[Title 25 CFR G]
[Code of Federal Regulations (annual edition) - April 1, 2004 Edition]
[Title 25 - INDIANS]
[Chapter I - BUREAU OF INDIAN AFFAIRS, DEPARTMENT OF THE INTERIOR]
[Subchapter G - FINANCIAL ACTIVITIES]
[From the U.S. Government Printing Office]


25INDIANS12004-04-012004-04-01falseFINANCIAL ACTIVITIESGSUBCHAPTER GINDIANSBUREAU OF INDIAN AFFAIRS, DEPARTMENT OF THE INTERIOR
                    SUBCHAPTER G_FINANCIAL ACTIVITIES


PART 101_LOANS TO INDIANS FROM THE REVOLVING LOAN FUND--Table of Contents




Sec.
101.1 Definitions.
101.2 Kinds of loans.
101.3 Eligible borrowers under United States direct loan program.
101.4 Applications.
101.5 Approval of loans.
101.6 Modification of loans.
101.7 Management and technical assistance.
101.8 Environmental and Flood Disaster Acts.
101.9 Preservation of historical and archeological data.
101.10 Federal Reserve Regulation Z and Fair Credit Reporting Act.
101.11 Interest.
101.12 Records and reports.
101.13 Security.
101.14 Maturity.
101.15 Penalties on default.
101.16 Default on loans made by relending organizations.
101.17 Uncollectable loans made by the United States.
101.18 Uncollectable loans made by relending organizations.
101.19 Assignment of loans.
101.20 Relending by borrower.
101.21 Repayments on United States direct loans.
101.22 Repayments on loans made by relending organizations.
101.23 Approval of articles of association and bylaws.
101.24 Loans for expert assistance for preparation and trial of Indian 
          claims.
101.25 Information collection.

    Authority: 25 U.S.C. 1469.

    Source: 40 FR 3587, Jan. 23, 1975, unless otherwise noted. 
Redesignated at 47 FR 13327, Mar. 30, 1982.



Sec. 101.1  Definitions.

    As used in this part 101:
    Applicant means an applicant for a United States Direct Loan from 
the revolving loan fund or a loan from a relending organization.
    Commissioner means the Commissioner of Indian Affairs or an 
authorized representative.
    Cooperative association means an association of individuals 
organized pursuant to state, Federal, or tribal law, for the purpose of 
owning and operating an economic enterprise for profit with profits 
distributed or allocated to patrons who are members of the organization.
    Corporation means an entity organized as a corporation pursuant to 
state, Federal, or tribal law, with or without stock, for the purpose of 
owning and operating an economic enterprise.
    Default means failure of a borrower to:
    (1) Make scheduled payments on a loan when due,
    (2) Obtain the lender's approval for disposal of assets mortgaged as 
security for a loan, or
    (3) Comply with the covenants, obligations, or other provisions of a 
loan agreement.
    Economic enterprise means any Indian-owned commercial, industrial, 
agricultural, or business activity established or organized for the 
purpose of profit, provided that eligible Indian ownership constitutes 
not less than 51 percent of the enterprise.
    Equity means the borrower's residual ownership, after deducting all 
business debt, of tangible business assets used in the business being 
financed, on which a lender can perfect a first lien position.
    Financing statement means the document filed or recorded in county 
or state offices pursuant to the provisions of the Uniform Commercial 
Code notifying third parties that a lender has a lien on the chattels 
and/or crops of a borrower.
    Indian means a person who is a member of an Indian tribe as defined 
in this part.
    Organization means the governing body of any Indian tribe, or entity 
established or recognized by such governing body for the purpose of the 
Indian Financing Act.
    Other organization means any non-Indian individual, firm, 
corporation, partnership, or association.
    Partnership means a form of business organization in which two or 
more legal persons are associated as co-owners for the purposes of 
business or professional activities for private pecuniary gain, 
organized pursuant to tribal, state, or Federal law.

[[Page 293]]

    Reservation means Indian reservation, California rancheria, public 
domain Indian allotment, former Indian reservation in Oklahoma, and land 
held by Alaska Native groups incorporated under the provisions of the 
Alaska Native Claims Settlement Act (85 Stat. 688), as amended.
    Revolving loan fund means all funds that are now or hereafter a part 
of the revolving fund authorized by the Act of June 18, 1934 (48 Stat. 
986), the Act of June 26, 1936 (49 Stat. 1968) and the Act of April 14, 
1950 (64 Stat. 44), as amended and supplemented including sums received 
in settlement of debts for livestock pursuant to the Act of May 24, 
1950, (64 Stat. 190) and sums collected in repayment of loans made, 
including interest or other charges on loans, and any funds appropriated 
pursuant to section 108 of the Indian Financing Act of 1974 (88 Stat. 
77).
    Secretary means the Secretary of the Interior.
    Tribe means any Indian tribe, bank, nation, rancheria, pueblo, 
colony or community, including any Alaska Native village or any 
regional, village, urban or group corporation as defined in or 
established pursuant to the Alaska Native Claims Settlement Act (85 
Stat. 688), as amended, which is recognized by the Federal Government as 
eligible for services from the Bureau of Indian Affairs.

[57 FR 46471, Oct. 8, 1992]



Sec. 101.2  Kinds of loans.

    Loans from the Indian Revolving Loan Fund shall be made for purposes 
which will improve and promote the economic development on Indian 
reservations.
    (a) Loans may be made by the United States to eligible relending 
organizations for relending to members for economic enterprises and to 
eligible tribes for relending to members, eligible corporations, 
cooperative associations, partnerships and subordinate bands and for 
financing tribal economic enterprises, which will promote the economic 
development of a reservation and/or the group or members thereon. Loans 
made by tribes or relending organizations may be for the following 
purposes:
    (1) To individual Indians or Natives, cooperative associations, 
corporations and partnerships, to finance economic enterprises operated 
for profit, the operation of which will contribute to the improvement of 
the economy of a reservation and/or the members thereon.
    (2) To individual Indians or Natives for purposes of purchasing, 
constructing or improving housing on a reservation and to be occupied by 
the borrower.
    (3) To individual Indians and Natives for purposes of obtaining a 
college or graduate education and degree in a field which will provide 
employment opportunities, provided that adequate funds are not available 
from sources such as grants, scholarships or other loan sources.
    (4) To individual Indians and Natives for purposes of attending 
vocational schools which provide training in desired skills in a field 
in which there are employment opportunities, provided that adequate 
funds and/or training are not available from grant or scholarship 
sources, or federal or state training programs.

Loans may also be made by the United States to tribes for loaning to or 
investing in other organizations subject to the provisions in paragraph 
(d) of this section.
    (b) Direct loans may be made by the United States to eligible 
tribes, tribal organizations or corporations and tribal cooperative 
associations without fund restrictions. Direct loans to individual 
Indians, partnerships, and other non-tribal organizations shall not 
exceed $350,000. Direct loans from the United States shall be made for 
the following purposes:
    (1) To eligible tribes, individual Indians, Natives, or associations 
thereof, corporations and partnerships, to finance economic enterprises 
operated for profit, the operation of which will contribute to the 
improvement of the economy of a reservation and/or the members thereon.
    (2) To individual Indians and Natives for purposes of purchasing, 
constructing or improving housing on a reservation and to be occupied by 
the borrower.
    (3) To individual Indians and Natives for purposes of obtaining a 
college or

[[Page 294]]

graduate education and degree in a field which will provide employment 
opportunities, provided that adequate funds are not available from 
sources such as grants, scholarships or other loan sources.
    (4) To individual Indians and Natives for purposes of attending 
vocational schools which provide training in desired skills in a field 
in which there are employment opportunities, provided that adequate 
funds and/or training are not available from grants or scholarship 
sources or federal or state training programs.
    (c) Before a United States direct loan is approved, the Commissioner 
may require the applicants to prepare a market and capacity report on 
existing or proposed economic enterprises for which financing is 
requested if the operation involves manufacturing, selling or providing 
services.
    (d) Loans may be made to eligible tribes and Indian organizations 
for use in attracting industries and economic enterprises, the operation 
of which will contribute to the economy of a reservation. Tribes and 
Indian organizations may receive loans from the revolving loan fund for 
investment in or lending to other organizations regardless of whether 
they are organizations of Indians. However, not more than 50 percent of 
the loan made to an Indian organization may be used for the purpose of 
making a loan to or investing in other organizations. Applications for 
loans to provide funds for lending to or investing in other 
organizations already in operation will be accompanied by:
    (1) Audited balance sheets and operating statements of the other 
organization for the immediate three preceding years;
    (2) Pro forma operating statement and balance sheets for the 
succeeding three years reflecting the results of operations after 
injection of the additional funds;
    (3) Names of owners or if a corporation and stock has been issued, 
names of major stockholders and shares of stock owned by each;
    (4) A copy of the articles of incorporation and bylaws, if 
incorporated, or other organization papers if not incorporated;
    (5) Names of members of the board of directors and officers with a 
resume of education and experience, and the number of shares of stock 
owned by each in the corporation;
    (6) Purposes for which loan or investment will be used; and
    (7) If for manufacturing, selling or providing services, a market 
and capacity report will be prepared. If a proposed operation is to be 
established, the information in paragraphs (d)(2) through (7) of this 
section will be furnished. The Commissioner may require additional 
information on the other organization, if needed, to adequately evaluate 
the benefits which the Indian organization will receive and the economic 
benefits which will accrue to a reservation. If the loan is for 
relending to another organization, the application must show what 
security is being offered. If the loan is for investment in another 
organization, the equity to be obtained must be shown. Copies of all 
agreements, contracts or other documents to be executed by the Indian 
organization and the other organization in connection with a loan or 
investment shall be submitted with the application for a loan and will 
require Commissioner approval prior to disbursement of loan funds to the 
Indian organization.

[40 FR 3587, Jan. 23, 1975. Redesignated at 47 FR 13327, Mar. 30, 1982, 
as amended at 54 FR 34974, Aug. 23, 1989]



Sec. 101.3  Eligible borrowers under United States direct loan program.

    (a) Loans may be made from the revolving loan fund to Indians, 
eligible tribes and relending organizations, and corporations, 
cooperative associations and partnerships having a form of organization 
satisfactory to the Commissioner. Loans may be made to applicants only 
when, in the judgment of the Commissioner, there is a reasonable 
prospect of repayment. Loans may be made only to an applicant who, in 
the opinion of the Commissioner, is unable to obtain financing on 
reasonable terms and conditions from other sources such as tribal 
relending programs, banks, Farmers Home Administration, Small Business 
Administration, Production Credit Associations,

[[Page 295]]

or Federal Land Banks, and is also unable to obtain a guaranteed or 
insured loan pursuant to title II of the Indian Financing Act of 1974 
(88 Stat. 77). In addition, the applicant will be required to have 
equity equal to 20 percent of the total cost of a new enterprise, or 20 
percent of the total cost of expansion of an existing enterprise.
    (b) The establishment of a United States direct revolving loan 
program on a reservation(s) for making direct loans will require the 
approval of the Commissioner. All requests for establishing a United 
States direct revolving loan program on a reservation will be 
accompanied by reasons for need, estimate of financing needs, and other 
sources of financing available to meet the needs. The Commissioner, in 
approving a United States direct loan program, may require the 
preparation and approval of a plan of operation for conducting the 
program.
    (c) If local lending conditions and/or the information in an 
application for a loan indicate a probability that an applicant may be 
able to obtain the loan from other sources, the Commissioner, before 
approving a United States direct loan, will require the applicant to 
furnish letters from two customary lenders in the area who are making 
loans for similar purposes, stating whether or not they are willing to 
make a loan to the applicant for the same purposes and amount. If a 
customary lender will make the loan on reasonable terms and conditions, 
the Commissioner will not approve a United States direct loan.

[40 FR 3587, Jan. 23, 1975. Redesignated at 47 FR 13327, Mar. 30, 1982, 
as amended at 54 FR 34974, Aug. 23, 1989; 57 FR 46471, Oct. 8, 1992]



Sec. 101.4  Applications.

    An applicant for a United States direct loan or a loan from a 
relending organization conducting a relending program under this part 
will submit an application on a form approved by the Commissioner. 
Applications shall include the name, current address and telephone 
number of the applicant(s); current and prior Taxpayer Identification 
Number--Employer Identification Number if a business entity, Social 
Security Number if an individual; and current employer's name, address, 
and telephone number; amount of the loan requested; purpose for which 
loan funds will be used; and security to be offered; period of the loan, 
assets, liabilities and repayment capacity of the applicant; budgets 
reflecting income and expenditures of the applicant; and any other 
information necessary to adequately evaluate the application. The 
borrower must sign a statement declaring no delinquency on Federal taxes 
or other Federal debt and borrower's good standing on dealings in 
procurement or non-procurement with the Federal Government. The Bureau 
will obtain a current credit bureau report and prescribe procedures to 
be used in handling loan proceeds. In addition, applications for loans 
to finance economic enterprises already in operation will be accompanied 
by:
    (a) A copy of operating statements, balance sheets and budgets for 
the prior two operating years or applicable period thereof preceding 
submittal of the application;
    (b) Current budget, balance sheet and operating statements; and
    (c) Pro forma budgets operating statements and balance sheets 
showing the estimated results for operating the enterprise for two years 
after injection of the loan funds into the operation.

A resume of the applicant's management experience will be submitted with 
the application. Applications for loans and requests for advance of 
tribal trust funds for relending under the provisions of this part shall 
be accompanied by a declaration of policy and plan of operation or other 
acceptable plan for conducting the program. Applications for loans or 
modifications thereof, to establish, acquire, operate, or expand an 
economic enterprise shall be accompanied by a plan of operation. 
Declarations of policy or other plans for conducting a relending program 
and plans of operation for economic enterprises require the approval of 
the Commissioner before becoming effective. An application from a 
corporation, partnership or cooperative association, for a United States 
direct loan or a loan under a relending program for financing an 
economic enterprise must, in addition to financial statements and 
budgets, include a copy of documents establishing the entity, or the 
proposed

[[Page 296]]

documents to be used in establishing it.

[40 FR 3587, Jan. 23, 1975. Redesignated at 47 FR 13327, Mar. 30, 1982, 
as amended at 57 FR 46471, Oct. 8, 1992]



Sec. 101.5  Approval of loans.

    (a) Loan agreements, including those used by relending organizations 
in operating a relending program, must be executed on a form approved by 
the Commissioner. On direct United States loans, the Commissioner will 
approve the loan by issuing a commitment order covering the terms and 
conditions for making the loan.
    (b) Applications for loans from relending organizations must be 
approved, if a tribe, by the governing body or designated committee, or 
other approving committee or body authorized to act on credit matters 
for a relending organization, before the Commissioner takes action on 
the application. This designated governing body of the tribe or 
committee must be authorized to act on behalf of the relending 
organization as evidenced in the organization's declaration of policy 
and plan of operation.
    (c) Corporations, partnerships and cooperative associations 
organized for the purpose of establishing, acquiring, expanding, and 
operating an economic enterprise shall be organized pursuant to federal, 
state or tribal law. The form of organization shall be acceptable to the 
Commissioner. Economic enterprises which are or will be operated on a 
reservation(s) must comply with the requirements of applicable rules, 
resolutions and ordinances enacted by the governing body of the tribe.



Sec. 101.6  Modification of loans.

    (a) United States direct loans. Any modification of the terms and 
provisions of a United States direct loan agreement must be requested in 
writing by the borrower and approved by the Commissioner. The borrower 
will submit the request for modification and will indicate the 
section(s) of the loan agreement to be modified together with a 
justification for the modification. Requests for modifications of loan 
agreements will include an agreement to abide by the provisions of the 
regulations in this part and future amendments and modifications 
thereof. In addition, a current credit bureau report, obtained by the 
Bureau of Indian Affairs, will be made a part of the modification 
request.
    (b) Relending program. Any modification of the terms and provisions 
of a loan agreement of a borrower from an organization conducting a 
relending program must be in writing, agreed to by the borrower, and 
must be approved by the body authorized to act on loans and 
modifications thereof as provided in an approved declaration of policy 
and plan of operation or other plan. If a request for modification of a 
loan has been disapproved by the body authorized to act on the request, 
the rejected borrower may request the Commissioner to make a direct loan 
from the revolving loan fund if the Commissioner determines that the 
rejection is unwarranted.

[40 FR 3587, Jan. 23, 1975. Redesignated at 47 FR 13327, Mar. 30, 1982, 
as amended at 57 FR 46472, Oct. 8, 1992]



Sec. 101.7  Management and technical assistance.

    Prior to and concurrent with the approval of a United States direct 
loan to finance an economic enterprise, the Commissioner will assure 
under title V of the Indian Financing Act of 1974 that competent 
management and technical assistance is available to the loan applicant 
for preparation of the application and/or administration of funds loaned 
consistent with the nature of the enterprise proposed to be or in fact 
funded by the loan. Assistance may be provided by available Bureau of 
Indian Affairs staff, the tribe or other sources which the Commissioner 
considers competent to provide needed assistance. Contracting for 
management and technical assistance may be used only when adequate 
assistance is not available without additional cost. Contracts for 
providing borrowers with competent management and technical assistance 
shall be in accordance with applicable Federal Procurement Regulations 
and the Buy Indian Act of April 30, 1908, chapter 153 (35 Stat. 71), as

[[Page 297]]

amended June 25, 1910, chapter 431, section 25 (36 Stat. 861).

[40 FR 3587, Jan. 23, 1975. Redesignated at 47 FR 13327, Mar. 30, 1982, 
as amended at 54 FR 34975, Aug. 23, 1989]



Sec. 101.8  Environmental and Flood Disaster Acts.

    Loans will not be approved until there is assurance of compliance 
with any applicable provisions of the Flood Disaster Protection Act of 
1973 (Pub. L. 93-234, 87 Stat. 975), the National Environmental Policy 
Act of 1969 (Pub. L. 91-190), (42 U.S.C. 4321) and Executive Order 
11514.



Sec. 101.9  Preservation of historical and archeological data.

    (a) On United States direct loans from the revolving loan fund and 
modifications thereof to provide additional loan funds which will 
involve excavations, road or street construction, land development or 
disturbance of land on known or reported historical or archeological 
sites, the Commissioner will take or require appropriate action to 
assure compliance with the applicable provisions of the Act of June 27, 
1960 (74 Stat. 220; (16 U.S.C. 469)), as amended by the Act of May 24, 
1974 (Pub. L. 93-291, 88 Stat. 174).
    (b) On loans made by relending organizations conducting a relending 
program using revolving loan funds, the body authorized to act on loan 
applications and modifications thereof will, at the time of taking 
action on a loan or request for modification, inform the applicant of 
the applicability of this Act to the loan and advise the Commissioner of 
compliance or the need to obtain compliance.



Sec. 101.10  Federal Reserve Regulation Z and Fair Credit Reporting Act.

    (a) United States direct loans and loans made by a relending 
organization are subject to the provisions of Federal Reserve Regulation 
Z (Truth In Lending, 12 CFR part 226; Pub. L. 91-508, 84 Stat. 1127). 
Economic enterprises which extend credit and require payment of finance 
charges on unpaid balances will determine the applicability of 
Regulation Z and comply with the requirements thereof. The Commissioner 
will issue any necessary instructions to assure compliance with 
Regulation Z on United States direct loans.
    (b) Relending organizations, through their committee or other body 
authorized to act on loan matters on its behalf, will assure compliance 
with the applicable provisions of this Act.
    (c) The Commissioner will require adherence to the provisions and 
requirements of title VI of the Fair Credit Reporting Act in making 
United States direct loans. Relending organizations, through the body 
authorized to act on credit matters, will require compliance with the 
requirements of the Fair Credit Reporting Act.



Sec. 101.11  Interest.

    (a) The interest to be charged on loans by the United States shall 
be at a rate determined by the Secretary of the Treasury in accordance 
with section 104, title I, of the Indian Financing Act of 1974 (Pub. L. 
93-262, 88 Stat. 77). The interest rate shall be determined monthly and 
shall be effective on advances made on loans during the current calendar 
month. The interest rate shall be stated in the promissory note(s) 
executed by the borrower(s) evidencing the advance(s).
    (b) Additional charges to cover loan administration costs, including 
credit reports, may be charged to borrowers.
    (c) Education loans may provide for deferral of interest while the 
borrower is in school full time or in the military service.
    (d) The interest rate on loans made by relending organizations which 
are conducting relending programs shall not be less than the rate the 
organization pays on its loan(s) from the United States. Relending 
organizations which adopt and follow the same procedure in calculating 
interest on educational loans as is followed on educational loans made 
by the United States, will not be charged interest on loans from the 
United States on the amount outstanding on educational loans during the 
period the organization is not charging its borrowers interest.
    (e) Interest rates on loan advances made by the United States as 
shown on promissory notes dated before April 12, 1974, will remain in 
effect until the loan is paid in full, refinanced, or modified to extend 
the repayment

[[Page 298]]

terms. Unless otherwise specifically provided in a loan contract, the 
interest rate on advances made after April 12, 1974, will be at a rate 
determined pursuant to section 104 of title I of the Indian Financing 
Act of 1974. The interest rate on loans for expert assistance will be at 
a rate established in Sec. 101.25 herein.

[40 FR 3587, Jan. 23, 1975. Redesignated at 47 FR 13327, Mar. 30, 1982, 
as amended at 57 FR 46472, Oct. 8, 1992]



Sec. 101.12  Records and reports.

    Loan agreements between the United States and tribes, corporations, 
partnerships, cooperative associations and individual Indians for 
financing economic enterprises, and to relending organizations, will 
require that borrowers establish and maintain accounting and operating 
records that are satisfactory to the Commissioner and submit written 
reports as required by the Commissioner. The records, accounts, and loan 
files shall be available for examination and audit by the Commissioner 
at any reasonable time. Unless an exception is approved by the 
Commissioner, borrowers will be required to have an annual audit made of 
the records of relending programs and economic enterprises financed with 
revolving loan funds, by a certified public accountant or a firm of 
certified public accountants or other qualified public accountants 
satisfactory to the Commissioner.



Sec. 101.13  Security.

