SEC. 2. JOHNSON-O’MALLEY SUPPLEMENTAL INDIAN EDU-
CATION PROGRAM MODERNIZATION ACT. 
The Act of April 16, 1934 (commonly known as the 
‘‘Johnson-O’Malley Act’’; 25 U.S.C. 452 et seq.), is 
amended by adding at the end the following new section: 
‘‘SEC. 7. JOHNSON-O’MALLEY SUPPLEMENTAL INDIAN EDU-
CATION PROGRAM MODERNIZATION ACT. 
‘‘(a) ESTABLISHMENT.—Notwithstanding any other 
provision of law, the Secretary of the Interior, acting 
through the Assistant Secretary of Indian Affairs and in 
conjunction with the Director of the Bureau of Indian 
Education, shall establish a program to enter into con-
tracts with eligible entities that have or serve Indian stu-
dents to provide educational benefits to such Indian stu-
dents. 
‘‘(b) USES OF FUNDS.—An eligible entity that enters 
into a contract under subsection (a) shall use the funds 
available under the contract to provide educational bene-
fits to Indian students, by— 
‘‘(1) carrying out programs or expanding pro-
grams in existence before the contract period that 
provide— 
‘‘(A) remedial instruction, counseling, and 
cultural programs; 
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‘‘(B) selected courses related to the aca-
demic and professional disciplines of science, 
technology, engineering, and mathematics; 
‘‘(C) important needs, such as school sup-
plies and items that enable recipients to partici-
pate in curricular and extra-curricular pro-
grams; and 
‘‘(D) program activities that were available 
to Indian students under contracts entered into 
under this Act before October 1, 2012; 
‘‘(2) the establishment of targeted and cul-
turally sensitive dropout prevention activities; and 
‘‘(3) the purchase of equipment to facilitate 
training for professional trade skills and intensified 
college preparation programs. 
‘‘(c) FUNDING.—The Secretary shall transfer to the 
Bureau of Indian Education the funds necessary to carry 
out this section. 
‘‘(d) COMPUTATION OF AWARDS.— 
‘‘(1) DETERMINATION OF TOTAL STUDENTS.— 
Except as provided under paragraph (2), for the 
purpose of computing the amount that an eligible 
entity may receive under a contract entered into 
under subsection (a) for any fiscal year, the Sec-
retary shall— 
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‘‘(A) determine the number of Indian stu-
dents who were in average daily attendance in 
the schools of the public school districts served 
by the eligible entity, and for whom such school 
districts provided free public education during 
the preceding school year; and 
‘‘(B) provide a minimum of $125 per In-
dian student described in subparagraph (A). 
‘‘(2) HOLD HARMLESS.—In the case of an eligi-
ble entity that has or serves eligible Indian children 
attending a public school that has been afforded 
supplemental services under a contract entered into 
under this Act on or before October 1, 1995, such 
eligible entity shall receive an amount under a con-
tract entered into under subsection (a) that is at 
least equal to the amount that such eligible entity 
would have received under the contract entered into 
under this Act on or before October 1, 1995. 
‘‘(e) DATA USE.— 
‘‘(1) IN GENERAL.—For purposes of the cal-
culation under subsection (d)(1), the Secretary shall 
use data for a public school district from not later 
than the fiscal year preceding the fiscal year for 
which the eligible entity involved is applying for a 
contract under subsection (a). 
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‘‘(2) TRIBAL ORGANIZATION.—In the case of a 
tribal organization that has been established by the 
Bureau of Indian Affairs on or after October 1, 
2012, such tribal organization, shall, for the first 
year of operation of such organization, be based on 
data for the public school districts served by the or-
ganization for the fiscal year for which the organiza-
tion is applying for a contract under subsection (a). 
‘‘(f) GEOGRAPHIC COVERAGE AND ENHANCED PAR-
TICIPATION.—In entering into contracts under subsection 
(a), the Secretary shall, to the extent practicable, ensure 
full geographic coverage and the full participation of all 
federally recognized tribes and school districts that have 
not entered into a contract under this Act before fiscal 
year 2015. 
‘‘(g) COMPLEMENTARY PROGRAM PARTICIPANTS.— 
In entering into contracts under subsection (a), the Sec-
retary may give preference a consortium of tribal organi-
zations, to encourage as many students and professionals 
as possible to benefit from the program established under 
this section, including such a consortium that includes a 
Tribal college or university. 
‘‘(h) ANNUAL REPORT.—The Secretary shall include 
in the Department of the Interior fiscal year annual budg-
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et request to Congress an annual assessment of the pro-
gram established under this section. 
‘‘(i) AUTHORIZATION OF APPROPRIATIONS.—There 
are authorized to be appropriated to the Secretary for car-
rying out this section such sums as may be necessary. 
‘‘(j) DEFINITIONS.— 
‘‘(1) ELIGIBLE ENTITY.—The term ‘eligible en-
tity’ means a— 
‘‘(A) tribal organization; 
‘‘(B) Indian Corporation; 
‘‘(C) public school district; 
‘‘(D) State; or 
‘‘(E) a consortium of tribal organizations. 
‘‘(2) ESEA TERMS.—The terms ‘elementary 
school’, ‘secondary school’, and ‘State’ have the 
meanings given such terms in section 9101 of the 
Elementary and Secondary Education Act of 1965 
(20 U.S.C. 7801). 
‘‘(3) INDIAN STUDENT.—The term ‘Indian stu-
dent’ means a student who— 
‘‘(A) attends a public school district; and 
‘‘(B) is between age 3 and grade 12, 
and— 
‘‘(i) resides on or near an Indian res-
ervation; 
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