Tribal Self-Governance

SUMMARY: This is a proposed rule to implement tribal Self-Governance,

as authorized by Title IV of the Indian Self-Determination and

Education Assistance Act. This proposed rule has been negotiated among

representatives of Self-Governance and non-Self-Governance Tribes and

the U.S. Department of the Interior. The intended effect is to transfer

to participating tribes control of, funding for, and decision making

concerning certain federal programs.

DATES: Comments must be received by May 13, 1998.

ADDRESSES: Comments regarding this proposed rule should be directed to:

William Sinclair, Director, Office of Self-Governance, MS-2542 MIB,

1849 C Street NW, Washington, DC, 20240; telephone: 202-219-0240;

electronic mail: [email protected]

FOR FURTHER INFORMATION CONTACT: Questions concerning this proposed

rule should be directed to: William Sinclair, Director, Office of Self-

Governance, MS-2542 MIB, 1849 C Street NW, Washington, DC, 20240;

telephone: 202-219-0240; electronic mail: [email protected]

SUPPLEMENTARY INFORMATION: These draft regulations are to implement

Title II of Pub. L. 103-413, the Indian Self-Determination Act

Amendments of 1994. This Act established the Tribal Self-Governance

program on a permanent basis and was added as Title IV (Tribal Self

Governance Act of 1994) of the Indian Self-Determination and Education

Assistance Act of 1975 (the ISDEA) (Pub. L. 93-638). Title I of Pub. L.

103-413 consisted of amendments to the self-determination contracting

provision of the ISDEA and regulations for Title I of Pub. L. 103-413

have already been promulgated. When Pub. L. 93-638 is mentioned in

these proposed regulations, it generally refers to what are now

Sections 109 and Title I of the ISDEA, as amended.

The ISDEA has been amended by Congress by the following:

Pub. L. 98-250 Technical Amendments to Indian Self-Determination and

Education Assistance Acts, April 3, 1984;

Pub. L. 100-202 Continuing Appropriations, Fiscal year 1988, December

22, 1987;

Pub. L. 100-446 Department of the Interior and Related Agencies

Appropriations Act, 1989, September 27, 1988;

Pub. L. 100-472 Indian Self-Determination And Education Assistance Act

Amendments of 1988, October 5, 1988;

Pub. L. 100-581 Review of Tribal Constitutions and Bylaws, November 1,

1988;

Pub. L. 101-301 Indian Law: Miscellaneous Amendments, May 24, 1990;

Pub. L. 101-512 Department of the Interior and Related Agencies

Appropriations Act, 1991, November 5, 1990;

Pub. L. 101-644 Indian Arts and Crafts Act of 1990, November 29, 1990

Pub. L. 102-184 Tribal Self-Governance Demonstration Project Act,

December 4, 1991;

Pub. L. 103-413 Indian Self-Determination Act Amendments of 1994,

October 25, 1994;

Pub. L. 103-435 Indian Technical Corrections, November 2, 1994;

Pub. L. 104-109 Technical Corrections to Law Relating to Native

Americans, February 12, 1996;

Pub. L. 104-208 Omnibus Appropriations Act, September 30, 1996

Since most of the legal citations are to Pub. L. 103-413, the

Indian Self-Determination Act Amendments of 1994, the following table

may be used to find pertinent parts of this act in 25 U.S.C.:

------------------------------------------------------------------------

Section of Pub. L. 103-413 25 U.S.C. part

------------------------------------------------------------------------

Sections 202, 203 and 401................. 25 U.S.C. 458aa

Section 402............................... 25 U.S.C. 458bb

Section 403............................... 25 U.S.C. 458cc

Section 404............................... 25 U.S.C. 458dd

Section 405............................... 25 U.S.C. 458ee

Section 406............................... 25 U.S.C. 458ff

Section 407............................... 25 U.S.C. 458gg

Section 408............................... 25 U.S.C. 458hh

------------------------------------------------------------------------

The following table may be used to find the pertinent parts of 93-

638, the ISDEA:

------------------------------------------------------------------------

Section of Pub. L. 93-638 25 U.S.C. part

------------------------------------------------------------------------

Section 3................................. 25 U.S.C. 450a

Section 4................................. 25 U.S.C. 450b

Section 5................................. 25 U.S.C. 450c

Section 6................................. 25 U.S.C. 450d

Section 9................................. 25 U.S.C. 450e-1

Section 102............................... 25 U.S.C. 450f

Section 103............................... 25 U.S.C. 450h

Section 104............................... 25 U.S.C. 450i

Section 105............................... 25 U.S.C. 450j

Section 106............................... 25 U.S.C. 450j-1

Section 107............................... 25 U.S.C. 450k

Section 108............................... 25 U.S.C. 450l

Section 109............................... 25 U.S.C. 450m

Section 110............................... 25 U.S.C. 450m-1

Section 111............................... 25 U.S.C. 450n

------------------------------------------------------------------------

The Indian Self-Determination Act Amendments of 1988 (Pub. L. 100-

472), authorized the Tribal Self-Governance Demonstration Project for a

5-year period and directed the Secretary to select up to 20 tribes to

participate. The purpose of the demonstration project was to transfer

to participating tribes the control of, funding for, and decision

making concerning certain federal programs, services, functions and

activities or portions thereof. In 1991, there were 7 annual funding

agreements under the project, and this expanded to 17 in 1992. In 1991,

the demonstration project was extended for an additional 3 years and

the number of tribes authorized to participate was increased to 30

(Pub. L. 102-184). The number of Self-Governance agreements increased

to 19 in 1993 and 28 in 1994. The 28 agreements in 1994 represented

participation in self-governance by 95 tribes authorized to

participate.

After finding that the Demonstration Project had successfully

furthered tribal self-determination and self-governance, Congress

enacted the ``Tribal Self-Governance Act of 1994,'' Public Law 103-413

which was signed by the President on October 25, 1994. The Tribal Self-

Governance Act of 1994 made the Demonstration Project a permanent

program and authorized the continuing participation of those tribes

already in the program.

A key feature of the 1994 Act included the authorization of up to

twenty tribes per year in the program, based on their successfully

completing a planning phase, being duly authorized by the tribal

government body and demonstrating financial stability and management

capability. The Act was amended by Public Law 104-208 on September 30,

1996, to allow up to 50 tribes annually to be selected from the

applicant pool. In 1996, the Act was also amended by Public Law 104-

109, ``An Act to make certain technical corrections and law related to

Native Americans''. Section 403 was amended to say the following:

(1) INCORPORATE SELF-DETERMINATION PROVISIONS,--At the option of

a participating tribe or tribes, any

[[Page 7203]]

or all provisions of title I of this Act shall be made part of an

agreement entered into under title III of this Act or this title.

The Secretary is obligated to include such provisions at the option

of the participating tribe or tribes. If such provision is

incorporated, it shall have the same force and effect as if set out

in full in title III or this title.

The number of annual funding agreements grew by one to 29 in 1995

and grew to 53 and 60 agreements in 1996 and 1997, respectively, to

include 180 and 202 tribes, respectively, either individually or

through consortium of tribes.

The Tribal Self-Governance Act of 1994, as amended, authorizes the

following things: (1) The director of the Office of Self-Governance may

select up to 50 tribes annually from the applicant pool to participate

in Tribal Self-Governance. (2) To be a member of the applicant pool

each tribe must have: (a) Successfully completed a planning phase that

includes budgetary research and internal tribal government planning and

organizational preparation; (b) have requested to participate in Self-

Governance by resolution; and (c) have demonstrated for the previous 3

fiscal years financial stability and financial management capability as

evidenced by the tribe having no material audit exceptions in their

required annual audits of Self-Determination contracts. (3) The

Secretary is to negotiate and enter into annual written funding

agreements with the governing body of each participating tribe that

will allow that tribe to plan, conduct, consolidate and administer

programs that were administered by the Bureau of Indian Affairs without

regard to agency or office within which such programs were

administered. Subject to such terms of the agreement, the tribes are

also authorized to redesign or consolidate programs and reallocate

funds. (4) The Secretary is to negotiate annual funding agreements with

tribes for programs administered by the Department other than through

BIA that are otherwise available to Indian tribes. Annual funding

agreements may also include programs from non-BIA bureaus that have a

special geographic, historic or cultural significance to the

participating tribe. (5) Tribes may retrocede all or a portion of the

programs. (6) For construction projects, the parties may negotiate for

inclusion in AFAs specific provisions of the Office of Federal

Procurement and Policy Act and Federal Acquisition Regulations. If not

included, then such provisions do not apply. (7) Not later than 90 days

before the effective date of the agreements, the agreements are to be

sent to the Congress and to potentially affected tribes. (8) Funding

agreements shall provide for advance payments to the tribes of amounts

equal to what the tribe would be eligible to receive under contracts

and grants under this Act. This is to include direct program and

contract support costs in addition to any funds that are specifically

or functionally related to the provision of benefits and services by

the Secretary to the tribe or its members without regard to the

organizational level within the Department where such functions are

provided. (9) Except as otherwise provided by law, the Secretary shall

interpret laws and regulations in a manner that will facilitate the

inclusion of programs and the implementation of the agreements. (10)

The Secretary has 60 days from the receipt of a tribal request for a

waiver of Departmental regulations in which to approve or deny such a

request; denial can only be based upon a finding that such a waiver is

prohibited by federal law. (11) An annual report is to be submitted to

the Congress regarding, among other things, the identification of the

costs and benefits of Self-Governance and the independent views of the

participating tribes. The Secretary is to publish in the Federal

Register, after consultation with the tribes, a list of, and

programmatic targets for, non-BIA programs eligible for inclusion in

AFA's. (12) Nothing in the Act shall be construed to limit or reduce in

any way the services, contracts or funds that any other Indian tribes

or tribal organizations are eligible to receive under any applicable

federal law or diminish the Secretary's trust responsibility to Indian

tribes, individual Indian or Indians with trust allotments.

The Act also authorized the formation of a negotiated rulemaking

committee if so requested by a majority of the Indian tribes with Self-

Governance agreements. Such a request was made to the Department of the

Interior and a rule making committee was formed. Pursuant to section

407 of the Act, membership was restricted to federal and tribal

government representatives, with a majority of the tribal members

representing tribes with agreements under the Act. Eleven tribal

representatives joined the committee. Seven tribal representatives were

from tribes with Self-Governance agreements and 4 were from tribes that

were not in Self-Governance. Formation of the rulemaking committee was

announced in the Federal Register on February 15, 1995.

The first meeting of the Joint Tribal/Federal Self-Governance

Negotiated Rule Making Committee was held in Washington, DC on May 18,

1995. A total of 12 meetings of the full committee were held in

different locations throughout the country. The last meeting was held

in Washington, DC on May 15 and 16, 1997. There were numerous workgroup

meetings and teleconferences during this period that were used to

develop draft material and exchange information in support of the full

committee meetings.

At the first meeting of the Committee, protocols were developed.

The main provisions of the protocols were: (1) The Committee meetings

were open, and minutes kept. The Federal Advisory Committee Act did not

apply pursuant to the Unfunded Mandates Reform Act of 1995. (2) A

quorum consisted of 8 members, including 7 tribal members and one

federal member. The tribal and federal representatives each selected

co-chairs for the Committee and an alternate. (3) The Committee

operated by consensus of the federal and tribal members and formed five

working groups to address specific issues and make recommendations to

the Committee. (4) The intended product of the negotiations is proposed

regulations developed by the Committee on behalf of the Secretary and

tribal representatives. The Secretary agreed to use the preliminary

report and the proposed regulations, developed by the Committee, as the

basis for the Notice of Proposed Rulemaking. (5) The Committee will

review all comments received from the notice of the Proposed Rulemaking

and submit a final report with recommendations to the Secretary for

promulgation of a final rule. Any modifications that the Secretary

proposes prior to the final rule shall be provided to the Committee

with notice and an opportunity to comment. (6) The Federal Mediation

and Conciliation Services was used to facilitate meetings.

At the conclusion of the May 15 and 16, 1997 negotiation session,

there were a number of provisions on which no agreement could be

reached.

Key Areas of Disagreement

Tribal and federal negotiators did not reach consensus on the

following issues, the federal and tribal suggested language for each

area of disagreement are presented below, in order, by subpart and

section, where appropriate. In addition to comments on the proposed

rule, we are also requesting comments on each of the areas of

disagreement.

General Issues

Tribal view: The fundamental disagreement between the federal

representatives and the tribal representatives goes to the heart of the

Tribal Self-Governance Act of 1994

[[Page 7204]]

(Title IV) (Pub. L. 103-413). The tribal representatives emphasized the

importance of the compact as a vehicle for government-to-government

relations and the funding agreements as a vehicle for the transfer of

funds.

The tribal representatives also point to the groundwork that has

been established under Title I of Pub. L. 93-638 and the regulations

published pursuant thereto. Self-Governance is the next logical

sequence in the era of self-determination policy. Hence, only steps

forward, only progressive policies, only those regulations which went

beyond Title I and advanced tribal empowerment over federal dominance

were advocated by the tribal representatives. It is thus the tribal

view that pursuant to these fundamental tenets and principles,

notwithstanding any language to the contrary in the proposed

regulations, a tribe assuming responsibility for any program

contractible under title I is entitled to all the rights that attach to

a program of the Bureau of Indian Affairs (BIA) under these

regulations.

The tribal representatives viewed the inclusion of many of the non-

BIA programs as mandatory and sought to negotiate the parameters of the

mandate. The Act provides the tribes with flexibility; the empowerment

to redesign programs and prioritize spending themselves; the

opportunity to get out from under the dominance of federal agencies;

and transferring the funds that support excessive federal oversight,

reporting and decision-making to the local tribal level.

Federal view: The federal team agrees that government-to-government

compacts and annual funding agreements are important within the context

of the Act. The federal views as to the differences between compacts

and annual funding agreements and the differences between programs

administered by BIA and the other departmental bureaus are set forth in

greater detail elsewhere in this Preamble. As a general matter, where

the program involved entails a tribe administering its own affairs, the

Department has sought to ensure that the tribe does have the control

and authority needed to govern itself and its members. However, where

the program instead involves programs administered for the Nation as a

whole, where it is not a matter of a tribe governing itself and its

members, then different standards apply under the law and in the

regulatory proposals that the federal team has made.

The federal team also agrees that self-governance is ``the next

logical sequence in the era of self-determination policy.'' However,

tribal participation in a non-BIA program which is not administered for

the benefit of Indians does not necessarily raise issues of either

self-determination or self-governance. Such programs instead entail a

cooperative spirit of working together with the local communities in

the administration of programs designed for the benefit of the Nation

as a whole.

BIA/Non-BIA References

Tribal view: A fundamental problem developed throughout the

negotiation process, which culminated in the delineation of Department

of the Interior programs into three distinct categories: (1) Bureau of

Indian Affairs programs; (2) non-Bureau of Indian Affairs programs

available under Title I of Pub. L. 93-638; and (3) non-Bureau of Indian

of Affairs programs not available under Title I of Pub. L. 93-638. The

statute mandates that all tribal rights acquired under these

regulations with regard to BIA programs are equally applicable to non-

BIA programs when those non-BIA programs could have been contracted

under Title I of Pub. L. 93-638.

Federal view: The Department has treated programs administered by

BIA differently from both non-BIA programs eligible for contracting

under Pub. L. 93-638 and non-BIA programs of a special geographic,

historic or cultural significance to a self-governance tribe because

the law so provides. Unlike for BIA programs under subsection

403(b)(1), (25 U.S.C. 458cc(b)(1)) subsections 403(b)(2) and (3) (25

U.S.C. 458cc(b)(2) and (3)) of the Tribal Self-Governance Act of 1994

authorize the Department to negotiate for terms and conditions for non-

BIA programs eligible for contracting under Pub. L. 93-638, as well as

requiring approval of the Department before their reallocation,

consolidation and redesign. Section 403(c), (25 U.S.C. 458cc(c))

affords the Secretary discretion to include other programs which are of

special historical, cultural or geographic significance to a tribe in

annual funding agreements. The federal team's proposals follow this

statutory framework.

Annual Funding Agreements

Tribal view: Section 1000.83 under Subpart E (Annual Funding

Agreements for BIA Programs) of the proposed regulations states that:

At the option of the tribe/consortium, and subject to the

availability of Congressional appropriations, a tribe/consortium may

negotiate an AFA with a term that exceeds one year in accordance

with section 105(c)(1) of Title I of Pub. L. 93-638. [Emphasis

added.]

