[Federal Register Volume 84, Number 191 (Wednesday, October 2, 2019)]
[Proposed Rules]
[Pages 52706-52733]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-21464]



[[Page 52705]]

Vol. 84

Wednesday,

No. 191

October 2, 2019

Part IV





 Department of Transportation





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49 CFR Part 29





 Tribal Transportation Self-Governance Program; Proposed Rule

  Federal Register / Vol. 84 , No. 191 / Wednesday, October 2, 2019 / 
Proposed Rules  

[[Page 52706]]


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DEPARTMENT OF TRANSPORTATION

Office of the Secretary

49 CFR Part 29

[Docket No. DOT-OST-2018-0104]
2105-AE71


Tribal Transportation Self-Governance Program

AGENCY: Office of the Secretary (OST), DOT.

ACTION: Notice of proposed rulemaking (NPRM).

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SUMMARY: The U.S. Department of Transportation (DOT or Department) 
requests comments on a proposed rule to establish and implement the 
Tribal Transportation Self-Governance Program (TTSGP or Program), as 
authorized by Section 1121 of the Fixing America's Surface 
Transportation (FAST) Act. The proposed rule was negotiated among 
representatives of Tribes and the Federal Government. The Program would 
provide to participating Tribes greater control and decision-making 
authority over their use of certain DOT funding for which they are 
eligible recipients while reducing associated administrative burdens. 
These proposed regulations include eligibility criteria, describe the 
contents of and process for negotiating self-governance compacts and 
funding agreements with the Department, and set forth the roles, 
responsibilities, and limitations on the Department and Tribes that 
participate in the TTSGP.

DATES: Written comments on this notice must be received on or before 
December 2, 2019. The Department will consider late comments to the 
extent practicable.

ADDRESSES: You may submit comments by any of the following methods:
    [ssquf] Electronically through the Federal eRulemaking Portal: 
www.regulations.gov. Follow the online instructions for submitting 
comments.
    [ssquf] Mail: U.S. Department of Transportation, Docket Operations, 
M-30, West Building Ground Floor, Room W12-140, 1200 New Jersey Avenue 
SE, Washington, DC 20590.
    [ssquf] Hand Delivery: U.S. Department of Transportation, Docket 
Operations, West Building Ground Floor, Room W12-140, 1200 New Jersey 
Avenue SE, Washington, DC 20590, between 9 a.m. and 5 p.m., Monday 
through Friday, except Federal holidays.
    [ssquf] Fax: 1-202-493-2251.
    All comment submissions must include the agency name, docket name, 
and docket number (DOT-OST-2018-0104) or Regulation Identifier Number 
(RIN) for this rulemaking (2105- AE71). Note that all comments received 
will be posted without change to www.regulations.gov, including any 
personal information provided. Physical access to the Docket is 
available at the Hand Delivery address noted above.
    This document may be viewed online under the docket number noted 
above through the Federal eRulemaking portal, www.regulations.gov. An 
electronic copy of this document may also be downloaded from the Office 
of the Federal Register's website, www.archives.gov/federal-register, 
and the Government Publishing Office's website, www.gpo.gov/fdsys. In 
accordance with 5 U.S.C. 553(c), DOT solicits comments from the public 
to better inform its rulemaking process. The DOT posts these comments, 
without edit, including any personal information the commenter 
provides, to www.regulations.gov, as described in the system of records 
notice (DOT/ALL-14 FDMS), which can be viewed at www.dot.gov/privacy.

FOR FURTHER INFORMATION CONTACT: Mr. Ronald Jackson, Designated Federal 
Officer, Office of the Secretary, (202) 366-9151 or via email at 
ronald.jackson@dot.gov, or Ms. Krystyna Bednarczyk, Office of the 
General Counsel, (202) 366-5283, or via email at 
krystyna.bednarczyk@dot.gov. Office hours are from 8 a.m. to 5 p.m., 
EST, Monday through Friday, except Federal holidays.

SUPPLEMENTARY INFORMATION: 

I. Background

A. Tribal Consultation

    Consistent with Executive Order 13175, Consultation and 
Coordination with Indian Tribal Governments, the Department will hold 
four public information, education, and consultation meetings during 
the public comment period to explain the rule, answer questions, and 
take oral testimony. While a court reporter will document these 
meetings, attendees are encouraged to submit written public comments. 
Three meetings will be held in or near Indian country at the locations 
listed below and a fourth meeting will be held virtually. Additional 
information on the meetings may be found at www.transportation.gov/self-governance. The Department will hold meetings on the following 
dates and locations:
    1. October 21, 2019, 8:30 a.m.-1 p.m. MDT, National Congress of 
American Indians Annual Convention, Albuquerque, NM.
    2. November 5, 2019, 8:30 a.m.-12 p.m. CST, United Southern and 
Eastern Tribes Annual Meeting, Choctaw, MS.
    3. November 19, 2019, Seattle, WA.
    4. November 21, 2019, 1 p.m.-5 p.m. EST, Virtual Listening Session 
by Webinar, https://connectdot.connectsolutions.com/sr500ausdot/. 
Telephone: 800-683-4564; Access Code: 027757.

B. Authority for This Rulemaking

    These proposed regulations would implement Section 1121 of the 
Fixing America's Surface Transportation (FAST) Act, Public Law (Pub. 
L.) 114-94, which was enacted on December 4, 2015, and is codified at 
23 U.S.C. 207 (Section 207). This section directs the Secretary of 
Transportation (Secretary) to establish and carry out the Tribal 
Transportation Self-Governance Program (TTSGP). It also directed the 
Department to develop regulations to implement the program pursuant to 
the Negotiated Rulemaking Act, 5 U.S.C. 561 et seq. The purpose of 
Section 207 is to transfer Federal funding for transportation-related 
programs to participating Tribes and to facilitate Tribal control over 
the delivery of transportation programs, services, functions and 
activities (PSFAs). Section 207 incorporates by reference select 
provisions of the Indian Self- Determination and Education Assistance 
Act of 1975, Public Law 93-638, as amended (ISDEAA).\1\ Congress 
enacted the ISDEAA to promote effective and meaningful participation by 
Tribes in the planning, conduct, and administration of Federal programs 
and services for Tribes. The ISDEAA authorizes Tribes to enter into 
self-determination contracts and self-governance compacts with the 
Departments of the Interior and Health and Human Services to assume 
operation of direct services for Tribes and administrative functions 
that support the delivery of these services by these Departments.
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    \1\ Following enactment of the FAST Act, Congress transferred 
the ISDEAA provisions within Title 25 of the U.S. Code. The docket 
contains a table that provides the relevant provisions and their 
current citations.
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    Implementation of the TTSGP through this rule would maintain and 
improve the Federal Government's unique and continuing relationship 
with and responsibility to Tribes, without a diminishment in any way of 
the trust responsibility of the United States to Indian Tribes and 
individual Indians that exists under treaties, Executive orders, or 
other laws and court decisions, and permit each eligible Tribe to 
choose the extent of its participation in the TTSGP. It would

[[Page 52707]]

provide Tribes with control over the implementation of covered 
programs, implement a process for negotiating and seeking approval of 
an alternative funding mechanism by executing a compact and funding 
agreement with the Department, and authorize Tribes to plan, conduct, 
redesign, and administer, as appropriate and consistent with other 
statutory authorities, PSFAs that meet the needs of the individual 
Tribal communities. Finally, the TTSGP would provide a reduction in 
administrative burdens.
    Section 207 is self-effectuating. It sets forth the following:
    [ssquf] To participate in the TTSGP, a Tribe's governmental body 
must authorize its participation in self-governance, and the Tribe must 
demonstrate, for the previous three fiscal years, financial stability 
and financial management capacity, and transportation program 
management capability.
    [ssquf] The Department and an eligible Tribe negotiate and enter 
into a written funding agreement that allows the Tribe to plan, 
conduct, consolidate, and administer programs that the Department would 
otherwise administer.
    [ssquf] A Tribe may redesign or consolidate certain programs and 
reallocate funds to best meet a Tribe's transportation needs.
    [ssquf] A Tribe may suspend performance under a compact and funding 
agreement in the absence of funding or, at the Tribe's election, 
retrocede all or a portion of the programs that are included in a 
funding agreement for any reason.
    [ssquf] Funding agreements must provide for advance payments to the 
participating Tribes for amounts equal to what the Tribe would be 
eligible to receive under contracts and grants under Section 207.
    [ssquf] Except as otherwise provided by law, the Secretary must 
interpret laws and regulations in a manner that will facilitate the 
inclusion of programs and funds in, and the implementation of, compacts 
and funding agreements.
    [ssquf] Each provision of Section 207, a compact, or a funding 
agreement must be liberally construed for the benefit of Tribes 
participating in self-governance and any ambiguity must be resolved in 
favor of Tribes.
    [ssquf] The Department has 90 days from the receipt of a request to 
waive the TTSGP regulations in which to approve or deny the request or 
the waiver request is deemed automatically approved.

C. Negotiated Rulemaking Process

    Section 207(n) directs the Secretary to develop the regulations 
consistent with the Negotiated Rulemaking Act and to adapt the 
negotiated rulemaking procedures to the unique context of self-
governance and the government-to-government relationship between the 
United States and Indian Tribes. Section 207(n) restricts membership of 
the negotiated rulemaking committee (committee) to Federal and Tribal 
government representatives. The Federal Highway Administration, on 
behalf of the Department, published a Federal Register notice (81 FR 
24158) on April 25, 2016, announcing the intent to establish a 
committee and soliciting nominations for membership on the committee. 
The Department published a Federal Register notice (81 FR 49193) on 
July 27, 2016, announcing the formation of the committee and 
identifying 23 Tribal representatives, and 7 Federal representatives.
    The first committee meeting was held in Sterling, VA on August 16-
18, 2016, during which the committee negotiated Protocols, a set of 
written procedures under which the committee would operate.\2\ A total 
of 11 meetings of the full committee were then held in different 
locations throughout the country.\3\ The committee members and 
technical advisors organized themselves into two work groups and used 
the scheduled committee meetings to develop draft materials and 
exchange information. The committee's meeting minutes and any materials 
approved by the full committee were made a part of the official record.
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    \2\ Documents adopted by the committee, including the Protocols 
and meeting minutes, are available at flh.fhwa.dot.gov/programs/ttp/ttsgp/.
    \3\ The December 2016 meeting did not achieve a quorum of 
committee members due to inclement weather and subsequent air travel 
flight cancellations. Those present participated in the established 
work groups to continue to develop and review proposed regulatory 
language, and the committee adopted that work product at the January 
2018 meeting.
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    There were no committee meetings between December 2016 and January 
2018, during which time, the Office of the Secretary assumed 
responsibility for the rulemaking. The Department published a Federal 
Register notice (82 FR 60571) on December 21, 2017, announcing a 
committee meeting in January 2018. The full committee reconvened in 
Sterling, VA on January 8-12, 2018. The committee discussed a draft 
document that consolidated the products of the committee work groups. 
The January 2018 meeting was followed by a one-day committee meeting in 
February 2018. These meetings were intended to gather information from 
the full committee to clarify areas of disagreement, identify the 
issues for which the committee had yet to discuss or propose text, and 
ensure the Federal members clearly understood how the negotiated 
provisions on which the committee previously reached consensus 
reflected statutory mandates.
    Next, the committee met in Washington, DC at Department 
headquarters on June 18-19, 2018. In advance of the meeting, the 
Department distributed a revised discussion draft, and a crosswalk 
comparison of the January and June 2018 drafts, for consideration by 
the full committee. The Tribal representatives attended the June 2018 
committee meeting but raised several objections. They believed that the 
draft being submitted to the committee had not been prepared mutually 
through a negotiated process involving both the Department and Tribal 
representatives. On June 19, 2018, the Tribal representatives suspended 
negotiations based on their objections. As such, the committee did not 
approve any meeting minutes or documents.
    Concurrent with its decision to suspend negotiations, the Tribal 
representatives submitted a letter \4\ to the Department proposing new 
timelines to conclude negotiations, setting forth a number of requests 
and conditions that must be met before the Tribal representatives would 
agree to resume negotiations. In order to meet the statutory time frame 
for publication of a draft and final rule, the Department declined the 
request of Tribal committee representatives to delay publication of the 
draft rule. However, negotiations resumed after enactment, on the 
August 14, 2018 of Public Law 115-235, which extended the statutory 
deadline to issue the proposed and final rule.
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    \4\ The letter is available in the docket.
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    At the request of the Tribal representatives, the Department 
retained the services of the Federal Mediation and Conciliation Service 
(FMCS), a neutral third-party, to facilitate subsequent negotiations. 
The Department and the Tribal representatives subsequently worked 
through their differences with the assistance of FMCS.
    In October 2018, the Tribal representatives submitted to the 
Department a revised discussion draft for the committee's 
consideration. With assistance from FMCS, the committee resumed 
negotiations in Washington, DC, between October 29-November 3, 2018. At 
the recommendation of FMCS, the committee appointed a drafting

[[Page 52708]]

subcommittee, composed of nominated committee members and technical 
advisors, to develop recommendations and draft regulatory text for 
consideration by the committee. The committee directed the work of the 
drafting subcommittee.
    Between November 2018 and February 2019, the FMCS convened the 
drafting subcommittee virtually and in Washington, DC to develop 
recommendations and proposed regulatory text for the committee's 
negotiation. After consulting with the Designated Federal Officer (DFO) 
and the Tribal Co-Chairs, the FMCS convened the committee in Shawnee, 
Oklahoma on March 18-19, 2019, followed by a two-day drafting 
subcommittee meeting on March 20-21, 2019. During the committee 
meeting, the committee reached tentative agreement on several proposed 
regulatory sections and provided additional direction to the drafting 
subcommittee. Finally, the committee authorized FMCS and the drafting 
subcommittee to continue to negotiate additional recommendations and to 
propose regulatory language addressing the remaining topics.
    FMCS convened the drafting subcommittee in Washington, DC on April 
1-4, April 23-26, and May 20-23, 2019, to develop the remaining 
provisions of the draft rule for the committee's consideration. After 
consulting with the DFO and the Tribal Co-Chairs, FMCS convened the 
committee in Scottsdale, Arizona on June 3-6, 2019. At the meeting, the 
drafting subcommittee presented the proposed regulatory language to the 
committee, identified a limited number of non-consensus items that 
remained outstanding, and provided recommendations and preferred 
language addressing these areas of disagreement. The committee reached 
tentative agreement on most of the rule and provided additional 
direction to the drafting subcommittee on the outstanding provisions. 
The committee authorized the drafting subcommittee to complete the 
draft rule for the committee's review and agreement.
    The drafting subcommittee met in Washington, DC on June 25-26, 
2019, to complete its work. On June 26, 2019, FMCS facilitated the 
subcommittee's briefing of the committee on the draft rule. The 
committee reached consensus on the draft rule, including the 
description of the disagreement items discussed below. The Tribal Co-
Chairs and the DFO confirmed the committee's consensus determination to 
submit the draft rule to the Department.

II. Summary of the Proposed Regulations

    The following summary describes the Department's proposed 
regulations to implement the TTSGP. Except for four areas of 
disagreement discussed below, the proposed regulations are the product 
of consensus. The Department seeks public comment on the proposed rule 
and the non-consensus items noted below.

Subpart A--General Provisions

    This subpart would set forth the purpose and authority of these 
regulations, Departmental policy, effect of these regulations on 
existing Tribal rights, the Department's obligation to consult with 
self-governance Tribes, and definitions. It would clarify the 
prospective effect of these regulations and address the status of a 
participating Tribe's existing Tribal Transportation Program (TTP) 
Agreement entered into under the authority of 23 U.S.C. 202 to a 
compact and funding agreement. Finally, it would clarify the effect of 
23 U.S.C. 207 on requirements contained in Federal program guidelines, 
manuals, or policy directives.
    The definition provision would define the phrase ``programs, 
services, functions, and activities'' or ``PSFAs.'' The Department does 
not deliver PSFAs on behalf of Tribes; Tribes instead carry out PSFAs 
using the five categories of funding eligible to be include in a 
funding agreement between the Department and the Tribe.

Subpart B--Eligibility and the Negotiation Process

    This subpart would identify the eligibility requirements for a 
Tribe or Tribal consortium (collectively ``Tribe'') to participate in 
the Program. Tribes must demonstrate financial stability and financial 
management capability, and transportation program management capability 
to be eligible to participate in the TTSGP. The regulation would 
provide three means by which Tribes may demonstrate financial stability 
and financial management capacity. First, the regulation would set 
forth Section 207's conclusive evidence standard. This regulation would 
also set forth a new, sufficient evidence standard for Tribes subject 
to the Single Audit Act that currently conduct business with DOT 
through the TTP or a DOT grant award and have no uncorrected 
significant and material audit exceptions in their required single 
audits. Finally, the regulation would introduce a standard for Tribes 
without a mandate to comply with the Single Audit Act that currently 
conduct business with DOT to request eligibility in DOT's discretion.
    Tribes that would meet the sufficient evidence standard are well 
placed to participate in the DOT self-governance program--they conduct 
audits under the Single Audit Act, demonstrate that they do not have 
material and significant audit exceptions, and demonstrate 
transportation program capability. While TTP Agreements are ``in 
accordance with the ISDEAA,'' Tribes are subject to Federal Highway 
Administration (FHWA) oversight when they administer TTP funds. Tribes 
plan, budget, prioritize, and otherwise manage their Tribal 
transportation programs. The sufficient evidence standard recognizes 
that Tribes that successfully work with the FHWA under TTP Agreements 
and successfully manage grants for the maintenance, rehabilitation, and 
construction of transportation facilities should receive the benefits 
Congress intended in enacting the TTSGP.
    The regulation would also provide a discretionary standard under 
which Tribes that do not meet the audit threshold of the Single Audit 
Act may participate in the Program if the necessary financial 
assurances are in place. This option is consistent with FHWA practice 
in administering the TTP provided the Tribe demonstrates financial 
capacity. FHWA has long permitted Tribes not subject to the Single 
Audit Act to participate, provided they undergo an independent audit 
and provide evidence demonstrating no uncorrected significant and 
material audit findings. DOT has determined that some smaller-funded 
Tribes have worked well with DOT under TTP Agreements as well as under 
the Federal Transit Administration's Tribal Transit Program. The 
Department does not want to compel those Tribes to join a consortium to 
be eligible for the DOT self-governance program.
    The regulation also would provide for technical assistance, to the 
extent the Department has the resources and expertise, to Tribes that 
do not meet the criteria for financial stability and financial 
management capacity due to uncorrected significant and material audit 
exceptions. While the Department will not substitute its judgement for 
that of another agency where the audit reveals findings related to a 
non-DOT program, the Department may provide technical assistance for 
audit exceptions related to DOT programs. In these instances, a Tribe 
can work with the Department to correct those exceptions so that they 
come into compliance and demonstrate financial stability and

[[Page 52709]]

financial management capacity under the conclusive, sufficient, or 
discretionary evidence standards.
    This regulation also would describe the evidence the Department 
would consider in making the discretionary determination that a Tribe 
has demonstrated transportation program management capability to be 
eligible to participate in the Program. The Department will use these 
criteria to evaluate the totality of the evidence presented in support 
of the eligibility application. Finally, this subpart would describe 
the negotiation process a Tribe must follow to enter into a compact and 
funding agreement with the Department to participate in the TTSGP.
    The United States Department of the Interior (DOI) operates the DOI 
Tribal Self-Governance Program pursuant to Title IV of ISDEAA, as 
amended (codified at 25 U.S.C. 5301 et seq.) and jointly administers 
with FHWA the TTP. This subpart does not alter, affect, modify or 
otherwise change the eligibility requirements under 25 U.S.C. 5362, or 
implementing regulations at 25 CFR part 1000, for a Tribe or Tribal 
consortium seeking to participate in the DOI Tribal Self-Governance 
Program. Nothing in this proposed rule shall be construed to diminish 
or otherwise affect the authority of the Secretary of the Interior to 
carry out and administer the DOI Tribal Self-Governance Program. 
Additionally, this subpart does not alter or otherwise effect existing 
TTP contracting options available to Tribes with DOI.

Subpart C--Final Offer Process

    This subpart would set forth the final offer process that a Tribe 
may invoke during negotiation with the Department of a compact and 
funding agreement. It is the Department's intent that a Tribe should 
only use the final offer process when there is a negotiation impasse 
and not before the parties have fully explored an area of disagreement. 
This subpart also would set forth the Department's responsibilities in 
processing a final offer, the grounds for rejecting the Tribe's final 
offer, and the Tribe's rights to challenge an adverse decision related 
to the final offer.