    (a) United States direct loans shall be secured by such security as 
the Commissioner may require. A lack of security will not preclude the 
making of a loan if the proposed use of the funds is sound and the 
information in the application and supporting papers correctly show that 
expected income will be adequate to pay all expenses and the loan 
principal and interest payments, indicating reasonable assurance that 
the loan will be repaid. Loans made by relending organizations 
conducting a relending program using revolving loan funds will require 
borrowers to give security for loans, if available, but the absence of 
security will not preclude the making of a loan if the proposed use of 
the funds is sound and the information in the application and supporting 
papers correctly show that expected income will be adequate to pay all 
expenses and the loan principal and interest payments, indicating 
reasonable assurance that the loan will be repaid. The declaration of 
policy and plan of operation of relending organizations conducting 
relending programs will include provisions covering the type and amount 
of security to be taken to secure loans made.
    (b) Land purchased by an individual Indian with the proceeds of a 
loan and land already held in trust or restricted status by the 
individual Indian may be mortgaged as security for a loan in accordance 
with 25 CFR 152.34 and the Act of March 29, 1956 (70 Stat. 62; (25 
U.S.C. 483a)). Mortgages of individually held trust or restricted land 
will include only an acreage of the borrower's land which the 
Commissioner determines is necessary to protect the loan in case of 
default. On proposed foreclosures which involve the sale of individually 
held trust or restricted land given as security for a loan, the tribe of 
the reservation on which the land is located will be notified in writing 
at least thirty calendar days in advance of the anticipated date of 
sale. Land purchased by a tribe with the proceeds of a loan from the 
revolving loan fund with title taken in a trust or restricted status, 
and land already held in a trust or restricted status by a tribe may not 
be mortgaged as security for a loan.
    (1) Title to any land purchased by a tribe or by an individual 
Indian with revolving loan funds may be taken in trust or restricted 
status unless the land is located outside the boundaries of a 
reservation or a tribal consolidation area approved by the Secretary. 
Title to any land purchased by a tribe or an individual Indian which is 
outside the boundaries of a reservation or approved consolidation area 
may be taken in trust if the purchaser was the owner of trust or 
restricted interests in the land before the purchase. Otherwise, title 
shall be taken in the name of the purchaser without any restrictions on 
alienation, control, or use.
    (c) Mortgages of leasehold interests in land held in trust or 
restricted status by an individual Indian, may be

[[Page 299]]

taken for the purpose of borrowing capital for the development and 
improvement of the leased premises when permitted in the lease or lease 
modification agreement. Such mortgages must be approved by the lessor 
and Commissioner. (70 Stat. 62, (25 U.S.C. 483a)).
    (d) Individuals may give assignments of income from trust property 
as security for loans. Tribes may give assignments of trust income as 
security for loans provided that the assignment shall be specific as to 
the source(s) of income being assigned. All assignments of trust income 
require approval by the Commissioner before becoming effective.
    (e) Chattels may be given as security for a loan. A mortgage on 
chattels, the title to which is known to be in trust, requires 
Commissioner approval. Non-trust chattels may be mortgaged without 
approval of any federal official.
    (f) Crops grown on lands held in trust or restricted status for the 
benefit of an individual Indian may be given as security for a loan when 
approved by the Commissioner. Crops grown on leased, trust or restricted 
land may be given as security for a loan when permitted by the 
provisions of a lease or when the owner gives written consent. Approval 
of the lien document by the Commissioner is required. Crops grown on 
trust or restricted land held by a tribe which has been assigned to an 
individual for use may be given as security for a loan, provided the 
terms of the assignment permit the assignee to give the crops as 
secuirty for a loan or the tribe's governing body specifically gives 
consent. The lien document requires Commissioner approval. Crops grown 
on non-trust or non-restricted land may be mortgaged without the 
approval of any federal official.
    (g) Title to any personal property purchased with a loan shall be 
taken in the name of the purchaser and mortgaged to secure the loan 
unless the loan is otherwise adequately secured. Tribes must adhere to 
the provisions of their constitutions and bylaws, corporate charters, or 
other organizational documents when mortgaging tribal property and 
assigning trust income as security for loans.
    (h) Relending organizations receiving a loan from the United States 
for relending shall be required to assign to the United States as 
security for the loan all securities acquired in connection with loans 
made to its members, sub-organizations, or associations from such funds, 
unless the Commissioner determines that repayment of the loan to the 
United States is otherwise reasonably assured. Funds advanced to finance 
a tribal economic enterprise shall be secured by an assignment of net 
income and net assets of the economic enterprise, unless the 
Commissioner determines that it is not feasible to require an assignment 
or that repayment of the loan to the United States is otherwise 
reasonably assured.
    (i) Securing documents or financing statements shall be filed or 
recorded in accordance with applicable state or federal laws except for 
those customarily filed in Bureau of Indian Affairs offices. Mortgages 
on documented vessels will be filed at the customs house designated as 
the home port of the vessel as shown on the marine document.



Sec. 101.14  Maturity.

    The maturity of any United States direct loan shall not exceed thiry 
years. Loans made will be scheduled for repayment at the earliest 
possible date consistent with the purpose of the loan and the repayment 
capacity of the borrower.



Sec. 101.15  Penalties on default.

    Unless otherwise provided in the loan agreement between the United 
States and a borrower, failure on the part of a borrower to conform to 
the terms of the loan agreement will be deemed grounds for the taking of 
any one or all of the following steps by the Commissioner:
    (a) Discontinue any further advance of funds contemplated by the 
loan agreement.
    (b) Take possession of any or all collateral given as security and 
in the case of individuals, corporation, partnerships or cooperative 
associations, the property purchased with the borrowed funds.
    (c) Prosecute legal action against the borrower or against officers 
of corporations, tribes, bands, credit associations, cooperative 
associations, and other organizations.

[[Page 300]]

    (d) Declare the entire amount advanced immediately due and payable.
    (e) Prevent further disbursement of credit funds under the control 
of the borrower.
    (f) Withdraw any unobligated funds from the borrower.
    (g) Require relending organizations conducting a relending program 
to apply all collections on loans to liquidate the debt to the United 
States.
    (h) Take possession of the assets of a relending organization 
conducting a relending program and exercise or arrange to exercise its 
powers until the Commissioner has received acceptable assurance of its 
repayment of the revolving loan and compliance with the provisions of 
the terms of the loan agreement.
    (i) Liquidate, operate or arrange for the operation of economic 
enterprises financed with revolving loans made to individuals, tribes, 
corporations, partnerships and cooperative associations until the 
indebtedness is paid or until the Commissioner has received acceptable 
assurance of its repayment and compliance with the terms of the loan 
agreement.
    (j) Report the name and account information of a delinquent borrower 
to a credit bureau.
    (k) Assess additional interest and penalty charges for the period of 
time that payment is not made.
    (l) Assess charges to cover additional administrative costs incurred 
by the Government to service the account.
    (m) Offset amounts owed the borrower under other Federal programs 
including other programs administered by the Bureau of Indian Affairs.
    (n) Refer the account to a private collection agency to collect the 
amount due.
    (o) Refer the account to the U.S. Department of Justice for 
collection by litigation.
    (p) If the borrower is a current or retired Federal employee, take 
action to offset the borrower's salary or civil service retirement 
benefits.
    (q) Refer the debt to the Internal Revenue Service for offset 
against any amount owed the borrower as an income tax refund.
    (r) Report any written-off debt to the Internal Revenue Service as 
taxable income to the borrower.
    (s) Recommend suspension or debarment from conducting further 
business with the Federal Government.

[40 FR 3587, Jan. 23, 1975. Redesignated at 47 FR 13327, Mar. 30, 1982, 
as amended at 57 FR 46472, Oct. 8, 1992]



Sec. 101.16  Default on loans made by relending organizations.

    Relending organizations conducting relending programs using 
revolving loan funds will follow prudent lending practices in making and 
servicing loans and take appropriate actions to protect their interests 
in the security given to secure repayment of loans. Declarations of 
policy and plans of operation shall include procedures which will be 
followed in acting to correct a default, such as modification of loan 
agreement or foreclosure and liquidation of security. Relending 
organizations employing a general counsel will refer legal questions on 
foreclosure procedures and sale of security to their counsel.



Sec. 101.17  Uncollectable loans made by the United States.

    If the Secretary determines that a United States direct loan is 
uncollectable in whole or in part or is collectable only at an 
unreasonable cost, or when such action would be in the best interest of 
the United States, the Secretary may cancel, adjust, compromise, or 
reduce the amount of any loan made from the revolving loan fund. The 
Commissioner may adjust, compromise, subordinate, or modify the terms of 
any mortgage, lease, assignment, contract, agreement, or other document 
taken as security for loans. The cancellation of all or part of a loan 
shall become effective when signed by the Secretary.

[54 FR 34975, Aug. 23, 1989]



Sec. 101.18  Uncollectible loans made by relending organizations.

    (a) Relending organizations conducting relending programs using 
revolving loan funds may, when approved by the Commissioner, chargeoff 
as uncollectible all or part of the balance of principal and interest 
owing on

[[Page 301]]

loans which are considered to be uncollectible. Usually a chargeoff 
includes both principal and interest and provides for cessation of 
interest accruals on the principal balance owing as of the date of the 
chargeoff.
    (b) Action to chargeoff a loan will be in the form of a resolution 
enacted by the committee or body authorized and responsible for actions 
on loan matters for the relending organization. Before action is taken 
to chargeoff a loan as uncollectible, the lender will make an effort, to 
the extent feasible, to liquidate the security given for a loan and 
apply the net proceeds as a repayment on the balance of principal and 
interest owed. The chargeoff of a loan by a relending organization as 
uncollectible will not reduce the principal balance owed to the United 
States. A chargeoff will not release the borrower of the obligation or 
the responsibility to make payments when his or her financial situation 
will permit. Chargeoff action will not release the lender of 
responsibility to continue its efforts to collect the loan.



Sec. 101.19  Assignment of loans.

    A borrower of a direct loan from the United States may not assign 
the loan agreement or any interest in it to a third party without the 
consent of the Commissioner. Relending organizations which are 
conducting relending programs may not assign the loan agreements of 
borrowers, or any interest therein, to third parties without the 
approval of the Commissioner and the borrower.



Sec. 101.20  Relending by borrower.

    (a) A relending organization may reloan funds loaned to it by the 
United States with the approval of the Commissioner. The Commissioner 
may authorize such lenders to approve applications for particular types 
of loans up to a specified amount.
    (b) Loans shall be secured by such securities as the lender and the 
Commissioner may require. With the Commissioner's approval, mortgages of 
individually held trust or restricted land, leasehold interests, 
chattels, crops grown on trust or restricted land, and assignments of 
trust income may all be taken as security for loans.
    (c) Title to personal property purchased with loans received from 
relending organizations using revolving loan funds in its relending 
program shall be taken in the name of the borrower.
    (d) The term of a loan made by a relending organization conducting a 
relending program shall not extend beyond the maturity date of its loan 
from the United States, unless an exception is approved by the 
Commissioner and the organization has funds available from which to make 
scheduled repayment on its loan from the United States. Loans made will 
be scheduled for repayment at the earliest possible date consistent with 
the purpose for which a loan is made and the indicated repayment 
capacity of the borrower.
    (e) Securing documents or financing statements shall be filed or 
recorded in accordance with federal or state law except those 
customarily filed in Bureau of Indian Affairs offices. Mortgages on 
documented vessels will be filed at the custom house designated as the 
home port of the vessel as shown on the marine document.

[40 FR 3587, Jan. 23, 1975. Redesignated at 47 FR 13327, Mar. 30, 1982. 
Further redesignated and amended at 57 FR 46472, Oct. 8, 1992]



Sec. 101.21  Repayments on United States direct loans.

    Repayments on United States direct loans shall be made to the 
authorized collection officer of the Bureau of Indian Affairs who shall 
issue an official receipt for the repayment and deposit the collection 
into the revolving loan fund. Collections will first be applied to pay 
interest to date of payment and the balance applied on the principal 
installment due. Collections on loans made by relending organizations 
which have been declared in default in which the Commissioner has taken 
control of the assets of the program (including loans made with balances 
owing) will be made to an authorized collection officer of the Bureau of 
Indian Affairs who shall issue a receipt to the payor and deposit the 
collection in the United States revolving loan fund. The relending 
organization's loan from the United States will be credited with the 
amounts collected from its borrowers,

[[Page 302]]

with the collections applied first on interest accrued and the balance 
applied to the principal. Payments on United States direct loans may be 
made in advance of due dates without penalty.

[40 FR 3587, Jan. 23, 1975. Redesignated at 47 FR 13327, Mar. 30, 1982. 
Further redesignated at 57 FR 46472, Oct. 8, 1992]



Sec. 101.22  Repayments on loans made by relending organizations.

    Repayments on loans made by a relending organization conducting a 
relending program will be made to the officers of the lending 
organization or individuals designated and authorized in a declaration 
of policy and plan of operation. Collections on loans and other income 
to a relending program will be deposited in the lender's revolving loan 
account as designated in a declaration of policy and plan of operation. 
Collections on loans will be first applied to pay interest to date of 
payment with the balance applied to the principal.

[40 FR 3587, Jan. 23, 1975. Redesignated at 47 FR 13327, Mar. 30, 1982. 
Further redesignated at 57 FR 46472, Oct. 8, 1992]



Sec. 101.23  Approval of articles of association and bylaws.

    Articles of association and bylaws of relending organizations and 
cooperative associations require approval of the Commissioner if they 
make application for a revolving credit loan.

[40 FR 3587, Jan. 23, 1975. Redesignated at 47 FR 13327, Mar. 30, 1982. 
Further redesignated at 57 FR 46472, Oct. 8, 1992]



Sec. 101.24  Loans for expert assistance for preparation and trial of Indian 
claims.

    (a) Loans may be made to Indian tribes, bands and other identifiable 
groups of Indians from funds authorized and appropriated under the 
provisions of section 1 of the Act of November 4, 1963 (Pub. L. 88-168, 
77 Stat. 301; 25 U.S.C. 70n-1), as amended by the Act of September 19, 
1966 (Pub. L. 89-592, 80 Stat. 814) and section 2 of the Act of May 24, 
1973 (Pub. L. 93-37, 87 Stat. 73). Loan proceeds may only be used for 
the employment of expert assistance, other than the assistance of 
counsel, for the preparation and trial of claims pending before the 
Indian Claims Commission. Applications for loans will be submitted on 
forms approved by the Commissioner and shall include a justification of 
the need for a loan. The justification shall include a statement from 
the applicant's claims attorney regarding the need for a loan. The 
application will be accompanied by a statement signed by an authorized 
officer of the applicant certifying that the applicant does not have 
adequate funds available to obtain and pay for the expert assistance 
needed. The Superintendent and the Area Director will attest to the 
accuracy of the statement or point out any inaccuracies. Loans will be 
approved by issuance of a commitment order by the Commissioner.
    (b) No loan shall be approved if the applicant has funds available 
on deposit in the United States Treasury or elsewhere in an amount 
adequate to obtain the expert assistance needed or if, in the opinion of 
the Commissioner, the fees to be paid the experts are unreasonable on 
the basis of the services to be performed by them.
    (c) Contracts for the employment of experts are subject to the 
provisions of 25 U.S.C. 81 and require approval by the Commissioner.
    (d) Vouchers or claims submitted by experts for payment for services 
rendered and reimbursement for expenses will be in accordance with the 
provisions of the expert assistance contract and shall be sufficiently 
detailed and itemized to permit an audit to determine that the amounts 
are in accordance with the contract. Vouchers or claims shall be 
reviewed by the borrower's claims attorney who will certify on the last 
page of the voucher or by attachment thereto, that the services have 
been rendered and payment is due the expert and that expenses and 
charges for work performed are in accordance with the provisions of the 
contract.
    (e) Requests for advances under the loan agreement shall be 
accompanied by a certificate signed by an authorized officer of the 
borrower certifying that the borrower does not have adequate funds 
available from its own financial resources with which to pay the expert. 
The Superintendent and Area Director will attest to the accuracy of the 
statement or point out inaccuracies. A copy of the voucher or claim from 
the expert

[[Page 303]]

will accompany the request for advance.
    (f) Loan funds will be advanced only as needed to pay obligations 
incurred under approved contracts for expert assistance. The funds will 
be deposited in a separate account, shall not be commingled with other 
funds of the borrower, and shall not be disbursed for any other purpose.
    (g) Loans shall bear interest at the rate of 5\1/2\ percent per 
annum from the date funds are advanced until the loan is repaid.
    (h) The principal amount of the loan advanced plus interest shall be 
repayable from the proceeds of any judgment received by the borrower at 
the time funds from the award become available to make the payment.

(77 Stat. 301 (25 U.S.C. 70n-1 to 70n-7))

[40 FR 3587, Jan. 23, 1975. Redesignated at 47 FR 13327, Mar. 30, 1982. 
Further redesignated at 57 FR 46472, Oct. 8, 1992]



Sec. 101.25  Information collection.

    (a) The collections of information contained in Sec. Sec. 101.3, 
101.4, 101.12, and 101.25 have been approved by the Office of Management 
and Budget under 44 U.S.C. 3501 et seq. and assigned clearance number 
1076-0020. The information will be used to rate applicants in accordance 
with the terms and conditions set forth in section 103 of the Indian 
Financing Act, as amended. Response is required to obtain a benefit in 
accordance with 25 U.S.C. 1451.
    (b) Public reporting burden for this information is estimated to 
vary from 15 minutes to 3 hours per response, with an average of one 
hour per response, including the time for reviewing instructions, 
searching existing data sources, gathering and maintaining the data 
needed, and completing and reviewing the collection of information. Send 
comments regarding this burden estimate or any other aspects of this 
collection of information, including suggestions for reducing the 
burden, to the Information Collection Clearance Officer, Bureau of 
Indian Affairs, Mailstop 337-SIB, 18th and C Streets NW., Washington, DC 
20240; and the Paperwork Reduction Project (1076-0020), Office of 
Management and Budget, Washington, DC 20503.

[54 FR 34975, Aug. 23, 1989. Redesignated at 57 FR 46472, Oct. 8, 1992]



PART 103_LOAN GUARANTY, INSURANCE, AND INTEREST SUBSIDY--Table of Contents




                      Subpart A_General Provisions

Sec.
103.1 What does this part do?
103.2 Who does the Program help?
103.3 Who administers the Program?
103.4 What kinds of loans will BIA guarantee or insure?
103.5 What size loan will BIA guarantee or insure?
103.6 To what extent will BIA guarantee or insure a loan?
103.7 Must the borrower have equity in the business being financed?
103.8 Is there any cost for a BIA guaranty or insurance coverage?

  Subpart B_How a Lender Obtains a Loan Guaranty or Insurance Coverage

103.9 Who applies to BIA under the Program?
103.10 What lenders are eligible under the Program?
103.11 How does BIA approve lenders for the Program?
103.12 How does a lender apply for a loan guaranty?
103.13 How does a lender apply for loan insurance coverage?
103.14 Can BIA request additional information?
103.15 Are there any prohibited loan terms?
103.16 How does BIA approve or reject a loan guaranty or insurance 
          application?
103.17 Must the lender follow any special procedures to close the loan?
103.18 How does BIA issue a loan guaranty or confirm loan insurance?
103.19 When must the lender pay BIA the loan guaranty or insurance 
          premium?

                       Subpart C_Interest Subsidy

103.20 What is interest subsidy?
103.21 Who applies for interest subsidy payments, and what is the 
          application procedure?
103.22 How does BIA determine the amount of interest subsidy?
103.23 How does BIA make interest subsidy payments?
103.24 How long will BIA make interest subsidy payments?

[[Page 304]]

               Subpart D_Provisions Relating to Borrowers

103.25 What kind of borrower is eligible under the Program?
103.26 What must the borrower supply the lender in its loan application?
103.27 Can the borrower get help preparing its loan application or 
          putting its loan funds to use?

                        Subpart E_Loan Transfers

103.28 What if the lender transfers part of the loan to another person?
103.29 What if the lender transfers the entire loan?

                  Subpart F_Loan Servicing Requirements

103.30 What standard of care must a lender meet?
103.31 What loan servicing requirements apply to BIA?
103.32 What sort of loan documentation does BIA expect the lender to 
          maintain?
103.33 Are there reporting requirements?
103.34 What if the lender and borrower decide to change the terms of the 
          loan?

                  Subpart G_Default and Payment by BIA

103.35 What must the lender do if the borrower defaults on the loan?
103.36 What options and remedies does the lender have if the borrower 
          defaults on the loan?
103.37 What must the lender do to collect payment under its loan 
          guaranty certificate or loan insurance coverage?
103.38 Is there anything else for BIA or the lender to do after BIA 
          makes payment?
103.39 When will BIA refuse to pay all or part of a lender's claim?
103.40 Will BIA make exceptions to its criteria for denying payment?
103.41 What happens if a lender violates provisions of this part?
103.42 How long must a lender comply with Program requirements?
103.43 What must the lender do after repayment in full?

           Subpart H_Definitions and Miscellaneous Provisions

103.44 What certain terms mean in this part.
103.45 Information collection.

    Authority: 25 U.S.C. 1498, 1511.

    Source: 66 FR 3867, Jan. 17, 2001, unless otherwise noted.



                      Subpart A_General Provisions



Sec. 103.1  What does this part do?

    This part explains how to obtain and use a BIA loan guaranty or loan 
insurance agreement under the Program, and who may do so. It also 
describes how to obtain and use interest subsidy payments under the 
Program, and who may do so.



Sec. 103.2  Who does the Program help?

    The purpose of the Program is to encourage eligible borrowers to 
develop viable Indian businesses through conventional lender financing. 
The direct function of the Program is to help lenders reduce excessive 
risks on loans they make. That function in turn helps borrowers secure 
conventional financing that might otherwise be unavailable.



Sec. 103.3  Who administers the Program?

    Authority for administering the Program ultimately rests with the 
Secretary, who may exercise that authority directly at any time. Absent 
a direct exercise of authority, however, the Secretary delegates Program 
authority to BIA officials through the U.S. Department of Interior 
Departmental Manual. A lender should submit all applications and 
correspondence to the BIA office serving the borrower's location.



Sec. 103.4  What kinds of loans will BIA guarantee or insure?

    In general, BIA may guarantee or insure any loan made by an eligible 
lender to an eligible borrower to conduct a lawful business organized 
for profit. There are several important exceptions:
    (a) The business must contribute to the economy of an Indian 
reservation or tribal service area recognized by BIA;
    (b) The borrower may not use the loan for relending purposes;
    (c) If any portion of the loan is used to refinance an existing 
loan, the borrower must be current on the existing loan; and
    (d) BIA may not guarantee or insure a loan if it believes the lender 
would be

[[Page 305]]

willing to extend the requested financing without a BIA guaranty or 
insurance coverage.



Sec. 103.5  What size loan will BIA guarantee or insure?

    BIA can guarantee or insure a loan or combination of loans of up to 
$500,000 for an individual Indian, or more for an acceptable Indian 
business entity, Tribe, or tribal enterprise involving two or more 
persons. No individual Indian may have an outstanding principal balance 
of more than $500,000 in guaranteed or insured loans at any time. BIA 
can limit the size of loans it will guarantee or insure, depending on 
the resources BIA has available.



Sec. 103.6  To what extent will BIA guarantee or insure a loan?

