I
104TH CONGRESS
2D SESSION
H. R. 4151
To establish a National Indian Bonding Authority Pilot Project to oversee
the issuance of bonds to provide funding for the construction of schools
of the Bureau of Indian Affairs of the Department of the Interior,
and for other purposes.
IN THE HOUSE OF REPRESENTATIVES
SEPTEMBER 24, 1996
Mr. JOHNSON of South Dakota (for himself, Mr. FALEOMAVAEGA, Mr. KIL-
DEE, Mr. MILLER of California, and Mr. RICHARDSON) introduced the
following bill; which was referred to the Committee on Economic and
Educational Opportunities
A BILL
To establish a National Indian Bonding Authority Pilot
Project to oversee the issuance of bonds to provide fund-
ing for the construction of schools of the Bureau of
Indian Affairs of the Department of the Interior, and
for other purposes.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ‘‘National Indian Bond-
ing Authority Pilot Project Act of 1996’’.
SEC. 2. FINDINGS.
The Congress finds that:
(1) There exists a unique political and legal re-
lationship between the Government of the United
States and governments of Indian tribes. Indian
tribes have a legal relationship with the United
States Government which is set forth in the Con-
stitution of the United States, treaties, Federal stat-
utes, and judicial decisions.
(2) The Constitution of the United States gives
the Congress plenary power over Indian affairs; and
through treaties, statutes, executive orders, course of
dealing, and custom, the United States has under-
taken a trust obligation to protect Indian tribes and
tribal resources.
(3) The trust responsibility includes the duty to
protect, preserve, and enhance tribal assets and re-
sources, and to assist Indian tribes in improving the
socioeconomic status of tribes and their members in
an effort to encourage economic development and
strengthen powers of self-government.
(4) By fostering the development of accom-
modative financial markets and tribal access to cap-
ital, the Federal Government can assist in providing
fundamental tools to greater economic development
and powers of self government.
(5) The need for financial capital by Indian
tribal governments is acute, and the Federal Govern-
ment should work to facilitate capital creation and
those mechanisms that will permit the Federal Gov-
ernment to issue debt instruments as a means of fi-
nancing tribal government needs.
(6) For the benefit of Indian people across the
United States, to increase their commerce welfare
and prosperity, and the improvement of their health
and living conditions, it is essential that this and fu-
ture generations of youth be given the fullest oppor-
tunity to learn and to develop their intellectual and
mental capacities.
(7) It is essential that institutions of education
be provided with appropriate additional means to as-
sist such youth in achieving the required levels of
learning and development of their intellectual and
mental capacities.
(8) Institutions should be enabled to refinance
outstanding indebtedness incurred to provide exist-
ing facilities and to preserve and enhance the facili-
ties for the purposes of education.
(9) There are approximately 16,600,000 square
feet of space in Indian schools nationwide.
(10) There exists a backlog in Grant School
and Bureau School facility improvement, repair, and
new construction needs of $850,000,000. Assuming
a 3 percent inflation rate, the cost of the
$850,000,000 in deferred maintenance grows by
$25,500,000 per year due to inflation, and approxi-
mately $55,000,000 per year due to natural aging
and deterioration for a total of $80,000,000 per
year.
(11) The replacement value of these facilities is
$1,830,000,000.
(12) The magnitude of the dollars and number
of projects has risen to a level where these projects
cannot be funded by current facility improvement
and repair and new construction program funds.
(13) With the physical condition of grant and
bureau schools deteriorating, and with the popu-
lation within these schools increasing, there is an
immediate need for funding of these projects.
(14) The schools propose, through actions taken
by Congress, to be allowed to bond for project need
using existing education program money sources and
reserve funds as the repayment source and security
for the bonds.
(15) The program would establish a national
pilot project with the power to issue bonds, utilizing
the municipal finance market established to serve
school districts and local governments.
(16) Instead of funding the project directly, a
portion of Tribal Education Construction funds cur-
rently appropriated for these types of projects would
be leveraged through the bonds to fund substantially
more projects.
(17) The use of funds in this manner will allow
the appropriations to go much further to alleviate
the construction problems facing the schools and will
reduce the deficit by building the schools faster and
decreasing the inflation buildup currently estimated
at $80,000,000 per year.
(18) It is the purpose of this Act to provide a
measure of assistance and an alternative method of
financing to enable tribal institutions of education to
provide the facilities and structure which are sorely
needed to accomplish the purposes of this Act.
