposes, in order 
to— 
‘‘(A) enable tribes and tribal organizations 
operating such schools, without reducing direct 
program services to the beneficiaries of the pro-
gram, to provide all related administrative over-
head services and operations necessary to meet 
the requirements of law and prudent manage-
ment practice; and 
‘‘(B) carry out other necessary support 
functions which would otherwise be provided by 
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the Secretary or other Federal officers or employ-
ees, from resources other than direct program 
funds, in support of comparable Bureau operated 
programs. 
‘‘(2) EFFECT UPON APPROPRIATED AMOUNTS.— 
Amounts appropriated to fund the grants provided 
under this section shall be in addition to, and shall 
not reduce, the amounts appropriated for the program 
being administered by the contract or grant school. 
‘‘(b) DETERMINATION OF GRANT AMOUNT.— 
‘‘(1) IN
GENERAL.—The amount of the grant 
provided to each tribe or tribal organization under 
this section for each fiscal year shall be determined by 
applying the administrative cost percentage rate of 
the tribe or tribal organization to the aggregate of the 
Bureau elementary and secondary functions operated 
by the tribe or tribal organization for which funds are 
received from or through the Bureau. The administra-
tive cost percentage rate determined under subsection 
(c) does not apply to other programs operated by the 
tribe or tribal organization. 
‘‘(2) DIRECT COST BASE FUNDS.—The Secretary 
shall— 
‘‘(A) reduce the amount of the grant deter-
mined under paragraph (1) to the extent that 
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payments for administrative costs are actually 
received by an Indian tribe or tribal organiza-
tion under any Federal education program in-
cluded in the direct cost base of the tribe or trib-
al organization; and 
‘‘(B) take such actions as may be necessary 
to be reimbursed by any other department or 
agency of the Federal Government for the portion 
of grants made under this section for the costs of 
administering any program for Indians that is 
funded by appropriations made to such other de-
partment or agency. 
‘‘(c) ADMINISTRATIVE COST PERCENTAGE RATE.— 
‘‘(1) IN GENERAL.—For purposes of this section, 
the administrative cost percentage rate for a contract 
or grant school for a fiscal year is equal to the per-
centage determined by dividing— 
‘‘(A) the sum of— 
‘‘(i) the amount equal to— 
‘‘(I) the direct cost base of the 
tribe or tribal organization for the fis-
cal year, multiplied by 
‘‘(II) the minimum base rate; plus 
‘‘(ii) the amount equal to— 
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‘‘(I) the standard direct cost base; 
multiplied by 
‘‘(II) the maximum base rate; by 
‘‘(B) the sum of— 
‘‘(i) the direct cost base of the tribe or 
tribal organization for the fiscal year; plus 
‘‘(ii) the standard direct cost base. 
‘‘(2) ROUNDING.—The administrative cost per-
centage rate shall be determined to the 1⁄100 of a dec-
imal point. 
‘‘(d) COMBINING FUNDS.— 
‘‘(1) IN GENERAL.—Funds received by a tribe or 
contract or grant school as grants under this section 
for tribal elementary or secondary educational pro-
grams may be combined by the tribe or contract or 
grant school into a single administrative cost account 
without the necessity of maintaining separate funding 
source accounting. 
‘‘(2) INDIRECT COST FUNDS.—Indirect cost funds 
for programs at the school which share common ad-
ministrative services with tribal elementary or sec-
ondary educational programs may be included in the 
administrative cost account described in paragraph 
(1). 
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‘‘(e) AVAILABILITY
OF FUNDS.—Funds received as 
grants under this section with respect to tribal elementary 
or secondary education programs shall remain available to 
the contract or grant school without fiscal year limitation 
and without diminishing the amount of any grants other-
wise payable to the school under this section for any fiscal 
year beginning after the fiscal year for which the grant is 
provided. 
‘‘(f) TREATMENT
OF
FUNDS.—Funds received as 
grants under this section for Bureau funded programs oper-
ated by a tribe or tribal organization under a contract or 
agreement shall not be taken into consideration for purposes 
of indirect cost underrecovery and overrecovery determina-
tions by any Federal agency for any other funds, from 
whatever source derived. 
‘‘(g) TREATMENT OF ENTITY OPERATING OTHER PRO-
GRAMS.—In applying this section and section 105 of the 
Indian Self-Determination and Education Assistance Act 
with respect to an Indian tribe or tribal organization 
that— 
‘‘(1) receives funds under this section for admin-
istrative costs incurred in operating a contract or 
grant school or a school operated under the Tribally 
Controlled Schools Act of 1988; and 
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‘‘(2) operates one or more other programs under 
a contract or grant provided under the Indian Self- 
Determination and Education Assistance Act, 
the Secretary shall ensure that the Indian tribe or tribal 
organization is provided with the full amount of the admin-
istrative costs that are associated with operating the con-
tract or grant school, and of the indirect costs, that are asso-
ciated with all of such other programs, provided that funds 
appropriated for implementation of this section shall be 
used only to supply the amount of the grant required to 
be provided by this section. 
‘‘(h) DEFINITIONS.—For purposes of this section: 
‘‘(1) ADMINISTRATIVE COST.—(A) The term ‘ad-
ministrative cost’ means the costs of necessary admin-
istrative functions which— 
‘‘(i) the tribe or tribal organization incurs 
as a result of operating a tribal elementary or 
secondary educational program; 
‘‘(ii) are not customarily paid by com-
parable Bureau operated programs out of direct 
program funds; and 
‘‘(iii) are either— 
‘‘(I) normally provided for comparable 
Bureau programs by Federal officials using 
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resources other than Bureau direct program 
funds; or 
‘‘(II) are otherwise required of tribal 
self-determination program operators by 
law or prudent management practice. 
‘‘(B) The term ‘administrative cost’ may in-
clude— 
‘‘(i) contract or grant (or other agreement) 
administration; 
‘‘(ii) executive, policy, and corporate leader-
ship and decisionmaking; 
‘‘(iii) program planning, development, and 
management; 
‘‘(iv) fiscal, personnel, property, and pro-
curement management; 
‘‘(v) related office services and record keep-
ing; and 
‘‘(vi) costs of necessary insurance, auditing, 
legal, safety and security services. 
‘‘(2) BUREAU
ELEMENTARY
AND
SECONDARY 
FUNCTIONS.—The term ‘Bureau elementary and sec-
ondary functions’ means— 
‘‘(A) all functions funded at Bureau schools 
by the Office; 
‘‘(B) all programs— 
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‘‘(i) funds for which are appropriated 
to other agencies of the Federal Government; 
and 
‘‘(ii) which are administered for the 
benefit of Indians through Bureau schools; 
and 
‘‘(C) all operation, maintenance, and repair 
funds for facilities and government quarters used 
in the operation or support of elementary and 
secondary education functions for the benefit of 
Indians, from whatever source derived. 
‘‘(3) DIRECT COST BASE.—(A) Except as other-
wise provided in subparagraph (B), the direct cost 
base of a tribe or tribal organization for the fiscal 
year is the aggregate direct cost program funding for 
all tribal elementary or secondary educational pro-
grams operated by the tribe or tribal organization 
during— 
‘‘(i) the second fiscal year preceding such 
fiscal year; or 
‘‘(ii) if such programs have not been oper-
ated by the tribe or tribal organization during 
the two preceding fiscal years, the first fiscal 
year preceding such fiscal year. 
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‘‘(B) In the case of Bureau elementary or sec-
ondary education functions which have not previously 
been operated by a tribe or tribal organization under 
contract, grant, or agreement with the Bureau, the di-
rect cost base for the initial year shall be the projected 
aggregate direct cost program funding for all Bureau 
elementary and secondary functions to be operated by 
the tribe or tribal organization during that fiscal 
year. 
‘‘(4) MAXIMUM
BASE
RATE.—The term ‘max-
imum base rate’ means 50 percent. 
‘‘(5) MINIMUM
BASE
RATE.—The term ‘min-
imum base rate’ means 11 percent. 
‘‘(6) STANDARD DIRECT COST BASE.—The term 
‘standard direct cost base’ means $600,000. 
‘‘(7) TRIBAL ELEMENTARY OR SECONDARY EDU-
CATIONAL PROGRAMS.—The term ‘tribal elementary 
or secondary educational programs’ means all Bureau 
elementary and secondary functions, together with 
any other Bureau programs or portions of programs 
(excluding funds for social services that are appro-
priated to agencies other than the Bureau and are ex-
pended through the Bureau, funds for major sub-
contracts, construction, and other major capital ex-
penditures, and unexpended funds carried over from 
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•HR 1 RH1&2 
prior years) which share common administrative cost 
functions, that are operated directly by a tribe or 
tribal organization under a contract, grant, or agree-
ment with the Bureau. 
‘‘(i) STUDIES FOR DETERMINATION OF FACTORS AF-
FECTING COSTS; BASE RATES LIMITS; STANDARD DIRECT 
COST BASE; REPORT TO CONGRESS.— 
‘‘(1) STUDIES.—Not later than 120 days after 
the date of the enactment of the No Child Left Behind 
Act of 2001, the Director of the Office of Indian Edu-
cation Programs shall— 
‘‘(A) conduct such studies as may be needed 
to establish an empirical basis for determining 
relevant factors substantially affecting required 
administrative costs of tribal elementary and 
secondary education programs, using the for-
mula set forth in subsection (c); and 
‘‘(B) conduct a study to determine— 
‘‘(i) a maximum base rate which ensures 
that the amount of the grants provided under 
this section will provide adequate (but not exces-
sive) funding of the administrative costs of the 
smallest tribal elementary or secondary edu-
cational programs; 
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‘‘(ii) a minimum base rate which ensures 
that the amount of the grants provided under 
this section will provide adequate (but not exces-
sive) funding of the administrative costs of the 
largest tribal elementary or secondary edu-
cational programs; and 
‘‘(iii) a standard direct cost base which is 
the aggregate direct cost funding level for which 
the percentage determined under subsection (c) 
will— 
‘‘(I) be equal to the median between the 
maximum base rate and the minimum base 
rate; and 
‘‘(II) ensure that the amount of the 
grants provided under this section will pro-
vide adequate (but not excessive) funding of 
the administrative costs of tribal elementary 
or secondary educational programs closest 
to the size of the program. 
‘‘(2) GUIDELINES.—The studies required under 
paragraph (1) shall— 
‘‘(A) be conducted in full consultation (in 
accordance with section 1131) with— 
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‘‘(i) the tribes and tribal organizations 
that are affected by the application of the 
formula set forth in subsection (c); and 
‘‘(ii) all national and regional Indian 
organizations of which such tribes and trib-
al organizations are typically members; 
‘‘(B) be conducted onsite with a representa-
tive statistical sample of the tribal elementary or 
secondary educational programs under a con-
tract entered into with a nationally reputable 
public accounting and business consulting firm; 
‘‘(C) take into account the availability of 
skilled labor; commodities, business and auto-
matic data processing services, related Indian 
preference and Indian control of education re-
quirements, and any other market factors found 
substantially to affect the administrative costs 
and efficiency of each such tribal elementary or 
secondary educational program studied in order 
to assure that all required administrative activi-
ties can reasonably be delivered in a cost effective 
manner for each such program, given an admin-
istrative cost allowance generated by the values, 
percentages, or other factors found in the studies 
to be relevant in such formula; 
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‘‘(D) identify, and quantify in terms of per-
centages of direct program costs, any general fac-
tors arising from geographic isolation, or num-
bers of programs administered, independent of 
program size factors used to compute a base ad-
ministrative cost percentage in such formula; 
and 
‘‘(E) identify any other incremental cost 
factors substantially affecting the costs of re-
quired administrative cost functions at any of 
the tribal elementary or secondary educational 
programs studied and determine whether the fac-
tors are of general applicability to other such 
programs, and (if so) how the factors may effec-
tively be incorporated into such formula. 
‘‘(3) CONSULTATION
WITH
INSPECTOR
GEN-
ERAL.—In carrying out the studies required under 
this subsection, the Director shall obtain the input of, 
and afford an opportunity to participate to, the In-
spector General of the Department of the Interior. 
‘‘(4) CONSIDERATION OF DELIVERY OF ADMINIS-
TRATIVE
SERVICES.—Determinations described in 
paragraph (2)(C) shall be based on what is prac-
ticable at each location studied, given prudent man-
agement practice, irrespective of whether required ad-
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•HR 1 RH1&2 
ministrative services were actually or fully delivered 
at these sites, or whether other services were delivered 
instead, during the period of the study. 
‘‘(5) REPORT.—Upon completion of the studies 
conducted under paragraph (1), the Director shall 
submit to Congress a report on the findings of the 
studies, together with determinations based upon such 
studies that would affect the definitions set forth 
under subsection (e) that are used in the formula set 
forth in subsection (c). 
‘‘(6) PROJECTION
OF
COSTS.—The Secretary 
shall include in the Bureau’s justification for each 
appropriations request beginning in the first fiscal 
year after the completion of the studies conducted 
under paragraph (1), a projection of the overall costs 
associated with the formula set forth in subsection (c) 
for all tribal elementary or secondary education pro-
grams which the Secretary expects to be funded in the 
fiscal year for which the appropriations are sought. 
‘‘(7) DETERMINATION OF PROGRAM SIZE.—For 
purposes of this subsection, the size of tribal elemen-
tary or secondary educational programs is determined 
by the aggregate direct cost program funding level for 
all Bureau funded programs which share common ad-
ministrative cost functions. 
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‘‘(j) AUTHORIZATION OF APPROPRIATIONS.— 
‘‘(1) IN GENERAL.—There are authorized to be 
appropriated such sums as necessary to carry out this 
section. 
‘‘(2) REDUCTIONS.—If the total amount of funds 
necessary to provide grants to tribes and tribal orga-
nizations in the amounts determined under subsection 
(b) for a fiscal year exceeds the amount of funds ap-
propriated to carry out this section for such fiscal 
year, the Secretary shall reduce the amount of each 
grant determined under subsection (b) for such fiscal 
year by an amount that bears the same relationship 
to such excess as the amount of such grants deter-
mined under subsection (b) bears to the total of all 
grants determined under subsection (b) section for all 
tribes and tribal organizations for such fiscal year. 
‘‘(k) APPLICABILITY TO SCHOOLS OPERATING UNDER 
TRIBALLY CONTROLLED SCHOOLS ACT OF 1988.—The pro-
visions of this section shall also apply to those schools oper-
ating under the Tribally Controlled Schools Act of 1988. 
‘‘SEC. 1129. DIVISION OF BUDGET ANALYSIS. 
‘‘(a) ESTABLISHMENT.—Not later than 12 months 
after the date of the enactment of the No Child Left Behind 
Act of 2001, the Secretary shall establish within the Office 
of Indian Education Programs a Division of Budget Anal-
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•HR 1 RH1&2 
ysis (hereinafter referred to as the ‘Division’). Such Divi-
sion shall be under the direct supervision and control of 
the Director of the Office. 
‘‘(b) FUNCTIONS.—In consultation with the tribal gov-
erning bodies and tribal school boards, the Director of the 
Office, through the Division, shall conduct studies, surveys, 
or other activities to gather demographic information on 
Bureau funded schools and project the amount necessary to 
provide Indian students in such schools the educational pro-
gram set forth in this part. 
‘‘(c) ANNUAL REPORTS.—Not later than the date that 
the Assistant Secretary for Indian Affairs makes the annual 
budget submission, for each fiscal year after the date of the 
enactment of the No Child Left Behind Act of 2001, the Di-
rector of the Office shall submit to the appropriate commit-
tees of Congress (including the Appropriations committees), 
all Bureau funded schools, and the tribal governing bodies 
of such schools, a report which shall contain— 
‘‘(1) projections, based upon the information 
gathered pursuant to subparagraph (b) and any other 
relevant information, of amounts necessary to provide 
Indian students in Bureau funded schools the edu-
cational program set forth in this part; 
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‘‘(2) a description of the methods and formulas 
used to calculate the amounts projected pursuant to 
paragraph (1); and 
‘‘(3) such other information as the Director of 
the Office considers appropriate. 
‘‘(d) USE OF REPORTS.—The Director of the Office 
and the Assistant Secretary for Indian Affairs shall use the 
annual report required by subsection (c) when preparing 
their annual budget submissions. 
‘‘SEC. 1130. UNIFORM DIRECT FUNDING AND SUPPORT. 
‘‘(a) ESTABLISHMENT
OF SYSTEM
AND FORWARD 
FUNDING.— 
‘‘(1) IN GENERAL.—The Secretary shall establish, 
by regulation adopted in accordance with section 
1138, a system for the direct funding and support of 
all Bureau funded schools. Such system shall allot 
funds in accordance with section 1127. All amounts 
appropriated for distribution under this section may 
be made available under paragraph (2). 
‘‘(2) TIMING FOR USE OF FUNDS.—(A) For the 
purposes of affording adequate notice of funding 
available pursuant to the allotments made under sec-
tion 1127, amounts appropriated in an appropria-
tions Act for any fiscal year shall become available 
for obligation by the affected schools on July 1 of the 
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•HR 1 RH1&2 
fiscal year in which such amounts are appropriated 
without further action by the Secretary, and shall re-
main available for obligation through the succeeding 
fiscal year. 
