[Federal Register Volume 61, Number 249 (Thursday, December 26, 1996)]
[Rules and Regulations]
[Pages 67931-67936]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-32738]
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DEPARTMENT OF THE INTERIOR
Office of the Special Trustee for American Indians
25 CFR Chapter VII and Part 1200
RIN 1035-AAOO
The American Indian Trust Fund Management Reform Act of 1994
AGENCY: Office of the Special Trustee for American Indians, Interior.
ACTION: Final rule.
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SUMMARY: The Office of Special Trustee for American Indians (OST) in
the Office of the Secretary of the Interior is promulgating this
regulation to implement Title II of Public Law 103-412, the American
Indian Trust Fund Management Reform Act of 1994 (the Act). The Act, for
the first time, permits American Indian tribes to take tribal funds out
of trust status with the Department of the Interior (DOI). The purpose
of the Act is to enable tribes to manage the funds by themselves, or
with the help of capable commercial fund managers. The regulation
affects tribal funds only, not Individual Indian Monies (IIM) funds.
EFFECTIVE DATE: These regulations take effect on January 27, 1997.
SUPPLEMENTARY INFORMATION: 25 CFR Part 1200 in chapter VII contains
provisions which affect 240 tribes with trust funds. These tribes
currently have approximately $1.5 billion in judgments, settlements,
awards, and associated earnings held in trust status by the Department
of the Interior. Key concepts of the regulation are as follows: (a)
Tribes wishing to withdraw some or all of their tribal funds under the
Act (not IIM funds) must present a tribal resolution acknowledging that
when funds leave the U.S. Treasury, the federal government has no
further liability relating to those funds; (b) tribes must also present
a management plan for Secretarial approval, detailing how the funds
will be managed once they are out of trust, including a protection
against a significant loss of principal; (c) if the funds are not
managed by the tribes, they are to be managed by capable investment
managers or investment firms with proof of liability insurance; (d)
tribes must provide notification to tribal members regarding their
intent to withdraw funds from trust; (e) tribes may return any or all
of their funds withdrawn under this act, including any earnings, to
trust status; (f) tribes may request technical assistance and/or grants
from the Department in order to develop the management plan. The
ability to take funds from trust creates new tribal opportunities for
investment of funds and for economic development; therefore,
establishment of the regulation has a high priority in Indian Country.
Summary of Regulation and Comment Received
In accordance with the Act, this regulation was developed with the
active participation of tribal representatives. The policy of the
Department is, whenever practical, to afford the public an opportunity
to participate in the rulemaking process. A Regulatory Workgroup was
established by the Office of Trust Funds Management (OTFM), which had
tribal representation, as well as representation from the InterTribal
Monitoring Association (ITMA), Departmental Office of the Solicitor
(SOL), and Bureau of Indian Affairs (BIA). Also in furtherance of
tribal participation, draft regulations were sent to all tribes with
trust funds in August, 1995; a formal presentation was made by OTFM at
a National Tribal Consultation in September, 1995. The consultation
session was announced in the Federal Register and was open to the
public. Comments which were incorporated from this consultation are as
follows: (a) A specific provision for notifying the tribal membership
of an intent to remove funds was included based on comments by the
Delaware Tribe of Oklahoma; (b) the ``certification'' by tribe's legal
counsel of authority of tribal government to withdraw funds was changed
to a requirement for a ``legal opinion'' to be included in the
application package based on comments from both the Hopi and Cheyenne
River Tribes; ( c) a requirement to provide a copy of audit or
investment report when requesting to withdraw additional funds was
included based on comments from the First Nations Development
Institute; (d) a requirement for liability insurance of tribal
officials was added based on a suggestion from the Skokomish Tribe of
Washington State. Other changes were made, such as changing the
approving official to the Secretary, Department of the Interior, from
the Commissioner of Indian Affairs, Bureau of Indian Affairs; removing
duplicative language from the policy statement; adding clarifying
language regarding applicability of these regulations to ``proceeds of
labor'' funds; and requiring tribes to submit copies of applicable
distribution plans or settlement acts when making application to
withdraw funds. The regulation was also rewritten in a ``user-
friendly'' format after the consultation.
