[Federal Register Volume 61, Number 96 (Thursday, May 16, 1996)]
[Proposed Rules]
[Pages 24731-24737]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-12143]



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DEPARTMENT OF THE INTERIOR

Bureau of Indian Affairs

25 CFR Part 144

RIN 1076-AD 28


The American Indian Trust Fund Management Reform Act of 1994

AGENCY: Bureau of Indian Affairs, Interior.

ACTION: Proposed rule with request for comments.

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SUMMARY: The Bureau of Indian Affairs proposes to establish a 
regulation to implement Title II of Pub. L. 103-412, the American 
Indian Trust Fund Management Reform Act of 1994 (the Act), which for 
the first time, permits American Indian Tribes to take restricted 
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 Money 
(IIM) funds.

DATES: Comments on this Proposed Rule must be received on or before 
July 15, 1996.

ADDRESSES: Mail comments to Donna Erwin, Director, Office of Trust 
Funds Management (OTFM), Department of the Interior, 505 Marquette Ave. 
NW, Suite 1000, Albuquerque, NM, 87102, OR hand deliver them to Suite 
1000 at the above address. Comments will be available for inspection at 
this address from 9:00 a.m. to 4:00 p.m. (MDT), Monday through Friday 
beginning approximately 30 days after publication of this document in 
the Federal Register.

FOR FURTHER INFORMATION CONTACT: Joe Weller, Office of Trust Funds 
Management, at the above address. Telephone (505) 248-5723, fax 248-
5782.

REQUEST FOR COMMENTS: It is the policy of the Department of the 
Interior, whenever practical, to afford the public an opportunity to 
participate in the rulemaking process. Accordingly, interested persons 
may submit written comments regarding this rule to the location 
identified in the Address section of this document. To ensure that 
public comments have maximum effect in developing the final 
regulations, the Department urges that each comment clearly identify 
the specific section or sections of the regulations that the comment 
addresses and that comments be in the same order as the regulations. 
Comments that concern information collection requirements must be sent 
to the Office of Management and Budget at the address listed in the 
Paperwork Reduction Act section of this preamble. A copy of these 
comments may also be sent to the Department representative named in the 
preceding paragraph.

SUPPLEMENTARY INFORMATION: 25 CFR Part 144 contains provisions which 
affect 240 tribes with trust funds. These tribes currently have 
approximately $1.5 billion dollars 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: (1) Tribes 
wishing to withdraw some or all of their restricted 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; (2) 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; (3) 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; (4) 
tribes must provide notification to tribal members regarding their 
intent to withdraw funds from trust; (5) tribes may return any or all 
of their funds withdrawn under this act, including any earnings, to 
trust status; (6) 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.

Development of the Regulation

    In accordance with the Act, this regulation was developed with the 
active participation of tribal representatives. A Regulatory Workgroup 
was established by OTFM, which had tribal representation, as well

[[Page 24732]]

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. 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 has also been rewritten into a ``user-
friendly'' format.

Statutory Authority

    Title II of Pub. L. 103-412, the American Indian Trust Fund 
Management Reform Act of 1994, governs the withdrawal of tribal funds 
from trust status within the Department of the Interior. Specifically, 
the Secretary is authorized to approve withdrawals of funds based on a 
Tribal Management Plan. The law states that regulations do not need to 
be in place for funds to be withdrawn.

Procedural Determinations

The Regulatory Flexibility Act

    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.).

Executive Order 12630

    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.''

Executive Order 12778

    The Department has certified to the Office of Management and Budget 
that this rule meets the applicable standards provided in Sections 2 
(a) and 2 (b) (2) of Executive Order 12778.

Executive Order 12866

    This document has been reviewed under Executive Order 12866 and is 
not a significant regulatory action.