‘‘(B) The Secretary shall, on the basis of the 
amount appropriated in accordance with this para-
graph— 
‘‘(i) publish, not later than July 1 of the 
fiscal year for which the funds are appropriated, 
allotments to each affected school made under 
section 1127 of 85 percent of such appropriation; 
and 
‘‘(ii) publish, not later than September 30 
of such fiscal year, the allotments to be made 
under section 1127 of the remaining 15 percent 
of such appropriation, adjusted to reflect the ac-
tual student attendance. 
‘‘(3) LIMITATION.—(A) Notwithstanding any 
other provision of law or regulation, the supervisor of 
a Bureau funded school may expend an aggregate of 
not more than $50,000 of the amount allotted the 
school under section 1127 to acquire materials, sup-
plies, equipment, services, operation, and mainte-
nance for the school without competitive bidding if— 
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‘‘(i) the cost for any single item purchased 
does not exceed $15,000; 
‘‘(ii) the school board approves the procure-
ment; 
‘‘(iii) the supervisor certifies that the cost is 
fair and reasonable; 
‘‘(iv) the documents relating to the procure-
ment executed by the supervisor or other school 
staff cite this paragraph as authority for the 
procurement; and 
‘‘(v) the transaction is documented in a 
journal maintained at the school clearly identi-
fying when the transaction occurred, what was 
acquired and from whom, the price paid, the 
quantities acquired, and any other information 
the supervisor or school board considers relevant. 
‘‘(B) Not later than 6 months after the date of 
the enactment of the No Child Left Behind Act of 
2001, the Secretary shall cause to be sent to each su-
pervisor of a Bureau operated program and school 
board chairperson, the education line officer or offi-
cers of each agency and area, and the Bureau Divi-
sion in charge of procurement, at both the local and 
national levels, notice of this paragraph. 
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‘‘(C) The Director shall be responsible for deter-
mining the application of this paragraph, including 
the authorization of specific individuals to carry out 
this paragraph, and shall be responsible for the provi-
sion of guidelines on the use of this paragraph and 
adequate training on such guidelines. 
‘‘(4) EFFECT OF SEQUESTRATION ORDER.—If a 
sequestration order issued under the Balanced Budget 
and Emergency Deficit Control Act of 1985 reduces 
the amount of funds available for allotment under sec-
tion 1127 for any fiscal year by more than 7 percent 
of the amount of funds available for allotment under 
such section during the preceding fiscal year— 
‘‘(A) to fund allotments under section 1127, 
the Secretary, notwithstanding any other law, 
may use— 
‘‘(i) funds appropriated for the oper-
ation of any Bureau school that is closed or 
consolidated; and 
‘‘(ii) funds appropriated for any pro-
gram that has been curtailed at any Bureau 
school; and 
‘‘(B) the Secretary may waive the applica-
tion of the provisions of section 1121(h) with re-
spect to the closure or consolidation of a school, 
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or the curtailment of a program at a school, dur-
ing such fiscal year if the funds described in 
clauses (i) and (ii) of subparagraph (A) with re-
spect to such school are used to fund allotments 
made under section 1127 for such fiscal year. 
‘‘(b) LOCAL FINANCIAL PLANS FOR EXPENDITURE OF 
FUNDS.— 
‘‘(1) PLAN REQUIRED.—In the case of all Bureau 
operated schools, allotted funds shall be expended on 
the basis of local financial plans which ensure meet-
ing the accreditation requirements or standards for 
the school established pursuant to section 1121 and 
which shall be prepared by the local school supervisor 
in active consultation with the local school board for 
each school. The local school board for each school 
shall have the authority to ratify, reject, or amend 
such financial plan, and expenditures thereunder, 
and, on its own determination or in response to the 
supervisor of the school, to revise such financial plan 
to meet needs not foreseen at the time of preparation 
of the financial plan. 
‘‘(2) The supervisor— 
‘‘(A) shall put into effect the decisions of the 
school board; 
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‘‘(B) shall provide the appropriate local 
union representative of the education employees 
with copies of proposed draft financial plans 
and all amendments or modifications thereto, at 
the same time such copies are submitted to the 
local school board; and 
‘‘(C) may appeal any such action of the 
local school board to the appropriate education 
line officer of the Bureau agency by filing a 
written statement describing the action and the 
reasons the supervisor believes such action should 
be overturned. A copy of such statement shall be 
submitted to the local school board and such 
board shall be afforded an opportunity to re-
spond, in writing, to such appeal. After review-
ing such written appeal and response, the appro-
priate education line officer may, for good cause, 
overturn the action of the local school board. The 
appropriate education line officer shall transmit 
the determination of such appeal in the form of 
a written opinion to such board and to such su-
pervisor identifying the reasons for overturning 
such action. 
‘‘(c) 
USE
OF
SELF-DETERMINATION
GRANTS 
FUNDS.—Funds for self-determination grants under section 
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•HR 1 RH1&2 
103(a)(2) of the Indian Self-Determination and Education 
Assistance Act shall not be used for providing technical as-
sistance and training in the field of education by the Bu-
reau unless such services are provided in accordance with 
a plan, agreed to by the tribe or tribes affected and the Bu-
reau, under which control of education programs is in-
tended to be transferred to such tribe or tribes within a spe-
cific period of time negotiated under such agreement. The 
Secretary may approve applications for funding tribal di-
visions of education and development of tribal codes of edu-
cation from funds appropriated pursuant to section 104(a) 
of such Act. 
‘‘(d) TECHNICAL ASSISTANCE AND TRAINING.—In the 
exercise of its authority under this section, a local school 
board may request technical assistance and training from 
the Secretary, and the Secretary shall, to the greatest extent 
possible, provide such services, and make appropriate provi-
sions in the budget of the Office for such services. 
‘‘(e) SUMMER PROGRAM OF ACADEMIC AND SUPPORT 
SERVICES.— 
‘‘(1) IN GENERAL.—A financial plan under sub-
section (b) for a school may include, at the discretion 
of the local administrator and the school board of 
such school, a provision for a summer program of 
academic and support services for students of the 
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•HR 1 RH1&2 
school. Any such program may include activities re-
lated to the prevention of alcohol and substance abuse. 
The Assistant Secretary for Indian Affairs shall pro-
vide for the utilization of any such school facility 
during any summer in which such utilization is re-
quested. 
‘‘(2) USE OF OTHER FUNDS.—Notwithstanding 
any other provision of law, funds authorized under 
the Act of April 16, 1934, and this Act may be used 
to augment the services provided in each summer pro-
gram at the option, and under the control, of the tribe 
or Indian controlled school receiving such funds. 
‘‘(3) TECHNICAL ASSISTANCE AND PROGRAM CO-
ORDINATION.—The Assistant Secretary for Indian Af-
fairs, acting through the Director of the Office, shall 
provide technical assistance and coordination for any 
program described in paragraph (1) and shall, to the 
extent possible, encourage the coordination of such 
programs with any other summer programs that 
might benefit Indian youth, regardless of the funding 
source or administrative entity of any such program. 
‘‘(f) COOPERATIVE AGREEMENTS.— 
‘‘(1) IN GENERAL.—From funds allotted to a Bu-
reau school under section 1127, the Secretary shall, if 
specifically requested by the tribal governing body (as 
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•HR 1 RH1&2 
defined in section 1141), implement any cooperative 
agreement entered into between the tribe, the Bureau 
school board, and the local public school district 
which meets the requirements of paragraph (2) and 
involves the school. The tribe, the Bureau school 
board, and the local public school district shall deter-
mine the terms of the agreement. Such agreement may 
encompass coordination of all or any part of the fol-
lowing: 
‘‘(A) Academic program and curriculum, 
unless the Bureau school is currently accredited 
by a State or regional accrediting entity and 
would not continue to be so accredited. 
‘‘(B) Support services, including procure-
ment and facilities maintenance. 
‘‘(C) Transportation. 
‘‘(2) EQUAL
BENEFIT
AND
BURDEN.—Each 
agreement entered into pursuant to the authority pro-
vided in paragraph (1) shall confer a benefit upon the 
Bureau school commensurate with the burden as-
sumed, though this requirement shall not be construed 
so as to require equal expenditures or an exchange of 
similar services. 
‘‘(g) PRODUCT OR RESULT OF STUDENT PROJECTS.— 
Notwithstanding any other provision of law, where there 
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•HR 1 RH1&2 
is agreement on action between the superintendent and the 
school board of a Bureau funded school, the product or re-
sult of a project conducted in whole or in major part by 
a student may be given to that student upon the completion 
of such project. 
‘‘(h) NOT CONSIDERED FEDERAL FUNDS FOR MATCH-
ING REQUIREMENTS.—Notwithstanding any other provi-
sion of law, funds received by a Bureau funded school under 
this part shall not be considered Federal funds for the pur-
poses of meeting a matching funds requirement for any Fed-
eral program. 
‘‘SEC. 1131. POLICY FOR INDIAN CONTROL OF INDIAN EDU-
CATION. 
‘‘(a) FACILITATION OF INDIAN CONTROL.—It shall be 
the policy of the Secretary and the Bureau, in carrying out 
the functions of the Bureau, to facilitate tribal control of 
Indian affairs in all matters relating to education. 
‘‘(b) CONSULTATION WITH TRIBES.— 
‘‘(1) IN GENERAL.—All actions under this Act 
shall be done with active consultation with tribes. 
‘‘(2) 
REQUIREMENTS.—The 
consultation 
re-
quired under paragraph (1) means a process involv-
ing the open discussion and joint deliberation of all 
options with respect to potential issues or changes be-
tween the Bureau and all interested parties. During 
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•HR 1 RH1&2 
such discussions and joint deliberations, interested 
parties (including tribes and school officials) shall be 
given an opportunity to present issues including pro-
posals regarding changes in current practices or pro-
grams which will be considered for future action by 
the Bureau. All interested parties shall be given an 
opportunity to participate and discuss the options 
presented or to present alternatives, with the views 
and concerns of the interested parties given effect un-
less the Secretary determines, from information avail-
able from or presented by the interested parties dur-
ing one or more of the discussions and deliberations, 
that there is a substantial reason for another course 
of action. The Secretary shall submit to any Member 
of Congress, within 18 days of the receipt of a written 
request by such Member, a written explanation of any 
decision made by the Secretary which is not con-
sistent with the views of the interested parties. 
‘‘SEC. 1132. INDIAN EDUCATION PERSONNEL. 
‘‘(a) IN GENERAL.—Chapter 51, subchapter III of 
chapter 53, and chapter 63 of title 5, United States Code, 
relating to classification, pay and leave, respectively, and 
the sections of such title relating to the appointment, pro-
motion, hours of work, and removal of civil service employ-
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•HR 1 RH1&2 
ees, shall not apply to educators or to education positions 
(as defined in subsection (p)). 
‘‘(b) REGULATIONS.—Not later than 60 days after the 
date of the enactment of the No Child Left Behind Act of 
2001, the Secretary shall prescribe regulations to carry out 
this section. Such regulations shall include— 
‘‘(1) the establishment of education positions; 
‘‘(2) the establishment of qualifications for edu-
cators and education personnel; 
‘‘(3) the fixing of basic compensation for edu-
cators and education positions; 
‘‘(4) the appointment of educators; 
‘‘(5) the discharge of educators; 
‘‘(6) the entitlement of educators to compensa-
tion; 
‘‘(7) the payment of compensation to educators; 
‘‘(8) the conditions of employment of educators; 
‘‘(9) the leave system for educators; 
‘‘(10) the annual leave and sick leave for edu-
cators; and 
‘‘(11) such matters as may be appropriate. 
‘‘(c) QUALIFICATIONS OF EDUCATORS.— 
‘‘(1) REQUIREMENTS.—In prescribing regula-
tions to govern the qualifications of educators, the 
Secretary shall require— 
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•HR 1 RH1&2 
‘‘(A)(i) that lists of qualified and inter-
viewed applicants for education positions be 
maintained in each agency and area office of the 
Bureau from among individuals who have ap-
plied at the agency or area level for an education 
position or who have applied at the national 
level and have indicated in such application an 
interest in working in certain areas or agencies; 
and 
‘‘(ii) that a list of qualified and interviewed 
applicants for education positions be maintained 
in the Office from among individuals who have 
applied at the national level for an education 
position and who have expressed interest in 
working in an education position anywhere in 
the United States; 
‘‘(B) that a local school board shall have the 
authority to waive on a case-by-case basis, any 
formal education or degree qualifications estab-
lished by regulation pursuant to subsection 
(b)(2), in order for a tribal member to be hired 
in an education position to teach courses on trib-
al culture and language and that subject to sub-
section (e)(2), a determination by a school board 
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•HR 1 RH1&2 
that such a person be hired shall be instituted 
supervisor; and 
‘‘(C) that it shall not be a prerequisite to 
the employment of an individual in an edu-
cation position at the local level that such indi-
vidual’s name appear on the national list main-
tained pursuant to subparagraph (A)(ii) or that 
such individual has applied at the national level 
for an education position. 
‘‘(2) EXCEPTION FOR CERTAIN TEMPORARY EM-
PLOYMENT.—The Secretary may authorize the tem-
porary employment in an education position of an 
individual who has not met the certification stand-
ards established pursuant to regulations, if the Sec-
retary determines that failure to do so would result 
in that position remaining vacant. 
‘‘(d) HIRING OF EDUCATORS.— 
‘‘(1) REQUIREMENTS.—In prescribing regula-
tions to govern the appointment of educators, the Sec-
retary shall require— 
‘‘(A)(i) that educators employed in a Bu-
reau operated school (other than the supervisor of 
the school) shall be hired by the supervisor of the 
school. In cases where there are no qualified ap-
plicants available, such supervisor may consult 
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•HR 1 RH1&2 
the national list maintained pursuant to sub-
section (c)(1)(A)(ii); 
‘‘(ii) each school supervisor shall be hired by 
the education line officer of the agency office of 
the Bureau in which the school is located; 
‘‘(iii) educators employed in an agency of-
fice of the Bureau shall be hired by the super-
intendent for education of the agency office; and 
‘‘(iv) each education line officer and edu-
cators employed in the Office of the Director of 
Indian Education Programs shall be hired by 
the Director; 
‘‘(B) that before an individual is employed 
in an education position in a school by the su-
pervisor of a school (or with respect to the posi-
tion of supervisor, by the appropriate agency 
education line officer), the local school board for 
the school shall be consulted. A determination by 
such school board that such individual should or 
should not be so employed shall be instituted by 
the supervisor (or with respect to the position of 
supervisor, by the agency superintendent for edu-
cation); 
‘‘(C) that before an individual may be em-
ployed in an education position at the agency 
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•HR 1 RH1&2 
level, the appropriate agency school board shall 
be consulted, and that a determination by such 
school board that such individual should or 
should not be employed shall be instituted by the 
agency superintendent for education; and 
‘‘(D) that before an individual may be em-
ployed in an education position in the Office of 
the Director (other than the position of Director), 
the national school boards representing all Bu-
reau schools shall be consulted. 
‘‘(2) INFORMATION REGARDING APPLICATION AT 
NATIONAL LEVEL.—Any individual who applies at the 
local level for an education position shall state on 
such individual’s application whether or not such in-
dividual has applied at the national level for an edu-
cation position in the Bureau. If such individual is 
employed at the local level, such individual’s name 
shall be immediately forwarded to the Secretary, who 
shall, as soon as practicable but in no event in more 
than 30 days, ascertain the accuracy of the statement 
made by such individual pursuant to the first sen-
tence of this paragraph. Notwithstanding subsection 
(e), if the individual’s statement is found to have been 
false, such individual, at the Secretary’s discretion, 
may be disciplined or discharged. If the individual 
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•HR 1 RH1&2 
has applied at the national level for an education po-
sition in the Bureau, the appointment of such indi-
vidual at the local level shall be conditional for a pe-
riod of 90 days, during which period the Secretary 
may appoint a more qualified individual (as deter-
mined by the Secretary) from the list maintained at 
the national level pursuant to subsection (c)(1)(A)(ii) 
to the position to which such individual was ap-
pointed. 
‘‘(3) STATUTORY CONSTRUCTION.—Except as ex-
pressly provided, nothing in this section shall be con-
strued as conferring upon local school boards author-
ity over, or control of, educators at Bureau funded 
schools or the authority to issue management deci-
sions. 
‘‘(e) DISCHARGE AND CONDITIONS OF EMPLOYMENT 
OF EDUCATORS.— 
‘‘(1) REGULATIONS.—In prescribing regulations 
to govern the discharge and conditions of employment 
of educators, the Secretary shall require— 
‘‘(A) that procedures be established for the 
rapid and equitable resolution of grievances of 
educators; 
‘‘(B) that no educator may be discharged 
without notice of the reasons therefore and op-
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•HR 1 RH1&2 
portunity for a hearing under procedures that 
comport with the requirements of due process; 
and 
‘‘(C) that educators employed in Bureau 
schools be notified 30 days prior to the end of the 
school year whether their employment contract 
will be renewed for the following year. 
‘‘(2) PROCEDURES FOR DISCHARGE.—The super-
visor of a Bureau school may discharge (subject to 
procedures established under paragraph (1)(B)) for 
cause (as determined under regulations prescribed by 
the Secretary) any educator employed in such school. 
Upon giving notice of proposed discharge to an educa-
tor, the supervisor involved shall immediately notify 
the local school board for the school of such action. A 
determination by the local school board that such edu-
cator shall not be discharged shall be followed by the 
supervisor. The supervisor shall have the right to ap-
peal such action to the education line officer of the 
appropriate agency office of the Bureau. Upon such 
an appeal, the agency education line officer may, for 
good cause and in writing to the local school board, 
overturn the determination of the local school board 
with respect to the employment of such individual. 
