"(g) Contracts and grants with tribal organizations pursuant to sections 102, 103, and 104 of this Act and the rules and regulations adopted by the Secretaries of Interior and of Health, Education, and Welfare pursuant to section 107 of this Act shall include provisions to assure the fair and uniform provision by such tribal organizations of the services and assistance they provide to Indians under such contracts and grants."

Section 107 provides for the adoption of the initial rules and regulations to implement Title I within certain time frames and requires consultation in their development with "national and regional Indian organizations", presentation of the proposed rules and regulations to the Congressional Committees on Interior and Insular Affairs, and their publication in the Federal Register for comment before final publication within ten months of enactment of S. 1017. We believe that we will be able to meet the specified time frames.

For purposes of clarification and to be consistent with section 107(a), we suggest that the word "each" be inserted after "shall" in each of paragraphs (1), (2), (3), and (4) of section 107(b) and after the word "are" in section 107(c). Section 108 is similar to section 2(c) of H.R. 6372, which we proposed. The term "Indian tribal organization" should be changed to "tribal organization" to be consistent with the remainder of the title.

We are aware of the Comptroller General's recommendation concerning section 108 in his March 20, 1974 letter (see April 1, 1974 Congressional Record, pages S4819-S4821). A requirement similar to that proposed by the Comptroller General is set out in 41 U.S.C. 254 (c) and we believe that it would be applicable to the contracts authorized in Title I of S. 1017 by virtue of the provision set out in 41 U.S.C. 260 and 41 U.S.C. 252 (c) (15). However, we have no objection to including such a provision in S. 1017 and making it applicable to both titles in line with the Comptroller General's recommendation. We also believe that the Act should require that reports made by the organizations receiving grants or contracts under the Act should be made available to the Indian people served under such grants or contracts and that any funds advanced but not utilized in connection with a grant or contract should be returned to the Treasury. These recommendations could be incorporated by deleting the last sentence in section 108 and inserting a new section 5 before Title I as follows:

"Sec. 5. (a) Each recipient of Federal financial assistance from the Secretary of the Interior or the Secretary of Health, Education, and Welfare, under this Act, shall keep such records as the appropriate Secretary shall prescribe, including records which fully disclose the amount and disposition by such recipient of the proceeds of such assistance, the cost of the project or undertaking in connection with which such assistance is given or used, the amount of that portion of the cost of the project or undertaking supplied by other sources, and such other records as will facilitate an effective audit."

"(b) The Comptroller General and the appropriate Secretary, or any of their duly authorized representatives, shall until the expiration of three years after completion of the project or undertaking referred to in the preceding subsection of this section, have access (for the purpose of audit and examination) to any books, documents, papers, and records of such recipients which in the opinion of the Comptroller General or the appropriate Secretary may be related or pertinent to the grants, contracts, subcontracts, subgrants, or other arrangements referred to in the preceding subsection.

"(c) Each recipient of Federal financial assistance referred to in subsection (a) of this section shall make such reports and information available to the Indian people served or represented by such recipient as and in a manner de termined to be adequate by the appropriate Secretary.

"(d) Any funds paid to a financial assistance recipient referred to in subsection (a) of this section and not expended or used for the purposes for which paid shall be repaid to the Treasury of the United States."

In place of the section 109 which we recommended be combined with section 104, we suggest the inclusion of the following new section 109 based on section 2(e) of H.R. 6372 and a similar provision recommended by the Comptroller General's March 20, 1974 letter:

"Sec. 109. Each contract or grant agreement entered into pursuant to sections 102, 103, and 104 of this Aet shall provide that in any case where the appropriate Secretary determines that the tribal organizations performance under such contract or grant agreement involves (1) the violation of the rights or endangerment of the health, safety, or welfare of any persons, or (2) gross negligence or mis

management in the handling or use of funds provided to the tribal organization pursuant to such contract or grant agreement, such Secretary may, under regulations prescribed by him and after providing notice and hearing to such tribal organization, rescind such contract or grant agreement and assume or resume control or operation of the program, activity, or service involved if he determines that the tribal organization has not taken corrective action as prescribed by him: Provided, That the appropriate Secretary may, upon notice to a tribal organization immediately rescind a contract or grant and resume control or operation of a program, activity, or service if he finds that there is an immediate threat to health or safety and, in such cases, he shall hold a hearing on such action within 10 days thereof. Such Secretary may decline to enter into a new contract or grant agreement and retain control of such program, activity, or service until such time as he is satisfied that the violations of rights, endangerment of health, safety, or welfare which necessitated the rescission has been corrected. Nothing in this section shall be construed as contravening the Occupational Safety and Health Act of 1970 (84 Stat. 1590) as amended (29 U.S.C. 651)."