    (a) BIA can guarantee up to 90 percent of the unpaid principal and 
accrued interest due on a loan.
    (b) BIA can insure up to the lesser of:
    (1) 90 percent of the unpaid principal and accrued interest due on a 
loan; or
    (2) 15 percent of the aggregate outstanding principal amount of all 
loans the lender has insured under the Program as of the date the lender 
makes a claim under its insurance coverage.
    (c) BIA's guaranty certificate or loan insurance agreement should 
reflect the lowest guaranty or insurance percentage rate that satisfies 
the lender's risk management requirements.
    (d) Absent exceptional circumstances, BIA will allow no more than:
    (1) Two simultaneous guarantees under the Program covering 
outstanding loans from the same lender to the same borrower; or
    (2) One loan guaranty under the Program when the lender 
simultaneously has one or more outstanding loans insured under the 
Program to the same borrower.



Sec. 103.7  Must the borrower have equity in the business being financed?

    The borrower must be projected to have at least 20 percent equity in 
the business being financed, immediately after the loan is funded. If a 
substantial portion of the loan is for construction or renovation, the 
borrower's equity may be calculated based upon the reasonable estimated 
value of the borrower's assets after completion of the construction or 
renovation.



Sec. 103.8  Is there any cost for a BIA guaranty or insurance coverage?

    BIA charges the lender a premium for a guaranty or insurance 
coverage.
    (a) The premium is:
    (1) Two percent of the portion of the original loan principal amount 
that BIA guarantees; or
    (2) One percent of the portion of the original loan principal amount 
that BIA insures, without considering the 15 percent aggregate 
outstanding principal limitation on the lender's insured loans.
    (b) Lenders may pass the cost of the premium on to the borrower, 
either by charging a one-time fee or by adding the cost to the principal 
amount of the borrower's loan. Adding the premium to the principal 
amount of the loan will not make any further premium due. BIA will 
guarantee or insure the additional principal to the same extent as the 
original approved principal amount.



  Subpart B_How a Lender Obtains a Loan Guaranty or Insurance Coverage



Sec. 103.9  Who applies to BIA under the Program?

    The lender is responsible for determining whether it will require a 
BIA guaranty or insurance coverage, based upon the loan application it 
receives from an eligible borrower. If the lender requires a BIA 
guaranty or insurance coverage, the lender is responsible for completing 
and submitting a guaranty application or complying with a loan insurance 
agreement under the Program.



Sec. 103.10  What lenders are eligible under the Program?

    (a) Except as specified in paragraph (b) of this section, a lender 
is eligible under the Program, and may be considered for BIA approval, 
if the lender is:
    (1) Regularly engaged in the business of making loans;

[[Page 306]]

    (2) Capable of evaluating and servicing loans in accordance with 
reasonable and prudent industry standards; and
    (3) Otherwise reasonably acceptable to BIA.
    (b) The following lenders are not qualified to issue loans under the 
Program:
    (1) An agency or instrumentality of the Federal Government;
    (2) A lender that borrows money from any Federal Government source, 
other than the Federal Reserve Bank System, for purposes of relending;
    (3) A lender that does not include the interest on loans it makes in 
gross income, for purposes of chapter 1, title 26 of the United States 
Code; and
    (4) A lender that does not keep any ownership interest in loans it 
originates.



Sec. 103.11  How does BIA approve lenders for the Program?

    (a) BIA approves each lender by entering into a loan guaranty 
agreement and/or a loan insurance agreement with it. BIA may provide up 
to three different levels of approval for a lender making guaranteed 
loans, depending on factors such as:
    (1) The number of loans the lender makes under the Program;
    (2) The total principal balance of the lender's Program loans;
    (3) The number of years the lender has been involved with the 
Program;
    (4) The relative benefits and opportunities the lender has given to 
Indian business efforts through the Program; and
    (5) The lender's historical compliance with Program requirements.
    (b) BIA will consider a lender's loan guaranty agreement and/or loan 
insurance agreement suspended as of:
    (1) The effective date of a change in the lender's corporate 
structure;
    (2) The effective date of a merger between the lender and any other 
entity, when the lender is not the surviving entity; or
    (3) The start of any legal proceeding in which substantially all of 
the lender's assets may be subject to disposition through laws governing 
bankruptcy, insolvency, or receivership.
    (c) A change in a lender's name, without any other change specified 
under paragraph (b) of this section, will not cause a suspension of the 
lender's loan guaranty agreement and/or loan insurance agreement. The 
lender should notify BIA of its name change as soon as possible.
    (d) If a lender's loan guaranty agreement and/or loan insurance 
agreement is suspended under paragraph (b) of this section, the lender, 
or its successor in interest, must enter into a new loan guaranty 
agreement and/or loan insurance agreement with BIA in order to secure 
any new BIA loan guarantees or insurance coverage.
    (e) The suspension of a loan guaranty agreement and/or loan 
insurance agreement does not affect the validity of any guaranty 
certificate or insurance coverage in effect before the date of the 
suspension. Any such certificate or insurance coverage will remain 
governed by applicable terms of the suspended loan guaranty agreement 
and/or loan insurance agreement.



Sec. 103.12  How does a lender apply for a loan guaranty?

    To apply for a loan guaranty, a BIA-approved lender must submit to 
BIA a loan guaranty application request form, together with each of the 
following:
    (a) A written explanation from the lender indicating why it needs a 
BIA guaranty for the loan, and the minimum loan guarantee percentage it 
will accept;
    (b) A copy of the borrower's complete loan application;
    (c) A description of the borrower's equity in the business being 
financed;
    (d) A copy of the lender's independent credit analysis of the 
borrower's business, repayment ability, and loan collateral (including 
insurance);
    (e) An original report from a nationally-recognized credit bureau, 
dated within 90 days of the date of the lender's loan guaranty 
application package, outlining the credit history of the borrower, and 
to the extent permitted by law, each co-maker or guarantor of the loan 
(if any);
    (f) A copy of the lender's loan commitment letter to the borrower, 
showing at a minimum the proposed loan

[[Page 307]]

amount, purpose, interest rate, schedule of payments, and security 
(including insurance requirements), and the lender's terms and 
conditions for funding;
    (g) The lender's good faith estimate of any loan-related fees and 
costs it will charge the borrower, as authorized under this part;
    (h) If any significant portion of the loan will be used to finance 
construction, renovation, or demolition work, the lender's:
    (1) Insurance and bonding requirements for the work;
    (2) Proposed draw requirements; and
    (3) Proposed work inspection procedures;
    (i) If any significant portion of the loan will be used to refinance 
or otherwise retire existing indebtedness:
    (1) A clear description of all loans being paid off, including the 
names of all makers, cosigners and guarantors, maturity dates, payment 
schedules, uncured delinquencies, collateral, and payoff amounts as of a 
specific date; and
    (2) A comparison of the terms of the loan or loans being paid off 
and the terms of the new loan, identifying the advantages of the new 
loan over the loan being paid off.



Sec. 103.13  How does a lender apply for loan insurance coverage?

    BIA-approved lenders can make loans insured under the Program in two 
ways, depending on the size of the loan:
    (a) For loans in an original principal amount of up to $100,000 per 
borrower, the lender can make each loan in accordance with the lender's 
loan insurance agreement, without specific prior approval from BIA.
    (b) For loans in an original principal amount of over $100,000, the 
lender must seek BIA's specific prior approval in each case. The lender 
must submit a loan insurance coverage application request form, together 
with the same information required for a loan guaranty under Sec. 
103.12, except for the information required by Sec. 103.12(a).
    (c) The lender must submit a loan insurance application package even 
for a loan of less than $100,000 if:
    (1) The total outstanding balance of all insured loans the lender is 
extending to the borrower under the Program exceeds $100,000; or
    (2) the lender makes a request for interest subsidy, pursuant to 
Sec. 103.21.



Sec. 103.14  Can BIA request additional information?

    BIA may require the lender to provide additional information, 
whenever BIA believes it needs the information to properly evaluate a 
new lender, guaranty application, or insurance application. After BIA 
issues a loan guaranty or insurance coverage, the lender must let BIA 
inspect the lender's records at any reasonable time for information 
concerning the Program.



Sec. 103.15  Are there any prohibited loan terms?

    A loan agreement guaranteed or insured under the Program may not 
contain:
    (a) Charges by the lender styled as ``points,'' loan origination 
fees, or any similar fees (however named), except that if authorized in 
the loan agreement, the lender may charge the borrower a reasonable 
annual loan servicing fee that:
    (1) Is not included as part of the loan principal; and
    (2) Does not bear interest;
    (b) Charges of any kind by the lender or by any third party except 
for the reasonable and customary cost of legal and architectural 
services, broker commissions, surveys, compliance inspections, title 
inspection and/or insurance, lien searches, appraisals, recording costs, 
premiums for required hazard, liability, key man life, and other kinds 
of insurance, and such other charges as BIA may approve in writing;
    (c) A loan repayment term of over 30 years;
    (d) Payments scheduled less frequently than annually;
    (e) A prepayment penalty, unless the terms of the penalty are 
clearly specified in BIA's loan guaranty or loan insurance conditions;
    (f) An interest rate greater than what BIA considers reasonable, 
taking into account the range of rates prevailing in the private market 
for similar loans;
    (g) A variable interest rate, unless the rate is tied to a specific 
prime rate

[[Page 308]]

published from time to time by a nationally recognized financial 
institution or news source;
    (h) An increased rate of interest based on default;
    (i) A fee imposed for the late repayment of any installment due, 
except for a late fee that:
    (1) Is imposed only after the borrower is at least 30 days late with 
payment;
    (2) Does not bear interest; and
    (3) Equals no more than 5 percent of the late installment;
    (j) An ``insecurity'' clause, or any similar provision permitting 
the lender to declare a loan default solely on the basis of its 
subjective view of the borrower's changed repayment prospects;
    (k) A requirement that the borrower take title to any real or 
personal property purchased with loan proceeds by a title instrument 
containing restrictions on alienation, control or use of the property, 
unless otherwise required by applicable law; or
    (l) A requirement that a borrower which is a tribe provide as 
security a general assignment of the tribe's trust income. If otherwise 
lawful, a tribe may provide as loan security an assignment of trust 
income from a specific source.



Sec. 103.16  How does BIA approve or reject a loan guaranty or insurance 
application?

    (a) BIA reviews each guaranty or insurance application, and may 
evaluate each loan application independently from the lender. BIA bases 
its loan guaranty or insurance decisions on many factors, including 
compliance with this part, and whether there is a reasonable prospect of 
loan repayment from business cash flow, or if necessary, from 
liquidating loan collateral. Lenders are expected to obtain a first lien 
security interest in enough collateral to reasonably secure repayment of 
each loan guaranteed or insured under the Program, to the extent that 
collateral is available.
    (b) BIA approves applications by issuing an approval letter, 
followed by the procedures in Sec. 103.18. If the guaranty or insurance 
application is incomplete, BIA may return the application to the lender, 
or hold the application while the lender submits the missing 
information. If BIA denies the application, it will provide the lender 
with a written explanation, with a copy to the borrower.



Sec. 103.17  Must the lender follow any special procedures to close the loan?

    (a) BIA officials or their representatives may attend the closing of 
any loan or loan modification that BIA agrees to guarantee or insure. 
For guaranteed loans, and insured loans that BIA must individually 
review under this part, the lender must give BIA notice of the date of 
closing at least 5 business days before closing occurs.
    (b) At or prior to closing, the lender must obtain appropriate, 
satisfactory title and/or lien searches for each asset to be used as 
loan collateral.
    (c) At or prior to closing, the lender must obtain recent appraisals 
for all real property and improvements to be used as collateral for the 
loan, to the extent required by law.
    (d) At or prior to closing, the lender must document that the lender 
and borrower have complied with all applicable Federal, State, local, 
and tribal laws implicated by financing the borrower's business, for 
example by securing:
    (1) Copies of all permits and licenses required to operate the 
borrower's business;
    (2) Environmental studies required for construction and/or business 
operations under NEPA and other environmental laws;
    (3) Archeological or historical studies required by law; and
    (4) Certification by a registered surveyor or appropriate BIA 
official indicating that the proposed business will not be located in a 
special flood hazard area, as defined by applicable law.
    (e) The lender must supply BIA with copies of all final, signed loan 
closing documents within 30 days following closing. To the extent 
applicable, loan closing documents must include the following:
    (1) Promissory notes;
    (2) Security agreements, including pledge and similar agreements, 
and related financing statements (together

[[Page 309]]

with BIA's written approval of any assignment of specific tribal trust 
assets under Sec. 103.15(l), or of any security interest in an 
individual Indian money account);
    (3) Mortgage instruments or deeds of trust (together with BIA's 
written approval, if required by 25 U.S.C. 483a, or if the mortgage is 
of a leasehold interest in tribal trust property);
    (4) Guarantees (other than from BIA);
    (5) Construction contracts, and plans and specifications;
    (6) Leases related to the business (together with BIA's written 
approval, if required under 25 CFR part 162);
    (7) Attorney opinion letters;
    (8) Resolutions made by a Tribe or business entity;
    (9) Waivers or partial waivers of sovereign immunity; and
    (10) Similar instruments designed to document the loan, establish 
the basis for a security interest in loan collateral, and comply with 
applicable law.
    (f) Unless BIA indicates otherwise in writing, the lender must close 
a guaranteed or insured loan within 90 days of any approval provided 
under Sec. 103.16.



Sec. 103.18  How does BIA issue a loan guaranty or confirm loan insurance?

    (a) A loan is guaranteed under the Program when all of the following 
occur:
    (1) BIA issues a signed loan guaranty certificate bearing a series 
number, an authorized signature, a guaranty percentage rate, the 
lender's name, the borrower's name, the original principal amount of the 
loan, and such other terms and conditions as BIA may require;
    (2) The loan closes and funds;
    (3) The lender pays BIA the applicable loan guaranty premium; and
    (4) The lender meets all of the conditions listed in the loan 
guaranty certificate.
    (b) A loan is insured under the Program when all of the following 
occur:
    (1) The loan's purpose and terms meet the requirements of the 
Program and the lender's loan insurance agreement with BIA;
    (2) The loan closes and funds;
    (3) The lender notifies BIA of the borrower's identity and 
organizational structure, the amount of the loan, the interest rate, the 
payment schedule, and the date on which the loan closing and funding 
occurred;
    (4) The lender pays BIA the applicable loan insurance premium;
    (5) If over $100,000 or if the loan requires interest subsidy, BIA 
approves the loan in writing; and
    (6) If over $100,000 or if the loan requires interest subsidy, the 
lender meets all of the conditions listed in BIA's written loan 
approval.



Sec. 103.19  When must the lender pay BIA the loan guaranty or insurance premium?

    The premium is due within 30 calendar days of the loan closing. If 
not paid on time, BIA will send the lender written notice by certified 
mail (return receipt requested), or by a nationally-recognized overnight 
delivery service (signature of recipient required), stating that the 
premium is due immediately. If the lender fails to make the premium 
payment within 30 calendar days of the date of BIA's notice, BIA's 
guaranty certificate or insurance coverage with respect to that 
particular loan is void, without further action.



                       Subpart C_Interest Subsidy



Sec. 103.20  What is interest subsidy?

    Interest subsidy is a payment BIA makes for the benefit of the 
borrower, to reimburse part of the interest payments the borrower has 
made on a loan guaranteed or insured under the Program. It is available 
to borrowers whose projected or historical earnings before interest and 
taxes, after adjustment for extraordinary items, is less than the 
industry norm.



Sec. 103.21  Who applies for interest subsidy payments, and what is the 
application procedure?

    (a) An eligible lender must request interest subsidy payments on 
behalf of an eligible borrower, after determining that the borrower 
qualifies. Typically, the lender should include a request for interest 
subsidy at the time it applies for a guaranty or insurance coverage 
under the Program. A request for interest subsidy must be supported by 
the information required in Sec. Sec. 103.12 and

[[Page 310]]

103.13 (relating to loan guaranty and insurance coverage applications). 
BIA approves, returns, or rejects interest subsidy requests in the same 
manner indicated in Sec. 103.16, based on the factors in Sec. 103.20 
and BIA's available resources.
    (b) BIA's approval of interest subsidy for an insured loan may 
provide for specific limitations on the manner in which the lender and 
borrower can modify the loan.



Sec. 103.22  How does BIA determine the amount of interest subsidy?

    Interest subsidy payments should equal the difference between the 
lender's rate of interest and the rate determined in accordance with 25 
U.S.C. 1464. BIA will fix the amount of interest subsidy as of the date 
it approves the interest subsidy request.

[66 FR 3867, Jan. 17, 2001, as amended at 67 FR 63543, Oct. 15, 2002]



Sec. 103.23  How does BIA make interest subsidy payments?

    The lender must send BIA reports at least quarterly on the 
borrower's loan payment history, together with a calculation of the 
interest subsidy then due. The lender's reports and calculation do not 
have to be in any specific format, but in addition to the calculation 
the reports must contain at least the information required by Sec. 
103.33(a). Based on the lender's reports and calculation, BIA will send 
interest subsidy payments to the borrower in care of the lender. The 
payments belong to the borrower, but the borrower and lender may agree 
in advance on how the borrower will use interest subsidy payments. BIA 
may verify and correct interest subsidy calculations and payments at any 
time.



Sec. 103.24  How long will BIA make interest subsidy payments?

    (a) BIA will issue interest subsidy payments for the term of the 
loan, up to 3 years. If interest subsidy payments still are justified, 
the lender may apply for up to two 1-year extensions of this initial 
term. BIA will make interest subsidy payments on a single loan for no 
more than 5 years.
    (b) BIA will choose the date from which it calculates interest 
subsidy years, usually the date the lender first extends the loan funds. 
Interest subsidy payments will apply to all loan payments made in the 
calendar years following that date.
    (c) Interest subsidy payments will not be due for any loan payment 
made after the corresponding loan guaranty or insurance coverage stops 
under the Program, regardless of the circumstances.



               Subpart D_Provisions Relating to Borrowers



Sec. 103.25  What kind of borrower is eligible under the Program?

    (a) A borrower is eligible for a BIA-guaranteed or insured loan if 
the borrower is:
    (1) An Indian individual;
    (2) An Indian-owned business entity organized under Federal, State, 
or tribal law, with an organizational structure reasonably acceptable to 
BIA;
    (3) A tribe; or
    (4) A business enterprise established and recognized by a tribe.
    (b) To be eligible for a BIA-guaranteed or insured loan, a business 
entity or tribal enterprise must be at least 51 percent owned by 
Indians. If at any time a business entity or tribal enterprise becomes 
less than 51 percent Indian owned, the lender either may declare a 
default as of the date the borrower stopped being at least 51 percent 
Indian owned and exercise its remedies under this part, or else continue 
to extend the loan to the borrower and allow BIA's guaranty or insurance 
coverage to become invalid.

[66 FR 3867, Jan. 17, 2001; 66 FR 46307, Sept. 4, 2001]



Sec. 103.26  What must the borrower supply the lender in its loan application?

    The lender may use any form of loan application it chooses. However, 
the borrower must supply the lender the information listed in this 
section in order for BIA to process a guaranty or insurance coverage 
application:
    (a) The borrower's precise legal name, address, and tax 
identification number or social security number;
    (b) Proof of the borrower's eligibility under the Program;

[[Page 311]]

    (c) A statement signed by the borrower, indicating that it is not 
delinquent on any Federal tax or other debt obligation;
    (d) The borrower's business plan, including resumes of all 
principals and a detailed discussion of the product or service to be 
offered, market factors, the borrower's marketing strategy, and any 
technical assistance the borrower may require;
    (e) A detailed description of the borrower's equity in the business 
being financed, including the method(s) of valuation;
    (f) The borrower's balance sheets and operating statements for the 
preceding 3 years, or so much of that period that the borrower has been 
in business;
    (g) The borrower's current financial statement, and the financial 
statements of all co-makers and guarantors of the loan (other than BIA);
    (h) At least 3 years of financial projections for the borrower's 
business, consisting of pro-forma balance sheets, operating statements, 
and cash flow statements;
    (i) A detailed list of all proposed collateral for the loan, 
including asset values and the method(s) of valuation;
    (j) A detailed list of all proposed hazard, liability, key man life, 
and other kinds of insurance the borrower will maintain on its business 
assets and operations;
    (k) If any significant portion of the loan will be used to finance 
construction, renovation, or demolition work:
    (1) Written quotes for the work from established and reputable 
contractors; and
    (2) To the extent available, copies of all construction and 
architectural contracts for the work, plans and specifications, and 
applicable building permits;
    (l) If the borrower is a tribe or a tribal enterprise, resolutions 
by the tribe and proof of authority under tribal law permitting the 
borrower to borrow the loan amount and offer the proposed loan 
collateral; and
    (m) If the borrower is a business entity, resolutions by the 
appropriate governing officials and proof of authority under its 
organizing documents permitting the borrower to borrow the loan amount 
and offer the proposed loan collateral.



Sec. 103.27  Can the borrower get help preparing its loan application 
or putting its loan funds to use?

    A borrower may seek BIA's assistance when preparing a loan 
application or when planning business operations, including assistance 
identifying and complying with applicable laws as indicated by Sec. 
103.17(d). The borrower should contact the BIA field or agency office 
serving the area in which the borrower's business is to be located, or 
if there is no separate field or agency office serving the area, then 
the borrower should contact the BIA regional office serving the area.



                        Subpart E_Loan Transfers



Sec. 103.28  What if the lender transfers part of the loan to another person?

    (a) A lender may transfer one or more interests in a guaranteed loan 
to another person or persons, as long as the parties have in place an 
agreement that designates one person to perform all of the duties 
required of the lender under the Program and the loan guaranty 
certificate. Starting on the date of the transfer, only the person 
designated to perform the duties of the lender will be entitled to 
exercise the rights conferred by BIA's loan guaranty certificate, and 
will from that point forward be considered the lender for purposes of 
the Program. A lender under the Program must both service the guaranteed 
loan and own at least a 10 percent interest in the guaranteed loan. BIA 
will not consider more than one person at any given time to be the 
lender with respect to any loan guaranty certificate. If the person 
designated to perform the duties of the lender in an agreement among 
loan participants is not the original lender, then the provisions of 
Sec. 103.29(a) will apply (relating to sale or assignment of guaranteed 
loans), and the person designated to perform the duties of the lender 
must give BIA notice of its interest in the loan. Failure to provide 
notice in accordance with Sec. 103.29(a) will void BIA's loan guaranty 
certificate, without further action.

[[Page 312]]

    (b) Transferring any interest in an insured loan to another person 
will void the insurance coverage for that loan, except where the 
transfer is effected by a merger.



Sec. 103.29  What if the lender transfers the entire loan?