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•HR 1 RH1&2 
‘‘(3) RECOMMENDATIONS
OF
SCHOOL
BOARDS 
FOR DISCHARGE.—Each local school board for a Bu-
reau school shall have the right— 
‘‘(A) to recommend to the supervisor of such 
school that an educator employed in the school be 
discharged; and 
‘‘(B) to recommend to the education line of-
ficer of the appropriate agency office of the Bu-
reau and to the Director of the Office, that the 
supervisor of the school be discharged. 
‘‘(f) APPLICABILITY OF INDIAN PREFERENCE LAWS.— 
‘‘(1) IN GENERAL.—Notwithstanding any provi-
sion of the Indian preference laws, such laws shall not 
apply in the case of any personnel action under this 
section respecting an applicant or employee not enti-
tled to Indian preference if each tribal organization 
concerned grants a written waiver of the application 
of such laws with respect to such personnel action and 
states that such waiver is necessary. This paragraph 
shall not relieve the Bureau’s responsibility to issue 
timely and adequate announcements and advertise-
ments concerning any such personnel action if such 
action is intended to fill a vacancy (no matter how 
such vacancy is created). 
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‘‘(2) TRIBAL ORGANIZATION DEFINED.—For pur-
poses of this subsection, the term ‘tribal organization’ 
means— 
‘‘(A) the recognized governing body of any 
Indian tribe, band, nation, pueblo, or other orga-
nized community, including a Native village (as 
defined in section 3(c) of the Alaska Native 
Claims Settlement Act); or 
‘‘(B) in connection with any personnel ac-
tion referred to in this subsection, any local 
school board as defined in section 1141 which 
has been delegated by such governing body the 
authority to grant a waiver under this sub-
section with respect to personnel action. 
‘‘(3) INDIAN PREFERENCE LAW DEFINED.—The 
term ‘Indian preference laws’ means section 12 of the 
Act of June 18, 1934, or any other provision of law 
granting a preference to Indians in promotions and 
other personnel actions. Such term shall not include 
section 7(b) of the Indian Self-Determination and 
Education Assistance Act. 
‘‘(g) COMPENSATION OR ANNUAL SALARY.— 
‘‘(1) IN GENERAL.—(A) Except as otherwise pro-
vided in this section, the Secretary shall fix the basic 
compensation for educators and education positions 
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•HR 1 RH1&2 
at rates in effect under the General Schedule for indi-
viduals with comparable qualifications, and holding 
comparable positions, to whom chapter 51 of title 5, 
United States Code, is applicable or on the basis of 
the Federal Wage System schedule in effect for the lo-
cality, and for the comparable positions, the rates of 
compensation in effect for the senior executive service. 
‘‘(B) The Secretary shall establish the rate of 
basic compensation, or annual salary rates, for the 
positions of teachers and counselors (including dor-
mitory counselors and home-living counselors) at the 
rates of basic compensation applicable (on the date of 
the enactment of the No Child Left Behind Act of 
2001 and thereafter) to comparable positions in the 
overseas schools under the Defense Department Over-
seas Teachers Pay Act. The Secretary shall allow the 
local school boards authority to implement only the 
aspects of the Defense Department Overseas Teacher 
pay provisions that are considered essential for re-
cruitment and retention. Implementation of such pro-
visions shall not be construed to require the imple-
mentation of the Act in its entirety. 
‘‘(C)(i) Beginning with the fiscal year following 
the date of the enactment of the No Child Left Behind 
Act of 2001, each school board may set the rate of 
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•HR 1 RH1&2 
compensation or annual salary rate for teachers and 
counselors (including academic counselors) who are 
new hires at the school and who have not worked at 
the school on the date of implementation of this provi-
sion, at rates consistent with the rates paid for indi-
viduals in the same positions, with the same tenure 
and training, in any other school within whose 
boundaries the Bureau school lies. In instances where 
the adoption of such rates cause a reduction in the 
payment of compensation from that which was in ef-
fect for the fiscal year following the date of the enact-
ment of the No Child Left Behind Act of 2001, the 
new rate may be applied to the compensation of em-
ployees of the school who worked at the school on of 
the date of the enactment of that Act by applying 
those rates to each contract renewal such that the re-
duction takes effect in three equal installments. Where 
adoption of such rates lead to an increase in the pay-
ment of compensation from that which was in effect 
for the fiscal year following the date of the enactment 
of the No Child Left Behind Act of 2001, the school 
board may make such rates applicable at the next 
contract renewal such that either— 
‘‘(I) the increase occurs in its entirety; or 
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‘‘(II) the increase is applied in three equal 
installments. 
‘‘(ii) The establishment of rates of basic com-
pensation and annual salary rates under subpara-
graphs (B) and (C) shall not preclude the use of regu-
lations and procedures used by the Bureau prior to 
April 28, 1988, in making determinations regarding 
promotions and advancements through levels of pay 
that are based on the merit, education, experience, or 
tenure of the educator. 
‘‘(D) The establishment of rates of basic com-
pensation and annual salary rates under subpara-
graphs (B) and (C) shall not affect the continued em-
ployment or compensation of an educator who was 
employed in an education position on October 31, 
1979, and who did not make an election under sub-
section (p) is in effect on January 1, 1990. 
‘‘(2) POST-DIFFERENTIAL RATES.—(A) The Sec-
retary may pay a post-differential rate not to exceed 
25 percent of the rate of basic compensation, on the 
basis of conditions of environment or work which 
warrant additional pay as a recruitment and reten-
tion incentive. 
‘‘(B)(i) Upon the request of the supervisor and 
the local school board of a Bureau school, the Sec-
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retary shall grant the supervisor of the school author-
ization to provide one or more post-differentials under 
subparagraph (A) unless the Secretary determines for 
clear and convincing reasons (and advises the board 
in writing of those reasons) that certain of the re-
quested post-differentials should be disapproved or de-
creased because there is no disparity of compensation 
for the involved employees or positions in the Bureau 
school, as compared with the nearest public school, 
that is either— 
‘‘(I) at least 5 percent; or 
‘‘(II) less than 5 percent and affects the re-
cruitment or retention of employees at the school. 
‘‘(ii) A request under clause (i) shall be deemed 
granted at the end of the 60th day after the request 
is received in the Central Office of the Bureau unless 
before that time the request is approved, approved 
with modification, or disapproved by the Secretary. 
‘‘(iii) The Secretary or the supervisor of a Bu-
reau school may discontinue or decrease a post-dif-
ferential authorized under this subparagraph at the 
beginning of a school year if— 
‘‘(I) the local school board requests that such 
differential be discontinued or decreased; or 
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‘‘(II) the Secretary or the supervisor deter-
mines for clear and convincing reasons (and ad-
vises the board in writing of those reasons) that 
there is no disparity of compensation that would 
affect the recruitment or retention of employees 
at the school after the differential is discontinued 
or decreased. 
‘‘(iv) On or before February 1 of each year, the 
Secretary shall submit to Congress a report describing 
the requests and grants of authority under this sub-
paragraph during the previous year and listing the 
positions contracted under those grants of authority. 
‘‘(h) LIQUIDATION OF REMAINING LEAVE UPON TER-
MINATION.—Upon termination of employment with the Bu-
reau, any annual leave remaining to the credit of an indi-
vidual within the purview of this section shall be liquidated 
in accordance with sections 5551(a) and 6306 of title 5, 
United States Code, except that leave earned or accrued 
under regulations prescribed pursuant to subsection (b)(10) 
of this section shall not be so liquidated. 
‘‘(i) TRANSFER OF REMAINING SICK LEAVE UPON 
TRANSFER, PROMOTION, OR REEMPLOYMENT.—In the case 
of any educator who is transferred, promoted, or re-
appointed, without break in service, to a position in the 
Federal Government under a different leave system, any re-
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•HR 1 RH1&2 
maining leave to the credit of such person earned or credited 
under the regulations prescribed pursuant to subsection 
(b)(10) shall be transferred to such person’s credit in the 
employing agency on an adjusted basis in accordance with 
regulations which shall be prescribed by the Office of Per-
sonnel Management. 
‘‘(j) INELIGIBILITY
FOR EMPLOYMENT
OF VOLUN-
TARILY TERMINATED EDUCATORS.—An educator who vol-
untarily terminates employment with the Bureau before the 
expiration of the existing employment contract between such 
educator and the Bureau shall not be eligible to be employed 
in another education position in the Bureau during the re-
mainder of the term of such contract. 
‘‘(k) DUAL COMPENSATION.—In the case of any educa-
tor employed in an education position described in sub-
section (l)(1)(A) who— 
‘‘(1) is employed at the close of a school year; 
‘‘(2) agrees in writing to serve in such position 
for the next school year; and 
‘‘(3) is employed in another position during the 
recess period immediately preceding such next school 
year, or during such recess period receives additional 
compensation referred to in section 5533 of title 5, 
United States Code, relating to dual compensation, 
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shall not apply to such educator by reason of any such em-
ployment during a recess period for any receipt of addi-
tional compensation. 
‘‘(l) VOLUNTARY SERVICES.—Notwithstanding section 
1342 of title 31, United States Code, the Secretary may, 
subject to the approval of the local school board concerned, 
accept voluntary services on behalf of Bureau schools. Noth-
ing in this part shall be construed to require Federal em-
ployees to work without compensation or to allow the use 
of volunteer services to displace or replace Federal employ-
ees. An individual providing volunteer services under this 
section is a Federal employee only for purposes of chapter 
81 of title 5, United States Code, and chapter 171 of title 
28, United States Code. 
‘‘(m) PRORATION OF PAY.— 
‘‘(1) ELECTION OF EMPLOYEE.—Notwithstanding 
any other provision of law, including laws relating to 
dual compensation, the Secretary, at the election of 
the employee, shall prorate the salary of an employee 
employed in an education position for the academic 
school year over the entire 12-month period. Each ed-
ucator employed for the academic school year shall 
annually elect to be paid on a 12-month basis or for 
those months while school is in session. No educator 
shall suffer a loss of pay or benefits, including benefits 
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under unemployment or other Federal or federally as-
sisted programs, because of such election. 
‘‘(2) CHANGE OF ELECTION.—During the course 
of such year the employee may change election once. 
‘‘(3) LUMP SUM PAYMENT.—That portion of the 
employee’s pay which would be paid between aca-
demic school years may be paid in a lump sum at 
the election of the employee. 
‘‘(4) DEFINITIONS.—For purposes of this sub-
section, the terms ‘educator’ and ‘education position’ 
have the meanings contained in paragraphs (1) and 
(2) of subsection (o). This subsection applies to those 
individuals employed under the provisions of section 
1132 of this title or title 5, United States Code. 
‘‘(n) EXTRACURRICULAR ACTIVITIES.— 
‘‘(1) STIPEND.—Notwithstanding any other pro-
vision of law, the Secretary may provide, for each 
Bureau area, a stipend in lieu of overtime premium 
pay or compensatory time off. Any employee of the 
Bureau who performs additional activities to provide 
services to students or otherwise support the school’s 
academic and social programs may elect to be com-
pensated for all such work on the basis of the stipend. 
Such stipend shall be paid as a supplement to the em-
ployee’s base pay. 
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‘‘(2) ELECTION NOT TO RECEIVE STIPEND.—If 
an employee elects not to be compensated through the 
stipend established by this subsection, the appropriate 
provisions of title 5, United States Code, shall apply. 
‘‘(3) APPLICABILITY OF SUBSECTION.—This sub-
section applies to all Bureau employees, whether em-
ployed under section 1132 of this title or title 5, 
United States Code. 
‘‘(o) DEFINITIONS.—For the purpose of this section— 
‘‘(1) EDUCATION
POSITION.—The term ‘edu-
cation position’ means a position in the Bureau the 
duties and responsibilities of which— 
‘‘(A) are performed on a school-year basis 
principally in a Bureau school and involve— 
‘‘(i) classroom or other instruction or 
the supervision or direction of classroom or 
other instruction; 
‘‘(ii) any activity (other than teaching) 
which requires academic credits in edu-
cational theory and practice equal to the 
academic credits in educational theory and 
practice required for a bachelor’s degree in 
education from an accredited institution of 
higher education; 
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‘‘(iii) any activity in or related to the 
field of education notwithstanding that aca-
demic credits in educational theory and 
practice are not a formal requirement for 
the conduct of such activity; or 
‘‘(iv) support services at, or associated 
with, the site of the school; or 
‘‘(B) are performed at the agency level of 
the Bureau and involve the implementation of 
education-related programs other than the posi-
tion for agency superintendent for education. 
‘‘(2) EDUCATOR.—The term ‘educator’ means an 
individual whose services are required, or who is em-
ployed, in an education position. 
‘‘(p) COVERED INDIVIDUALS; ELECTION.—This section 
shall apply with respect to any educator hired after Novem-
ber 1, 1979 (and to any educator who elected for coverage 
under that provision after November 1, 1979) and to the 
position in which such individual is employed. The enact-
ment of this section shall not affect the continued employ-
ment of an individual employed on October 31, 1979 in 
an education position, or such person’s right to receive the 
compensation attached to such position. 
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‘‘SEC. 1133. COMPUTERIZED MANAGEMENT INFORMATION 
SYSTEM. 
‘‘(a) ESTABLISHMENT OF SYSTEM.—Not later than 
July 1, 2003, the Secretary shall establish within the Office, 
a computerized management information system, which 
shall provide processing and information to the Office. The 
information provided shall include information regard-
ing— 
‘‘(1) student enrollment; 
‘‘(2) curriculum; 
‘‘(3) staffing; 
‘‘(4) facilities; 
‘‘(5) community demographics; 
‘‘(6) student assessment information; 
‘‘(7) information on the administrative and pro-
gram costs attributable to each Bureau program, di-
vided into discreet elements; 
‘‘(8) relevant reports; 
‘‘(9) personnel records; 
‘‘(10) finance and payroll; and 
‘‘(11) such other items as the Secretary deems 
appropriate. 
‘‘(b) IMPLEMENTATION OF SYSTEM.—Not later than 
July 1, 2004, the Secretary shall complete implementation 
of such a system at each field office and Bureau funded 
school. 
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‘‘SEC. 1134. UNIFORM EDUCATION PROCEDURES AND PRAC-
TICES. 
‘‘The Secretary shall cause the various divisions of the 
Bureau to formulate uniform procedures and practices with 
respect to such concerns of those divisions as relate to edu-
cation, and shall report such practices and procedures to 
the Congress. 
‘‘SEC. 1135. RECRUITMENT OF INDIAN EDUCATORS. 
‘‘The Secretary shall institute a policy for the recruit-
ment of qualified Indian educators and a detailed plan to 
promote employees from within the Bureau. Such plan shall 
include opportunities for acquiring work experience prior 
to actual work assignment. 
‘‘SEC. 1136. BIENNIAL REPORT; AUDITS. 
‘‘(a) BIENNIAL REPORTS.—The Secretary shall submit 
to each appropriate committee of Congress, all Bureau 
funded schools, and the tribal governing bodies of such 
schools, a detailed biennial report on the state of education 
within the Bureau and any problems encountered in Indian 
education during the 2-year period covered by the report. 
Such report shall contain suggestions for the improvement 
of the Bureau educational system and for increasing tribal 
or local Indian control of such system. Such report shall 
also include the current status of tribally controlled commu-
nity colleges. The annual budget submission for the Bu-
reau’s education programs shall include— 
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‘‘(1) information on the funds provided to pre-
viously private schools under section 208 of the In-
dian Self-Determination and Education Assistance 
Act, and recommendations with respect to the future 
use of such funds; 
‘‘(2) the needs and costs of operations and main-
tenance of tribally controlled community colleges eli-
gible for assistance under the Tribally Controlled 
Community College Assistance Act of 1978 and rec-
ommendations with respect to meeting such needs and 
costs; and 
‘‘(3) the plans required by sections 1121 (g), 
1122(c), and 1125(b). 
‘‘(b) FINANCIAL AND COMPLIANCE AUDITS.—The In-
spector General of the Department of the Interior shall es-
tablish a system to ensure that financial and compliance 
audits are conducted of each Bureau operated school at least 
once in every 3 years. Audits of Bureau schools shall be 
based upon the extent to which such school has complied 
with its local financial plan under section 1130. 
‘‘SEC. 1137. RIGHTS OF INDIAN STUDENTS. 
‘‘The Secretary shall prescribe such rules and regula-
tions as are necessary to ensure the constitutional and civil 
rights of Indian students attending Bureau funded schools, 
including such students’ right to privacy under the laws 
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of the United States, such students’ right to freedom of reli-
gion and expression, and such students’ right to due process 
in connection with disciplinary actions, suspensions, and 
expulsions. 
‘‘SEC. 1138. REGULATIONS. 
‘‘(a) IN GENERAL.—The Secretary is authorized to 
issue only such regulations as are necessary to ensure com-
pliance with the specific provision of this Act. The Sec-
retary shall publish proposed regulations in the Federal 
Register, shall provide a period of not less than 90 days 
for public comment thereon, and shall place in parentheses 
after each regulatory section the citation to any statutory 
provision providing authority to promulgate such regu-
latory provision. 
‘‘(b) MISCELLANEOUS.— 
‘‘(1) CONSTRUCTION.—The provisions of this Act 
shall supersede any conflicting provisions of law (in-
cluding any conflicting regulations) in effect on the 
day before the date of the enactment of this Act and 
the Secretary is authorized to repeal any regulation 
inconsistent with the provisions of this Act. 