(19) 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. This Act will
incorporate the commitment and support of tribal
self-determination by utilizing section 102 of Public
Law 93–638 and Public Law 100–297 to allow
tribes to manage their own construction projects.
SEC. 3. DEFINITIONS.
As used in this Act:
(1) AUTHORITY.—The term ‘‘Authority’’ means
the National Indian Bonding Pilot Project Authority
established by section 101 of this Act.
(2) CERTIFICATES
OF
PARTICIPATION.—The
term ‘‘certificates of participation’’ means revenue
bonds of the Authority issued under title II of this
Act.
(3) COST.—The term ‘‘cost’’ as applied to a
project or any portion thereof financed under the
provisions of the Act means all or any part of the
cost of construction, acquisition, alteration, enlarge-
ment, reconstruction, and remodeling of a project in-
cluding all lands, structures, real or personal prop-
erty, rights, rights-of-way, franchises, easements,
and interests acquired or used for or in connection
with a project, the cost of demolishing or removing
any buildings or structures on land so acquired; the
cost of all machinery and equipment, financing
charges, interest prior to, during, and for a period
after completion of such construction and acquisi-
tion, provisions for reserves for principal and inter-
est, and for extensions, enlargements, additions, and
improvements, the cost of architectural, engineering,
financial, and legal services, plans, specifications,
studies, surveys, estimates of cost and of revenues,
administrative expenses, necessary or incident to de-
termining the feasibility or practicability of con-
structing the project and such other expenses as
may be necessary or incident to the construction and
acquisition of the project.
(4) PROJECT.—The term ‘‘project’’ means a
structure or structures available for use as an ad-
ministration building, academic building, library,
classroom, athletic facility, dormitory, or other stu-
dent housing facility, maintenance, storage, em-
ployee housing, or utility facility, and other struc-
tures or facilities related thereto or required or use-
ful for the instruction of students whether proposed,
under construction, or completed. Parking and other
facilities or structures essential or convenient for the
orderly conduct of such institution, including land-
scaping and site preparation, shall also be included.
(5) SECRETARY.—The term ‘‘Secretary’’ means
the Secretary of the Interior.
(6) TRIBAL SCHOOL.—The term ‘‘tribal school’’
means a school that is operated by a tribal organiza-
tion for the education of Indian children with finan-
cial assistance under a Public Law 100–297 grant
or Public Law 93–638 contract with the Bureau of
Indian Affairs.
TITLE 
I—ESTABLISHMENT 
OF
NATIONAL INDIAN BONDING
PILOT PROJECT AUTHORITY
SEC. 101. ESTABLISHMENT.
(a) IN GENERAL.—There is established a commission
to be known as the National Indian Bonding Pilot Project
Authority.
(b) MEMBERSHIP.—
(1) COMPOSITION.—The Authority shall be
composed of 7 members appointed by the Secretary
of the Interior as follows:
(A) One member shall be designated by the
Authority as chairperson of the Authority.
(B) One member shall be designated by
the Authority as the vice chairperson of the Au-
thority.
(C) At least 1 member shall be a person
having a favorable reputation for skill, knowl-
edge, and experience in the field of public fi-
nance.
(D) At least 1 member shall be a person
having a favorable reputation for skill, knowl-
edge, and experience in the building construc-
tion field.
(E) At least 2 of the members shall be a
trustee, director, officer, or employee of a tribal
school.
The members may be from the public or private sec-
tor, and may include Federal or tribal officers or
employees, members of academia, nonprofit organi-
zations, or other interested individuals.
(2) DATE.—The appointments of the members
of the Authority shall be made no later than 3
months after the date of enactment of this Act.
(c) PERIOD OF APPOINTMENT; VACANCIES.—Two of
the initial members shall be appointed for a 2-year term,
3 of the initial members shall be appointed for a 4-year
term, and 2 of the initial members shall be appointed for
a 6-year term. Thereafter, all members shall be appointed
for a 6-year term. Any vacancy in the Authority shall not
affect its powers, but shall be filled in the same manner
as the original appointment.
(d) INITIAL MEETING.—No later than 30 days after
the date on which all members of the Authority have been
appointed, the Authority shall hold its first meeting.
(e) MEETINGS.—The Authority shall meet at the call
of the Chairperson.