    (a) A lender may transfer all of its rights in a guaranteed loan to 
any other person. The acquiring person must send BIA written notice of 
the transfer, describing the borrower, the loan, BIA's loan guaranty 
certificate number, and the acquiring person's name and address. 
Starting on the date of the transfer, only the acquiring person will be 
entitled to exercise the rights conferred by BIA's loan guaranty 
certificate, and will from that point forward be considered the lender 
for purposes of the Program. The acquiring person must service the 
guaranteed loan and otherwise perform all of the duties required of the 
lender under the Program and the loan guaranty certificate. Except when 
a transfer is effected by a merger, any failure by the acquiring person 
to send BIA proper notice of the transfer within 30 calendar days of the 
transfer date will void BIA's loan guaranty certificate, without further 
action.
    (b) Transferring an insured loan to another person will void the 
insurance coverage for that loan, except where the transfer is effected 
by a merger.
    (c) If a lender is not the surviving entity after a merger, the 
lender's successor must notify BIA in writing of the change within 30 
calendar days of the merger. The lender also must re-apply to become an 
approved lender under the Program, as indicated in Sec. 103.11.



                  Subpart F_Loan Servicing Requirements



Sec. 103.30  What standard of care must a lender meet?

    Lenders must service all loans guaranteed or insured under the 
Program in a commercially reasonable manner, in accordance with 
standards and procedures adopted by prudent lenders in the BIA region in 
which the borrower's business is located, and in accordance with this 
part. If the lender fails to follow any of these standards, BIA may 
reduce or eliminate entirely the amount payable under its guaranty or 
insurance coverage to the extent BIA can reasonably attribute the loss 
to the lender's failure. BIA also may deny payment completely if the 
lender gets a loan guaranty or insurance coverage through fraud, or 
negligently allows a borrower's fraudulent loan application or use of 
loan funds to go undetected. In particular, and without limitation, 
lenders must:
    (a) Check and verify information contained in the borrower's loan 
application, such as the borrower's eligibility, the authority of 
persons acting on behalf of the borrower, and the title status of any 
proposed collateral;
    (b) Take reasonable precautions to assure that loan proceeds are 
used as specified in BIA's guaranty certificate or written insurance 
approval, or if not so specified, then in descending order of 
importance:
    (1) BIA's written loan guaranty approval;
    (2) The loan documents;
    (3) The terms of the lender's final loan commitment to the borrower; 
or
    (4) The borrower's loan application;
    (c) When feasible, require the borrower to use automatic bank 
account debiting to make loan payments;
    (d) Require the borrower to take title to real and personal property 
purchased with loan proceeds in the borrower's own name, except for real 
property to be held in trust by the United States for the benefit of a 
borrower that is a tribe;
    (e) Promptly record all security interests and subsequently keep 
them in effect. Lenders must record all mortgages and other security 
interests in accordance with State and local law, including the laws of 
any tribe that may have jurisdiction. Lenders also must record any 
leasehold mortgages or assignments of income involving individual Indian 
or tribal trust land with the BIA office having responsibility for 
maintaining records on that trust land;
    (f) Assure, to the extent reasonably practicable, that the borrower 
and any guarantor of the loan (other than BIA) keep current on all taxes 
levied on real

[[Page 313]]

and personal property used in the borrower's business or as collateral 
for the loan, and on all applicable payroll taxes;
    (g) Assure, to the extent reasonably practicable, that all required 
insurance policies remain in effect, including hazard, liability, key 
man life, and other kinds of insurance, in amounts reasonably necessary 
to protect the interests of the borrower, the borrower's business, and 
the lender;
    (h) Assure, to the extent reasonably practicable, that the borrower 
remains in compliance with all applicable Federal, State, local and 
tribal laws, including environmental laws and laws concerning the 
preservation of historical and archeological sites and data;
    (i) Assure, to the extent reasonably practicable, that the borrower 
causes any construction, renovation, or demolition work funded by the 
loan to proceed in accordance with approved construction contracts and 
plans and specifications, which must be sufficient in scope and detail 
to adequately govern the work;
    (j) Reserve for itself and BIA the right to inspect the borrower's 
business records and all loan collateral at any reasonable time;
    (k) Promptly notify the borrower in writing of any material breach 
by the borrower of the terms of its loan, with specific instructions on 
how to cure the breach and a deadline for doing so;
    (l) Participate in any probate, receivership, bankruptcy, or similar 
proceeding involving the borrower and any guarantor or co-maker of the 
borrower's debt, to the extent necessary to maintain the greatest 
possible rights to repayment; and
    (m) Otherwise seek to avoid and mitigate any potential loss arising 
from the loan, using at least that level of care the lender would use if 
it did not have a BIA loan guaranty or insurance coverage.



Sec. 103.31  What loan servicing requirements apply to BIA?

    Once a lender extends a loan that is guaranteed or insured under the 
Program, BIA has no responsibility for decisions concerning it, except 
for:
    (a) Any approvals required under this part;
    (b) Any decisions reserved to BIA under conditions of BIA's guaranty 
certificate or insurance coverage; and
    (c) Decisions concerning a loan that the lender has assigned to BIA 
or to which BIA is subrogated by virtue of paying a claim based on a 
guaranty certificate or insurance coverage.



Sec. 103.32  What sort of loan documentation does BIA expect the lender 
to maintain?

    For every loan guaranteed or insured under the Program, the lender 
must maintain:
    (a) BIA's original loan guaranty certificate or insurance coverage 
approval letter, if applicable;
    (b) Original signed and/or certified counterparts of all final loan 
documents, including those listed in Sec. 103.17 (concerning documents 
required for loan closing), all renewals, modifications, and additions 
to those documents, and signed settlement statements;
    (c) Originals or copies, as appropriate, of all documents gathered 
by the lender under Sec. Sec. 103.12, 103.13 and 103.26 (concerning 
information submitted by the borrower in its loan application, and 
information supplied to BIA in the lender's loan guaranty or insurance 
coverage application);
    (d) Originals or copies, as appropriate, of all applicable insurance 
binders or certificates, including without limitation hazard, liability, 
key man life, and title insurance;
    (e) A complete and current history of all loan transactions, 
including dated disbursements, payments, adjustments, and notes 
describing all contacts with the borrower;
    (f) Originals or copies, as appropriate, of all correspondence with 
the borrower, including default notices and evidence of receipt;
    (g) Originals or copies, as appropriate, of all correspondence, 
notices, news items or other information concerning the borrower, 
whether gathered by the lender or furnished to it, containing material 
information about the borrower and its business operations;
    (h) Originals or copies, as appropriate, of all advertisements, 
notices, title instruments, accountings, and

[[Page 314]]

other documentation of efforts to liquidate loan collateral; and
    (i) Originals or copies, as appropriate, of all notices, pleadings, 
motions, orders, and other documents associated with any legal 
proceeding involving the lender and the borrower or its assets, 
including without limitation judicial or non-judicial foreclosure 
proceedings, suits to collect payment, bankruptcy proceedings, probate 
proceedings, and any settlement associated with threatened or actual 
litigation.



Sec. 103.33  Are there reporting requirements?

    (a) The lender must periodically report the borrower's loan payment 
history so that BIA can recalculate the government's contingent 
liability. Loan payment history reports must be quarterly unless BIA 
provides otherwise for a particular loan. These reports can be in any 
format the lender desires, as long as they contain:
    (1) The lender's name;
    (2) The borrower's name;
    (3) A reference to BIA's Loan Guaranty Certificate or Loan Insurance 
Agreement number;
    (4) The lender's internal loan number; and
    (5) The date and amount of all loan balance activity for the 
reporting period.
    (b) If applicable, the lender must supply a calculation of any 
interest subsidy payments that are due, as indicated in Sec. 103.23.
    (c) If there is a transfer of any or all of the lender's ownership 
interest in the loan, the party receiving the ownership interest may be 
required to notify BIA, as indicated in Sec. Sec. 103.28 and 103.29.
    (d) If there is a default on the loan, the lender must notify BIA, 
as indicated in Sec. Sec. 103.35 and 103.36.
    (e) If the borrower ceases to qualify for a BIA-guaranteed or 
insured loan under Sec. 103.25(b), the lender must promptly notify BIA 
even if the lender does not pursue default remedies under Sec. Sec. 
103.35 and 103.36. This notice allows BIA to eliminate the guaranty or 
insurance coverage from its active recordkeeping system.
    (f) If the loan is prepaid in full, the lender must promptly notify 
BIA in writing so that BIA can eliminate the guaranty or insurance 
coverage from its active recordkeeping system.
    (g) If a lender changes its name, it should notify BIA in accordance 
with Sec. 103.11(c).



Sec. 103.34  What if the lender and borrower decide to change the terms 
of the loan?

    (a) The lender must obtain written BIA approval before modifying a 
loan guaranteed or insured under the Program, if the change will:
    (1) Increase the borrower's outstanding principal amount (if a term 
loan), or maximum available credit (if a revolving loan).
    (i) BIA will approve or disapprove a loan increase based upon the 
lender's explanation of the borrower's need for additional funding, and 
updated information of the sort required under Sec. Sec. 103.12, 
103.13, and 103.26, as applicable.
    (ii) Upon approval by BIA and payment of an additional guaranty or 
insurance premium in accordance with Sec. Sec. 103.8 and 103.19 and 
this section, the entire outstanding loan amount, as modified, will be 
guaranteed or insured (as the case may be) to the extent BIA specifies. 
The lender must pay the additional premium only on the increase in the 
outstanding principal amount of the loan (if a term loan) or the 
increase in the credit limit available to the borrower (if a revolving 
loan).
    (iii) Lenders may not increase the outstanding principal amount of a 
loan guaranteed or insured under the Program if a significant purpose of 
doing so would be to allow the borrower to pay accrued loan interest it 
otherwise would have difficulty paying.
    (2) Permanently adjust the loan repayment schedule.
    (3) Increase a fixed interest rate, convert a fixed interest rate to 
an adjustable interest rate, or convert an adjustable interest rate to a 
fixed interest rate.
    (4) Allow any changes in the identity or organizational structure of 
the borrower.
    (5) Allow any material change in the use of loan proceeds or the 
nature of the borrower's business.
    (6) Release any collateral taken as security for the loan, except 
items sold

[[Page 315]]

in the ordinary course of business and promptly replaced by similar 
items of collateral, such as inventory.
    (7) Allow the borrower to move any significant portion of its 
business operations to a location that is not on or near an Indian 
reservation or tribal service area recognized by BIA.
    (8) Be likely to materially increase the risk of a claim on BIA's 
guaranty or insurance coverage, or materially reduce the aggregate value 
of the collateral securing the loan.
    (9) Cure a default for which BIA is to receive notice under Sec. 
103.35(b).
    (b) In the case of an insured loan, the amount of which will not 
exceed $100,000 when combined with all other insured loans from the 
lender to the borrower, the lender need not obtain BIA's prior approval 
to make any of the loan modifications indicated in Sec. 103.34(a), 
except as provided in Sec. 103.21(b). However, all loan modifications 
must remain consistent with the lender's loan insurance agreement with 
BIA, and in the event of an increase in the borrower's outstanding 
principal amount (if a term loan), or maximum available credit (if a 
revolving loan), the lender must send BIA an additional premium payment 
in accordance with Sec. Sec. 103.8, 103.19 and this section. The lender 
must pay the additional premium only on the increase in the outstanding 
principal amount of the loan (if a term loan) or the increase in the 
credit limit available to the borrower (if a revolving loan). To the 
extent a loan modification changes any of the information supplied to 
BIA under Sec. 103.18(b)(3), the lender also must promptly notify BIA 
of the new information.
    (c) Subject to any applicable BIA loan guaranty or insurance 
coverage conditions, a lender may extend additional loans to a borrower 
without BIA approval, if the additional loans are not to be guaranteed 
or insured under the Program.



                  Subpart G_Default and Payment by BIA



Sec. 103.35  What must the lender do if the borrower defaults on the loan?

    (a) The lender must send written notice of the default to the 
borrower, and otherwise meet the standard of care established for the 
lender in this part. The lender's notice to the borrower should be sent 
as soon as possible after the default, but in any event before the 
lender's notice to BIA under paragraph (b) of this section. For purposes 
of the Program, ``default'' will mean a default as defined in this part.
    (b) The lender also must send written notice of the default to BIA 
by certified mail (return receipt requested), or by a nationally-
recognized overnight delivery service (signature of recipient required) 
within 60 calendar days of the default, unless the default is fully 
cured before that deadline. This notice is required even if the lender 
grants the borrower a forbearance under Sec. 103.36(a). One purpose of 
the notice is to give BIA the opportunity to intervene and seek 
assistance for the borrower, even though BIA has no duty, either to the 
lender or the borrower, to do so. Another purpose of the notice is to 
permit BIA to plan for a possible loss claim from the lender, under 
Sec. 103.36(d). The lender's notice must clearly indicate:
    (1) The identity of the borrower;
    (2) The applicable Program guaranty certificate or insurance 
agreement number;
    (3) The date and nature of all bases for default;
    (4) If a monetary default, the amount of past due principal and 
interest, the date through which interest has been calculated, and the 
amount of any late fees, precautionary advances, or other amounts the 
lender claims;
    (5) The nature and outcome of any correspondence or other contacts 
with the borrower concerning the default; and
    (6) The precise nature of any action the borrower could take to cure 
the default.



Sec. 103.36  What options and remedies does the lender have if the borrower 
defaults on the loan?

    (a) The lender may grant the borrower a temporary forbearance, even 
beyond any default cure periods specified in the loan documents, if 
doing so

[[Page 316]]

is likely to result in the borrower curing the default. However, BIA 
must approve in writing any forbearance or other agreement that:
    (1) Permanently modifies the terms of the loan in any manner 
indicated by Sec. 103.34(a);
    (2) Would allow the borrower's default to extend beyond the deadline 
established in Sec. 103.36(d) for the lender to elect a remedy; or
    (3) Is not likely to result in the borrower curing the default.
    (b) The lender may make precautionary advances on the borrower's 
behalf during the default, if doing so is reasonably necessary to ensure 
that loan recovery prospects do not significantly deteriorate. Items for 
which the lender may make precautionary advances include, for example:
    (1) Hazard, liability, or key man life insurance premiums;
    (2) Security measures to safeguard abandoned business assets;
    (3) Real or personal property taxes;
    (4) Corrective actions required by court or administrative orders; 
or
    (5) Essential maintenance.
    (c) BIA will guaranty or insure the amount of precautionary advances 
from the date of each advance to the same extent as other amounts due 
under the loan, if:
    (1) The borrower has demonstrated its inability or unwillingness to 
make the payment or perform the duty that jeopardizes loan recovery, 
including by undue delay in making the payment or performing the duty;
    (2) The total expense of all precautionary advances by the lender 
does not at the time of the advance exceed 10 percent of the outstanding 
principal balance of the loan;
    (3) Where loan document provisions do not require the borrower to 
repay precautionary advances (however termed) when made by the lender, 
or where the total expense of all precautionary advances by the lender 
will exceed 10 percent of the outstanding principal balance of the loan 
when made, the lender secures BIA's prior written approval; and
    (4) The lender properly claims and documents all precautionary 
advances, if and when it submits a claim for loss under Sec. 103.37.
    (d) If the default remains uncured, the lender must send BIA a 
written notice by certified mail (return receipt requested), or by a 
nationally-recognized overnight delivery service (signature of recipient 
required) within 90 calendar days of the default to select one of the 
following remedies:
    (1) In the case of a guaranteed loan, the lender may submit a claim 
to BIA for its loss;
    (2) In the case of either a guaranteed or insured loan, the lender 
may liquidate all collateral securing the loan, and upon completion, if 
it has a residual loss on the loan, it may submit a claim to BIA for 
that loss; or
    (3) The lender may negotiate a loan modification agreement with the 
borrower to permanently change the terms of the loan in a manner that 
will cure the default. If the lender chooses this remedy, it may take no 
longer than 45 calendar days from the date BIA receives the notice of 
remedy selection to finalize a loan modification agreement and secure 
BIA's written approval of it, unless BIA specifically extends this 
deadline in writing. However, the lender may at any time before the 
expiration of the 45-day period (or any extension thereof) change its 
choice of remedy by sending BIA a notice otherwise complying with Sec. 
103.36(d)(1) or (2). If the lender fails to send BIA a notice changing 
its choice of remedy and does not finalize an approved loan modification 
agreement within the 45-day period (or any extension thereof), the 
lender's only permissible remedy under the Program will be to pursue the 
procedure specified in Sec. 103.36(d)(2).
    (e) Failure by the lender to provide BIA with notice of the lender's 
election of remedy within 90 calendar days of the default, as indicated 
in Sec. 103.36(d), will invalidate BIA's loan guaranty certificate or 
insurance coverage for that particular loan, absent an express waiver of 
this provision by BIA. BIA may preserve the validity of a loan guaranty 
certificate or insurance coverage through waiver of this provision only 
when BIA determines, in its discretion, that:
    (1) The lender consistently has acted in good faith, and

[[Page 317]]

    (2) The lender's failure to provide timely notice either:
    (i) Has not caused any actual or potential prejudice to BIA; or
    (ii) Was the result of the lender relying upon specific written 
advice from a BIA official.



Sec. 103.37  What must the lender do to collect payment under its loan 
guaranty certificate or loan insurance coverage?

    (a) For guaranteed loans, the lender must submit a claim for its 
loss on a form approved by BIA.
    (1) If the lender makes an immediate claim under Sec. 103.36(d)(1), 
it must send BIA the claim for loss within 90 calendar days of the 
default by certified mail (return receipt requested), or by a 
nationally-recognized overnight delivery service (signature of recipient 
required). The lender's claim for loss may include interest that has 
accrued on the outstanding principal amount of the loan only through the 
date it submits the claim.
    (2) If the lender elects first to liquidate the collateral securing 
the loan under Sec. 103.36(d)(2), and has a residual loss after doing 
so, it must send BIA the claim for loss within 30 calendar days of 
completing all liquidation efforts. The lender must perform collateral 
liquidation as expeditiously and thoroughly as is reasonably possible, 
within the standards established by this part. The lender's claim for 
loss may include interest that has accrued on the outstanding principal 
amount of the loan only through the earlier of:
    (i) The date it submits the claim;
    (ii) The date the lender gets a judgment of foreclosure or sale (or 
the non-judicial equivalent) on the principal collateral securing the 
loan; or
    (iii) One hundred eighty calendar days after the date of the 
default.
    (b) For insured loans, after liquidating all loan collateral, the 
lender must submit a claim for its loss (if any) on a form approved by 
BIA. The lender must send BIA the claim for loss by certified mail 
(return receipt requested), or by a nationally-recognized overnight 
delivery service (signature of recipient required) within 30 calendar 
days of completing all liquidation efforts. The lender must perform 
collateral liquidation as expeditiously and thoroughly as is reasonably 
possible, within the standards established by this part. The lender's 
claim for loss may include interest that has accrued on the outstanding 
principal amount of the loan through the earlier of:
    (1) The date it submits the claim;
    (2) The date the lender gets a judgment of foreclosure or sale (or 
the non-judicial equivalent) on the principal collateral securing the 
loan; or
    (3) One hundred eighty calendar days after the date of the default.
    (c) Whenever the lender liquidates loan collateral under Sec. 
103.36(d)(2), it must vigorously pursue all reasonable methods of 
collection concerning the loan collateral before submitting a claim for 
its residual loss (if any) to BIA. Without limiting the generality of 
the preceding sentence, the lender must:
    (1) Foreclose, either judicially or non-judicially, all rights of 
redemption the borrower or any co-maker or guarantor of the loan (other 
than BIA) may have in collateral under any mortgage securing the loan;
    (2) Gather and dispose of all personal property pledged as 
collateral under the loan, in accordance with applicable law;
    (3) Exercise all set-off rights the lender may have under contract 
or applicable law;
    (4) Make demand for payment on the borrower, all co-makers, and all 
guarantors of the loan (other than BIA); and
    (5) Participate fully in all bankruptcy proceedings that may arise 
involving the borrower and any co-maker or guarantor of the loan. Full 
participation might include, for example, filing a proof of claim in the 
case, attending creditors' meetings, and seeking a court order releasing 
the automatic stay of collection efforts so that the lender can 
liquidate affected loan collateral.
    (d) BIA may require further information, including without 
limitation copies of any documents the lender is to maintain under Sec. 
103.32 and all documentation of liquidation efforts, to help BIA 
evaluate the lender's claim for loss.

[[Page 318]]

    (e) BIA will pay the lender the guaranteed or insured portion of the 
lender's claim for loss, to the extent the claim is based upon 
reasonably sufficient evidence of the loss and compliance with the 
requirements of this part. BIA will render a decision on a claim for 
loss within 90 days of receiving all information it requires to properly 
evaluate the loss.



Sec. 103.38  Is there anything else for BIA or the lender to do after 
BIA makes payment?

    When BIA pays the lender on its claim for loss, the lender must sign 
and deliver to BIA an assignment of rights to its loan agreement with 
the borrower, in a document acceptable to BIA. Immediately upon payment, 
BIA is subrogated to all rights of the lender under the loan agreement 
with the borrower, and must pursue collection efforts against the 
borrower and any co-maker and guarantor, as required by law.



Sec. 103.39  When will BIA refuse to pay all or part of a lender's claim?

    BIA may deny all or part of a lender's claim for loss when:
    (a) The loan is not guaranteed or insured as indicated in Sec. 
103.18;
    (b) The guarantee or insurance coverage has become invalid under 
Sec. Sec. 103.28, 103.29, or 103.36(e);
    (c) The lender has not met the standard of care indicated in Sec. 
103.30;
    (d) The lender presents a claim for a residual loss after attempting 
to liquidate loan collateral, and:
    (1) The lender has not made a reasonable effort to liquidate all 
security for the loan;
    (2) The lender has taken an unreasonable amount of time to complete 
its liquidation efforts, the probable consequence of which has been to 
reduce overall prospects of loss recovery; or
    (3) The lender's loss claim is inflated by unreasonable liquidation 
expenses or unjustifiable deductions from collateral liquidation 
proceeds applied to the loan balance; or
    (e) The lender has otherwise failed in any material respect to 
follow the requirements of this part, and BIA can reasonably attribute 
some or all of the lender's loss to that failure.



Sec. 103.40  Will BIA make exceptions to its criteria for denying payment?

    (a) BIA will not reduce or deny payment solely on the basis of 
Sec. Sec. 103.39(c) or (e) when the lender making the claim for loss:
    (1) Is a person to whom a previous lender transferred the loan under 
Sec. Sec. 103.28 or 103.29 before maturity for value;
    (2) Notified BIA of its acquisition of the loan interest as required 
by Sec. Sec. 103.28 or 103.29;
    (3) Had no involvement in or knowledge of the actions or 
circumstances that would have allowed BIA to reduce or deny payment to a 
previous lender; and
    (4) Has not itself violated the standards set forth in Sec. Sec. 
103.39(c) or (e).
    (b) If BIA makes payment to a lender under this section, it may seek 
reimbursement from the previous lender or lenders who contributed to the 
loss by violating Sec. Sec. 103.39(c) or (e).



