Section 105 of the bill addresses the Secretaries' authority to 
promulgate interpretative regulations in carrying out the mandates 
of the Act. It amends section 107 (a) and (b) of the Act by limiting 
the delegated authorization of the Secretaries to 

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promulgate regulations. This action is a direct result of the failure 
of the Secretaries to respond promptly and appropriately to the 
comprehensive amendments developed by this committee six years ago.
* * * * *
    Section 105(l) amends Sec. 107(a) by delegating to the Secretary 
the authority only to promulgate implementing regulations in certain 
limited subject matter areas. By and large these areas correspond to 
the areas of concern identified by the Departments in testimony and 
in discussions. Beyond the areas specified in subsection (a) * * * 
no further delegated authority is conferred.

    Sen. Rep. No. 103-374 at 14. For this reason, the new NPRM covers 
substantially fewer topics than the January 1994 NPRM. As specified by 
Congress, the new NPRM is limited to regulations relating to chapter 
171 of title 28 of the United States Code, commonly known as the 
``Federal Tort Claims Act;'' the Contract Disputes Act of 1978 (41 
U.S.C. 601 et seq.); declination and waiver procedures; appeal 
procedures; reassumption procedures; discretionary grant procedures for 
grants awarded under section 103 of the Act; property donation 
procedures arising under section 105(f) of the Act; internal agency 
procedures relating to the implementation of this Act; retrocession and 
tribal organization relinquishment procedures; contract proposal 
contents; conflicts of interest; construction; programmatic reports and 
data requirements; procurement standards; property management 
standards; and financial management standards. All but two of these 
permitted regulatory topics--discretionary grant procedures and tribal 
organization relinquishment procedures--are addressed in this NPRM.
    The 1994 amendments also require that, if the Departments elect to 
promulgate regulations, the Departments must use the notice and comment 
procedures of the Administrative Procedure Act, and must promulgate the 
regulations as a single set of regulations in title 25 of the Code of 
Federal Regulations. Section 107(a)(2). Finally, the 1994 amendments 
require that any regulations must be developed with the direct 
participation of tribal representatives using as a guide the Negotiated 
Rulemaking Act of 1990. This latter requirement is also explained in 
the accompanying Senate Report:

    To remain consistent with the original intent of the Act and to 
ensure that the input received from the tribes and tribal 
organizations in the regulation drafting process is not disregarded 
as has previously been the case, section 107 also has been amended 
by adding a new subsection (d), requiring the Secretaries to employ 
the negotiated rulemaking process.Sen. Rep. No. 103-374 at 14. 
As a result of the October 1994 
amendments and earlier initiatives previously discussed, the 
Departments chartered a negotiated rulemaking committee under the 
Federal Advisory Committee Act. The committee's purpose is to develop 
regulations that implement amendments to the Act.
    The committee has 63 members. Forty-eight of these members 
represent Tribes--two tribal members from each BIA area and two from 
each IHS area. Nine members are from the Department of the Interior and 
six members are from the Department of Health and Human Services. 
Additionally, four individuals from the Federal Mediation and 
Conciliation Service served as facilitators. The committee is co-
chaired by four tribal representatives and two Federal representatives. 
While the committee is much larger than usually chartered under the 
Negotiated Rulemaking Act, its larger size was justified due to the 
diversity of tribal interests and programs available for contracting 
under the Act.
    The committee agreed to operate based on consensus decisionmaking. 
The Departments committed to publish all consensus decisions as the 
proposed rule. The committee further agreed that any committee member 
or his/her constituents could comment on this proposed rule.
    In order to complete the regulations within the statutory 
timeframe, the committee divided the areas subject to regulation among 
six working groups. The workgroups made recommendations to the 
committee on whether regulations in a particular area were desirable. 
If the committee agreed that regulations were desirable, the workgroups 
developed options for draft regulations. The workgroups presented their 
options to the full committee, where the committee discussed them and 
eventually developed the proposed regulations.
    The first meeting of the committee was in April of 1995. At that 
meeting, the committee established six workgroups, a meeting schedule, 
and a protocol for deliberations. Between April and September of 1995, 
the committee met five times to discuss draft regulations produced by 
the workgroups. Each of these meetings generally lasted three days. 
Additionally, the workgroups met several more times between April and 
September to develop recommendations for the committee to consider.
    The policy of the Departments is, whenever possible, to afford the 
public an opportunity to participate in the rulemaking process. All of 
the sessions of the committee were announced in the Federal Register 
and were open to the public.
    The Departments commend the ability of the committee to cooperate 
and develop a proposal that addresses the interests of the tribes and 
the Federal agencies. This negotiated rulemaking process is a model for 
developing successful Federal and tribal partnerships in other 
endeavors. The consensus process allowed for true bilateral 
negotiations between the Federal government and the tribes in the best 
spirit of the government-to-government relationship.
    In developing regulatory language, full committee consensus was 
reached on the regulations which follow under subparts ``A'' through 
``P.'' In addition, at the request of tribal and Federal 
representatives, the Secretaries have agreed to propose and publish 
additional introductory materials under subpart ``A.'' Where the full 
committee could not reach consensus as defined in its protocol, this 
preamble includes a brief description of the issue, along with the 
Federal and tribal positions when available. The public is invited to 
comment on these issues as well as on the proposed regulations.
    Where the tribal position is stated it reflects dissatisfaction 
with proposed resolution of the issues by the Federal representatives 
and preference for alternative language as put forth by the tribes. 
Where the Federal position is stated, it represents the official views 
of the Departments, as expressed by the designated Federal officials. 
The paragraphs below address five areas of disagreement within the 
committee. The five areas are: internal agency procedures, 
confidentiality, conflicts of interest, and two areas of Secretarial 
policy.