Paperwork Reduction Act of 1995

    Section 144.7 contains information collection requirements. As 
required by the Paperwork Reduction Act of 1995 (44 U.S.C. 3507 (d) ), 
the Department of Interior has submitted a copy of this section to the 
Office of Management and Budget (OMB) for its review. These regulations 
affect any tribe for whom the Office of Special Trustee manages funds 
in tribal trust.
    Information in Subpart B (Application to Withdraw Tribal Funds from 
Trust Status) is being collected to determine the eligibility of 
applicants, and the capability of tribes or their contractors to manage 
and invest large blocks of funds. This is in accordance with statutory 
authority which requires that a tribal Management Plan be approved by 
the Secretary prior to release of funds from trust. This information 
will be collected once only from each applicant. Annual reporting and 
recordkeeping burden for this collection of information is estimated to 
average 342 hours for each response for 12 tribal respondents, 
including the time for reviewing instructions, searching existing data 
sources, gathering and maintaining the data needed, and completing and 
reviewing the collection of information. Thus, the total annual 
reporting and recordkeeping burden for this collection is estimated to 
be 4,104 hours.
    Information in Subpart D (Application for Federal Assistance and 
Budget Information--Non-Construction Programs) is being collected to 
determine the eligibility of applicants, 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. Annual reporting and recordkeeping burden for this 
collection of information is estimated to average 52 hours for each 
response for 12 tribal respondents, including the time for reviewing 
instructions, searching existing data sources, gathering and 
maintaining the data needed, and completing and reviewing the 
collection of information. Thus, the total annual reporting and 
recordkeeping burden for this collection is estimated to be 624 hours.
    Organizations and individuals desiring to submit comments on the 
information collection requirements should direct them to the Office of 
Information and Regulatory Affairs, OMB, Room 10235, New Executive 
Office Building, Washington, D.C. 20503; Attention: Desk Officer for 
U.S. Department of the Interior.
    The Department considers comments by the public on these proposed 
collections of information in:
    Evaluating whether the proposed collections of information are 
necessary for the proper performance of the functions of the 
Department, including whether the information will have practical 
utility;
    Evaluating the accuracy of the Department's estimate of the burden 
of the proposed collections of information, including the validity of 
the methodology and assumptions used; and
    Enhancing the quality, usefulness, and clarity of the information 
to be collected.
    OMB is required to make a decision concerning the collections of 
information contained in these proposed regulations between 30 and 60 
days after publication of this document in the Federal Register. 
Therefore, a comment to OMB is best assured of having its full effect 
if OMB receives it within 30 days of publication. This does not affect 
the deadline for the public to comment to the Department on the 
proposed regulations.

National Environmental Policy Act of 1969

    We have determined that this rulemaking is not a major Federal 
action significantly affecting the quality of the human environment, 
and a detailed statement under section 102(2)(C) of the National 
Environmental Policy Act of 1969 (42 U.S.C. 4332(2)(C)) is not 
required.

[[Page 24733]]

List of Subjects in 25 CFR Part 144

    Indians, Indian tribal trust funds, Indian trust responsibility.

    For the reasons set out in the preamble, Part 144 of Title 25, 
Chapter 1, of the Code of Federal Regulations is proposed to be added 
as set forth below.

PART 144--AMERICAN INDIAN TRUST FUND REFORM ACT

Subpart A--General Provisions

Sec.
144.1  Purpose of this regulation.
144.2  Definitions.
144.3  What is the Department's policy on tribal management of trust 
funds?
144.4  May tribes exercise increased direction over their trust 
funds and retain the protections of Federal trust status?
144.5  What are the advantages and disadvantages of managing trust 
funds?
144.6  Do these regulations tell tribes how to receive future income 
directly rather than having the government continue to collect it?
144.7  Information collection.

Subpart B--Withdrawing Tribal Funds From Trust

144.10  Who is eligible to withdraw their tribal funds from trust?
144.11  What funds may be withdrawn?
144.12  What limitations and restrictions apply to withdrawn funds?
144.13  How does a tribe apply to withdraw funds?
144.14  What must the Tribal Management Plan contain?
144.15  What is the approval process for management plans?
144.16  What criteria will be used in evaluating the management 
plan?
144.17  What special criteria will be used to evaluate management 
plans for judgment or settlement funds?
144.18  When does the Department's trust responsibility end?
144.19  How can the plan be revised?
144.20  How can a tribe withdraw additional funds?
144.21  How may a tribe appeal denials under this part?