Sec. 103.41  What happens if a lender violates provisions of this part?

    In addition to reducing or eliminating payment on a specific claim 
for loss, BIA may either temporarily suspend, or permanently bar, a 
lender from making or acquiring loans under the Program if the lender 
repeatedly fails to abide by the requirements of this part, or if the 
lender significantly violates the requirements of this part on any 
single occasion.



Sec. 103.42  How long must a lender comply with Program requirements?

    (a) A lender must comply in general with Program requirements 
during:
    (1) The effective period of its loan guaranty agreement or loan 
insurance agreement; and
    (2) Whatever additional period is necessary to resolve any 
outstanding loan guaranty or insurance claims or coverage the lender may 
have.
    (b) Except as otherwise required by law, a lender must maintain 
records with respect to a particular loan for 6 years after either:
    (1) The loan is repaid in full; or
    (2) The lender accepts payment from BIA for a loss on the loan, 
pursuant to a guaranty certificate or an insurance agreement.

[[Page 319]]

    (c) At any time 2 years or more following one of the events 
specified in paragraphs (b)(1) or (2) of this section, a lender may 
convert its records for corresponding loans to any electronic format 
that is readily retrievable and that provides an accurate, detailed 
image of the original records. Upon converting its records in this 
manner, the lender may dispose of its original loan records.
    (d) This section does not restrict any claims BIA may have against 
the lender or any other party arising from the lender's participation in 
the Program.



Sec. 103.43  What must the lender do after repayment in full?

    The lender must completely and promptly release of record all 
remaining collateral for a guaranteed or insured loan after the loan has 
been paid in full. The release must be at the lender's sole cost. In 
addition, if the loan is prepaid the lender must notify BIA in 
accordance with Sec. 103.33(f).



           Subpart H_Definitions and Miscellaneous Provisions



Sec. 103.44  What certain terms mean in this part.

    BIA means the Bureau of Indian Affairs within the United States 
Department of the Interior.
    Default means:
    (1) The borrower's failure to make a scheduled loan payment when it 
is due;
    (2) The borrower's failure to meet a material condition of the loan 
agreement;
    (3) The borrower's failure to comply with any other condition, 
covenant or obligation under the terms of the loan agreement within 
applicable grace or cure periods;
    (4) The borrower's failure to remain at least 51 percent Indian 
owned, as provided in Sec. 103.25(b);
    (5) The filing of a voluntary or involuntary petition in bankruptcy 
listing the borrower as debtor;
    (6) The imposition of a Federal, State, local, or tribal government 
lien on any assets of the borrower or assets otherwise used as 
collateral for the loan, except real property tax liens imposed by law 
to secure payments that are not yet due;
    (7) Any default defined in the loan agreement, to the extent the 
definition is not inconsistent with this part.
    Equity means the value, after deducting all debt, of the borrower's 
tangible assets in the business being financed, on which a lender can 
perfect a first lien security interest. It can include cash, securities, 
or other cash equivalent instruments, but cannot include the value of 
contractual options, the right to pay below market rental rates, or 
similar rights if those rights:
    (1) Are unassignable; or
    (2) Can expire before maturity of the loan.
    Indian means a person who is a member of a tribe as defined in this 
part.
    Loan agreement means the collective terms and conditions under which 
the lender extends a loan to a borrower, as reflected by the documents 
that evidence the loan.
    Mortgage means a consensual lien on real or personal property in 
favor of the lender, given by the borrower or a co-maker or guarantor of 
the loan (other than BIA), to secure loan repayment. The term 
``mortgage'' includes ``deed of trust.''
    NEPA means the National Environmental Policy Act of 1969, 42 U.S.C. 
4321 et seq.
    Person means any individual or distinct legal entity.
    Program means the BIA's Loan Guaranty, Insurance, and Interest 
Subsidy Program, established under 25 U.S.C. 1481 et seq., 25 U.S.C. 
1511 et seq., and this part 103.
    Reservation means any land that is an Indian reservation, California 
rancheria, public domain Indian allotment, pueblo, Indian colony, former 
Indian reservation in Oklahoma, or land held by an Alaska Native 
corporation under the provisions of the Alaska Native Claims Settlement 
Act (85 Stat. 688), as amended.
    Secretary means the Secretary of the United States Department of the 
Interior, or his authorized representative.
    Tribe means any Indian or Alaska Native tribe, band, nation, pueblo, 
rancheria, village, community or corporation that the Secretary 
acknowledges to exist as an Indian tribe, and that is eligible for 
services from BIA.

[[Page 320]]



Sec. 103.45  Information collection.

    (a) The information collection requirements of Sec. Sec. 103.11, 
103.12, 103.13, 103.14, 103.17, 103.21, 103.23, 103.26, 103.32, 103.33, 
103.34, 103.35, 103.36, 103.37, and 103.38 have been approved by the 
Office of Management and Budget under 44 U.S.C. 3501 et seq., and 
assigned approval number 1076-0020. The information will be used to 
approve and make payments on Federal loan guarantees, insurance 
agreements, and interest subsidy awards. Response is required to obtain 
a benefit.
    (b) The burden on the public to report this information is estimated 
to average from 15 minutes to 2 hours per response, including the time 
for reviewing instructions, gathering and maintaining data, and 
completing and reviewing the information collection. Direct comments 
regarding the burden estimate or any other aspect of this information 
collection to the Information Collection Control Officer, Bureau of 
Indian Affairs, MS 4613, 1849 C Street, NW., Washington, DC 20240.



PART 111_ANNUITY AND OTHER PER CAPITA PAYMENTS--Table of Contents




Sec.
111.1 Persons to share payments.
111.2 Enrolling non-full-blood children.
111.3 Payments by check.
111.4 Election of shareholders.
111.5 Future payments.

    Authority: 5 U.S.C. 301.

    Source: 22 FR 10549, Dec. 24, 1957, unless otherwise noted. 
Redesignated at 47 FR 13327, Mar. 30, 1982.



Sec. 111.1  Persons to share payments.

    In making all annuity and other per capita payments, the funds shall 
be equally divided among the Indians entitled thereto share and share 
alike. The roll for such payments should be prepared on Form 5-322,\1\ 
in strict alphabetical order by families of husband, wife, and unmarried 
dependent minor children. Unless otherwise instructed,
---------------------------------------------------------------------------

    \1\ Forms may be obtained from the Commissioner of Indian Affairs, 
Washington, D.C.
---------------------------------------------------------------------------

    (a) Indians of both sexes may be considered adults at the age of 18 
years;
    (b) Deceased enrollees may be carried on the rolls for one payment 
after death;
    (c) Where final rolls have been prepared constituting the legal 
membership of the tribe, only Indians whose names appear thereon are 
entitled to share in future payments, after-born children being excluded 
and the shares of deceased enrollees paid to the heirs if determined or 
if not determined credited to the estate pending determination; and
    (d) The shares of competent Indians will be paid to them directly 
and the shares of incompetents and minors deposited for expenditure 
under the individual Indian money regulations.

    Cross References: For regulations pertaining to the determination of 
heirs and approval of wills, see part 15 and subpart G of part 11 of 
this chapter. For individual Indian money regulations, see part 115 of 
this chapter.



Sec. 111.2  Enrolling non-full-blood children.

    Where an Indian woman was married to a white man prior to June 7, 
1897, and was at the time of her marriage a recognized member of the 
tribe even though she left it after marriage and lived away from the 
reservation, the children of such a marriage should be enrolled--and, 
also in the case of an Indian woman married to a white man subsequent to 
the above date but who still maintains her affiliation with the tribe 
and she and her children are recognized members thereof; however, where 
an Indian woman by marriage with a white man after June 7, 1897, has, in 
effect, withdrawn from the tribe and is no longer identified with it, 
her children should not be enrolled. In case of doubt all the facts 
should be submitted to the Bureau of Indian Affairs, Washington, D.C., 
for a decision.



Sec. 111.3  Payments by check.

    All payments should be made by check. In making payments to 
competent Indians, each check should be drawn to the order of the 
enrollee and given or sent directly to him. Powers of attorney and 
orders given by an Indian to another person for his share in

[[Page 321]]

a payment will not be recognized. Superintendents will note in the 
``Remarks'' column on the roll the date of birth of each new enrollee 
and the date of death of deceased annuitants.



Sec. 111.4  Election of shareholders.

    An Indian holding equal rights in two or more tribes can share in 
payments to only one of them and will be required to elect with which 
tribe he wishes to be enrolled and to relinquish in writing his claims 
to payments to the other. In the case of a minor the election will be 
made by the parent or guardian.



Sec. 111.5  Future payments.

    Indians who have received or applied for their pro rata shares of an 
interest-bearing tribal fund under the act of March 2, 1907 (34 Stat. 
1221; 25 U.S.C. 119, 121), as amended by the act of May 18, 1916 (39 
Stat. 128), will not be permitted to participate in future payments made 
from the accumulated interest.

                  PART 114_SPECIAL DEPOSITS [RESERVED]



PART 115_TRUST FUNDS FOR TRIBES AND INDIVIDUAL INDIANS--Table of Contents



         Subpart A_Purpose, Definitions, and Public Information

Sec.
115.001 What is the purpose of this part?
115.002 What definitions do I need to know?

                         Subpart B_IIM Accounts

115.100 Osage Agency.
115.101 Individual accounts.
115.102 Adults under legal disability.
115.103 Payments by other Federal agencies.
115.104 Restrictions.
115.105 Funds of deceased Indians of the Five Civilized Tribes.
115.106 Assets of members of the Agua Caliente Band of Mission Indians.
115.107 Appeals.

                     Subpart C_IIM Accounts: Minors

 115.400 Will a minor's IIM account always be supervised?
115.401 What is a minor's supervised account?
115.402 Will a minor have access to information about his or her 
          account?
115.403 Who will receive information regarding a minor's supervised 
          account?
115.404 What information will be provided in a minor's statement of 
          performance?
115.405 How frequently will a minor's statement of performance be 
          mailed?
115.406 Who provides an address of record for a minor's supervised 
          account?
115.407 How is an address of record for a minor's supervised account 
          changed?
115.408 May a minor's supervised account have more than one address on 
          file with the BIA?
115.409 How is an address for a minor's residence changed?
115.410 What types of identification will the BIA or OTFM accept as 
          ``verifiable photo identification''?
115.411 What if the individual making a request regarding a minor's 
          supervised account does not have any verifiable photo 
          identification?
115.412 Will child support payments be accepted for deposit into a 
          minor's supervised account?
115.413 Who may receive funds from a minor's supervised account?
115.414 What is an authorized disbursement request?
115.415 How will an authorized disbursement from a minor's supervised 
          account be sent?
115.416 Will the United States post office forward mail regarding a 
          minor's supervised account to a forwarding address left with 
          the United States post office?
115.417 What portion of funds in a minor's supervised account may be 
          withdrawn under a distribution plan?
115.418 What types of trust funds may a minor have?
115.419 Who develops a minor's distribution plan?
115.420 When developing a minor's distribution plan, what information 
          must be considered and included in the evaluation?
115.421 What information will be included in the copy of the minor's 
          distribution plan that will be provided to OTFM?
115.422 As a custodial parent, the legal guardian, the person who BIA 
          has recognized as having control and custody of the minor, or 
          an emancipated minor, what are your responsibilities if you 
          receive trust funds from a minor's supervised account?
115.423 If you are a custodial parent, a legal guardian, or an 
          emancipated minor, may BIA authorize the disbursement of funds 
          from a minor's supervised account without your knowledge?
115.424 Who receives a copy of the BIA-approved distribution plan and 
          any amendments to the plan?
115.425 What will we do if we find that a distribution plan has not been 
          followed or

[[Page 322]]

          an individual has acted improperly in regard to his or her 
          duties involving a minor's trust funds?
115.426 What is the BIA's responsibility regarding the management of a 
          minor's supervised account?
115.427 What is the BIA's annual review process for a minor's supervised 
          account?
115.428 Will you automatically receive all of your trust funds when you 
          reach the age of 18?
115.429 What do you need to do when you reach 18 years of age to access 
          your trust funds?
115.430 Will your account lose its supervised status when you reach the 
          age of 18?
115.431 If you are an emancipated minor may you withdraw trust funds 
          from your account?

                 Subpart D_IIM Accounts: Estate Accounts

 115.500 When is an estate account established?
115.501 How long will an estate account remain open?
115.502 Who inherits the money in an IIM account when an account holder 
          dies?
115.503 May money in an IIM account be withdrawn after the death of an 
          account holder but prior to the end of the probate 
          proceedings?
115.504 If you have a life estate interest in income-producing trust 
          assets, how will you receive the income?

 Subpart E_IIM Accounts: Hearing Process for Restricting an IIM Account

 115.600 If BIA decides to restrict your IIM account under Sec. 115.102 
          or Sec. 115.104, what procedures must the BIA follow?
115.601 Under what circumstances may the BIA restrict your IIM account 
          through supervision or an encumbrance?
115.602 How will the BIA notify you or your guardian, as applicable, of 
          its decision to restrict your IIM account?
115.603 What happens if BIA's notice of its decision to place a 
          restriction on your IIM account that is sent by United States 
          certified mail is returned to the BIA as undeliverable for any 
          reason?
115.604 When will BIA authorize OTFM to place a restriction on your IIM 
          account?
115.605 What information will the BIA include in its notice of the 
          decision to restrict your IIM account?
115.606 What happens if you do not request a hearing to challenge BIA's 
          decision to restrict your IIM account during the allotted time 
          period?
115.607 How do you request a hearing to challenge the BIA's decision to 
          restrict your IIM account?
115.608 If you request a hearing to challenge BIA's decision to restrict 
          your IIM account, when will BIA conduct the hearing?
115.609 Will you be allowed to present testimony and/or evidence at the 
          hearing?
115.610 Will you be allowed to present witnesses during a hearing?
115.611 Will you be allowed to question opposing witnesses during a 
          hearing?
115.612 May you be represented by an attorney during your hearing?
115.613 Will the BIA record the hearing?
115.614 Why is the BIA hearing recorded?
115.615 How long after the hearing will BIA make its final decision?
115.616 What information will be included in BIA's final decision?
115.617 What happens when the BIA decides to supervise or encumber your 
          IIM account after your hearing?
115.618 What happens if at the conclusion of the notice and hearing 
          process we decide to encumber your IIM account because of an 
          administrative error which resulted in funds that you do not 
          own being deposited in your account or distributed to you or 
          to a third party on your behalf?
115.619 If the BIA decides that the restriction on your IIM account will 
          be continued after your hearing, do you have the right to 
          appeal that decision?
115.620 If you decide to appeal the BIA's final decision pursuant to 
          Sec. 115.107, will the BIA restrict your IIM account during 
          the appeal?

           Subpart F_Trust Fund Accounts: General Information

 115.700 Why is money held in trust for tribes and individual Indians?
115.701 What types of accounts are maintained for Indian trust funds?
115.702 What specific sources of money will be accepted for deposit into 
          a trust account?
115.703 May we accept for deposit into a trust account money not 
          specified in Sec. 115.702?
115.704 May we accept for deposit into a trust account retirement 
          checks/payments or pension fund checks/payments even though 
          those funds are not specified in Sec. 115.702?
115.705 May we accept for deposit into a trust account money awarded or 
          assessed by a court of competent jurisdiction?
115.706 When funds are awarded or assessed by a court of competent 
          jurisdiction in a cause of action involving trust assets, what 
          documentation is required to deposit the trust funds into a 
          trust account?
115.707 Will the Secretary accept administrative fees for deposit into a 
          trust account?
115.708 How quickly will trust funds received by the Secretary on behalf 
          of

[[Page 323]]

          tribes or individual Indians be deposited into a trust 
          account?
115.709 Will an annual audit be conducted on trust funds?

                        Investments and Interests

115.710 Does money in a trust account earn interest?
115.711 How is money in a trust account invested?
115.712 What is the interest rate earned on money in a trust account?
115.713 When does money in a trust account start earning interest?

                        Subpart G_Tribal Accounts

 115.800 When does OTFM open a tribal account?
115.801 How often will a tribe receive information about its trust 
          account(s)?
115.802 May a tribe make a request to OTFM to receive information about 
          its trust account more frequently?
115.803 What information will be provided in a statement of performance?
115.804 Will we account to a tribe for those trust funds the tribe 
          receives through direct pay?
115.805 If a tribe is paid directly under a contract for the sale or use 
          of trust assets, will we accept those trust funds for deposit 
          into a tribal trust account?
115.806 How will the BIA assist in the administration of tribal judgment 
          fund accounts?

                Investing and Managing Tribal Trust Funds

115.807 Will OTFM consult with tribes about investments of tribal trust 
          funds?
115.808 Could trust fund investments made by OTFM lose money?
115.809 May a tribe recommend to OTFM how to invest the tribe's trust 
          funds?
115.810 May a tribe directly invest and manage its trust funds?
115.811 Under what conditions may a tribe redeposit funds with OTFM that 
          were previously withdrawn under the Trust Reform Act?
115.812 Is a tribe responsible for its expenditures of trust funds that 
          are not made in compliance with statutory language or other 
          federal law?
115.813 Is there a limit to the amount of trust funds OTFM will disburse 
          from a tribal trust account?
115.814 If a tribe withdraws money from its trust account for a 
          particular purpose or project, may the tribe redeposit any 
          money that was not used for its intended purpose?

                     Withdrawing Tribal Trust Funds

115.815 How does a tribe request trust funds from a tribal trust 
          account?
115.816 May a tribe's request for a withdrawal of trust funds from its 
          trust account be delayed or denied?
115.817 How does OTFM disburse money to a tribe?

                       Unclaimed Per Capita Funds

115.818 What happens if an Indian adult does not cash his or her per 
          capita check?
115.819 What steps will be taken to locate an individual whose per 
          capita check is returned as undeliverable or not cashed within 
          twelve (12) months of issuance?
115.820 May OTFM transfer money in a returned per capita account to a 
          tribal account?

                   Subpart H_Special Deposit Accounts

 115.900 Who receives the interest earned on trust funds in a special 
          deposit account?
115.901 When will the trust funds in a special deposit account be 
          credited or paid out to the owner of the funds?
115.902 May administrative or land conveyance fees paid as federal 
          reimbursements be deposited in a special deposit account?
115.903 May cash bonds (e.g., performance bonds, appeal bonds, etc.) be 
          deposited into a special deposit account?
115.904 Where earnest money is paid prior to Secretarial approval of a 
          conveyance or contract instrument involving trust assets, may 
          the BIA deposit that earnest money into a special deposit 
          account?

                            Subpart I_Records

115.1000 Who owns the records associated with this part?
115.1001 How must records associated with this part be preserved?

    Authority: R.S. 441, as amended, R.S. 463, R.S. 465; 5 U.S.C. 301; 
25 U.S.C. 2; 25 U.S.C. 9; 43 U.S.C. 1457; 25 U.S.C. 4001; 25 U.S.C. 
161(a); 25 U.S.C. 162a; 25 U.S.C. 164; Pub. L. 87-283; Pub. L. 97-100; 
Pub. L. 97-257; Pub. L. 103-412; Pub. L. 97-458; 44 U.S.C. 3101 et seq.

    Source: 66 FR 7094, Jan. 22, 2001, unless otherwise noted.



         Subpart A_Purpose, Definitions, and Public Information



Sec. 115.001  What is the purpose of this part?

    This part sets forth guidelines for the Secretary of the Interior, 
including any tribe or tribal organization if that entity is 
administering specific programs, functions, services or activities,

[[Page 324]]

previously administered by the Secretary of the Interior, but now 
authorized under a Self-Determination Act contract (pursuant to 25 
U.S.C. Sec. 450f) or a Self-Governance compact (pursuant to 25 U.S.C. 
Sec. 558cc), to carry out the trust duties owed to tribes and 
individual Indians to manage and administer trust assets for the 
exclusive benefit of tribal and individual Indian beneficiaries pursuant 
to federal law, including the American Indian Trust Fund Management 
Reform Act of 1994, Public Law 103-412, 108 Stat. 4239, 25 U.S.C. Sec. 
4001 (Trust Reform Act).



Sec. 115.002  What definitions do I need to know?