Key Areas of Disagreement

Internal Agency Procedures

    The tribal representatives of the negotiated rulemaking committee 
believe the Act requires that provisions concerning the internal 
procedures of the Departments of the Interior and Health and Human 
Services must be drafted by the negotiated rulemaking committee and 
should be included in the final regulation.
    The tribal representatives' goal is to have uniform procedures 
among the Federal agencies for the implementation and interpretation of 
the Act and these regulations. Further, tribal representatives believe 
that, unless the internal agency procedures subpart is 

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included in these regulations, the Federal agencies may use internal 
agency procedures to limit the effect of the 1994 amendments of the 
Act.
    Previously, in the House and Senate Reports that accompanied the 
final version of the 1994 bill each committee observed:

    The recently promulgated proposed regulations severely undercut 
Congress' intent in the original Act and those amendments to 
liberalize the contracting process and to put these programs firmly 
in the hands of the tribes. The proposed January 1994 regulations 
erect a myriad of new barriers and restrictions upon contractors 
rather than simplifying the contracting process and freeing tribes 
from the yoke of excess Federal oversight and control.

    Sen. Rep. No. 103-374 at 14; Cong. Rec. at H-11145 (daily ed. Oct. 
6, 1994). Tribal representatives believe that internal agency 
procedures may be used in this same way again if allowed to be created 
outside the negotiated rulemaking process.
    For purposes of soliciting comments the tribal representatives 
recommend the following regulation provision to address the issue of 
internal agency procedures:

Internal Agency Procedures

    A. No internal agency procedure, policy, or other issuance which 
interprets the meaning or application of any provision of the Act or 
these regulations shall be binding upon an Indian tribe or tribal 
organization. Any such issuance shall instead:
    (1) Fall within the specific area of delegated rulemaking 
authority specified in section 107(a) of the Act; and
    (2) Be promulgated pursuant to the negotiated rulemaking and 
notice and comment procedures of the Act.
    B. No issuance which fails to meet these criteria shall have any 
force or effect, or be binding on any tribe or tribal organization.
    C. No internal agency procedure and no Departmental official or 
employee shall impose any requirements, limitation, or condition on 
any tribe or tribal organization relating to any matter arising 
under the Act. All such matters shall be governed exclusively by the 
Act and these regulations.

    The Federal position is that a comprehensive manual for the 
internal management of self-determination contracts should not be 
developed through the formal rulemaking process. Internal agency 
procedures are more appropriately developed outside the negotiated 
rulemaking process, to allow flexibility in addressing practical 
considerations which arise in the field, and to allow maximum 
participation from those agency officials who bear much of the 
responsibility for implementing the Act to its fullest capability. The 
Federal position supports a joint tribal and Federal commitment to work 
together to generate a procedural manual which will promote the 
purposes underlying the Act and facilitate contracting by Indian tribes 
and tribal organizations.
    One goal of the full committee is to have uniform procedures for 
the implementation and interpretation of the act and these regulations 
which apply to all Federal agencies which administer contracted 
programs. The Federal members of the committee propose that the parties 
formally agree to work together to develop a manual which guides all 
contracting agencies through the contracting process. This is 
consistent with the position taken by the work group charged with 
making recommendations regarding internal agency procedures.
    To that end, Federal committee members would commit to a firm time 
line within which to produce a manual. In addition, the Federal 
government would seek meaningful consultation throughout the 
development process from representatives of Indian tribes and tribal 
organizations.