Subpart D--Contents of Compacts and Funding Agreements

    This subpart would identify what is included in a compact, funding 
agreements and amendments, the duration of such agreements, and the 
rights and responsibilities of the Department and a Tribe. It would 
clarify that, notwithstanding the effect of 23 U.S.C. 207(n)(4), the 
compacts and funding agreements must include the requirements related 
to public health and safety associated with the funding under the 
relevant programs.

Subpart E--Rules and Procedures for Transfer of Funds

    This subpart would set forth the five categories of Department 
funds that a Tribe may elect to include in its funding agreement and, 
with agreement of a State, the transfer of Federal-aid funds. This 
subpart also describes responsibilities of the Department with respect 
to transfer of such funds, including the time to transfer the funds, 
and other issues related to the funding provided to Tribes through 
their TTSGP compact and funding agreements, including the use of such 
funds via the funding agreement. This subpart also would address how 
these funds may be used for matching or cost participation purposes and 
investment standards. Finally, while Sec.  29.401(c)(2) sets forth the 
requirement from Section 207(h)(2) that the Department include in a 
funding agreement amounts equal to the project-related administrative 
expenses (PRAE) incurred by the Bureau of Indian Affairs (BIA) that the 
Department would have withheld under the Tribal Transportation Program, 
the Department notes that it does not presently provide to the BIA any 
funds for PRAE.

Subpart F--Program Operations

    This subpart includes information and instructions to Tribes that 
participate in the TTSGP. Topics covered in this subpart include: (1) 
Audits and cost principles; (2) management systems and standards; (3) 
procurement management systems and standards; (4) property management 
systems and standards; (5) recordkeeping requirements; (6) reporting; 
(7) technical assistance; (8) prevailing wages; (9) Indian preference; 
(10) environmental and cultural resource compliance; (11) Federal Tort 
Claims Act applicability, and (12) waiver of Program regulations. The 
technical assistance provision would clarify that the Department is 
committed to carrying out the principles of self-governance while also 
ensuring proper stewardship and oversight of Federal funds.
    With respect to rights-of-way on Tribal lands, these regulations 
would not affect the Department of the Interior's (DOI's) authority. 
DOI will continue to exercise its authority relating to the 
application, review, grant, administration, and oversight of rights-of-
way on Tribal lands under 25 U.S.C. 323-328 and 25 CFR part 169.

Subpart G--Withdrawal

    This subpart would describe the process for a Tribe to withdraw 
from a consortium's TTSGP compact or funding agreement with the 
Department, including distribution of the Tribe's shares of TTSGP 
funding. It would clarify that the Department is not a party to 
internal consortium disputes and would provide notice to consortia that 
seek to participate in the TTSGP that its agreements should adequately 
address the circumstances under which a member Tribe may withdraw.

Subpart H--Retrocession

    This subpart would clarify that a Tribe may voluntarily discontinue 
performing a portion or all of the PSFAs under its compact and funding 
agreement, and may return remaining funds to the Department in 
accordance with the process set forth in this subpart. It also would 
clarify the effect of a Tribe's retrocession on its eligibility, and 
sets forth how funds must be distributed when the retrocession takes 
effect.

Subpart I--Termination and Reassumption

    This subpart would describe when and under what circumstances the 
Department may terminate a Tribe's compact and funding agreement.

Subpart J--Dispute Resolution and Appeals

    This subpart would set forth procedures, including various 
alternative dispute resolution mechanisms, that a Tribe may use to 
resolve disputes with the Department arising before or after execution 
of a compact or funding agreement, as well as the appeal rights and 
procedures Tribes must use to appeal the Department's decisions to 
terminate a Tribe's compact and funding agreement. It would provide the 
process for filing and processing appeals from adverse decisions and 
the applicable burden of proof.

III. Key Areas of Disagreement

    The committee did not reach consensus on four issues. These 
include: (1) Whether to establish an Office of Self-Governance in the 
Department and create a Self-Governance Advisory committee prior to or 
simultaneous with issuance of the final rule; (2) whether the title I 
ISDEAA provision, 25 U.S.C. 5325(a), relating to contract support costs 
(CSCs), is in conflict with Section 207; (3) whether the title I ISDEAA 
provision, 25 U.S.C. 5324(l), relating to lease payments to a Tribe for 
facilities a Tribe makes

[[Page 52710]]

available to the Program, is in conflict with Section 207; and (4) 
whether the Department may require in this rule that a Tribe must 
exhaust administrative remedies for pre-award decisions, other than 
final offers, as a pre-condition to the Tribe filing suit in Federal 
court.
    Each area of disagreement is presented below, in order, by subpart 
and section, as appropriate. To the extent a disagreement could not be 
resolved, the Department has incorporated its language proposal into 
the proposed regulatory text, and the Tribal and Department views on 
these areas of disagreement are set forth below. The Department 
solicits comments on these areas of disagreement.
    During the negotiated rulemaking, the committee addressed over two 
dozen general subject matter areas: (1) Congressional and Secretarial 
policy; (2) definitions; (3) technical assistance; (4) eligibility; (5) 
negotiating funding agreements and compacts, including final offer; (6) 
contents of compacts and funding agreements; (7) regulatory waivers and 
streamlining; (8) transfer of funds; (9) requirements, limitations, and 
uses of funding; (10) financial management, property management and 
procurement management systems and standards, and disposition of 
Federal property; (11) retrocession, termination and assumption; (12) 
withdrawal from a Tribal consortium; (13) appeals and dispute 
resolution, and Equal Access to Justice Act (EAJA); (14) applicability 
to the Program of ISDEAA provisions; (15) CSCs; (16) facility lease 
payments under 25 U.S.C. 5324(l); (17) limitations on Secretarial 
action related to transfer of funds; (18) environmental review; (19) 
Federal Tort Claims Act (FTCA) applicability; (20) reporting and 
auditing; (21) applicability of certain Federal laws and regulations, 
prevailing wages, and Indian preference; (22) respective roles and 
functions to implement the Program: Office of Self-Governance, 
officials, consultations, and advisory councils; (23) effect of the 
Program on Department authority concerning formula and discretionary or 
competitive grants and consolidation and redesign authority; (24) 
effect of Program on Tribal Transportation Program (TTP) agreements, 
Tribal rights and current agreements; and (25) Federal sources of 
supply and excess, surplus Federal property. The committee broke each 
area into questions and answers, and the vast majority of these topics 
were agreed to by the Federal and Tribal representatives, and are 
reflected in the NPRM.

A. Establishing an Office of Self-Governance and Establishing an 
Advisory Committee

1. Tribal View
    Tribal representatives believe that the Department should establish 
an Office of Self-Governance in order to successfully administer the 
Program. This office would act as the point of contact for Tribes to 
learn about the Program and their eligibility to participate, and, over 
time, to provide knowledge and expertise to the Department relating to 
Indian Tribes and the TTSGP. Tribes believe this Office should be 
created as soon as practicable. The regulations do contemplate a Chief 
Self Governance Official who will handle all matters related to the 
TTSGP. It is the Tribal representatives' view that staffing an Office 
of Self-Governance and meeting with Indian Tribes, Tribal elected 
officials, and Tribal transportation, transit and highway safety staff 
prior to the rule taking effect would be indispensable to the Program 
and the Department, and would better guarantee the Department's 
successful implementation of the TTSGP. With respect to the 
establishment of a TTSGP Self-Governance Advisory Committee, Tribal 
representatives believe that Tribal advisory committees have proven for 
years to be indispensable assets to Tribes and the Department of the 
Interior's (DOI) Bureau of Indian Affairs (BIA), the Department of 
Health and Human Services' (HHS) Indian Health Service (IHS), and the 
Department's Federal Highway Administration. These committees provide 
recommendations to the agencies and information to their respective 
Tribes and regions to better administer these programs that are 
critical to the Indian Tribes and their citizens. These bodies were 
established by and are referenced in agency regulations. See 25 CFR 
170.135-170.137 (Tribal Transportation Program Coordinating Committee), 
1000.102 (DOI Self-Governance Advisory Committee), 42 CFR 137.25, 
137.10, and 137.204 (IHS Self-Governance Committee). Tribal 
representatives feel that the Department will lose a valuable resource 
of Tribal knowledge and expertise by not establishing an advisory body 
to assist the Department in implementing the Program.
2. Department View
    Section 207 does not require the establishment of an Office of 
Self-Governance, and it is not Federal agency practice to establish new 
offices in regulation. Establishing an office within the Department is 
a matter of internal organization and management. These regulations are 
not the appropriate mechanism for resolving the Tribal representatives' 
recommendation.
    The Department does not foreclose the possibility of establishing 
an Office of Self-Governance. The proposed regulations provide for a 
Chief Self-Governance Official, a flexible structure that may 
accommodate an office in the future. In the interim, the Deputy 
Assistant Secretary for Tribal Affairs liaises with Tribal 
representatives by providing information, making technical assistance 
available, and coordinating policy across the Department in support of 
self-governance activities.
    The Department does not disagree that an advisory committee may 
provide important information to the Department as it begins to carry 
out the TTSGP. However, this regulation is not the appropriate 
mechanism for establishing an advisory committee. In addition, the 
Department may avail itself of other processes, such as the Tribal 
consultation provision in Subpart A, to solicit feedback and 
information from Tribes and self-governance experts as it begins the 
process of implementing the TTSGP.

B. Applicability of Contract Support Costs

1. Tribal View
    Tribal representatives assert that section 207(l)(8) makes 25 
U.S.C. 5325(a) applicable to the Program, and is not in conflict with 
Section 207 as a matter of law and policy. Section 207 requires payment 
of contract support costs (CSCs), which are primarily administrative 
costs, in support of funds transferred to Tribes under the TTSGP. The 
ISDEAA requires CSCs to be added to program funds otherwise made 
available by an agency to a Tribe ``for the reasonable costs of 
activities which must be carried out by a Tribal organization as a 
contractor to ensure compliance with the terms of the contract and 
prudent management, but which . . . normally are not carried on by the 
respective Secretary in his direct operation of the program; or . . . 
are provided by the Secretary in support of the contracted program from 
resources other than those under contract.'' 25 U.S.C. 5325(a)(2)(A) 
and (B). The Tribal Representatives contend that the Department should 
only find an ISDEAA provision ``in conflict'' with Section 207 if it 
would take away from the effectiveness of the Program and the statutory 
scheme established by Section 207. The Tribal position is that these 
provisions apply to the Department and are not in conflict with Section 
207.

[[Page 52711]]

    CSCs are an eligible expense that should be included in and paid in 
addition to the funds made available to a Tribe under the Program. The 
absence of appropriations specifically for CSCs in annual 
appropriations for the Department's formula-based and discretionary and 
competitive grant programs is not a legal basis to find 25 U.S.C. 
5325(a) in conflict with Section 207. Tribal representatives believe 
that Section 207 requires the Department to fully fund CSCs.
    Based on their experience with ISDEAA programs, Tribes believe that 
Tribal success in implementing ISDEAA agreements, especially with 
regard to financial management systems integrity, compliance with 
annual audits, and the good stewardship of Federal funds, depends on 
Federal agencies requesting the full level of Tribal need for CSC 
funds. These same principles apply to the TTSGP just as they do to 
health care, social services, and other programs Tribes administer 
under self-governance programs.
    The basis for payment of CSCs is not whether the Department 
provided direct services to Tribes prior to Tribes carrying out ISDEAA 
agreements. Newly recognized Indian Tribes that seek to enter into 
ISDEAA contracts and funding agreements with the BIA and the IHS are 
eligible for full CSCs on the same basis as other Tribes even though 
the Federal agencies may never have provided direct services to these 
Tribes or their members. ISDEAA's CSC requirement is based on a Tribe's 
administrative needs associated with the Tribe performing PSFAs with 
Federal funds, not the agency funding history or structure for 
providing such funds.
    Tribes carrying out self-governance programs face challenges paying 
for administrative costs that come along with running programs when 
CSCs are not fully funded. Administrative overhead costs are 
``mandatory'' costs that Tribes must incur to properly account for and 
expend Federal funds. Tribes should not have to use their formula 
program funds or limited Tribal funds to cover such mandatory costs; 
this reduces the funds available to operate the programs Tribes 
administer under self-governance.
    If the Department does not authorize the addition of CSC funds to 
assist the Tribe in carrying out the Tribe's PSFAs, Tribal 
representatives assert that the final rule should remain silent on the 
issue so that, should CSCs be determined to apply to the Program in the 
future, such funds can be added without changes to the rule.
2. Department View
    The Department acknowledges that, except to the extent there are 
conflicts, 25 U.S.C. 5325(a) is made applicable to the Program by 
operation of Section 207(l)(8). However, pursuant to Section 207(l), 
the Department has preliminarily determined that 25 U.S.C. 5325(a) 
conflicts with Section 207(h), which mandates that the Secretary 
provide funds to Tribes in ``an amount equal to'' (1) the sum of funds 
the Tribes would receive under a funding formula or other allocation 
method established under title 23 and chapter 53 of title 49 of the 
U.S. Code added to ``(2) such additional amounts as the Secretary 
determines equal the amounts that would have been withheld for the 
costs of the Bureau of Indian Affairs for administration of the program 
or project.'' \5\ The plain language of 23 U.S.C. 207(h) is a funding 
limitation, because the provision uses the phrase ``an amount equal 
to.'' This limitation conflicts with the mandate in 25 U.S.C. 
5325(a)(1) to provide to Tribes funds in an amount ``not . . . less 
than'' the agency would have provided to operate the program for the 
contract period, including supportive administrative functions.'' The 
limitation in 23 U.S.C. 207(h) also conflicts with the mandate in 25 
U.S.C. 5325(a)(2) that requires the agency to ``add[ ]'' contract 
support costs (CSCs) to the amount provided under 25 U.S.C. 5325(a)(1). 
Accordingly, the Department is not obligated to pay CSCs to supplement 
the five categories of funds set forth in Sec.  29.400.
---------------------------------------------------------------------------

    \5\ The Department does not withhold funds for the costs of the 
Bureau of Indian Affairs for project or program administration, and 
therefore anticipates that this amount will always be zero.
---------------------------------------------------------------------------

    Even absent a conflict, Tribes carrying out compacts and funding 
agreements under the Program would not incur CSCs. CSCs ensure that a 
Tribe does not experience diminution in program resources when PSFAs 
are transferred from the Federal Government to Tribal operation. Tribes 
carrying out their Tribal PSFAs with Department funding do not risk 
diminishing their program resources due to their participation in the 
Program because the Department never administered the activities to 
begin with. When Tribes enter the Program, they will not assume 
operation of a transportation program from the Federal Government and 
will not incur additional expenses associated with activities 
previously performed by the Federal Government for the benefit of 
Tribes or on their behalf. In the context of DOT's formula funding for 
Tribes, the funds appropriated for transfer to Tribes are either Tribal 
shares or residual agency funds to perform inherent Federal functions 
such as program management and oversight. The competitive and 
discretionary grant programs are not programs that the Department 
previously performed and therefore CSC funding is not necessary to 
prevent a diminution in the competitive and discretionary grant 
program. Rather, these programs contemplate that Tribes would use a 
portion of the funds to cover administrative obligations, and the 
funding limitation in 23 U.S.C. 207(h) requires that the funds 
allocated to Tribes be used to offset any administrative obligations.
    The Department administers two programs that solely benefit Tribes 
and that allocate funds to Tribes under a funding formula: The Tribal 
Transportation Program and the Tribal Transit Program. The Department 
does not plan, conduct, and administer a program or service that the 
Federal Government would have otherwise provided directly. Rather, the 
Department transfers funds to Tribes and authorizes them to plan, 
conduct, and administer the funds to deliver Tribal programs and 
services in accordance with their needs and priorities. The 
Department's administration of these programs is limited to program 
management and oversight, and other inherent Federal functions. The 
vast majority of other Departmental funding programs are non-formula, 
competitive and discretionary grant programs that are not solely for 
the benefit of Tribes and do not provide CSCs for non-Tribal 
recipients. Therefore, CSCs would not apply even if 25 U.S.C. 5325(a) 
were not in conflict with Section 207.
    Nevertheless, Tribes may be able to recover some funding for the 
indirect costs they incur while administering a grant from the 
Department transferred in a funding agreement on the same basis as any 
other grantee. The payment of indirect costs would be governed by the 
Federal cost principles that apply to grants programs, as well as any 
applicable caps on indirect cost funding. To be clear, certain costs 
that Tribes seek to recover as CSCs under the TTSGP are generally 
available as an eligible and allocable expense of both DOT formula 
programs. Under these programs, Tribal recipients may use Federal 
financial assistance for eligible planning, operating, and capital 
expenses. Tribes may also use program funds for pre-award, startup, 
direct, indirect, and program oversight costs. However, this does not 
mean that additional funds have been authorized or appropriated for 
these expenses, and

[[Page 52712]]

there are no additional funds to provide to Tribes for CSCs. Based on 
the Department's preliminary determination, the funding limitation in 
Section 207(h) does not allow any other outcome.

C. Facility Leases and Facility Support Costs (Sec.  29.420)

1. Tribal View
    The Tribal representatives and the Department disagree on whether 
the Department must enter into a lease with a Tribe when it requests to 
use a facility for the administration and delivery of services under a 
TTSGP funding agreement. Section 207(l)(8) incorporates by reference 25 
U.S.C. 5324(l), which directs the Department to pay Tribes for the 
costs of leasing a facility that a Tribe (1) owns, leases, or holds a 
trust interest in; and (2) uses to carry out an ISDEAA agreement.
    Tribal representatives disagree with the preliminary finding that 
ISDEAA provisions regarding facility leaseback options conflict with 
Section 207. Tribes assert that the lack of appropriations to the 
Department to give effect to the leasing provision of 25 U.S.C. 5324(l) 
of the ISDEAA is not a legal or policy basis for finding the provision 
to be ``in conflict'' with the purposes of the TTSGP. The proper 
question to ask is whether it advances the purposes and goals of the 
TTSGP for the Department to compensate a Tribe for the Tribe's use of a 
facility leased or otherwise made available by the Tribe to carry out 
the PSFAs that are eligible for inclusion in a compact and funding 
agreement under the Program. By covering necessary facilities costs, 
lease payments would free up funding for construction, maintenance, and 
other transportation projects, furthering the goals of the Program. Far 
from conflicting with the TTSGP, the 25 U.S.C. 5324(l) leasing 
provisions empower the Program to do more.
2. Department View
    The Department acknowledges that Section 207(l)(8) incorporates by 
reference 25 U.S.C. 5324(l), which directs the Department to compensate 
Tribes for the use of a facility for the administration and delivery of 
services under ISDEAA. However, pursuant to Section 207(l), the 
Department has preliminarily determined that 25 U.S.C. 5324(l) 
conflicts with the funding limitation in Section 207(h). If the 
Department provided additional funding under 25 U.S.C. 5324(l), the 
amount of funds would never equal the amount contemplated by Section 
207(h).
    Currently, the Tribal Transportation Program and the Tribal Transit 
Program makes the construction or leasing of transportation facilities, 
including certain facility support costs, an eligible cost of each 
program's funds. Finally, the Department notes that additional funds 
have not been authorized or appropriated for these expenses, and there 
are no additional funds to provide to Tribes with facility lease-back 
and facility support costs. This is consistent with the funding mandate 
of Section 207(h).

D. Exhaustion of Administrative Remedies (Sec.  29.906)

1. Tribal View
    The Tribal representatives object to the Department's inclusion of 
a requirement to exhaust administrative remedies for pre-award 
decisions (except appeals of the rejection of a final offer) before 
initiating a civil action against the Department in the U.S. District 
Courts. Tribal representatives argue that there is no statutory mandate 
in Section 207 or the incorporated provisions of the ISDEAA that 
requires a Tribe to exhaust administrative remedies before a Tribe may 
bring suit in Federal court. Regulations of the DOI and IHS, which 
implement titles I, IV and V of the ISDEAA, do not include an 
exhaustion provision; Tribes assert the Program should operate in the 
same way. Tribal representatives assert that Tribes may incorporate 
section 110 of the ISDEAA, 25 U.S.C. 5331, in a compact or funding 
agreement by operation of section 207(l) and 25 U.S.C. 5396, which 
allows for a direct appeal to U.S. District Courts of an adverse agency 
decision without the need to exhaust administrative remedies. Tribal 
representatives assert that while some Tribes may choose to exhaust 
administrative remedies before considering further recourse, the 
decision of whether to pursue additional administrative remedies is an 
act of self-determination and self-governance that a Tribe should make 
and that the Department should defer to the principles of self-
governance on this issue.
2. Department View
    In negotiating the disputes and administrative appeal provisions, 
the committee requested the drafters to develop a simple, easy to 
follow dispute resolution process. Accordingly, the Department proposes 
a two-step process for pre-award disputes by which all initial 
decisions would be made by a Chief Self-Governance Official and 
appealed to a hearing official appointed by the Office of the General 
Counsel. This requirement does not apply to appeals of the Department's 
denial of a final offer because Section 207 provides that a Tribe may 
proceed directly to U.S. District Courts, in lieu of an administrative 
appeal. The Department devised an efficient, timely, and responsive 
process that would ensure a proper record for certain pre-award 
disputes. While Section 207 does not include an express exhaustion 
requirement, the Department interprets the Administrative Procedure Act 
and Supreme Court precedent to grant the Department discretion to 
impose a requirement that Tribes exhaust their administrative remedies 
before proceeding to the U.S. district courts. Additionally, the 
Department disagrees that 25 U.S.C. 5331 provides direct review in U.S. 
District Courts. Instead, 25 U.S.C. 5331 addresses the proper venue and 
relief that can be granted for civil actions filed pursuant to this 
section, but does not address timing of when these civil actions may be 
brought.