    As used in this part:
    Account holder means a tribe or a person who owns the funds in a 
tribal or Individual Indian Money (IIM) account that is maintained by 
the Secretary.
    Account means a record of trust funds that is maintained by the 
Secretary for the benefit of a tribe or a person.
    Administratively restricted account means an IIM account that is 
placed on temporary hold by OTFM where an account holder's current 
address of record is unknown or where more documentation is needed to 
make a distribution from an account.
    Adult means an individual who has reached 18 years of age, except 
when the individual's tribe has determined the age for adulthood to be 
older than 18 for access to tribal trust fund per capita proceeds.
    Adult in need of assistance means an individual who has been 
determined to be ``incapable of managing or administering his or her 
property, including his or her financial affairs'' either (a) through a 
BIA administrative process that is based on a finding by a licensed 
medical professional or licensed mental health professional, or (b) by 
an order or judgment of a court of competent jurisdiction.
    BIA means the Bureau of Indian Affairs, Department of the Interior, 
or its authorized representative.
    Bond means security for the performance of certain obligations or a 
guaranty of such performance as furnished by a third-party surety. As 
used in this part, bonds may include cash bonds, performance bonds, and 
surety bonds.
    Court of competent jurisdiction means a federal or tribal court with 
jurisdiction; however, if there is no tribal court with jurisdiction, 
then a state court with jurisdiction.
    Day means a calendar day unless otherwise specified.
    Department means the Department of the Interior or its authorized 
representative.
    Deposits mean receiving funds, ordinarily through a Federal Reserve 
Bank, for credit to a trust fund account.
    Emancipated minor means a person under 18 years of age who is 
married or who is determined by a court of competent jurisdiction to be 
legally able to care for himself or herself.
    Encumber or encumbrance means to attach trust assets held by the 
Secretary with a claim, lien, or charge that has been approved by the 
Secretary.
    Encumbered account means a trust fund account where some portion of 
the proceeds are obligated to another party.
    Estate account means an account for a deceased IIM account holder.
    FOIA means the Freedom of Information Act, 5 U.S.C. Sec. 552.
    Guardian means a person who is legally responsible for the care and 
management of an individual and his or her estate. This definition 
includes, but is not limited to, conservator or guardian of the 
property. However, this definition does not apply to property subject to 
Sec. 115.106 of this part.
    Individual Indian Money (IIM) accounts means an interest bearing 
account for trust funds held by the Secretary that belong to a person 
who has an interest in trust assets. These accounts are under the 
control and management of the Secretary. There are three types of IIM 
accounts: unrestricted, restricted, and estate accounts.
    Legal disability means the lack of legal capability to perform an 
act which includes the ability to manage or administer his or her 
financial affairs as determined by a court of competent jurisdiction or 
another federal agency where the federal agency has determined that the 
adult requires a representative payee and there is no

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legal guardian to receive federal benefits on his or her behalf.
    MSW means a Master of Social Work degree from an accredited college 
or university.
    Minor means an individual who is not an adult as defined in this 
part.
    Non-compos mentis means a person who has been determined by a court 
of competent jurisdiction to be of unsound mind or incapable of managing 
his or her own affairs.
    OST means the Office of the Special Trustee for American Indians, 
Department of the Interior, or its authorized representative.
    OTFM means the Office of Trust Funds Management, within the Office 
of the Special Trustee for American Indians, Department of the Interior, 
or its authorized representative.
    Privacy Act means the Federal Privacy Act, 5 U.S.C. Sec. 552a.
    Restricted fee land(s) means land the title to which is held by an 
individual Indian or a tribe and which can only be alienated or 
encumbered by the owner with the approval of the Secretary because of 
limitations contained in the conveyance instrument pursuant to federal 
law.
    Secretary means the Secretary of the Interior or an authorized 
representative; it also means a tribe or tribal organization if that 
entity is administering specific programs, functions, services or 
activities, previously administered by the Secretary of the Interior, 
but now authorized under a Self-Determination Act contract (pursuant to 
25 U.S.C. Sec. 450f) or a Self-Governance compact (pursuant to 25 
U.S.C. Sec. 558cc).
    Special deposit account means a temporary account for the deposit of 
trust funds that cannot immediately be credited to the rightful account 
holders.
    Supervised account means a restricted IIM account, from which all 
disbursements must be approved by the BIA, that is maintained for 
minors, emancipated minors, adults who are in need of assistance, adults 
who under legal disability, or adults who are non-compos mentis.
    Tribal account or tribal trust account generally means a trust fund 
account for a federally recognized tribe that is maintained and held in 
trust by the Secretary.
    Tribe means any Indian tribe, nation, band, pueblo, rancheria, 
colony, or community, including any Alaska Native Village or regional or 
village corporation as defined or established under the Alaska Native 
Claims Settlement Act which is federally recognized by the United States 
government for special programs and services provided by the Secretary 
to Indians because of their status as Indians. Tribe also means two or 
more tribes joined for any purpose, the joint assets of which include 
funds held in trust by the Secretary.
    Trust account means a tribal account, an IIM account, or a special 
deposit account for trust funds maintained by the Secretary.
    Trust assets mean trust lands, natural resources, trust funds, or 
other assets held by the federal government in trust for Indian tribes 
and individual Indians.
    Trust funds means money derived from the sale or use of trust lands, 
restricted fee lands, or trust resources and any other money that the 
Secretary must accept into trust.
    Trust land(s) means any tract or interest therein, that the United 
States holds in trust status for the benefit of a tribe or an individual 
Indian.
    Trust Reform Act means the American Indian Trust Fund Management 
Reform Act of 1994, Pub. L. 103-412, 108 Stat. 4239, 25 U.S.C. Sec. 
4001.
    Trust resources means any element or matter directly derived from 
Indian trust property.
    Unrestricted account means an IIM account in which an Indian account 
holder may determine the timing and amount of disbursements from the 
account.
    Voluntary hold means a request by an individual Indian with an 
unrestricted IIM account to keep his or her trust funds in a trust 
account instead of having the trust funds automatically disbursed.
    We or Us or Our means the Secretary as defined in this part.
    You or Your means an IIM account holder.

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                         Subpart B_IIM Accounts



Sec. 115.100  Osage Agency.

    The provisions of this part do not apply to funds the deposit or 
expenditure of which is subject to the provisions of part 117 of this 
subchapter.



Sec. 115.101  Individual accounts.

    Except as otherwise provided in this part, adults shall have the 
right to withdraw funds from their accounts. Upon their application, or 
an application made in their behalf by the Secretary or his authorized 
representative, their funds shall be disbursed to them. All such 
disbursements will be made at such convenient times and places as the 
Secretary or his authorized representatives may designate.



Sec. 115.102  Adults under legal disability.

    The funds of an adult who is non compos mentis or under other legal 
disability may be disbursed for his benefit for such purposes deemed to 
be for his best interest and welfare, or the funds may be disbursed to a 
legal guardian or curator under such conditions as the Secretary or his 
authorized representative may prescribe.



Sec. 115.103  Payments by other Federal agencies.

    Moneys received from the Veterans Administration or other Government 
agency pursuant to the Act of February 25, 1933 (47 Stat. 907; 25 U.S.C. 
14), may be accepted and administered for the benefit of adult Indians 
under legal disability or minors for whom no legal guardian or fiduciary 
has been appointed.



Sec. 115.104  Restrictions.

    Funds of individuals may be applied by the Secretary or his 
authorized representative against delinquent claims of indebtedness to 
the United States or any of its agencies or to the tribe of which the 
individual is a member, unless such payments are prohibited by acts of 
Congress, and against money judgments rendered by courts of Indian 
offenses or under any tribal law and order code. Funds derived from the 
sale of capital assets which by agreement approved prior to such sale by 
the Secretary or his authorized representative are to be expended for 
specific purposes, and funds obligated under contractual arrangements 
approved in advance by the Secretary or his authorized representative or 
subject to deductions specifically authorized or directed by acts of 
Congress, shall be disbursed only in accordance with the agreements 
(including any subsequently approved modifications thereof) or acts of 
Congress. The funds of an adult whom the Secretary or his authorized 
representative finds to be in need of assistance in managing his 
affairs, even though such adult is not non compos mentis or under other 
legal disability, may be disbursed to the adult, within his best 
interest, under approved plans. Such finding and the basis for such 
finding shall be recorded and filed with the records of the account. For 
rules governing the payment of judgments from individual Indian money 
accounts, see Sec. 11.208 of this chapter.



Sec. 115.105  Funds of deceased Indians of the Five Civilized Tribes.

    Funds of a deceased Indian of the Five Civilized Tribes may be 
disbursed to pay ad valorem and personal property taxes, Federal and 
State estate and income taxes, obligations approved by the Secretary or 
his authorized representative prior to death of decedent, expenses of 
last sickness and burial and claims found to be just and reasonable 
which are not barred by the statute of limitations, costs of determining 
heirs to restricted property by the State courts, and claims allowed 
pursuant to part 16 of this chapter.



Sec. 115.106  Assets of members of the Agua Caliente Band of Mission Indians.

    (a) The provisions of this section apply to money or other property, 
except real property, held by the United States in trust for such 
Indians, which may be used, advanced, expended, exchanged, deposited, 
disposed of, invested, and reinvested by the Director, Palm Springs 
Office, in accordance with the Act of October 17, 1968 (Pub. L. 90-597). 
The management or disposition of real property is covered in other parts 
of this chapter.

[[Page 327]]

    (b) Investments made by the Director, Palm Springs Office, under the 
Act of October 17, 1968, supra, shall be of such a nature as will afford 
reasonable protection of the assets of the individual Indian involved. 
The Director is authorized to enter into contracts for the management of 
the assets (except real property) of individual Indians. The consent of 
the individual Indian concerned must be obtained prior to the taking of 
actions affecting his assets, unless the Director determines, under the 
provisions of section (e) of the Act, that consent is not required.
    (c) The Director may, consistent with normal business practices, 
establish appropriate fees for reports he requires from guardians, 
conservators, or other fiduciaries appointed under State law for members 
of the Band.



Sec. 115.107  Appeals.

    Appeals from an action taken by an official of the Bureau of Indian 
Affairs may be taken pursuant to 25 CFR part 2, subject to the terms of 
subpart E.



                     Subpart C_IIM Accounts: Minors



Sec. 115.400  Will a minor's IIM account always be supervised?

    Yes, all IIM accounts established by BIA for minors will be a 
supervised by the BIA.



Sec. 115.401  What is a minor's supervised account?

    A minor's supervised account is a restricted IIM account from which 
all disbursements must be made pursuant to a distribution plan approved 
by the BIA that is established for:
    (a) A minor, or
    (b) An emancipated minor.



Sec. 115.402  Will a minor have access to information about his or her 
account?

    A minor will not have access to information about his or her IIM 
account without approval of the custodial parent(s) or legal guardian. 
However, an emancipated minor will have access to information about his 
or her IIM account.



Sec. 115.403  Who will receive information regarding a minor's supervised 
account?

    (a) The parent(s) with legal custody of the minor or the minor's 
legal guardian will receive a minor's statement of performance at the 
address of record for the minor's supervised account.
    (b) An emancipated minor will receive his or her statement of 
performance at the address of record for the minor's supervised account.



Sec. 115.404  What information will be provided in a minor's statement of 
performance?

    A minor's statement of performance will identify the source, type, 
and status of the funds deposited and held in the account; the beginning 
balance; the gains and losses; receipts and disbursements, if any; and 
the ending balance of the quarterly statement period for the minor's 
supervised account.



Sec. 115.405  How frequently will a minor's statement of performance be 
mailed?

    We will mail a minor's statement of performance to the address of 
record quarterly, within and no later than 20 business days after the 
close of the quarterly statement period.



Sec. 115.406  Who provides an address of record for a minor's supervised 
account?

    (a) The custodial parent or the legal guardian must provide an 
address to the BIA and this address will be the address of record for 
the minor's supervised account. Where applicable, a parent or legal 
guardian must provide a copy of the custodial order or guardianship 
order from a court of competent jurisdiction when providing the address 
of record for the minor's supervised IIM account.
    (b) The emancipated minor must provide his or her address of record 
to the BIA.
    (c) Upon receipt of the change of address of record from the parent 
or legal guardian, the BIA must provide the change of the address of 
record to the OTFM.

[[Page 328]]



Sec. 115.407  How is an address of record for a minor's supervised account 
changed?

    (a) To change an address of record for a minor's supervised IIM 
account, a custodial parent(s), legal guardian, or emancipated minor 
must provide BIA with the following information:
    (1) The minor's or emancipated minor's name;
    (2) The name of the custodial parent(s) or legal guardian, if 
applicable;
    (3) A custody order from a court of competent jurisdiction or a copy 
of a guardianship, if applicable;
    (4) The new address of the custodial parent(s), legal guardian, or 
emancipated minor; and
    (5) The signature, mark or thumb print of a custodial parent, legal 
guardian, or emancipated minor that has been notarized by a notary 
public and/or witnessed by a DOI employee who has been shown verifiable 
photo identification. See Sec. 115.410
    (b) When requesting a change of an address of record, the following 
information will further assist us to identify the minor's account:
    (1) The minor's or emancipated minor's IIM account number;
    (2) The minor's or emancipated minor's date of birth;
    (3) The minor's or emancipated minor's tribal enrollment number; and
    (4) The minor's or emancipated minor's social security number.



Sec. 115.408  May a minor's supervised account have more than one address 
on file with the BIA?

    Yes, a minor's supervised account may have more than one address on 
file with the BIA. We request that the parent, legal guardian, or the 
person who has been recognized by the BIA as having control and custody 
of the minor, notify us of the following addresses for the minor:
    (a) The minor's residence;
    (b) The address of record where the statement of performance will be 
mailed;
    (c) The address where disbursement checks will be mailed or 
financial institution information for direct deposits of trust funds as 
authorized under an approved distribution plan.



Sec. 115.409  How is an address for a minor's residence changed?

    (a) To change an address for a minor's residence, the custodial 
parent, legal guardian, or the person who has been recognized by the BIA 
as having control and custody of the minor must provide BIA with the 
following information:
    (1) The minor's name;
    (2) The name of the custodial parent(s) or legal guardian;
    (3) A copy of a custodial order from a court of competent 
jurisdiction or a guardianship order, where applicable;
    (4) The new address of the minor's residence; and
    (5) The signature, mark or thumb print of the individual who is 
providing the updated address for the minor's residence that has been 
notarized by a notary public and/or witnessed by a DOI employee who has 
been shown verifiable photo identification. See Sec. 115.410
    (b) When requesting a change of an address for a minor's residence, 
the following information will further assist us to identify the minor's 
account:
    (1) The minor's IIM account number;
    (2) The minor's date of birth;
    (3) The minor's tribal enrollment number (if known); and
    (4) The minor's social security number (where known).



Sec. 115.410  What types of identification will the BIA or OTFM accept 
as ``verifiable photo identification''?

    BIA or OTFM will accept the following forms of identification as 
``verifiable photo identification'':
    (a) A valid driver's license;
    (b) A government-issued photo identification card, such as a 
passport, security badge, etc.; or
    (c) A tribal photo identification card.



Sec. 115.411  What if the individual making a request regarding a minor's 
supervised account does not have any verifiable photo identification?

    If the individual making a request regarding a minor's supervised 
account does not have any verifiable photo identification, the 
individual may make a request in person at the BIA and we will talk with 
the individual and review information in the minor's

[[Page 329]]

file to see if we can attest to the individual's identity. If we cannot 
establish the identity of the individual, we will not accept the 
request.



Sec. 115.412  Will child support payments be accepted for deposit into 
a minor's supervised account?

    The Secretary will not accept child support payments for deposit 
into a minor's supervised account.



Sec. 115.413  Who may receive funds from a minor's supervised account?

    A custodial parent, a legal guardian, a person who has been 
recognized by the BIA as having control and custody of the minor, or an 
emancipated minor may be eligible to withdraw funds from a minor's 
supervised account if there is an authorized disbursement request that 
is based upon the terms of a BIA-approved distribution plan.



Sec. 115.414  What is an authorized disbursement request?

    An authorized disbursement request is the form or letter that must 
be approved by the BIA that specifies the funds to be disbursed from an 
IIM account. The authorized disbursement request may not be issued to 
disburse funds from a minor's supervised account unless an approved 
distribution plan exists, the amount to be disbursed is in conformity 
with the distribution plan and the disbursement will be made to an 
individual or third party specified in the plan.



Sec. 115.415  How will an authorized disbursement from a minor's supervised 
account be sent?

    OTFM will make an authorized disbursement based on the approved 
distribution plan from a minor's supervised account by:
    (a) Making a direct deposit to a specified account at a financial 
institution (a direct deposit into the specified account will eliminate 
lost, stolen or damaged checks and will also eliminate delays associated 
with mailing the check);
    (b) Mailing a check to the address of record or to a specified 
disbursement address; or
    (c) Mailing a check to a specified third party's address.



Sec. 115.416  Will the United States post office forward mail regarding 

a minor's supervised account to a forwarding address left with the United 
States post office?

    (a) Federal law does not allow the United States post office to 
forward checks that are issued by the federal government. Therefore, a 
check from a minor's supervised account will not be forwarded to an 
address left with the United States post office. The new address of 
record must be provided directly to BIA.
    (b) Where a forwarding address has been provided to the United 
States post office, the United States post office will forward a 
statement of performance and general correspondence regarding a minor's 
supervised account that is mailed to the minor's address of record for a 
limited time period. However, it is the responsibility of a custodial 
parent, legal guardian, or emancipated minor to give BIA the new address 
of record for the minor's supervised account.



Sec. 115.417  What portion of funds in a minor's supervised account may 
be withdrawn under a distribution plan?

    Trust money in a minor's supervised account will not be distributed 
without a review of other resources that may be available to meet the 
needs of the minor. Any trust funds of a minor that are distributed must 
be used for the direct benefit of the minor and in accordance with any 
additional limitations (e.g., statutory, court order, tribal resolution, 
etc.) placed on the use of specific trust funds. Allowable uses may 
include health, education, or welfare when based upon a justified unmet 
need. The BIA will require receipts for expenditures of funds disbursed 
from a minor's account to a custodial parent, legal guardian, person who 
has been recognized by the BIA as having control and custody of the 
minor, or an emancipated minor.



Sec. 115.418  What types of trust funds may a minor have?

    A minor may have one or more of the following types of trust funds:
    (a) Judgment per capita funds: Withdrawals may only be made upon BIA

[[Page 330]]

approval of an application made under Public Law 97-458. See 25 CFR 1.2.
    (b) Tribal per capita funds: Withdrawals may only be made under a 
BIA approved distribution plan and in accordance with the terms of the 
tribe's per capita resolution/document.
    (c) Other trust funds: Withdrawals may only be made under a minor's 
BIA-approved distribution plan that is based on a justified unmet need 
for the minor's health, education, or welfare.
    (d) Funds from other federal agencies (e.g., SSA, SSI, VA) received 
for the benefit of the minor: Withdrawals must be made only under a BIA-
approved distribution plan that must be consistent with the disbursing 
agency's (e.g., SSA, SSI, VA) allowable uses for the funds.



Sec. 115.419  Who develops a minor's distribution plan?

    A social service provider will develop a minor's distribution plan 
for approval by the BIA after evaluating the needs of the minor in 
consultation with a custodial parent, a legal guardian, the person who 
has been recognized by the BIA as having control and custody of the 
minor, or emancipated minor. A minor's distribution plan may only 
provide for those expenditures outlined in part Sec. 115.417.



Sec. 115.420  When developing a minor's distribution plan, what 
information must be considered and included in the evaluation?

    When developing a minor's distribution plan, the following 
information must be considered and included in the evaluation:
    (a) Documentation which establishes who has physical custody of the 
minor (e.g., home visits, school records, medical records, etc.);
    (b) A copy of any custodial orders or guardianship orders from a 
court of competent jurisdiction;
    (c) The name(s) of the person and his or her relationship to the 
minor, if any, who make a request for a disbursement from the minor's 
account;
    (d) An evaluation of other resources, including parental income, 
that may be available to meet the unmet needs of the minor;
    (e) A list of the amounts, purposes, and dates for which 
disbursements will be made;
    (f) The name(s) of the person to whom disbursements may be made, 
including, as applicable:
    (1) A custodial parent;
    (2) A legal guardian;
    (3) The person who has been recognized by the BIA as having control 
and custody of the minor;
    (4) An emancipated minor; and/or
    (5) Any third parties to whom the BIA will make direct payment for 
goods or services provided to the minor and supported by an invoice or 
bill of sale;
    (g) The date(s) (at least every six months) when the custodial 
parent, the legal guardian, the person who has been recognized by the 
BIA as having control and custody of the minor, or the emancipated minor 
must provide receipts to the BIA to show that expenditures were made in 
accordance with the approved distribution plan;
    (h) Additional requirements and justification for those 
requirements, as necessary to ensure that any distribution(s) will 
benefit the minor;
    (i) The dates the disbursement plan was developed, approved, and 
reviewed, and the date for the next scheduled review;
    (j) The date(s) the distribution plan was amended and an explanation 
for any amendment(s) to the distribution plan, when an amendment is 
necessary;
    (k) The signature of the BIA official approving the plan with the 
certification that the plan is in the best interest of the account 
holder; and
    (l) The signature(s) of the custodial parent, legal guardian, with 
date(s) signed, certifying that he or she has been consulted and has 
agreed to the terms of the evaluation and the distribution plan.



Sec. 115.421  What information will be included in the copy of the 
minor's distribution plan that will be provided to OTFM?

    A minor's distribution plan must contain the following:
    (a) A copy of any custodial order or guardianship order from a court 
of competent jurisdiction;

[[Page 331]]

    (b) A list of the amounts, purposes, and dates for which 
disbursements will be made;
    (c) The name(s) of the person(s) to whom disbursements may be made, 
including, as applicable:
    (1) A custodial parent;
    (2) A legal guardian;
    (3) The person who has been recognized by the BIA as having control 
and custody of the minor and the address of that person;
    (4) An emancipated minor; and/or
    (5) Any third parties and the address(es) of the third parties to 
whom the direct payment will be made for goods or services provided to 
the minor and supported by an invoice or bill of sale, where applicable;
    (d) The date that the disbursement plan was approved and the 
expiration date of the distribution plan; and
    (e) The date and signature of the BIA official approving the plan 
with a certification that the plan is in the best interest of the 
account holder.



Sec. 115.422  As a custodial parent, the legal guardian, the person who 

BIA has recognized as having control and custody of the minor, or an 
emancipated minor, what are your responsibilities if you receive trust 
funds from a minor's supervised account?

    If you are a custodial parent, the legal guardian, the person who 
BIA has recognized as having control and custody of the minor, or an 
emancipated minor who receives funds from a minor's supervised account, 
you must:
    (a) Consult with the social service provider on the development of 
an evaluation;
    (b) Sign an acknowledgment that you have reviewed the evaluation;
    (c) Follow the terms of a distribution plan approved by the BIA;
    (d) Follow any applicable court order;
    (e) Provide receipts to the social services provider in accordance 
with terms of the evaluation for all expenses paid out of the minor's 
IIM funds;
    (f) Review the statements of performance for the supervised account 
for discrepancies, if applicable;
    (g) File tax returns on behalf of the account holder, if applicable; 
and
    (h) Notify the social service provider of any change in 
circumstances that impairs your performance of your obligations under 
this part or inform the social service provider of any information 
regarding misuse of a minor's trust funds.



Sec. 115.423  If you are a custodial parent, a legal guardian, or an 

emancipated minor, may BIA authorize the disbursement of funds from 
a minor's supervised account without your knowledge?

    At the Secretary's discretion, the BIA may authorize the 
disbursement of funds from a minor's supervised account for the benefit 
of the minor.



Sec. 115.424  Who receives a copy of the BIA-approved distribution plan 
and any amendments to the plan?

    The BIA-approved distribution plan will be provided to:
    (a) The custodial parent; or
    (b) A legal guardian; or
    (c) At the Secretary's discretion, in unusual circumstances, to a 
family member who has been recognized as having control and custody of 
the minor; or
    (d) An emancipated minor; and
    (e) OTFM.



Sec. 115.425  What will we do if we find that a distribution plan has 

not been followed or an individual has acted improperly in regard to 
his or her duties involving a minor's trust funds?

    If we find that a distribution plan has not been followed or that a 
custodial parent, a legal guardian, or the person who has been 
recognized by the BIA as having control and custody of the minor has 
failed to satisfactorily account for expenses or has not used the 
minor's funds for the primary benefit of the minor, we will:
    (a) Notify the individual; and
    (b) Take action to protect the interests of the minor, which may 
include:
    (1) Referring the matter for civil or criminal legal action;
    (2) Demanding repayment from the individual who has improperly 
expended trust funds or failed to account for the use of trust funds;
    (3) Liquidating a bond posted by the legal guardian, where 
applicable, to recover improperly expended trust funds up to the amount 
of the bond; or

[[Page 332]]

    (4) Immediately modifying the distribution plan for up to sixty 
days, including suspending the authority of the individual to receive 
further disbursements.



Sec. 115.426  What is the BIA's responsibility regarding the management 
of a minor's supervised account?