‘‘(2) LEGAL AUTHORITY TO BE STATED.—Regu-
lations issued to implement this Act shall contain, 
immediately following each substantive provision of 
such regulations, citations to the particular section or 
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sections of statutory law or other legal authority upon 
which provision is based. 
‘‘SEC. 1138A. REGIONAL MEETINGS AND NEGOTIATED RULE-
MAKING. 
‘‘(a) MEETINGS.— 
‘‘(1) IN GENERAL.—The Secretary shall obtain 
tribal involvement in the development of proposed reg-
ulations under this part and the Tribally Controlled 
Schools Act of 1988. The Secretary shall obtain the 
advice of and recommendations from representatives 
of Indian tribes with Bureau funded schools on their 
reservations, Indian tribes whose children attend Bu-
reau funded off-reservation boarding schools, school 
boards, administrators or employees of Bureau funded 
schools, and parents and teachers of students enrolled 
in Bureau funded schools. 
‘‘(2) ISSUES.—The Secretary shall provide for a 
comprehensive discussion and exchange of informa-
tion concerning the implementation of this part and 
the Tribally Controlled Schools Act of 1988 through 
such mechanisms as regional meetings and electronic 
exchanges of information. The Secretary shall take 
into account the information received through such 
mechanisms in the development of proposed regula-
tions and shall publish a summary of such informa-
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tion in the Federal Register together with such pro-
posed regulations. 
‘‘(b) DRAFT REGULATIONS.— 
‘‘(1) IN GENERAL.—After obtaining the advice 
and recommendations described in subsection (a)(1) 
and before publishing proposed regulations in the 
Federal Register, the Secretary shall prepare draft 
regulations implementing this part and the Tribally 
Controlled Schools Act of 1988 and shall submit such 
regulations to a negotiated rulemaking process. Par-
ticipants in the negotiations process shall be chosen 
by the Secretary from individuals nominated by the 
entities described in subsection (a)(1). To the max-
imum extent possible, the Secretary shall ensure that 
the tribal representative membership chosen pursuant 
to the preceding sentence reflects the proportionate 
share of students from tribes served by the Bureau 
funded school system. The negotiation process shall be 
conducted in a timely manner in order that the final 
regulations may issued by the Secretary no later than 
18 months after the enactment of this section. 
‘‘(2) NOTIFICATION TO CONGRESS.—If draft reg-
ulations implementing this part and the Tribally 
Controlled Schools Act of 1988 are not issued in final 
form by the deadline provided in paragraph (1), the 
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Secretary shall notify the appropriate committees of 
Congress of which draft regulations were not issued in 
final form by the deadline and the reason such final 
regulations were not issued. 
‘‘(3) 
EXPANSION
OF
NEGOTIATED
RULE-
MAKING.—All regulations pertaining to this part and 
the Tribally Controlled Schools Act of 1988 that are 
promulgated after the date of the enactment of this 
subsection shall be subject to a negotiated rulemaking 
(including the selection of the regulations to be nego-
tiated), unless the Secretary determines that applying 
such a requirement with respect to given regulations 
is impracticable, unnecessary, or contrary to the pub-
lic 
interest 
(within 
the 
meaning 
of 
section 
553(b)(3)(B) of title 5), and publishes the basis for 
such determination in the Federal Register at the 
same time as the proposed regulations in question are 
first published. All published proposed regulations 
shall conform to agreements resulting from such nego-
tiated rulemaking unless the Secretary reopens the ne-
gotiated rulemaking process or provides a written ex-
planation to the participants in that process why the 
Secretary has decided to depart from such agreements. 
Such negotiated rulemaking shall be conducted in ac-
cordance with the provisions of subsection (a), and 
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the Secretary shall ensure that a clear and reliable 
record of agreements reached during the negotiation 
process is maintained. 
‘‘(c) APPLICABILITY
OF FEDERAL ADVISORY COM-
MITTEE ACT.—The Federal Advisory Committee Act shall 
apply to activities carried out under this section. 
‘‘SEC. 1139. EARLY CHILDHOOD DEVELOPMENT PROGRAM. 
‘‘(a) IN GENERAL.—The Secretary shall provide grants 
to tribes, tribal organizations, and consortia of tribes and 
tribal organizations to fund early childhood development 
programs that are operated by such tribes, organizations, 
or consortia. 
‘‘(b) AMOUNT OF GRANTS.— 
‘‘(1) IN
GENERAL.—The total amount of the 
grants provided under subsection (a) with respect to 
each tribe, tribal organization, or consortium of tribes 
or tribal organizations for each fiscal year shall be 
equal to the amount which bears the same relation-
ship to the total amount appropriated under the au-
thority of subsection (g) for such fiscal year (less 
amounts provided under subsection (f)) as— 
‘‘(A) the total number of children under 6 
years of age who are members of— 
‘‘(i) such tribe; 
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‘‘(ii) the tribe that authorized such 
tribal organization; or 
‘‘(iii) any tribe that— 
‘‘(I) is a member of such consor-
tium; or 
‘‘(II) authorizes any tribal orga-
nization that is a member of such con-
sortium; bears to 
‘‘(B) the total number of all children under 
6 years of age who are members of any tribe 
that— 
‘‘(i) is eligible to receive funds under 
subsection (a); 
‘‘(ii) is a member of a consortium that 
is eligible to receive such funds; or 
‘‘(iii) authorizes a tribal organization 
that is eligible to receive such funds. 
‘‘(2) LIMITATION.—No grant may be provided 
under subsection (a)— 
‘‘(A) to any tribe that has less than 500 
members; 
‘‘(B) to any tribal organization which is 
authorized— 
‘‘(i) by only one tribe that has less 
than 500 members; or 
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‘‘(ii) by one or more tribes that have a 
combined total membership of less than 500 
members; or 
‘‘(C) to any consortium composed of tribes, 
or tribal organizations authorized by tribes, that 
have a combined total tribal membership of less 
than 500 members. 
‘‘(c) APPLICATION. 
‘‘(1) IN GENERAL.—A grant may be provided 
under subsection (a) to a tribe, tribal organization, or 
consortia of tribes and tribal organizations only if the 
tribe, organization, or consortia submits to the Sec-
retary an application for the grant at such time and 
in such form as the Secretary shall prescribe. 
‘‘(2) CONTENTS.—Applications submitted under 
paragraph (1) shall set forth the early childhood de-
velopment program that the applicant desires to oper-
ate. 
‘‘(d) REQUIREMENT
OF PROGRAMS FUNDED.—The 
early childhood development programs that are funded by 
grants provided under subsection (a)— 
‘‘(1) shall coordinate existing programs and may 
provide services that meet identified needs of parents 
and children under 6 years of age which are not being 
met by existing programs, including— 
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‘‘(A) prenatal care; 
‘‘(B) nutrition education; 
‘‘(C) health education and screening; 
‘‘(D) family literacy services; 
‘‘(E) educational testing; and 
‘‘(F) other educational services; 
‘‘(2) may include instruction in the language, 
art, and culture of the tribe; and 
‘‘(3) shall provide for periodic assessment of the 
program. 
‘‘(e) COORDINATION
OF
FAMILY
LITERACY
PRO-
GRAMS.—Family literacy programs operated under this 
section and other family literacy programs operated by the 
Bureau of Indian Affairs shall be coordinated with family 
literacy programs for Indian children under part B of title 
I of the Elementary and Secondary Education Act of 1965 
in order to avoid duplication and to encourage the dissemi-
nation of information on quality family literacy programs 
serving Indians. 
‘‘(f) ADMINISTRATIVE COSTS.—The Secretary shall, 
out of funds appropriated under subsection (g), include in 
the grants provided under subsection (a) amounts for ad-
ministrative costs incurred by the tribe, tribal organization, 
or consortium of tribes in establishing and maintaining the 
early childhood development program. 
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‘‘(g) AUTHORIZATION OF APPROPRIATIONS.—For the 
purpose of carrying out the provisions of this section, there 
are authorized to be appropriated $10,000,000 for fiscal 
year 2002 and such sums as may be necessary for each of 
the fiscal years 2003, 2004, 2005, and 2006. 
‘‘SEC. 1140. TRIBAL DEPARTMENTS OR DIVISIONS OF EDU-
CATION. 
‘‘(a) IN GENERAL.—Subject to the availability of ap-
propriations, the Secretary shall provide grants and tech-
nical assistance to tribes for the development and operation 
of tribal departments of education for the purpose of plan-
ning and coordinating all educational programs of the 
tribe. 
‘‘(b) GRANTS.—Grants provided under this section 
shall— 
‘‘(1) be based on applications from the governing 
body of the tribe; 
‘‘(2) reflect factors such as geographic and popu-
lation diversity; 
‘‘(3) facilitate tribal control in all matters relat-
ing to the education of Indian children on Indian res-
ervations (and on former Indian reservations in 
Oklahoma); 
‘‘(4) provide for the development of coordinated 
educational programs on Indian reservations (and on 
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former Indian reservations in Oklahoma) (including 
all preschool, elementary, secondary, and higher or 
vocational educational programs funded by tribal, 
Federal, or other sources) by encouraging tribal ad-
ministrative support of all Bureau funded edu-
cational programs as well as encouraging tribal co-
operation and coordination with all educational pro-
grams receiving financial support from State agen-
cies, other Federal agencies, or private entities; 
‘‘(5) provide for the development and enforce-
ment of tribal educational codes, including tribal edu-
cational policies and tribal standards applicable to 
curriculum, personnel, students, facilities, and sup-
port programs; and 
‘‘(6) otherwise comply with regulations for 
grants under section 103(a) of the Indian Self-Deter-
mination and Educational Assistance Act that are in 
effect on the date that application for such grants are 
made. 
‘‘(c) PRIORITIES.— 
‘‘(1) IN GENERAL.—In making grants under this 
section, the Secretary shall give priority to any appli-
cation that— 
‘‘(A) includes assurances from the majority 
of Bureau funded schools located within the 
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boundaries of the reservation of the applicant 
that the tribal department of education to be 
funded under this section will provide coordi-
nating services and technical assistance to all of 
such schools, including the submission to each 
applicable agency of a unified application for 
funding for all of such schools which provides 
that— 
‘‘(i) no administrative costs other than 
those attributable to the individual pro-
grams of such schools will be associated 
with the unified application; and 
‘‘(ii) the distribution of all funds re-
ceived under the unified application will be 
equal to the amount of funds provided by 
the applicable agency to which each of such 
schools is entitled under law; 
‘‘(B) includes assurances from the tribal 
governing body that the tribal department of 
education funded under this section will admin-
ister all contracts or grants (except those covered 
by the other provisions of this title and the Trib-
ally Controlled Community College Assistance 
Act of 1978) for education programs adminis-
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tered by the tribe and will coordinate all of the 
programs to the greatest extent possible; 
‘‘(C) includes assurances for the monitoring 
and auditing by or through the tribal depart-
ment of education of all education programs for 
which funds are provided by contract or grant to 
ensure that the programs meet the requirements 
of law; and 
‘‘(D) provides a plan and schedule for— 
‘‘(i) the assumption over the term of 
the grant by the tribal department of edu-
cation of all assets and functions of the Bu-
reau agency office associated with the tribe, 
insofar as those responsibilities relate to 
education; and 
‘‘(ii) the termination by the Bureau of 
such operations and office at the time of 
such assumption, 
except that when mutually agreeable between the 
tribal governing body and the Assistant Sec-
retary, the period in which such assumption is 
to occur may be modified, reduced, or extended 
after the initial year of the grant. 
‘‘(2) TIME PERIOD OF GRANT.—Subject to the 
availability of appropriated funds, grants provided 
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under this section shall be provided for a period of 3 
years and the grant may, if performance by the 
grantee is satisfactory to the Secretary, be renewed for 
additional 3-year terms. 
‘‘(d) TERMS, CONDITIONS, OR REQUIREMENTS.—The 
Secretary shall not impose any terms, conditions, or re-
quirements on the provision of grants under this section 
that are not specified in this section. 
‘‘(e) AUTHORIZATION OF APPROPRIATIONS.—For the 
purpose of carrying out the provisions of this section, there 
are authorized to be appropriated $2,000,000 for fiscal year 
2002 and such sums as may be necessary for each of the 
fiscal years 2003, 2004, 2005, and 2006. 
‘‘SEC. 1141. DEFINITIONS. 
‘‘For the purposes of this part, unless otherwise speci-
fied: 
‘‘(1) AGENCY SCHOOL BOARD.—The term ‘agency 
school board’ means a body, the members of which are 
appointed by all of the school boards of the schools lo-
cated within an agency, including schools operated 
under contract or grant, and the number of such 
members shall be determined by the Secretary in con-
sultation with the affected tribes, except that, in agen-
cies serving a single school, the school board of such 
school shall fulfill these duties, and in agencies having 
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schools or a school operated under contract or grant, 
one such member at least shall be from such a school. 
‘‘(2) BUREAU.—The term ‘Bureau’ means the 
Bureau of Indian Affairs of the Department of the In-
terior. 
‘‘(3) BUREAU FUNDED SCHOOL.—The term ‘Bu-
reau funded school’ means— 
‘‘(A) a Bureau school; 
‘‘(B) a contract or grant school; or 
‘‘(C) a school for which assistance is pro-
vided under the Tribally Controlled Schools Act 
of 1988. 
‘‘(4) BUREAU
SCHOOL.—The term ‘Bureau 
school’ means a Bureau operated elementary or sec-
ondary day or boarding school or a Bureau operated 
dormitory for students attending a school other than 
a Bureau school. 
‘‘(5) CONTRACT OR GRANT SCHOOL.—The term 
‘contract or grant school’ means an elementary or sec-
ondary school or dormitory which receives financial 
assistance for its operation under a contract, grant or 
agreement with the Bureau under section 102, 103(a), 
or 208 of the Indian Self-Determination and Edu-
cation Assistance Act, or under the Tribally Con-
trolled Schools Act of 1988. 
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‘‘(6) EDUCATION LINE OFFICER.—The term ‘edu-
cation line officer’ means education personnel under 
the supervision of the Director, whether located in the 
central, area, or agency offices. 
‘‘(7) FAMILY
LITERACY
SERVICES.—The term 
‘family literacy services’ has the meaning given that 
term in section 8101 of the Elementary and Sec-
ondary Education Act of 1965 (20 U.S.C. 8801). 
‘‘(8) FINANCIAL
PLAN.—The term ‘financial 
plan’ means a plan of services provided by each Bu-
reau school. 
‘‘(9) INDIAN ORGANIZATION.—the term ‘Indian 
organization’ means any group, association, partner-
ship, corporation, or other legal entity owned or con-
trolled by a federally recognized Indian tribe or 
tribes, or a majority of whose members are members 
of federally recognized tribes. 
‘‘(10) LOCAL EDUCATIONAL AGENCY.—The term 
‘local educational agency’ means a board of education 
or other legally constituted local school authority hav-
ing administrative control and direction of free public 
education in a county, township, independent, or 
other school district located within a State, and in-
cludes any State agency which directly operates and 
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maintains facilities for providing free public edu-
cation. 
‘‘(11) LOCAL SCHOOL BOARD.—The term ‘local 
school board’, when used with respect to a Bureau 
school, means a body chosen in accordance with the 
laws of the tribe to be served or, in the absence of such 
laws, elected by the parents of the Indian children at-
tending the school, except that in schools serving a 
substantial number of students from different tribes, 
the members shall be appointed by the governing bod-
ies of the tribes affected, and the number of such 
members shall be determined by the Secretary in con-
sultation with the affected tribes. 
‘‘(12) OFFICE.—The term ‘Office’ means the Of-
fice of Indian Education Programs within the Bu-
reau. 
‘‘(13) SECRETARY.—The term ‘Secretary’ means 
the Secretary of the Interior. 
‘‘(14) 
SUPERVISOR.—The 
term 
‘supervisor’ 
means the individual in the position of ultimate au-
thority at a Bureau school. 
‘‘(15) TRIBAL
GOVERNING
BODY.—The term 
‘tribal governing body’ means, with respect to any 
school, the tribal governing body, or tribal governing 
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bodies, that represent at least 90 percent of the stu-
dents served by such school. 
‘‘(16) TRIBE.—The term ‘tribe’ means any In-
dian tribe, band, nation, or other organized group or 
community, including any Alaska Native village or 
regional or village corporation as defined in or estab-
lished pursuant to the Alaska Native Claims Settle-
ment Act, which is recognized as eligible for the spe-
cial programs and services provided by the United 
States to Indians because of their status as Indians.’’. 
SEC. 314. TRIBALLY CONTROLLED SCHOOLS ACT OF 1988. 
Sections 5202 through 5212 of the Tribally Controlled 
Schools Act of 1988 (25 U.S.C. 2501 et seq.) are amended 
to read as follows: 
‘‘SEC. 5202. FINDINGS. 