On February 9, 1996, the OTFM was moved from the BIA to the OST by
Secretarial Order Number 3197. This action was taken to implement Title
III of the Act which established the Office of the Special Trustee for
American Indians. The Director, OTFM, reports directly to the Special
Trustee.
The Department published a Notice of Proposed Rulemaking in the
Federal Register as part 144 in Chapter I of 25 CFR on May 16, 1996, on
page 24731, with a 60-day open comment period. This final rule is being
published as new part 1200 in the newly established chapter VII of 25
CFR, which is reserved for rules published by the Office of the Special
Trustee.
Only one formal comment was received on the proposed rule. An
Oklahoma City law firm commented that in discussions with
representatives of three tribes, concerns had been expressed relating
to the ability of tribes
[[Page 67932]]
to use withdrawn funds for economic development purposes as part of an
overall business plan. The firm was not authorized to comment directly
for the tribes, but recommended modifying Sec. 144.14 to clarify the
use of funds withdrawn from trust to obtain financing for economic
development purposes. The Act does not address economic development
activities as a part of a tribe's plan for management of their
withdrawn trust funds. After review, it is felt that an attempt to
include a discussion of ``economic development purposes'' in the
regulations is not necessary. The Secretary is tasked with determining
if a tribes' plan is ``reasonable,'' has adequate protection against a
``significant loss of principal,'' and will allow the tribe to follow
the dictates of any approved distribution plan for judgment or
settlement awards. Each tribal plan will be evaluated by the Secretary
on its own merits based on the criteria listed in the regulation.
Administrative Matters
The Department has determined that this rulemaking will not have a
significant economic effect on a substantial number of small entities
under the Regulatory Flexibility Act (5 U.S.C. 601 et seq.).
The Department certifies that the rule does not represent a
governmental action capable of interference with constitutionally
protected property rights. Thus, a Takings Implication Assessment need
not be prepared under Executive Order 12630, ``Government Action and
Interference with Constitutionally Protected Property Rights.''
The Department has certified to the Office of Management and Budget
that this rule meets the applicable standards provided in Sections 3(a)
and 3(b)(2) of Executive Order 12998.
This document has been reviewed under Executive Order 12866 and is
not a significant regulatory action.
The Department has determined that this rule does not constitute a
major Federal action significantly affecting the quality of the human
environment and that no detailed statement is required under the
National Environmental Policy Act of 1969.
Paperwork Reduction Act of 1995
The Office of Management and Budget (OMB) has approved, under 44
U.S.C. chapter 35, the information collection requirements in Subpart B
(Application to Withdraw Tribal Funds from Trust Status) under control
number 1035-0001. The information for this Subpart is being collected
and used by the OST to determine applicant eligibility, evaluate
applicant capabilities, protect the service population, safeguard
tribal trust funds, and permit the OST to evaluate capability of tribes
or their contractors to manage and invest large blocks of funds.
The OMB has approved under 44 U.S.C. chapter 35, information
collection requirements in Subpart D (Applications for Technical
Assistance to Withdraw Tribal Funds from Trust Status--General and
Specific Budget) under control number(s) 1035-0002 and 1035-0003. The
information for this Subpart is being collected and used by the OST to
determine applicant eligibility, as well as the level of need for
technical assistance in order for tribes to develop the Management
Plans and to complete the application for withdrawal process. This is
in accordance with statutory authority which requires the Secretary to
provide technical assistance for tribes to complete the required
Management Plan. This information will be collected once only from each
applicant.
The OST estimates that the average burden of complying with the
collection, broken down by Subpart, will be as follows: Subpart B
(Application to Withdraw Tribal Funds from Trust Status), 342 hours;
Subpart D (Applications for Technical Assistance to Withdraw Tribal
Funds from Trust Status) General form, 13 hours; Specific Budget form,
39 hours.
Responses to the collection of information under this regulation
are required in order for Indian tribes to obtain or retain benefits
under the Act. However, not every tribe will need to respond to each
request for information contained in the regulation, as some of the
requests pertain to specific situations (requests for technical
assistance). Any disagreements over application approvals are subject
to the criteria and procedures in Sec. 1200.21 of the regulation.