    The BIA's responsibility in regard to the management of a minor's 
supervised account is to:
    (a) Review and approve the evaluation and the distribution plan;
    (b) Authorize OTFM to disburse IIM funds in accordance with an 
approved distribution plan; and
    (c) Conduct annual reviews of case records for minors' supervised 
accounts to ensure that the social service providers have managed the 
accounts in accordance with the approved evaluation and distribution 
plan.



Sec. 115.427  What is the BIA's annual review process for a minor's 
supervised account?

    A BIA social worker with an MSW will conduct an annual review of 
minors' supervised accounts by:
    (a) Verifying that all receipts for disbursements made under a 
distribution plan were collected in accordance with the terms specified 
in the evaluation;
    (b) Reviewing the receipts for disbursements made from a minor's 
supervised account to ensure that all expenditures were made in 
accordance with the distribution plan;
    (c) Reviewing all case worker reports and notes;
    (d) Reviewing account records to insure that withdrawals and 
payments were made in accordance with the distribution plan;
    (e) Verifying current addresses, including the address of record, 
the address of the minor's residence, and the disbursement address; and
    (f) Deciding whether the distribution plan needs to be modified.



Sec. 115.428  Will you automatically receive all of your trust funds when 
you reach the age of 18?

    No, we will not automatically send your trust funds to you when you 
reach the age of 18.



Sec. 115.429  What do you need to do when you reach 18 years of age to 
access your trust funds?

    You must contact OTFM to request withdrawal of any or all of your 
trust funds that may be available to you. OTFM may require certain 
information from you to verify your identity, etc. prior to the release 
of your trust funds. All signatures must be notarized by a notary public 
or witnessed by a DOI employee. In addition, if you choose to have a 
check mailed to you, you must provide us with your address of record. If 
you choose to have your trust funds electronically transferred to you, 
you must provide your financial institution account information to OTFM.



Sec. 115.430  Will your account lose its supervised status when you reach 
the age of 18?

    Your account will no longer be supervised when you reach the age of 
18 unless statutory language or a tribal resolution specifies an age 
other than 18 years of age for access to specific trust funds. However, 
if a court of competent jurisdiction has found you to be non-compos 
mentis, under legal disability, or the BIA has determined you to be an 
adult in need of assistance, your account will remain supervised and you 
will be notified in accordance with subpart E.



Sec. 115.431  If you are an emancipated minor may you withdraw trust funds 
from your account?

    If you are an emancipated minor, you may have access to some or all 
of your trust funds as follows:
    (a) For judgment per capita funds: you may not make withdrawals from 
your account until you have reached the age specified in the judgment. 
Exceptions are only granted upon the approval of an application made 
under Public Law 97-458. See 25 CFR 1.2.
    (b) Tribal per capita funds: access to these funds will be 
determined by tribal resolution.
    (c) Other trust funds: You may be able to have supervised access to 
some or all of your funds, but the BIA must approve all requests for 
withdrawals from your account. You must work with the BIA to develop a 
distribution

[[Page 333]]

plan to access the funds in your account. In no instance will the BIA 
allow an emancipated minor to make unsupervised withdrawals.
    (d) For funds from other federal agencies (e.g., SSA, SSI, VA), you 
may be able to receive funds directly, but you must contact and make 
arrangements with the other federal agency. Direct receipt of funds from 
another federal agency will not change the supervised status of an 
emancipated minor's trust account.



                 Subpart D_IIM Accounts: Estate Accounts



Sec. 115.500  When is an estate account established?

    An estate account is established when we receive notice of an 
account holder's death.



Sec. 115.501  How long will an estate account remain open?

    An estate account will remain open until the funds have been 
distributed in accordance with the distribution and/or probate order.



Sec. 115.502  Who inherits the money in an IIM account when an account 
holder dies?

    At the end of all probate procedures, funds remaining in a 
decedent's estate account will be distributed from the decedent's estate 
account and paid directly to or deposited into an IIM account of the 
decedent's heirs, beneficiaries, or other persons or entities entitled 
by law to receive the funds, where applicable. See 25 CFR part 15.



Sec. 115.503  May money in an IIM account be withdrawn after the death 
of an account holder but prior to the end of the probate proceedings?

    (a) If you are responsible for making the funeral arrangements of a 
decedent who had an IIM account and you have an immediate need for 
emergency assistance to pay for funeral arrangements prior to burial, 
you may make a request to the BIA for up to $1,000 from the decedent's 
IIM account if the decedent's IIM account has more than $2,500 in the 
account at the date of death.
    (b) You must apply for this assistance and submit to the BIA an 
original itemized estimate of the cost of the service to be rendered and 
the identification of the service provider.
    (c) We may approve reasonable costs up to $1,000 that are necessary 
for the burial services.
    (d) We will make payments directly to the providers of the 
service(s).



Sec. 115.504  If you have a life estate interest in income-producing 
trust assets, how will you receive the income?

    If you have a life estate interest in income-producing trust assets, 
which is earning income, OTFM will open an IIM-life estate account for 
you and funds will be distributed after BIA has certified ownership of 
the trust funds.



 Subpart E_IIM Accounts: Hearing Process for Restricting an IIM Account



Sec. 115.600  If BIA decides to restrict your IIM account under 
Sec. 115.102 or Sec. 115.104, what procedures must the BIA follow?

    If under Sec. 115.102 or Sec. 115.104, the BIA has decided to 
limit your access to your IIM account (i.e., decided to supervise the 
IIM account), or if the BIA has decided to pay creditors with funds from 
your IIM account, including creditors with judgments from Courts of 
Indian Offenses for which preliminary procedures are prescribed in 25 
CFR 11.208, the BIA must notify you or your guardian, as applicable, to 
provide you or your guardian, as applicable, with an opportunity to 
challenge the BIA's decision to restrict your IIM account as specified 
in subpart E.



Sec. 115.601  Under what circumstances may the BIA restrict your IIM 
account through supervision or an encumbrance?

    (a) The BIA may restrict your IIM account through supervision if the 
BIA:
    (1) Receives an order from a court of competent jurisdiction that 
you are non-compos mentis; or
    (2) Receives an order or judgment from a court of competent 
jurisdiction that you are an adult in need of assistance because you are 
``incapable of

[[Page 334]]

managing or administering property, including your financial affairs;'' 
or
    (3) Determines through an administrative process that you are an 
adult in need of assistance based on a finding by a licensed medical or 
mental health professional that you are ``incapable of managing or 
administering property, including your financial affairs;'' or
    (4) Receives information from another federal agency that you are 
under a legal disability and that the agency has appointed a 
representative payee to receive federal benefits on your behalf.
    (b) The BIA may restrict your IIM account through an encumbrance if 
the BIA:
    (1) Receives an order from a court of competent jurisdiction 
awarding child support from your IIM account; or
    (2) Receives from a third party:
    (i) A copy of the original contract between you and the third party 
in which you used your IIM funds as security/collateral for the 
transaction;
    (ii) A copy of the document showing that the BIA approved in advance 
the use of your IIM funds as security/collateral for the contract;
    (iii) Proof of your default on the contract according to the terms 
of the contract; and
    (iv) A copy of the original assignment of IIM income as security/
collateral for the contract that is signed and dated by you and is 
notarized;
    (3) Receives a money judgment from a Court of Indian Offenses 
pursuant to 25 CFR 11.208 or under any tribal law and order code;
    (4) Is provided documentation showing that BIA or OTFM caused an 
administrative error which resulted in a deposit into your IIM account, 
or a disbursement to you, or to a third party on your behalf; or
    (5) Is provided with proof of debts owed to the United States 
pursuant to Sec. 115.104 of this part.



Sec. 115.602  How will the BIA notify you or your guardian, as applicable, 
of its decision to restrict your IIM account?

    The BIA will notify you or your guardian, as applicable, of its 
decision to restrict your IIM account by:
    (a) United States certified mail to your address of record;
    (b) Personal delivery to you or your guardian, as applicable, or to 
your address of record;
    (c) Publication for four consecutive weeks in your tribal newspaper 
if your whereabouts are unknown and in the local newspaper serving your 
last known address of record; or
    (d) United States certified mail to you in care of the warden, if 
you are incarcerated. The BIA may send a copy of the notification to 
your attorney, if known.



Sec. 115.603  What happens if BIA's notice of its decision to place

a restriction on your IIM account that is sent by United States 
certified mail is returned to the BIA as undeliverable for any reason?

    If BIA's notice of its decision to place a restriction on your IIM 
account that is sent by United States certified mail is returned to the 
BIA as undeliverable for any reason, the BIA will remove the restriction 
on your account, which was placed five days after the notice was mailed, 
and will publish a notice in accordance with Sec. 115.602(c) and Sec. 
115.605(b).



Sec. 115.604  When will BIA authorize OTFM to place a restriction on 
your IIM account?

    BIA will authorize OTFM to place a restriction on your IIM account 
after providing OTFM with supporting documentation (i.e., receipts, 
notice of publication, etc.) of the following:
    (a) Five (5) days after the date BIA mails you or your guardian, as 
applicable, notice of its decision to restrict your account by United 
States certified mail to your address of record;
    (b) One (1) day after BIA has made personal delivery to you or your 
guardian, as applicable, or to your address of record of its notice of 
the BIA's decision to restrict your account; or
    (c) Five (5) days after the fourth publication of the public notice 
of BIA's decision to restrict your account.

[[Page 335]]



Sec. 115.605  What information will the BIA include in its notice of 
the decision to restrict your IIM account?

    (a) When the BIA provides notice of its decision to restrict your 
IIM account by certified mail or personal delivery to you or your 
guardian, as applicable, the notice must contain:
    (1) The name on the IIM account;
    (2) The reason for the restriction;
    (3) The amount to be encumbered, if applicable;
    (4) A statement that your IIM account will be restricted 5 days 
after the date the notice was sent United States certified mail to your 
address of record;
    (5) An explanation that you have 40 days from the date the notice 
was sent United States certified mail to request a hearing to challenge 
BIA's decision to restrict your IIM account;
    (6) An explanation of how to request a hearing;
    (7) A statement that the BIA will conduct the hearing and that you 
are assured a fair hearing;
    (8) A copy of the fair hearing guidelines;
    (9) A statement that you may contact the BIA to authorize immediate 
payment from your IIM account to pay the claim, if applicable;
    (10) The address and phone number of the BIA office that made the 
decision to restrict your IIM account and provided the notice; and
    (11) Other information as may be determined appropriate by the BIA.
    (b) When the BIA provides public notice of its decision to restrict 
your account, the only information the public notice will include is:
    (1) The name on the account;
    (2) The date of first publication of the public notice;
    (3) A statement that the BIA has decided to place a restriction on 
your IIM account;
    (4) A statement that the public notice will be published once a week 
for four consecutive weeks;
    (5) A statement that the BIA will place a restriction on your 
account five (5) days after the date of the fourth publication of the 
public notice;
    (6) A statement that your opportunity to request a hearing to 
challenge BIA's decision to restrict your account will expire 30 days 
after the date of the fourth publication of the public notice; and
    (7) An address and telephone number of the BIA office publishing the 
notice to request further information and instructions on how to request 
a hearing.



Sec. 115.606  What happens if you do not request a hearing to challenge 
BIA's decision to restrict your IIM account during the allotted time period?

    If you or your guardian, as applicable, do not request a hearing to 
challenge BIA's decision to restrict your IIM account during the 
allotted time period, BIA's decision to restrict your IIM account will 
become final. BIA will follow the procedures outlined in Sec. 115.616 
through Sec. 115.618, and Sec. 115.620, as applicable.



Sec. 115.607  How do you request a hearing to challenge the BIA's 
decision to restrict your IIM account?

    You or your guardian, as applicable, must request a hearing to 
challenge the BIA's decision to restrict your IIM account from the BIA 
office that made the decision and notified you of the restriction. Your 
request must:
    (a) Be in writing;
    (b) Specifically request a hearing to challenge the restriction; and
    (c) Be hand delivered to the BIA office or postmarked within:
    (i) 40 days of the date that BIA's notice was sent United States 
certified mail or personally delivered to the address of record, or
    (ii) 30 days of the date of the final publication of the public 
notice.



Sec. 115.608  If you request a hearing to challenge BIA's decision to 
restrict your IIM account, when will BIA conduct the hearing?

    BIA will conduct a hearing within ten (10) working days from its 
receipt of a written request from you or your guardian, as applicable, 
for a hearing to challenge the decision to restrict your IIM account.



Sec. 115.609  Will you be allowed to present testimony and/or evidence 
at the hearing?

    Yes, you or your guardian, as applicable, will be provided the 
opportunity

[[Page 336]]

to present testimony and/or evidence as to the reasons the BIA should 
not restrict your IIM account, including information showing how an 
encumbrance may create an undue financial hardship, if applicable. You 
may not challenge a court order or judgment in this proceeding. However, 
if you have appealed an order or judgment from a court of competent 
jurisdiction, you or your guardian, as applicable, may present evidence 
of your appeal and the BIA hearing will be postponed until there is a 
final order from the court. The restriction on your IIM account will 
remain in place until after the hearing is concluded.



Sec. 115.610  Will you be allowed to present witnesses during a hearing?

    Yes, you or your guardian, as applicable, may present witnesses 
during a hearing. You are responsible for any and all expenses which may 
be associated with presenting witnesses.



Sec. 115.611  Will you be allowed to question opposing witnesses during 
a hearing?

    Yes, you or your guardian, as applicable, may question all opposing 
witnesses testifying during your hearing. You may also present witnesses 
to challenge opposing witness testimony.



Sec. 115.612  May you be represented by an attorney during your hearing?

    Yes, you may have an attorney or other person represent you during 
your hearing. However, you are responsible for any and all expenses 
associated with having an attorney or other person represent you.



Sec. 115.613  Will the BIA record the hearing?

    Yes, the BIA will record the hearing.



Sec. 115.614  Why is the BIA hearing recorded?

    The BIA hearing will be recorded so that it will be available for 
review if the hearing process is appealed under Sec. 115.107. The BIA 
hearing record must be preserved as a trust record.



Sec. 115.615  How long after the hearing will BIA make its final decision?

    BIA will make its final decision within 10 business days of the end 
of the hearing.



Sec. 115.616  What information will be included in BIA's final decision?

    BIA's final written decision to the parties involved in the 
proceeding will include:
    (a) BIA's decision to remove or retain the restriction on the IIM 
account;
    (b) A detailed justification for the supervision or encumbrance of 
the IIM account, where applicable;
    (c) The amount(s) to be paid, the name and address of a third party 
to whom payment will be made, and the time period for repayment 
established under 617(a) of this part, where applicable;
    (d) Any provision to allow for distributions to the account holder 
because of an undue financial hardship created by the encumbrance, if 
applicable; and
    (e) Any other information the hearing officer deems necessary.



Sec. 115.617  What happens when the BIA decides to supervise or encumber 
your IIM account after your hearing?

    BIA will provide OTFM with a copy of the distribution plan, after 
the BIA decides to:
    (a) Supervise your IIM account. BIA social services staff will 
consult with you and/or your guardian to develop a distribution plan. 
Upon BIA approval, the distribution plan will be valid for one year.
    (b) Encumber your IIM account. BIA will review your account balance 
and your future IIM income to develop a distribution plan that 
establishes the amount(s) to be paid and the dates payment(s) will be 
made to the specified party. Payments may need to be made over the 
course of one or more years if the amount owed to the specified party is 
greater than your current IIM account balance.

[[Page 337]]



Sec. 115.618  What happens if at the conclusion of the notice and hearing

process we decide to encumber your IIM account because of an administrative 
error which resulted in funds that you do not own being deposited in 
          your account or distributed to you or to a third party on your 
          behalf?

    If we decide at the conclusion of the notice and hearing process to 
encumber your account because of an administrative error which resulted 
in funds that you do not own being deposited into your IIM account or 
distributed to you or to a third party on your behalf, we will consult 
with you or your guardian, as applicable, to determine how the funds 
will be re-paid.



Sec. 115.619  If the BIA decides that the restriction on your IIM account

will be continued after your hearing, do you have the right to appeal that 
decision?

    Yes, if the BIA decides after your hearing to continue the 
restriction on your IIM account, you or your guardian, as applicable, 
have the right to appeal the decision under the procedures proscribed in 
Sec. 115.107.



Sec. 115.620  If you decide to appeal the BIA's final decision pursuant 
to Sec. 115.107, will the BIA restrict your IIM account during the appeal?

    Yes, if under Sec. 115.107 you or your guardian, as applicable, 
decide to appeal the BIA's final decision to:
    (a) Supervise your IIM account, your IIM account will remain 
restricted during the appeal period.
    (b) Encumber your IIM account, your IIM account will remain 
restricted up to the amount at issue during the appeal period. If your 
account balance is greater than the amount encumbered, those funds will 
be available to you upon request to and by approval of the Secretary.



           Subpart F_Trust Fund Accounts: General Information



Sec. 115.700  Why is money held in trust for tribes and individual Indians?

    Congress has passed a number of laws that require the Secretary to 
establish and administer trust fund accounts for Indian tribes and 
certain individual Indians who have an interest(s) in trust lands, trust 
resources, or trust assets.



Sec. 115.701  What types of accounts are maintained for Indian trust funds?

    Indian trust funds are deposited in tribal accounts, Individual 
Indian Money (IIM) accounts, and special deposit accounts. The 
illustration below provides information on each of these trust accounts.

[[Page 338]]

[GRAPHIC] [TIFF OMITTED] TR22JA01.172


[66 FR 7094, Jan. 22, 2001, as amended at 66 FR 8768, Feb. 2, 2001]



Sec. 115.702  What specific sources of money will be accepted for deposit 
into a trust account?

    We must accept proceed on behalf of tribes or individuals from the 
following sources:

[[Page 339]]

[GRAPHIC] [TIFF OMITTED] TR22JA01.173


[[Page 340]]


[GRAPHIC] [TIFF OMITTED] TR22JA01.174


[[Page 341]]


[GRAPHIC] [TIFF OMITTED] TR22JA01.175


[66 FR 7094, Jan. 22, 2001. Redesignated at 66 FR 8768, Feb. 2, 2001]



Sec. 115.703  May we accept for deposit into a trust account money not 
specified in Sec. 115.702?

    No, we will not accept funds from sources that are not identified in 
the table in Sec. 115.702 for deposit into a trust account.



Sec. 115.704  May we accept for deposit into a trust account retirement

checks/payments or pension fund checks/payments even though those funds 
are not specified in Sec. 115.702?

    No, we will not accept retirement checks/payments or pension fund 
checks/payments or any funds from sources that are not identified in the 
table in Sec. 115.702 for deposit into a trust account.



Sec. 115.705  May we accept for deposit into a trust account money 
awarded or assessed by a court of competent jurisdiction?

    We will accept money awarded or assessed by a court of competent 
jurisdiction for a cause of action directly related to trust assets to 
be deposited into a trust account. Other funds awarded by a court of 
competent jurisdiction may not be deposited into a trust account.



Sec. 115.706  When funds are awarded or assessed by a court of competent 

jurisdiction in a cause of action involving trust assets, what documentation 
is required to deposit the trust funds into a trust account?

    When funds are awarded or assessed by a court of competent 
jurisdiction in a cause of action involving trust assets, we must 
receive the funds awarded as stipulated in the court order and a copy of 
the court's order.



Sec. 115.707  Will the Secretary accept administrative fees for deposit 
into a trust account?

    No. The Secretary will not accept administrative fees for deposit 
into a trust account because administrative fees are not trust funds. 
However, administrative fees may be deposited into a non-interest 
bearing, non-trust account with the BIA.



Sec. 115.708  How quickly will trust funds received by the Secretary on 
behalf of tribes or individual Indians be deposited into a trust account?

    Trust funds received by the Secretary on behalf of a tribe or 
individual Indians will be deposited into a trust account within twenty-
four hours, or no later than the close of business on the next business 
day following the receipt of funds at a location with a designated 
federal depository.



Sec. 115.709  Will an annual audit be conducted on trust funds?

    Yes, in accordance with the Trust Reform Act an annual audit will be 
conducted on trust funds. Each tribe and IIM account holder will be 
notified when the Secretary has conducted an annual audit on a fiscal 
year basis of all the trust funds held by the United States for the 
benefit of tribes and individual Indians. This notice will be provided 
in the first quarterly statement of performance following the 
publication of the audit.

[[Page 342]]

                        Investments and Interests



Sec. 115.710  Does money in a trust account earn interest?

    Yes, all money deposited in a trust account is invested and earns 
interest or yield returns, or both.



Sec. 115.711  How is money in a trust account invested?

    OTFM manages trust fund investments and its investment decisions are 
governed by federal statute. See 25 U.S.C. Sec. Sec. 161(a) and 162a.



Sec. 115.712  What is the interest rate earned on money in a trust account?

    The rate of interest on a trust account changes based on how the 
money is invested and how those investments perform.



Sec. 115.713  When does money in a trust account start earning interest?

    Funds must remain on deposit at least one business day before 
interest is earned. Interest earnings of less than one cent are not 
credited to any account.



                        Subpart G_Tribal Accounts



Sec. 115.800  When does OTFM open a tribal account?

    A tribal account is opened when OTFM receives income from the 
sources described in Sec. 115.702.



Sec. 115.801  How often will a tribe receive information about its trust 
account(s)?

    The OTFM is required to provide each tribe with a statement of 
performance quarterly, within or no later than 20 business days after 
the close of every quarterly statement period.



Sec. 115.802  May a tribe make a request to OTFM to receive information 
about its trust account more frequently?

    Yes, a tribe may contact OTFM at any time to:
    (a) Request information about account transactions and balances;
    (b) Make arrangements to access account information electronically; 
or
    (c) Receive a monthly statement.



Sec. 115.803  What information will be provided in a statement of 
performance?

    The statement of performance will identify the source, type, and 
status of the trust funds deposited and held in a trust account; the 
beginning balance; the gains and losses; receipts and disbursements; and 
the ending account balance of the quarterly statement period.



Sec. 115.804  Will we account to a tribe for those trust funds the tribe 
receives through direct pay?

    No, under the Trust Reform Act we are only responsible for 
accounting for those trust funds received into, and maintained by, the 
Department's trust funds management system.



Sec. 115.805  If a tribe is paid directly under a contract for the sale 

or use of trust assets, will we accept those trust funds for deposit 
into a tribal trust account?

    If a contract for the sale or use of trust assets specifies that 
payments are to be made directly to a tribe, we will not accept these 
trust funds into a tribal trust account. Where a tribe under 25 U.S.C. 
450f et seq. has contracted or compacted with the federal government to 
operate a federal program and the tribe, operating the federal program 
on behalf of the Secretary, receives trust funds for the sale or use of 
trust assets pursuant to a contract that specifies that payments are to 
be made to the Secretary on behalf of a tribe or an individual [the 
owner of the trust assets], the tribe must follow Sec. 115.708 for the 
deposit of the trust funds into the trust account.