Subpart C--Returning Tribal Funds to Trust

144.30  How does a tribe notify the Department if it wishes to 
return withdrawn funds to Federal trust status?
144.31  What part of withdrawn funds can be returned to trust?
144.32  How often can funds be returned?
144.33  How can funds be returned?
144.34  Can a tribe withdraw redeposited funds?

Subpart D--Technical Assistance

144.40  How will the Department provide technical assistance for 
tribes?
144.41  What types of technical assistance are available?
144.42  Who can provide technical assistance?
144.43  How can a tribe apply for technical assistance?
144.44  What action will the Department take on requests for 
technical assistance?

    Authority: 25 U.S.C. 4001.

Subpart A--General Provisions


Sec. 144.1   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. 144.2   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 within the 
Department of the Interior.
    Department or DOI means the Department of the Interior.
    General Counsel means the attorney for the tribe.
    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 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. 144.3  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. 144.4  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 in these regulations: ``Indian Self-
Determination and Education Assistance Act Program'' ( 25 CFR Part 271, 
et seq.) and the ``Self- Governance Program'' (25 CFR Part 1001).


Sec. 144.5  What are the advantages and disadvantages of managing trust 
funds?

    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).

[[Page 24734]]

Sec. 144.6  Do these regulations tell tribes how to receive future 
income directly rather than having 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 its agency or area office to find out how 
to do this.


Sec. 144.7  Information collection.

    Information collection requirements contained in Subpart B of this 
part, Withdrawal of Tribal Funds from Trust, and Subpart D of this 
part, Technical Assistance, have been submitted to the Office of 
Management and Budget for approval as required by 44 U.S.C. 3501 et 
seq. Information collected in Sec. 144.13, (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. 144.43, 
(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. The 
collections of information for Subpart B and Subpart D of this part 
will not be required until approved by the Office of Management and 
Budget.

Subpart B--Withdrawing Tribal Funds From Trust


Sec. 144.10  Who is eligible to withdraw their tribal funds from trust?

    Any tribe for whom we manage funds in trust.


Sec. 144.11  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. 144.12  What limitations and restrictions apply to withdrawn 
funds?

    (a) A tribe may withdraw funds appropriated to satisfy judgments of 
the 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. 144.13   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. 144.15 
and make only those changes that conform to revision procedures in the 
approved plan and the requirements of Sec. 144.19; 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. 144.14.


Sec. 144.14   What must the Tribal Management Plan contain?

    The Tribal Management Plan required by Sec. 144.13 must include 
each of the following.
    (a) Tribal investment goals and the strategy for achieving them.

[[Page 24735]]

    (b) A description of the protection against the substantial loss of 
principal, as set forth in Sec. 144.16.
    (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.
    (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. 144.15  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, and in providing technical 
assistance.
    (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. 144.16, 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. 144.16  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

[[Page 24736]]

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. 144.17  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. 144.16, 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. 144.18  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. 144.19  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.


Sec. 144.20  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 Section 144.13);
    (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. 144.21  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. 144.30  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 Section 144.13. 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. 144.31  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. 144.32  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 6 months after date of withdrawal, 
except with approval of the Secretary.


Sec. 144.33  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. 162(a). Cash can be 
transferred to the US Treasury by Electronic Funds Transfers (EFT), or 
the Automated Clearing House (ACH) process. Tribes must coordinate 
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. 162(a).


Sec. 144.34  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. 144.40  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. 144.41  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. 144.42  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 
BIA staff; intertribal organizations; public agencies; and contracted 
private investment firms.


Sec. 144.43   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

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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 Section 144.13.
    (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. 144.44   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: May 8, 1996.
Ada E. Deer,
Assistant Secretary--Indian Affairs.
[FR Doc. 96-12143 Filed 5-15-96; 8:45 am]
BILLING CODE 4310-02-P