With regards to confidentiality, an Indian tribe is not protected
under the Privacy Act. However, in accordance with DOI, OST, BIA and
OTFM policy, tribes are accorded confidentiality with regard to trust
fund account matters. Tribal information provided will not be shared
with anyone outside the Department without permission from the tribe.
The Department may not collect information, nor are Indian tribes
or other persons required to respond to such collections unless the
collection displays a currently valid OMB control number.
List of Subjects in 25 CFR Part 1200
Indians, Indian tribal trust funds, Indian trust responsibility,
Tribal funds withdrawal.
For the reasons given in the preamble, the Department of the
Interior establishes a new chapter VII consisting of part 1200 in Title
25 of the Code of Federal Regulations as set forth below.
CHAPTER VII--OFFICE OF THE SPECIAL TRUSTEE FOR AMERICAN INDIANS,
DEPARTMENT OF THE INTERIOR
PART 1200--AMERICAN INDIAN TRUST FUND MANAGEMENT REFORM ACT
Subpart A--General Provisions
Sec.
1200.1 Purpose of this regulation.
1200.2 Definitions.
1200.3 What is the Department's policy on tribal management of
trust funds?
1200.4 May tribes exercise increased direction over their trust
funds and retain the protections of Federal trust status?
1200.5 What are the advantages and disadvantages of managing trust
funds under the options in Sec. 1200.4?
1200.6 Do these regulations tell tribes how to receive future
income directly rather than have the government continue to collect
it?
1200.7 Information collection.
Subpart B--Withdrawing Tribal Funds From Trust
1200.10 Who is eligible to withdraw their tribal funds from trust?
1200.11 What funds may be withdrawn?
1200.12 What limitations and restrictions apply to withdrawn
funds?
1200.13 How does a tribe apply to withdraw funds?
1200.14 What must the Tribal Management Plan contain?
1200.15 What is the approval process for management plans?
1200.16 What criteria will be used in evaluating the management
plan?
1200.17 What special criteria will be used to evaluate management
plans for judgment or settlement funds?
1200.18 When does the Department's trust responsibility end?
1200.19 How can the plan be revised?
1200.20 How can a tribe withdraw additional funds?
1200.21 How may a tribe appeal denials under this part?
Subpart C--Returning Tribal Funds to Trust
1200.30 How does a tribe notify the Department if it wishes to
return withdrawn funds to Federal trust status?
1200.31 What part of withdrawn funds can be returned to trust?
1200.32 How often can funds be returned?
1200.33 How can funds be returned?
1200.34 Can a tribe withdraw redeposited funds?
[[Page 67933]]
Subpart D--Technical Assistance
1200.40 How will the Department provide technical assistance for
tribes?
1200.41 What types of technical assistance are available?
1200.42 Who can provide technical assistance?
1200.43. How can a tribe apply for technical assistance?
1200.44 What action will the Department take on requests for
technical assistance?
Authority: 25 U.S.C. 4001.
Subpart A--General Provisions
Sec. 1200.1 Purpose of this regulation.
This part describes the processes by which Indian tribes can manage
tribal funds currently held in trust by the United States. It defines
how tribes may withdraw their funds from trust status; how they may
return funds to trust; and how they may request technical assistance or
grants to help prepare plans to manage funds or to ensure the
capability to manage those funds.
Sec. 1200.2 Definitions.
As used in this part:
Act means the American Indian Trust Fund Management Reform Act of
1994 (Pub. L. 103-412, 108 Stat. 4239, 25 U.S.C. 4001).
Agency Superintendent means the official in charge of a Bureau of
Indian Affairs Agency.
Area Director means the official in charge of a Bureau of Indian
Affairs area office.
Bureau or BIA means the Bureau of Indian Affairs, Department of the
Interior.
Department or DOI means the Department of the Interior.
General Counsel means the attorney for the tribe.
OST means the Office of the Special Trustee for American Indians,
Department of the Interior.
OTFM means the Office of Trust Funds Management, Department of the
Interior.
Resolution means the formal manner in which a tribal government
expresses its legislative will.
Secretary means the Secretary of the Interior or his/her designee.
Solicitor means the Office of the Solicitor, Department of the
Interior.
Special Trustee means the Special Trustee for American Indians
appointed under Title III of the Act.
Tribal council means the elected or appointed governing officials
of any tribe which is recognized by the Secretary.