The terms ``agreement,'' ``funding agreement,'' and ``annual

funding agreement'' are used interchangeably throughout the Tribal

Self-Governance Act itself. During the Self-Governance rulemaking

negotiations process, the term ``Annual Funding Agreement (AFA)'' was

used in many of the initial draft documents prior to the drafting

Sec. 1000.83. Consistent with Sec. 1000.83, the term ``Funding

Agreement'' should replace ``Annual Funding Agreement'' to reflect the

intent of this Subpart.

As outlined in section 1000.83, funding amounts which may be

included in a Tribe's agreement are clearly subject to annual

appropriation levels. However, the ``funding agreement'' is a

negotiated document which may also include other terms and conditions

relative to the transfer and assumption of BIA programs to a tribe/

consortium. The tribal representatives contend that the proposed

consistent use of this term provides clarification to this definition.

Federal view: The Tribal Self-Governance Act of 1994 is explicit in

requiring the Secretary to ``to negotiate and enter into an annual

written funding agreement,'' (Pub. L. 103-413, 25 U.S.C. 458 cc (a)).

The federal team has used this statutory language throughout the entire

regulation; however, it has made an exception in section 1000.83 which

applies only to BIA. The legislative history supports the federal

position:

The Committee intends for the Secretary of the Interior to enter

into government-to-government negotiations with a participating

tribal government on an annual basis for the purpose of establishing

annual written funding agreements for periods. S. Rpt. No. 205, 103d

Cong., 1st Sess. 6 (1993) at 8.

Moreover, most appropriations for the non-BIA bureaus are annual in

nature and do not permit multi-year terms in advance of future

appropriations. Accordingly, whenever the term ``funding agreement'' is

mentioned in the Tribal Self-Governance Act and also in this

regulation, the term ``annual'' will always be applied.

Central Office Issue

Tribal view: The Tribal Self-Governance Act of 1994 is clear that

``central office'' funds are to be included in funding Agreements in

sections 403 (b)(1), 405 (b)(5) and 405 (d), (25 U.S.C. 458cc(b)(l);

458ee(b)(5) and (d). Congress was especially clear in emphasizing the

importance of the inclusion of Central Office funds:

The bill language makes plain the Committee's intention that all

BIA central office funds are to be negotiable and that tribal shares

should be developed as a

[[Page 7205]]

percentage of the function transferred. If the Department of the

Interior does not take positive action to fully implement this

commitment to Self-Governance Tribes, the Committee will be

compelled to consider mandating specific tribal share negotiation

requirements for BIA central office. While the inflexibility of a

statutory approach may well be less than desirable, the Department

of the Interior's delay on this issue can no longer be ignored. The

Committee strongly urges the Department of the Interior to

immediately implement the commitment it has made to these Tribes and

to the Committee. S. Rpt. No. 205, 103d Cong., 1st Sess. 6 (1993) at

10.

It is the Committee's firm intent that BIA Central Office funds

and resources be included in the tribe-by-tribe negotiations for

tribal shares. The Committee is partially distressed by the

Department of the Interior's recent policy reversal regarding their

intent to engage in serious negotiations on tribal shares of

programs, services, activities, and functions controlled by BIA

Central Office. This decision is in clear violation of the spirit

and intent of Tribal Self-Governance. The committee strongly urges

the Department to reexamine this policy reversal and pursue

negotiations of tribal shares of programs, services, activities, and

functions controlled by BIA Central Office. Should the Department

fail to take action, the Committee will consider a legislative

solution to ensure that tribes in Tribal Self-Governance receive a

fair share of the programs, services, activities, and functions in

the BIA Central Office accounts. H. R. Rep. No. 653, 103d Cong., 2nd

Sess. 7 (1994) at 11.

The Committee also is troubled by the continuing refusal of the

Department of the Interior for the past four years to negotiate, on

a line-by line basis with Indian tribes participating in Tribal

Self-Governance for the tribal shares of BIA Central office funds

and resources despite clear directives to do so from various

Congressional Committees. This bill language makes clear that all

BIA Central office funds are to be negotiated and that tribal shares

should be developed as a percentage of the function transferred. The

language in the bill ``all funds specifically or functionally

related'' means all funds appropriated or administered * * * The

Committee intends any funds that are specifically or functionally

related to the delivery of services or benefits to the tribe and its

members, regardless of the source of the funds or the location in

the Department, shall be available for self-governance compacting.

H. R. Rep. No. 653, 103d Cong., 2nd Sess. 7 (1994) at 12.

Hence, the authorizing Committees intended that the permanent

policy of the United States Department of the Interior should be to

include central office shares in tribal funding agreements. While

appropriation committees may set policies on an annual basis, they are

generally limited to directives for the fiscal year only. The clear

intent of Congress was to include central office shares on a permanent

basis and the regulations must follow the statute and the Congressional

intent.

Federal view: The sections of these proposed regulations that deal

with central office tribal shares are 1000.88 and 1000.94 and are

adopted by the Rulemaking Committee prior to enactment of the FY 1997

Department of the Interior and Related Agencies Appropriations Act

(Pub. L. 104-20) which prohibited the inclusion of central office

tribal shares in annual funding agreements. In light of this

prohibition, the Department specifically requests comments on whether

sections 1000.88 and 1000.94 of the proposed regulation should be

amended to explicitly provide that central office funding may not be

available as a result of such appropriations provisions.

Definitions

Inherently Federal Functions

Tribal view: The committee was not able to reach consensus on a

definition for ``inherently federal functions.'' The definition of

inherently federal functions has been an issue of great controversy

during the rulemaking process. It is a critical concept because it

defines a term found in Pub. L. 103-413, sec. 403 (25 U.S.C. 458cc(k))

by identifying those functions and activities of programs that may not

be included in a funding agreement. The Solicitor's Memorandum of May

17, 1996, entitled ``Inherently Federal Functions under the Tribal

Self-Governance Act of 1994'' is one with which the tribal

representatives substantially agrees. The tribal representatives

propose citing the Solicitor's Memorandum as guidance in the

definitions as follows:

Inherently federal functions means those functions that must be

performed by federal officials, and only federal officials, as

defined in accordance with general guidelines of the May 17, 1996

Department of the Interior Solicitor's Memorandum.

As an alternative, the tribal representatives proposed the

following definition, which is consistent with the Solicitor's

Memorandum and substantially similar to the definition developed by the

Tribal Work Group on Tribal Shares formed to review BIA work on

determining tribal shares for all programs, services, functions and

activities of the BIA:

Inherently federal functions means of all functions provided by

a federal agency in carrying out its duties, inherently federal

functions are those which by law (U.S. Constitution, treaties,

federal statutes, and federal court decisions) can only be performed

by federal employees, and which the agency cannot delegate to tribes

or tribal organizations for performance because it is

constitutionally or statutorily barred from doing so.

A well understood definition that narrowly construes this concept

as clearly derived from the Constitution and statutes, while

recognizing that tribes as self-governing entities stand in a different

relationship to the United States than do mere grantees or contractors,

is essential to successful implementation of the Tribal Self Governance

Act of 1994.

Federal view: The federal team agrees that the concept of

inherently federal functions is important. The federal team believes

that ``inherently federal'' is one of several factors that must be

considered during the negotiation of an AFA. Pub. L. 103-413, section

403 (k) (25 U.S.C. Section 458cc(k)) provides that the Tribal Self-

Governance Act of 1994 does not ``* * * authorize the Secretary to

enter into any agreement under Pub. L. 103-413, sections 403(b)(2) and

403(c)(1), (25 U.S.C. sections 458cc(b)(2) and 458ee(c)(1)) with

respect to functions that are inherently federal or where the statute

establishing the existing program does not authorize the type of

participation sought by the tribe. * * *'' Thus, the type of

participation sought by the tribe is equally a factor that must be

considered in negotiations.

The federal team further believes that the concept of ``inherently

federal'' will not apply to entire programs which may be eligible for

negotiation, but instead to functions or activities within those

programs required under federal law to be carried out by federal

officials.

As recognized in the above mentioned opinion of the Solicitor and

because the scope of programs available for inclusion in an AFA is

dependent upon the underlying programmatic statutes and annual

appropriations, such decisions are best made on a case-by-case basis

during the government-to-government negotiation process. In this

manner, all relevant factors can be considered by the parties.

Subpart E--Annual Funding Agreements for Bureau of Indian Affairs

Programs

Suspension, Withhold or Delay Payment Under Annual Funding Agreements

Tribal view: Under Title I of Pub. L. 93-638 as amended, the

Secretary is specifically given authority to withhold, suspend or delay

payments (25 U.S.C. section 450j-1(l)). Such authority implies

evaluations and oversight of tribal actions. However, a close review of

Title IV the Tribal Self-Governance Act of 1994 (Pub. L. 103-413)

reveals that Title IV provides no authority for the Secretary with the

authority to suspend, withhold or delay payment

[[Page 7206]]

under an AFA. Congress determined that the funds would be better spent

for services, rather than funding an additional federal compliance

bureaucracy. The tribes recognize that some funds are appropriated by

Congress with explicit statutory limitations regarding their

expenditure and that tribes are required to meet these explicit

limitations.

The tribal representatives propose this question and answer:

Does the Secretary or a designated representative have authority to

suspend, withhold, or delay payment under an AFA?

No, unless the funds subject to suspension, withholding or delay

are subject to a statutory limitation on their expenditure and the

tribe/consortium has agreed to the terms under which such an action

may be imposed. The Secretary must notify the affected tribe/

consortium of the determination so that the tribe/consortium may

appeal the determination. The Secretary's determination will be

stayed pending the appeal.

Federal view: The federal team believes that there should be

guidance regarding the conditions under which the federal government

may enforce compliance with annual funding agreements by withholding,

suspending or delaying payments. Pub. L. 93-638 statutory and

regulatory language has a similar provision in 25 U.S.C. section 450j-

1(l) and 25 CFR 900, as proposed below in the federal question and

answer. Proposed section 1000.79 provides that AFAs ``are legally

binding and mutually enforceable written agreements. * * *'' The

federal team believes that in order for agreements to be binding and

enforceable, the federal government needs some enforcement mechanism to

suspend, withhold or delay payments when there is a determination that

the tribe has not complied with the AFA. The federal team believes that

this will have no serious effect on tribes because tribes would have an

automatic emergency appeal of this governmental action. This

enforcement mechanism will not require any additional federal

bureaucracy. It is not anticipated that BIA will have staff for or

evaluations for oversight and compliance purposes. This proposal

addresses those times when a tribe has substantially failed to carry

out the AFA without good cause. The federal proposal is as follows:

Does the Secretary or a designated representative have authority to

suspend, withhold, or delay payment under an AFA?

No, unless otherwise provided in this part or when the Secretary

makes a determination that the tribe/consortium has failed to

substantially carry out the AFA without good cause. The Secretary

must notify the affected tribe/consortium of the determination so

that the tribe/consortium may appeal the determination. The

Secretary's determination will be stayed pending the appeal.

Subpart F--Non-BIA Annual Funding Agreement

Tribal view: The tribal representatives disagree with the federal

view of Pub. L. 103-413 section 403(b)(2), (25 U.S.C. 458cc(b)(2))

which is set forth below:

(b) Contents--Each funding agreement shall--* * *

(2) subject to such terms as may be negotiated, authorize the

tribe to plan, conduct, consolidate, and administer programs,

services, functions, and activities, or portions thereof,

administered by the Department of the Interior, other than through

the Bureau of Indian Affairs, that are otherwise available to Indian

tribes or Indians, as identified in section 405(c) [25 U.S.C.

458ee(c)] of this title, except that nothing in this subsection may

be construed to provide any tribe with a preference with respect to

the opportunity of the tribe to administer programs, services,

functions, and activities, or portions thereof, unless such

preference is otherwise provided for by law; [Emphasis added.]

This provision mandates that certain non-BIA programs must be

included in tribal Self-Governance compacts and funding agreements upon

the request of a tribe. The word ``shall,'' which appears at the

beginning of this section, is an express, clear and specific statement

by the Congress that there are some non-BIA programs in the Interior

Department which are mandatorily compactable under the Tribal Self-

Governance Act of 1994; specifically, those programs which are deemed

to be ``otherwise available'' to tribes. The tribal representatives

acknowledge that the section limits these matters to terms which are

subject to negotiation--in contrast, the federal representatives viewed

all non-BIA Interior programs, not eligible for contracting under Pub.

L. 93-638, and can only be included in the Self-Governance program upon

the approval of the Department.

The tribal representatives noted that Pub. L. 103-413 section

403(c), (25 U.S.C. 458cc(c)) includes the discretionary programs for

non-BIA agencies, whereas Pub. L. 103-413 section 403(b)(2), (25 U.S.C.

458cc(b)(2)) clearly is meant to provide for the mandatory non-BIA

programs. Congress provided two separate sections of the Tribal Self-

Governance Act of 1994 for a reason and the mandatory versus

discretionary dichotomy is both logical and consistent with the plain

language of that Act. Congress clearly intended that the Department err

on the side of including Interior Department programs in tribal Self-

Governance agreements. Congress created a presumption in favor of

inclusion under the ``facilitation clause'' of Pub. L. 103-413 section

403(i), (25 U.S.C. 458cc(i)) which requires the Secretary to interpret

laws and regulations in a manner that will facilitate the inclusion of

programs and the implementation of agreements, but the Congress left it

to the Self-Governance Negotiated Rulemaking Committee to determine

which types of programs would be mandatory and which would be

discretionary with the understanding that both were presumptively

inclusive. Indeed, in discussing these non-BIA provisions, the House

Report states:

The Committee intends this provision in conjunction with the

rest of the Act, to ensure that any federal activity carried out by

the Secretary within the exterior boundaries of the reservation

shall be presumptively eligible for inclusion in the Self-Governance

funding agreement. H. Rpt. No. 653, 103d Cong., 2nd Sess. 7 (1994)

at 10.

The tribal representatives propose the following:

Are there non-BIA programs for which the Secretary must negotiate

for inclusion in an Annual Funding Agreement subject to such terms

as the parties may negotiate?

Subject to such terms as may be negotiated, the Secretary shall

negotiate and enter into an Annual Funding Agreement authorizing the

tribe to plan, conduct, consolidate, and administer programs,

services, functions, and activities, or portions thereof,

administered by the Department of the Interior, that are otherwise

available to Indian tribes or Indians, as identified in section

405(c), to the extent authorized and not otherwise prohibited by

law.

What programs are included under section 403(b)(2) of the Act?

(a) Those programs, or portions thereof, eligible for

contracting under Pub. L. 93-638; and

(b) Other programs in a non-BIA bureau of the Department that

are ``otherwise available to Indian tribes and Indians'' to the

extent authorized by this section of the Act, including other

programs that the Secretary is not prohibited by law from awarding

by contract, grant or cooperative agreement, and for competitive

programs for which the tribe has received the award.

There is a clear difference between the types of programs

contemplated in Pub. L. 93-638 [Title I] and those contemplated in 103-

413 [Title IV]. Pub. L. 93-638 only encompasses programs for the

``benefit of Indians because of their status as Indians'' whereas Pub.

L. 100-472 and Pub. L. 103-413 encompass all programs ``otherwise

available to Indian tribes or Indians''. This standard was created in

Pub. L. 100-472 in 1988 and its meaning for Pub. L. 103-413 is

delineated in report language:

[[Page 7207]]

The Committee wishes to make clear to the Department of the

Interior, the Committee's intention with regard to what funds are to

be negotiable. At a minimum, the Secretary must provide the money

that a Tribe would have been eligible to receive under Self-

Determination Act contracts and grants. In addition to this, the

Secretary must provide all funds specifically or functionally

related to the Department of the Interior's provision of services

and benefits to the Tribe and its members. This means the Department

of the Interior must include in a Tribe's Self-Governance Funding

Agreement all those funds and resources sought by the Tribe which

the Federal government would have used in any way to carry out its

programs and operations if it had provided services and benefits,

either directly or through contracts, grants or other agreements, to

the Tribe or its members in lieu of a Self-Governance agreement.

This would include all funds and resources regardless of the

geographic location or administrative level at which the Department

of the Interior would have expended funds in lieu of a Self-

Governance agreement. The only funds the Department is legally

permitted to hold back from negotiation are those which are

expressly excluded by statute or those funds necessary to carry out

certain limited functions which by statute may be performed only by

a Federal official. S. Rpt. No. 205, 103rd Cong., 1st Sess. 6 1996

at 9. [Emphasis added.]