Section 110 provides desirable assurance that nothing in the Act alters tribal sovereign immunity from suit or authorizes the termination of any trust responsibility to Indian people.

We have been asked whether the phrase "elected governing body of any Indian tribe" in the section 4(c) definition of "tribal organization" would exclude those Pueblos which select their leaders by their traditional method and not by what is commonly considered an election. We would not so construe the provision but to avoid any misunderstanding, we suggest that the word "elected" be replaced by "elected or otherwise recognized". This would enable us to determine the body which is authorized to act as the "governing body" for each specific tribal situation.

We recommend that the Act include provision for criminal penalties for embezzlement, willful misapplication, or fraud in connection with grants and contracts pursuant to Titles I and II. We suggest the addition of a new paragraph 6 before Title I as follows:

"Sec. 6. Whoever, being an officer, director, agent, or employee of, or connected in any capacity with, any recipient of a grant, subgrant, contract, or subcontract pursuant to this Act or the Act of April 16, 1934 (48 Stat. 596), as amended, embezzles, willfully misapplies, steals, or obtains by fraud any of the money, funds, assets, or property which are the subject of such a grant, subgrant, contract, or subcontract, shall be fined not more than $10,000 or imprisoned for not more than two years, or both, but if the amount so embezzled, misapplied, stolen, or obtained by fraud does not exceed $100, he shall be fined not more than $1,000 or imprisoned not more than one year, or both."

Construction activity is possible under S. 1017 and provision should be made for the payment of prevailing wage rates. Such a provision (with an incorrect citation) is included in section 206 (f) but is appliciable only to school construction under Part C of title II. We recommend that a new section 7 (based on section 14 of H.R. 9011) applicable to all of S. 1017 be inserted before title I as follows:

"Sec. 7. All laborers and mechanics employed by contractors or subcontrators in the construction, alteration, or repair, including painting or decorating of buildings or other facilities in connection with contracts or grants entered into pursuant to this Act, shall be paid wages at not less than those prevailing on similar construction in the locality, as determined by the Secretary of Labor in accordance with the Davis-Bacon Act of March 3, 1931 (46 Stat. 1494), as amended. With respect to construction, alteration, or repair work to which the Act of March 3, 1931, is applicable under the terms of this section, the Secretary of Labor shall have the authority and functions set forth in Reorganization Plan Numbered 14 of 1950 (15 F.R. 3176: 64 Stat. 1267) and section 2 of the Act of June 13, 1934 (48 Stat. 948, 40 U.S.C. 276c).”

We wish to reiterate our recommendation that Title I of S. 1017 be enacted, subject to the above comments and suggestions, because of its critical importance to achieving Indian Self-Determination, strengthening tribal governments, and improving the general welfare of Indian people.

The Office of Management and Budget has advised that the presentation of this report is in accord with the program of the President.

Sincerely yours,

MORRIS THOMPSON, Commissioner of Indian Affairs.

SECTION-BY-SECTION ANALYSIS OF S. 1017

Sec. 1 cites Act as "Indian Self-Determination and Education Assistance Act."

Sec. 2 contains a statement of congressional findings relative to Indian selfdetermination and education.

Sec. 3 contains a congressional declaration of policy committing the Congress to a policy of Indian self-determination with respect to Indian control and involvement in Federal services to Indians.

Sec. 4 contains definitions of Indian, Indian tribes, tribal organization, Secretary, school district, and State education agency.

TITLE I-THE INDIAN SELF-DETERMINATION ACT

Sec. 101 cites title as "Indian Self-Determination Act."

Sec. 102 (a) directs the Secretary of the Interior, at the request of an Indian tribe to contract with a tribal organization to carry out the services and programs provided to Indians through the Bureau of Indian Affairs. The Secretary must make certain determinations concerning the desirablility of contracting and the ability of the tribe or tribal organization to carry out the contract.