Tribe means any Indian tribe, band, nation, rancheria, pueblo,
colony or community, including any Alaska Native village or regional or
village corporation as defined or established pursuant to the Alaska
Native Claims Settlement Act which is federally recognized by the U.S.
Government for special programs and services provided by the Secretary
to Indians because of their status as Indians. For this purpose, it
also means two or more tribes joined for any purpose, the joint assets
of which include funds held in trust by the Secretary. An example of
this would be the KCA (consisting of the Kiowa, Comanche and Apache
Tribes).
Us means the Department of the Interior, i.e., the Secretary of the
Interior or his/her designee.
We means the Department of the Interior, i.e., the Secretary of the
Interior or his/her designee.
Sec. 1200.3 What is the Department's policy on tribal management of
trust funds?
(a) We will give tribes as much responsibility as they desire for
the management of their tribal funds that we currently hold in trust.
(b) Title II of the American Indian Trust Fund Management Reform
Act, implemented by these regulations, offers tribes one approach for
assuming increased management of their funds that we now hold in trust
and administer. Under Title II, a tribe may completely remove its funds
from Federal trust status and manage them as it wishes, subject to the
requirements and conditions in this part. When a tribe withdraws its
funds under this part, it may invest those funds in equities or other
investment vehicles that are statutorily unavailable to us.
Sec. 1200.4 May tribes exercise increased direction over their trust
funds and retain the protections of Federal trust status?
Yes. The Tribal Self-Governance Act (25 U.S.C. 458) and the Indian
Self-Determination and Education Assistance Act (25 U.S.C. 450 et.
seq.) provide other options for trust funds management. A tribe may
choose to manage its trust funds under the provisions of these Acts if
it wishes. These options are covered by 25 CFR part 900 (the ``Indian
Self-Determination and Education Assistance Act Program'') and 25 CFR
part 1000 (the ``Self-Governance Program'').
Sec. 1200.5 What are the advantages and disadvantages of managing
trust funds under the options in Sec. 1200.4?
Under these other options, the funds remain in Federal trust status
and the tribe can exercise a range of control over their management.
However, the tribe has fewer investment options than it has when it
withdraws its funds completely from trust status. If a tribe chooses to
keep its funds in trust status, the tribe is subject to the same
statutory investment restrictions that bind us. That means that the
tribe's investments are limited to bank deposits and securities
guaranteed by the United States. (See 25 U.S.C. 162a for specific
statutory investment restrictions.)
Sec. 1200.6 Do these regulations tell tribes how to receive future
income directly rather than have the government continue to collect it?
No. These regulations apply only to the withdrawal of funds which
are in trust. Some of these funds come from the sale or lease of trust
resources. Even if a tribe withdraws its funds, we will collect and
manage future income. If a tribe wishes to receive future income
directly, it should contact the OST/OTFM staff at its agency or area
office to find out how to do this.
Sec. 1200.7 Information collection.
The information collection requirements contained in subpart B of
this part, Application to Withdraw Tribal Funds from Trust Status and
subpart D of this part, Application to Withdraw Tribal Funds from Trust
Status-General and Specific Budget Technical Assistance, have been
approved by the Office of Management and Budget under 44 U.S.C. 3507 et
seq. and assigned clearance numbers 1035-001 (subpart B), and 1035-002
and 1035-003 (subpart D). Information collected in Sec. 1200.13, (How
does a tribe apply to withdraw funds?) will be used to determine the
eligibility of applicants, and the capability of tribes or their
contractors to manage and invest large blocks of funds. Information
collected in Sec. 1200.43, (How can a tribe apply for technical
assistance?) will be used to determine the eligibility of applicants,
as well as the level of need for technical assistance, in order for
tribes to develop Management Plans and to complete the application for
withdrawal process.
Subpart B--Withdrawing Tribal Funds From Trust
Sec. 1200.10 Who is eligible to withdraw their tribal funds from
trust?
Any tribe for whom we manage funds in trust.
Sec. 1200.11 What funds may be withdrawn?
A tribe may withdraw some or all funds that we hold in trust if we
approve a plan that it submits under this part.
Sec. 1200.12 What limitations and restrictions apply to withdrawn
funds?