‘‘Congress, after careful review of the Federal Govern-
ment’s historical and special legal relationship with, and 
resulting responsibilities to, Indians, finds that— 
‘‘(1) the Indian Self-Determination and Edu-
cation Assistance Act, which was a product of the le-
gitimate aspirations and a recognition of the inherent 
authority of Indian nations, was and is a crucial 
positive step towards tribal and community control; 
‘‘(2) the Bureau of Indian Affairs’ administra-
tion and domination of the contracting process under 
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such Act has not provided the full opportunity to de-
velop leadership skills crucial to the realization of 
self-government and has denied Indians an effective 
voice in the planning and implementation of pro-
grams for the benefit of Indians which are responsive 
to the true needs of Indian communities; 
‘‘(3) Indians will never surrender their desire to 
control their relationships both among themselves and 
with non-Indian governments, organizations, and 
persons; 
‘‘(4) true self-determination in any society of 
people is dependent upon an educational process 
which will ensure the development of qualified people 
to fulfill meaningful leadership roles; 
‘‘(5) the Federal administration of education for 
Indian children has not effected the desired level of 
educational achievement or created the diverse oppor-
tunities and personal satisfaction that education can 
and should provide; 
‘‘(6) true local control requires the least possible 
Federal interference; and 
‘‘(7) the time has come to enhance the concepts 
made manifest in the Indian Self-Determination and 
Education Assistance Act. 
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‘‘SEC. 5203. DECLARATION OF POLICY. 
‘‘(a) RECOGNITION.—Congress recognizes the obliga-
tion of the United States to respond to the strong expression 
of the Indian people for self-determination by assuring 
maximum Indian participation in the direction of edu-
cational services so as to render such services more respon-
sive to the needs and desires of those communities. 
‘‘(b) COMMITMENT.—Congress declares its commitment 
to the maintenance of the Federal Government’s unique and 
continuing trust relationship with and responsibility to the 
Indian people through the establishment of a meaningful 
Indian self-determination policy for education which will 
deter further perpetuation of Federal bureaucratic domina-
tion of programs. 
‘‘(c) NATIONAL GOAL.—Congress declares that a major 
national goal of the United States is to provide the re-
sources, processes, and structure which will enable tribes 
and local communities to effect the quantity and quality 
of educational services and opportunities which will permit 
Indian children to compete and excel in the life areas of 
their choice and to achieve the measure of self-determination 
essential to their social and economic well-being. 
‘‘(d) EDUCATIONAL NEEDS.—Congress affirms the re-
ality of the special and unique educational needs of Indian 
peoples, including the need for programs to meet the lin-
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guistic and cultural aspirations of Indian tribes and com-
munities. These may best be met through a grant process. 
‘‘(e) FEDERAL
RELATIONS.—Congress declares its 
commitment to these policies and its support, to the full 
extent of its responsibility, for Federal relations with the 
Indian Nations. 
‘‘(f) TERMINATION.—Congress hereby repudiates and 
rejects House Resolution 108 of the 83d Congress and any 
policy of unilateral termination of Federal relations with 
any Indian Nation. 
‘‘SEC. 5204. GRANTS AUTHORIZED. 
‘‘(a) IN GENERAL.— 
‘‘(1) ELIGIBILITY.—The Secretary shall provide 
grants to Indian tribes, and tribal organizations 
that— 
‘‘(A) operate contract schools under title XI 
of the Education Amendments of 1978 and no-
tify the Secretary of their election to operate the 
schools with assistance under this part rather 
than continuing as contract school; 
‘‘(B) operate other tribally controlled schools 
eligible for assistance under this part and submit 
applications (which are approved by their tribal 
governing bodies) to the Secretary for such 
grants; or 
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‘‘(C) elect to assume operation of Bureau 
funded schools with the assistance under this 
part and submit applications (which are ap-
proved by their tribal governing bodies) to the 
Secretary for such grants. 
‘‘(2) DEPOSIT
OF
FUNDS.—Grants provided 
under this part shall be deposited into the general op-
erating fund of the tribally controlled school with re-
spect to which the grant is made. 
‘‘(3) USE OF FUNDS.—(A) Except as otherwise 
provided in this paragraph, grants provided under 
this part shall be used to defray, at the discretion of 
the school board of the tribally controlled school with 
respect to which the grant is provided, any expendi-
tures for education related activities for which any 
funds that compose the grant may be used under the 
laws described in section 5205(a), including, but not 
limited to, expenditures for— 
‘‘(i) school operations, academic, edu-
cational, residential, guidance and counseling, 
and administrative purposes; and 
‘‘(ii) support services for the school, includ-
ing transportation. 
‘‘(B) Grants provided under this part may, at 
the discretion of the school board of the tribally con-
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trolled school with respect to which such grant is pro-
vided, be used to defray operations and maintenance 
expenditures for the school if any funds for the oper-
ation and maintenance of the school are allocated to 
the school under the provisions of any of the laws de-
scribed in section 5205(a). 
‘‘(b) LIMITATIONS.— 
‘‘(1) ONE GRANT PER TRIBE OR ORGANIZATION 
PER FISCAL YEAR.—Not more than one grant may be 
provided under this part with respect to any Indian 
tribe or tribal organization for any fiscal year. 
‘‘(2) 
NONSECTARIAN
USE.—Funds 
provided 
under any grant made under this part may not be 
used in connection with religious worship or sec-
tarian instruction. 
‘‘(3) 
ADMINISTRATIVE
COSTS
LIMITATION.— 
Funds provided under any grant under this part may 
not be expended for administrative costs (as defined 
in section 1128(h)(1) of the Education Amendments 
of 1978) in excess of the amount generated for such 
costs under section 1128 of such Act. 
‘‘(c) LIMITATION ON TRANSFER OF FUNDS AMONG 
SCHOOLSITES.— 
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‘‘(1) IN GENERAL.—In the case of a grantee that 
operates schools at more than one schoolsite, the 
grantee may expend not more than the lesser of— 
‘‘(A) 10 percent of the funds allocated for 
such schoolsite under section 1128 of the Edu-
cation Amendments of 1978; or 
‘‘(B) $400,000 of such funds, at any other 
schoolsite. 
‘‘(2) DEFINITION OF SCHOOLSITE.—For purposes 
of this subsection, the term ‘schoolsite’ means the 
physical location and the facilities of an elementary 
or secondary educational or residential program oper-
ated by, or under contract or grant with, the Bureau 
for which a discreet student count is identified under 
the funding formula established under section 1127 of 
the Education Amendments of 1978. 
‘‘(d) NO REQUIREMENT TO ACCEPT GRANTS.—Noth-
ing in this part may be construed— 
‘‘(1) to require a tribe or tribal organization to 
apply for or accept; or 
‘‘(2) to allow any person to coerce any tribe or 
tribal organization to apply for, or accept, 
a grant under this part to plan, conduct, and administer 
all of, or any portion of, any Bureau program. Such appli-
cations and the timing of such applications shall be strictly 
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voluntary. Nothing in this part may be construed as allow-
ing or requiring any grant with any entity other than the 
entity to which the grant is provided. 
‘‘(e) NO EFFECT
ON FEDERAL RESPONSIBILITY.— 
Grants provided under this part shall not terminate, mod-
ify, suspend, or reduce the responsibility of the Federal Gov-
ernment to provide a program. 
‘‘(f) RETROCESSION.— 
‘‘(1) IN GENERAL.—Whenever a tribal governing 
body requests retrocession of any program for which 
assistance is provided under this part, such retroces-
sion shall become effective upon a date specified by 
the Secretary that is not later than 120 days after the 
date on which the tribal governing body requests the 
retrocession. A later date as may be specified if mutu-
ally agreed upon by the Secretary and the tribal gov-
erning body. If such a program is retroceded, the Sec-
retary shall provide to any Indian tribe served by 
such program at least the same quantity and quality 
of services that would have been provided under such 
program at the level of funding provided under this 
part prior to the retrocession. 
‘‘(2) STATUS AFTER RETROCESSION.—The tribe 
requesting retrocession shall specify whether the ret-
rocession is to status as a Bureau operated school or 
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as a school operated under contract under title XI of 
the Education Amendments of 1978. 
‘‘(3) TRANSFER
OF
EQUIPMENT
AND
MATE-
RIALS.—Except as otherwise determined by the Sec-
retary, the tribe or tribal organization operating the 
program to be retroceded must transfer to the Sec-
retary (or to the tribe or tribal organization which 
will operate the program as a contract school) the ex-
isting equipment and materials which were ac-
quired— 
‘‘(A) with assistance under this part; or 
‘‘(B) upon assumption of operation of the 
program under this part if the school was a Bu-
reau funded school under title XI of the Edu-
cation Amendments of 1978 before receiving as-
sistance under this part. 
‘‘(g) PROHIBITION OF TERMINATION FOR ADMINISTRA-
TIVE CONVENIENCE.—Grants provided under this part may 
not be terminated, modified, suspended, or reduced solely 
for the convenience of the administering agency. 
‘‘SEC. 5205. COMPOSITION OF GRANTS. 
‘‘(a) IN GENERAL.—The grant provided under this 
part to an Indian tribe or tribal organization for any fiscal 
year shall consist of— 
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‘‘(1) the total amount of funds allocated for such 
fiscal year under sections 1127 and 1128 of the Edu-
cation Amendments of 1978 with respect to the trib-
ally controlled schools eligible for assistance under 
this part which are operated by such Indian tribe or 
tribal organization, including, but not limited to, 
funds provided under such sections, or under any 
other provision of law, for transportation costs; 
‘‘(2) to the extent requested by such Indian tribe 
or tribal organization, the total amount of funds pro-
vided from operations and maintenance accounts and, 
notwithstanding section 105 of the Indian Self-Deter-
mination Act, or any other provision of law, other fa-
cilities accounts for such schools for such fiscal year 
(including but not limited to those referenced under 
section 1126(d) of the Education Amendments of 1978 
or any other law); and 
‘‘(3) the total amount of funds that are allocated 
to such schools for such fiscal year under— 
‘‘(A) title I of the Elementary and Sec-
ondary Education Act of 1965; 
‘‘(B) the Individuals with Disabilities Edu-
cation Act; and 
‘‘(C) any other Federal education law, that 
are allocated to such schools for such fiscal year. 
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‘‘(b) SPECIAL RULES.— 
‘‘(1) IN
GENERAL.—(A) Funds allocated to a 
tribally controlled school by reason of paragraph (1) 
or (2) of subsection (a) shall be subject to the provi-
sions of this part and shall not be subject to any ad-
ditional restriction, priority, or limitation that is im-
posed by the Bureau with respect to funds provided 
under— 
‘‘(i) title I of the Elementary and Sec-
ondary Education Act of 1965; 
‘‘(ii) the Individuals with Disabilities Edu-
cation Act; or 
‘‘(iii) any Federal education law other than 
title XI of the Education Amendments of 1978. 
‘‘(B) Indian tribes and tribal organizations to 
which grants are provided under this part, and trib-
ally controlled schools for which such grants are pro-
vided, shall not be subject to any requirements, obliga-
tions, restrictions, or limitations imposed by the Bu-
reau that would otherwise apply solely by reason of 
the receipt of funds provided under any law referred 
to in clause (i), (ii), or (iii) of subparagraph (A). 
‘‘(2) 
SCHOOLS
CONSIDERED
CONTRACT 
SCHOOLS.—Tribally controlled schools for which 
grants are provided under this part shall be treated 
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as contract schools for the purposes of allocation of 
funds under sections 1126(d), 1127, and 1128 of the 
Education Amendments of 1978. 
‘‘(3) 
SCHOOLS
CONSIDERED
BUREAU 
SCHOOLS.—Tribally controlled schools for which 
grants are provided under this chapter shall be treat-
ed as Bureau schools for the purposes of allocation of 
funds provided under— 
‘‘(A) title I of the Elementary and Sec-
ondary Education Act of 1965; 
‘‘(B) the Individuals with Disabilities Edu-
cation Act; and 
‘‘(C) any other Federal education law, that 
are distributed through the Bureau. 
‘‘(4) ACCOUNTS; USE OF CERTAIN FUNDS.—(A) 
Notwithstanding section 5204(a)(2), with respect to 
funds from facilities improvement and repair, alter-
ation and renovation (major or minor), health and 
safety, or new construction accounts included in the 
grant under section 5204(a), the grantee shall main-
tain a separate account for such funds. At the end of 
the period designated for the work covered by the 
funds received, the grantee shall submit to the Sec-
retary a separate accounting of the work done and the 
funds expended to the Secretary. Funds received from 
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these accounts may only be used for the purpose for 
which they were appropriated and for the work en-
compassed by the application or submission under 
which they were received. 
‘‘(B) Notwithstanding subparagraph (A), a 
school receiving a grant under this part for facilities 
improvement and repair may use such grant funds 
for new construction if the tribal government or other 
organization provides funding for the new construc-
tion equal to at least 25 percent of the total cost of 
such new construction. 
‘‘(C) Where the appropriations measure or the 
application submission does not stipulate a period for 
the work covered by the funds so designated, the Sec-
retary and the grantee shall consult and determine 
such a period prior to the transfer of the funds. A pe-
riod so determined may be extended upon mutual 
agreement of the Secretary and the grantee. 
‘‘(5) ENFORCEMENT OF REQUEST TO INCLUDE 
FUNDS.—If the Secretary fails to carry out a request 
made under subsection (a)(2) within 180 days of a 
request filed by an Indian tribe or tribal organization 
to include in such tribe or organization’s grant the 
funds described in subsection (a)(2), the Secretary 
shall be deemed to have approved such request and the 
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Secretary shall immediately amend the grant accord-
ingly. Such tribe or organization may enforce its 
rights under subsection (a)(2) and this paragraph, in-
cluding any denial or failure to act on such tribe or 
organization’s request, pursuant to the disputes au-
thority described in section 5209(e). 
‘‘SEC. 5206. ELIGIBILITY FOR GRANTS. 
‘‘(a) RULES.— 
‘‘(1) IN GENERAL.—A tribally controlled school 
is eligible for assistance under this part if the 
school— 
‘‘(A) on April 28, 1988, was a contract 
school under title XI of the Education Amend-
ments of 1978 and the tribe or tribal organiza-
tion operating the school submits to the Sec-
retary a written notice of election to receive a 
grant under this part; 
‘‘(B) was a Bureau operated school under 
title XI of the Education Amendments of 1978 
and has met the requirements of subsection (b); 
‘‘(C) is a school for which the Bureau has 
not provided funds, but which has met the re-
quirements of subsection (c); or 
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‘‘(D) is a school with respect to which an 
election has been made under paragraph (2) and 
which has met the requirements of subsection (b). 
‘‘(2) NEW
SCHOOLS.—Any application which 
has been submitted under the Indian Self-Determina-
tion and Education Assistance Act by an Indian tribe 
for a school which is not in operation on the date of 
the enactment of the No Child Left Behind Act of 
2001 shall be reviewed under the guidelines and regu-
lations for applications submitted under the Indian 
Self-Determination and Education Assistance Act 
that were in effect at the time the application was 
submitted, unless the Indian tribe or tribal organiza-
tion elects to have the application reviewed under the 
provisions of subsection (b). 
‘‘(b) ADDITIONAL REQUIREMENTS FOR BUREAU FUND-
ED SCHOOLS AND CERTAIN ELECTING SCHOOLS.— 
‘‘(1) BUREAU FUNDED SCHOOLS.—A school that 
was a Bureau funded school under title XI of the 
Education Amendments of 1978 on the date of the en-
actment of the No Child Left Behind Act of 2001, and 
any school with respect to which an election is made 
under subsection (a)(2), meets the requirements of this 
subsection if— 
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‘‘(A) the Indian tribe or tribal organization 
that operates, or desires to operate, the school 
submits to the Secretary an application request-
ing that the Secretary— 
‘‘(i) transfer operation of the school to 
the Indian tribe or tribal organization, if 
the Indian tribe or tribal organization is 
not already operating the school; and 
‘‘(ii) make a determination as to 
whether the school is eligible for assistance 
under this part; and 
‘‘(B) the Secretary makes a determination 
that the school is eligible for assistance under 
this part. 
‘‘(2) CERTAIN ELECTING SCHOOLS.—(A) By not 
later than the date that is 120 days after the date on 
which an application is submitted to the Secretary 
under paragraph (1)(A), the Secretary shall deter-
mine— 
‘‘(i) in the case of a school which is not 
being operated by the Indian tribe or tribal or-
ganization, whether to transfer operation of the 
school to the Indian tribe or tribal organization; 
and 
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‘‘(ii) whether the school is eligible for assist-
ance under this part. 
‘‘(B) In considering applications submitted 
under paragraph (1)(A), the Secretary— 
‘‘(i) shall transfer operation of the school to 
the Indian tribe or tribal organization, if the 
tribe or tribal organization is not already oper-
ating the school; and 
‘‘(ii) shall determine that the school is eligi-
ble for assistance under this part, unless the Sec-
retary finds by clear and convincing evidence 
that the services to be provided by the Indian 
tribe or tribal organization will be deleterious to 
the welfare of the Indians served by the school. 
‘‘(C) In considering applications submitted 
under paragraph (1)(A), the Secretary shall consider 
whether the Indian tribe or tribal organization would 
be deficient in operating the school with respect to— 
‘‘(i) equipment; 
‘‘(ii) bookkeeping and accounting proce-
dures; 
‘‘(iii) ability to adequately manage a school; 
or 
‘‘(iv) adequately trained personnel. 
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‘‘(c) ADDITIONAL REQUIREMENTS
FOR
A SCHOOL 
WHICH IS NOT A BUREAU FUNDED SCHOOL.— 
‘‘(1) IN GENERAL.—A school which is not a Bu-
reau funded school under title XI of the Education 
Amendments of 1978 meets the requirements of this 
subsection if— 
‘‘(A) the Indian tribe or tribal organization 
that operates, or desires to operate, the school 
submits to the Secretary an application request-
ing a determination by the Secretary as to 
whether the school is eligible for assistance under 
this part; and 
‘‘(B) the Secretary makes a determination 
that a school is eligible for assistance under this 
part. 