Hence, the Congress meant Title IV Pub. L. 103-413 self-governance

agreements to include Title I Pub. L. 93-638 programs in addition to

other funds. The best support for this position is provided in the

Tribal Self Governance Act of 1994 itself under section 403(g)(3), (25

U.S.C. 458cc(g)(3)), which applies to both BIA and non-BIA agreements:

(3) Subject to paragraph (4) of this subsection and paragraphs

(1) through (3) of subsection (b), the Secretary shall provide funds

to the tribe under an agreement under this title for programs,

services, functions, and activities, or portions thereof, in an

amount equal to the amount that the tribe would have been eligible

to receive under contracts and grants under this Act, including

amounts for direct program and contract support costs and, in

addition, any funds that are specifically or functionally related to

the provision by the Secretary of services and benefits to the tribe

or its members, without regard to the organization level within the

Department where such functions are carried out. [Emphasis added.]

The tribal representatives propose the following:

Under Pub. L. 103-413 section 403(b)(2), (25 U.S.C. 458cc(b)(2))

when must programs be awarded non-competitively?

(a) Pub. L. 93-638 Programs.

Programs eligible for contracting under Title I of Pub. L. 93-

638 must be awarded non-competitively.

(b) Non-Pub. L. 93-638 Programs.

Other programs otherwise available to Indian tribes or Indians

must be awarded non-competitively, except when a statute requires a

competitive process.

The tribal representatives are seeking in this regulation to

require the Department to treat Pub. L. 93-638 programs and non-Pub. L.

93-638 programs similarly. Without this regulation, the Department

would be allowed to remove certain programs from eligibility for all

tribes and arbitrarily establish its own competitive process.

Under Pub. L. 103-413 section 403(b), (2), (25 U.S.C. 458cc(b)(2)),

the non-BIA bureaus have little discretion as to what funds get

included in agreements, and no discretion as far as establishing

competitive processes, unless allowed to do so by the Congress. The

House Report states:

The language in the bill ``all funds specifically or

functionally related'' means all funds appropriated or administered,

not just by BIA, but also every office or agency or bureau with the

Department of the Interior, including, but not limited to, the

Bureau of Reclamation, the U.S. Fish and Wildlife Service, the

Office of Policy Management and Budget, the National Park Service,

the Bureau of Land Management, the Minerals Managements Service, the

U.S. Geological Survey, the Office of Surface Mining and

Enforcement, and the Bureau of Mines. The Committee intends any

funds that are specifically or functionally related to the delivery

of services or benefits to the tribe and its members, regardless of

the source of the funds or the location in the Department, shall be

available for self-governance compacting. H.R. Rep. No. 653, 103d.

Cong., 2nd Sess 7 (1994) at 12.

The Senate Report, using similar language to that reprinted above,

added:

Neither the source of the appropriated funds, nor the location

in which it would have been otherwise spent, may limit the

negotiability of these funds. S. Rep. No. 205, 103d Cong., 1st Sess

6 (1993) at 10-11.

Hence, the negotiability of funds from all divisions, bureaus and

offices within the Interior Department was clearly intended by the

Congress. Nowhere in the Act or in the legislative history did the

Congress indicate that the Department would be allowed to make funds

competitive on its own or arbitrarily take funds off the negotiating

table. Each division of the Interior Department is required to make a

determination, through negotiations, of the appropriate allocation of

funds to a particular tribe, and once that allocation is determined,

the Department is to provide that funding in a Self-Governance

agreement.

The funds to be provided for non-BIA programs should not be

constricted by the programmatic requirements of the non-BIA bureaus.

Thus the tribal representatives propose the following:

How is funding for non-BIA programs determined?

The amount of funding is determined pursuant to section 403(g),

(25 U.S.C. 458cc(g)) and applicable provisions of law, regulation,

or Office of Management and Budget (OMB) Circulars.

The Tribal Self-Governance Act of 1994 makes no distinction between

the method of determining funding for BIA and non-BIA programs. Section

403(g), (25 U.S.C. 458cc(g)) provides that tribes are to receive an

amount equal to the amount the tribe would have received under ``Pub.

L. 93-638'' contracts and grants, plus contract support, plus funds

specifically and functionally related to the provision of services by

the Secretary without regard to the level within the Department where

such services are carried out. Section 403(g), (25 U.S.C. 458cc(g))

applies across the board to BIA and non-BIA bureaus. Hence, the tribal

proposed regulation merely requires that the Department follow the law

with regard to making payments to the tribes under the Tribal Self-

Governance Act of 1994.

Federal view: The federal team notes that when Congress established

a permanent Self-Governance program to replace the demonstration phase,

it clearly distinguished between the scope of and treatment for

programs administered by the Bureau of Indian Affairs under Pub. L.

103-413 403(b)(1), (25 U.S.C. 458cc(b)(1)), and programs ``otherwise

available to Indian tribes or Indians'' which are administered by the

other Departmental bureaus. This distinction is consistent with the

objective of the Tribal Self-Governance Act of 1994 for Self-Governance

tribes to have the opportunity to elect how and to what extent, they

intend to administer programs that have been historically run for their

benefit, ``[T]he United States recognizes a special government-to-

government relationship with Indian tribes, including the right of the

tribes to self-governance, as reflected in the Constitution, treaties,

federal statutes, and the course of dealings of the United States with

Indian tribes. * * *'' section 202(2) of the Tribal Self-Governance Act

of 1994, (25 U.S.C. 458aa) (emphasis added).

Much of the difficulty in interpreting the law and how it applies

to the non-BIA bureaus is the lack of agreement on the meaning of the

term ``otherwise available to Indian tribes or Indians.''

The legislative history of the Tribal Self-Governance Act of 1994

supports the federal team's view that ``otherwise available to''

programs under section 403(b)(2) is essentially a different way of

describing those programs which are eligible for contracting under Pub.

L.

[[Page 7208]]

93-638. Significantly in this regard, the Tribal Self-Governance Act

continued the scope of programs that were eligible for inclusion in

AFAs under the Self-Governance Demonstration Program which stated,

``shall authorize the tribe to plan, conduct, consolidate, and

administer programs, services and functions of the Department of the

Interior * * * that are otherwise available to Indian tribes or

Indians. * * *'' [Title III of Pub. L. 93-638, as added by Pub. L. 100-

472, Title II, section 209, 25 U.S.C. 450f (note)].

The Congressional Committee reports give no indication that

Congress had expanded the scope of the Program to other than programs

for Indian tribes and individual Indians:

Self-Governance promises an orderly transition from the federal

domination of programs and services benefitting Indian tribes to

tribal authority and control over those programs and services. (H.R.

Report No. 653, 103d Congress, 2nd Session, at 7 (1994)).

Since 1988, Interior has conducted Self-Governance under

demonstration authority. The Self-Governance Demonstration Project

has had measurable success. It has achieved the goals it set out to

achieve--examining the benefits of allowing tribes to assume more

control and responsibility over programs, services, functions and

activities provided to their members previously furnished by the

federal agency administering these programs, services, functions and

activities. (S. Rpt. No. 205 at 5, 103d Cong., 1st Sess. (1993)).

The funds transferred to Self-Governance tribes should include

only those fun[d]s that otherwise would have been spent by the

Department of the Interior, either directly or indirectly for the

benefit of these tribes. Therefore, this bill should have no impact

on federal outlays if it is properly administered in conformity with

the intent of the Congress. (S. Rpt. No. 205 at 14, 103d Cong., 1st

Sess. (1993)).

Thus, the federal team believes that programs which ``benefit''

tribes are those eligible for contracting under Pub. L. 93-638. These

statements of Congressional intent are consistent with both the concept

of tribes choosing how to administer programs previously administered

by the Department for their benefit, and the federal team's

interpretation of programs eligible for contracting under Pub. L. 103-

413 section 403(b)(2), (25 U.S.C. 458cc(b)(2)).

The exception clause of Pub. L. 103-413 (25 U.S.C. 458cc(b)(2))

section 403(b)(2), i.e., ``* * * except that nothing in this subsection

may be construed to provide any tribe with a preference with respect to

the opportunity of the tribe to administer programs, services,

functions, and activities, or portions thereof, unless such preference

is otherwise provided by law * * *,'' also supports this

interpretation. This clause effectively precludes the inclusion of

programs in annual funding agreements for which no exemption from the

competitive contracting rules apply. Programs eligible for Pub. L. 93-

638 contracting are both exempt from competitive contracting and are

the only programs intended specifically for Indian tribes and their

members. Only Pub. L. 93-638 programs involve tribes assuming ``more

control and responsibility over programs'' provided to their members

and previously furnished by one or more of the non-BIA bureaus.

Congress further distinguished between BIA programs and programs

administered by other bureaus in the Department in stipulating that

annual funding agreements negotiated under Pub. L. 93-638 section

403(b)(2), (25 U.S.C. 458cc(b)(2)) are subject to such terms as may be

negotiated. Similarly, under Pub. L. 93-638 section 403(b)(3), (25

U.S.C. 458cc(b)(3)), consolidation and redesign of only non-BIA

programs authorized by section 403(b)(2), (25 U.S.C. 458cc(b)(2)) are

subject to joint agreements between the parties. Congress authorized

annual funding agreements for additional programs of ``special

geographic, historical, or cultural significance'' to a Self-Governance

tribe under Pub. L. 103-413 section 403(c), (25 U.S.C. 458cc(c)) on a

discretionary basis.

The federal representatives agree with the tribal representatives

that the Act was meant, primarily, to provide a means for tribes to

have an opportunity to assume the dominant role in administering

programs established for the benefit of Indians. The House and Senate

reports to which the tribal representatives refer, however, do not

support the view that non-BIA, ``non-Indian'' programs were meant to be

treated the same as either BIA or non-BIA programs eligible under Pub.

L. 93-638. Nor do these reports even suggest that Congress intended

Title III of Pub. L. 100-472 and Title IV of Pub. L. 103-413 programs

``otherwise available'' to Indians to extend to non-BIA, non-Indian

programs. Rather, such funds must be used in accordance with the

specific programmatic and appropriations requirements imposed by

Congress. Consistent with the federal position, Pub. L. 103-413 section

403(b)(3), (25 U.S.C. 458cc(b)(3)) permits the reallocation of funds

for non-BIA programs only in accordance with a joint agreement of the

tribe and the Department in order to ensure that funds are not used for

purposes different from those provided in the relevant appropriations

act.

The federal team also does not agree that non-BIA bureaus have

little discretion as to the funding levels to be included in AFAs for

programs not eligible for contracting under Pub. L. 93-638. Pub. L.

103-413 section 403(g)(3), (25 U.S.C. 458cc(g)(3)) of the Act directs

the Secretary to include funds ``in an amount equal to the amount that

the tribe would have been eligible to receive under contracts and

grants under this Act * * *.'' The reference to the ``Act'' in this

quotation is to Pub. L. 93-638. This provision also supports the

federal view that programs ``otherwise available to Indians'' is simply

another way of describing programs eligible for contracting under Pub.

L. 93-638, i.e., those programs established for the benefit of Indians

because of their status as Indians, since it directs funding only for

such programs. Thus, for non-Public Law 93-638 programs, the self-

governance statute does not direct the inclusion of funds for such

programs. The federal proposals, below, require that funding for such

programs instead be at levels that the relevant bureau would have spent

to administer the program at the level of activity recognized by the

AFA. This balances the needs of the tribe for adequate funds to

administer programs under AFA's, with the requirements of the Secretary

and the bureaus to determine how to allocate their financial resources

for non-Indian programs to address national, regional, and local

priorities.

The federal proposal is the following:

Are there non-BIA programs for which the Secretary must negotiate

for inclusion in an Annual Funding Agreement subject to such terms

as the parties may negotiate?

Yes, those programs, or portions thereof, that are eligible for

contracting under Pub. L. 93-638.

What programs are included under Pub. L. 103-413, section 403(b),

(2) (25 U.S.C. 103-413)?

Those programs, or portions thereof, that are eligible for

contracting under Pub. L. 93-638.

Under Pub. L. 103-413, section 403(b), (2), (25 U.S.C. 103-413)

when must programs be awarded non-competitively?

They must be awarded non-competitively for programs eligible for

contracts under Pub. L. 93-638.

The annual listing of programs, functions, and activities or

portions thereof that are eligible for inclusion in AFAs required by

Pub. L. 103-413 section 405(c), (25 U.S.C. 458ee(c)) are of two types.

First are those programs eligible for contracting under Pub. L. 103-

413, section 403(b), (2), (25 U.S.C. 458cc(b)(2)) that are available to

Indians

[[Page 7209]]

or Indian tribes for which there is a contracting preference provided

by law. Second are those programs authorized by 403(c) (25 U.S.C.

458cc(c)) that may be included in AFAs that are of special geographic,

historical, or cultural significance to the Self-Governance tribe,

subject to such terms as may be mutually agreed upon. These programs

are listed as eligible for inclusion in AFAs at the discretion of the

Secretary. The annual listing required by section 405(c) (25 U.S.C.

458ee(c)) provides a framework for discussion with Self-Governance

tribes concerning what programs might be available for inclusion in

AFAs under section 403(b)(2), (25 U.S.C. 458cc(b)(2)), and section

403(c) (25 U.S.C. 458cc(c)).

Subpart G--Negotiation Process for Annual Funding Agreements

Self-Governance Compact

Tribal view: The tribal position is that Compacts are important

vehicles to reflect the government-to-government relationship between

tribes and the United States. This relationship by definition permits

variation among tribes. Additionally, individual tribes may desire to

emphasize specific aspects of the relationship that have particular

importance for such tribes. In interpreting what provisions permissibly

may be part of a Compact, it is important to consider the guiding

principles of Indian law as well as the Secretary's obligations

enunciated in the Tribal Self-Governance Act of 1994 as the basis for

inclusion.

25 U.S.C. section 458cc(I)(1) also provides that the Secretary is

to construe laws and regulations in a manner that favors inclusion of

programs in Self-Governance. In this context, it is not necessary to

find specific statutory authorization to justify adding appropriate

terms and conditions to Compacts. Compacts were created without

statutory authorization by the tribes and the Department in the

exercise of reasonable discretion to further the implementation of

Self-Governance. To the extent that the tribe's desired terms and

conditions for Compacts do not conflict with these regulations, when

promulgated, that same discretion that created Compacts should allow

such terms and conditions.

One area in which there should be no question is the inclusion of

any provision authorized by Pub. L. 104-109 which provides that any and

all provisions of Title I of Pub. L. 93-638 may be included in Self-

Governance agreements. It reads:

At the option of a participating tribe or tribes, any or all

provisions of part A of this subchapter shall be made part of an

agreement entered into under title III of this Act or this part. The

Secretary is obligated to include such provisions at the option of

the participating tribe or tribes. If such provision is incorporated

it shall have the same force and effect as if set out in full in

Title III or this part. Pub. L. 104-109

The term ``agreement'' as used in Title III of Pub. L. 104-109 and

Title IV of Pub. L. 104-413 means both compacts and funding agreements.

Congress was aware that both documents existed and, had it wished to

limit the application to funding agreements or only agreements for BIA

programs, it would have done so. In the same provision, Congress made

clear through the use of the terms ``shall,'' ``obligated,'' and

``option of the participating tribe'' that the Secretary has no

discretion to refuse to incorporate such provisions. Therefore, the

provisions of Title I can be incorporated into a compact applicable to

BIA programs and non-BIA programs.

The tribal proposal is the following:

Can a tribe negotiate other terms and conditions not contained in

the model compact?

Yes. The Secretary and a self-governance tribe/consortium may

negotiate additional terms relating to the government-to-government

relationship between the tribe(s) and the United States. A tribe/

consortium may include any term that may be included in a contract

and funding agreement under Title I in the model compact contained

in appendix A.

Federal view: The federal team acknowledges the significant role

played by the negotiated compacts during the Tribal Demonstration

Program. With no regulations in place, those compacts established the

rules pertaining to the particular BIA programs that were covered in

AFAs. The proposed regulations in subpart G recognize that the role of

compacts for the permanent program is somewhat different. Section

1000.151, for instance, provides that a ``self-governance compact is an

executed document which affirms the government-to-government

relationship between a self-governance tribe and the United States.''

It is important to remember that the Act does not explicitly authorize

or require the Secretary to enter into compacts, nor does it require

that a tribe have a compact in order to participate in the Self-

Governance Program. The Secretary lacks the authority from Congress

under this Act to enter into binding agreements of a perpetual term

applicable to all programs administered by the Department.