(a) A tribe may withdraw funds appropriated to satisfy judgments of
the
[[Page 67934]]
Indian Claims Commission (ICC) and the Court of Federal Claims and that
we hold under the Indian Judgment Funds Use and Distributions Act (25
U.S.C. 1401) or another act of Congress if:
(1) The tribe uses the funds as specified in the previously
approved judgment fund plan, and;
(2) The tribe withdraws only funds held for Indian tribes and does
not include any funds held for individual tribal members.
(b) A tribe may withdraw funds appropriated to satisfy settlement
agreements relating to certain tribal claims and that we hold and
manage for the tribe pursuant to an act of Congress if:
(1) The tribe uses the funds as specified in the previously
approved settlement act plan;
(2) The tribe withdraws only funds held for Indian tribes and does
not include any funds held for individual tribal members; and
(3) It is determined that there is no provision in the act or
settlement agreement requiring that the funds remain in trust to
implement the act or agreement that cannot be waived.
(c) Tribal funds commonly known as `` Proceeds of Labor'' funds,
usually income to trust resources, are generally withdrawn under normal
tribal budgeting procedures, but may also be withdrawn from trust under
this part. These funds may be returned to trust under the provisions of
subpart C of this part.
Sec. 1200.13 How does a tribe apply to withdraw funds?
The tribe must submit four copies of its application and the
attachments listed below to: Director, Office of Trust Funds
Management, Department of the Interior, 505 Marquette NW, Suite 1000,
Albuquerque, NM 87102. We will notify the tribe if the application is
incomplete and will help the tribe complete the application if
requested. When we determine that the application is complete, we will
send copies to the appropriate agency superintendent and area director,
the Special Trustee and the Solicitor. Each application package must
contain the items listed below.
(a) Proof that the tribe has notified its members of its intent to
remove funds from trust and that, when the request is approved, the
tribe and not the United States Government will be liable for funds
management. Notification must be by the method(s) that the tribe
customarily uses to notify its members of significant tribal actions.
The notification must identify the specific funds to be withdrawn.
(b) A tribal resolution that:
(1) Expressly authorizes the withdrawal of the funds and indicates
the (approximate) dollar amount of the funds to be withdrawn;
(2) Expressly acknowledges that the funds, once withdrawn in
accordance with the Act, will no longer be held in trust status by the
United States, and that we have no further liability or responsibility
for the funds; and
(3) Acknowledges that:
(i) Neither we nor the tribe necessarily accept the account
balances at the time of withdrawal as accurate; and
(ii) Neither we nor the tribe have waived any rights regarding the
balances, including the right to seek compensation for incorrect
balances.
(c) A copy of a formal agreement between the tribe and the manager
of the funds to be withdrawn, in which the manager agrees to:
(1) Comply with the terms of the plan we approve under Sec. 1200.15
and make only those changes that conform to revision procedures in the
approved plan and the requirements of Sec. 1200.19; and
(2) Transfer funds to the tribe or another manager only after
receiving a valid tribal resolution calling for this transfer and proof
that the tribe has notified its members of intent to transfer the
funds. The resolution must clearly state that:
(i) The funds are being withdrawn to be reinvested by the tribe in
a manner consistent with the goals and strategies of the approved plan;
and
(ii) The fund managers will continue to follow any previously
approved distribution plan conditions.
(d) A legal opinion by the tribe's attorney or its general counsel
that:
(1) The resolution referred to in paragraph (b) of this section was
enacted under procedures established by the tribe's organic documents
or oral tradition;
(2) The tribal governing body has the legal authority to withdraw
funds from trust status and that the withdrawal does not require a
referendum vote or other procedure beyond a tribal council resolution;
and
(3) If the funds to be withdrawn are judgment or settlement funds,
that the tribe's plan for managing the funds meets the requirements of
any applicable judgment fund use and distribution plan or settlement
act.
(e) The results of a tribal referendum, if one was held.
(f) If the funds to be withdrawn are judgment or settlement funds,
a copy of the act and/or plan that sets out the conditions for the uses
of the funds or income from them.
(g) A management plan as provided for in Sec. 1200.14.
Sec. 1200.14 What must the Tribal Management Plan contain?