E. Tribal Concerns Related To Transfer of Funds

    While not a disagreement issue, the Tribal representatives want to 
solicit public comment on three sections in Subpart E addressing the 
timing for the transfer of funds. The committee agreed that the rule 
would require the Department to transfer funds included in a funding 
agreement within 30 days of the apportionment of funds from the Office 
of Management and Budget to the Department or, for discretionary and 
competitive grants, within 30 days of inclusion of the grant in a 
funding agreement. See Sec.  29.403 (initial transfer), Sec.  29.404 
(funds not paid as part of the initial lump sum or initial periodic 
payment), and Sec.  29.404 (discretionary and competitive grants).
    Tribes initially asserted that the transfers should occur within 10 
days of the apportionment of funds by the Office of Management and 
Budget to the Department, or 10 days after execution of the funding 
agreement covering grants, unless the funding agreement provides 
otherwise, in accordance with 25 U.S.C. 5388(a). The Tribal 
representatives agreed to the 30-day requirements because in some 
instances the Department may be able to make such transfers within 10 
days if the Department's financial management systems permit, but could 
not do so in all instances. Tribes urge the Department to identify any 
limitations in the Department's financial management systems that would 
prevent the timely transfer of funds to

[[Page 52713]]

Tribes under the Program. The success of a Tribe's transportation 
project or program may depend on the expeditious transfer of Federal 
funds because many Tribes operate with very short construction seasons. 
It is the Tribes' view that the Department should improve its transfer 
process so that the vast majority of fund transfers occur within 10 
days.

IV. Regulatory Analyses and Notices

A. Executive Order 12866, Regulatory Planning and Review, Executive 
Order 13563, Improving Regulation and Regulatory Review, Executive 
Order 13771, Reducing Regulation and Controlling Regulatory Costs, and 
USDOT Regulatory Policies and Procedures

    The DOT, in consultation with the Office of Management and Budget, 
has determined that this action does not constitute a significant 
regulatory action within the meaning of Executive Order (E.O.) 12866 or 
within the meaning of DOT regulatory policies and procedures. In 
addition, this action complies with the principles of E.O. 13563. After 
evaluating the costs and benefits of these proposed amendments, DOT 
anticipates that the economic impact of this rulemaking would be 
minimal. Tribes would not be required to participate in the TTSGP, so 
any costs associated with implementation would be voluntarily assumed 
by the Tribes. The proposed rule would enable Indian Tribes to exert 
greater control and decision-making authority over the administration 
of funds awarded under other statutorily authorized formula fund and 
competitive or discretionary grant programs eligible for inclusion in 
the program. The rule describes the process and procedures for 
negotiating compacts and annual funding agreements with Tribes and 
intertribal consortia. The rule would not impose a compliance burden on 
the economy generally, does not introduce any new funds into the stream 
of commerce, and does not adversely affect in any material way the 
economy, productivity, competition, jobs, the environment, public 
health or safety. Finally, this proposed rule is not expected to be an 
E.O. 13771 regulatory action because this proposed rule is not 
significant under E.O. 12866. For additional information about the 
costs and benefits of this rulemaking, please see the Regulatory Impact 
Analysis, which is available in the Docket.

B. Regulatory Flexibility Act

    In compliance with the Regulatory Flexibility Act (Pub. L. 96-354; 
5 U.S.C. 60l-612), DOT has evaluated the effects of this proposed rule 
on small entities, such as local governments and businesses. Based on 
the evaluation, the Department anticipates that this action would not 
have a significant economic impact on small entities. The Department 
only foresees this rule having an impact on the Federal Government and 
Indian Tribes, which are not considered to be small entities for 
purposes of this Act. The DOT certifies that this document will not 
have a significant economic effect on a substantial number of small 
entities.

C. Unfunded Mandates Reform Act

    The DOT has determined that this proposed rule would not impose 
unfunded mandates as defined by the Unfunded Mandates Reform Act of 
1995 (Pub. L. 104-4, March 22, 1995, 109 Stat. 48). The actions 
proposed in this NPRM would not result in the expenditure by State, 
local, and Tribal governments, in the aggregate, or by the private 
sector, of $151 million or more in any one year (when adjusted for 
inflation) in 2012 dollars. In addition, the definition of ``Federal 
mandate'' in the Unfunded Mandates Reform Act excludes financial 
assistance of the type in which State, local, or Tribal governments 
have the authority to adjust their participation in the program in 
accordance with changes made in the program by the Federal Government. 
The funding programs subject to this rulemaking permit this type of 
flexibility.

D. Executive Order 12630, Taking of Private Property

    The DOT has analyzed this NPRM under E.O. 12630, Governmental 
Actions and Interference with Constitutionally Protected Property 
Rights. The DOT does not anticipate that this proposed action would 
affect taking of private property interests or otherwise have taking 
implications under E.O. 12630.

E. Executive Order 13132, Federalism Assessment

    The DOT has analyzed this NPRM in accordance with the principles 
and criteria contained in E.O. 13132. This NPRM would impact Tribal 
governments, but there is no federalism impact on the relationship or 
balance of power between the United States and Indian Tribes affected 
by this action. The DOT has determined that this action would not have 
sufficient federalism implications to warrant the preparation of a 
federalism assessment. The DOT has also determined that this action 
would not preempt any State law or regulation, or affect the States' 
ability to discharge traditional State governmental functions.

F. Executive Order 12988, Civil Justice Reform

    This action meets applicable standards in sections 3(a) and 3(b)(2) 
of E.O. 12988 to minimize litigation, eliminate ambiguity, and reduce 
burden.

G. Paperwork Reduction Act

    Under the Paperwork Reduction Act of 1995 (PRA) (44 U.S.C. 3501, et 
seq.), Federal agencies must obtain approval from the Office of 
Management and Budget for each collection of information they conduct, 
sponsor, or require through regulations. The DOT has determined that 
the proposed rule does not contain collection of information 
requirements for the purposes of the PRA.

H. National Environmental Policy Act

    The Department has analyzed the environmental impacts of this final 
rule pursuant to the National Environmental Policy Act of 1969 (NEPA) 
(42 U.S.C. 4321, et seq.) and has determined preliminarily that it is 
categorically excluded pursuant to DOT Order 5610.1C, Procedures for 
Considering Environmental Impacts (44 FR 56420, Oct. 1, 1979). 
Categorical exclusions are actions identified in an agency's NEPA 
implementing procedures that do not normally have a significant impact 
on the environment and therefore do not require either an environmental 
assessment (EA) or environmental impact statement (EIS). See 40 CFR 
1508.4. In analyzing the applicability of a categorical exclusion, the 
agency must also consider whether extraordinary circumstances are 
present that would warrant the preparation of an EA or EIS. Id. The 
purpose of this rulemaking is to establish a departmental Tribal 
transportation self-governmental program. The Department does not 
anticipate any environmental impacts, and there are no extraordinary 
circumstances present in connection with this rulemaking, but the 
Department invites comment on this determination.

I. Executive Order 13175, Tribal Consultation

    The Department has analyzed this NPRM under E.O. 13175, and has 
determined that because the NPRM would uniquely affect Tribal 
governments, it would follow departmental and Administration procedures 
in consulting with Tribal governments on the NPRM. We have

[[Page 52714]]

evaluated this action for potential effects on federally recognized 
Indian Tribes and have determined that the NPRM would not impose 
substantial direct compliance costs on Indian Tribal governments, would 
not preempt Tribal law, would not have any potentially adverse effects, 
economic or otherwise, on the viability of Indian Tribes. Rather, this 
action will reduce the administrative burden of Indian Tribes 
participating in this program. Therefore, a Tribal summary impact 
statement is not required.
    The Department initiated a negotiated rulemaking process, with both 
Tribal and Federal representatives, which the Department asserts 
fulfills its obligations to consult, as appropriate. The results of 
these ongoing negotiated rulemaking meetings were periodically reported 
and discussed in other Federal and Tribal fora. The Tribal and Federal 
representatives reached consensus on the rule text and Preamble, except 
for the four areas of disagreement discussed above. The DOT will 
continue to seek the input of Tribes through the comment period and 
until publication of the Final Rule.

J. Executive Order 13045, Protection of Children From Environmental 
Health Risks and Safety Risks

    The DOT has analyzed this proposed action under E.O. 13045. The DOT 
certifies that this proposed action would not cause an environmental 
risk to health or safety that may disproportionately affect children.

K. Regulation Identifier Number

    A Regulation Identifier Number (RIN) is assigned to each regulatory 
action listed in the Unified Agenda of Federal Regulations. The 
Regulatory Information Service Center publishes the Unified Agenda in 
April and October of each year. The RIN number contained in the heading 
of this document can be used to cross-reference this action with the 
Unified Agenda.

List of Subjects in 49 CFR Part 29:

    Grant programs--transportation, Grant programs--Indians, Indians.

    Issued on: September 27, 2019.
Elaine L. Chao,
Secretary of Transportation.


0
For the reasons set out in the preamble, the Department of 
Transportation proposes to add part 29 to title 49 of the Code of 
Federal Regulations to read as follows:

PART 29--TRIBAL TRANSPORTATION SELF-GOVERNANCE PROGRAM

Subpart A--General Provisions
Sec.
29.1 What is the purpose and authority for this part?
29.2 What is the Department's policy for the Program?
29.3 What is the effect of this part on existing Tribal rights?
29.4 How do Departmental circulars, policies, manuals, guidance, or 
rules apply to a Tribe's performance under the Program?
29.5 Who is responsible for carrying out the functions connected 
with the Program?
29.6 Must the Department consult with Tribes regarding matters that 
affect the Program?
29.7 What is the effect of this Program on existing Tribal 
Transportation Program agreements?
29.8 What happens if more than one party purports to be the 
authorized representative of a Tribe?
29.9 What definitions apply to this part?
Subpart B--Eligibility and Negotiation Process

Eligibility

29.100 What are the criteria for eligibility to participate in the 
Program?

Negotiations

29.101 How does a Tribe commence negotiations for a compact, funding 
agreement, or amendment?
29.102 What information should the Tribe provide to the Department 
when it expresses its interest in negotiating a compact, funding 
agreement, or amendment?
29.103 How will the Department respond to the Tribe's written 
request?
29.104 Must the Department and the Tribe follow a specific process 
when negotiating compacts, funding agreements, and amendments?
29.105 Will negotiations commence or conclude within a specified 
time period?
29.106 What are best practices to pursue negotiations?
29.107 What recourse does the Department or the Tribe have if the 
negotiations reach an impasse?
29.108 May the Department and the Tribe continue to negotiate after 
the Tribe submits a final offer?
29.109 Who is responsible for drafting the compact or funding 
agreement?
Subpart C--Final Offer Process
29.200 What is covered by this subpart?
29.201 In what circumstances should a Tribe submit a final offer?
29.202 How does a Tribe submit a final offer?
29.203 What must a final offer contain?
29.204 How long does the Department have to respond to a final 
offer?
29.205 How does the Department acknowledge receipt of a final offer?
29.206 May the Department request and obtain an extension of time of 
the 45-day review period?
29.207 What happens if the Department takes no action within the 45-
day review period (or any extensions thereof)?
29.208 What happens once the Department accepts the Tribe's final 
offer or the final offer is accepted by operation of law?

Rejection of Final Offers

29.209 On what basis may the Department reject a Tribe's final 
offer?
29.210 How does the Department reject a final offer?
29.211 Is technical assistance available to a Tribe to overcome 
rejection of a final offer?
29.212 May a Tribe appeal the rejection of a final offer?
29.213 If a Tribe appeals a final offer, do the remaining provisions 
of the compact, funding agreement, or amendment not in dispute go 
into effect?
Subpart D--Contents of Compacts and Funding Agreements

Compacts

29.300 What is included in a compact?
29.301 Is a compact required to participate in the Program?
29.302 What is the duration of a compact?
29.303 May more than one Tribe enter into a single compact and 
funding agreement?
29.304 May a compact be amended?

Funding Agreements

29.305 When can a Tribe initiate negotiation of a funding agreement?
29.306 What is the duration of a funding agreement?
29.307 What terms must a funding agreement include?
29.308 May the funding agreement include additional terms?
29.309 Will a funding agreement include provisions pertaining to 
flexible or innovative financing?
29.310 May a Tribe redesign, consolidate, reallocate, or redirect 
the funds included in a funding agreement?
29.311 How is a funding agreement amended?
29.312 Is a subsequent funding agreement retroactive to the end of 
the term of the preceding funding agreement?
Subpart E--Rules and Procedures for Transfer of Funds
29.400 What funds may a Tribe elect to include in a funding 
agreement?
29.401 What funds must the Department transfer to a Tribe in a 
funding agreement?
29.402 Which entity is responsible for the funds included in a 
funding agreement?
29.403 When must the Department transfer to a Tribe the funds 
identified in a funding agreement?
29.404 When must the Department transfer funds that were not paid as 
part of the initial lump sum payment (or initial periodic payment)?
29.405 When must the Department transfer funds for a discretionary 
or competitive grant?
29.406 Does the award of funds for a discretionary or competitive 
grant entitle a Tribe to receive the same amount in subsequent 
years?

[[Page 52715]]

29.407 Does the award of funds for discretionary or competitive 
grants entitle the Tribe to receive contract support costs?
29.408 How may a Tribe use interest earned on funds included in a 
funding agreement?
29.409 May a Tribe carry over from one fiscal year to the next any 
funds that remain at the end of the funding agreement?
29.410 May a Tribe use remaining funds from a competitive or 
discretionary grant included in a funding agreement?
29.411 Are funds included in a compact and funding agreement non-
Federal funds for purposes of meeting matching or cost participation 
requirements under any other Federal or non-Federal program?
29.412 May the Department increase the funds included in the funding 
agreement if necessary to carry out the Program?
29.413 How will the Department assist a Tribe with its credit 
requests?
29.414 What limitations apply to Department actions related to 
transfer of funds associated with PSFAs?
29.415 Does the Prompt Payment Act apply to funds transferred to a 
Tribe in a funding agreement?
29.416 What standard applies to a Tribe's management of funds 
included in a funding agreement?
29.417 Must a Tribe continue performance of the Tribal 
Transportation Program or the Tribal Transit Program under a compact 
and funding agreement if the Department does not transfer sufficient 
funds?
29.418 May a funding agreement include transfers of State funds?
29.419 Does the award of formula funds entitle a Tribe to receipt of 
contract support costs?
29.420 Is a Tribe entitled to enter into facility leases from the 
Department and to receive facility support costs?
SUBPART F--PROGRAM OPERATIONS

Audits and Cost Principles

29.500 Must a Tribe undertake an annual audit?
29.501 Must a Tribe submit any required audits to the Federal Audit 
Clearinghouse and the Department?
29.502 How long must a Tribe keep and make records available for 
Federal examination or audit?
29.503 Who is responsible for compiling, copying, and paying for 
materials for any audit or examination?
29.504 How may the Federal Government make a claim against a Tribe 
relating to any disallowance of costs based on an audit conducted 
under this part?
29.505 What cost principles must a Tribe apply in compacts and 
funding agreements under this part?

Management Systems and Standards

29.506 What are the general financial management system standards 
that apply to a Tribe when carrying out a compact and funding 
agreement under this part?
29.507 What general minimum standards apply to a Tribe's financial 
management systems when carrying out a compact and funding 
agreement?
29.508 What specific minimum requirements must a Tribe's financial 
management system include to meet general minimum standards?
29.509 What procurement standards apply to contracts carried out 
using funds included in a funding agreement?
29.510 What property management systems and standards must a Tribe 
maintain?

Records

29.511 Must a Tribe maintain a recordkeeping system?
29.512 Are Tribal records subject to the Freedom of Information Act 
and Federal Privacy Act?
29.513 Must a Tribe make its records available to the Department?
29.514 How long must a Tribe keep management system records?

Procurement

29.515 When procuring property or services with funds included in a 
funding agreement, can a Tribe follow its own procurement standards?
29.516 What are the minimum procurement standards that a Tribe must 
follow when procuring property or services with funds included in a 
funding agreement?
29.517 Do Federal laws and regulations apply to a Tribe's 
contractors or subcontractors?
29.518 Can a Tribe use Federal supply sources in the performance of 
a compact and funding agreement?

Reporting

29.519 What reporting must a Tribe provide?

Property

29.520 How may a Tribe use existing Department facilities, 
equipment, or property?
29.521 How may a Tribe acquire surplus or excess Federal property 
for use under the Program?
29.522 How must a Tribe use surplus or excess Federal property 
acquired under the Program?
29.523 If a compact or funding agreement (or portion thereof) is 
retroceded, reassumed, terminated, or expires, may the Department 
reacquire title to property purchased with funds under any compact 
and funding agreement or excess or surplus Federal property that was 
donated to the Tribe under the Program?

Technical Assistance

29.524 What technical assistance is available from the Department?

Prevailing Wages

29.525 Do the wage and labor standards in the Davis-Bacon Act apply 
to employees of a Tribe?

Tribal Preference

29.526 Does Indian preference apply to PSFAs under the Program?
29.527 When do Tribal employment law and contract preference laws 
govern?

Environmental and Cultural Resource Compliance

29.528 What compliance with environmental and cultural resource 
statutes is required?

Federal Tort Claims Act

29.529 Is the Federal Tort Claims Act applicable to a Tribe when 
carrying out a compact and funding agreement under the Program?
29.530 What steps should a Tribe take after becoming aware of a 
Federal Tort Claim?
29.531 Is it necessary for a compact or funding agreement to include 
any terms about FTCA coverage?
29.532 Does FTCA cover employees of the Tribe who are paid by the 
Tribe from funds other than those provided through the compact and 
funding agreement?
29.533 May persons who are not Indians assert claims under FTCA?
29.534 Does the year PSFAs are funded affect FTCA coverage?

Waiver of Program Regulations

29.535 What is the process for regulation waivers under this part?
Subpart G--Withdrawal
29.600 May a Tribe withdraw from a consortium?
29.601 When does a withdrawal become effective?
29.602 How are funds redistributed when a Tribe fully or partially 
withdraws from a compact and funding agreement and elects to enter 
into a compact with the Department?
29.603 How are funds distributed when a Tribe fully or partially 
withdraws from a compact and funding agreement administered by a 
consortium serving more than one Tribe, and the withdrawing Tribe 
elects not to or is ineligible to enter into a compact under this 
part?
Subpart H--Retrocession
29.700 May a Tribe retrocede a PSFA and the associated funds?
29.701 How does a Tribe notify the Department of its intention to 
retrocede?
29.702 What happens if the Department of the Interior determines 
that it provides the transportation services the Tribe intends to 
retrocede?
29.703 What happens if the Department of the Interior determines 
that it does not provide the transportation services the Tribe 
intends to retrocede?
29.704 What is the effective date of a retrocession?
29.705 What effect will a retrocession have on a Tribe's right to 
compact under the Program?
29.706 Will retrocession adversely affect future funding available 
for the retroceded program?
Subpart I--Termination and Reassumption
29.800 When can the Department reassume a compact or funding 
agreement?
29.801 Can the Department reassume a portion of a compact or funding 
agreement and the associated funds?

[[Page 52716]]

29.802 What process must the Department follow before termination of 
a compact or funding agreement (or portion thereof)?
29.803 What happens if the Department determines that the Tribe has 
not corrected the conditions that the Department identified in the 
notice?
29.804 When may the Department reassume?
29.805 When can the Department immediately terminate a compact or 
funding agreement (or portion thereof)?
29.806 Upon termination, what happens to the funds associated with 
the terminated portions of the compact or funding agreement?
Subpart J--Dispute Resolution and Appeals
29.900 What is the purpose of this subpart?
29.901 Can a Tribe and the Department resolve disputes using 
alternative dispute resolution processes?
29.902 Does the Equal Access to Justice Act apply to the Program?
29.903 What determinations may not be appealed under this subpart?

