II

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.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 That the American Indian Trust Fund Management Re4 form Act (108 Stat. 4239, 25 U.S.C. 4041), as amended,

5 is further amended by adding a new Title V as follows:
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1 ‘‘TITLE V—INVESTMENT OF

2 FUNDS—TRIBAL OPTIONS

3 ‘‘SEC. 501. TRIBAL OPTIONS.

4 ‘‘(a) Within one year from the date of enactment of

5 this title, the Secretary, with the advice and assistance of

6 the Comptroller of the Currency, shall contract with quali7 fied financial institutions that are regulated by a federal

8 bank regulatory agency for the investment of all funds

9 presently managed in trust status for Indian tribes and

10 individual Indians by the United States, unless:

11 ‘‘(1) the tribe whose money is held in trust re12 quests in writing that the funds continue to be in13 vested by the Department of the Interior, or

14 ‘‘(2) contracting of the particular fund would be

15 inconsistent with the United States’ trust responsi16 bility or would contravene any provision of law spe17 cifically related to that particular fund.

18 ‘‘(b) The Secretary shall afford a tribe an opportunity

19 to designate in writing a qualified financial institution to

20 manage its funds. Unless a tribe designates a specific in21 stitution, the Secretary shall comply with the provisions

22 of the Buy-Indian Act (25 U.S.C. 47) in the selection of

23 a qualified financial institution pursuant to this title.
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1 ‘‘(c) Any contract entered into pursuant to this sec2 tion shall, at a minimum, include provisions acceptable to

3 the Secretary that will:

4 ‘‘(1) direct that all funds are invested in a man5 ner consistent with the requirements of the prudent

6 investor rule applicable to the financial institution,

7 the fiduciary responsibility of the institution, and the

8 trust responsibility of the Secretary;

9 ‘‘(2) within the requirements of paragraph (1),

10 permit tribes to direct the financial institution re11 garding the kinds of instruments for investment;

12 ‘‘(3) subject to the provisions of paragraphs (1)

13 and (2), encourage the investment of funds in ways

14 that directly benefit the affected tribe and Indian

15 community;

16 ‘‘(4) require that the financial institution be lia17 ble for any financial losses incurred by the trust

18 beneficiary as a result of its failure to comply with

19 the terms of its contract, the investment instructions

20 provided by the tribe, its general fiduciary obliga21 tion, or the prudent investor rule;

22 ‘‘(5) insure that the financial institution carry

23 sufficient insurance or other surety satisfactory to

24 the Secretary to compensate the trust beneficiary in
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1 connection with any liability and the Secretary in

2 the event of a subrogation under subsection (d);

3 ‘‘(6) allow the financial institution to recover its

4 reasonable costs incurred in investing trust funds in

5 investment instruments that are 100% guaranteed

6 by the United States and be compensated for invest7 ing trust funds in other investment instruments by

8 charging a commercially reasonable fee, approved by

9 the Secretary, that shall be deducted from the cor10 pus of the trust funds in the same manner as for

11 private investors.

12 ‘‘(d) No provision of this title, nor any action taken

13 pursuant thereto, shall in any way diminish the trust re14 sponsibility of the United States for any funds presently

15 managed in the trust status or to the tribes or individual

16 Indians who are the beneficial owners of such funds. The

17 Secretary shall remain responsible for any losses incurred

18 by a trust beneficiary for which a financial institution is

19 liable under paragraph (c)(4) but shall be entitled to sub20 rogation of any claim to the extent the beneficiary receives

21 compensation from the United States.

22 ‘‘(e) Any amounts transferred shall not result in the

23 closure of the account in question and the Secretary shall

24 be obligated to continue efforts to determine whether the

25 account balance is accurate, including efforts to identify
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1 and secure documentation supporting such accounting

2 balance.’’.

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