The Tribal Management Plan required by Sec. 1200.13 must include
each of the following:
(a) Tribal investment goals and the strategy for achieving them.
(b) A description of the protection against the substantial loss of
principal, as set forth in Sec. 1200.16.
(c) A copy of the tribe's ordinances and procedures for managing or
overseeing the management of the funds to be withdrawn. These must
include adequate protections against fraud, abuse, and violations of
the management plan.
(d) A description of the tribe's previous experience managing or
overseeing the management of invested funds. This should include
factual data of past performance of tribally-managed funds (i.e.,
audited reports) and the identity and qualifications of the tribe's
investment officer.
(e) A description of the capability of all of the individuals or
investment institutions that will be involved in managing and investing
the funds for the tribe. Provide copies of State or Federal security
applications for account executive(s).
(1) Investment entities named must submit:
(i) Ownership information (including Central Registry Depository
(CRD) numbers);
(ii) Asset size and capitalization;
(iii) Assets under management;
(iv) Performance statistics on managed accounts for the past 5
years; and
(v) Any adverse actions by licensing and/or regulatory bodies
within the past 5 years.
(2) In addition, we may ask about:
(i) Soft dollar arrangements;
(ii) Affiliation with broker dealers, banks, insurance and/or
investment companies;
(iii) Research done in house;
(iv) Recent changes in active portfolio managers; and
(v) Any other information necessary to make an adequate evaluation
of the proposed plan.
(f) A description of how the plan will ensure that the fund manager
will comply with any conditions established in judgment fund plans or
settlement acts.
(g) Proof of liability insurance of the investment firm.
(h) Proof of liability insurance that protects against fraud for
those Tribal Council members with authority to disburse funds. In many
tribes the chairperson, and the comptroller and/or the tribal
treasurer, for example, would be the positions having this authority.
[[Page 67935]]
(i) A plan for custodianship of investment securities that
includes:
(1) Name of persons in the tribe who can direct the custodian;
(2) Name of the custodian;
(3) Copy of intended custodian agreement;
(4) Size of custodian operation;
(5) Disclosure of any security lending provisions; and
(6) Insurance coverage.
(j) A tribal council agreement to provide an annual audit and
report on performance of withdrawn funds to the tribal membership, with
a copy to: Office of the Special Trustee for American Indians,
Department of the Interior, MS-5140, 1849 C Street NW, Washington, DC,
20240. This agreement must include:
(1) A statement that the copy to the Special Trustee is for
information only, and infers no liability on our part regarding the
audit results, nor does it infer a requirement for us to take any
action whatsoever; and
(2) A description of the steps (including audit performance and
reporting) the tribe will take to ensure its membership that the tribe
is continuing to comply with the terms of the plan submitted and
approved pursuant to judgment fund limitations (if any) and/or the
terms of the Act.
(k) The proposed date for transfer of funds.
(l) A statement as to whether the tribe chooses to receive the
withdrawal as a cash balance transfer, as a transfer of marketable
investments that we own for the tribe, or as a combination of the two.
(1) A cash balance transfer may require us to sell bonds, notes, or
other investments that we purchased when investing the tribe's monies.
(2) We cannot transfer non-marketable securities to a tribe. We can
only purchase and hold them and must sell them back to the U.S.
Treasury.
(3) If we sell a tribe's security at a loss (i.e., when market
value is less than book value or carrying value) we will first notify
the tribe. The tribe must instruct us to proceed with the sale and must
agree not to hold us responsible for the loss before we will make the
sale.
(4) If the tribe asks us to transfer marketable securities, upon
proper instructions from the new tribal custodian, we will order our
custodian to physically transfer the proper security to the new
custodian on the agreed upon date.
(m) Agreement that judgment award funds will have segregated
accounts.
(n) A description of the procedures for amending or revising the
plan.
Sec. 1200.15 What is the approval process for management plans?
The Secretary will approve or disapprove each management plan,
based in part upon our recommendation.
(a) We will determine the completeness of the application, provide
for adequate professional review of the application and the management
plan, and provide technical assistance as necessary to make an
application complete.
(b) We will coordinate with area directors in confirming authority
of tribal governments to make requests.