‘‘(2) DEADLINE
FOR
DETERMINATION
BY
SEC-
RETARY.—(A) By not later than the date that is 180 
days after the date on which an application is sub-
mitted to the Secretary under paragraph (1)(A), the 
Secretary shall determine whether the school is eligible 
for assistance under this part. 
‘‘(B) In making the determination under sub-
paragraph (A), the Secretary shall give equal consid-
eration to each of the following factors: 
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‘‘(i) with respect to the applicant’s pro-
posal— 
‘‘(I) the adequacy of facilities or the 
potential to obtain or provide adequate fa-
cilities; 
‘‘(II) geographic and demographic fac-
tors in the affected areas; 
‘‘(III) adequacy of the applicant’s pro-
gram plans; 
‘‘(IV) geographic proximity of com-
parable public education; and 
‘‘(V) the needs as expressed by all af-
fected parties, including but not limited to 
students, families, tribal governments at 
both the central and local levels, and school 
organizations; and 
‘‘(ii) with respect to all education services 
already available— 
‘‘(I) geographic and demographic fac-
tors in the affected areas; 
‘‘(II) adequacy and comparability of 
programs already available; 
‘‘(III) consistency of available pro-
grams with tribal education codes or tribal 
legislation on education; and 
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‘‘(IV) the history and success of these 
services for the proposed population to be 
served, as determined from all factors in-
cluding, if relevant, standardized examina-
tion performance. 
‘‘(C) The Secretary may not make a deter-
mination under this paragraph that is pri-
marily based upon the geographic proximity of 
comparable public education. 
‘‘(D) Applications submitted under para-
graph (1)(A) shall include information on the 
factors described in subparagraph (B)(i), but the 
applicant may also provide the Secretary such 
information relative to the factors described in 
subparagraph (B)(ii) as the applicant considers 
appropriate. 
‘‘(E) If the Secretary fails to make a deter-
mination under subparagraph (A) with respect 
to an application within 180 days after the date 
on which the Secretary received the application, 
the Secretary shall be treated as having made a 
determination that the tribally controlled school 
is eligible for assistance under the title and the 
grant shall become effective 18 months after the 
date on which the Secretary received the applica-
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•HR 1 RH1&2 
tion, or on an earlier date, at the Secretary’s 
discretion. 
‘‘(d) FILING OF APPLICATIONS AND REPORTS.— 
‘‘(1) IN GENERAL.—All applications and reports 
submitted to the Secretary under this part, and any 
amendments to such applications or reports, shall be 
filed with the education line officer designated by the 
Director of the Office of Indian Education Programs 
of the Bureau of Indian Affairs. The date on which 
such filing occurs shall, for purposes of this part, be 
treated as the date on which the application or 
amendment was submitted to the Secretary. 
‘‘(2) SUPPORTING DOCUMENTATION.—Any appli-
cation that is submitted under this chapter shall be 
accompanied by a document indicating the action 
taken by the tribal governing body in authorizing 
such application. 
‘‘(e) EFFECTIVE
DATE
FOR
APPROVED
APPLICA-
TIONS.—Except as provided by subsection (c)(2)(E), a 
grant provided under this part, and any transfer of the op-
eration of a Bureau school made under subsection (b), shall 
become effective beginning the academic year succeeding the 
fiscal year in which the application for the grant or transfer 
is made, or at an earlier date determined by the Secretary. 
‘‘(f) DENIAL OF APPLICATIONS.— 
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•HR 1 RH1&2 
tions taken (including the costs associated with such ac-
tions), under this section at the same time that the Presi-
dent is required to submit to Congress the budget under sec-
tion 1105 of title 31, United States Code. 
‘‘SEC. 5207. DURATION OF ELIGIBILITY DETERMINATION. 
‘‘(a) IN GENERAL.—If the Secretary determines that 
a tribally controlled school is eligible for assistance under 
this part, the eligibility determination shall remain in effect 
until the determination is revoked by the Secretary, and 
the requirements of subsection (b) or (c) of section 5206, 
if applicable, shall be considered to have been met with re-
spect to such school until the eligibility determination is 
revoked by the Secretary. 
‘‘(b) ANNUAL REPORTS.— 
‘‘(1) IN GENERAL.—Each recipient of a grant 
provided under this part shall complete an annual re-
port which shall be limited to— 
‘‘(A) an annual financial statement report-
ing revenue and expenditures as defined by the 
cost accounting established by the grantee; 
‘‘(B) an annual financial audit conducted 
pursuant to the standards of the Single Audit 
Act of 1984; 
‘‘(C) an annual submission to the Secretary 
of the number of students served and a brief de-
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•HR 1 RH1&2 
scription of programs offered under the grant; 
and 
‘‘(D) a program evaluation conducted by an 
impartial evaluation review team, to be based on 
the standards established for purposes of sub-
section (c)(1)(A)(ii). 
‘‘(2) EVALUATION REVIEW TEAMS.—Where ap-
propriate, other tribally controlled schools and rep-
resentatives of tribally controlled community colleges 
shall make up members of the evaluation review 
teams. 
‘‘(3) EVALUATIONS.—In the case of a school 
which is accredited, evaluations will be conducted at 
intervals under the terms of accreditation. 
‘‘(4) SUBMISSION OF REPORT.— 
‘‘(A) TO
TRIBALLY
GOVERNING
BODY.— 
Upon completion of the report required under 
paragraph (a), the recipient of the grant shall 
send (via first class mail, return receipt re-
quested) a copy of such annual report to the trib-
al governing body (as defined in section 1132(f) 
of the Education Amendments of 1978) of the 
tribally controlled school. 
‘‘(B) TO SECRETARY.—Not later than 30 
days after receiving written confirmation that 
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•HR 1 RH1&2 
the tribal governing body has received the report 
send pursuant to subsection (A), the recipient of 
the grant shall send a copy of the report to the 
Secretary. 
‘‘(c) REVOCATION OF ELIGIBILITY.— 
‘‘(1) IN GENERAL.—(A) The Secretary shall not 
revoke a determination that a school is eligible for as-
sistance under this part if— 
‘‘(i) the Indian tribe or tribal organization 
submits the reports required under subsection (b) 
with respect to the school; and 
‘‘(ii) at least one of the following subclauses 
applies with respect to the school: 
‘‘(I) The school is certified or accred-
ited by a State or regional accrediting asso-
ciation or is a candidate in good standing 
for such accreditation under the rules of the 
State or regional accrediting association, 
showing that credits achieved by the stu-
dents within the education programs are, or 
will be, accepted at grade level by a State 
certified or regionally accredited institution. 
‘‘(II) A determination made by the 
Secretary that there is a reasonable expecta-
tion that the accreditation described in sub-
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clause (I), or the candidacy in good stand-
ing for such accreditation, will be reached 
by the school within 3 years and that the 
program offered by the school is beneficial to 
the Indian students. 
‘‘(III) The school is accredited by a 
tribal department of education if such ac-
creditation is accepted by a generally recog-
nized regional or State accreditation agen-
cy. 
‘‘(IV) The schools accept the standards 
promulgated under section 1121 of the Edu-
cation Amendments of 1978 and an evalua-
tion of performance is conducted under this 
section in conformance with the regulations 
pertaining to Bureau operated schools by 
an impartial evaluator chosen by the grant-
ee, but no grantee shall be required to com-
ply with these standards to a higher degree 
than a comparable Bureau operated school. 
‘‘(V) A positive evaluation of the school 
is conducted by an impartial evaluator 
agreed upon by the Secretary and the grant-
ee every 2 years under standards adopted 
by the contractor under a contract for a 
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•HR 1 RH1&2 
school entered into under the Indian Self- 
Determination and Education Assistance 
Act (or revisions of such standards agreed to 
by the Secretary and the grantee) prior to 
the date of the enactment of this Act. If the 
Secretary and the grantee other than the 
tribal governing body fail to agree on such 
an evaluator, the tribal governing body 
shall choose the evaluator or perform the 
evaluation. If the Secretary and a grantee 
which is the tribal governing body fail to 
agree on such an evaluator, this subclause 
shall not apply. 
‘‘(B) The choice of standards employed for the 
purpose of subparagraph (A)(ii) shall be consistent 
with section 1121(e) of the Education Amendments of 
1978. 
‘‘(2) NOTICE
REQUIREMENTS
FOR
REVOCA-
TION.—The Secretary shall not revoke a determina-
tion that a school is eligible for assistance under this 
part, or reassume control of a school that was a Bu-
reau school prior to approval of an application sub-
mitted under section 5206(b)(1)(A) until the Sec-
retary— 
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‘‘(A) provides notice to the tribally con-
trolled school and the tribal governing body 
(within the meaning of section 1141(14) of the 
Education Amendments of 1978) of the tribally 
controlled school which states— 
‘‘(i) the specific deficiencies that led to 
the revocation or resumption determination; 
and 
‘‘(ii) the actions that are needed to 
remedy such deficiencies; and 
‘‘(B) affords such authority an opportunity 
to effect the remedial actions. 
‘‘(3) TECHNICAL
ASSISTANCE.—The Secretary 
shall provide such technical assistance as is prac-
ticable to effect such remedial actions. Such notice 
and technical assistance shall be in addition to a 
hearing and appeal to be conducted pursuant to the 
regulations described in section 5206(f)(1)(C). 
‘‘(d) APPLICABILITY OF SECTION PURSUANT TO ELEC-
TION UNDER SECTION 5209(b).—With respect to a tribally 
controlled school which receives assistance under this part 
pursuant to an election made under section 5209(b)— 
‘‘(1) subsection (b) of this section shall apply; 
and 
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‘‘(2) the Secretary may not revoke eligibility for 
assistance under this part except in conformance with 
subsection (c) of this section. 
‘‘SEC. 5208. PAYMENT OF GRANTS; INVESTMENT OF FUNDS. 
‘‘(a) PAYMENTS.— 
‘‘(1) IN GENERAL.—Except as otherwise provided 
in this subsection, the Secretary shall make payments 
to grantees under this part in two payments, of 
which— 
‘‘(A) the first payment shall be made not 
later than July 15 of each year in an amount 
equal to 85 percent of the amount which the 
grantee was entitled to receive during the pre-
ceding academic year; and 
‘‘(B) the second payment, consisting of the 
remainder to which the grantee is entitled for the 
academic year, shall be made not later than De-
cember 1 of each year. 
‘‘(2) NEWLY FUNDED SCHOOLS.—For any school 
for which no payment under this part was made from 
Bureau funds in the preceding academic year, full 
payment of the amount computed for the first aca-
demic year of eligibility under this part shall be made 
not later than December 1 of the academic year. 
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‘‘(3) LATE FUNDING.—With regard to funds for 
grantees that become available for obligation on Octo-
ber 1 of the fiscal year for which such funds are ap-
propriated, the Secretary shall make payments to 
grantees not later than December 1 of the fiscal year. 
‘‘(4) APPLICABILITY OF CERTAIN TITLE 31 PROVI-
SIONS.—The provisions of chapter 39 of Title 31, 
United States Code, shall apply to the payments re-
quired to be made by paragraphs (1), (2), and (3). 
‘‘(5) RESTRICTIONS.—Paragraphs (1), (2), and 
(3) shall be subject to any restriction on amounts of 
payments under this part that are imposed by a con-
tinuing resolution or other Act appropriating the 
funds involved. 
‘‘(b) INVESTMENT OF FUNDS.— 
‘‘(1) TREATMENT OF INTEREST AND INVESTMENT 
INCOME.—Notwithstanding any other provision of 
law, any interest or investment income that accrues 
to any funds provided under this part after such 
funds are paid to the Indian tribe or tribal organiza-
tion and before such funds are expended for the pur-
pose for which such funds were provided under this 
part shall be the property of the Indian tribe or tribal 
organization and shall not be taken into account by 
any officer or employee of the Federal Government in 
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determining whether to provide assistance, or the 
amount of assistance, under any provision of Federal 
law. Such interest income shall be spent on behalf of 
the school. 
‘‘(2) PERMISSIBLE
INVESTMENTS.—Funds pro-
vided under this part may be invested by the Indian 
tribe or tribal organization before such funds are ex-
pended for the purposes of this part so long as such 
funds are— 
‘‘(A) invested by the Indian tribe or tribal 
organization only in obligations of the United 
States, or in obligations or securities that are 
guaranteed or insured by the United States, or 
mutual (or other) funds registered with the Secu-
rities and Exchange Commission and which only 
invest in obligations of the United States, or se-
curities that are guaranteed or insured by the 
United States; or 
‘‘(B) deposited only into accounts that are 
insure by and agency or instrumentality of the 
United States, or are fully collateralized to en-
sure protection of the funds, even in the event of 
a bank failure. 
‘‘(c) RECOVERIES.—For the purposes of underrecovery 
and overrecovery determinations by any Federal agency for 
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any other funds, from whatever source derived, funds re-
ceived under this part shall not be taken into consideration. 
‘‘SEC. 5209. APPLICATION WITH RESPECT TO INDIAN SELF- 
DETERMINATION AND EDUCATION ASSIST-
ANCE ACT. 
‘‘(a) CERTAIN PROVISIONS TO APPLY TO GRANTS.— 
The following provisions of the Indian Self-Determination 
and Education Assistance Act (and any subsequent revi-
sions thereto or renumbering thereof), shall apply to grants 
provided under this part: 
‘‘(1) Section 5(f) (relating to single agency 
audit). 
‘‘(2) Section 6 (relating to criminal activities; 
penalties). 
‘‘(3) Section 7 (relating to wage and labor stand-
ards). 
‘‘(4) Section 104 (relating to retention of Federal 
employee coverage). 
‘‘(5) Section 105(f) (relating to Federal prop-
erty). 
‘‘(6) Section 105(k) (relating to access to Federal 
sources of supply). 
‘‘(7) Section 105(l) (relating to lease of facility 
used for administration and delivery of services). 
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‘‘(8) Section 106(e) (relating to limitation on 
remedies relating to cost allowances). 
‘‘(9) Section 106(i) (relating to use of funds for 
matching or cost participation requirements). 
‘‘(10) Section 106(j) (relating to allowable uses 
of funds). 
‘‘(11) Section 108(c) (Model Agreements provi-
sions (1)(a)(5) (relating to limitations of costs), 
(1)(a)(7) (relating to records and monitoring), 
(1)(a)(8) (relating to property), and (a)(1)(9) (relat-
ing to availability of funds). 
‘‘(12) Section 109 (relating to reassumption). 
‘‘(13) Section 111 (relating to sovereign immu-
nity and trusteeship rights unaffected). 
‘‘(b) ELECTION FOR GRANT IN LIEU OF CONTRACT.— 
‘‘(1) IN GENERAL.—Contractors for activities to 
which this part applies who have entered into a con-
tract under the Indian Self-Determination and Edu-
cation Assistance Act that is in effect upon the date 
of the enactment of the No Child Left Behind Act of 
2001 may, by giving notice to the Secretary, elect to 
have the provisions of this part apply to such activity 
in lieu of such contract. 
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‘‘(2) EFFECTIVE DATE OF ELECTION.—Any elec-
tion made under paragraph (1) shall take effect on 
the later of— 
‘‘(A) October 1 of the fiscal year succeeding 
the fiscal year in which such election is made; or 
‘‘(B) 60 days after the date of such election. 
‘‘(3) EXCEPTION.—In any case in which the 60- 
day period referred to in paragraph (2)(B) is less 
than 60 days before the beginning of the succeeding 
fiscal year, such election shall not take effect until the 
fiscal year after the fiscal year succeeding the election. 
‘‘(c) NO DUPLICATION.—No funds may be provided 
under any contract entered into under the Indian Self-De-
termination and Education Assistance Act to pay any ex-
penses incurred in providing any program or services if 
a grant has been made under this part to pay such expenses. 
‘‘(d) TRANSFERS AND CARRYOVERS.— 
‘‘(1) BUILDINGS, EQUIPMENT, SUPPLIES, MATE-
RIALS.—A tribe or tribal organization assuming the 
operation of— 
‘‘(A) a Bureau school with assistance under 
this part shall be entitled to the transfer or use 
of buildings, equipment, supplies, and materials 
to the same extent as if it were contracting under 
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•HR 1 RH1&2 
the Indian Self-Determination and Education 
Assistance Act; or 
‘‘(B) a contract school with assistance under 
this part shall be entitled to the transfer or use 
of buildings, equipment, supplies and materials 
that were used in the operation of the contract 
school to the same extent as if it were contracting 
under the Indian Self-Determination and Edu-
cation Assistance Act. 
‘‘(2) FUNDS.—Any tribe or tribal organization 
which assumes operation of a Bureau school with as-
sistance under this part and any tribe or tribal orga-
nization which elects to operate a school with assist-
ance under this part rather that to continue as a con-
tract school shall be entitled to any funds which 
would carryover from the previous fiscal year as if 
such school were operated as a contract school. 
‘‘(e) EXCEPTIONS, PROBLEMS, AND DISPUTES.—Any 
exception or problem cited in an audit conducted pursuant 
to section 5207(b)(2), any dispute regarding a grant au-
thorized to be made pursuant to this part or any amend-
ment to such grant, and any dispute involving an adminis-
trative cost grant under section 1128 of the Education 
Amendments of 1978 shall be administered under the provi-
sions governing such exceptions, problems, or disputes in 
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the case of contracts under the Indian Self-Determination 
and Education Assistance Act of 1975. The Equal Access 
to Justice Act shall apply to administrative appeals filed 
after September 8, 1988, by grantees regarding a grant 
under this part, including an administrative cost grant. 