The federal team distinguishes between compacts which set forth the

terms of the government-to-government relationship generally and AFAs

which detail the funding, terms and conditions pertaining to the

specific programs established by Congress and which are eligible to be

administered under the Tribal Self-Governance Act of 1994 by a tribe/

consortium. With the promulgation of regulations under the Act, the

federal team views compacts as serving primarily the policy function of

emphasizing the government-to-government relationship between the

United States and tribes. The federal team believes that the reference

in Pub. L. 104-109 to ``agreements'' is intended to refer to annual

funding agreements. The particular programs of the non-BIA bureaus are

performed under a number of different programmatic statutes and

appropriations provisions which vary substantially from the

administration of BIA programs. It is difficult, if not impossible, to

develop and apply rules applicable to all such programs. Rather, the

federal team believes that Congress intended that this is best left to

the individual AFAs. At the same time, by explicitly recognizing the

discretion of the Secretary in proposed section 1000.153 to include

additional terms in compacts not included in the Model Compact, the

regulations provide the Secretary with the flexibility to include

particular terms that address specific situations that may arise in the

future. Because of this the federal team does not believe any

additional language is required in proposed section 1000.153

The federal position is reflected in the proposed regulation at

section 1000.153.

Successor Annual Funding Agreements

Tribal view: Successor funding agreements are important to protect

against gaps in funding and to provide legal protections that may occur

from unintended breaks between agreements. For example, if the

Department and the tribe/consortium reach a point where a gap occurs

and no agreement is in place, the Federal Tort Claims Act may not

protect the tribe. Such gaps, whether caused by the inability to

negotiate new terms or a delay in processing funding agreements, are

also dangerous in numerous other areas ranging from the protection of

trust assets to law enforcement.

The Secretary has ample discretion, as demonstrated throughout

these regulations, to adopt successor funding agreements. There is

nothing in Title IV, Tribal Self-Governance Act of 1994, that would

prohibit the Secretary from utilizing successor funding agreements.

These agreements are, of course, subject

[[Page 7210]]

to appropriations and would not create any new funding obligations for

the Department. Successor agreements, which are equally applicable to

BIA and non-BIA programs, are clearly within the discretion of the

Secretary and serve important governmental purposes. As noted in

previous sections, the Secretary has an obligation to utilize

discretion to make Self-Governance effective and inclusive.

The tribal proposal is the following:

How are successor annual funding agreements completed?

At the conclusion of the negotiations of the successor AFA, the

tribe/consortium is responsible for submission of the proposed AFA

to the Secretary. If the successor AFA is submitted to the Secretary

no less than 105 days prior to its effective date, prior to 90 days

before the effective date of the AFA,

(a) the Annual Funding Agreement shall be executed by the

Secretary or proposed amendments delivered in writing to the tribe/

consortium; or

(b) the previous year's AFA shall, subject to appropriations, be

deemed to have been extended until a successor AFA is acted upon and

becomes effective when executed by the Secretary on the 90th day

prior to the proposed effective date.

Federal view: The federal team believes the following: (1) There is

no authorization in the Tribal Self-Governance Act of 1994 for an AFA

to be automatically extended; (2) the Department lacks the legal

authority to ``deem'' agreements to be extended; (3) such action in

advance of an appropriation would be considered a violation of the

Anti-Deficiency Act, 31 U.S.C. 1341; and (4) there is no legally

permissible means of dealing with the problem of the potential gap

caused by the 90 day Congressional review period. Accordingly, the

federal team has not proposed a question and answer for this issue.

Subpart H--Limitation and/or Reduction of Services, Contracts, and

Funds

Tribal view: Proposed regulations 1000.81 through 1000.88 implement

section 406(a) of the Tribal Self-Governance Act of 1994 (25 U.S.C.

458ff(a)), which provides:

Nothing in this title shall be construed to limit or reduce in

any way the services, contracts, or funds that any other Indian

tribe or tribal organization is eligible to receive under section

102 or any other applicable Federal law.

These provisions were designed to assure that funds transferred to

Self-Governance tribes/consortia do not have negative consequences for

non-self-governance tribes/consortia with respect to programs which

they were entitled to receive. The concept that another party may be

injured requires an examination of which programs tribes have a right

to expect under existing law. The proposed regulations as drafted apply

only to BIA programs and not to non-BIA programs. The regulations

should apply to non-BIA programs as well.

The crux of the issue, as reflected in a number of disputed

regulations, is whether any non-BIA programs are mandatory--programs

for which tribes/consortia have a right to the program in a funding

agreement. At least some non-BIA programs are ``mandatory'' programs,

through pre-existing language that predicates the Secretary's

requirement to include programs of special significance to Indians in

Self-Governance. The discretionary authority provided to the Secretary

to negotiate special terms and conditions in agreements for such

programs does not in the tribal view remove the ``mandatory'' inclusion

requirement as reflected by the Congressional use of the term ``shall''

rather than the term ``may.'' Pub. L. 103-413, section 403(b), 25

U.S.C. section 458cc(b).

The tribal representatives find the federal argument in this

subpart inconsistent with the federal position in subpart F for non-BIA

programs. The Federal team, without ever conceding in these regulations

that any of these programs may be available as a matter of right, view

that the individuals and tribes might suffer unfairly from the limits

on remedies under the provisions applicable to the BIA. The tribal

representatives believe that the federal argument is for rejecting

application of plain language of the statute to their programs.

Regardless of the bureau responsible for a program, an individual or

tribe with concerns that arise under this subpart should have the

opportunity to formally raise them and have them considered.

Federal view: The federal team acknowledges that the proposed

regulations concerning limitation and/or reduction of services,

contracts and awards apply only to agreements covering programs

administered by BIA. The proposed regulations implement section 406(a)

of Pub. L. 104-413 (25 U.S.C. 458ff(a)) which provides:

Nothing in this title shall be construed to limit or reduce in

any way the services, contracts, or funds that any other Indian

tribe or tribal organization is eligible to receive under section

102 or any other applicable federal law.

This provision applies on its face whenever another tribe or tribal

organization is ``eligible'' to receive funding, and not only when such

funding is mandatory.

The Department disagrees with the tribal proposal for several

reasons. First, it is not clear to what extent this provision will

impact programs of the non-BIA bureaus and the Department is uncertain

in what situations or how this issue is likely to arise. Until some

experience in this regard is gained, and because the non-BIA bureaus

will handle such issues on a case-by-case basis in the absence of

regulations, the Department has not supported issuing regulations which

are applicable to the non-BIA bureaus. The Department encourages

comments to be submitted on how this provision should be viewed in

relation to non-BIA programs which in many cases are funded quite

differently from those of BIA. In particular, can or should this

provision be construed to apply only to programs eligible for

contracting under Pub. L. 93-638? In some cases, multiple tribes or

tribal organizations could be eligible to carry out a ``nexus'' program

administered by a non-BIA bureau. In such cases, a literal reading of

section 406(a), (25 U.S.C. 458ff(a)) would imply that no AFA could be

entered for such programs since it reduces the amount of funding that

the other eligible tribes or tribal organizations could receive. Could

or should the other eligible tribes be able to ``waive'' any rights

they might have under this statutory provision?

Second, the federal team has concerns about whether the provisions

proposed for BIA programs are appropriate for the non-BIA bureaus.

Proposed regulation 1000.183 does not allow this issue to be raised

administratively by individual Indians who might be affected or

aggrieved by an AFA within the context of section 406(a) of Pub. L.

104-413 (25 U.S.C. 458ff(a)). Proposed regulation 1000.185 only permits

the issue to be raised at certain times, although an affected tribe or

tribal organization may not have actual knowledge that it has been

impacted by that AFA, or the limitation does not actually affect that

other tribe or organization until some later year. While the proposed

regulations would deny administrative appeals, it would appear that

aggrieved parties could still seek judicial review under section 110 of

Pub. L. 93-638 (25 U.S.C. 450m-1). In such cases, there would not be an

administrative record for review by the court. The federal team does

not support limiting the rights of aggrieved parties at the

administrative level for the programs that they administer. Moreover,

proposed regulation 1000.188 provides that ``shortfall funding,

supplemental funding, or other available'' resources would be used to

remedy these

[[Page 7211]]

situations in the current fiscal year. The non-BIA bureaus do not have

``shortfall'' funding; it is quite possible that they will lack the

resources to commit additional resources to such programs as this

provision proposes, and they cannot support a regulatory provision with

which they could be unable to comply.

Subpart K--Construction

Tribal view: Tribal representatives have proposed a regulation

which explains that all provisions of the regulations apply to funding

agreements that include construction projects to the extent that they

are not inconsistent with provisions in the regulations that are

specific to construction activities. The tribal proposal is as follows:

Do all provisions or other subparts apply to construction portions

of AFAs?

Yes, unless they are inconsistent with this subpart.

Federal representatives argue that this provision should

specifically identify provisions in the regulations which under no

circumstances apply to construction funding agreements. Tribal

representatives reject the federal proposal because it is overbroad--it

requires that specific regulations not apply to construction funding

agreements, when in fact they may apply to such agreements in certain

circumstances.

For example, federal representatives assert that sections 1000.32,

1000.33 and 1000.34 cannot apply to construction funding agreements

because they allow tribes to withdraw from a tribal organization's

funding agreement a portion of funds which is attributable to that

tribe. Under the federal proposal, these provisions cannot apply to

construction funding agreements because there are no circumstances

under which a tribe can withdraw from a tribal organization and take

out its share of the funds. While this may be correct for construction

projects that are funded on a lump sum, project specific basis (i.e.

building a dam that affects a number of tribes), this is not true if

the construction project is funded through an accumulation of tribal

shares from tribes that make up the tribal organization that is

responsible for the construction activities (i.e. constructing roads

for a number of tribes). In the latter scenario there is no reason why

a withdrawing tribe would not have a right to its tribal share if it

wishes to do the construction itself. The tribal proposal makes it

clear that a withdrawing tribe is only entitled to a portion of the

funds that were included in the funding agreement on the same basis or

methodology upon which the funds were included in the consortium's

funding agreement.

Another example is the applicability of Sec. 1000.82 of these

regulations to construction funding agreements. Federal representatives

argue that a tribe may not select any provision of Title I (Pub. L. 93-

638) for inclusion in a construction funding agreement because doing so

would be inconsistent with all of the construction regulations. This

argument completely ignores that there are provisions in Title I (Pub.

L. 93-638) which a tribe may choose to include in its construction

funding agreement that are not inconsistent with the construction

regulations. For example, Pub. L. 93-638, section 106 (25 U.S.C. 450j-

1(h)) explains how indirect costs for construction programs are to be

calculated. This provision is not inconsistent with the subpart in

these regulations that address construction issues, and therefore there

is no reason why a tribe would not have the right as provided for in

section 1000.82 to incorporate it in a construction funding agreement.

These examples illustrate how the federal proposal is overbroad

because it would not make applicable to construction funding agreements

a number of provisions in the regulations which may apply in specific

circumstances. The tribal proposal addresses the federal concern by

making clear that no regulations apply to construction funding

agreements if they are inconsistent with the construction-specific

regulations.

Federal view: The federal and tribal representatives agree that

where other provisions of these regulations are inconsistent with the

construction subpart, the construction subpart shall govern. It is the

Federal team's view, however, that in addition to this general

exception, specific sections are inconsistent and that these sections

should be specifically identified. The federal team proposes the

following question and answer:

Do all provisions of other subparts apply to construction portions

of AFAs?

Yes, except for sections 1000.32, 1000.33, 1000.34, 1000.82,

1000.83, 1000.88, 1000.92, 1000.94, 1000.95, 1000.96, 1000.97,

1000.98, and 1000.100 or unless they are inconsistent with this

subpart.

The justification for excluding these sections of the proposed

regulations from the construction subpart follows:

Sections 1000.32, 1000.33, and 1000.34. These sections allow

tribes(s) in a consortium to withdraw from the consortium's AFA and

take out the portion of funds attributable to the withdrawing tribe.

Whether the construction project was in the design or construction

phase, the project would immediately become underfunded without any

basis to resolve the shortfall of funds. Unlike most other programs,

construction is a nonrecurring service; any suspension or delay in

construction automatically results in an increase in costs and a delay

in the delivery date agreed to in the AFA. For example, any delays in a

segment of a critical path project, such as an aqueduct, delays the

entire construction project. This conflicts with the construction

subpart, particularly sections 1000.227 and 1000.228(d), which requires

performance in accordance with the AFA delivery schedule and only

allows changes in the work which increase the negotiated funding

amount, the performance period or the scope or objective of the

project, with prior Secretarial approval.

Section 1000.82. This section is inconsistent with the entire

construction subpart, since a tribe could select ``any'' provision of

Title I of Pub. L. 93-638 in an AFA. Section 403(e)(1), (25 U.S.C.

458cc(e)(1)) allows the negotiation of Federal Acquisition Regulations

provisions and 403(e)(2) of Pub. L. 103-413, (25 U.S.C. 458cc(e)(2))

requires the Secretary to ensure health and safety for construction.

The basic premise of many exceptions for construction in Pub. L. 93-

638(25 U.S.C. 450j) was to enable the Secretary to ensure health and

safety. For example, the model contract in section 108 of Pub. L. 93-

638 (25 U.S.C. 450l) was expressly excluded from construction by

section 105(m) of Pub. L. 93-638 (25 U.S.C. 450j(m)). The model

contract permits only one performance monitoring visit by the Secretary

for the contract. The engineering staffs of the Department of Health

and Human Services and the Department of the Interior concluded that

the Secretary could not ensure health and safety with the right to

conduct only one performance inspection during the contract. Also, the

model contract allows design changes during performance without

Secretarial approval and does not allow termination of a construction

contract by the Secretary for substantial failures of performance.

Further, the model contract excludes federal program guidelines,

manuals or policy directives, which is inconsistent with the

construction subpart. These are only a couple of Pub. L. 93-638

provisions that are inconsistent with the construction subpart.

Section 1000.83. This provision would extend the term of a

construction

[[Page 7212]]

contract at the option of a tribe, which would generally increase the

cost of the project.

Sections 1000.88 and 1000.92. These sections will eliminate a pro

rata portion of Facilities Management Construction Center and the BIA

Road Construction Division for the central office, area offices, and

field offices for these functions for the portion of the appropriation

allocable to Self-Governance AFAs. However, the BIA is still

responsible under agreement with the Department of Transportation and

under Pub. L. 103-413 section 403(e)(2), (25 U.S.C. 458cc(e)(2) to

ensure safe construction.

Sections 1000.94 through 1000.98. These sections raise the same

issues discussed for sections 1000.88 and 1000.92 above.

Section 1000.100. This section allows the tribe to reallocate funds

at its option in BIA AFAs, unless otherwise required by law. Many

construction projects are decided on a priority basis out of many needy

projects. Others are simply listed in the relevant bureau's budget.

However, these projects are not ``required'' by law, since they are not

usually earmarked in writing in the Appropriation Act. It is clear,

however, that the bureau is ``required'' by the appropriate

Congressional committee to obligate and expend the funds as approved in

the budget submitted to Congress. Accordingly, the answer to this

question should at a minimum state: ``Unless otherwise required by

budget submitted to Congress or law, and except for construction

projects, the Secretary does not have to approve the reallocation of

funds between programs.''

Subpart Q--Miscellaneous Provisions Cash Management

Tribal view: Federal representatives propose below regulations that

restrict the manner in which tribes or tribal organizations can invest

funds that are received through Self-Governance agreements. There is no

statutory authority for such regulations in Pub. L. 103-413; Pub. L.

93-638 similarly contains no such statutory authority and,

appropriately, no regulations under Title I impose such limitations on

the ability of tribes to invest funds. The federal proposal undermines

the Tribal Self-Governance Act of 1994 by precluding tribes from

managing and investing funds as responsible stewards in a manner which

allows maximum return on their investments while insuring the integrity

of the funds.

Recognizing that the federal representatives expressed an interest

shared by tribes which is to insure that funds are held in a manner

that insures financial integrity tribal representatives propose

language on investments which imposes the same financial management

standards that the special trustee has proposed for managing Indian

monies entrusted in the care of the federal government, the ``prudent

investor'' standard. The tribal proposal is:

1. Are there any restrictions on how funds transferred to a tribe/

consortium under a funding agreement may be spent?

Yes, funds may be spent only for costs associated with purposes

authorized under the funding agreement.