(c) We will approve or disapprove a request within 90 calendar days
of receiving a completed application. This 90-day period does not
include time that we spend awaiting a response from the tribe for
additional information that we have requested. All determinations will
be in writing, and all responses will be by certified mail.
(d) If we find that a plan does not meet the criteria in
Sec. 1200.16, we will notify the tribe of shortcomings of the request,
and allow the tribe to respond before recommending formal disapproval.
(e) Before final approval, we will reach agreement with the tribe
on how many days after final approval we will transfer the funds. We
will transfer the funds as soon after final approval as the tribe or
manager is ready to receive them, unless we need additional time to
sell existing instruments.
Sec. 1200.16 What criteria will be used in evaluating the management
plan?
Each plan must be approved by the appropriate tribal governing
body, and must be accompanied by a resolution approving the plan. The
plan must be reasonable in light of the trust responsibility and the
principles of Indian self-determination, and other appropriate factors,
including, but not limited to, the factors listed below:
(a) We will evaluate the individuals or entities that will manage
the funds to be withdrawn, or that will advise the tribe on investing
the funds to be withdrawn in order to determine if they have the
capability and experience to manage the funds. Among the elements we
will evaluate are: the number of years in business, the performance
record for funds management, and the ability to compensate the tribe if
the entity is found liable for failing to comply with the tribe's
management plan (i.e., its assets, bonding, and insurance).
(b) We will review the tribe's experience in managing investments.
We will compare this experience to the complexity of the proposed
management plan to determine whether the tribe has the experience to
manage its proposed plan or whether it should begin with a less complex
approach.
(c) We will evaluate the tribe's internal audit and control systems
for overseeing or monitoring its investment activity.
(d) We will evaluate the adequacy of protection against substantial
loss of principal. Our determination will include a thorough evaluation
of the tribe's investment plan including:
(1) The goals and objectives;
(2) The proposed uses of the fund in order to meet business
objectives;
(3) The size and diversity of the investment portfolio (for
example, the class of stocks and the mixture of types of investments);
(4) The financial condition of the tribe;
(5) The inherent riskiness of the proposed investments; and
(6) The tribe's projected need and proposed timeframes to draw down
the funds being invested or the income from them.
(e) We will determine the likelihood that the plan will be
followed. We will base this determination on the contents of the
agreement between the tribe and the fund manager and other appropriate
factors.
Sec. 1200.17 What special criteria will be used to evaluate management
plans for judgment or settlement funds?
For judgment or settlement funds, in addition to the criteria in
Sec. 1200.16, we will determine if the plan adequately provides for
compliance with any conditions, uses of funds, or other requirements
established by the appropriate judgment fund plan or settlement act.
Sec. 1200.18 When does the Department's trust responsibility end?
Our trust responsibility for funds withdrawn under this part ends
on the date that the funds are withdrawn. However at the time of
withdrawal neither we nor the tribe may be deemed to have accepted the
account balance at the time of withdrawal as accurate; or waived any
rights regarding the balance and our ability to seek compensation.
Sec. 1200.19 How can the plan be revised?
Once a tribe has withdrawn its funds, the tribe may revise its plan
without our approval. All revisions should conform to the procedures
outlined in the approved management plan. The tribe should inform its
members of all revisions to a plan through normal tribal procedures
before the revisions are implemented.
[[Page 67936]]
Sec. 1200.20 How can a tribe withdraw additional funds?
(a) If a tribe has withdrawn funds under an approved tribal
management plan and wishes to withdraw additional funds that will be
managed under the same plan, it need not submit a complete new
application. The tribe must:
(1) Notify us of the additional amount it intends to withdraw and
whether the funds to be withdrawn are in kind or cash. (Written
notification should be provided to our address in Sec. 1200.13);
(2) Send us a tribal resolution approving the new withdrawal and
certifying that the funds are being withdrawn subject to the same
conditions and that they will be managed under the plan in the original
approved application;
(3) Send us a copy of the most recent compliance audit or
investment report.
(b) After we finish our review we will release the additional
funds, unless the compliance audit or investment report indicates that
the tribe is not complying with its management plan. In this case, we
will not release the additional funds until the tribe demonstrates that
it is complying with the management plan.
Sec. 1200.21 How may a tribe appeal denials under this part?
