25 C.F.R. Subpart B—Withdrawing Tribal Funds From Trust
Title 25 - Indians
Any tribe for whom we manage funds in trust. A tribe may withdraw some or all funds that we hold in trust if we approve a plan that it submits under this part. (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 (c) Tribal funds commonly known as “Proceeds of Labor” funds, usually income to trust resources, are generally withdrawn under normal tribal budgeting procedures, but may also be withdrawn from trust under this part.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. To withdraw funds, a tribe must submit four copies of its application and the attachments listed in this section to: Director, Office of External Affairs, Office of the Special Trustee for American Indians, Department of the Interior, MS–5140, 1849 C Street NW., Washington, DC 20240. 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 regional director, and to 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 §1200.15 and make only those changes that conform to revision procedures in the approved plan and the requirements of §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 §1200.14. [61 FR 67932, Dec. 26, 1996, as amended at 71 FR 15339, Mar. 28, 2006] The Tribal Management Plan required by §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 §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. (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. The agreement must include 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. [61 FR 67932, Dec. 26, 1996, as amended at 71 FR 15339, Mar. 28, 2006] 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 regional 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 §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. [61 FR 67932, Dec. 26, 1996, as amended at 71 FR 15339, Mar. 28, 2006] 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. For judgment or settlement funds, in addition to the criteria in §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. 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. 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. (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 §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. 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.
Title 25: Indians
PART 1200—AMERICAN INDIAN TRUST FUND MANAGEMENT REFORM ACT
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?