Subsection (b) requires the Secretary to notify the tribe of his objections in the event he declines to enter into a requested contract and provide the tribe with an opportunity for a hearing.

Subsection (c) directs the Secretary to require a tribal contractor to obtain liability insurance provided that the insurance carrier may not set up as a defense, within the limits of the insurance coverage, the tribal sovereign immunity from suit; nor may it waive or otherwise limit tribal sovereign immunity beyond the coverage and limits of the insurance policy.

Sec. 103 directs the Secretary of Health, Education, and Welfare, at the request of an Indian tribe, to contract with tribal organizations to carry out services and programs provided to Indians through the Indian Health Service. The conditions and limitations imposed upon the Secretary of the Interior in section 102 are likewise imposed upon the Secretary of Health, Education, and Welfare.

Sec. 104 authorizes both Secretaries to make grants to Indian tribal organizations to assist them in entering into contracts pursuant to sections 102 and 103. Sec. 105 amends the Intergovernmental Personnel Act of 1970, the Indian Health Service enabling Act of August 5, 1954; and the Military Selective Service Act of 1967 to permit the assigning of civil service or commissioned personnel to tribal contractors without loss of benefits under such acts.

Sec. 106 (a) provides that contracts made under this title with any tribal organization must comply with general Federal contracting laws, and regulations except that they may be negotiated without advertising and they need not comply with the provisions of the Act of August 24, 1935 (49 Stat. 793) which relates mainly to bonding requirements.

(b) provides that payments under any such contract or grant can be made in advance of performance on a reimbursement basis and that they can be made in installments and under such conditions as the Secretary deems necessary.

(c) authorizes the appropriate Secretary to enter into contracts for a period of up to three years provided there are available appropriations. These contracts may be renegotiated annually to reflect such factors as cost increases beyond the control of a tribe or tribal organization.

(d) provides that the appropriate Secretary can, with the consent of or upon the request of the tribal organization, revise or amend such contract or grant. The appropriate Secretary, however, is directed to grant retrocession upon the request of the tribe which originally requested the contract.

(e) authorizes the appropriate Secretary to permit a tribal organization, contracting under authority of this title, to use Federal buildings, equipment, and personal property such as hospitals, school buildings, vehicles, office equipment, etc.

(f) provides that the contracts or grants authorized by this title may include provision for the continuation of personal service contracts so long as the trust responsibility of the Federal Government is not impaired.

(g) provides that the Indian contractor must apply the same standards in the implementation of the contracts as would the Federal Government.

Sec. 107 authorizes the two Secretaries to do whatever else is necessary and to make such rules and regulations as are necessary to carry out the provisions of the title and provides for notice of the proposed promulgation of such rules and regulations.

Sec. 108 provides for the filing of a report with the Secretary by any tribe which requests a contract or grant pursuant to this title and that records of any contracting organization shall be subject to audit.

Sec. 109 authorizes appropriation of $3,000,000 for the Department of the Interior and $2,000,000 for the Department of HEW for the next three fiscal years each.

Sec. 110 preserves the sovereign immunity of Indian tribes and provides that the provisions of this title shall not affect the trust responsibility of the United States toward Indian people.

TITLE II. THE INDIAN EDUCATION ASSISTANCE ACT

Sec. 201 cites title as "Indian Education Assistance Act."

Part A.-Education of Indians in public schools

Sec. 202 amends the Johnson-O'Malley Act of 1934 by adding four new sections. The amendments (1) require that a prospective contractor for education of Indians must submit a plan with the Secretary which meets certain minimum conditions; (2) requires a school district affected by a Johnson-O'Malley contract, where the school board is not composed of a majority of Indians, to cooperate and consult with an Indian Parents Committee elected from among their own numbers. Existing parent committee may be utilized for the purposes of the section; (3) authorizes Johnson-O'Malley funding for school districts attended by Indian students in Federal dormitories; and (4) authorizes appropriations of $65,000,000 for each of fiscal years 1975 and 1976.

Sec. 203 requires the Secretary of the Interior, after consulting with the Secretary of HEW and others competent in Indian education, to prepare and submit to the Congress no later than October 1, 1974, a report on the JohnsonO'Malley program, including an analysis of the allocation of funds among eligible school districts and the relationship of the program to other Federal programs providing Federal assistance to public schools educating Indian students.