(f) QUORUM.—A majority of the members of the Au-
thority shall constitute a quorum, but a lesser number of
members may hold hearings. Each member of the Author-
ity shall have 1 vote, and the vote of each member shall
be accorded the same weight.
SEC. 102. DUTIES OF THE AUTHORITY.
The Authority shall—
(1) enter into an agreement with a private un-
derwriter to provide for the issuance of certificates
of participation in accordance with title II; and
(2) promulgate regulations to carry out para-
graph (1).
SEC. 103. POWERS OF THE AUTHORITY.
(a) Purpose.—The purpose of the Authority shall be
to assist institutions in the construction, financing, and
refinancing of projects.
(b) RULES.—The Authority is authorized and em-
powered to adopt rules for the conduct of its business.
(c) LOCATION AND CHOICE OF PROJECTS.—The Au-
thority is authorized and empowered to determine the lo-
cation and character of any project to be financed under
the provisions of this Act. The Authority shall work with
the Department of the Interior to determine those schools
that are in critical need and eligible for the program out-
lined in this Act.
(d) INFORMATION FROM FEDERAL AGENCIES.—The
Authority may secure directly from the Department of the
Interior such information as the Authority considers nec-
essary to carry out the duties specified in section 102.
Upon request of the chairperson of the Authority, the head
of such department or agency shall furnish such informa-
tion to the Authority.
(e) POSTAL SERVICES.—The Authority may use the
United States mails in the same manner and under the
same conditions as other departments and agencies of the
Federal Government.
(f) ISSUE BONDS.—The Authority is authorized and
empowered to issue revenue bonds whose aggregate prin-
cipal amount at any time shall not exceed $200,000,000
and to issue notes, bond anticipation notes, and revenue
refunding bonds of the authority under the provisions of
this Act to provide funds for acquiring, constructing, re-
constructing, enlarging, remodeling, renovating, improv-
ing, furnishing, or equipping 1 or more projects or parts
thereof.
(g) CONTRACTS.—The Authority is authorized and
empowered to enter into contracts and execute all instru-
ments necessary or appropriate to carry out the purposes
of this Act.
(h) USE OF REVENUES.—The Authority is author-
ized and empowered to pledge, assign, or otherwise encum-
ber as security for the bonds, the rentals, revenues, and
other income, charges, and moneys realized from the use,
lease, sale or other disposition of 1 or more projects or
parts thereof as may be designated in the bond proceed-
ings, and enter into trust agreements for the benefit of
bondholders.
(i) USE OF CONSULTANTS.—The Authority is au-
thorized and empowered to employ consulting engineers,
architects, attorneys, accountants, construction and finan-
cial experts, superintendents, managers, and such other
employees and agents as may be necessary in its judg-
ment, and to fix their compensation.
(j) RECEIPT OF GRANTS.—The Authority is author-
ized and empowered to receive and accept from any public
agency loans or grants for or in aid of the acquisition,
construction, or refinancing of a project or any portion
thereof, and to receive and accept loans, grants, aid, or
contributions from any source of either money, property,
labor, or other things of value to be held, used and applied
only for the purposes for which such loans, grants, aid,
and contributions are made.
(k) STATE AND LOCAL AGREEMENTS.—The Author-
ity is authorized and empowered to enter into appropriate
arrangements with any Federal or State department or
agency, county, township, municipal corporation, or other
political subdivision, taxing district, or public body or
agency for the planning and installation of streets, roads,
alleys, water supply and distribution facilities, storm and
sanitary sewage collection and disposal facilities, and other
necessary appurtenances to a project.
(l) INSURANCE.—The Authority is authorized and
empowered to purchase fire and extended coverage and li-
ability insurance for a project, and any other insurance
the Authority may agree to provide under the bond pro-
ceedings.
SEC. 104. AUTHORITY PERSONNEL MATTERS.
(a) COMPENSATION OF MEMBERS.—Each member of
the Authority who is not an officer or employee of the Fed-
eral Government shall be compensated at a rate equal to
the daily equivalent of the annual rate of basic pay pre-
scribed for level IV of the Executive Schedule under sec-
tion 5315 of title 5, United States Code, for each day (in-
cluding travel time) during which such member is engaged
in the performance of the duties of the Authority. All
members of the Authority who are officers or employees
of the United States shall serve without compensation in
addition to that received for their services as officers or
employees of the United States.