2. May a tribe/consortium invest funds received under self-

governance agreements?

Yes. Any such funds must be invested in accordance with the

``prudent investor standard,'' and must be managed with care and

prudence in a manner which would ensure against any significant loss

of principal.

3. Are there restrictions on how interest or investment income

which accrues on funds provided under self-governance agreements

may be used?

Unless restricted by the annual funding agreement, interest or

income earned on investments or deposits of self-governance awards

may be placed in the tribe's general fund and used for any

governmental purpose approved by the tribe. The tribe may also use

the interest earned to provide expanded services under the self-

governance funding agreement and to support some or all of the costs

of investment services.

Federal view: It is the concern of federal team that federal funds

be safeguarded pending expenditure for purposes approved under an AFA.

The federal representatives assert that placing federal cash in non-

secured investments poses a significant risk of loss of federal funds.

Where the Congress by statute has allowed other Indian grantees to

invest federal funds (e.g. the Tribally Controlled Community College

Assistance Amendments of 1986 and the Tribally Controlled Community

Schools Act of 1988) such investments have been limited to obligations

of the United States or in obligations that are fully insured by the

United States. The same limitations on investments are proposed for

federal funds advanced to Indian tribes under self-governance AFAs.

The federal team believes that the following proposals impose

minimal requirements on Self-Governance tribes/consortia, yet are

critical to the maintenance of federal financial integrity. As such,

these proposals are authorized as part of maintaining the federal trust

responsibility under section 406(b) of the Public Law 103-413 (25

U.S.C. 458ff(b)).

1. Are there any restrictions on how funds transferred to a tribe/

consortium under an AFA may be spent?

Yes, funds may be spent only for costs associated with programs,

services, functions and activities contained in the self-governance

AFAs.

2. May a tribe/consortium invest funds received under self-

governance agreements?

Yes, self-governance funds may be invested if such investment is

in (1) obligations of the United States; (2) obligations or

securities that are within the limits guaranteed or insured by the

United States, or; (3) deposits insured by an agency or

instrumentality of the United States.

3. Are there restrictions on how interest or investment income

which accrues on any funds provided under self-governance AFAs may

be used?

Unless restricted by the AFA, interest or income earned on

investments or deposits of self-governance awards may be placed in

the tribe's general fund and used for any purpose approved by the

tribe. The tribe may also use the interest earned to provide

expanded services under the self-governance AFA and to support some

or all of the costs of investment services.

Waiver Request

Tribal view: The tribal representatives note that Pub. L. 103-413,

sec. 403 (I)(2) (25 U.S.C. section 458cc(I)(2)) authorizes the

Secretary, upon request of a tribe/consortium, to waive the application

of a federal regulation included in a self-governance funding

agreement. The provision provides as follows:

Not later than 60 days after receipt by the Secretary of a

written request by a tribe to waive application of a Federal

regulation for an agreement entered into under this section, the

Secretary shall either approve or deny the waiver in writing to the

tribe. A denial may be made only upon a specific finding by the

Secretary that identified language in the regulation may not be

waived because such waiver is prohibited by Federal law. The

Secretary's decision shall be final for the Department.

This language authorizes waiver of all federal regulations that may

apply to funding agreements and the provision includes a strong

presumption in favor of waiving regulations. Further, tribal

representatives note that section 107(e) of Title I (25 U.S.C. 450k(e))

has been interpreted by the Department of the Interior to permit a

waiver to be automatically granted in the event the Department does not

provide a response to the request within a certain time-frame.

Regulations implementing these provisions provide for the automatic

granting of a waiver if the Department fails to act within a period of

90 days. See 25 CFR 900.144. There is no reason why this right should

not be extended

[[Page 7213]]

to tribes under Title IV, the Tribal Self-Governance Act of 1994.

Accordingly, tribal representatives proposed a waiver regulation, set

forth below, which is consistent with the waiver of regulations adopted

under Pub. L. 93-638, Title I:

How much time does the Secretary have to process a waiver request?

The Secretary must approve or deny a waiver request within 60

days of receipt of the request. The decision must be in writing.

Unless a waiver request is denied within sixty (60) days after the

date it was received it shall be deemed approved.

Federal view: The federal team acknowledges that the Tribal Self-

Governance Act of 1994 (Pub. L. 103-413; Title IV requires a written

decision be made within a 60-day period. Consistent with that Act, the

regulations also should state this point. Unlike under Pub. L. 93-638

(25 U.S.C. 450), there is no authorization in Tribal Self-Governance

Act of 1994 for automatic approval of waiver requests when a deadline

is missed. Furthermore, the nature and scope of the Pub. L. 93-638

waiver provision is substantially different from that of the self-

governance waiver provision. The Pub. L. 93-638 regulations at 25 CFR

900.144 authorize waiver of only the Self-Determination regulations

which are procedural regulations. The waiver provision of Title IV of

Pub. L. 103-413 addresses the waiver of substantive Department-wide

regulations. Because this waiver provision is broader in scope, and

because the Department lacks statutory authority to deem approval, the

federal team wants to ensure that when a waiver is granted, there has

been active federal participation in the approval process.

How much time does the Secretary have to process a waiver request?

The Secretary must approve or deny a waiver request for an

existing AFA within 60 days of receipt of the request. The decision

must be in writing.

Conflicts of Interest

Tribal view: The tribal representatives object to the federal

proposal on conflicts of interest for a number of fundamental reasons.

First, there is no statutory basis in Title IV (Pub. L. 103-413) for

requiring such rules for tribes. Indeed, the point of this Act is to

allow tribes greater autonomy to run their internal affairs in their

own way. Second, at the heart of the Act is the compact and the AFAs

which are to reflect the government-to-government relations between the

tribe and the United States. Any specific requirements for matters such

as conflict of interest should be the subject of the specific

agreements entered into by individual tribes. Third, establishing a

single set of rules fails to take into account the diversity of tribes

and tribal situations. Providing flexibility, as the tribal

representatives believe their proposed language does, does not diminish

the likelihood of adequate safeguards; it improves the likelihood by

allowing tribes to set standards consistent with the tribe's size,

history, culture, and tradition.

The tribal representatives propose language limiting the

application of the regulations to situations where in the financial

interests of tribes and beneficial owners conflict and are significant

enough to impair a tribe's objectivity.

Organizational Conflicts

What is an organizational conflict of interest?

An organization conflict of interest arises when there is a

direct conflict between the financial interests of the Indian tribe/

consortium and the financial interests of the beneficial owners

relating to Indian trust resources. This section only applies where

the financial interests of the Indian tribe/consortium are

significant enough to impair the Indian tribe/consortium's

objectivity in carrying out an AFA, or a portion of an AFA. Further,

this section only applies if the conflict was not addressed when the

AFA was first negotiated.

What must an Indian tribe/consortium do if an organizational

conflict of interest arises under an AFA?

This section only applies if the conflict was not addressed when

the AFA was first negotiated. When an Indian tribe/consortium

becomes aware of a conflict of interest, the Indian tribe/consortium

must immediately disclose the conflict to the Secretary.

Personal Conflicts

What is a personal conflict of interest?

A personal conflict of interest may arise when a person with

authority within the tribe/consortium has a financial interest that

may conflict with an interest of the tribe/consortium or an

individual beneficial owner of a trust resource.

When must an Indian tribe/consortium regulate its employees or

subcontractors to avoid a personal conflict of interest?

An Indian tribe/consortium must maintain written standards of

conduct, consistent with tribal law and custom, to govern officers,

employees, and agents (including subcontractors) engaged in

functions related to the management of trust assets and provide for

a tribally approved mechanism to resolve such conflicts of interest.

The federal proposal is overbroad and unnecessarily burdensome. The

proposed regulation imposes requirements on tribes with regard to the

``statutory obligations of the United States to third parties.''

Exactly how the tribes are to be given notice of these obligations is

unclear, yet the regulations proposed impose a duty on the tribes to

avoid conflicts with these third parties. The federal proposal includes

three regulations on ``personal conflicts'' which impose federal-type

standards onto tribes. Such requirements inhibit tribes from

legislating and regulating on their own and are a significant breach of

tribal sovereignty.

Federal view: The federal team believes that conflicts of interest

regulations are required to balance the federal-tribal government

relationship with the Secretary's trust responsibility under section

406(b) of Pub. L. 103-413 (25 U.S.C. 458ff(b)) to Indian tribes,

individual Indians and Indians with Trust allotments. The federal

proposal is essentially identical to the Pub. L. 93-638 (25 U.S.C. 450)

regulation adopted by the Secretaries of the Interior and Health and

Human Services. The federal proposal addresses two types of conflicts:

conflicts of the tribe or tribal organization itself (an

``organizational conflict''), and; conflicts of individual employees

involved in trust resource management.

Under the federal proposal, the conflicts of interest regulations

only apply if the AFA fails to provide equivalent protection against

conflicts of interest to these regulations.

The proposed federal regulations for an organizational conflict of

interest address only those conflicts discovered after the AFA is

signed.

Such conflicts occur when there is a direct conflict between the

financial interests of the Indian tribe/consortium and the financial

interests of the beneficial owners relating to trust resources; the

tribe and the United States relating trust resources; or an express

statutory obligation of the United States to third parties. If the

Indian tribe/consortium's AFA does not address conflicts of interest,

then the Indian tribe/consortium must immediately disclose the conflict

to the Secretary.

The proposed federal regulations for personal conflicts of interest

would require an Indian tribe/consortium to have a tribally-approved

mechanism to ensure that no officer, employee, or agent of the Indian

tribe/consortium has a financial or employment interest that conflicts

with that of the trust beneficiary. The proposal also prohibits such

individuals from receiving gratuities.

The federal proposal is as follows:

[[Page 7214]]

What is an organizational conflict of interest?

An organizational conflict of interest arises when there is a

direct conflict between the financial interests of the Indian tribe/

consortium and:

(a) The financial interests of beneficial owners of trust

resources;

(b) The financial interests of the United States relating to

trust resources, trust acquisitions, or lands conveyed or to be

conveyed pursuant to the Alaska Native Claims Settlement Act (43

U.S.C. 1601 et seq); or

(c) An express statutory obligation of the United States to

third parties. This section only applies where the financial

interests of the Indian tribe/consortium are significant enough to

impair the Indian tribe/consortium's objectivity in carrying out an

AFA.

What must an Indian tribe/consortium do if an organization conflict

of interest arises under an AFA?

This section only applies if the conflict was not addressed when

the AFA was first negotiated. When an Indian tribe/consortium

becomes aware of a conflict of interest, the Indian tribe/consortium

must immediately disclose the conflict to the Secretary.

When must an Indian tribe/consortium regulate its employees or

subcontractors to avoid a personal conflict of interest?

An Indian tribe/consortium must maintain written standards of

conduct to govern officers, employees, and agents (including

subcontractors) engaged in functions related to the management of

trust assets.

What types of personal conflicts of interest involving tribal

officers, employees or subcontractors would have to be regulated by

an Indian tribe/consortium?

The Indian tribe/consortium must have a tribally approved

mechanism to ensure that no officer, employee, or agent (including a

subcontractor) of the Indian tribe/consortium reviews a trust

transaction in which that person has a financial or employment

interest that conflicts with that of the trust beneficiary, whether

the Indian tribe/consortium or an allottee. Interests arising from

membership in, or employment by, an Indian tribe/consortium, or

rights to share in a tribal claim need not be regulated.

What personal conflicts of interest must the standards of conduct

regulate?

The standards must prohibit an officer, employee, or agent

(including a subcontractor) from participating in the review,

analysis, or inspection of a trust transaction involving an entity

in which such persons have a direct financial interest or an

employment relationship. It must also prohibit such officers,

employees, or agents from accepting any gratuity, favor, or anything

of more than nominal value, from a party (other than the Indian

tribe/consortium) with an interest in the trust transactions under

review. Such standards must also provide for sanctions or remedies

for violating the standards.

May an Indian tribe/consortium elect to negotiate AFA provision on

conflict of interest to take the place of this regulation?

Yes. An Indian tribe/consortium and the Secretary may agree to

AFA provisions concerning either personal or organizational

conflicts that address the issues specific to the program included

in the AFA. Such provisions must provide equivalent protection

against conflicts of interests to these regulations. Agreed-upon

provisions shall be followed, rather than the related provisions of

this regulation. For example, the Indian tribe/consortium and the

Secretary may agree that using the Indian tribe/consortium's own

written code of ethics satisfied the objectives of the personal

conflicts provision of this regulation, in whole or in part.

Supply Sources

Tribal view: The tribal proposal differs from that of the federal

team in that the tribal representatives believe that it should be the

duty of the Department of the Interior to facilitate the relationship

with the General Services Administration. The tribal proposal would so

require in the regulation given the continuing difficulties tribes have

in accessing their full rights to receive services through the General

Services Administration. The tribal proposal reads:

Can a tribe/consortium use federal supply sources in the

performance of an AFA?

A tribe/consortium and its employees may use Federal supply

sources (including lodging, airline, interagency motor pool

vehicles, and other means of transportation) which must be available

to the tribe/consortium and to its employees to the same extent as

if the tribe/consortium were a federal agency. Implementation of

this section is the responsibility of the General Services

Administration (GSA). The Department of the Interior shall

facilitate the tribe/consortium's use of supply sources and assist

it to resolve any barriers to full implementation that may arise in

the GSA.

Federal view: The federal team maintains that only General Services

Administration (GSA) has the legal authority concerning a tribe's/

consortium's use of federal supply sources. Pub. L. 93-638 requires

that the tribes/consortia be treated as any other federal agency in use

of federal supply sources. The GSA is responsible for implementation

and approval for all federal agencies with respect to sources of

federal supplies. The federal proposal alerts the tribes/consortia to

the fact that they will receive the same treatment from GSA as all

other federal agencies. The Department of the Interior intends to work

with GSA to implement this provision. The federal proposal is as

follows:

Can a tribe/consortium use federal supply sources in the

performance of an AFA?

A tribe/consortium and its employees may use federal supply

sources (including lodging, airline, interagency motor pool

vehicles, and other means of transportation) which must be available

to the tribe/consortium and to its employees to the same extent as

if the tribe/consortium were a federal agency. Implementation of

this section is the responsibility of the General Services

Administration (GSA).

Leasing

Tribal view: There is no authority in the statute to limit the

rights of Self-Governance tribes compared to the rights of contracting

tribes or to impose limitations regarding the acquisition of property

not otherwise imposed by any existing statute or regulation Pub. L. 93-

638, section 105 (25 U.S.C. 450j(l)) states:

(l) Lease of facility used for administration and delivery of

services

(1) Upon the request of an Indian tribe or tribal organization,

the Secretary shall enter into a lease with the Indian tribe or

tribal organization that holds title to, a leasehold interest in, or

a trust interest in, a facility used by the Indian tribe or tribal

organization for the administration and delivery of services under

this Act.

(2) The Secretary shall compensate each Indian tribe or tribal

organization that enters into a lease under paragraph (1) for the

use of the facility leased for the purposes specified in such

paragraph. Such compensation may include rent, depreciation based on

the useful life of the facility, principal and interest paid or

accrued, operation and maintenance expenses, and such other

reasonable expenses that the Secretary determines, by regulation, to

be allowable.

Indeed, the regulation (25 CFR Sec. 900.69-900.72) adopted under Title

I, provides a laundry list of costs that may be included in the lease

compensation, but, consistent with the statute, nowhere does the Title

I regulation proscribe leases on buildings acquired from the federal

government or purchased with federal resources. The source of the

building is not relevant to the terms of the lease, nor does the fact

that the building may have been acquired through federal assistance

mean that the tribe is not experiencing costs associated with the

building that need to be compensated. The tribal representatives

propose either deleting this section entirely or making the Title I,

(Pub. L. 93-638) regulations, 25 CFR 900.69-900.72, applicable.

Federal view: The federal team proposal is drafted so that it

complies with Pub. L. 93-638, section 106 (25 U.S.C. section 450j(l)).

The federal proposal delineates limited circumstances that would not

allow

[[Page 7215]]

leasing arrangements if title to the facility was obtained by the tribe

through excess federal government property or if the construction of

the facility was federally financed. There is no rationale for the

federal government to pay twice--once for the construction of the

facility and again for the leasing back of that facility from the

tribe. The federal proposal is as follows:

Can a tribe/consortium lease its tribal facilities to the federal

government for use in the performance of an AFA?