If we deny a request or do not approve an application within 90
days of a request, the tribe may address any problems that we identify
and resubmit a revised request, seek technical assistance, or appeal
the denial under 43 CFR Part 4.
Subpart C--Returning Tribal Funds to Trust
Sec. 1200.30 How does a tribe notify the Department if it wishes to
return withdrawn funds to Federal trust status?
If a tribe elects to return some or all of the funds it has
withdrawn from Federal trust status pursuant to this Act, it must first
notify us in writing at our address in Sec. 1200.13. This notification
must provide a proposed date for the return of the funds, as well as
the amount of funds to be returned, or actual securities to be
delivered to the appropriate custodian.
Sec. 1200.31 What part of withdrawn funds can be returned to trust?
A tribe may return all or a portion of the principal which was
removed from trust under this Act along with earnings and profits. We
will verify the amount declared for earnings before we accept a return.
We will accept any amount less than the original principal amount as a
principal amount.
Sec. 1200.32 How often can funds be returned?
Tribes may return all or part of withdrawn funds no more than twice
a year, beginning no sooner than six months after date of withdrawal,
except with approval of the Secretary.
Sec. 1200.33 How can funds be returned?
Funds may be returned either as cash or securities, which meet the
requirements for investments in 25 U.S.C. 162a. Cash can be transferred
to the US Treasury by Electronic Funds Transfers (EFT), or the
Automated Clearing House (ACH) process. Tribes must coordinate the
transfer of ownership in securities with us to ensure proper credit to
the tribe. The securities must meet investment restrictions contained
in 25 U.S.C. 162a.
Sec. 1200.34 Can a tribe withdraw redeposited funds?
Yes. If a tribe wishes to withdraw redeposited funds from Federal
trust status, it must submit a written request to do so, accompanied by
a new resolution and any revisions it wishes to make in its original
management plan.
Subpart D--Technical Assistance
Sec. 1200.40 How will the Department provide technical assistance for
tribes?
(a) We will provide direct or contract technical assistance, in
accordance with appropriations availability to tribes for developing,
implementing, and managing Indian trust fund investment plans. We will
ensure that our legal, financial and other expertise is made fully
available to advise tribes in developing, implementing, and managing
investment plans.
(b) We may award grants to tribes for developing and implementing
plans for investing Indian tribal trust funds.
( c) Tribes may also obtain technical assistance on their own.
Sec. 1200.41 What types of technical assistance are available?
The types of technical assistance include: investment planning;
accounting; selection of investment managers; monitoring of
investments; asset management; or other assistance appropriate to
support funds withdrawal.
Sec. 1200.42 Who can provide technical assistance?
A sample of competent providers includes any of the following
entities with the appropriate skills and capabilities: available DOI or
OST staff; intertribal organizations; public agencies; and contracted
private investment firms.
Sec. 1200.43 How can a tribe apply for technical assistance?
(a) Tribes wishing technical assistance may request it by sending
us a letter along with a tribal resolution outlining the technical
assistance required, tribal resources which may be applied to the need,
and suggested provider, if known. The resolution must state clearly
that the assistance is needed for developing, implementing, or managing
an investment plan under the provisions of this authority.
(b) Tribes requesting funds for technical assistance must send a
completed SF-424, APPLICATION FOR FEDERAL ASSISTANCE, and SF-424A,
BUDGET INFORMATION, along with a tribal resolution, detailing the
assistance specifically requested, and the suggested provider to our
address in Sec. 1200.13.
( c) We will make grants subject to funds availability. We will
publish a notice in the Federal Register concerning the availability of
funding, deadlines for grants, the application process, and approval
criteria. If funding is limited, grants will be awarded based on
criteria that we feel will best meet the intent of the Act. We will
consult with tribes in determining annual criteria. Unsolicited grant
requests will not be accepted.
Sec. 1200.44 What action will the Department take on requests for
technical assistance?
We will respond in writing to all requests for technical assistance
and grants, advising of decision, availability of appropriate expertise
and funding, and anticipated delivery of the service.
Dated: December 19, 1996.
Ada E. Deer,
Assistant Secretary--Indian Affairs.
[FR Doc. 96-32738 Filed 12-24-96; 8:45 am]
BILLING CODE 4310-12-P