(b) TRAVEL EXPENSES.—The members of the Au-
thority shall be allowed travel expenses, including per diem
in lieu of subsistence, at rates authorized for employees
of agencies under subchapter I of chapter 57 of title 5,
United States Code, while away from their homes or regu-
lar places of business in the performance of services for
the Authority.
(c) STAFF.—
(1) IN GENERAL.—The chairperson of the Au-
thority may, without regard to the civil service laws
and regulations, appoint and terminate an executive
director and such other additional personnel as may
be necessary to enable the Authority to perform its
duties. The employment and termination of an exec-
utive director shall be subject to confirmation by the
Authority.
(2) COMPENSATION.—The chairperson of the
Authority may fix the compensation of the executive
director and other personnel without regard to the
provisions of chapter 51 and subchapter III of chap-
ter 53 of title 5, United Stated Code, relating to
classification of positions and General Schedule pay
rates, except that the rate of pay for such personnel
may not exceed the rate payable for level V of the
Executive Schedule under section 5316 of such title.
(d) DETAIL
OF GOVERNMENT EMPLOYEES.—Any
Federal Government employee may be detailed to the Au-
thority without reimbursement, and such detail shall be
without interruption or loss of civil service status or privi-
lege.
(e) PROCUREMENT OF TEMPORARY AND INTERMIT-
TENT SERVICES.—The chairperson of the Authority may
procure temporary and intermittent services under section
3109(b) of title 5, United States Code, at rates for individ-
ual which do not exceed the daily equivalent of the annual
rate of basic pay prescribed for level V of the Executive
Schedule under section 5316 of such title.
SEC. 105. AUTHORIZATION OF APPROPRIATIONS.
(a) IN GENERAL.—There are authorized to be appro-
priated to the Authority to carry out the purposes of this
Act, $13,500,000 for fiscal years 1998 through 2000 to
begin the pilot project. The rate at which the amount shall
be appropriated is $2,250,000 for fiscal year 1998,
$4,500,000 for fiscal year 1999, and $6,750,000 for fiscal
year 2000. These funds shall be used to supplement the
security pool and to make annual debt service payments.
The funds shall also be used to operate the Commission.
(b) AVAILABILITY.—Any sums appropriated under
this section shall remain available, without fiscal year limi-
tation, until expended.
TITLE II—PRIVATE BONDS
SEC. 201. ISSUANCE OF BONDS.
(a) IN GENERAL.—The Authority shall, by regula-
tion, establish a program to provide for the issuance of
certificates of participation and other debt instruments
pursuant to an agreement that the Authority shall enter
into with a private underwriter to provide funding for fa-
cility improvement, repair, and new construction of schools
of the Bureau of Indian Affairs under part B of title XI
of the Education Amendments Act of 1978 (25 U.S.C.
2001 et seq.) including section 1126(d) of that Act (25
U.S.C. 2005 and 2006(d)).
(b) TRANSFER OF FUNDS.—
(1) IN GENERAL.—Notwithstanding any other
provision of law, for each fiscal year, the Secretary
of the Interior shall transfer to the Secretary of the
Treasury $10,000,000 of unobligated funds made
available to the Secretary of the Interior by appro-
priations for advanced planning and design, facility
improvement and repair, employee housing construc-
tion, and new construction of schools of the Bureau
of Indian Affairs pursuant to the authorities speci-
fied in subsection (a), including any such funds in
the accounts of the Bureau of Indian Affairs com-
monly known as the ‘‘X’’ accounts.
(2) DEBT SERVICE PAYMENTS.—The Secretary
of the Treasury shall use any amounts transferred
pursuant to paragraph (1) as well as additional fu-
ture appropriations to make debt service payments
to the Authority with respect to the certificates of
participation issued under this section. The Author-
ity shall deposit any amount of debt service payment
made by the Secretary of the Treasury in an account
established by the trustee appointed under sub-
section (d).
(c) ISSUANCE
OF CERTIFICATES
OF PARTICIPA-
TION.—
(1) IN GENERAL.—Notwithstanding any other
provision of law, the Authority shall, subject to the
availability of funds referred to in subsection (b),
enter into an agreement with a private underwriter
to sell certificates of participation issued by the Au-
thority in such forms and denominations, bearing
such maturities, and subject to such terms and con-
ditions as may be prescribed by the Authority.
(2) SUBJECT
TO
TAXES.—Any Certificate of
Participation issued under this section shall be sub-
ject to Federal taxes under the Internal Revenue
Code of 1986.
