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General Memorandum 13-101

General Memorandum 13-101
Legislation Introduced to Amend the 477 Program

On October 16, 2013, Senator Murkowski (R-AK) introduced S 1574, the Indian Employment, Training and Related Services Consolidation Act of 2013. The purpose of the bill is to amend and expand the scope of the Indian Employment, Training and Related Services Demonstration Act of 1991, PL102-477, commonly referred to as the "477 Program." The bill was referred to the Senate Committee on Indian Affairs. A copy is available at: http://www.gpo.gov/fdsys/pkg/BILLS-113s1574is/pdf/BILLS-113s1574is.pdf

Public Law 102-477 has no expiration date and no specific authorization level as it is an authorization for tribes to combine programs serving similar purposes across federal agency lines. Under the current 477 Program tribes and tribal organizations are allowed to carry out consolidated programs combining federal formula-funded employment, training and related services programs of the Departments of Interior (DOI), Health and Human Services (DHHS) and Labor (DOL). The 477 Plan, which must be approved by the Secretary of Interior, allows tribes to utilize a single consolidated budget and a consolidated reporting system.

The 477 Work Group. In the recent past more than 250 tribes have been involved in operating 477 Plans, some as single-tribe plans and others as tribal organization plans. More than $100 million a year has been funded to 477 Plans through agreements under Titles I and IV of the Indian Self-Determination Education and Assistance Act (ISDEAA). Unusual among federal initiatives, the 477 Program was not implemented with federal regulations. Instead, participating tribes and tribal organizations formed an independent organization called the 477 Tribal Work Group, which developed an extensive guidebook describing the 477 Program and assisted tribes and tribal organizations with developing 477 Plans. The 477 Work Group also conducts periodic symposiums and workshops to keep participating and non-participating tribes and tribal organizations informed about program requirements and operating procedures.

S 1574 Proposed Changes. S 1574 would expand the reach of the 477 Program, and resolve differences between participating tribes and affected agencies that have disrupted the administration of the 477 Program in recent years. It would add eligible employment-related programs from the Departments of Agriculture, Commerce, Transportation, and other agencies that tribes and tribal organizations could draw on in designing their own employment-related programs consolidated in an approved 477 Plan. It would expand the scope of the original program to cover a wider range of departmental and agency funds and funding types (including competitive funds).

Other provisions address timely approval of 477 Plans and waivers of regulations, and would streamline reporting requirements, provide means for dispute resolution, and allow tribes and tribal organizations to recover indirect costs for all programs that are included in a 477 Plan.

S 1574 would also address two of the 477 tribes' primary concerns with current administration of the 477 Program by the federal agencies: 1) the 2008 decision by DOI and HHS to end the practice of transferring 477 Program funds to tribes through ISDEAA; and 2) the 2009 Circular A-133, issued by the Office of Management and Budget (OMB), which requires that tribes report 477 expenditures separately by funding source number for auditing. Under the proposed amendments, all funds for programs and services covered by an approved plan would be transferred to a tribe or tribal organization pursuant to an existing contract, compact or funding agreement under ISDEAA, and tribes and tribal organizations could combine federal funds for use in performing allowable activities authorized under an approved 477 Plan, with no requirement to maintain separate records tracing services or activities conducted under an approved 477 Plan to individual federal program sources for audit purposes.

Prior Congressional Efforts to Address Tribal Concerns. In 2011, the House Appropriations Interior, Environment, and Related Agencies Subcommittee included language in Section 430 of its FY 2012 appropriations bill that would have resolved the tribal-federal agencies differences in a manner proposed by the tribes participating in the 477 Program. The federal agencies opposed the change. The Appropriations conferees agreed to defer consideration of legislation and requested that federal agencies and the tribes participating in the 477 Program engage in government-to-government consultations to resolve the issues. This led to the formation of the "P.L. 102-477 Administrative Flexibility Work Group" which has included policy and program representatives from the tribes and DOI, HHS, DOL, and OMB. The appropriations conference language made clear that the consultation process should conclude with a "general consensus" and "permanently resolve" the issues addressed in the proposed legislation. After two years of meetings and negotiations, the "Flexibility" group has not reached any agreement on these issues.

The introduction of S 1574 by Senator Murkowski is in response to tribal concerns regarding federal agency resistance to and weakening of the 477 Program. In the past the 477 Program has enjoyed bipartisan support, and has been recognized as an important mechanism of self-governance because it authorizes tribes to manage 477 Plan funds locally to best meet the employment needs of the local American Indian or Alaska Native population.

Please let us know if we may provide additional information regarding the Indian Employment, Training and Related Services Consolidation Act of 2013.

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Inquiries may be directed to:
Vernon Peterson (vpeterson@hobbsstraus.com)
Geoff Strommer (gstrommer@hobbsstraus.com)
Karen Funk (kfunk@hobbsstraus.com)

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