Pre-Award Decisions

29.904 What are pre-award decisions that a Tribe may appeal?
29.905 To whom does a Tribe appeal a pre-award decision?
29.906 Must a Tribe exhaust its administrative remedies before 
initiating a civil action against the Department in the U.S. 
District Courts for a pre-award decision?
29.907 When and how must a Tribe appeal a pre-award decision?
29.908 May a Tribe request an extension of time to file an 
administrative appeal to the hearing official?
29.909 When and how must the hearing official respond to the Tribe's 
appeal?
29.910 What is the Department's burden of proof for appeals of pre-
award decisions?
29.911 What is the effect of a pending appeal on negotiations?

Post-Award Disputes

29.912 What is a post-award dispute?
29.913 What is a claim under the Contract Disputes Act?
29.914 How does a Tribe file a Contract Disputes Act claim?
29.915 Must a Tribe certify a Contract Disputes Act claim?
29.916 Who bears the burden of proof in a Contract Disputes Act 
claim?
29.917 What is the Department's role in processing the Contract 
Disputes Act claim?
29.918 What information must the Chief Self-Governance Official's 
decision contain?
29.919 When must the Chief Self-Governance Official issue a written 
decision on the claim?
29.920 Is a decision of the Chief Self-Governance Official final?
29.921 Where may a Tribe appeal the Chief Self-Governance Official's 
decision on a Contract Disputes Act claim?
29.922 May a party appeal a Civilian Board of Contract Appeals 
decision?
29.923 What is the effect of a pending appeal?

Termination Appeals

29.924 May a Tribe appeal the Department's decision to terminate a 
compact or funding agreement?
29.925 Is a Tribe entitled to a hearing on the record?
29.926 What rights do the parties have in an appeal of a termination 
decision?
29.927 What notice and service must the parties provide?
29.928 What is the Department's burden of proof for a termination 
decision?
29.929 How will the Department communicate its decision following a 
hearing on a termination decision?
29.930 May a party appeal the decision of an administrative law 
judge?
29.931 What is the effect of an appeal on negotiations?

    Authority: 23 U.S.C. 207.

Subpart A--General Provisions


Sec.  29.1  What is the purpose and authority for this part?

    (a) The regulations in this part implement the Tribal 
Transportation Self Governance Program required by 23 U.S.C. 207 and 
set forth rules for compacts and funding agreements negotiated between 
the Department and eligible Tribes under the Program. Funding 
agreements may contain funds as set forth in 23 U.S.C. 207(d)(2)(A) and 
Sec.  29.400.
    (b) The Department prepared and issued these rules pursuant to 23 
U.S.C. 207(n) with the active participation and representation of 
Tribes, consortia, Tribal organizations, and individual Tribal members, 
consistent with the negotiated rulemaking procedures.


Sec.  29.2  What is the Department's policy for the Program?

    It is the Department's policy to:
    (a) Recognize the unique government-to-government relationship with 
Tribes, including the right of Tribes to self-government, and to 
support Tribal sovereignty and self-determination;
    (b) Encourage Tribes to participate in the Program;
    (c) Affirm and enable the United States to fulfill its obligations 
to Tribes under treaties and other laws, and to ensure the continuation 
of the trust responsibility of the United States to Tribes and Indians 
that exist under treaties, other laws, and Executive orders;
    (d) Interpret Federal laws and regulations to facilitate the 
inclusion of eligible funds in funding agreements under the Program to 
carry out Tribal PSFAs, except as otherwise provided by law;
    (e) Consult with Tribes directly and meaningfully on policies that 
have Tribal implications and affect the Program;
    (f) Acknowledge that PSFAs performed by Tribes are an exercise of 
Tribal self-determination and self-governance; and that Tribes are 
responsible for day-to-day operation of PSFAs carried out under the 
Program, and accept responsibility and accountability for the use of 
funds and satisfactory performance consistent with the terms of funding 
agreements; and
    (g) Liberally construe this part to effectuate 23 U.S.C. 207 for 
the benefit of Tribes participating in the Program.


Sec.  29.3  What is the effect of this part on existing Tribal rights?

    (a) Nothing in this part requires a Tribe to apply to participate 
in the Program.
    (b) A Tribe's decision to participate in the Program does not:
    (1) Affect, modify, diminish, or otherwise impair the sovereign 
immunity from suit enjoyed by the Tribe;
    (2) Terminate, waive, modify, or reduce the trust responsibility of 
the United States to the Tribe or individual Indians; or
    (3) Reduce the amount of the Tribe's formula or discretionary 
funding from the Department or impair the Tribe's ability to obtain 
funding from another Federal program.


Sec.  29.4  How do Departmental circulars, policies, manuals, guidance, 
or rules apply to a Tribe's performance under the Program?

    A Tribe's performance under the Program is not subject to any 
Departmental circular, policy, manual, guidance, or rule, except for 
this part, unless the Tribe and Department otherwise negotiate and 
agree in the compact or funding agreement.


Sec.  29.5  Who is responsible for carrying out the functions connected 
with the Program?

    The Department will carry out the Program, including making 
eligibility determinations; negotiating compacts and funding agreements 
with Tribes; overseeing compliance with Department requirements; and 
otherwise administering and implementing the Program consistent with 
this Part. As provided in Sec.  29.402, Tribes are responsible for day-
to-day management of the Tribe's PSFAs consistent with the compact and 
funding agreement.


Sec.  29.6  Must the Department consult with Tribes regarding matters 
that affect the Program?

    Yes. The Department must consult with Tribes on matters relating to 
the Program. The Department will carry out

[[Page 52717]]

consultations in accordance with Executive Order 13175 and applicable 
Department policies, including the Department's Tribal Consultation 
Plan.


Sec.  29.7  What is the effect of this Program on existing Tribal 
Transportation Program agreements?

    This Program does not terminate existing authority for a Tribe to 
enter into agreements with the Federal Highway Administration, or 
contracts or agreements with the Department of the Interior, for the 
Tribal Transportation Program. A Tribe may maintain its current 
contracts or agreements, or include Tribal Transportation Program funds 
in a funding agreement under this Program. A Tribe may only have one 
agreement at a time for the same funds.


Sec.  29.8  What happens if more than one party purports to be the 
authorized representative of a Tribe?

    If more than one party purports to be the authorized representative 
of a Tribe during the negotiation of a compact, funding agreement, or 
amendment, the Department will notify the parties, consult with the 
Department of the Interior, defer negotiation or execution of any 
documents until such authority is clarified, and provide written notice 
to the parties of the Department's decision to defer.


Sec.  29.9  What definitions apply to this part?

    Unless otherwise provided in this part:
    Appeal means a request by a Tribe for an administrative or judicial 
review of a decision by the Department.
    Chief Self-Governance Official means a Department official 
responsible for overseeing the Program and carrying out the 
responsibilities set forth in this part.
    Compact means a legally binding and mutually enforceable written 
agreement between the Department and a Tribe entered into pursuant to 
23 U.S.C. 207(c) that sets forth the general terms that will govern the 
Tribe's participation in the Program and affirms the government-to-
government relationship.
    Consortium means an organization or association of Tribes that is 
authorized by those Tribes to participate in the Program under this 
part and is responsible for negotiating, executing, and implementing 
compacts and funding agreements on behalf of its member Tribes.
    Consultation means the process by which the Department and a Tribe 
engage in timely, substantive, and meaningful government-to-government 
communication, collaboration and participation, and exchange views in 
furtherance of the Federal trust responsibility and the principles of 
self-governance, before any action is taken that will have Tribal 
implications as defined by Executive Order 13175, in accordance with 
the Department's Tribal Consultation Plan, Executive Order 13175, all 
subsequent Presidential Memoranda regarding Tribal consultation, and 
applicable Federal law.
    Contractor means a third party who has entered into a legally 
binding agreement with a Tribe to provide goods or services.
    Days means calendar days, except where the last day of any time 
period specified in this part falls on a Saturday, Sunday, or Federal 
holiday, the period shall carry over to the next business day unless 
otherwise prohibited by law.
    Department means the U.S. Department of Transportation.
    Discretionary or competitive grant means a grant in which the 
Federal awarding agency may select the award amount and recipients from 
among all eligible applicants in light of the legislative and 
regulatory requirements and published selection criteria established 
for a program.
    Excess property is real or personal property under the control of a 
Federal agency, which is not required for the agency's needs and the 
discharge of its responsibilities.
    Funding agreement means a legally binding and mutually enforceable 
written agreement between the Department and a Tribe entered into 
pursuant to 23 U.S.C. 207(d) that identifies the funds the Tribe will 
use to carry out its PSFAs, and sets forth the terms and conditions 
under which the Tribe will receive the funds.
    Gross mismanagement means a significant, clear, and convincing 
violation of a compact, funding agreement, or regulatory or statutory 
requirements applicable to Federal funds included in a compact and 
funding agreement that results in a significant reduction of funds 
available for a PSFA carried out by a Tribe.
    Imminent jeopardy means an immediate threat to a trust asset, 
natural resource, or public health and safety that is caused by the act 
or omission of a Tribe and that arises out of a failure by the Tribe to 
carry out the compact or funding agreement.
    Indian means a person who is a member or citizen of a Tribe.
    Indian Tribe or Tribe means any Indian or Alaska Native tribe, 
band, nation, pueblo, village, or community (including colonies and 
rancherias) that is recognized as eligible for the special programs and 
services provided by the United States to Indians because of their 
status as Indians. In any case in which an Indian Tribe has authorized 
another Indian Tribe, an intertribal consortium, or a Tribal 
organization to plan for or carry out PSFAs on its behalf under this 
part, the authorized Indian Tribe, intertribal consortium, or Tribal 
organization shall have the rights and responsibilities of the 
authorizing Indian Tribe (except as otherwise provided in the 
authorizing resolution or in Title 23 U.S. Code). In such event, the 
term Indian Tribe or Tribe as used in this part shall include such 
other authorized Indian Tribe, intertribal consortium, or Tribal 
organization.
    Inherent Federal functions means those Federal functions that 
cannot legally be delegated to a non-Federal entity, including a Tribe.
    Operating Administration means a component administration of the 
U.S. Department of Transportation.
    Program means the Tribal Transportation Self-Governance Program 
established by 23 U.S.C. 207.
    Project means any activity determined as being eligible under the 
U.S. Code title and program for which funds are being provided.
    Programs, services, functions, and activities or PSFAs means 
programs, services, functions, and activities, or portions thereof, 
that a Tribe carries out using funds included in a funding agreement 
under the Program.
    Real property means any interest in land together with the 
improvements, structures, and fixtures and appurtenances.
    Reassumption means the termination, in whole or part, of a funding 
agreement and assuming or resuming the remaining funds included in the 
compact and funding agreement pursuant to 23 U.S.C. 207(f)(2)(A).
    Receipt means the actual date on which a submission is received. 
With respect to the Department, receipt is the date on which the 
authorized Department official specified in this part receives the 
submission. Demonstration of receipt includes a date stamp, postal 
return receipt, express delivery service receipt, or any other method 
that provides receipt, including electronic mail.
    Retrocession means the voluntary return of a Tribe's PSFA and 
associated remaining funds for any reason, before or on the expiration 
of the term of the funding agreement.
    Secretary means the Secretary of Transportation.
    Self-Determination Contract means a contract (or grant or 
cooperative agreement) entered into pursuant to Title I of the Indian 
Self-Determination and Education Assistance Act (25 U.S.C. 5321) 
between a Tribe and the

[[Page 52718]]

appropriate Secretary for the planning, conducting and administration 
of programs or services that are otherwise provided to Tribes.
    Self-governance means the Federal policy of Indian self-
determination and self-government rooted in the inherent sovereignty of 
Tribes, reflected in the government-to-government relationship between 
the United States and Tribes, and expressed in the Indian Self-
Determination and Education Assistance Act, Public Law 93-638, as 
amended, and the program of self-governance established under the 
Program.
    State means any of the 50 States, the District of Columbia, or 
Puerto Rico.
    Surplus government property means excess real or personal property 
that is not required for the needs of and the discharge of the 
responsibilities of all Federal agencies that has been declared surplus 
by the General Services Administration.
    Technical assistance means the process by which the Department 
provides targeted support to a Tribe with a development need or 
problem.
    Transit means regular, continuing shared ride surface 
transportation services that are open to the general public or open to 
a segment of the general public defined by age, disability, or low 
income, excluding the transportation services set forth in 49 U.S.C. 
5302(14)(B).
    Tribal Transportation Program (TTP) means a program established in 
Section 1119 of Moving Ahead for Progress in the 21st Century (MAP-21), 
Public Law 112-141 (July 6, 2012), and codified in 23 U.S.C. 201 and 
202. This program was continued under Fixing America's Surface 
Transportation Act (FAST Act), Public Law 114-94 (December 4, 2015).
    TTP Agreement means an agreement between a Tribe and either the 
Federal Highway Administration or the Bureau of Indian Affairs pursuant 
to 23 U.S.C. 202 that authorizes a Tribe to carry out all but the 
inherently Federal functions of the TTP.
    Tribal Organization means the recognized governing body of any 
Tribe; any legally established organization of Indians that is 
controlled, sanctioned, or chartered by such governing body or is 
democratically elected by the adult members of the Indian community to 
be served by such organization and includes the maximum participation 
of Indians in all phases of its activities.

Subpart B--Eligibility and Negotiation Process

Eligibility


Sec.  9.100  What are the criteria for eligibility to participate in 
the Program?

    (a) Eligibility. A Tribe is eligible to participate in the Program 
if--
    (1) The Tribe requests participation in the Program by resolution 
or other official action by the governing body of the Tribe; and
    (2) The Department determines that, over the 3 most recent fiscal 
years, the Tribe has demonstrated financial stability and financial 
management capability, and transportation program management capability 
in accordance with the criteria specified in 23 U.S.C. 207(b) and this 
section.
    (b) Financial stability and financial management capability--(1) 
Conclusive evidence. A Tribe subject to the Single Audit Act 
demonstrates financial stability and financial management capability by 
providing evidence establishing that, during the preceding 3 fiscal 
years, the Tribe had no uncorrected significant and material audit 
exceptions in the required annual audit of the Tribe's self-
determination contracts or self-governance funding agreements with any 
Federal agency. This will be conclusive evidence of the required 
financial stability and financial management capability.
    (2) Sufficient evidence. A Tribe subject to the Single Audit Act 
that has a TTP Agreement or a grant award provided by the Department 
may provide evidence establishing that, during the preceding 3 fiscal 
years, the Tribe had no uncorrected significant and material audit 
exceptions in its required single audit of the Tribe's Federal award 
programs. This will be sufficient evidence of the required financial 
stability and financial management capability.
    (3) Evidence without a mandate to comply with the Single Audit Act. 
If a Tribe is not subject to the Single Audit Act, the Department will 
consider the following evidence to determine if the Tribe demonstrates 
financial stability and financial management capability:
    (i) Evidence demonstrating that the Tribe has financial management 
systems and standards that meet or exceed the standards set forth in 
Sec. Sec.  29.506-29.508 of this part; and
    (ii) An independent audit containing no uncorrected significant and 
material audit exceptions that covers the preceding 3 fiscal years of 
the Tribe's self-determination contracts or self-governance funding 
agreements with any Federal agency, TTP agreements, or a grant award 
from the Department.
    (4) Evidence of management systems. As part of the Department's 
eligibility determination under paragraph (b)(3) of this section, the 
Department may require a Tribe to demonstrate that it has the 
management systems in place that meet or exceed the standards required 
in Sec. Sec.  29.506 through 29.511 and 29.516 of this part. The 
Department will confirm in writing within 90 days of receipt of any 
such submission by the Tribe whether the Tribe's management systems are 
or are not sufficient to meet the required standards.
    (5) Technical assistance. At a Tribe's request, the Department will 
provide, to the extent feasible, technical assistance, such as feedback 
on management systems and standards or review of internal controls, to 
a Tribe with one or more uncorrected significant and material audit 
exceptions with the goal of assisting the Tribe to establish 
eligibility for the Program.
    (c) Transportation program management capability. (1) In making the 
eligibility determination under 23 U.S.C. 207(b), the Department also 
must determine that a Tribe demonstrates transportation program 
management capability, including the capability to manage and complete 
projects eligible under title 23 and chapter 53 of title 49.
    (2) To assist the Department in determining transportation program 
management capability, a Tribe may submit evidence including, but not 
limited to:
    (i) Documentation showing that the Tribe has previously or is 
currently directing or carrying out transportation services, projects, 
or programs under a self-determination, self-governance, or TTP 
Agreement, or a grant award with the Department.
    (ii) Documentation showing the extent to which the Tribe previously 
received Federal funding and carried out management responsibilities 
relating to the planning, design, delivery, construction, maintenance, 
or operation of transportation-related projects, and whether they were 
completed;
    (iii) Documentation that the Tribe has established and maintains, 
as appropriate, a staffed and operational transportation or transit 
program, department, commission, board, or official of any Tribal 
government charged by its laws with the responsibility for 
transportation-related responsibilities, including but not limited to, 
administration, planning, maintenance, and construction activities. 
This documentation should identify the Tribal personnel, job 
descriptions, and expertise necessary to administer or implement PSFAs 
that the Tribe proposes to assume under the

[[Page 52719]]

Program. The documentation may also include resolutions, other 
authorizations, or proposed budgets demonstrating that the Tribe has 
taken steps to organize a Tribal office or department to address the 
transportation-related needs of the Tribe and how that entity has or 
will demonstrate transportation program management capacity; and
    (iv) Documentation showing the completion of one or more 
transportation projects or operation of a program that is related to or 
similar to the PSFA the Tribe requests to include in a funding 
agreement negotiated between the Tribe and the Department. The 
Department will consider the number, complexity, and type of projects 
or programs that the Tribe describes as part of this determination. 
This documentation should address the substantive involvement of the 
Tribe in operating a transportation program, which may be demonstrated 
by:
    (A) Involvement in the development of a completed and approved 
highway safety plan;
    (B) Involvement in the development of a completed and approved 
plans, specifications and estimates design package for one or more 
transportation projects to be carried out with available funding;
    (C) Involvement in the delivery of a completed and approved 
transportation construction project using Federal or non-Federal funds;
    (D) Oversight or operation of a public transit project or public 
transit system;
    (E) Oversight or operation of a transportation maintenance system; 
or
    (F) Other information that evidences the transportation program 
management capabilities of the Tribe.
    (4) Other indicia of program management capability. In determining 
transportation program management capability, the Department will 
consider any other criteria and evidence that a Tribe may submit, 
including the operation by the Tribe of non-transportation programs of 
similar complexity, size, administrative need, staffing requirement, or 
budget.
    (d) Program eligibility determination. (1) Within 15 calendar days 
of receipt of a Tribe's submission seeking an eligibility determination 
under this section to participate in the Program, the Department will 
notify the Tribe in writing to confirm that it has received the 
submission and notify the Tribe whether any evidence necessary to make 
the determination is missing.
    (2) Within 90 days of receipt of a Tribe's submission of its 
financial management systems and standards pursuant to paragraphs 
(b)(3)(i) and (b)(4)(i), the Department will notify the Tribe whether 
the systems and standards are sufficient to meet the standards set 
forth in Sec. Sec.  29.506 through 29.508 of this part.
    (3) Within 120 days of receipt of an initial submission, the 
Department will issue its determination of a Tribe's eligibility to 
participate in the Program. If the Tribe provides additional evidence 
at the Department's request to complete the application, the Department 
will have up to an additional 45 days to issue its determination of the 
Tribe's eligibility to participate in the Program. The determination 
will constitute final agency action which the Tribe may appeal in 
accordance with Sec. Sec.  29.904 through 29.911.

Negotiations


Sec.  29.101  How does a Tribe commence negotiations for a compact, 
funding agreement, or amendment?

    After the Department notifies a Tribe in writing that it is 
eligible to participate in the Program pursuant to Sec.  29.100, the 
Tribe must submit a written request to the Chief Self-Governance 
Official to begin negotiating a compact, funding agreement, or 
amendment. The Tribe may send the request to ttsgp@dot.gov or use any 
other method that provides receipt.


Sec.  29.102  What information should the Tribe provide to the 
Department when it expresses its interest in negotiating a compact, 
funding agreement, or amendment?