(3) CERTIFICATES OF PARTICIPATION ARE NOT
FEDERAL OBLIGATIONS; MORAL OBLIGATIONS.—
(A) Certificates of participation issued pur-
suant to this Act do not—
(i) represent or constitute a debt or
pledge of the faith and credit of the Fed-
eral Government; or
(ii) grant to the owners or holders
thereof any right to have the Federal Gov-
ernment levy any taxes or appropriate any
funds for the payment of the principal
thereof or interest thereon.
(B) Certificates of participation are pay-
able solely from such funds as are pledged for
the payment of the certificates in accordance
with certificate proceedings.
(C)(i) Certificates of participation are con-
sidered moral obligations of the Federal Gov-
ernment in that the Federal Government has a
trust responsibility to continue to fund tribal
education.
(ii) In the event Congress fails to appro-
priate sufficient money to pay the annual debt
service on the certificates of participation, and
there is a need to deplete the security pool to
pay the annual debt service, the Secretary of
the Interior shall request in the next year’s
budget request funds equal to the amount of
the depletion.
(d) BOND TRUSTEE.—
(1) IN GENERAL.—Notwithstanding any other
provision of law, any certificate of participation is-
sued by the Authority shall be secured by a trust
agreement between the Authority and a trustee.
(2) TRUSTEE.—Any bank or trust company
that meets requirements established by the Author-
ity by regulation may be designated as a trustee
under paragraph (1).
(3) CONTENT OF TRUST AGREEMENT.—A trust
agreement entered into by the Authority under this
subsection shall specify that the trustee, with respect
to bonds issued under this section shall—
(A) act as a repository for the proceeds of
the certificates of participation sold pursuant to
this section;
(B) make payments to certificate holders;
(C) invest such amounts of the proceeds as
the trustee determines not to be necessary to
make payments under subparagraph (A); and
(D) from any amounts in excess of the
amounts necessary to make payments to bond-
holders, in accordance with the requirements of
paragraph (4), make direct payments to con-
tractors with the Secretary, the governing body
of an Indian tribe, or the appropriate official of
a school of the Bureau of Indian Affairs for fa-
cility improvement, repair, or new construction
pursuant to an authority specified in subsection
(a).
(4) REQUIREMENTS FOR MAKING DIRECT PAY-
MENTS.—
(A) IN
GENERAL.—Notwithstanding any
other provision of law, only the trustee shall
make the direct payments referred to in para-
graph (3)(D) in accordance with requirements
that the Authority shall prescribe in the agree-
ment entered into under paragraph (3). The
Authority shall require the trustee, prior to
making a payment to a contractor under para-
graph (3)(D), to inspect the project that is the
subject of the contract, or provide for an in-
spection of that project by a local financial in-
stitution to ensure the completion of the
project.
(B) CONTRACTS.—Each contract referred
to in paragraph (3)(D) shall specify, or be re-
negotiated to specify, that payments under the
contract shall be made in accordance with this
subsection.
TITLE III—MISCELLANEOUS
PROVISIONS
SEC. 301. ANNUAL REPORT.
The Authority shall keep an accurate account of all
of its activities and all of its receipts and expenditures and
shall annually make a report thereof to the Secretary of
the Interior. The Secretary of the Interior shall review and
comment upon the report and make such recommenda-
tions as the Secretary deems necessary to the Congress
of the United States and Indian nations.
SEC. 302. SOVEREIGN IMMUNITY.
This Act shall not be construed so as to impact, limit,
or affect the current sovereign immunity of the tribal,
State or Federal governments.
SEC. 303. COORDINATION WITH BUREAU OF INDIAN AF-
FAIRS.
This pilot project shall coordinate with the Bureau
of Indian Affairs by utilizing Public Law 93–638, section
102 authority, or Public Law 100–297 which allow tribes
to assume direct management over school construction
projects. The funding package developed in this Act shall
be used for all projects within the National Indian Bond-
ing Pilot Project. The pilot project will focus on critical
need projects within the grant and contract schools across
the country. Nothing in these regulations shall be con-
strued to:
(1) Mandate a tribe to apply for a contract or
contract with the Bureau of Indian Affairs to plan,
conduct, and administer all or parts of any Bureau
program. Such applications under these regulations
are strictly voluntary.
(2) Authorize or require the termination of any
trust responsibility of the United States with respect
to the Indian people.
(3) Permit significant reduction in services to
Indian people as a result of this Act.
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