(a) For BIA programs, the Secretary must enter into a lease with

the tribe/consortium to use tribal facilities for AFA programs. The

Secretary may enter into a lease only if appropriations are

available for implementation of section 105(l)(1) and (2) of Pub. L.

93-638, as amended (25 U.S.C. 450j(l)),

(b) This section does not apply to former federal facilities

acquired by a tribe/consortium as excess or surplus property, or to

construction projects by the tribe/consortium paid for with federal

funds, except to the extent that improvements to the facilities have

been made from other than federal funds.

Prompt Payment Act (Pub. L. 97-452, as Amended)

Tribal view: Tribal representatives note that Pub. L. 103-413,

section 403(g), (25 U.S.C. 458cc(g)) gives tribes and consortia the

right to receive payments under a self-governance agreement in advance

in the form of an annual or semi-annual installment, at the discretion

of the tribe or consortium. In addition, this section requires the

Secretary to provide funding for BIA and non-BIA programs that are

included in a self-governance agreement that are equal to the amount

that the tribe or consortium would be eligible to receive under Title I

of Pub. L. 103-413. Under section 108 of Title I (25 U.S.C. 450; (l),

the Prompt Payment Act is made applicable to all advance payments of

funds that are made to tribes under that Title. The Prompt Payment Act

should apply to all Department of the Interior programs which tribes

may assume under the Tribal Self-Governance Act of 1994, including all

BIA and non-BIA programs. No distinction between BIA and non-BIA

programs is drawn in Title I of Pub. L. 103-413 and none should be

drawn in Title IV of Pub. L.103-413. Accordingly, tribal

representatives proposed the following regulation:

Does the Prompt Payment Act apply?

Yes, the Prompt Payment Act applies to all programs funded under

the Tribal Self-Governance Act of 1994.

Federal view: The federal team understands that the Prompt Payment

Act is generally applicable to the extent goods and services are

provided in advance of payment rather than where the payment is made in

advance of the delivery. The Prompt Payment Act, (31 U.S.C. 3902(a)),

provides in pertinent part: ``* * * the head of an agency acquiring

property or service from a business concern, who does not pay the

concern for each complete delivered item of property or service by the

required payment date, shall pay an interest penalty to the concern on

the amount of the payment due.'' Congress established, in 31 U.S.C.

3902(h)(2)(B) statutory deadlines addressing the ``required payment or

loan closing date'' for various types of transactions. No such

statutory deadline is provided for agreements under the Tribal Self-

Governance Act of 1994, and the federal team is uncertain of its

authority to prescribe or how to prescribe such deadlines for advance

payments in the absence of more explicit instructions from Congress.

Appropriations law makes it impossible for the Department to distribute

funds in advance of the first day of a fiscal year, and delays in

bureaus receiving their annual appropriations and resulting funding

allocations often also result in delays beyond the Department's

control. Prompt payment interest penalties must be derived from

``amounts made available to carry out the program for which the penalty

is incurred'' and are not an authorization for additional

appropriations (31 U.S.C. 3902(e)). Pub. L. 103-413, 403(g)(3), (25

U.S.C. 458cc(g)(3)) generally requires the bureau to include all funds

it would have expended directly or indirectly for that portion of the

program, except for functions retained by the bureau either because

they are inherently federal or by agreement of the parties. It would

appear that Congress has not authorized funds to pay the interest

penalty without in turn first directly or indirectly reducing the

programs to be provided for that Self-Governance tribe. Moreover, using

funds intended for programs for other tribes or tribal organizations

would violate Pub. L. 103-413, section 406(a)), (25 U.S.C. 458ff(a)).

While the Model Agreement contained in section 108 of the ISDEA (Pub.

L. 93-638), as amended provides for the application of the Prompt

Payment Act, the Title I regulations (Pub. L. 93-638 (25 U.S.C. 450))

do not contain any language to implement that provision. Thus, the

federal team does not know how to implement this provision without

reducing funding or programs for the tribe involved, and therefore

requests public comments addressing such provisions.

Does the Prompt Payment Act (Pub. L. 97-452, as amended) apply?

Yes, the Prompt Payment Act (Pub. L. 97-452, as amended) applies

to programs eligible for contracting under Pub. L. 93-638 (25 U.S.C.

450).

Subpart R--Appeals

Tribal view: The tribal representatives have organized the appeals

section to provide a user-friendly format, without extensive internal

cross reference. The tribal representatives believe that it is easier

to identify the proper appeal forum based on the issue at hand rather

than reviewing the different forums available first and then deciding

whether the issue at hand fits.

A crucial part of the tribal proposal is that appeals be heard at

the level of the Assistant Secretary for the different bureaus. It is

the tribal view that the Tribal Self-Governance Act of 1994 vested

authority and discretion exclusively in the Secretary of the Interior.

Accountability for official decisions should be vested at a similarly

high level. Tribal representatives feel it would be inappropriate for

appeals to be heard by ``bureau heads'' who would likely be the

officials responsible for initial adverse decisions. The purpose of

``appeals'' is review by a higher authority who is removed from the

initial dispute. Moving discretionary decision-making down the

organizational level of the Department without clear and consistent

guideposts for the exercise of discretion should not be permitted below

the Assistant Secretary's level. The tribal representatives propose the

following:

1. What is the purpose of this subpart?

This subpart prescribes the process for resolving disputes with

Department officials which arise before or after execution of an AFA

and certain other disputes related to self-governance. This subpart

also describes the administrative process for reviewing disputes

related to compact provisions. This subpart describes the process

for administrative appeals to:

(a) The Interior Board of Indian Appeals (IBIA) for certain pre-

AFA disputes and reassumption of programs eligible for contracting

under Pub. L. 93-638 (25 U.S.C. 450);

(b) The Interior board of Contract Appeals (IBCA) for certain

post-AFA disputes;

(c) The bureau head for the bureau responsible for certain

disputed decisions; and

(d) The Secretary for reconsideration of decisions involving

self-governance compacts.

2. In general, how can a tribe appeal a decision of a bureau once

it has signed an AFA?

The tribes may refer to section 110 of Pub. L. 93-638 which

directs them to follow the

[[Page 7216]]

procedures found within the Contract Disputes Act Pub. L. 95-563 (41

U.S.C 601)), as amended. Generally, the provisions of section 110 of

Pub. L. 93-638 (25 U.S.C. 450m-l) apply to all issues arising from

agreements under the Tribal Self-Governance Act of 1994. The tribe

may sign an agreement, as well, and reserve issues for appeal under

the provisions of section 110. Exceptions are noted below in tribal

Question 3.

3. Are there any decisions which are not appealable under this

subpart?

Yes. The following types of decisions are not appealable under

this subpart.

(a) Decisions regarding requests for waivers of regulations

which are addressed in Subpart J of these regulations (Waivers).

(b) Decisions under any other statute, such as the Freedom of

Information Act and the Privacy Act. See 43 CFR Part 2.

(c) Decisions for which Subpart K--Construction provides

otherwise.

4. How can a tribe appeal a decision of a bureau official relative

to a Title I, Pub. L. 93-638 eligible program before it has signed

an AFA?

Any bureau decision regarding the self-governance program not

governed under the provisions of the Contract Disputes Act pursuant

to section 406(c) of Pub. L. 103-413 (25 U.S.C. 458ff(c)), and

except those listed under tribal Question 5, may be appealed within

30 days of notification to the IBIA under the provisions of 25 CFR

900.150(a)-(h), and 900.152-900.169. Tribes/consortiums wishing to

appeal an adverse decision must do so within 30 days of receiving

such decision. For purposes of such appeals only, the terms

``contract'' and ``self-determination contract'' shall mean annual

funding agreements under the Tribal Self-Governance Act of 1994. The

terms ``tribe'' and ``tribal organization'' shall mean ``tribe/

consortium.'' References to the Department of Health and Human

Services therein are inapplicable.

5. To whom are appeals directed regarding pre-award AFA decisions

of Department officials, other than those described in tribal

Question 4?

Using the procedures described in tribal Question 6, the

following pre-AFA disputes and decisions are appealable to the

Assistant Secretary of the bureau responsible for the decision or

dispute:

(a) Decisions regarding non-Title I (non Pub. L. 93-638)

eligible programs and disputes over failure to reach an agreement in

an AFA negotiation for non-Title I (non Pub. L. 93-638) eligible

programs pursuant to section 1000.173 of these regulations (``last

and best offer'').

(b) Decisions relating to planning and negotiation grants

(Subpart C--Planning and Negotiation Grants);

(c) Decisions involving a limitation and/or reduction of

services for BIA programs. (Subpart H--Limitation and/or Reduction

of Services for BIA Services, Contracts and Funds);

(d) Decisions regarding the eligibility of a tribe for admission

to the applicant pool;

(e) Decisions involving BIA residual functions or inherently

federal functions;

(f) Decisions declining to provide requested information on

federal programs, budget, staffing, and locations which are

addressed in Section 1000.162 of these regulations.

(g) Decisions related to a dispute between a consortium and a

withdrawing tribe.

6. How should a tribe/consortium appeal a pre-AFA decision

described in tribal Question 5?

A tribe/consortium may appeal such decision by making a written

request for review to the appropriate Assistant Secretary within 30

days of failure to reach agreement under section 1000.173. The

request should include a statement describing its reasons for

requesting the review, with any supporting documentation or indicate

that such a statement will be submitted within 30 days. A copy of

the request must also be sent to the Director of the Office of Self-

Governance.

7. Does the tribe have a right to an informal conference?

Yes. Within 30 days of submitting an appeal to the Assistant

Secretary under Question 5 above, the tribe may request an informal

conference with the Assistant Secretary or an appointed

representative of the Secretary. The Secretary cannot appoint the

official whose decision is being appealed as his representative.

This conference will be held within 20 days of request, unless

otherwise agreed between the parties, and 25 CFR 900.154 to 900.157

will govern the procedure of the informal conference.

8. When must an Assistant Secretary issue a decision in the

administrative review?

The Assistant Secretary must issue a written final decision

stating the reasons for such decision, and transmit it to the tribe/

consortium within 60 days of receipt of the request for review and

tribal statement of reasons. The Assistant Secretary's decision

shall be final for the Department unless reversed by the Secretary

upon a discretionary review in accordance with 43 CFR 4.4.

9. Can a tribe seek reconsideration of the Assistant Secretary's

decision?

Yes. The Tribe may request that the Secretary reconsider a final

Department decision by sending a written request for reconsideration

within 30 days of the receipt of the decision to the Secretary or

under 43 CFR 4.4. A copy of this request should also be sent to the

Director of the Office of Self-Governance.

10. How can a tribe/consortium seek reconsideration of the

Secretary's decision involving a self-governance compact?

A tribe/consortium may request reconsideration of the

Secretary's decision involving a self-governance compact by sending

a written request for reconsideration to the Secretary within 30

days of receipt of the decision. A copy of this request must also be

sent to the Director of the Office of Self-Governance.

11. When will the Secretary respond to a request for

reconsideration of a decision involving a self-governance compact?

The Secretary will respond in writing to the tribe/consortium

within 30 days of receipt of the tribe/consortium's request for

reconsideration.

12. How should a tribe/consortium appeal a Department decision or

dispute regarding a signed AFA?

Sections 110 and 406(c) of the Pub. L. 103-413 (25 U.S.C. 450m-l

and 458ff(d), respectively) make the Contracts Disputes Act (CDA)

(Pub. L. 95-563; 41 U.S.C. 601), as amended applicable to all

disputes regarding signed self-governance AFAs, and give tribes/

consortiums the right to appeal directly to federal district court

or to appeal administratively to the Interior Board of Contract

Appeals (IBCA). Administrative appeals regarding post-AFA are

governed by 25 CFR 900.216-900.230, except that appeals of decisions

regarding reassumption of programs are governed by 25 CFR 900.170-

900.176, and except for the types of decisions described in tribal

Question 3, which are not appealable under this subpart.

Federal view: The Federal proposals would establish a process for

resolving disputes with Department officials which arise both before

and after the execution of AFAs. Depending upon the precise matter for

which review is sought, appeals of decisions are made to either the

IBIA, the IBCA or the head of the particular bureau. Reconsideration of

decisions relating to the terms of compacts (as opposed to AFAs)

between a tribe/consortium and the Secretary would be submitted to the

Secretary. As a general matter, the IBIA would be responsible for

appeals relating to pre-award issues and reassumption for imminent

jeopardy concerning programs eligible for contracting under Pub. L. 93-

638; the IBCA under the Contract Disputes Act (Pub. L. 93-563) for

appeals concerning post-award disputes other than reassumption for

imminent jeopardy; and bureau heads for matters entailing some degree

of discretionary decision-making by an appropriate bureau official.

This role for the bureau heads is consistent with normal Departmental

practices and also recognizes the generally greater familiarity of

bureau heads than the programmatic assistant secretaries for the types

of issues to be decided. In accordance with Subpart K of the proposed

regulations, appeals from disputes surrounding suspension of work under

section 1000.230 of these regulations are made like other post-award

disputes under the CDA.

The federal proposal follows:

1. What is the purpose of this subpart?

This subpart prescribes the process for resolving disputes with

Department officials

[[Page 7217]]

which arise before or after execution of an AFA or as a result of a

reassumption of an AFA and certain other disputes related to self-

governance. This subpart also describes the administrative process

for reviewing disputes related to compact provisions. This subpart

describes the process for administrative appeals to:

(a) The Interior Board of Indian Appeals (IBIA) for certain pre-

AFA disputes and reassumption of programs eligible for contracting

under Pub. L. 93-638 (25 U.S.C. 450);

(b) The Interior Board of Contract Appeals (IBCA) for certain

post-AFA disputes;

(c) The bureau head for the bureau responsible for certain

disputed decisions; and

(d) The Secretary for reconsideration of decisions involving

self-governance compacts.

2. What decisions are appealable to the IBIA?

(a) Except for pre-award matters described in federal Question

5(b)-(d), (f) and (g), decisions of Department officials made before

the signing of an AFA under the Tribal Self-Governance Act of 1994

that involve programs eligible for contracting under Pub. L. 93-638

are appealable to the IBIA. The provisions of 25 CFR 900.150(a)-(h),

900.151-900.169 are applicable. For purposes of such appeals only,

the terms ``contract'' and ``self-determination contract'' shall

mean annual funding agreements under the Tribal Self-Governance Act

of 1994. The term ``tribe'' shall mean ``tribe/consortium.''

References to the Department of Health and Human Services therein

are inapplicable.

(b) Decisions to reassume a program that is eligible for

contracting under Pub. L. 93-638, after the failure of the tribe to

adequately respond or mitigate, or decisions to suspend or delay

payment for a program that is eligible for contracting under Pub. L.

93-638. The provisions of 25 CFR 900.170 to 900.175 apply, except as

otherwise provided in Subpart K--Construction.

(c) If a tribe does not appeal a decision to the IBIA within 30

days of receipt of the decision, the decision will be final for the

Department.

3. What decisions are appealable to the Interior Board of Contract

Appeals (IBCA) under this section?

Post-award AFA decisions of Department officials are appealable

to IBCA, except appeals covered in federal Questions 2(b), 5(c),

5(e), and 5(g) of this subpart and decisions involving reassumption

for imminent jeopardy, non-Pub. L. 93-638 programs, and all

construction disputes.

4. What statutes and regulations govern resolution of disputes

concerning signed AFAs that are appealed to the IBCA?

Section 110 of Pub. L. 93-638 (25 U.S.C. 450m-l) and the

regulations at 25 CFR 900.216-900.230 apply to disputes concerning

signed AFAs that are appealed to the IBCA, except that any

references to the Department of Health and Human Services are

inapplicable. For the purposes of such appeals only, the terms

``contract'' and ``self-determination contract'' shall apply to AFAs

under the Tribal Self-Governance Act of 1994.

5. What decisions are appealable to the bureau head for review?

(a) Pre-award AFA decisions of Department officials, other than

those described in federal Question 2 of this subpart, shall be

directed to the bureau head. For example, a review involving a non-

Pub. L. 93-638 program.

(b) Decisions of Department officials that a tribe is not

eligible for admission to the applicant pool.

(c) Pre-AFA and post-AFA decisions of a Department official,

other than a BIA official, on whether an AFA would limit or reduce

other AFAs, services, contacts, or funds under Pub. L. 93-638, or

other applicable federal law, to an Indian tribe/consortium or

tribal organization that is not a party to the AFA.