    When a Tribe expresses its interest in negotiating a compact, 
funding agreement, or amendment, the written request need only request 
that the Department enter into negotiations for a compact, funding 
agreement, or amendment. To the degree the Tribe has the following 
information available to it, the request may include, as appropriate:
    (a) Whether the Tribe wants to negotiate a compact, funding 
agreement, or amendment;
    (b) The funding programs that the Tribe wants to include in the 
funding agreement or amendment;
    (c) The terms the Tribe wants to include in the compact, funding 
agreement, or amendment;
    (d) Any information or technical assistance the Tribe needs from 
the Department to assist in pursuing the negotiation process; and
    (e) The Tribal official with authority to negotiate on behalf of 
the Tribe, the designated Tribal contact, relevant contact information, 
and, if applicable, the name and contact information of an attorney 
authorized to represent the interests of the Tribe in the negotiation.


Sec.  29.103  How will the Department respond to the Tribe's written 
request?

    Within 15 days of receipt of a Tribe's written request, the 
Department will notify the Tribe in writing of the identity of the 
designated representative(s) of the Department who will conduct the 
negotiation and, to the extent feasible, will provide to the Tribe the 
information requested by the Tribe consistent with Sec.  29.102(d).


Sec.  29.104  Must the Department and the Tribe follow a specific 
process when negotiating compacts, funding agreements, and amendments?

    The Department and the Tribe do not have to follow a specific 
process when negotiating compacts, funding agreements, and amendments. 
The Department and the Tribe should cooperate to develop a plan to 
address each issue subject to negotiation and provide the 
representatives an opportunity to address the Tribal proposals, legal 
or program issues of concern, the time needed to complete the 
negotiations, and the development of a term sheet.


Sec.  29.105  Will negotiations commence or conclude within a specified 
time period?

    Unless the Department and the Tribe agree otherwise, negotiations 
will commence within 60 days of the Department's receipt of the Tribe's 
written request to negotiate a compact, funding agreement, or 
amendment. The Department and the Tribe should make every effort to 
conclude negotiations within 90 days from the date on which 
negotiations commence, unless the parties agree to extend the time 
period for negotiations. Negotiations may proceed by electronic mail, 
teleconferences, or in-person meetings.


Sec.  29.106  What are best practices to pursue negotiations?

    (a) The parties should collaborate and provide a clear explanation 
of their positions and interests. Each party should provide timely and 
specific responses to proposals presented during negotiations in order 
to conclude negotiations as soon as possible within the period provided 
in Sec.  29.105.
    (b) In negotiating the applicable construction, design, monitoring, 
or health and safety requirements that apply to the PSFAs the Tribe 
carries out using funds included in a funding agreement, along with the 
other terms set forth in Sec.  29.307, the parties should cooperate and 
will prioritize the reduction of administrative requirements on the 
Tribe when

[[Page 52720]]

negotiating the terms of the compact, funding agreement, or amendment 
to effectuate the purposes of self-governance.
    (c) The parties should conduct the negotiations in order to reach 
agreement on as many items as possible, and to refine unresolved issues 
in order to avoid disputed terms. The negotiations should conclude with 
mutually agreed upon terms and conditions. If any unresolved issues 
remain, a Tribe may submit a final offer to the Department under 
subpart C of this part.


Sec.  29.107  What recourse does the Department or the Tribe have if 
the negotiations reach an impasse?

    The Department and the Tribe should resolve disagreements by mutual 
agreement whenever possible. If the Tribe and the Department are unable 
to reach agreement by the agreed upon date for completing negotiations, 
the Tribe may request to participate in an alternative dispute 
resolution process pursuant to Sec.  29.901, or it may submit a final 
offer to the designated Department representative in accordance with 
subpart C of this part.


Sec.  29.108  May the Department and the Tribe continue to negotiate 
after the Tribe submits a final offer?

    The parties may continue negotiations after the Tribe submits a 
final offer by mutual agreement, and may execute the remaining parts of 
the compact, funding agreement, or amendment consistent with Sec.  
29.213.


Sec.  29.109  Who is responsible for drafting the compact or funding 
agreement?

    It is the mutual obligation of the Department and the Tribe to 
draft the compact, funding agreement, or amendment. Either party may 
offer to prepare the initial draft for the other party's review.

Subpart C--Final Offer Process


Sec.  29.200  What is covered by this subpart?

    This subpart explains the final offer process for resolving, within 
a specific timeframe, disputes that may develop in negotiation of a 
compact, funding agreement, or amendment.


Sec.  29.201  In what circumstances should a Tribe submit a final 
offer?

    If the Department and the Tribe are unable to agree, in whole or in 
part, on the terms of a compact, funding agreement, or amendment, the 
Tribe may submit a final offer to the Department.


Sec.  29.202  How does a Tribe submit a final offer?

    (a) A Tribe must submit a written final offer to the Department's 
designated representative and the Chief Self-Governance Official to 
ttsgp@dot.gov or send the final offer using any other method that 
provides receipt to: Chief Self-Governance Official, U.S. Department of 
Transportation, 1200 New Jersey Avenue SE, Washington, DC 20590.
    (b) The document should be separate from the compact, funding 
agreement, or amendment and clearly identified as a ``Final Offer--
Response due within 45 days of receipt.''


Sec.  29.203  What must a final offer contain?

    A final offer must contain a description of the disagreement 
between the Department and the Tribe, the Tribe's final proposal to 
resolve the disagreement, including any draft proposed terms to be 
included in a compact, funding agreement or amendment, and the name and 
contact information for the person authorized to act on behalf of the 
Tribe. If the final offer is insufficient for the Department to make a 
decision, the Department will notify the Tribe and request additional 
information. A request for more information has no effect on deadlines 
for response.


Sec.  29.204  How long does the Department have to respond to a final 
offer?

    The Department has 45 days to respond to the final offer. The 45-
day review period begins on the date the Chief Self-Governance Official 
receives the final offer.


Sec.  29.205  How does the Department acknowledge receipt of a final 
offer?

    Within 10 days of the Chief Self-Governance Official receiving the 
final offer, the Department will send the Tribe an acknowledgement of 
the final offer, together with documentation that indicates the date on 
which the Chief Self-Governance Official received the final offer. The 
Department's failure to send the acknowledgement does not constitute 
approval of the final offer.


Sec.  29.206  May the Department request and obtain an extension of 
time of the 45-day review period?

    The Department may request an extension of time before the 
expiration of the 45-day review period. The Tribe may either grant or 
deny the Department's request for an extension. Any grant of extension 
of time must be in writing and signed by a person authorized by the 
Tribe to grant the extension before the expiration of the 45-day review 
period.


Sec.  29.207  What happens if the Department takes no action within the 
45-day review period (or any extensions thereof)?

    The final offer is accepted by operation of law if the Department 
takes no action within the 45-day review period (or any extensions 
thereof).


Sec.  29.208  What happens once the Department accepts the Tribe's 
final offer or the final offer is accepted by operation of law?

    Once the Department accepts the Tribe's final offer or the final 
offer is accepted by operation of law, the Department must add the 
terms of the Tribe's final offer to the compact, funding agreement, or 
amendment and transfer funds, if appropriate, no later than 30 days 
after the apportionment of such funds by the Office of Management and 
Budget to the Department.

Rejection of Final Offers


Sec.  29.209  On what basis may the Department reject a Tribe's final 
offer?

    The Department may reject a Tribe's final offer for any of the 
following reasons:
    (a) The amount of funds proposed in the final offer exceeds the 
applicable funding level to which the Tribe is entitled;
    (b) The subject of the final offer is an inherent Federal function 
that cannot legally be delegated to a Tribe;
    (c) Carrying out the PSFA would result in significant danger or 
risk to public health or safety; or
    (d) The Tribe is not eligible to participate in self-governance 
under section 23 U.S.C. 207(b).


Sec.  29.210  How does the Department reject a final offer?

    The Department must reject a final offer by providing written 
notice to the Tribe based on the criteria in Sec.  29.209 no more than 
45 days after receipt of a final offer by the Chief Self-Governance 
Official, or within a longer time period as agreed to by the Tribe 
consistent with this subpart. The notice must explain the basis for the 
rejection of the final offer.


Sec.  29.211  Is technical assistance available to a Tribe to overcome 
rejection of a final offer?

    Upon receiving a final offer, the Department must provide technical 
assistance to overcome the objections stated in the Department's 
rejection of a final offer.


Sec.  29.212  May a Tribe appeal the rejection of a final offer?

    A Tribe may appeal the rejection of a final offer in accordance 
with Sec. Sec.  29.904 through 29.911.

[[Page 52721]]

Sec.  29.213  If a Tribe appeals a final offer, do the remaining 
provisions of the compact, funding agreement, or amendment not in 
dispute go into effect?

    If a Tribe appeals the rejection of a final offer, the parties may 
execute and make effective the remaining provisions of the compact, 
funding agreement, or amendment that are not subject to appeal.

Subpart D--Contents of Compacts and Funding Agreements

Compacts


Sec.  29.300  What is included in a compact?

    A compact only includes the general terms that govern a Tribe's 
participation in the Program and such other terms as the parties 
mutually agree that will continue to apply from year to year, and 
affirms the government-to-government relationship between the Tribe and 
the Department. Such terms include the authority, purpose, and 
obligations of the Tribe and the Department. The written compact 
memorializes matters on which the Department and the Tribe agree. 
Language addressing disagreement between the Department and the Tribe 
will not be included in the compact.


Sec.  29.301  Is a compact required to participate in the Program?

    A Tribe must have a compact in place to participate in the Program. 
A compact must be in effect between the Department and the Tribe before 
the Tribe may enter into a funding agreement with the Department. The 
Tribe may negotiate a compact at the same time it is negotiating a 
funding agreement, so long as the compact is executed prior to or 
concurrent with the funding agreement.


Sec.  29.302  What is the duration of a compact?

    A compact remains in effect until it is terminated by mutual 
written agreement, retrocession, or reassumption under this part.


Sec.  29.303  May more than one Tribe enter into a single compact and 
funding agreement?

    A consortium of two or more Tribes may participate in the Program 
on the same basis as an individual Tribe. A consortium may comprise a 
combination of one or more Tribes that may or may not be independently 
eligible under Sec.  29.100, so long as the consortium is eligible.


Sec.  29.304  May a compact be amended?

    A compact may be amended at any time by the mutual written 
agreement of the Tribe and the Department.

Funding Agreements


Sec.  29.305  When can a Tribe initiate negotiation of a funding 
agreement?

    Concurrent with or after a Tribe has entered into a compact with 
the Department, the Department and Tribe will negotiate a funding 
agreement, consistent with Sec. Sec.  29.101 through 29.109. The 
funding agreement is the legally binding written agreement that 
identifies the funds a Tribe will use to carry out its PSFAs, and sets 
forth the terms and conditions under which the Tribe will receive the 
funds.


Sec.  29.306  What is the duration of a funding agreement?

    (a) The duration of a funding agreement is one year unless the 
parties negotiate a multiyear funding agreement or, for an initial 
funding agreement, a partial year agreement.
    (b) Each funding agreement will remain in full force and effect 
until the parties execute a subsequent funding agreement, except when:
    (1) A Tribe provides notice to the Department that it is 
withdrawing or retroceding funds for the operation of one or more PSFAs 
(or portions thereof) identified in the funding agreement;
    (2) The Department terminates the funding agreement under 23 U.S.C. 
207(f)(2); or
    (3) The parties agree otherwise.


Sec.  29.307  What terms must a funding agreement include?

    A funding agreement must set forth the following:
    (a) The funds the Department will provide, including those funds 
provided on a recurring basis;
    (b) The PSFAs the Tribe intends to carry out using the funds;
    (c) The general budget category assigned to the funds;
    (d) The time and method of transfer of funds;
    (e) The responsibilities of the Department and the Tribe;
    (f) Any applicable statutory limitations on the use of funds;
    (g) Any statutory or negotiated reporting requirements;
    (h) Any applicable Federal or federally approved design, 
construction, and monitoring standards, unless the Tribe's design, 
construction, and monitoring standards are consistent with or exceed 
such standards;
    (i) Other Federal health and safety requirements that apply to the 
funds included in the funding agreement, unless the Tribe provides 
adequate assurance that its relevant health and safety requirements are 
consistent with or exceed such requirements;
    (j) Any other provision agreed to by the Tribe and the Department; 
and
    (k) Provisions authorizing the Department to terminate the funding 
agreement (in whole or in part) and reassume the remaining funding for 
transfer as appropriate.


Sec.  29.308  May the funding agreement include additional terms?

    At a Tribe's request, the parties may incorporate into a compact or 
funding agreement any other provision of Title I of the Indian Self-
Determination and Education Assistance Act, unless the Department 
determines there is a conflict between the provision and 23 U.S.C. 207. 
The Department will make the determination consistent with 23 U.S.C. 
207(j).


Sec.  29.309  Will a funding agreement include provisions pertaining to 
flexible or innovative financing?

    If the Department and a Tribe agree, a funding agreement will 
include provisions pertaining to flexible financing and innovative 
financing. In that event, the Department and Tribe will establish terms 
and conditions relating to the flexible and innovative financing 
provisions that are consistent with 23 U.S.C. 207(d)(2)(C).


Sec.  29.310  May a Tribe redesign, consolidate, reallocate, or 
redirect the funds included in a funding agreement?

    A Tribe may redesign, consolidate, reallocate, or redirect funds 
included in the Tribe's funding agreement in any manner it considers to 
be in the best interest of the Indian community being served, subject 
to any statutory requirements specific to the funding program, provided 
that the funds are expended on projects identified in a transportation 
improvement program approved by the Department, where statutorily 
required, and used in accordance with the requirements in 
appropriations acts, title 23 of the U.S. Code, chapter 53 of title 49 
of the U.S. Code, and any other applicable law. However, a Tribe must 
use any discretionary or competitive grant funds or 23 U.S.C. 202(a)(9) 
funds included in the funding agreement, for the purpose for which the 
funds were originally authorized.


Sec.  29.311  How is a funding agreement amended?

    A funding agreement may be amended by the mutual written agreement 
of the Department and the Tribe as provided for in the funding 
agreement. The Department will not revise, amend, or require additional 
terms in a new or subsequent funding agreement without the consent of 
the

[[Page 52722]]

Tribe, unless such terms are required by Federal law.


Sec.  29.312  Is a subsequent funding agreement retroactive to the end 
of the term of the preceding funding agreement?

    When the Department and a Tribe execute a subsequent funding 
agreement, the provisions of such a funding agreement are retroactive 
to the end of the term of the preceding funding agreement.

Subpart E--Rules and Procedures for Transfer of Funds


Sec.  29.400  What funds may a Tribe elect to include in a funding 
agreement?

    A Tribe may elect to include in a funding agreement the following 
funds:
    (a) Funds provided to the Tribe under the Tribal Transportation 
Program identified in 23 U.S.C. 202 in accordance with the statutory 
formula set forth in 23 U.S.C. 202(b);
    (b) Any transit funds provided to the Tribe under 49 U.S.C. 5311;
    (c) Funds for any discretionary and competitive grant administered 
by the Department awarded to the Tribe for a transportation program 
under title 23 of the U.S. Code or chapter 53 of title 49 of the U.S. 
Code;
    (d) Funds for any other discretionary and competitive grant for a 
transportation-related purpose administered by the Department otherwise 
available to the Tribe; and
    (e) Federal-aid funds apportioned to a State under chapter 1 of 
title 23 of the U.S. Code if the State elects to provide a portion of 
such funds to the Tribe for a project eligible under 23 U.S.C. 
202(a)(9) or formula funds awarded to a State under 49 U.S.C. 5311 that 
are allocated to the Tribe by the State, and at the election of both 
the Tribe and State are designated for the direct obligation of funds 
to the Tribe.


Sec.  29.401  What funds must the Department transfer to a Tribe in a 
funding agreement?

    (a) Subject to the terms of a funding agreement, the Department 
must transfer to a Tribe all the funds provided for in the funding 
agreement.
    (b) The Department must provide funds for periods covered by a 
joint resolution adopted by Congress making continuing appropriations 
and authorization extensions, to the extent permitted by such 
resolutions. The Department will defer payment of funds to the Tribe if 
the period of continuing appropriations is less than 35 days.
    (c) The Department will include funds in a funding agreement in the 
amount equal to:
    (1) The sum of the funds that the Tribe would otherwise receive in 
accordance with a funding formula or other allocation method set forth 
in title 23 U.S.C. or 49 U.S.C. chapter 53; and
    (2) Such additional amounts as the Department determines equal the 
amounts that would have been withheld, if any, for the costs of the 
Bureau of Indian Affairs to administer the program or project on behalf 
of the Tribe.


Sec.  29.402  Which entity is responsible for the funds included in a 
funding agreement?

    The Tribe is responsible for implementing the Tribe's PSFAs using 
the funds included in a funding agreement and for administering the 
funds in accordance with this part. In addition, the Tribe must carry 
out its PSFAs in accordance with the funding agreement, and all 
applicable statutes and regulations identified in the funding 
agreement.


Sec.  29.403  When must the Department transfer to a Tribe the funds 
identified in a funding agreement?

    When a funding agreement requires an annual transfer of funds to be 
made by the Department at the beginning of a fiscal year, or requires 
semiannual or other periodic transfers of funds to be made to the 
Tribe, the Department will make the first transfer no later than 30 
days after the apportionment of such funds by the Office of Management 
and Budget to the Department, unless the funding agreement provides 
otherwise.


Sec.  29.404  When must the Department transfer funds that were not 
paid as part of the initial lump sum payment (or initial periodic 
payment)?

    The Department must transfer any funds that were not paid in the 
initial lump sum payment (or initial periodic payment) within 30 days 
after the apportionment of such funds by the Office of Management and 
Budget to the Department, and the Department has determined any 
distribution methodologies, as applicable, and made other decisions 
regarding payment of those funds.


Sec.  29.405  When must the Department transfer funds for a 
discretionary or competitive grant?

    If the Department selects a Tribe for a discretionary or 
competitive grant, and the Tribe elects to include the grant funds in 
its funding agreement, the Department will transfer the funds to a 
Tribe in accordance with the terms of the Notice of Funding Opportunity 
or as the Department and the Tribe may agree. The Department will 
transfer these funds no later than 30 days after the Department and the 
Tribe execute a funding agreement or an amendment covering the grant.


Sec.  29.406  Does the award of funds for a discretionary or 
competitive grant entitle a Tribe to receive the same amount in 
subsequent years?

    The award of funds for a discretionary or competitive grant does 
not entitle a Tribe to receive the same amount of funds in subsequent 
years.


Sec.  29.407  Does the award of funds for discretionary or competitive 
grants entitle the Tribe to receive contract support costs?

    Funds awarded for discretionary and competitive grants do not 
entitle the Tribe to receive contract support costs, are not part of 
the amount required to be transferred by the Department pursuant to 25 
U.S.C. 5325, and are not subject to the prohibition on the Department's 
ability to reduce funds in Sec.  29.413(a)(4). However, a Tribe may use 
grant funds to cover overhead and administrative expenses associated 
with operation of the grant, as provided in the grant award.


Sec.  29.408  How may a Tribe use interest earned on funds included in 
a funding agreement?

    A Tribe may retain interest earned on funds included in a funding 
agreement to carry out governmental or transportation purposes.


Sec.  29.409  May a Tribe carry over from one fiscal year to the next 
any funds that remain at the end of the funding agreement?

    The period of availability for funds transferred to a Tribe in a 
funding agreement does not lapse, except where the Tribe receives funds 
pursuant to a discretionary or competitive grant award for which 
Congress authorizes a defined period of availability. After transfer to 
the Tribe, such funds will remain available until expended. If a Tribe 
elects to carry over funds from one fiscal year to the next, such 
carryover funds will not diminish the amount of formula funds the Tribe 
is authorized to receive under its funding agreement in that or any 
subsequent fiscal year.


Sec.  29.410  May a Tribe use remaining funds from a competitive or 
discretionary grant included in a funding agreement?

    A Tribe may use remaining funds from a competitive or discretionary 
grant included in a funding agreement, but only with written approval 
from the Department. The Department must determine that the use of such 
funds is consistent with the statutory requirements of the grant 
program, including purpose and time, and is for the project for which 
the grant was provided.

[[Page 52723]]

Sec.  29.411  Are funds included in a compact and funding agreement 
non-Federal funds for purposes of meeting matching or cost 
participation requirements under any other Federal or non-Federal 
program?

    Notwithstanding any other provision of law, funds included in a 
compact and funding agreement are non-Federal funds for purposes of 
meeting matching or cost participation requirements under any other 
Federal or non-Federal program.


