[Congressional Bills 106th Congress]
[From the U.S. Government Publishing Office]
[S. 739 Introduced in Senate (IS)]







106th CONGRESS
  1st Session
                                 S. 739

To amend the American Indian Trust Fund Management Reform Act to direct 
  the Secretary of the Interior to contract with qualified financial 
 institutions for the investment of certain trust funds, and for other 
                               purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             March 25, 1999

 Mr. Murkowski (for himself and Mr. Campbell) introduced the following 
  bill; which was read twice and referred to the Committee on Indian 
                                Affairs

_______________________________________________________________________

                                 A BILL


 
To amend the American Indian Trust Fund Management Reform Act to direct 
  the Secretary of the Interior to contract with qualified financial 
 institutions for the investment of certain trust funds, and for other 
                               purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,
That the American Indian Trust Fund Management Reform Act (108 Stat. 
4239, 25 U.S.C. 4041), as amended, is further amended by adding a new 
Title V as follows:

             ``TITLE V--INVESTMENT OF FUNDS--TRIBAL OPTIONS

``SEC. 501. TRIBAL OPTIONS.

    ``(a) Within one year from the date of enactment of this title, the 
Secretary, with the advice and assistance of the Comptroller of the 
Currency, shall contract with qualified financial institutions that are 
regulated by a federal bank regulatory agency for the investment of all 
funds presently managed in trust status for Indian tribes and 
individual Indians by the United States, unless:
            ``(1) the tribe whose money is held in trust requests in 
        writing that the funds continue to be invested by the 
        Department of the Interior, or
            ``(2) contracting of the particular fund would be 
        inconsistent with the United States' trust responsibility or 
        would contravene any provision of law specifically related to 
        that particular fund.
    ``(b) The Secretary shall afford a tribe an opportunity to 
designate in writing a qualified financial institution to manage its 
funds. Unless a tribe designates a specific institution, the Secretary 
shall comply with the provisions of the Buy-Indian Act (25 U.S.C. 47) 
in the selection of a qualified financial institution pursuant to this 
title.
    ``(c) Any contract entered into pursuant to this section shall, at 
a minimum, include provisions acceptable to the Secretary that will:
            ``(1) direct that all funds are invested in a manner 
        consistent with the requirements of the prudent investor rule 
        applicable to the financial institution, the fiduciary 
        responsibility of the institution, and the trust responsibility 
        of the Secretary;
            ``(2) within the requirements of paragraph (1), permit 
        tribes to direct the financial institution regarding the kinds 
        of instruments for investment;
            ``(3) subject to the provisions of paragraphs (1) and (2), 
        encourage the investment of funds in ways that directly benefit 
        the affected tribe and Indian community;
            ``(4) require that the financial institution be liable for 
        any financial losses incurred by the trust beneficiary as a 
        result of its failure to comply with the terms of its contract, 
        the investment instructions provided by the tribe, its general 
        fiduciary obligation, or the prudent investor rule;
            ``(5) insure that the financial institution carry 
        sufficient insurance or other surety satisfactory to the 
        Secretary to compensate the trust beneficiary in connection 
        with any liability and the Secretary in the event of a 
        subrogation under subsection (d);
            ``(6) allow the financial institution to recover its 
        reasonable costs incurred in investing trust funds in 
        investment instruments that are 100% guaranteed by the United 
        States and be compensated for investing trust funds in other 
        investment instruments by charging a commercially reasonable 
        fee, approved by the Secretary, that shall be deducted from the 
        corpus of the trust funds in the same manner as for private 
        investors.
    ``(d) No provision of this title, nor any action taken pursuant 
thereto, shall in any way diminish the trust responsibility of the 
United States for any funds presently managed in the trust status or to 
the tribes or individual Indians who are the beneficial owners of such 
funds. The Secretary shall remain responsible for any losses incurred 
by a trust beneficiary for which a financial institution is liable 
under paragraph (c)(4) but shall be entitled to subrogation of any 
claim to the extent the beneficiary receives compensation from the 
United States.
    ``(e) Any amounts transferred shall not result in the closure of 
the account in question and the Secretary shall be obligated to 
continue efforts to determine whether the account balance is accurate, 
including efforts to identify and secure documentation supporting such 
accounting balance.''.
                                 <all>