(d) Decisions involving BIA residual functions. (See sections

1000.91 and 1000.92--BIA AFAs in these draft regulations.)

(e) Decisions involving reassumption for imminent jeopardy for

non-Pub. L. 98-638 programs.

(f) Decisions declining to provide requested information on

federal programs, budget, staffing, and locations which are

addressed in subpart 1000.162 of these regulations.

(g) Decisions related to a dispute between a consortium and a

withdrawing tribe (1000.34).

6. When and how must a tribe/consortium appeal a decision to the

bureau head?

If a tribe/consortium wishes to appeal a decision to the bureau

head it must make a written request for review to the appropriate

bureau head within 30 days of receiving the initial adverse

decision. The request should include a statement describing its

reasons for requesting a review, with any supporting documentation

or indicate that such a statement will be submitted within 30 days.

A copy of the request must also be sent to the Director of the

Office of Self-Governance.

If a tribe does not request a review within 30 days of receipt

of the decision, the decision will be final for the Department.

7. When must the bureau head issue a decision in the administrative

review?

The bureau head must issue a written final decision stating the

reasons for such decision, and transmit it to the tribe/consortium

within 60 days of receipt of the request for review and the

statement of reasons.

8. What is the effect of the bureau head's decision in an

administrative review?

The decision is final for the Department.

9. May tribes/consortia appeal Department decisions to a U.S.

District Court?

Yes. Tribes/consortia may choose to appeal decisions of

Department officials relating to the self-governance program to a

U.S. Court, as authorized by section 110 of Pub. L. 93-638 (25

U.S.C. 450m-l) , or other applicable law.

10. How can a tribe/consortium seek reconsideration of the

Secretary's decision involving a self-governance compact?

A tribe/consortium may request reconsideration of the

Secretary's decision involving a self-governance compact by sending

a written request for reconsideration within 30 days of receipt of

the decision to the Secretary. A copy of this request must also be

sent to the Director of the Office of Self-Governance.

11. When will the Secretary respond to a request for

reconsideration of a decision involving a self-governance compact?

The Secretary will respond in writing to the tribe/consortium

within 30 days of receipt of the tribe/consortium's request for

reconsideration.

12. Are there any decisions which are not appealable under this

section?

Yes. The following types of decisions are not appealable under

this subpart:

(a) Decisions regarding requests for waivers of regulations

which are addressed in Subpart J of these regulations. (Waivers)

(b) Decisions relating to planning and negotiation grants in

section 1000.71 of these regulations. Subpart D--Other Financial

Assistance for Planning and Negotiation Grants for Non-BIA Programs.

(c) Decisions relating to discretionary grants under section 103

of Pub. L. 93-638 (25 U.S.C. 450h) which may be appealed under 25

CFR Part 2.

(d) Decisions under any other statute, such as the Freedom of

Information Act and the Privacy Act. See 43 CFR Part 2.

(e) Decisions involving a limitation and or reduction of service

for BIA programs. Subpart H--Limitation and/or Reduction of Services

for BIA Services, Contracts, and Funds.

(f) Decisions for which Subpart K--Construction provides

otherwise.

13. What procedures apply to post-award construction disputes

except for reassumptions for imminent jeopardy?

The Contract Disputes Act procedures (Pub. L. 95-593 (41 U.S.C.

601), as amended)

Subpart S--Property Donation Procedures

Tribal view: Section 406(c) of Title IV (Pub. L. 103-413; 25 U.S.C.

458ff (c)) specifically incorporates section 105(f) of Pub. L. 93-638

(25 U.S.C. 450; (f)), a provision which gives tribes significant rights

relating to the transfer of BIA and non-BIA property to tribes for use

under a contract or AFA. In June 1996, the Departments of the Interior

and Health and Human Services promulgated joint regulations

implementing Pub. L. 93-638, including section 105(f). See 25 CFR 900

et seq. The regulations make clear that transfer of property under

section 105(f) applies to BIA and non-BIA property.

The regulations promulgated under Pub. L. 93-638 implementing

section 105(f) apply equally to Title IV--for

[[Page 7218]]

both BIA and non-BIA programs. Tribal representatives proposed

regulations that closely tracked 25 CFR 900.85-900.107.

Government-Furnished Property

1. How does an Indian tribe/consortium obtain title to property

furnished by the federal government for use in the performance of a

self-governance agreement pursuant to section 105(f)(2)(A) of Pub. L.

93-638 (25 U.S.C. 450; (f))(2)(A)?

(a) For federal government-furnished personal property made

available to an Indian tribe/consortium before October 25, 1994:

(1) The Secretary, in consultation with each Indian tribe/

consortium, shall develop a list of the property used in a self-

governance agreement.

(2) The Indian tribe/consortium shall indicate any items on the

list to which the Indian tribe/consortium wants the Secretary to retain

title.

(3) The Secretary shall provide the Indian tribe/consortium with

any documentation needed to transfer title to the remaining listed

property to the Indian tribe/consortium.

(b) For federal government-furnished real property made available

to an Indian tribe/consortium before October 25, 1994:

(1) The Secretary, in consultation with the Indian tribe/

consortium, shall develop a list of the property furnished for use in a

self-governance agreement.

(2) The Secretary shall inspect any real property on the list to

determine the presence of any hazardous substance activity, as defined

in 41 CFR 101-47.202.2(b)(10). If the Indian tribe/consortium desires

to take title to any real property on the list, the Indian tribe/

consortium shall inform the Secretary, who shall take such steps as

necessary to transfer title to the Indian tribe/consortium.

(c) For federal government-furnished real and personal property

made available to an Indian tribe/consortium on or after October 25,

1994:

(1) The Indian tribe/consortium shall take title to all property

unless the Indian tribe/consortium requests that the United States

retain the title.

(2) The Secretary shall determine the presence of any hazardous

substance activity, as defined in 41 CFR 101-47.202.2(b)(10).

2. What should the Indian tribe/consortium do if it wants to obtain

title to federal government-furnished real property that includes land

not already held in trust?

If the land is owned by the United States but not held in trust for

an Indian tribe or individual Indian, the Indian tribe/consortium shall

specify whether it wants to acquire fee title to the land or whether it

wants the land to be held in trust for the benefit of a tribe.

(a) If the Indian tribe/consortium requests fee title, the

Secretary shall take the necessary action under federal law and

regulations to transfer fee title.

(b) If the Indian tribe/consortium requests beneficial ownership

with fee title to be held by the United States in trust for an Indian

tribe:

(1) The Indian tribe/consortium shall submit with its request a

resolution of support from the governing body of the Indian tribe in

which the beneficial ownership is to be registered.

(2) The Secretary of the Interior shall expeditiously process all

requests in accordance with applicable federal law and regulations.

(3) The Secretary shall not require the Indian tribe/consortium to

furnish any information in support of a request other than that

required by law or regulation.

3. When may the Secretary elect to reacquire federal government-

furnished property whose title has been transferred to an Indian tribe/

consortium?

(a) Except as provided in paragraph (b) of this section, when a

self-governance agreement, or portion thereof, is retroceded,

reassumed, terminated or expires, the Secretary shall have the option

to take title to any item of federal government-furnished property for

which:

(1) title has been transferred to an Indian tribe/consortium;

(2) is still in use in the program; and

(3) has a current fair market value, less the cost of improvements

borne by the Indian tribe/consortium, in excess of $5,000.

(b) If property referred to in paragraph (a) of this section is

shared between one or more ongoing self-governance agreements and a

self-governance agreement is retroceded, reassumed, terminated or

expires, and the Secretary wishes to use such property in the

retroceded or reassumed program, the Secretary and the Indian tribe/

consortium using such property shall negotiate an acceptable

arrangement for continued sharing of such property and for the

retention or transfer of title.

4. Does government-furnished real property to which an Indian tribe/

consortium has taken title continue to be eligible for facilities

operation and maintenance funding from the Secretary?

Yes.

Property Purchased by an Indian Tribe/Consortium

5. Who takes title to property purchased with funds under a self-

governance agreement pursuant to section 105(f)(2)(A) of Pub. L. 93-638

(25 U.S.C. 450j (f)(2)(A))?

The Indian tribe/consortium takes title to such property, unless

the Indian tribe/consortium chooses to have the United States take

title. In that event, the Indian tribe/consortium must inform the

Secretary of the purchase and identify the property and its location in

such manner as the Indian tribe/consortium and the Secretary deem

necessary. A request for the United States to take title to any item of

Indian tribe/consortium-purchased property may be made at any time. A

request for the Secretary to take fee title to real property shall be

expeditiously processed in accordance with applicable federal law and

regulation.

6. What should the Indian tribe/consortium do if it wants Indian tribe/

consortium-purchased real property that it has purchased to be taken

into trust?

The Indian tribe/consortium shall submit a resolution of support

from the governing body of the Indian tribe in which the beneficial

ownership is to be registered. The Secretary of the Interior shall

expeditiously process all requests in accord with applicable federal

law and regulation.

7. When may the Secretary elect to acquire title to Indian tribe/

consortium-purchased property?

(a) Except as provided in paragraph (b) of this section when a

self-governance agreement, or portion thereof, is retroceded,

reassumed, terminated or expires, the Secretary shall have the option

to take title to any item of tribe/consortium-purchased property:

(1) Whose title has been transferred to an Indian tribe/consortium;

(2) That is still in use in the program; and

(3) That has a current fair market value, less the cost of

improvements borne by the Indian tribe/consortium, in excess of $5,000.

(b) If property referred to in paragraph (a) of this section is

shared between one or more ongoing self-governance agreements and a

self-governance agreement that is retroceded, reassumed, terminated or

expires, and the Secretary wishes to use such property in the

retroceded or reassumed program, the Secretary and the Indian tribe/

consortium using such property

[[Page 7219]]

shall negotiate an acceptable arrangement for continued sharing of such

property and for the retention or transfer of title.

8. Is Indian tribe/consortium-purchased real property to which an

Indian tribe/consortium holds title eligible for facilities operation

and maintenance funding from the Secretary?

Yes.

Tribal representatives believe that the federal position

misinterprets section 105(f) (25 U.S.C. 450j(f)) and is incorrect in

any conclusion that section 105(f) does not apply to non-BIA property.

Initially, it should be pointed out that the federal representatives

position is inconsistent with the position taken by the Department of

the Interior during the Title I (Pub. L. 93-638) rulemaking process--

the final rules promulgated in 25 CFR sections 900.87-900.94 clearly

apply to non-BIA, as well as BIA, programs. There is no reason why the

Department should change this interpretation in Title IV; doing so

would violate Congressional direction that self-governance ``co-exist''

with the Self-Determination Act (see section 203 of Title IV (Pub. L.

103-413) and section 1000.4(b)(3) of the proposed regulations).

Clearly, if regulations implementing the same statutory provisions

under Title I conflict with regulations under Title IV, the two titles

do not ``co-exist,'' they ``conflict.''

The federal representatives argument is based on an incorrect

reading of section 105(f)(2). First, section 105(f)(2) provides that

the Secretary ``may'' ``donate'' IHS, BIA, or GSA property--clearly a

discretionary act, while section 105(f)(2)(A) provides that title to

property and equipment furnished by the federal government, ``shall

vest'' in the tribe, clearly a command where the Secretary has no

discretion.

It is evident from the different language used in these two

provisions that they have very different purposes; they address

different types of property and give the Secretary some or no

discretion. Furthermore, if Congress wanted to limit section

105(f)(2)(A) to GSA, IHS, and BIA property, as the federal

representatives assert, it would have said so in the section. The use

of ``government-furnished property'' clearly indicated an intent to

refer to property other than GSA, IHS, or BIA. Finally, the term

``except'' can grammatically be read as a signal that the contents of

section 105(f)(2)(A) are not subject to the limitations set forth in

section 105(f)(2), which would as the federal representatives assert,

give meaning to every word in the statute.

Federal view: It is the federal team's view that section

105(f)(2)(A) of Pub. L. 93-638 (25 U.S.C. 450j(f)(2)(A)) does not apply

to non-BIA bureaus.

Prior to the 1994 amendments, section 105(f)(2) of Pub. L. 93-638

gave the Secretary discretion to donate personal BIA excess property,

including contractor-purchased property as one type of ``excess'' BIA

property:

(f) In connection with any self-determination contract or grant

made pursuant to section 102 or 103 of this Act, the appropriate

Secretary may--

(2) donate to an Indian tribe or tribal organization the title

to any personal or real property found to be excess to the needs of

the Bureau of Indian Affairs, the Indian Health Service, or the

General Services Administration, including property and equipment

purchased with funds under any self-determination contract or grant

agreement; and (emphasis added)

But, as the legislative history of section 2(12) of S. 2036 (the

Senate Bill section which revised section 105(f)(2)(A), (B) and (C))

indicates, Congress decided to treat contractor-purchased property and

federal government-furnished property exactly the same as under federal

grant procedures:

Section 2(12) amends section 105(f)(2) to address both the

acquisition of property with contract funds after a contract has

been awarded and also the management of government-furnished

property. Currently, standard grant regulations provide that title

to property purchased with grant funds vests in the grantee. The

amendment extends the same policy to property purchased with self-

determination contract funds. The policy reasons underlying the

Self-Determination Act strongly counsel in favor of such a regime,

and the amendment eliminates the need for a technical ``donation''

of the property in such circumstances. At the same time, the

amendment provides a mechanism for the return of property still in

use to the Secretary, in the event a contracting program is

retroceded back to the federal government. Finally, in conjunction

with Paragraph 1(b)(7) of the model contract set forth in section 3

of the bill, the amendment assures that, although title to such

property will vest in the tribe or tribal organization, the

Secretary is to treat such property in the same manner for purposes

of replacement as he or she would have had title to the property

vested of the government. S. Rpt. No. 103-374, 103d Cong., 2d Sess.

7 (1994).

Thus, section 105(f)(2)(A) of Pub. L. 93-638 (25 U.S.C. 450j

(f)(2)(A)) now gives title to a tribe just as grant procedures give

title to a grantee. Also, Congress eliminated the need to go through

time consuming donation procedures applicable to other excess property

and allow for automatic vesting of title at the option of the tribe for

contractor-purchased and federal government-furnished property. There

was no intent to change the agencies to which these provisions applied;

i.e., BIA, IHS, and GSA, and indeed, no such change was made.

The significance of this modification of section 105(f)(2) of Pub.

L. 93-638 is that the recrafting of section 105(f)(2)(A) continued to

be limited to BIA, IHS and GSA:

(f) In connection with any self-determination contract or grant

made pursuant to section 102 or 103 of this Act, the appropriate

Secretary may--

(2) donate to an Indian tribe or tribal organization title to

any personal or real property found to be excess to the needs of the

Bureau of Indian Affairs, the Indian Health Service, or the General

Services Administration, except that--

``(A) subject to the provisions of subparagraph (B), title to

property and equipment furnished by the Federal Government for use

in the performance of the contract or purchased with funds under any

self-determination contract or grant agreement shall, unless

otherwise requested by the tribe or tribal organization, vest in the

appropriate tribe or tribal organization;

Had Congress intended to change the clear limitation of the pre-

1994 Amendment language of section 105(f)(2) of Pub. L. 93-638 to

include non-BIA bureaus, it surely would have modified this continued

reference to only BIA, IHS, and GSA in this section. However, it did

not. While making a significant change by allowing title to

automatically pass to tribes for contractor-purchased and federal

government-furnished excess property, it made absolutely no change to

the above-referenced agencies to which these rights apply. Even though

section 105(f)(2)(A) refers to the ``Federal Government'' and ``any

self-determination contract'' this subsection must be read within the

context of its antecedent parent clause in subsection (2), which limits

applicability to only the BIA, IHS, and GSA. This is the most

reasonable interpretation of these provisions. To do otherwise, would

require reading the terms ``Bureau of Indian Affairs, Indian Health

Service, and General Services Administration'' completely out of

section 105(f)(2), (25 U.S.C. 450j(f)(2), when interpreting subsection

(A) of section 105(f)(2). This would certainly ignore the mandate of

statutory interpretation to give meaning to all words of a statute.

In addition, the term ``except'' preceding ``(A),'' is defined in

Webster's Collegiate Dictionary to mean ``to take out from a number or

whole,'' i.e., a part of the whole. Thus, the whole is section

105(f)(2), which applies to BIA, IHS, and GSA, and ``A'' is part of

section

[[Page 7220]]

105(f)(2) and is also limited to BIA, IHS, and GSA.