Sec.  29.412  May the Department increase the funds included in the 
funding agreement if necessary to carry out the Program?

    The Department may increase the funds included in the funding 
agreement if necessary to carry out the Program. However, the Tribe and 
the Department must agree to any transfer of funds to the Tribe unless 
otherwise provided for in the funding agreement.


Sec.  29.413  How will the Department assist a Tribe with its credit 
requests?

    At the request of a Tribe that has applied for a loan or other 
credit assistance from a State infrastructure bank or other financial 
institution to complete an eligible transportation-related project with 
funds included in a funding agreement, the Department will provide 
documentation in its possession or control to assist the Tribe.


Sec.  29.414  What limitations apply to Department actions related to 
transfer of funds associated with PSFAs?

    The Department will not:
    (a) Fail or refuse to transfer to a Tribe its full share of funds 
due under the program, except as required by Federal law;
    (b) Withhold portions of such funds for transfer over a period of 
years;
    (c) Reduce the amount of funds identified for transfer in a funding 
agreement to make funding available for self-governance monitoring or 
administration by the Department;
    (d) Reduce the amount of funds required under the program in 
subsequent years, except pursuant to:
    (1) A reduction in appropriations or change in the funding formula 
results from the previous fiscal year for the funds included in a 
funding agreement;
    (2) A congressional directive in legislation or accompanying 
report;
    (3) A Tribal authorization;
    (4) A change in the amount of pass-through funds included in the 
funding agreement;
    (5) A termination of the funding agreement (or portion thereof) due 
to a finding of gross mismanagement or imminent jeopardy pursuant to 
subpart I;
    (6) Completion of a project, activity, or program for which 
competitive or discretionary grant funds were provided or expenditure 
of all competitive or discretionary grant funds authorized by the 
Department under separate statutory authorities for an eligible 
project, activity, or program; or
    (7) A final decision by the Department pursuant to subpart I to 
terminate a compact and funding agreement (or portions thereof) due to 
gross mismanagement or imminent jeopardy.
    (e) Reduce the amount of funds identified in a funding agreement to 
pay for Federal functions, including Federal pay costs, Federal 
employee retirement benefits, automated data processing, technical 
assistance, and monitoring of activities under the program, except that 
such prohibition is inapplicable when Congress authorizes the 
Department to set aside a portion of the funds for project monitoring 
and oversight related functions; or
    (f) Reduce the amount of funds required under the Program to pay 
for costs of Federal personnel displaced by compacts and funding 
agreements.


Sec.  29.415  Does the Prompt Payment Act apply to funds transferred to 
a Tribe in a funding agreement?

    The Prompt Payment Act, 39 U.S.C. 3901 et seq., applies to the 
transfer of funds under this program.


Sec.  29.416  What standard applies to a Tribe's management of funds 
included in a funding agreement?

    (a) A Tribe must invest and manage funds included in a funding 
agreement as a prudent investor would, in light of the purpose, terms, 
distribution requirements, and applicable provisions in the compact and 
funding agreement. This duty requires the exercise of reasonable care, 
skill, and caution, and is to be applied to investments not in 
isolation, but in the context of the investment portfolio and as a part 
of an overall investment strategy, which should incorporate risk and 
return objectives reasonably suited to the Tribe. In making and 
implementing investment decisions, the Tribe has a duty to diversify 
the investments unless, under the circumstances, it is prudent not to 
do so.
    (b) The Tribe must:
    (1) Conform to fundamental fiduciary duties of loyalty and 
impartiality;
    (2) Act with prudence in deciding whether and how to delegate 
authority and in the selection and supervision of agents; and
    (3) Incur only costs that are reasonable in amount and appropriate 
to the investment responsibilities of the Tribe.


Sec.  29.417  Must a Tribe continue performance of the Tribal 
Transportation Program or the Tribal Transit Program under a compact 
and funding agreement if the Department does not transfer sufficient 
funds?

    A Tribe does not have to continue performance of the Tribal 
Transportation Program (23 U.S.C. 202(b)) or the Tribal Transit Program 
(49 U.S.C. 5311(c)(1)) that requires an expenditure of funds in excess 
of the amount of funds included in a funding agreement. If at any time 
the Tribe has reason to believe that the total amount included in a 
funding agreement is insufficient, the Tribe must provide reasonable 
notice of such insufficiency to the Chief Self-Governance Official. If 
the Department does not increase the amount of funds included in the 
funding agreement for the Tribal Transportation Program or Tribal 
Transit Program, the Tribe may suspend performance of the program 
activity until such time as the Department transfers additional funds.


Sec.  29.418  May a funding agreement include transfers of State funds?

    (a) A State may elect to provide a portion of Federal-aid funds 
apportioned to the State under chapter 1 of title 23 of the U.S. Code 
to an eligible Tribe for a project eligible under 23 U.S.C. 202(a).
    (b) If a State provides such funds, the transfer may occur in 
accordance with 23 U.S.C. 202(a)(9), or the State may transfer the 
funds back to the Department, and the Department will transfer the 
funds to the participating Tribe through the Tribe's funding agreement.
    (c) If a State provides such funds, the Tribe (and not the State) 
will be responsible for constructing and maintaining any projects 
carried out using the funds and for administering and supervising the 
projects and funds in accordance with 23 U.S.C. 207 during the 
applicable statute of limitations period related to the construction of 
the project.
    (d) Contract support costs will not be made available to a Tribe in 
connection with any State funds transferred at the election of a State 
to the Tribe pursuant to 23 U.S.C. 202(a)(9) or funds awarded to a 
State pursuant to 49 U.S.C. 5311 that are transferred at the election 
of a State to FTA for the benefit of a Tribe. However, overhead and 
administrative expenses may be an eligible use of such funds.

[[Page 52724]]

Sec.  29.419  Does the award of formula funds entitle a Tribe to 
receipt of contract support costs?

    The award of formula funds does not entitle a Tribe to receipt of 
contract support costs under 25 U.S.C. 5325(a). A funding agreement 
under this part will not provide additional funds for contract support 
costs to carry out PSFAs. While a Tribe is not entitled to additional 
funds for contract support costs, a Tribe may use a portion of its 
formula funds (Sec.  29.400(a) and (b)) for overhead and administrative 
expenses if such costs are reasonable, allowable, and allocable in 
accordance with 2 CFR part 200 and the applicable statutory and 
regulatory program requirements.


Sec.  29.420  Is a Tribe entitled to enter into facility leases from 
the Department and to receive facility support costs?

    A Tribe is not entitled to enter into facility leases with the 
Department and receive facility support costs. A funding agreement 
under this part will not provide additional funds for facility leases 
and facility support costs to carry out PSFAs. However, facility leases 
and facility support costs may be an eligible and allowable use of 
funds a Tribe receives under a funding agreement.

Subpart F--Program Operations

Audits and Cost Principles


Sec.  29.500  Must a Tribe undertake an annual audit?

    A Tribe that meets the applicable thresholds under 2 CFR 200.501 
must undertake an annual audit pursuant to the regulations set forth in 
2 CFR part 200, Uniform Administrative Requirements, Cost Principles, 
and Audit Requirements for Federal Awards, except to the extent that 
part exempts a Tribe from complying with the audit requirements.


Sec.  29.501  Must a Tribe submit any required audits to the Federal 
Audit Clearinghouse and the Department?

    A Tribe must submit any required audits to the Federal Audit 
Clearinghouse pursuant to the Office of Management and Budget 
procedures and provide prompt notice to the Department it has done so.


Sec.  29.502  How long must a Tribe keep and make records available for 
Federal examination or audit?

    A Tribe must keep books, documents, papers, and records of funding, 
grants, and State-provided funds for 3 years from the date of 
submission of the Single Audit Act audit and provide access to the 
Department or the Comptroller General for audit and examination related 
to grants, contracts, compacts subcontracts, sub-grants, or other 
arrangements.


Sec.  29.503  Who is responsible for compiling, copying, and paying for 
materials for any audit or examination?

    The agency or entity undertaking the examination or audit will be 
responsible for all costs associated with an audit or examination of 
Tribal records. Tribes are responsible to make records available during 
regular business hours, and may prevent removal of the records from 
Tribal offices. If an agency or entity undertaking the examination or 
audit requests that the Tribe make copies of records for its use, the 
Tribe may charge the examining agency reasonable per-page fees for 
photocopying or scanning of documents and records.


Sec.  29.504  How may the Federal Government make a claim against a 
Tribe relating to any disallowance of costs based on an audit conducted 
under this part?

    (a) Disallowance of costs. Any claim by the Federal Government 
against a Tribe relating to funds included in a funding agreement based 
on any audit conducted pursuant to this part is subject to 25 U.S.C. 
5325(f).
    (1) Any right of action or other remedy (other than those relating 
to a criminal offense) relating to any disallowance of costs is barred 
unless the Department provides notice of such a disallowance within 365 
days from receiving any required annual audit report. The notice must 
set forth the right of appeal and hearing in accordance with Sec. Sec.  
29.912 through 29.923.
    (2) To calculate the 365-day period, an audit report is deemed 
received by the Department on the date of electronic submission to the 
Federal Audit Clearinghouse. The Department has 60 days after receiving 
the audit report to give notice to the Tribe of its determination to 
reject an audit report as insufficient due to non-compliance with the 
applicable provisions of 2 CFR part 200 or any applicable statute.
    (b) Criminal penalties. Any person, officer, director, agent, 
employee, or person otherwise connected with a recipient of a contract, 
subcontract, grant, or sub-grant who embezzles, willfully misapplies, 
steals, or obtains by fraud any of the money, funds, assets, or 
property provided to the recipient will be fined not more than $10,000 
or imprisoned for not more than 2 years, or both. If the amount of 
funds in question does not exceed $100, then the fine will be no more 
than $1,000 and imprisonment not more than 1 year, or both.


Sec.  29.505  What cost principles must a Tribe apply in compacts and 
funding agreements under this part?

    (a) A Tribe must apply the applicable cost principles of the Office 
of Management and Budget's Uniform Administrative Requirements, Cost 
Principles, and Audit Requirements for Federal Awards, 2 CFR part 200, 
except as modified by:
    (1) 25 U.S.C. 5325(k), which sets forth certain categories of 
allowable uses of funds that a Tribe may include in a funding agreement 
provided that such use supports implementation of the PSFA.
    (2) Other provisions of Federal law; or
    (3) Any subsequent exemptions granted by the Office of Management 
and Budget.
    (b) The Department may not require other audit or accounting 
standards.

Management Systems and Standards


Sec.  29.506  What are the general financial management system 
standards that apply to a Tribe when carrying out a compact and funding 
agreement under this part?

    (a) Generally. A Tribe carrying out a compact and funding agreement 
under this part must develop, implement, and maintain systems that meet 
the minimum financial standards set forth in this section, unless one 
or more of the standards have been waived, in whole or in part.
    (b) Applicability to Tribal contractors. A Tribe may require that 
its contractors comply with some or all of the standards in this 
section when the Tribe retains contractors to assist in carrying out 
the requirements of a funding agreement.
    (c) Evaluation. When required under 2 CFR part 200, an independent 
auditor retained by a Tribe must evaluate the financial management 
systems of the Tribe through an annual audit report in accordance with 
the Single Agency Audit Act, 31 U.S.C. 7501-7506.
    (d) Financial management systems standards. The general financial 
management system standards that apply to a Tribe carrying out a 
funding agreement under this part must expend and account for funds 
provided to the Tribe through a funding agreement in accordance with 
all statutory requirements applicable to the receipt and use of the 
funds being provided, as well as the requirements set forth in the 
applicable compact and funding agreement, and applicable provisions of 
2 CFR part 200.

[[Page 52725]]

Sec.  29.507  What general minimum standards apply to a Tribe's 
financial management systems when carrying out a compact and funding 
agreement?

    The following general minimum standards apply to a Tribe's 
financial management systems when carrying out a compact and funding 
agreement. The fiscal control and accounting procedures of a Tribe must 
be sufficient to:
    (a) Permit preparation of reports required by the compact, funding 
agreement, and this part; and
    (b) Permit the tracing of program funds to a level of expenditure 
adequate to establish that the funds have not been used in violation of 
any restrictions or prohibitions contained in any statute or provision 
of 2 CFR part 200 that applies to the receipt and use of the funds 
included in the compact and funding agreement.


Sec.  29.508  What specific minimum requirements must a Tribe's 
financial management system include to meet general minimum standards?

    To meet the general minimum standards of Sec.  29.507, the 
financial management system of a Tribe must include the following 
specific minimum requirements:
    (a) Financial reports. The financial management system must provide 
for accurate, current, and complete disclosure of the financial results 
of activities carried out by the Tribe under a compact and funding 
agreement;
    (b) Accounting records. The financial management system must 
maintain records sufficiently detailed to identify the source and 
application of funding transferred to the Tribe in a funding agreement. 
The system must contain sufficient information to identify contract 
awards, obligations and unobligated balances, assets, liabilities, 
outlays, or expenditures and income;
    (c) Internal controls. The financial management system must 
maintain effective control and accountability for all funds transferred 
to the Tribe in the funding agreement and for all Federal real 
property, personal property, and other assets furnished for use by the 
Tribe under its compact and funding agreement;
    (d) Budget controls. The financial management system must permit 
the comparison of actual expenditures or outlays with the amounts 
budgeted by the Tribe for each funding agreement; and
    (e) Allowable costs. The financial management system must be 
sufficient to determine that the expenditure of funds is reasonable, 
allowable, and allocable based upon the terms of the funding agreement 
and applicable provisions of 2 CFR part 200.


Sec.  29.509  What procurement standards apply to contracts carried out 
using funds included in a funding agreement?

    (a) Each contract carried out using funds included in a funding 
agreement must, at a minimum:
    (1) Be in writing;
    (2) Identify the interested parties, their respective roles and 
responsibilities, and the purposes of the contract;
    (3) State the work to be performed under the contract;
    (4) State the process for making any claim, the payments to be 
made, and the terms of the contract; and
    (5) State that it is subject to 25 U.S.C. 5307(b) to the extent 
identified in Sec.  29.525.
    (b) A Tribe that chooses to use a procurement method that is not 
provided for in its established procurement management standards in the 
delivery of a Tribal transportation project must submit the request to 
deviate from these standards to the Department for review and approval 
in accordance with Sec.  29.515. The deviation request must specify the 
procurement method that the Tribe proposes to use and the project to 
which such method will be applied.


Sec.  29.510  What property management systems and standards must a 
Tribe maintain?

    (a) Property management system. A Tribe must maintain a property 
management system to account for all property acquired with funds 
included in a funding agreement, acquired with Federal funds awarded by 
the Department or the Department of the Interior, or obtained as excess 
or surplus Federal property to be used for activities under the 
Program. The property management system must contain requirements for 
the use, care, maintenance, and disposition of such property as 
follows:
    (1) Where title vests in the Tribe, in accordance with Tribal law 
and procedures; or
    (2) In the case of a consortium, according to the internal property 
procedures of the consortium.
    (b) Transit asset management. In addition to the property 
management system and standards in this section, property acquired with 
transit funds (chapter 53 of Title 49 U.S. Code) is subject to the 
property management requirements set forth in 49 U.S.C. 5326 concerning 
the transit asset management plan, performance targets, and reports.
    (c) Tracking requirements under a property management system. The 
property management system of the Tribe relating to property used under 
the Program must track:
    (1) Personal property and rolling stock with an acquisition value 
in excess of $5,000 per item;
    (2) Sensitive personal property, which is all personal property 
that is subject to theft and pilferage, as defined by the Tribe; and
    (3) Real property.
    (d) Records. The property management system must maintain records 
that accurately describe the property, including any serial number, 
vehicle identification number, or other identification number. These 
records should contain current information such as the source, 
titleholder, acquisition date, acquisition cost, share of Federal 
participation in the cost, location, use and current condition of the 
property, and the date of disposal and sale price, if any.
    (e) Internal controls. The property management system must maintain 
effective internal controls that include, at a minimum, procedures for 
the Tribe to:
    (1) Conduct periodic, physical inventories at least once every 2 
years and reconcile such inventories with the Tribal internal property 
and accounting records;
    (2) Prevent loss or damage to property; and
    (3) Ensure that property is used by the Tribe to carry out 
activities under a funding agreement until the Tribe declares the 
property excess to the needs of the PSFAs carried out by the Tribe 
under the funding agreement, consistent with the property management 
system of the Tribe.
    (f) Maintenance requirements. Required maintenance includes the 
performance of actions necessary to keep the property in good working 
condition, the procedures recommended by equipment manufacturers, and 
steps necessary to protect the interests of the Tribe and the 
Department in any express warranties or guarantees covering the 
property.
    (g) Disposition of personal property acquired under a funding 
agreement. Prior to disposition of any personal property, including 
rolling stock, the Tribe must report to the Chief Self-Governance 
Official in writing of the property's status (e.g., worn out, lost, 
stolen, damaged beyond repair, or no longer needed to carry out 
activities under a funding agreement). The Department will provide 
disposition instructions in accordance with 2 CFR 200.313. A Tribe may 
retain, sell or otherwise dispose of personal property with a current 
per unit fair market value

[[Page 52726]]

of $5,000 or less with no further obligation to the Department.
    (h) Disposition of real property acquired under a funding 
agreement. Prior to disposition of any real property acquired under a 
funding agreement, the Tribe must report to the Chief Self-Governance 
Official, who will ensure the Department provides disposition 
instructions in accordance with 2 CFR 200.311.

Records


Sec.  29.511  Must a Tribe maintain a recordkeeping system?

    A Tribe must maintain records and provide Federal agency access to 
those records as provided in 25 U.S.C. 5386(d) and the statutory 
requirements of the funds included in a funding agreement.


Sec.  29.512  Are Tribal records subject to the Freedom of Information 
Act and Federal Privacy Act?

    (a) Except to the extent that a Tribe specifies otherwise in its 
compact or funding agreement, the records of the Tribe retained by the 
Tribe will not be considered Federal records for purposes of chapter 5 
of title 5, U.S. Code.
    (b) Tribal records submitted to the Department are considered 
Federal records for the purposes of the Freedom of Information Act and 
Federal Privacy Act. If a Tribe provides information to the Department 
that the Tribe considers to be trade secret, or confidential commercial 
or financial information, the Tribe must identify it as such. The 
Department will not disclose the information to the public, except to 
the extent required by law. In the event the Department receives a FOIA 
request for the information, the Department will follow the procedures 
described in its FOIA regulations at 49 CFR part 7.


Sec.  29.513  Must a Tribe make its records available to the 
Department?

    After 30 days advance written notice from the Department, a Tribe 
must provide the Department with reasonable access to such records to 
enable the Department to meet its minimum legal recordkeeping system 
and audit requirements.


Sec.  29.514  How long must a Tribe keep management system records?

    A Tribe must keep books, documents, papers, and records of funding, 
grants, and State-provided funds for 3 years from the date of 
submission of the Single Audit Act audit such that the Department or 
the Comptroller General may have access to the records for audit and 
examination related to grants, contracts, compacts subcontracts, sub-
grants, or other arrangements.

Procurement


Sec.  29.515  When procuring property or services with funds included 
in a funding agreement, can a Tribe follow its own procurement 
standards?

    When procuring property or services with funds included in a 
funding agreement, a Tribe must have standards that conform to the 
procurement standards in this subpart. If a Tribe relies upon 
procurement standards different than those described in Sec.  29.516, 
it must identify the standards it will use in a proposed waiver in the 
initial negotiation of a funding agreement or as a waiver request to an 
existing funding agreement. The Tribe must submit the request to the 
Department in accordance with Sec.  29.535.


Sec.  29.516  What are the minimum procurement standards that a Tribe 
must follow when procuring property or services with funds included in 
a funding agreement?