Part B.-Preparation of professionals in Indian education

Sec. 204 authorizes the Secretary of the Interior to make grants to or contract with institutions of higher education or other organizations, including Indian tribes, to provide fellowships to carry out programs designed to develop or improve the qualification of professionals in Indian education and educationrelated services. Indians would be given a preference as beneficiaries of such fellowships or programs.

Sec. 205 authorizes to be appropriated $10,000,000 for the fiscal year of enactment of the Act and $15,000,000 for the next two succeeding years.

Part C.-School construction

Sec. 206 (a) authorizes Federal assistance for public school construction, acquisition or renovation to school districts on or near Indian reservation with Indian enrollment;

(b) directs the Secretary of the Interior to expend not less than 75% of such funds on projects which would be eligible for assistance under the impact aid provisions of P.L. 815. The Commissioner of Education is required to submit a list of such projects;

(c) requires Secretary to expend not more than 25% of such funds on former private schools which have been, or will be, taken over by Indian tribes;

(d) provides that contracts entered into for such assistance contain provisions which (1) insure educational standards compatible with those in similar nonIndian school districts and (2) guarantee compliance with local building codes; (e) requires consultation with local Indian arent committees and tribal governing bodies prior to entering into such contracts;

(f) requires compliance with local prevailing wage rates under such contracts; (g) authorizes the Secretary of the Interior to make an evaluation and report within 90 days of the end of the three year period following enactment on the operation and implementation of the program; and

(h) authorizes $35,000,000 for fiscal year ending June 30, 1974, and $35,000,000 for each of the four succeeding years. Fund would remain available until expended.

Part D.-Youth intern program

Sec. 207 provides for the establishment of a summer youth intern program for Indian students 16 years of age or older who are enrolled in secondary, vocational, or higher education programs.

Sec. 208 requires the Secretary to recognize community service fields which can provide opportunities for career related activities for Indian youth; provides that the Secretary determine number of eligible Indian youth for summer employment under (a); and provides for negotiations between the Secretary and the employer which will include job description, evaluation of progress, and formal consultation.

Sec. 209 establishes procedural requirements for the Secretary in administering the youth intern program related to wages, preservation of fulltime employees and benefits of employment.

Sec. 210 authorizes appropriations for Part D of $10,000,000 for the first fiscal year and $15,000,000 for each of the next two fiscal years.

Part E.-Education research and development

Sec. 211 authorizes educational research and development grants and contracts with universities, colleges, and other public and non-profit private organizations; requires that the Secretary shall obtain the advice of educational specialists, including Indians, prior to making or entering into such grants or contracts; and requires that such grants or contracts not duplicate substantially other similar efforts.

Sec. 212 authorizes $2,000,000 for the first fiscal year and $3,000,000 for the next two succeeding years.

Part F.-Adult vocational, early childhood special and higher education

Sec. 213 requires the Secretary, after consultation with the Indians, to submit to the 94th Congress proposed programs in each of the areas contained in the Part heading.

Sec. 214 authorizes $750,000 for Part F.

Part G.-General provisions

Sec. 215 requires that the quality of educational services provided for Indian students by affected districts be comparable to those for non-Indian students before Federal funding under this title is available.

Sec. 216 limits to public agencies and tribal organizations except those bodies are permitted to subcontract with their individuals, organizations, or corporations.

Sec. 217 provides for Secretarial promulgation of regulation for this title.

Sec. 218 authorizes the Secretary to provide funds for the operation of former private schools over which the tribes assume authority. The Secretary is required to submit annual reports to the House and Senate Interior Committees on this program.

Sec. 219 provides that financial assistance to public schools for the education of Indians under this title shall be in addition and supplemental to assistance provided under title IV of the Act of June 23, 1972.

Hon. JAMES A. HALEY,

U.S. DEPARTMENT OF THE INTERIOR,

OFFICE OF THE SECRETARY, Washington, D.C., May 17, 1974.

Chairman, Committee on Interior and Insular Affairs, House of Representatives, Washington, D.C.

DEAR MR. CHAIRMAN: This further responds to your request for the views of this Department on S. 1017 (the "Indian Self-Determination and Education Assistance Act"). In a separate letter we provided you our views on Title I (the "Indian Self-Determination Act") of S. 1017.