Furthermore, the legislative history for this section, as discussed

above, indicates it was intended that title to property purchased with

contract funds or furnished by the federal government should vest

``automatically'' and the amendment eliminates the need for a technical

donation of the property. Thus, the Congressional intent was that

donation procedures should be avoided for federal government-furnished

and contract-funded property. Clearly, paragraphs (A), (B), and (C)

were not stand-alone provisions, but were an integral part of

subsection (2), in order to limit ``donation'' procedures in subsection

(2) to only excess property, while providing the automatic vesting

concept in paragraph (A) for federal government-furnished and contract-

funded property. Therefore, it also follows that paragraphs (A), (B),

and (C), like subsection (2), apply only to the agencies referenced in

subsection (2); i.e., BIA, IHS, and GSA.

Nor do we agree with the tribal representatives that subpart I of

Pub. L. 93-638 regulations, published on June 24, 1996, resolved the

issue of applicability of section 105(f)(2)(A), (25 U.S.C. 450j

(f)(2)(A)) to non-BIA bureaus. The 25 CFR sections 900.87 and 900.91

refer only to title transfers when section 105(f)(2)(A) applies, but do

not state to which bureaus section 105(f)(2)(A) does apply. The Pub. L.

93-638 rulemaking therefore left open for litigation whether it applies

to non-BIA bureaus. The Department of the Interior believes that

section 105(f)(2)(A) does not apply to non-BIA programs under the

Tribal Self-Governance Act of 1994 or Pub. L. 93-638.

The Tribal Self-Governance Act of 1994 does not authorize and other

statutes prohibit the transfer of title to non-BIA real property. For

example, nothing in that Act provides a basis for transferring title

from the United States to a Self-Governance tribe of a portion of a

national park or a national wildlife refuge because an AFA permits a

tribe to administer a program within a park or refuge under section

403(c), (25 U.S.C. 458cc(c)) of the Act. An AFA with BLM to conduct

cadastral survey work in Alaska relating to conveyances for Native

allotments would not permit the transfer of title to such property to

the Self-Governance tribe/consortium. Similarly, federal reclamation

law prohibits the transfer of title to reclamation projects without the

specific approval of Congress.

Summary of Regulations

Subpart A--General Provisions

This subpart contains the Congressional policy as stated in the

Tribal Self-Governance Act of 1994 and adds the Secretarial policy that

will guide the implementation of the Act by the Secretary and the

various bureaus of the Department of the Interior. The subpart also

defines terms used throughout the rule.

Subpart B--Selection of Additional Tribes for Participation in Tribal

Self-Governance

This subpart describes the steps a tribe/consortium must take to

participate in tribal self-governance and how a tribe can withdraw from

a consortium's AFA. Under the Act, a tribe/consortium must first be

admitted into the applicant pool and then be selected for

participation. The applicant pool contains those tribes/consortia that

the Director of the Office of Self-Governance (OSG) has determined are

eligible to participate in self-governance.

The Director, OSG may select up to 50 tribes or consortia of tribes

from the applicant pool for negotiation. If there are more tribes in

the applicant pool than are to be selected to negotiate in any given

year, the Director will choose tribes/consortia based upon the earliest

postmark date of completed applications.

The rule also stipulates that a tribe/consortium may be selected to

negotiate an AFA for non-BIA programs that are otherwise available to

Indian tribes without first negotiating an AFA for BIA programs.

However, to negotiate for a non-BIA program under Pub. L. 103-413,

section 403(c), (25 U.S.C. 458cc(c)) for which the tribe/consortium has

only a geographic, cultural, or historical connection, the Act requires

that the tribe/consortium must first have an AFA with the BIA, under

section 403(b)(1) Pub. L. 103-413; (25 U.S.C. 458cc(b)(1)) or any non-

BIA bureau under section 403(b)(2), (25 U.S.C. 458cc(b)(2)). (The term

``programs'' as used in the rule and in this preamble refers to

complete or partial programs, services, functions, or activities.)

Subpart B also describes what happens when a tribe wishes to

withdraw from a consortium's AFA. In such instances, the withdrawing

tribe must notify the consortium, appropriate DOI bureau, and OSG of

its intent to withdraw 180 days before the effective date of the next

AFA. Unless otherwise agreed to, the effective date of the withdrawal

will be the date on which the current agreement expires.

In completing the withdrawal, the consortium's AFA must be reduced

by that portion of funds attributable to the withdrawing tribe on the

same basis or methodology upon which the funds were included in the

consortium's AFA. If such a basis or methodology does not exist, then

the tribe, consortium, appropriate DOI bureau, and OSG must negotiate

an appropriate amount. A tribe may not withdraw from a consortium's AFA

in any other part of the year unless all parties agree.

Subpart C--Section 402(d) Planning and Negotiation Grants

Subpart C describes the criteria and procedures for awarding

various self-governance negotiation and planning grants. These grants

are discretionary and will be awarded by the Director of the OSG. The

award amount and number of grants depends upon Congressional

appropriation. If funding in any year is insufficient to meet total

requests for grants and financial assistance, priority will be given

first to negotiation grants and second to planning grants.

Negotiation grants are non-competitive. In order to receive a

negotiation grant, a tribe/consortium must first be selected from the

applicant pool and then submit a letter affirming its readiness to

negotiate and requesting a negotiation grant. This subpart also

indicates that tribe/consortium may also elect to negotiate for a self-

governance agreement if selected from the applicant pool without

applying for or receiving a negotiation grant. Planning grants will be

awarded to tribes/consortia requesting financial assistance in order to

complete the planning phase requirement for admission into the

applicant pool.

Subpart D--Other Financial Assistance for Planning and Negotiating

Grants for Non-BIA Programs

This subpart describes the other financial assistance for planning

and negotiating non-BIA programs available to any tribe/consortium

that:

(a) Has an existing AFA;

(b) Is in the applicant pool; or

(c) Has been selected from the applicant pool.

Tribes/consortia may submit only one application per year for a

grant under this subpart. This financial assistance will support

information gathering, analysis, and planning activities that may

involve consulting with appropriate non-BIA bureaus, and negotiation

activities.

Subpart D outlines what must be submitted in the application and

the criteria used to rank the applications.

[[Page 7221]]

Subpart E--Annual Funding Agreements for Bureau of Indian Affairs

Programs

This subpart describes the components of an Annual Funding

Agreement (AFA) for BIA programs. An AFA is a legally binding and

mutually enforceable written agreement between a self-governance tribe/

consortium and the BIA. It specifies the programs that are to be

performed by the BIA as inherently federal functions, programs

transferred to the tribe/consortium, and programs retained by the BIA

to carry out for the self-governance tribe. The division of the

responsibilities between the tribe/consortium and the BIA is to be

clearly stated in the AFA.

Subpart E states that a tribe/consortium may include BIA-

administered programs in its AFA regardless of the BIA agency or office

that performs the program. The Secretary must provide to the tribe/

consortium:

(a) Funds equal to what the tribe/consortium would have received

under contracts and grants under Title I of Pub. L. 93-638 (25 U.S.C.

450);

(b) Any funds specifically or functionally related to providing

services to the tribe/consortium by the Secretary; and

(c) Any funds that are otherwise available to Indian tribes for

which appropriations are made to other agencies other than the

Department of the Interior.

Except for construction, a tribe/consortium may redesign a program

without approval from the BIA except when the redesign first requires a

waiver of a Departmental regulation. Redesign does not entitle tribes/

consortia to an increase in the negotiated funding amount.

In determining the funding amount to be included in an AFA, this

subpart defines residual funds as those funds needed to carry out the

inherently federal functions of the BIA should all tribes assume

programmatic responsibility. The residual level will be determined

through a process that is consistent with the overall process used by

the BIA.

The subpart defines tribal shares as the amount determined for that

tribe/consortium from a particular program. Tribal share amounts may be

determined by either:

(a) A formula that has a reasonable basis in the function or

service performed by the BIA office and is consistently applied to all

tribes served by the area and agency offices; or

(b) On a tribe-by-tribe basis, such as awarded competitive grants

or special project funding.

Funding amounts may be adjusted while the AFA is in effect in order

to adjust for certain Congressional actions, correct a mistake, or if

there is mutual agreement. During the year, a tribe/consortium may

reallocate funds between programs without Secretarial approval.

This subpart also defines base budgets as the amount of recurring

funding identified in the annual budget of the President as adjusted by

Congressional action. Base budgets are derived from:

(a) A tribe/consortium's Pub. L. 93-638 contract amounts;

(b) Negotiated amounts of agency, area, and central office funding;

(c) Other recurring funding;

(d) Special projects, if applicable;

(e) Programmatic shortfall; and

(f) Any other general increases/decreases to tribal priority

allocations that might include pay, retirement, or other inflationary

cost adjustments.

Base budgets do not include any non-recurring program funds,

Congressional earmarks, or other funds specifically excluded by

Congress.

If a tribe/consortium had funding amounts included in its base

budgets or was base eligible before these regulations, the tribe/

consortium may retain the amounts previously negotiated. Once base

budgets are established, a tribe/consortium need not renegotiate these

amounts unless it wants to. If the tribe/consortium wishes to

renegotiate, it also would be required to renegotiate all funding

included in the AFA on the same basis as all other tribes.

Subpart F--Non-BIA Annual Self-Governance Compacts and Funding

Agreements

This subpart describes program eligibility, funding for, and terms

and conditions relating to AFAs covering non-BIA programs. This subpart

also establishes procedures for consultation with tribes for

preparation of an annual listing in the Federal Register of non-BIA

programs that are eligible for negotiation by self-governance tribes.

Although the committee reached a consensus on most of the provisions

pertaining to AFAs for non-BIA programs, no agreement was reached on

several questions concerning program eligibility. See the explanation

of matters in disagreement found elsewhere in this preamble.

Sections 1000.112 through 1000.125 of these proposed regulations

contain rules on the eligibility of programs for inclusion in AFAs.

Under the Tribal Self-Governance Act of 1994, non-BIA programs are

eligible for negotiation and inclusion in AFAs based on either section

403(b)(2), (25 U.S.C. 458cc(b)(2)) (pertaining to programs available to

Indians), or section 403(c), (25 U.S.C. 458cc(c)) (pertaining to

programs of special geographic, historical, or cultural significance to

the participating tribe/consortium).

These provisions reflect the discretion afforded by the Act with

respect to the terms or eligibility of non-BIA programs for inclusion

in AFAs, as compared to agreements covering BIA programs. For instance,

section 403(b)(2) authorizes a non-BIA bureau to negotiate terms that

it may require in AFAs and section 403(b)(3) allows redesign and

consolidation of non-BIA programs or reallocation of funds when the

parties agree.

Sections 1000.126 through 1000.131 of these proposed regulations

describe how AFA funding is determined. Programs that would be eligible

for self-determination contracts under Title I of the Indian Self-

Determination and Education Assistance Act (ISDEA) (Pub. L. 93-638, as

amended) are to be funded at the same level as required for self-

determination contracts.

Programs which are only available because of a special geographic,

historical, or cultural significance eligible under section 403'' of

the Tribal Self-Governance Act of 1994 are not eligible for self-

determination contracting. The regulations provide that such programs

generally are to be funded at the level that would have been spent by

the bureau to operate the program, plus provisions for allowable

indirect costs. The latter are generally based on rates negotiated by

the Department of the Interior Inspector General, or the Inspector

General of another applicable federal agency.

Subpart G--Negotiation Process for Annual Funding Agreements

This subpart establishes the process and time lines for a newly

selected or participating tribe/consortium wishing to negotiate either

an initial or a successor AFA with any DOI bureau. Under subpart G, the

negotiation process consists of two phases, an information phase and a

negotiation phase.

In the information phase, any tribe/consortium that has been

admitted to the self-governance program or to the applicant pool may

submit requests for information concerning programs they wish to

administer under the Tribal Self-Governance Act of 1994. Although this

phase is not mandatory, it is expected to facilitate successful

negotiations by providing for a timely exchange of information on the

requested programs.

[[Page 7222]]

The negotiation phase establishes detailed time lines and

procedures for conducting negotiations with tribes that have been

accepted into the self-governance program, identifying the

responsibilities of the tribe/consortium and bureau representatives in

the negotiation process, and for executing AFAs.

The proposed deadlines for the negotiation process were chosen by

the committee to reflect the availability of annual budget information

and the time needed for the bureau and the tribe/consortium to reach an

agreement and the requirement under the Tribal Self-Governance Act of

1994 that each AFA must be submitted for Congressional review at least

90 days before its proposed effective date.

This subpart also establishes, in sections 1000.173 through

1000.175, rules for the negotiation process for successor AFAs. A

successor agreement is a funding agreement negotiated with a particular

bureau after an initial agreement with that bureau. The procedures for

negotiating a successor agreement are the same as those for initial

agreements. The committee expects, however, that successor agreements

will build upon the prior agreements and will result in an expedited

and simplified negotiation process.

The model compact serves as an umbrella document to recognize the

government-to-government relationship between the tribe(s) and the

Department. Self-governance tribes may choose to execute a compact with

the Secretary but are not required to do so in order to enter into AFAs

with Departmental bureaus. A model self-governance compact is provided

in Appendix A. The model compact is not the same as an AFA and is not

intended to replace, duplicate or lessen the importance of the AFA.

Proposed section 1000.153 permits the parties to agree to additional

terms and conditions for inclusion in compacts.

The Committee agreed that for BIA programs only, a tribe/consortium

may elect to continue under the terms of its pre-regulation compact as

long as those provisions are in compliance with other federal laws and

are consistent with these regulations. For BIA programs, a tribe/

consortium may include any term that may be included in a contract

under Title I (Pub. L. 93-638; 25 U.S.C. 450) in the model compact.

Subpart H--Limitation and/or Reduction of Services, Contracts, and

Funds

This subpart describes the process used by the Secretary to

determine whether the implementation of an AFA will cause a limitation

or reduction in services, contracts or funds to any other Indian tribe/

consortium or tribal organization as prohibited by section 406(a) of

Pub. L. 93-638 (25 U.S.C. 458ff(a)). Subpart H applies only to BIA

programs and does not apply to the general public and non-Indians.

The BIA may raise the issue of limitation and/or reduction of

services, contracts, or funding to other tribes from the beginning of

the negotiation period until the end of the first year of

implementation of the AFA. An adversely affected tribe/consortium may

raise the issue of limitation or reduction of services, contracts, or

funding during area wide tribal shares meetings before the first year

of implementation, within the 90-day review period before the effective

date of the AFA, and during the first year of implementation of the

AFA. Claims not filed on time are barred.

A claim by either the Department or an adversely affected tribe/

consortium or tribal organization must be a written notification that

specifies the alleged limitation or reduction of services, contracts,

or funding. If a limitation and/or reduction exists, then the BIA must

use shortfall funding, supplemental funding, or other available BIA

resources to prevent the reduction during the existing AFA year. The

BIA may, in a subsequent AFA, adjust the funding to correct a finding

of actual reduction in services, contracts, or funds for that

subsequent year. All adjustments under this subpart must be mutually

agreed to between BIA and the tribe/consortium.

Subpart I--Public Consultation Process

This subpart describes when public consultation is appropriate and

the protocols that should be used in this process. The roles of the

tribe/consortium and the bureau are outlined, including notification

procedures and the commitment to share information concerning inquiries

about AFAs.

Public consultation is used when required by law or when

appropriate under bureau discretion. When the law requires a public

consultation process, the bureau will include the tribe/consortium to

the maximum extent possible. When a public consultation process is a

matter of bureau discretion, the bureau and the tribe/consortium may

develop guidelines for the conduct of public meetings.

When the bureau conducts a public meeting, it must notify the

tribe/consortium and involve the tribe/consortium in as much of the

conduct of the meeting as is practicable and allowed by law. When

someone other than the bureau conducts a meeting to discuss a

particular AFA and the bureau is invited to attend, the bureau will

notify the tribe/consortium of the invitation and encourage the meeting

sponsor to invite the tribe/consortium to participate.

The bureau and the tribe/consortium will exchange information about

other inquiries relating to the AFA under negotiation from other

affected or interested parties.

Subpart J--Waiver of Regulations

This subpart implements section 403(I)(2)(A) of the Tribal Self-

Governance Act of 1994 (25 U.S.C. 458cc(I)(2)(A)). It authorizes the

Secretary to waive all DOI regulations governing programs included in

an AFA, as identified by the tribe/consortium.

Subpart J also provides time lines, explains how a tribe/consortium

applies for a waiver, the basis for granting or denyin

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