    A Tribe must follow the minimum procurement standards set forth 
below when procuring property or services with funds included in a 
funding agreement.
    (a) Minimum procurement standards. (1) A Tribe must ensure that its 
vendors and contractors perform in accordance with the terms, 
conditions, and specifications of their contracts or purchase 
agreements or orders.
    (2) A Tribe must maintain written standards of conduct governing 
the performance of its employees who award and administer contracts 
paid for using funds transferred to the Tribe under a funding 
agreement.
    (i) An employee, officer, elected official, or agent of a Tribe 
must not participate in the selection, award, or administration of a 
procurement supported by Federal funds if a conflict of interest, real 
or apparent, as defined in the conflict of interest policies of the 
Tribe, would be involved.
    (ii) Employees, officers, elected officials, or agents of a Tribe, 
or of a subcontractor of the Tribe, must not solicit or accept 
gratuities, favors, or anything of monetary value from contractors, 
potential contractors, or parties to sub-agreements, except that the 
Tribe may exempt a financial interest that is not substantial or a gift 
that is an unsolicited item of nominal value.
    (iii) The standards must also provide for penalties, sanctions, or 
other disciplinary actions for violations of the procurement standards.
    (3) A Tribe must review proposed procurements to avoid buying 
unnecessary or duplicative items and ensure the reasonableness of the 
price. The Tribe should consider consolidating or breaking out 
procurement to obtain more economical purchases. Tribes are encouraged 
to realize economies of scale in the procurement of goods, services, 
and supplies under this part, including the negotiation of cooperative 
agreements with other public authorities. Where appropriate, the Tribe 
must compare leasing and purchasing alternatives to determine which is 
more economical.
    (4) A Tribe must conduct all major procurement transactions that 
exceed the simplified acquisition threshold set forth in 2 CFR 200.88 
by providing full and open competition, to the extent necessary to 
assure efficient expenditure of contract funds and to the extent 
feasible in the local area.
    (i) Consistent with 2 CFR 200.88, a Tribe may develop its own 
definition for a simplified acquisition threshold.
    (ii) A Tribe may apply to any procurement award the Indian 
preference requirements for wages and grants contained in 25 U.S.C. 
5307(b).
    (5) A Tribe must make procurement awards only to responsible 
entities with the ability to perform successfully under the terms and 
conditions of the proposed procurement. In making this judgment, the 
Tribe will consider such matters as the contractor's integrity, its 
compliance with public policy, its record of past performance, and its 
financial and technical resources.
    (6) A Tribe must maintain records on the significant history of all 
major procurement transactions. These records must include, but are not 
limited to, the rationale for the method of procurement, the selection 
of contract type, the contract selection or rejection, and the basis 
for the contract price.
    (7) A Tribe is solely responsible, using good administrative 
practice and sound business judgment, for processing and settling all 
contractual and administrative issues arising out of a procurement. 
These issues include, but are not limited to, source evaluation, 
protests, disputes, and claims.
    (i) The settlement of any protest, dispute, or claim will not 
relieve the Tribe of any obligations under a funding agreement.
    (ii) Violations of law must be referred to the Tribal or Federal 
authority having proper jurisdiction.
    (b) Conflicts of interest. A Tribe participating in the program 
must ensure that internal measures and controls are in place to address 
conflicts of interest in the administration of compacts and funding 
agreements under this part.

[[Page 52727]]

Sec.  29.517  Do Federal laws and regulations apply to a Tribe's 
contractors or subcontractors?

    A Tribe's contractors are responsible for complying with Federal 
laws and regulations. Contracts between a Tribe and its contractors 
should inform contractors that the contract is carried out using funds 
transferred to the Tribe in a funding agreement, and that the 
contractors and its subcontractors are responsible for identifying and 
ensuring compliance with applicable Federal laws and regulations. The 
Department and the Tribe may, through negotiation, identify all or a 
portion of such requirements in the funding agreement and, if so 
identified, these requirements should be identified in the contracts 
the Tribe awards using funds included in a funding agreement.


Sec.  29.518  Can a Tribe use Federal supply sources in the performance 
of a compact and funding agreement?

    A Tribe and its employees may use Federal supply sources (including 
lodging, airline, interagency motor pool vehicles, and other means of 
transportation) to the same extent as if the Tribe were a Federal 
agency. The Department will assist the Tribes, to the extent feasible, 
to resolve any barriers to full implementation.

Reporting


Sec.  29.519  What reporting must a Tribe provide?

    (a) A Tribe must provide reports mandated by statute associated 
with the funds included in the funding agreement. In accordance with 
Sec.  29.307, the funding agreement will list these reporting 
requirements. A Tribe will cooperate with the Department to assist it 
in complying with its statutory reporting requirements. No additional 
reporting will be required.
    (b) Notwithstanding paragraph (a) of this section, if the Tribe 
includes funds for a discretionary or competitive grant in a funding 
agreement, the parties will negotiate the appropriate reporting 
requirements to include in the funding agreement.

Property


Sec.  29.520  How may a Tribe use existing Department facilities, 
equipment, or property?

    At the request of a Tribe, the Department will permit a Tribe to 
use and maintain existing facilities, equipment therein or appertaining 
thereto, and other personal property, if applicable, owned by the 
Government within the Department's jurisdiction, subject to terms and 
conditions agreed to by the Department and the Tribe. The requested 
facilities, equipment, or property must be used to carry out the 
Tribe's PSFAs under the compact and funding agreement. Such facilities, 
equipment, or other personal property will be eligible for replacement, 
maintenance, and improvement using funds included in a funding 
agreement, or the Tribe may expend its own funds. The Department does 
not have any additional funding sources for replacement, maintenance, 
or improvement of such facilities, equipment, other personal property. 
The Department will exercise discretion in a way that gives the maximum 
effect to the request of a Tribe to use such facilities, equipment, or 
property.


Sec.  29.521  How may a Tribe acquire surplus or excess Federal 
property for use under the Program?

    A Tribe may acquire any surplus or excess property for use in the 
performance of the compact and funding agreement consistent with the 
procedures established by the General Services Administration. The 
Tribe must notify the Chief Self-Governance Official of the surplus or 
excess property it proposes to acquire and the purpose for which it 
will be used in the performance of the compact or funding agreement. If 
the Department participates in the acquisition by the Tribe of any 
excess or surplus Federal property, the Department will expeditiously 
process the request and assist the Tribe in its acquisition to the 
extent feasible and exercise discretion in a way that gives maximum 
effect to the Tribe's request for donation of the excess or surplus 
Federal property. When the Department's participation is required, the 
Department should expeditiously request acquisition of the property 
from General Services Administration or the holding agency, as 
appropriate, by submitting the necessary documentation prior to the 
expiration of any ``freeze'' placed on the property by the Tribe or the 
Department on the Tribe's behalf. The Tribe must take title to any 
property acquired pursuant to this section. Such surplus or excess 
property will be eligible for replacement, maintenance, and improvement 
using funds included in a funding agreement, or the Tribe may expend 
its own funds. The Department does not have any additional funding 
sources for replacement, maintenance, or improvement of such surplus or 
excess property.


Sec.  29.522  How must a Tribe use surplus or excess Federal property 
acquired under the Program?

    The Tribe must use any property acquired under this section in a 
manner consistent with the justification submitted at acquisition. The 
Tribe should notify the Chief Self-Governance Official whenever use of 
the property changes significantly and upon disposal or sale.


Sec.  29.523  If a compact or funding agreement (or portion thereof) is 
retroceded, reassumed, terminated, or expires, may the Department 
reacquire title to property purchased with funds under any compact and 
funding agreement or excess or surplus Federal property that was 
donated to the Tribe under the Program?

    If a compact or funding agreement (or portion thereof) is 
retroceded, reassumed, terminated, or expires, the Tribe retains title 
to the property purchased with funds under any compact or funding 
agreement or excess for surplus Federal property donated under the 
Program if it is valued at $5,000 or less. If the value of the property 
is over $5,000 at the time of retrocession, withdrawal, or 
reassumption, title to such property may revert to the Department at 
the Department's discretion.

Technical Assistance


Sec.  29.524  What technical assistance is available from the 
Department?

    Upon the written request of a Tribe, and to the extent feasible, 
the Department will provide technical assistance, including periodic 
program reviews, to assist a Tribe improve its performance in carrying 
out the Program.

Prevailing Wages


Sec.  29.525  Do the wage and labor standards in the Davis-Bacon Act 
apply to employees of a Tribe?

    Wage and labor standards of the Davis-Bacon Act do not apply to 
employees of a Tribe. However, Davis Bacon wage rates apply to all 
Tribal contractors and subcontractors.

Tribal Preference


Sec.  29.526  Does Indian preference apply to PSFAs under the Program?

    To the greatest extent feasible, any contract, subcontract, grant, 
or subgrant under a compact and funding agreement must give preference 
for employment and training, and the award of subcontracts and sub-
grants, to Indians, Indian organizations, and Indian-owned economic 
enterprises, as defined in 25 U.S.C. 1452.

[[Page 52728]]

Sec.  29.527  When do Tribal employment law and contract preference 
laws govern?

    To the extent provided in applicable Federal law, Tribal law 
governs Indian preference policies in the performance of a compact and 
funding agreement under the Program. When a compact or funding 
agreement is intended to benefit one Tribe, the Tribal employment or 
contract preference laws adopted by such Tribe will govern with respect 
to the administration of the compact and funding agreement.

Environmental and Cultural Resource Compliance


Sec.  29.528  What compliance with environmental and cultural resource 
statutes is required?

    (a) The Department must meet the requirements of applicable Federal 
environmental and cultural resource laws, such as the National 
Environmental Policy Act and the National Historic Preservation Act, 
for a proposed project under the Program.
    (b) The Secretary has delegated environmental and cultural resource 
compliance responsibilities to the Operating Administrations, as 
appropriate. As such, an Operating Administration will serve as the 
lead agency responsible for final review and approval of environmental 
documents, and any associated environmental determinations and findings 
for a proposed project under the Program. The Secretary, as delegated 
to the Operating Administrations, is also responsible for making 
determinations and issuing approvals in accordance with Section 4(f) 
(23 U.S.C. 138 and 49 U.S.C. 303), as applicable. Tribes may consult 
with the Chief Self-Governance Official to determine which Operating 
Administration should serve as the lead agency.
    (c) If the Department is conducting the environmental review 
process for a proposed project under the Program, the Tribe must assist 
the Department to satisfy the requirements of applicable Federal 
environmental and cultural resource laws.
    (d) A Tribe may manage or conduct the environmental review process 
for a proposed project under the Program and may prepare drafts of the 
appropriate environmental review documents for submission to the 
Department.
    (1) A Tribe may follow its own environmental review procedures if 
the procedures and documentation also satisfy the Federal environmental 
review requirements applicable to the project. A Tribe should work with 
the Operating Administration serving as lead agency to ensure the 
Tribal process will satisfy all applicable Federal environmental review 
requirements.
    (2) The Operating Administration serving as lead agency must 
determine that the process and documentation satisfy the applicable 
Federal environmental review requirements.
    (e) As resources permit and at the request of a Tribe, the 
Department will provide advice and technical assistance to the Tribe to 
assist in the management of the Federal environmental review process 
and preparation of environmental documents.
    (f) Unless prohibited by law, a Tribe may use funds included in a 
funding agreement to pay for environmental review activities.

Federal Tort Claims Act


Sec.  29.529  Is the Federal Tort Claims Act applicable to a Tribe when 
carrying out a compact and funding agreement under the Program?

    (a) Section 314 of Public Law 101-512 and 25 U.S.C. 5396(a) 
incorporated by 23 U.S.C. 207(l)(8) make the Federal Tort Claims Act 
(FTCA), 28 U.S.C. 1346(b), 2401, 2671-2680, applicable to a Tribe 
carrying out a compact and funding agreement under the Program.
    (b) Contractors, subcontractors, or sub-recipients of a Tribe are 
not subject to the terms and conditions of FTCA. The Tribe may use the 
regulations set forth in 25 CFR part 900, subpart M, as guidance on the 
Tribe's rights and responsibilities under the FTCA. Accordingly, the 
Tribe must include, in any contract entered into with funds provided 
under a compact and funding agreement, a requirement that contractors, 
sub-contractors, or sub-recipients maintain applicable insurance 
coverage, such as workers compensation, auto, and general liability 
insurance, consistent with statutory minimums and local industry 
standards.


Sec.  29.530  What steps should a Tribe take after becoming aware of a 
Federal Tort Claim?

    (a) Immediately after receiving a claim or a summons and complaint 
filed under the FTCA, the Tribe must notify the Chief Self-Governance 
Official at ttsgp@dot.gov or use any other method that provides 
receipt.
    (b) The Tribe, through a designated tort claims liaison assigned by 
the Tribe, must assist the Department in preparing a comprehensive and 
factually based report, which will inform the Department's report to 
the U.S. Department of Justice.
    (c) The Tribe's designated tort claims liaison must immediately 
provide the following significant details of the event and include, as 
appropriate and to the extent within their knowledge, possession, or 
control:
    (1) The date, time, and exact place of the accident or incident;
    (2) A concise and complete statement of the circumstances of the 
accident or incident;
    (3) The names and addresses of Tribal or Federal employees involved 
as participants or witnesses;
    (4) The names and addresses of all other eyewitnesses;
    (5) An accurate description of all Federal, Tribal, and privately 
owned property involved, and the nature and amount of damage, if any;
    (6) A statement as to whether any person involved was cited for 
violating a Federal, State, or Tribal law, ordinance, or regulation;
    (7) The Tribe's determination as to whether any of its employees 
(including Federal employees assigned to the Tribe) involved in the 
incident giving rise to the tort claim were acting within the scope of 
their employment in carrying out the funding agreement at the time the 
incident occurred;
    (8) Copies of all relevant documentation, including available 
police reports, statements of witnesses, newspaper accounts, weather 
reports, plats, and photographs of the site or damaged property, that 
may be necessary or useful for the Department to determine the claim; 
and
    (9) Insurance coverage information, copies of medical bills, and 
relevant employment records.
    (d) The Tribe must cooperate with and provide all necessary 
assistance to the U.S. Department of Justice and the Department's 
attorneys assigned to defend the tort claim including, but not limited 
to, case preparation, discovery, and trial.
    (e) If requested by the Department, the Tribe must make an 
assignment and subrogation of all the Tribe's rights and claims (except 
those against the Federal Government) arising out of a tort claim 
against the Tribe.
    (f) If requested by the Department, the Tribe must authorize 
representatives of the Department to settle or defend any claim and to 
represent the Tribe in or take charge of any action. If the Federal 
Government undertakes the settlement or defense of any claim or action, 
the Tribe must provide all reasonable additional assistance in reaching 
a settlement or asserting a defense.


Sec.  29.531  Is it necessary for a compact or funding agreement to 
include any terms about FTCA coverage?

    Terms about FTCA coverage are optional in a compact or funding

[[Page 52729]]

agreement, and the FTCA applies even if terms regarding FTCA are not 
included in a compact or funding agreement.


Sec.  29.532  Does FTCA cover employees of the Tribe who are paid by 
the Tribe from funds other than those provided through the compact and 
funding agreement?

    Subject to FTCA limitations, the FTCA covers employees of the Tribe 
who are not paid from compact and funding agreement funds as long as 
the services out of which the claim arose were performed in carrying 
out a compact and funding agreement under the Program.


Sec.  29.533  May persons who are not Indians assert claims under FTCA?

    Any aggrieved person may assert claims for alleged torts arising 
from activities performed in carrying out compacts and funding 
agreements under the Program.


Sec.  29.534  Does the year PSFAs are funded affect FTCA coverage?

    The year the funding was provided has no effect on the application 
of the FTCA.

Waiver of Program Regulations


Sec.  29.535  What is the process for regulation waivers under this 
part?

    (a) A Tribe may request a waiver of a regulation promulgated under 
this part with respect to a compact or funding agreement. The Tribe 
must submit the request in writing to the Chief Self-Governance 
Official to ttsgp@dot.gov or use any other method that provides 
receipt, at the following address: Chief Self-Governance Official, U.S. 
Department of Transportation, 1200 New Jersey Avenue SE, Washington, DC 
20590. The request must be marked with the words ``REQUEST TO WAIVE 
REGULATIONS'' on the first page of the request and on the envelope 
enclosing the request (or in the subject line if by electronic mail). 
The request must identify the regulation subject to the waiver request, 
the language the Tribe seeks to waive, and the basis for the request.
    (b) Within 10 days of receipt of the waiver request, the Chief 
Self-Governance Official will send the Tribe an acknowledgement of the 
waiver request, together with a date-stamped cover sheet that indicates 
the date on which the Department received the waiver request.
    (c) No later than 90 days after the date of receipt of a written 
request under paragraph (a) of this section, the Department must 
approve or deny the request in writing. If the application for a waiver 
is denied, the Department must provide the Tribe with the reasons for 
the denial as part of the written response.
    (d) The Department will consider the following factors in making 
its decision on a waiver request:
    (1) The extent to which the waiver provides flexibility to 
facilitate the implementation of the Program at the Tribal level;
    (2) The extent to which the Tribe will benefit from the waiver;
    (3) Whether the waiver is contrary to Federal law; and
    (4) Whether the waiver is consistent with Federal transportation 
policy.
    (e) If the Department does not approve or deny a request submitted 
under paragraph (a) of this section on or before the last day of the 
90-day period, the request will be deemed approved by operation of law.
    (f) A decision by the Department on a waiver request is a final 
agency action subject to judicial review under the Administrative 
Procedure Act.

Subpart G--Withdrawal


Sec.  29.600  May a Tribe withdraw from a consortium?

    A Tribe may fully or partially withdraw from a consortium in 
accordance with any applicable terms and conditions of a consortium 
agreement with the Tribe. The withdrawing Tribe must provide written 
notification to the consortium and the Department of its decision to 
withdraw.


Sec.  29.601  When does a withdrawal become effective?

    A withdrawal becomes effective within the time frame specified in 
the resolution that authorizes the Tribe to withdraw from the 
consortium. In the absence of a specific time frame set forth in the 
resolution, such withdrawal becomes effective on:
    (a) The earlier of 1 year after the date of submission of such 
request, or the date on which the funding agreement expires; or
    (b) Such date as may be mutually agreed upon by the Department, the 
withdrawing Tribe, and the consortium that has signed the compact and 
funding agreement.


Sec.  29.602  How are funds redistributed when a Tribe fully or 
partially withdraws from a compact and funding agreement and elects to 
enter into a compact with the Department?

    A withdrawing Tribe that is eligible for the Program under 23 
U.S.C. 207(b) and Sec.  29.100 may enter into a compact and funding 
agreement for its share of funds supporting those PSFAs that the Tribe 
will carry out, calculated on the same basis as the funds were 
initially allocated in the funding agreement of the consortium, unless 
otherwise agreed to by the consortium and the Tribe.


Sec.  29.603  How are funds distributed when a Tribe fully or partially 
withdraws from a compact and funding agreement administered by a 
consortium serving more than one Tribe, and the withdrawing Tribe 
elects not to or is ineligible to enter into a compact under this part?

    Unless otherwise agreed to by the consortium and the Tribe, the 
consortium must return to the Department all funds not obligated and 
expended by the consortium associated with the withdrawing Tribe when 
the withdrawing Tribe elects not to or is ineligible to enter into a 
compact under this part.

Subpart H--Retrocession


Sec.  29.700  May a Tribe retrocede a PSFA and the associated funds?

    A Tribe may voluntarily retrocede (fully or partially) its PSFA 
under a compact and funding agreement under this Part. A Tribe may 
retrocede for any reason.


Sec.  29.701  How does a Tribe notify the Department of its intention 
to retrocede?

    (a) Notice. A Tribe must submit a written notice of its intent to 
retrocede to the Chief Self-Governance Official to ttsgp@dot.gov or by 
any other method that provides receipt. The notice must specifically 
identify those PSFAs the Tribe intends to retrocede.
    (b) Notice to the Department of the Interior. The Department will 
send the Tribe's notice of its intention to retrocede to the Department 
of the Interior and request that the Department of the Interior 
determine whether the PSFA is associated with transportation services 
provided by the Department of the Interior.


Sec.  29.702  What happens if the Department of the Interior determines 
that it provides the transportation services the Tribe intends to 
retrocede?

    If the Department of the Interior determines that it provides the 
transportation services the Tribe intends to retrocede, the Department 
will notify the Tribe. The Tribe must return all remaining funds, less 
closeout costs, associated with those transportation services to the 
Department for transfer to the Department of the Interior.


Sec.  29.703  What happens if the Department of the Interior determines 
that it does not provide the transportation services the Tribe intends 
to retrocede?

    If the Department of the Interior determines that it does not 
provide the

[[Page 52730]]

transportation services the Tribe intends to retrocede, the Tribe may 
withdraw its notice to retrocede or return all remaining funds, less 
closeout costs, associated with the retroceded PSFA, and the Department 
will distribute those funds in accordance with applicable law.


Sec.  29.704  What is the effective date of a retrocession?

    The retrocession becomes effective within the timeframe specified 
in the funding agreement. In the absence of a specified date, the 
retrocession becomes effective:
    (a) On the earlier of 1 year after the date of the Tribe's 
submission of the request, or the date on which the funding agreement 
expires; or
    (b) Such date mutually agreed upon by the Departments and the 
retroceding Tribe when the Department of the Interior has agreed to 
assume a retroceded PSFA.