‘‘SEC. 5210. ROLE OF THE DIRECTOR. 
‘‘Applications for grants under this part, and all ap-
plication modifications, shall be reviewed and approved by 
personnel under the direction and control of the Director 
of the Office of Indian Education Programs. Required re-
ports shall be submitted to education personnel under the 
direction and control of the Director of such Office. 
‘‘SEC. 5211. REGULATIONS. 
‘‘The Secretary is authorized to issue regulations relat-
ing to the discharge of duties specifically assigned to the 
Secretary by this part. In all other matters relating to the 
details of planning, development, implementing, and evalu-
ating grants under this part, the Secretary shall not issue 
regulations. Regulations issued pursuant to this part shall 
not have the standing of a Federal statute for the purposes 
of judicial review. 
‘‘SEC. 5212. THE TRIBALLY CONTROLLED GRANT SCHOOL 
ENDOWMENT PROGRAM. 
‘‘(a) IN GENERAL.— 
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‘‘(1) TRUST
FUNDS.—Each school receiving 
grants under this part may establish, at a Federally 
insured banking and savings institution, a trust fund 
for the purposes of this section. 
‘‘(2) AUTHORITY OF SCHOOLS REGARDING TRUST 
FUNDS.—The school may provide— 
‘‘(A) for the deposit into the trust fund, only 
funds from non-Federal sources, except that the 
interest on funds received from grants under this 
part may be used for this purpose; 
‘‘(B) for the deposit in the account of any 
earnings on funds deposited in the account; and 
‘‘(C) for the sole use of the school any 
noncash, in-kind contributions of real or per-
sonal property, such property may at any time 
be converted to cash. 
‘‘(b) INTEREST.—Interest from the fund established 
under subsection (a) may periodically be withdrawn and 
used, at the discretion of the school, to defray any expenses 
associated with the operation of the school. 
‘‘SEC. 5213. DEFINITIONS. 
‘‘For the purposes of this part: 
‘‘(1) BUREAU.—The term ‘Bureau’ means the 
Bureau of Indian Affairs of the Department of the In-
terior. 
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‘‘(2) ELIGIBLE INDIAN STUDENT.—The term ‘eli-
gible Indian student’ has the meaning of such term in 
section 1127(f) of the Education Amendments of 1978. 
‘‘(3) INDIAN
TRIBE.—The term ‘Indian tribe’ 
means any Indian tribe, band, nation, or other orga-
nized group or community, including Alaska Native 
Village or regional corporations (as defined in or es-
tablished pursuant to the Alaskan Native Claims Set-
tlement Act, which is recognized as eligible for the 
special programs and services provided by the United 
States to Indians because of their status as Indians. 
‘‘(4) LOCAL EDUCATIONAL AGENCY.—The term 
‘local educational agency’ means a public board of 
education or other public authority legally constituted 
within a State for either administrative control or di-
rection of, or to perform a service function for, public 
elementary or secondary schools in a city, county, 
township, school district, or other political subdivi-
sion of a State or such combination of school districts 
or counties as are recognized in a State as an admin-
istrative agency for its public elementary or sec-
ondary schools. Such term includes any other public 
institution or agency having administrative control 
and direction of a public elementary or secondary 
school. 
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‘‘(5) SECRETARY.—The term ‘Secretary’ means 
the Secretary of the Interior. 
‘‘(6) TRIBAL
ORGANIZATION.—(A) The term 
‘tribal organization’ means— 
‘‘(i) the recognized governing body of any 
Indian tribe; or 
‘‘(ii) any legally established organization of 
Indians which— 
‘‘(I) is controlled, sanctioned, or char-
tered by such governing body or is demo-
cratically elected by the adult members of 
the Indian community to be served by such 
organization; and 
‘‘(II) includes the maximum participa-
tion of Indians in all phases of its activi-
ties. 
‘‘(B) In any case in which a grant is provided 
under this part to an organization to provide services 
benefiting more than one Indian tribe, the approval 
of the governing bodies of Indian tribes representing 
80 percent of those students attending the tribally 
controlled school shall be considered a sufficient tribal 
authorization for such grant. 
‘‘(7) TRIBALLY CONTROLLED SCHOOL.—The term 
‘tribally controlled school’ means a school operated by 
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a tribe or a tribal organization, enrolling students in 
kindergarten through grade 12, including preschools, 
which is not a local educational agency and which is 
not directly administered by the Bureau of Indian Af-
fairs.’’. 
TITLE 
IV—PROMOTING 
IN-
FORMED PARENTAL CHOICE 
AND INNOVATIVE PROGRAMS 
PART A—INNOVATIVE PROGRAMS 
SEC. 401. INNOVATIVE PROGRAMS. 
Title IV is amended to read as follows: 
‘‘TITLE 
IV—PROMOTING 
IN-
FORMED PARENTAL CHOICE 
AND INNOVATIVE PROGRAMS 
‘‘PART A—INNOVATIVE PROGRAMS 
‘‘Subpart 1—State and Local Innovative Programs 
‘‘SEC. 4101. FINDINGS AND STATEMENT OF PURPOSE. 
‘‘(a) FINDINGS.—Congress finds that this subpart— 
‘‘(1) provides flexibility to meet local needs; 
‘‘(2) promotes local and State education reforms; 
‘‘(3) contributes to the improvement of academic 
achievement for all students; 
‘‘(4) provides funding for critical activities; and 
‘‘(5) provides services for private school students. 
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‘‘(b) STATEMENT OF PURPOSE.—It is the purpose of 
programs under this subpart— 
‘‘(1) to provide funding to enable States and 
local educational agencies to implement promising 
educational reform programs and school improvement 
initiatives based on scientifically based research; 
‘‘(2) to provide a continuing source of innova-
tion and educational improvement, including support 
for library services and instructional and media ma-
terials; and 
‘‘(3) to meet the educational needs of all stu-
dents, including at-risk youth. 
‘‘(c) STATE AND LOCAL RESPONSIBILITY.— 
‘‘(1) IN GENERAL.—The States shall have the 
basic responsibility for the administration of funds 
made available under this subpart, but such adminis-
tration shall be carried out with a minimum of pa-
perwork. 
‘‘(2) DESIGN AND IMPLEMENTATION.—Notwith-
standing paragraph (1), local educational agencies, 
school superintendents and principals, and classroom 
teachers and supporting personnel shall be mainly re-
sponsible for the design and implementation of pro-
grams assisted under this subpart, because such agen-
cies and individuals have the most direct contact with 
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•HR 1 RH1&2 
students and are most likely to be able to design pro-
grams to meet the educational needs of students in 
their own school districts. 
‘‘CHAPTER 1—STATE AND LOCAL 
PROGRAMS 
‘‘SEC. 4111. ALLOCATION TO STATES. 
‘‘(a) RESERVATIONS.—From the sums appropriated to 
carry out this subpart for each fiscal year, the Secretary 
shall reserve not more than 1 percent for payments to out-
lying areas to be allotted in accordance with their respective 
needs. 
‘‘(b) ALLOCATION OF REMAINDER.—From the remain-
der of such sums, the Secretary shall allocate, and make 
available in accordance with this subpart, to each State an 
amount which bears the same ratio to the amount of such 
remainder as the school-age population of the State bears 
to the school-age population of all States, except that no 
State shall receive less than an amount equal to 1⁄2 of 1 
percent of such remainder. 
‘‘SEC. 4112. ALLOCATION TO LOCAL EDUCATIONAL AGEN-
CIES. 
‘‘(a) DISTRIBUTION RULE.— 
‘‘(1) IN
GENERAL.—Subject to paragraph (2), 
from the sums made available each year to carry out 
this subpart, the State shall distribute not less than 
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•HR 1 RH1&2 
85 percent to local educational agencies within such 
State according to the relative enrollments in public 
and private, nonprofit schools within the jurisdictions 
of such agencies, adjusted, in accordance with criteria 
approved by the Secretary, to provide higher per- 
pupil allocations to local educational agencies that 
have the greatest numbers or percentages of children 
whose education imposes a higher than average cost 
per child, such as— 
‘‘(A) children living in areas with high con-
centrations of economically disadvantaged fami-
lies; 
‘‘(B) children from economically disadvan-
taged families; and 
‘‘(C) children living in sparsely populated 
areas. 
‘‘(2) EXCEPTION.—100 percent of any amount 
by which the funds paid to a State under this subpart 
for a fiscal year exceed the amount of such funds paid 
to the State for fiscal year 2001 shall be distributed 
to local educational agencies and used locally for in-
novative assistance described in section 4131(b). 
‘‘(3) LIMITATION ON USE OF FUNDS FOR ADMIN-
ISTRATION.—In each fiscal year, a State may use not 
more than 25 percent of the funds available for State 
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programs under this subpart for State administration 
under section 4121. 
‘‘(b) CALCULATION OF ENROLLMENTS.— 
‘‘(1) IN GENERAL.—The calculation of relative 
enrollments under subsection (a)(1) shall be on the 
basis of the total of— 
‘‘(A) the number of children enrolled in 
public schools; and 
‘‘(B) the number of children enrolled in pri-
vate, nonprofit schools whose parents would like 
their children to participate in programs or 
projects assisted under this subpart, for the fiscal 
year preceding the fiscal year for which the de-
termination is made. 
‘‘(2) CONSTRUCTION.—Nothing in this subsection 
shall diminish the responsibility of each local edu-
cational agency to contact, on an annual basis, ap-
propriate officials from private nonprofit schools 
within the areas served by such agencies in order to 
determine whether such schools desire that their chil-
dren participate in programs assisted under this 
chapter. 
‘‘(3) ADJUSTMENTS.— 
‘‘(A) IN
GENERAL.—Relative enrollments 
calculated under subsection (a)(1) shall be ad-
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justed, in accordance with criteria approved by 
the Secretary under subparagraph (B), to pro-
vide higher per-pupil allocations only to local 
educational agencies that serve the greatest num-
bers or percentages of— 
‘‘(i) children living in areas with high 
concentrations of economically disadvan-
taged families; 
‘‘(ii) children from economically dis-
advantaged families; or 
‘‘(iii) children living in sparsely popu-
lated areas. 
‘‘(B) CRITERIA.—The Secretary shall review 
criteria submitted by a State for adjusting allo-
cations under paragraph (1) and shall approve 
such criteria only if the Secretary determines 
that such criteria are reasonably calculated to 
produce an adjusted allocation that reflects the 
relative needs of the State’s local educational 
agencies based on the factors set forth in sub-
paragraph (A). 
‘‘(c) PAYMENT OF ALLOCATIONS.— 
‘‘(1) DISTRIBUTION.—From the funds paid to a 
State under this subpart for a fiscal year, a State 
shall distribute to each eligible local educational agen-
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•HR 1 RH1&2 
cy that has submitted an application as required in 
section 4133 the amount of such local educational 
agency’s allocation, as determined under subsection 
(a). 
‘‘(2) ADDITIONAL FUNDS.— 
‘‘(A) IN
GENERAL.—Additional funds re-
sulting from higher per-pupil allocations pro-
vided to a local educational agency on the basis 
of adjusted enrollments of children described in 
subsection (a)(1) may, in the discretion of the 
local educational agency, be allocated for expend-
itures to provide services for children enrolled in 
public and private, nonprofit schools in direct 
proportion to the number of children described in 
subsection (a)(1) and enrolled in such schools 
within the local educational agency. 
‘‘(B) ELECTION.—In any fiscal year, any 
local educational agency that elects to allocate 
such additional funds in the manner described 
in subparagraph (A) shall allocate all additional 
funds to schools within the local educational 
agency in such manner. 
‘‘(C) CONSTRUCTION.—Subparagraphs (A) 
and (B) may not be construed to require any 
school to limit the use of the additional funds de-
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•HR 1 RH1&2 
scribed in subparagraph (A) to the provision of 
services to specific students or categories of stu-
dents. 
‘‘CHAPTER 2—STATE PROGRAMS 
‘‘SEC. 4121. STATE USE OF FUNDS. 
‘‘A State may use funds made available for State use 
under this subpart only for— 
‘‘(1) State administration of programs under 
this subpart including— 
‘‘(A) supervision of the allocation of funds 
to local educational agencies; 
‘‘(B) planning, supervision, and processing 
of State funds; and 
‘‘(C) monitoring and evaluation of pro-
grams and activities under this subpart; 
‘‘(2) support for planning, designing, and initial 
implementation of charter schools as described in part 
B; 
‘‘(3) statewide education reform and school im-
provement activities and technical assistance and di-
rect grants to local educational agencies which assist 
such agencies under section 4131; and 
‘‘(4) support for arrangements that provide for 
independent analysis to measure and report on school 
district achievement. 
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‘‘SEC. 4122. STATE APPLICATIONS. 
‘‘(a) APPLICATION REQUIREMENTS.—If a State seeks 
to receive assistance under this subpart, the individual, en-
tity, or agency responsible for public elementary and sec-
ondary education policy under the State constitution or 
State law shall submit to the Secretary an application 
that— 
‘‘(1) provides for an annual statewide summary 
of how assistance under this subpart is contributing 
toward improving student achievement or improving 
the quality of education for students; 
‘‘(2) provides information setting forth the allo-
cation of such funds required to implement section 
4142; 
‘‘(3) provides that the State will keep such 
records and provide such information to the Secretary 
as may be required for fiscal audit and program eval-
uation (consistent with the responsibilities of the Sec-
retary under this section); 
‘‘(4) provides assurance that, apart from tech-
nical and advisory assistance and monitoring compli-
ance with this subpart, the State has not exercised 
and will not exercise any influence in the decision-
making processes of local educational agencies as to 
the expenditure made pursuant to an application 
under section 4133; 
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•HR 1 RH1&2 
‘‘(5) contains assurances that there is compliance 
with the specific requirements of this subpart; and 
‘‘(6) provides for timely public notice and public 
dissemination of the information provided under 
paragraph (2). 
‘‘(b) STATEWIDE SUMMARY.—The statewide summary 
referred to in subsection (a)(1) shall be submitted to the Sec-
retary and shall be derived from the evaluation information 
submitted by local educational agencies to the State under 
section 4133(a)(2)(H). The format and content of such sum-
mary shall be in the discretion of the State and may include 
statistical measures such as the number of students served 
by each type of innovative assistance described in section 
4131(b), including the number of teachers trained. 
‘‘(c) PERIOD OF APPLICATION.—An application filed 
by the State under subsection (a) shall be for a period not 
to exceed 3 years, and may be amended annually as may 
be necessary to reflect changes without filing a new applica-
tion. 
‘‘(d) AUDIT
LIMITATION.—Each local educational 
agency receiving less than an average of $5,000 under this 
subpart may not be audited more frequently than once every 
5 years. 
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‘‘CHAPTER 3—LOCAL INNOVATIVE 
EDUCATION PROGRAMS 
‘‘SEC. 4131. USE OF FUNDS. 
‘‘(a) IN GENERAL.—Funds made available to local 
educational agencies under section 4112 shall be used for 
innovative assistance programs described in subsection (b). 
‘‘(b) INNOVATIVE ASSISTANCE.—The innovative assist-
ance programs referred to in subsection (a) may include— 
‘‘(1) professional development activities and the 
hiring of teachers, including activities carried out in 
accordance with title II, that give teachers, prin-
cipals, and administrators the knowledge and skills to 
provide students with the opportunity to meet chal-
lenging State or local academic content standards 
and student achievement standards; 
‘‘(2) technology related to the implementation of 
school-based reform programs, including professional 
development to assist teachers, and other school offi-
cials, regarding how to use effectively such equipment 
and software; 
‘‘(3) programs for the development or acquisition 
and use of instructional and educational materials, 
including library services and materials (including 
media materials), academic assessments, reference 
materials, computer software and hardware for in-
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•HR 1 RH1&2 
structional use, and other curricular materials that 
are tied to high academic standards, that will be used 
to improve student achievement, and that are part of 
an overall education reform program; 
‘‘(4) promising education reform projects, in-
cluding effective schools and magnet schools; 
‘‘(5) programs to improve the academic skills of 
disadvantaged elementary and secondary school stu-
dents and to prevent students from dropping out of 
school; 
‘‘(6) programs to combat illiteracy; 
‘‘(7) programs to provide for the educational 
needs of gifted and talented children; 
‘‘(8) planning, designing, and initial implemen-
tation of charter schools as described in part B; 
‘‘(9) school improvement programs or activities 
under sections 1116 and 1117; 
‘‘(10) community service programs that use 
qualified school personnel to train and mobilize 
young people to measurably strengthen their commu-
nities through nonviolence, responsibility, compassion, 
respect, and moral courage; 
‘‘(11) activities to promote consumer, economic, 
and personal finance education, such as dissemi-
nating and encouraging the best practices for teaching 
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the basic principles of economics and promoting the 
concept of achieving financial literacy through the 
teaching of personal financial management skills (in-
cluding the basic principles involved with earning, 
spending, saving, and investing); 
‘‘(12) activities to promote, implement, or ex-
pand public school choice; 
‘‘(13) programs to hire and support school 
nurses; 
‘‘(14) expanding and improving school-based 
mental health services, including early identification 
of drug use and violence, assessment, and direct indi-
vidual or group counseling services provided to stu-
dents, parents, and school personnel by qualified 
school based mental health services personnel; and 
‘‘(15) alternative educational programs for those 
students who have been expelled or suspended from 
their regular educational setting, including programs 
to assist students to reenter the regular educational 
setting upon return from treatment or alternative 
educational programs. 