Sec.  29.705  What effect will a retrocession have on a Tribe's right 
to compact under the Program?

    Provided that a Tribe is eligible under Sec.  29.100, retrocession 
will not adversely affect any future request by the Tribe to include 
funds from the same program in a compact or funding agreement.


Sec.  29.706  Will retrocession adversely affect future funding 
available for the retroceded program?

    Retrocession will not adversely affect future funding for the 
retroceded program. Future funding will be available to the Tribe at 
the same level of funding as if there had been no retrocession.

Subpart I--Termination and Reassumption


Sec.  29.800  When can the Department reassume a compact or funding 
agreement?

    The Department may terminate and reassume a compact or funding 
agreement (or portion thereof) when the Department makes a specific 
finding, in writing, to a Tribe, that the Department has found that 
there is:
    (a) Imminent jeopardy to a trust asset, natural resources, or 
public health and safety that is caused by an act or omission of the 
Tribe and that arises out of a failure by the Tribe to carry out the 
compact or funding agreement; or
    (b) Gross mismanagement with respect to funds transferred to the 
Tribe under the compact and funding agreement, as determined by the 
Department in consultation with the Office of the Inspector General, as 
appropriate. Gross mismanagement means a significant, clear, and 
convincing violation of compact, funding agreement, or regulatory or 
statutory requirements applicable to Federal funds included in a 
compact and funding agreement that results in a significant reduction 
of funds available for the PSFA carried out by the Tribe.


Sec.  29.801  Can the Department reassume a portion of a compact or 
funding agreement and the associated funds?

    The Department may reassume a portion of a compact or funding 
agreement and the associated funds if the Department has sufficient 
grounds to do so. The Department must identify the narrowest portion of 
the compact or funding agreement for reassumption.


Sec.  29.802  What process must the Department follow before 
termination of a compact or funding agreement (or portion thereof)?

    Except as provided in Sec.  29.805, prior to a termination becoming 
effective, the Department must:
    (a) Notify the Tribe in writing by any method that provides receipt 
of the findings required under Sec.  29.800;
    (b) Request specific corrective action within a reasonable period 
of time, no less than 45 days, to correct the conditions that may 
result in the Department's termination of a compact or funding 
agreement (or portion thereof);
    (c) To the extent feasible and if requested, offer and provide 
technical assistance to assist the Tribe in overcoming the conditions 
that led to the findings described under paragraph (a) of this section. 
Technical assistance may take the form of feedback, review, and other 
assistance requested, as appropriate; and
    (d) Provide an opportunity for a hearing on the record in 
accordance with Subpart J of this part.


Sec.  29.803  What happens if the Department determines that the Tribe 
has not corrected the conditions that the Department identified in the 
notice?

    (a) If the Department determines that the Tribe has not corrected 
the conditions that the Department identified in the notice, the 
Department must provide a second written notice by any method that 
provides receipt to the Tribe that the Department will terminate the 
compact or funding agreement, in whole or in part.
    (b) The second notice must include:
    (1) The effective date of the termination;
    (2) The details and facts supporting the termination; and
    (3) Instructions that explain the Tribe's right to a hearing 
pursuant to Sec.  29.925.


Sec.  29.804  When may the Department reassume?

    Except as provided inSec.  29.805, the Department may not reassume 
until 30 days after the final resolution of the hearing and any 
subsequent appeals to provide the Tribe with an opportunity to take 
corrective action in response to any adverse final ruling.


Sec.  29.805  When can the Department immediately terminate a compact 
or funding agreement (or portion thereof)?

    (a) The Department may immediately terminate a compact or funding 
agreement (or a portion thereof) if:
    (1) The Department makes a finding of imminent substantial and 
irreparable jeopardy to a trust asset, natural resource, or public 
health and safety; and
    (2) The jeopardy arises out of a failure to carry out the compact 
or funding agreement.
    (b) The Department must provide notice of immediate termination by 
any method that provides receipt. The notice must set forth the 
findings that support the Department's determination, advise the Tribe 
whether it will be reimbursed for any closeout costs incurred after the 
termination, request the return of any property, and advise the Tribe 
of its right to a hearing pursuant to Sec.  29.925. Concurrently, the 
Department must notify the Office of Hearings that the Department 
intends to immediately terminate a compact or funding agreement. 
Pursuant to Sec.  29.928, the Department has the burden of proof in any 
hearing or appeal of an immediate termination.


Sec.  29.806  Upon termination, what happens to the funds associated 
with the terminated portions of the compact or funding agreement?

    Upon termination, the Department will reassume the remaining funds 
associated with the terminated portions of the compact or funding 
agreement. The Department may:
    (a) Transfer funds associated with transportation services provided 
by the Department of the Interior to the Department of the Interior; or
    (b) Distribute any funds not transmitted to the Department of the 
Interior in accordance with applicable law.

Subpart J--Dispute Resolution and Appeals


Sec.  29.900  What is the purpose of this subpart?

    This subpart sets forth procedures that a Tribe may use to resolve 
disputes with the Department arising before or after the execution of a 
compact or

[[Page 52731]]

funding agreement under the Program. It also sets forth the process for 
filing and processing administrative appeals.


Sec.  29.901  Can a Tribe and the Department resolve disputes using 
alternative dispute resolution processes?

    At any time, a Tribe or the Department may request an informal 
process or an alternate dispute resolution procedure, such as 
mediation, conciliation, or arbitration, to resolve disputes. The goal 
of any such process (which may involve a third party) is to provide an 
inexpensive and expeditious mechanism to resolve disputes by mutual 
agreement instead of an administrative or judicial proceeding. The 
parties should resolve disputes at the lowest possible staff level 
whenever possible.


Sec.  29.902  Does the Equal Access to Justice Act apply to the 
Program?

    The Equal Access to Justice Act (EAJA), 5 U.S.C. 504 and 28 U.S.C. 
2414, and the relevant implementing regulations (48 CFR 6101.30 and 
6101.31; 49 CFR part 6) will apply if the Tribe's compact or funding 
agreement make these provisions applicable.


Sec.  29.903  What determinations may not be appealed under this 
subpart?

    The following determinations may not be appealed under this 
subpart:
    (a) Waiver determination. A waiver determination made pursuant to 
Sec.  29.535 is a final agency action subject to judicial review under 
the Administrative Procedure Act.
    (b) Disputes or appeals arising under other Federal laws. Decisions 
made under other Federal statutes, such as the Freedom of Information 
Act and the Privacy Act. Such decisions may be appealable under those 
statutes and their implementing regulations.
    (c) Selection and award decisions for competitive or discretionary 
grants. The Department's selection and level of award decisions for 
competitive or discretionary grants administered by the Department are 
not subject to appeal.

Pre-Award Decisions


Sec.  29.904  What are pre-award decisions that a Tribe may appeal?

    A Tribe may appeal pre-award decisions, which include:
    (a) A decision whether to include a Department program in a funding 
agreement;
    (b) A decision whether an activity is an inherent Federal function;
    (c) A decision on a final offer before the Department and the Tribe 
enter into a compact or funding agreement;
    (d) A decision on a final offer before the Department and the Tribe 
execute an amendment modifying the terms of an existing compact or 
funding agreement; and
    (e) An eligibility determination.


Sec.  29.905  To whom does a Tribe appeal a pre-award decision?

    A Tribe appeals a pre-award decision to a hearing official, who was 
not involved in the initial decision, appointed by the General Counsel.


Sec.  29.906  Must a Tribe exhaust its administrative remedies before 
initiating a civil action against the Department in the U.S. District 
Courts for a pre-award decision?

    A Tribe must exhaust its administrative remedies before initiating 
a civil action against the Department in the U.S. District Courts 
except a Tribe may appeal the rejection of a final offer directly to 
the U.S. District Courts in lieu of an administrative appeal.


Sec.  29.907  When and how must a Tribe appeal a pre-award decision?

    (a) A pre-award decision becomes final 30 days after receipt by the 
Tribe. To appeal the pre-award decision, a Tribe must submit the 
written request to the Office of the General Counsel and the official 
whose decision the Tribe is appealing within 30 days of receiving the 
decision. The request must include a statement describing the reasons 
for appeal and any supporting documentation.
    (b) The Tribe may request to resolve the dispute using an 
alternative dispute resolution process before the hearing official 
issues a decision.


Sec.  29.908  May a Tribe request an extension of time to file an 
administrative appeal to the hearing official?

    If a Tribe needs additional time, it may request an extension of 
time to file an appeal of a pre-award decision. Within 30 days of 
receiving a decision, a Tribe must request the extension from the 
Office of the General Counsel, which has the discretion to grant the 
extension. The request must be in writing and give a reason for not 
filing its administrative appeal within the 30-day period. The 
Department may accept an appeal after the 30-day period for good cause.


Sec.  29.909  When and how must the hearing official respond to the 
Tribe's appeal?

    (a) The hearing official must issue a decision in writing within 60 
days of the receipt of the appeal. If the Tribe requests an informal 
hearing, the hearing official must issue a decision within 60 days of 
the hearing.
    (b) All decisions issued by the hearing official must include a 
statement describing the rights of a Tribe to appeal the decision to 
the U.S. District Courts. The Department must provide the decision by 
any method that provides a receipt.


Sec.  29.910  What is the Department's burden of proof for appeals of 
pre-award decisions?

    The Department must demonstrate by clear and convincing evidence 
the validity of a pre-award decision, and that the decision is 
consistent with 23 U.S.C. 207.


Sec.  29.911  What is the effect of a pending appeal on negotiations?

    A pending appeal of a pre-award decision will not prevent the 
Department from negotiating and executing the non-disputed, severable 
portions of a compact or funding agreement or prevent the Department 
from awarding funds to the Tribe that may be included in a funding 
agreement.

Post-Award Disputes


Sec.  29.912  What is a post-award dispute?

    A post-award dispute is a claim that arises under the Contract 
Disputes Act of 1978 (CDA), 41 U.S.C. 7101-7109. Such disputes arise 
once a compact or funding agreement is executed. Post-award disputes 
include:
    (a) Disputed interpretation of a provision of an executed compact 
or funding agreement;
    (b) Disallowance of costs under a funding agreement;
    (c) Suspension of payments under a funding agreement;
    (d) Allocation, distribution, or reduction of funds when a dispute 
arises between a consortium and a withdrawing Tribe;
    (e) Failure to comply with the terms of a funding agreement; and
    (f) Any other claim arising out of a compact or funding agreement.


Sec.  29.913  What is a claim under the Contract Disputes Act?

    A Contract Disputes Act claim is a written demand filed by a Tribe 
that seeks one or more of the following:
    (a) Payment of a specific sum of money under the funding agreement;
    (b) Adjustment or interpretation of terms in a funding agreement;
    (c) Payment that is disputed as to liability or amount;
    (d) Payment that the Department has not acted upon in a reasonable 
time following a demand for payment; or
    (e) Any other claim relating to the terms of the compact or funding 
agreement.

[[Page 52732]]

Sec.  29.914  How does a Tribe file a Contract Disputes Act claim?

    A Tribe must submit its claim in writing to the Chief Self-
Governance Official, who serves as the Department's awarding official 
for the purposes of Contract Disputes Act claims. The Chief Self-
Governance Official will document the receipt of the claim.


Sec.  29.915  Must a Tribe certify a Contract Disputes Act claim?

    A Tribe must certify a claim for more than $100,000 in accordance 
with the Contract Disputes Act. The Tribe must certify that:
    (a) The claim is made in good faith;
    (b) Supporting documents or data are accurate and complete to the 
best of the Tribe's knowledge and belief;
    (c) The amount claimed accurately reflects the amount the Tribe 
believes is owed; and
    (d) The individual making the certification is authorized to make 
the claim on behalf of the Tribe and bind the Tribe with respect to the 
claim.


Sec.  29.916  Who bears the burden of proof in a Contract Disputes Act 
claim?

    The Tribe bears the burden of proof to demonstrate, by a 
preponderance of the evidence, the validity of a Contract Disputes Act 
claim.


Sec.  29.917  What is the Department's role in processing the Contract 
Disputes Act claim?

    (a) The Department must document the date that the Chief Self-
Governance Official received the claim.
    (b) The Chief Self-Governance Official must provide the Tribe with 
an opportunity to resolve the claim informally with assistance from 
Department officials who have not substantially participated in the 
disputed matter. Such informal mechanisms may include participating in 
dispute resolution pursuant to Sec.  29.901.
    (c) If the Department and the Tribe do not agree on a settlement, 
the Chief Self-Governance Official must issue a written decision on the 
claim by any method that provides a receipt.


Sec.  29.918  What information must the Chief Self-Governance 
Official's decision contain?

    (a) The Chief Self-Governance Official's decision must:
    (1) Describe the claim or dispute;
    (2) Reference the relevant terms of the compact and funding 
agreement;
    (3) Set forth the factual areas of agreement and disagreement; and
    (4) Set forth the Chief Self-Governance Official's decision, and 
provide the facts and reasons that support the decision.
    (b) The Chief Self-Governance Official must provide the decision to 
the Tribe and describe the Tribe's appeal rights in language similar to 
the following:
    This is a final decision. You may appeal this decision to the 
Civilian Board of Contract Appeals (CBCA), 1800 F Street NW, 
Washington, DC 20245. If you decide to appeal, you must provide written 
notice within 90 days of receipt of this decision to the CBCA and 
provide a copy to the Chief Self-Governance Official. The notice must 
indicate that an appeal is intended, and refer to the decision and 
contract number. Instead of appealing to the CBCA, you may bring an 
action in the U.S. Court of Federal Claims or U.S. District Courts 
within 12 months of the date you receive this notice. If you do not 
appeal a decision within one of these time periods, it is not subject 
to further review.


Sec.  29.919  When must the Chief Self-Governance Official issue a 
written decision on the claim?

    (a) If the claim is for less than $100,000, the Tribe may request 
that the Chief Self-Governance Official issue a decision within 60 days 
of the date of receipt of the claim. If the Tribe does not request that 
the Chief Self-Governance Official issue a decision within 60 days of 
the date of receipt of the claim, the Chief Self-Governance Official 
must issue a decision within a reasonable time, which will depend on 
the size and complexity of the claim and the adequacy of the 
information provided in support of the claim. The Tribe must request a 
decision by the Chief Self-Governance Official before seeking an appeal 
in accordance with paragraph (c) of this section.
    (b) If the claim is for more than $100,000, the Chief Self-
Governance Official must issue a decision within 60 days of the date of 
receipt of the claim or notify the Tribe of the time within which the 
Chief Self-Governance Official will issue a decision. Such timeframe 
must be reasonable, which will depend on the size and complexity of the 
claim and the adequacy of the information provided in support of the 
claim.
    (c) If the Chief Self-Governance Official does not issue a decision 
within these time frames, a Tribe may treat the delay as a denial and 
appeal the decision in accordance with Sec.  29.921.


Sec.  29.920  Is a decision of the Chief Self-Governance Official 
final?

    (a) A decision of the Chief Self-Governance Official is final and 
conclusive, and not subject to review, unless the Tribe timely 
commences an appeal or suit pursuant to the Contract Disputes Act.
    (b) Once the Chief Self-Governance Official issues a decision, the 
decision may not be changed except by agreement of the parties or under 
the following limited circumstances:
    (1) Evidence is discovered that could not have been discovered 
through due diligence before the Chief Self-Governance Official issued 
the decision;
    (2) The Chief Self-Governance Official learns that there has been 
fraud, misrepresentation, or other misconduct by a party;
    (3) The decision is beyond the scope of the Chief Self-Governance 
Official's authority;
    (4) The claim has been satisfied, released, or discharged; or
    (5) Any other reason justifying relief from the decision.
    (c) If the Chief Self-Governance Official withdraws a decision and 
issues a new decision that is not acceptable to the Tribe, the Tribe 
may appeal the new decision in accordance with Sec.  29.921. If the 
Chief Self-Governance Official does not issue a new decision, the Tribe 
may proceed under Sec.  29.919(c).
    (d) If a Tribe files an appeal or suit, the Chief Self-Governance 
Official may modify or withdraw the final decision before a decision is 
issued in the pending appeal.


Sec.  29.921  Where may a Tribe appeal the Chief Self-Governance 
Official's decision on a Contract Disputes Act claim?

    A Tribe may appeal the Chief Self-Governance Official's decision on 
a Contract Disputes Act claim in one of the following forums:
    (a) The Civilian Board of Contract Appeals. The appeal must be in 
accordance with the Board's implementing regulations in 48 CFR part 
6101;
    (b) The U.S. Court of Federal Claims; or
    (c) The U.S. District Courts.


Sec.  29.922  May a party appeal a Civilian Board of Contract Appeals 
decision?

    A party may appeal a decision of the Civilian Board of Contract 
Appeals within 120 days to the U.S. Court of Appeals for the Federal 
Circuit.


Sec.  29.923  What is the effect of a pending appeal?

    (a) A Tribe must continue performance in accordance with the 
compact and funding agreement during the appeal of any claims to the 
same extent the Tribe would have performed had there been no dispute.
    (b) A pending dispute will not affect or prevent the negotiation or 
award of any subsequent compact or funding

[[Page 52733]]

agreement between the Department and the Tribe.

Termination Appeals


Sec.  29.924  May a Tribe appeal the Department's decision to terminate 
a compact or funding agreement?

    A Tribe may appeal the Department's decision to terminate a compact 
or funding agreement to the Department's Office of Hearings.


Sec.  29.925  Is a Tribe entitled to a hearing on the record?

    (a) The Department must provide a Tribe with a hearing on the 
record for a non-immediate termination prior to or in lieu of the 
corrective action period set forth in the termination notice as 
described in Sec.  29.802.
    (b) The Department must provide a Tribe with a hearing on the 
record for an immediate termination. The Department and the Tribe will 
work together to determine a mutually acceptable time and place for the 
hearing. The hearing on the record must commence no later than 10 days 
after the date of such termination or a later date upon mutual 
agreement. If feasible, the hearing may occur virtually or 
telephonically. If requested by the Tribe, the Department may arrange 
for an in-person hearing.
    (c) The Tribe may decline a hearing in writing.


Sec.  29.926  What rights do the parties have in an appeal of a 
termination decision?

    (a) During the appeal of a termination decision, a Tribe and the 
Department have the right to:
    (1) A designated representative;
    (2) Present the testimony of witnesses, orally or in writing, who 
have knowledge of the relevant issues;
    (3) Cross-examine witnesses;
    (4) Introduce oral or documentary evidence, or both;
    (5) Receive, upon request and payment of reasonable costs, a copy 
of the transcript of the hearing, and copies of all documentary 
evidence that is introduced at the hearing;
    (6) Take depositions, request the production of documents, serve 
interrogatories on other parties, and request admissions; and
    (7) Any other procedural rights established under the 
Administrative Procedure Act.
    (b) An administrative law judge assigned by the chief 
administrative law judge of the Department's Office of Hearings must 
conduct hearings on the record for a termination decision unless the 
Tribe waives the hearing.


Sec.  29.927  What notice and service must the parties provide?

    (a) The parties must file each document with U.S. Department of 
Transportation, Docket Operations, M-30, West Building Ground Floor, 
Room W12-140, 1200 New Jersey Avenue SE, Washington, DC 20590.
    (b) The parties must serve copies of each document with:
    (1) The Chief Self-Governance Official; and
    (2) The authorized Tribal representative.


Sec.  29.928  What is the Department's burden of proof for a 
termination decision?

    The Department must demonstrate by clear and convincing evidence 
the validity of the grounds for the termination.


Sec.  29.929  How will the Department communicate its decision 
following a hearing on a termination decision?

    After the hearing or any post-hearing briefing schedule established 
by the Department's Office of Hearings, the administrative law judge 
must send all parties the decision by any method that provides a 
receipt. The decision must contain the administrative law judge's 
findings of fact and conclusions of law on all the issues.


Sec.  29.930  May a party appeal the decision of an administrative law 
judge?

    The decision of an administrative law judge is a final agency 
action subject to judicial review under the Administrative Procedure 
Act, and a party may appeal it to the U.S. District Courts.


Sec.  29.931  What is the effect of an appeal on negotiations?

    A pending appeal of a termination decision will not affect or 
prevent the award of another funding agreement or TTP agreement. 
However, if the Department terminates all or a portion of a compact or 
funding agreement due to a finding of gross mismanagement or imminent 
jeopardy, which is sustained on appeal, and the Tribe has not corrected 
the adverse findings, the Department has discretion to reject a 
proposal to award the Tribe a new funding agreement or provide new 
funds in an existing funding agreement.

[FR Doc. 2019-21464 Filed 10-1-19; 8:45 am]
 BILLING CODE 4910-9X-P