‘‘SEC. 4132. ADMINISTRATIVE AUTHORITY. 
‘‘In order to conduct the activities authorized by this 
subpart, each State or local educational agency may use 
funds made available under this subpart to make grants 
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•HR 1 RH1&2 
to, and to enter into contracts with, local educational agen-
cies, institutions of higher education, libraries, museums, 
and other public and private nonprofit agencies, organiza-
tions, and institutions, including religious organizations. 
‘‘SEC. 4133. LOCAL APPLICATIONS. 
‘‘(a) CERTIFICATION.— 
‘‘(1) IN GENERAL.—A local educational agency 
or a consortium of such agencies may receive an allo-
cation of funds under this subpart for any year for 
which the agency or consortium submits an applica-
tion under this section that is certified by the State 
to meet the requirements of this section. 
‘‘(2) CONTENTS
OF APPLICATION.—The State 
shall certify each application that— 
‘‘(A) describes locally identified needs rel-
ative to the purposes of this subpart and to the 
innovative 
assistance 
described 
in 
section 
4131(b); 
‘‘(B) based on the needs identified in sub-
paragraph (A), sets forth the planned allocation 
of funds among innovative assistance programs 
described in section 4131 and describes the pro-
grams, projects, and activities designed to carry 
out such innovative assistance programs that the 
local educational agency intends to support; 
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‘‘(C) contains information setting forth the 
allocation of such funds required to implement 
section 4142; 
‘‘(D) describes how assistance under this 
subpart will contribute to improving student 
academic achievement; 
‘‘(E) provides assurances of compliance 
with the provisions of this subpart, including the 
participation of children enrolled in private, 
nonprofit schools in accordance with section 
4142; 
‘‘(F) provides assurance that the local edu-
cational agency will keep such records, and pro-
vide such information to the State as may be 
reasonably required for fiscal audit and program 
evaluation, consistent with the responsibilities of 
the State under this subpart; 
‘‘(G) provides in the allocation of funds for 
the assistance authorized by this subpart, and in 
the design, planning, and implementation of 
such programs, for systematic consultation with 
parents of children attending elementary and 
secondary schools in the area served by the local 
educational agency, with teachers and adminis-
trative personnel in such schools, and with other 
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•HR 1 RH1&2 
groups involved in the implementation of this 
subpart (such as librarians, school counselors, 
and other pupil services personnel) as may be 
considered appropriate by the local educational 
agency; and 
‘‘(H) provides assurance that— 
‘‘(i) programs, services, and activities 
will be evaluated annually; 
‘‘(ii) such evaluation will be used to 
determine 
and 
implement 
appropriate 
changes in program services and activities 
for the subsequent year; 
‘‘(iii) such evaluation will describe how 
assistance under this subpart contributed 
toward 
improving 
student 
academic 
achievement; and 
‘‘(iv) such evaluation will be submitted 
to the State in the time and manner re-
quested by the State. 
‘‘(b) TIME PERIOD
TO WHICH APPLICATION RE-
LATES.—An application submitted by a local educational 
agency under subsection (a) may seek allocations under this 
part for a period of time not to exceed 3 fiscal years and 
may be amended annually as may be necessary to reflect 
changes without the filing of a new application. 
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‘‘(c) LOCAL EDUCATIONAL AGENCY DISCRETION.— 
‘‘(1) IN
GENERAL.—Subject to the limitations 
and requirements of this subpart, a local educational 
agency shall have complete discretion in determining 
how funds made available under this chapter will be 
divided among programs and activities described in 
section 4131. 
‘‘(2) LIMITATION.—In exercising the discretion 
described in paragraph (1), a local educational agen-
cy shall ensure that expenditures under this chapter 
carry out the purposes of this subpart and are used 
to meet the educational needs within the schools of 
such local educational agency. 
‘‘CHAPTER 4—GENERAL PROVISIONS 
‘‘SEC. 4141. MAINTENANCE OF EFFORT; FEDERAL FUNDS 
SUPPLEMENTARY. 
‘‘(a) MAINTENANCE OF EFFORT.— 
‘‘(1) IN GENERAL.—Except as provided in para-
graph (2), a State is entitled to receive its full alloca-
tion of funds under this subpart for any fiscal year 
only if the Secretary determines that either the com-
bined fiscal effort per student or the aggregate expend-
itures within the State with respect to the provision 
of free public education for the fiscal year preceding 
the fiscal year for which the determination is made 
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was not less than 90 percent of such combined fiscal 
effort or aggregate expenditures for the fiscal year 
that is 2 fiscal years before the fiscal year for which 
the determination is made. 
‘‘(2) REDUCTION
OF
FUNDS.—The Secretary 
shall reduce the amount of the allocation of funds 
under this subpart in any fiscal year in the exact 
proportion to which the State fails to meet the re-
quirements of paragraph (1) by falling below 90 per-
cent of both the fiscal effort per student and aggregate 
expenditures (using the measure most favorable to the 
State), and no such lesser amount shall be used for 
computing the effort required under paragraph (1) for 
subsequent years. 
‘‘(3) WAIVER.—The Secretary may waive, for 1 
fiscal year only, the requirements of this section if the 
Secretary determines that such a waiver would be eq-
uitable due to exceptional or uncontrollable cir-
cumstances such as a natural disaster or a precipi-
tous and unforeseen decline in the financial resources 
of the State. 
‘‘(b) FEDERAL FUNDS SUPPLEMENTARY.—A State or 
local educational agency may use and allocate funds re-
ceived under this subpart only to supplement and, to the 
extent practical, to increase the level of funds that would, 
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in the absence of Federal funds made available under this 
subpart, be made available from non-Federal sources, and 
in no case may such funds be used so as to supplant funds 
from non-Federal sources. 
‘‘SEC. 4142. PARTICIPATION OF CHILDREN ENROLLED IN 
PRIVATE SCHOOLS. 
‘‘(a) PARTICIPATION ON EQUITABLE BASIS.— 
‘‘(1) IN GENERAL.—To the extent consistent with 
the number of children in the school district of a local 
educational agency which is eligible to receive funds 
under this subpart or which serves the area in which 
a program or project assisted under this subpart is lo-
cated, who are enrolled in private nonprofit elemen-
tary and secondary schools, or with respect to instruc-
tional or personnel training programs funded by the 
State from funds made available for State use, such 
agency, after consultation with appropriate private 
school officials— 
‘‘(A) shall provide for the benefit of such 
children in such schools secular, neutral, and 
nonideological services, materials, and equip-
ment, including the participation of the teachers 
of such children (and other educational personnel 
serving such children) in training programs, and 
the repair or minor remodeling of public facili-
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ties as may be necessary for their provision (con-
sistent with subsection (c) of this section); or 
‘‘(B) if such services, materials, and equip-
ment are not feasible or necessary in 1 or more 
such private schools as determined by the local 
educational agency after consultation with the 
appropriate private school officials, shall provide 
such other arrangements as will assure equitable 
participation of such children in the purposes 
and benefits of this subpart. 
‘‘(2) OTHER PROVISIONS FOR SERVICES.—If no 
program or project is carried out under paragraph 
(1) in the school district of a local educational agen-
cy, the State shall make arrangements, such as 
through contracts with nonprofit agencies or organi-
zations, under which children in private schools in 
such district are provided with services and materials 
to the extent that would have occurred if the local 
educational agency had received funds under this sub-
part. 
‘‘(3) APPLICATION OF REQUIREMENTS.—The re-
quirements of this section relating to the participa-
tion of children, teachers, and other personnel serving 
such children shall apply to programs and projects 
carried out under this subpart by a State or local 
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educational agency, whether directly or through 
grants to or contracts with other public or private 
agencies, institutions, or organizations. 
‘‘(b) EQUAL EXPENDITURES.— 
‘‘(1) IN GENERAL.—Expenditures for programs 
pursuant to subsection (a) shall be equal (consistent 
with the number of children to be served) to expendi-
tures for programs under this subpart for children en-
rolled in the public schools of the local educational 
agency. 
‘‘(2) CONCENTRATED
PROGRAMS.—Taking into 
account the needs of the individual children and other 
factors which relate to the expenditures referred to in 
paragraph (1), and when funds available to a local 
educational agency under this subpart are used to 
concentrate programs or projects on a particular 
group, attendance area, or grade or age level, children 
enrolled in private schools who are included within 
the group, attendance area, or grade or age level se-
lected for such concentration shall, after consultation 
with the appropriate private school officials, be as-
sured equitable participation in the purposes and 
benefits of such programs or projects. 
‘‘(c) ADMINISTRATIVE RULES.— 
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‘‘(1) FUNDS
AND
PROPERTY.—The control of 
funds provided under this subpart, and title to mate-
rials, equipment, and property repaired, remodeled, 
or constructed with such funds, shall be in a public 
agency for the uses and purposes provided in this sub-
part, and a public agency shall administer such funds 
and property. 
‘‘(2) PROVISION OF SERVICES.—The provision of 
services pursuant to this subpart shall be provided by 
employees of a public agency or through contract by 
such public agency with a person, an association, 
agency, or corporation who or which, in the provision 
of such services, is independent of such private school 
and of any religious organizations, and such employ-
ment or contract shall be under the control and super-
vision of such public agency, and the funds provided 
under this subpart shall not be commingled with 
State or local funds. 
‘‘(d) WAIVER.— 
‘‘(1) STATE PROHIBITION WAIVER.—If by reason 
of any provision of law a State or local educational 
agency is prohibited from providing for the participa-
tion in programs of children enrolled in private ele-
mentary and secondary schools, as required by this 
section, the Secretary shall waive such requirements 
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and shall arrange for the provision of services to such 
children through arrangements which shall be subject 
to the requirements of this section. 
‘‘(2) FAILURE TO COMPLY.—If the Secretary de-
termines that a State or a local educational agency 
has substantially failed or is unwilling to provide for 
the participation on an equitable basis of children en-
rolled in private elementary and secondary schools as 
required by this section, the Secretary may waive 
such requirements and shall arrange for the provision 
of services to such children through arrangements 
which shall be subject to the requirements of this sec-
tion. 
‘‘(e) WITHHOLDING OF ALLOCATION.—Pending final 
resolution of any investigation or complaint that could re-
sult in a waiver under subsection (d)(1) or (d)(2), the Sec-
retary may withhold from the allocation of the affected 
State or local educational agency the amount estimated by 
the Secretary to be necessary to pay the cost of services to 
be provided by the Secretary under such subsection. 
‘‘(f) TERM OF DETERMINATIONS.—Any determination 
by the Secretary under this section shall continue in effect 
until the Secretary determines that there will no longer be 
any failure or inability on the part of the State or local 
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educational agency to meet the requirements of subsections 
(a) and (b). 
‘‘(g) PAYMENT FROM STATE ALLOTMENT.—When the 
Secretary arranges for services pursuant to this section, the 
Secretary shall, after consultation with the appropriate 
public and private school officials, pay the cost of such serv-
ices, including the administrative costs of arranging for 
those services, from the appropriate allotment of the State 
under this subpart. 
‘‘(h) REVIEW.— 
‘‘(1) WRITTEN OBJECTIONS.—The Secretary shall 
not take any final action under this section until the 
State and the local educational agency affected by 
such action have had an opportunity, for not less 
than 45 days after receiving written notice thereof, to 
submit written objections and to appear before the 
Secretary or the Secretary’s designee to show cause 
why that action should not be taken. 
‘‘(2) COURT ACTION.—If a State or local edu-
cational agency is dissatisfied with the Secretary’s 
final action after a proceeding under paragraph (1), 
such agency may, not later than 60 days after notice 
of such action, file with the United States court of ap-
peals for the circuit in which such State is located a 
petition for review of that action. A copy of the peti-
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tion shall be transmitted by the clerk of the court to 
the Secretary. The Secretary thereupon shall file in 
the court the record of the proceedings on which the 
Secretary based this action, as provided in section 
2112 of title 28, United States Code. 
‘‘(3) REMAND TO SECRETARY.—The findings of 
fact by the Secretary, if supported by substantial evi-
dence, shall be conclusive; but the court, for good 
cause shown, may remand the case to the Secretary 
to take further evidence and the Secretary may make 
new or modified findings of fact and may modify the 
Secretary’s previous action, and shall file in the court 
the record of the further proceedings. Such new or 
modified findings of fact shall likewise be conclusive 
if supported by substantial evidence. 
‘‘(4) COURT REVIEW.—Upon the filing of such 
petition, the court shall have jurisdiction to affirm the 
action of the Secretary or to set such action aside, in 
whole or in part. The judgment of the court shall be 
subject to review by the Supreme Court of the United 
States upon certiorari or certification as provided in 
section 1254 of title 28, United States Code. 
‘‘(i) PRIOR DETERMINATION.—Any bypass determina-
tion by the Secretary under chapter 2 of title I of this Act 
(as such chapter was in effect on the day preceding the date 
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of enactment of the Improving America’s Schools Act of 
1994) shall, to the extent consistent with the purposes of 
this title, apply to programs under this title. 
‘‘SEC. 4143. FEDERAL ADMINISTRATION. 
‘‘(a) TECHNICAL ASSISTANCE.—The Secretary, upon 
request, shall provide technical assistance to States and 
local educational agencies under this subpart. 
‘‘(b) RULEMAKING.—The Secretary shall issue regula-
tions under this subpart only to the extent that such regula-
tions are necessary to ensure that there is compliance with 
the specific requirements and assurances required by this 
subpart. 
‘‘(c) AVAILABILITY
OF APPROPRIATIONS.—Notwith-
standing any other provision of law, unless expressly in 
limitation of this subsection, funds appropriated in any fis-
cal year to carry out activities under this subpart shall be-
come available for obligation on July 1 of such fiscal year 
and shall remain available for obligation until the end of 
the subsequent fiscal year. 
‘‘SEC. 4144. DEFINITIONS. 
‘‘In this subpart, the following definitions apply: 
‘‘(1) 
SCHOOL-AGE
POPULATION.—The 
term 
‘school-age population’ means the population aged 5 
through 17. 
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‘‘(2) STATE.—The term ‘State’ means each of the 
50 States, the District of Columbia, and the Common-
wealth of Puerto Rico. 
‘‘SEC. 4145. AUTHORIZATION OF APPROPRIATIONS. 
‘‘There are authorized to be appropriated to carry out 
this subpart $450,000,000 for fiscal year 2002 and such 
sums as may be necessary for each of fiscal years 2003 
through 2006. 
‘‘Subpart 2—Arts Education 
‘‘SEC. 4151. ASSISTANCE FOR ARTS EDUCATION. 
‘‘(a) FINDINGS.—The Congress finds that— 
‘‘(1) every student can benefit from an education 
in the arts; 
‘‘(2) a growing body of research indicates that 
education in the arts may provide cognitive benefits 
and bolster academic achievement, beginning at an 
early age and continuing through secondary school; 
‘‘(3) qualified arts teachers and a sequential cur-
riculum are the basis and core for substantive arts 
education for students; 
‘‘(4) the arts should be taught according to rig-
orous academic standards under arts education pro-
grams that provide mechanisms under which edu-
cators are accountable to parents, school officials, and 
the community; 
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‘‘(5) opportunities to participate in the arts have 
enabled individuals with disabilities of all ages to 
participate more fully in school and community ac-
tivities; and 
‘‘(6) arts education is a valuable part of the ele-
mentary and secondary school curriculum. 
‘‘(b) PURPOSES.—The purposes of this subpart are 
to— 
‘‘(1) support systemic education reform by 
strengthening arts education as an integral part of 
the elementary and secondary school curriculum; and 
‘‘(2) help ensure that all students meet chal-
lenging State academic content standards and chal-
lenging State student academic achievement stand-
ards in the arts. 
‘‘(c) AUTHORITY.—In accordance with this subpart, 
the Secretary may make grants to, or enter into contracts 
or cooperative agreements with, eligible entities described 
in subsection (d). 
‘‘(d) ELIGIBLE ENTITIES.—The Secretary may make 
assistance available under subsection (c) to each of the fol-
lowing entities: 
‘‘(1) States. 
‘‘(2) Local educational agencies. 
‘‘(3) Institutions of higher education. 
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‘‘(4) Museums or other cultural institutions. 
‘‘(5) Any other public or private agencies, insti-
tutions, and organizations. 
‘‘(e) USE
OF FUNDS.—Assistance made available 
under this subpart may be used only for— 
‘‘(1) research on arts education; 
‘‘(2) planning, developing, acquiring, expanding, 
improving, or disseminating model school-based arts 
education programs; 
‘‘(3) the development of model State arts edu-
cation assessments based on State academic stand-
ards; 
‘‘(4) the development and implementation of cur-
riculum frameworks for arts education; 
‘‘(5) the development of model inservice profes-
sional development programs for arts educators and 
other instructional staff; 
‘‘(6) supporting collaborative activities with Fed-
eral agencies or institutions, arts educators, and orga-
nizations representing the arts, including State and 
local arts agencies involved in arts education; 
‘‘(7) supporting model projects or programs in 
the performing arts for children and youth or pro-
grams which assure the participation in mainstream 
settings in arts and education programs of individ-
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