Sec. 115.806  How will the BIA assist in the administration of tribal 
judgment fund accounts?

    (a) If the tribe requests assistance or if Congress directs the 
Secretary to provide assistance, BIA will provide technical assistance 
on developing a judgment use and distribution plan to a tribe.
    (b) BIA will review all tribal requests for distribution of tribal 
judgment funds to ensure that each request complies with any 
requirements associated with the use of that money found in

[[Page 343]]

statutory language, congressional directives, court orders, court-
approved settlements, settlement agreements, use and distribution plans, 
or bond or loan payments.

                Investing and Managing Tribal Trust Funds



Sec. 115.807  Will OTFM consult with tribes about investments of tribal 
trust funds?

    Upon the request of a tribe, OTFM will consult with the tribe 
annually to develop investment strategies to accommodate the cash flow 
needs of the tribe.



Sec. 115.808  Could trust fund investments made by OTFM lose money?

    The value of trust fund investments made by OTFM will vary depending 
on the type of investment and, including but not limited to, the 
following:
    (a) Current interest rates;
    (b) Whether the security/investment is held to its maturity; and
    (c) Original purchase price.
    However, as long as the purchase price of the security/investment is 
made at or below face value and the security/investment is held until 
maturity or payoff, the security/investment will not lose principal 
invested funds.



Sec. 115.809  May a tribe recommend to OTFM how to invest the tribe's 
trust funds?

    Tribes may recommend certain investments to OTFM, but the 
recommendations must be in accordance with the statutory requirements 
set forth in 25 U.S.C. Sec. Sec. 161a and 162a. The OTFM will make the 
final investment decision based on prudent investment practices.



Sec. 115.810  May a tribe directly invest and manage its trust funds?

    A tribe may apply to withdraw its trust funds from OTFM for 
investment and management by the tribe. The tribe's request to withdraw 
funds must be in accordance with the requirements of the Trust Reform 
Act and 25 CFR part 1200, subpart B, unless otherwise specified by 
statutory language or the controlling document which governs the use of 
the trust funds.



Sec. 115.811  Under what conditions may a tribe redeposit funds with 
OTFM that were previously withdrawn under the Trust Reform Act?

    Tribal trust funds withdrawn under the Trust Reform Act may be 
returned to OTFM under the following conditions:
    (a) A tribe must make a written request to OTFM to redeposit all or 
part of the withdrawn trust funds;
    (b) No tribal trust funds may be redeposited to a tribal trust 
account during the first six months after being withdrawn, except with 
the approval of the Secretary;
    (c) Tribal trust funds may only be returned to OTFM a maximum of 
twice a year, except with the approval of the Secretary; and
    (d) A tribe must return withdrawn trust funds in accordance with the 
requirements of the Trust Reform Act in 25 CFR, part 1200, subpart C.



Sec. 115.812  Is a tribe responsible for its expenditures of trust funds

that are not made in compliance with statutory language or other federal 
law?

    If a tribe's use of trust funds is limited by statutory language or 
other federal law(s) and a tribe uses those trust funds in direct 
violation of those laws, absent an approved modification which allows 
for the expenditures, we will require the tribe to reimburse its trust 
fund account.



Sec. 115.813  Is there a limit to the amount of trust funds OTFM will 
disburse from a tribal trust account?

    OTFM will only disburse the available balance of the trust funds in 
a tribal trust account in accordance with a use and distribution plan, 
if applicable, and will not overdraw a tribal trust account. If a 
tribe's trust funds are invested in securities that have not matured, 
OTFM will only sell the asset to make cash available to the tribe if:
    (a) There are no restrictions against the sale, and
    (b) A tribe provides OTFM with a tribal resolution stating that:
    (1) The security must be sold;
    (2) The tribe acknowledges that they may incur a penalty when the 
security is sold; and

[[Page 344]]

    (3) The tribe acknowledges that the security may lose value if it is 
sold prior to maturity.



Sec. 115.814  If a tribe withdraws money from its trust account for a 

particular purpose or project, may the tribe redeposit any money that 
was not used for its intended purpose?

    A tribe may redeposit funds not used for a particular purpose or 
project if:
    (a) The funds were withdrawn in accordance with:
    (1) The terms of Trust Reform Act;
    (2) The terms of the legislative settlement; or
    (3) The terms of a judgment use and distribution plan; and
    (b) The tribe can provide documentation showing the source of the 
funds to be redeposited.

                     Withdrawing Tribal Trust Funds



Sec. 115.815  How does a tribe request trust funds from a tribal trust 
account?

    To request trust funds from a tribal trust account, a tribe may:
    (a) Make a written request to the BIA or the OTFM that is signed by 
the proper authorizing official(s), list the amount of trust funds to be 
withdrawn, provide any additional documentation or information required 
by law to withdraw certain trust funds, and must include a tribal 
resolution approving the withdrawal of the specified amount of trust 
funds; or
    (b) Contact the OTFM to withdraw funds in accordance with the Trust 
Reform Act and 25 CFR part 1200.



Sec. 115.816  May a tribe's request for a withdrawal of trust funds from 
its trust account be delayed or denied?

    (a) Action on a tribe's request for a withdrawal of trust funds may 
be delayed or denied if:
    (1) The tribe did not submit all the necessary documentation;
    (2) The tribe's request is not signed by the proper authorizing 
official(s);
    (3) OTFM does not have documentation from the tribe certifying its 
recognized, authorizing officials;
    (4) The tribe's request is in conflict with statutory language or 
the controlling document governing the use of the trust funds; or
    (5) The BIA or OTFM requires clarification regarding the tribe's 
request.
    (b) If action on a tribe's request to withdraw trust funds will be 
delayed or denied, the BIA or the OTFM will:
    (1) Notify the tribe within ten (10) working days of the date of a 
request made under Sec. 115.815(a);
    (2) Notify the tribe under the time frames established in 25 CFR 
part 1200 for requests made under the Trust Reform Act; and
    (3) Provide technical assistance to the tribe to address any 
problems.



Sec. 115.817  How does OTFM disburse money to a tribe?

    Upon receipt of all necessary documentation, OTFM will process the 
request for disbursement and send the tribe the requested amount of 
trust funds within one business day. Whenever possible, trust funds will 
be disbursed electronically to an account in a financial institution 
designated by the tribe. If there are circumstances that preclude 
electronic payments, OTFM will mail a check.

                       Unclaimed Per Capita Funds



Sec. 115.818  What happens if an Indian adult does not cash his or her 
per capita check?

    (a) If an Indian adult does not cash his or her per capita check 
within twelve (12) months of the date the check was issued, the check 
will be canceled and the trust funds will be deposited into a ``returned 
per capita account'' where the funds will be maintained until we receive 
a request for disbursement by the Indian adult or for disposition by a 
tribe pursuant to Sec. 115.820.
    (b) If an Indian adult's per capita check is returned to us as 
undeliverable, the trust funds will be immediately deposited into a 
``returned per capita account'' where the funds will be maintained until 
we receive a request for disbursement by the individual or for 
disposition by a tribe pursuant to Sec. 115.820.

[[Page 345]]



Sec. 115.819  What steps will be taken to locate an individual whose per

capita check is returned as undeliverable or not cashed within twelve 
(12) months of issuance?

    The OTFM will notify a tribe of the names of the individuals whose 
per capita checks were returned as undeliverable or not cashed within 
twelve (12) months of issuance and will take reasonable action, 
including utilizing electronic search tools, to locate the individual 
entitled to receive the per capita funds.



Sec. 115.820  May OTFM transfer money in a returned per capita account 
to a tribal account?

    Funds in a returned per capita account will not automatically be 
returned to a tribe. However, a tribe may apply under 25 U.S.C. 164 and 
Public Law 87-283, 75 Stat. 584 (1961), to have the unclaimed per capita 
funds transferred to its account for the tribe's use after six years 
have passed from the date of distribution.



                   Subpart H_Special Deposit Accounts



Sec. 115.900  Who receives the interest earned on trust funds in a special 
deposit account?

    Generally, any interest earned on trust funds in a special deposit 
account will follow the principal (i.e., the tribe or individual who 
owns the trust funds in the special deposit account will receive the 
interest earned).



Sec. 115.901  When will the trust funds in a special deposit account 
be credited or paid out to the owner of the funds?

    OTFM will disburse the trust funds from a special deposit account 
and deposit the trust funds in the owner's trust account following the 
BIA certification of the ownership of the funds and OTFM's receipt of 
such certification.



Sec. 115.902  May administrative or land conveyance fees paid as federal 
reimbursements be deposited in a special deposit account?

    No, administrative or land conveyance fees paid as federal 
reimbursements may not be deposited with OTFM, which includes special 
deposit accounts. These fees must be deposited in the Federal Financial 
System.



Sec. 115.903  May cash bonds (e.g., performance bonds, appeal bonds, 
etc.) be deposited into a special deposit account?

    No, cash bonds may not be deposited with OTFM, which includes the 
special deposit accounts at OTFM. Cash bonds held by the Secretary are 
to be deposited in non-interest bearing accounts until the term of the 
bonds expire.



Sec. 115.904  Where earnest money is paid prior to Secretarial approval 

of a conveyance or contract instrument involving trust assets, may the 
BIA deposit that earnest money into a special deposit account?

    No, any money received prior to Secretarial approval of conveyance 
or contract instrument involving trust assets must be deposited into a 
non-interest bearing, non-trust account. After the Secretary approves 
the conveyance or contract instrument involving trust assets, the money 
designated by the conveyance or contract instrument will be deposited 
into a trust fund account.



                            Subpart I_Records



Sec. 115.1000  Who owns the records associated with this part?

    (a) Records are the property of the United States if they:
    (1) Are made or received by a tribe or tribal organization in the 
conduct of a federal trust function under this part, including the 
operation of a trust program pursuant to 25 U.S.C. 450f et seq.; and
    (2) Evidence the organization, functions, policies, decisions, 
procedures, operations, or other activities undertaken in the 
performance of a federal trust function under this part.
    (b) Records not covered by paragraph (a) of this section that are 
made or received by a tribe or tribal organization in the conduct of 
business with the Department of the Interior under this part are the 
property of the tribe.



Sec. 115.1001  How must records associated with this part be preserved?

    (a) Any organization, including tribes and tribal organizations, 
that have

[[Page 346]]

records identified in Sec. 115.1000(a) must preserve the records in 
accordance with approved Departmental records retention procedures under 
the Federal Records Act, 44 U.S.C. Chapters 29, 31 and 33. These records 
and related records management practices and safeguards required under 
the Federal Records Act are subject to inspection by the Secretary and 
the Archivist of the United States.
    (b) A tribe or tribal organization should preserve the records 
identified in Sec. 115.1000(b) for the period of time authorized by the 
Archivist of the United States for similar Department of the Interior 
records in accordance with 44 U.S.C. Chapter 33. If a tribe or tribal 
organization does not preserve records associated with its conduct of 
business with the Department of the Interior under this part, the tribe 
or tribal organization may be prevented from being able to adequately 
document essential transactions or furnish information necessary to 
protect its legal and financial rights or those of persons directly 
affected by its activities.



PART 117_DEPOSIT AND EXPENDITURE OF INDIVIDUAL FUNDS OF MEMBERS OF THE

OSAGE TRIBE OF INDIANS WHO DO NOT HAVE CERTIFICATES OF COMPETENCY
--Table of Contents




Sec.
117.1 Definitions.
117.2 Payment of taxes of adult Indians.
117.3 Payment of taxes of Indians under 21 years of age.
117.4 Disbursement of allowance funds.
117.5 Procedure for hearings to assume supervision of expenditure of 
          allowance funds.
117.6 Allowance for minors.
117.7 Disbursement or expenditure of surplus funds.
117.8 Purchase of land.
117.9 Construction and repairs.
117.10 Purchase of automotive equipment.
117.11 Insurance.
117.12 Costs of recording and conveyancing.
117.13 Telephone and telegraph messages.
117.14 Miscellaneous expenditure of surplus funds.
117.15 Collections from insurance companies.
117.16 Reimbursement to surplus funds.
117.17 Inactive surplus funds accounts.
117.18 Withdrawal and payment of segregated trust funds.
117.19 Debts of Indians.
117.20 Purchase orders.
117.21 Fees and expenses of attorneys.
117.22 Disbursements to legal guardians.
117.23 Transactions between guardian and ward.
117.24 Compensation for guardians and their attorneys.
117.25 Charges for services to Indians.
117.26 Expenses incurred pending qualification of an executor or 
          administrator.
117.27 Custody of funds pending administration of estates.
117.28 Payment of claims against estates.
117.29 Sale of improvements.
117.30 Sale of personal property.
117.31 Removal of restrictions from personal property.
117.32 Funds of Indians of other tribes.
117.33 Signature of illiterates.
117.34 Financial status of Indians confidential.
117.35 Appeals.

    Authority: 5 U.S.C. 301.

    Source: 22 FR 10554, Dec. 24, 1957, unless otherwise noted. 
Redesignated at 47 FR 13327, Mar. 30, 1982.



Sec. 117.1  Definitions.

    When used in the regulations in this part the following words or 
terms shall have the meaning shown below:
    (a) Secretary means the Secretary of the Interior or his authorized 
representative.
    (b) Commissioner means the Commissioner of Indian Affairs or his 
authorized representative.
    (c) Superintendent means the superintendent of the Osage Agency.
    (d) Quarterly payment means the payment of not to exceed $1,000 
which is made each fiscal quarter to or on behalf of an adult Indian, 
from the following sources:
    (1) The pro rata distribution of tribal mineral income and other 
tribal revenues.
    (2) The interest on segregated trust funds.
    (3) Surplus funds in addition to the income from the foregoing 
sources in the amount necessary to aggregate $1,000 when the income from 
those sources is less than $1,000 and the Indian has a balance of 
accumulated surplus funds in excess of $10,000.
    (e) Surplus funds means all those moneys and securities readily 
convertible into cash, except allowance funds and segregated trust 
funds, which are held to the credit of an Indian at the

[[Page 347]]

Osage Agency and which may be disbursed, expended or invested only upon 
authorization by the Secretary. The term includes:
    (1) That portion of the quarterly distribution of tribal income and 
interest on segregated trust funds, in excess of $1,000, belonging to an 
adult Indian.
    (2) The proceeds, including appreciation, of the sale or conversion 
of restricted real or personal property (other than partition sales).
    (3) Payments made by insurance companies or others for loss or 
damage to restricted real or personal property.
    (4) All moneys and securities, other than segregated trust funds, to 
the credit of an Indian who is less than 21 years of age (except the 
income from restricted lands payable as provided by Sec. 117.3).
    (5) Funds and securities placed to the credit of an Indian upon the 
distribution of an Osage estate.
    (f) Allowance funds means that income payable to or on behalf of a 
living adult Indian, the expenditure and disbursement of which is not 
subject to supervision unless authorized pursuant to the procedure 
contained in Sec. 117.5. The term includes:
    (1) The quarterly payment in an amount not to exceed $1,000.
    (2) The rentals and income from restricted lands owned by the 
Indian.
    (3) The rentals and income from restricted lands owned by the minor 
children of the Indian, as provided in Sec. 117.3.
    (4) Income from investments.
    (5) Interest on deposits to the credit of the Indian.
    (g) Segregated trust funds means those moneys held in the United 
States Treasury at interest to the credit of an Indian which represent 
pro rata shares of the segregation of tribal trust funds and the 
proceeds of the partition of restricted lands.



Sec. 117.2  Payment of taxes of adult Indians.

    The superintendent may cause to be paid out of any money heretofore 
accrued or hereafter accruing to the credit of any adult Indian all 
taxes of every kind and character for which such Indian is or may be 
liable before paying to or for such person any funds as required by law. 
All checks in payment of taxes shall be made payable to the proper 
collector. For the purpose of establishing a fund with which to meet the 
payment of such taxes when due, the Superintendent may cause the funds 
of an adult Indian to be hypothecated in the following manner:
    (a) For the payment of ad valorem taxes, one-fourth of the estimated 
amount ad valorem taxes from each quarterly payment unless this 
procedure would cause the obligation of more than 25 percent of such 
quarterly payments, in which event the necessary additional funds shall 
be retained from other allowance funds payable to such person under the 
law. If there be no other allowance funds available, or if the funds 
from these sources are insufficient, one-fourth of the estimated amount 
of such ad valorem taxes may be obligated from each quarterly payment. 
If an Indian who is liable for ad valorem taxes has no allowance funds, 
or such funds are insufficient for the payment thereof, surplus funds 
may be used for such payment.
    (b)(1) For the payment of income taxes, one-half of the estimated 
amount of income taxes from each semi-annual payment of interest on 
deposits, but if such interest payments are insufficient to meet this 
obligation, additional funds shall be retained from interest on 
investments, rentals, or other allowance funds.
    (2) Whenever funds are withheld for the purpose of establishing a 
fund to meet the payment of taxes, the Indian shall be notified of the 
action taken.



Sec. 117.3  Payment of taxes of Indians under 21 years of age.

    All taxes assessed against the restricted lands of Indians less than 
21 years of age shall be paid by the superintendent direct to the 
collector from the rents and income derived from such lands, and the 
balance, if any, of such rents and income shall be paid to the living 
parents or parent. If the parents are separated, the balance shall be 
paid to the parent having custody of the Indian under 21 years of age. 
All other taxes for which an Indian under 21 years of age may be liable 
shall be paid from his surplus funds.

[[Page 348]]



Sec. 117.4  Disbursement of allowance funds.

    Except as provided in Sec. 117.5, all allowance funds shall be 
disbursed to the Indian owner unless the Indian owner directs otherwise 
in writing. At the request of the Indian owner, such funds may be 
retained by the superintendent as voluntary deposits subject to 
withdrawal or other disposition upon demand or direction of the Indian 
owner. The superintendent may recognize a power of attorney executed by 
the Indian and may disburse the allowance funds of the Indian in 
conformity therewith so long as the power of attorney remains in force 
and effect.



Sec. 117.5  Procedure for hearings to assume supervision of expenditure 
of allowance funds.

    (a) Whenever the superintendent has reason to believe that an adult 
Indian is wasting or squandering his allowance funds the superintendent 
may cause an investigation and written report of the facts to be made. 
If the report indicates that the Indian is wasting or squandering his 
allowance funds the following notice shall be served upon the Indian, in 
person or by registered mail, and a copy thereof shall likewise be 
served upon his guardian if the Indian is under guardianship:

    Section 1 of the act of February 27, 1925 (43 Stat. 1008) provides 
in part as follows:
    ``All payments to adults not having certificates of competency, 
including amounts paid for each minor, shall, in case the Secretary of 
the Interior finds that such adults are wasting or squandering said 
income, be subject to the supervision of the Superintendent of the Osage 
Agency: . . .''
    Enclosed is a copy of a report which has been made to me concerning 
your handling and management of the income paid to you through the Osage 
Agency. This report indicates that you have been wasting and squandering 
your payments.
    You are hereby notified that a hearing will be held in the Osage 
Indian Agency, Pawhuska, Oklahoma, at ------ m., on the---- day of ----
----, 19----, before the Superintendent, for the purpose of taking 
testimony and evidence to be submitted to the Commissioner of Indian 
Affairs for his consideration in determining whether your payments shall 
be subject to the supervision of the Superintendent.
    You are requested to be present at the hearing at the time and place 
designated above. You may introduce at the hearing such testimony and 
evidence as you deem appropriate to show that you are not wasting or 
squandering your payments and that your payments should continue to be 
made to you without supervision for your unrestricted use.
    You are entitled to employ an attorney to assist you in this matter. 
Upon your request the employees of the Osage Agency will furnish you 
with any information you desire concerning your accounts at the Osage 
Agency or any of your transactions handled through the Osage Agency.
    Date.
    Superintendent.

    (b) A hearing shall be held pursuant to the notice, the date of 
which shall be not less than 30 days after the date of the notice. For 
good cause shown to exist the superintendent may continue the hearing to 
a later date.
    (c) A record of the proceedings, consisting of the superintendent's 
preliminary report, the notice and proof of service, all testimony and 
evidence introduced at the hearing, and all briefs and letters filed by 
the Indian or his attorney shall be submitted to the Commissioner, 
together with a recommendation from the superintendent.
    (d) Upon a finding by the Commissioner that the Indian is wasting or 
squandering his income, his allowance funds shall thereafter be subject 
to the supervision of the superintendent. Notice of the decision of the 
Commissioner shall be furnished all interested parties.



Sec. 117.6  Allowance for minors.

    The superintendent may disburse from the surplus funds of an Indian 
under 21 years of age not to exceed $300 quarterly for the support and 
maintenance of the minor. Disbursement may be made to the parent, 
guardian, or other person, school or institution having actual custody 
of the minor, or, when the minor is 18 years of age or over, 
disbursement may be made direct to the minor.



Sec. 117.7  Disbursement or expenditure of surplus funds.

    Except as provided in the regulations in this part, no disbursement 
or expenditure of surplus funds of Indians shall be made without the 
consent of

[[Page 349]]

the Indian owner and until authorization has been obtained from the 
Commissioner. Application by an Indian or his legal guardian, or if he 
is a minor, by his parent or legal guardian, for the expenditure of 
surplus funds shall be presented to the Commissioner, fully justified 
with the appropriate attachments such as court orders, decrees or other 
papers. Such application shall contain full information regarding the 
individual including his cash balance, the sum invested, the number of 
shares in the Osage mineral estate, total income from all sources 
including that paid on behalf of minors, the family status and the 
occupation or industry of the applicant. When request is made for 
payment to the individual without supervision, the record of said 
individual and his ability to handle such funds shall be shown.



Sec. 117.8  Purchase of land.

    Upon written application of an adult Indian, the superintendent may 
disburse not to exceed $10,000 from the surplus funds of such Indian for 
the purchase of land, the title to which has been examined and accepted 
by the special attorney for the Osage Indians or other legal officer 
designated by the Commissioner. In all cases title must be taken by deed 
containing a clause restricting alienation or encumbrance without the 
consent of the Secretary of the Interior or his authorized 
representative.



Sec. 117.9  Construction and repairs.

    Upon written application by an adult Indian, the superintendent may 
disburse not to exceed $1,000 during any one fiscal year from the 
surplus funds of such Indian to make repairs and improvements to 
restricted real property and in addition not to exceed $300 for new 
construction. When such expenditures are being made on property 
producing an income, reimbursement shall be required from such income 
unless otherwise directed by the Commissioner. When an Indian refuses to 
make application for funds to defray the cost of repairs necessary to 
preserve restricted property, the superintendent may, when authorized by 
the Commissioner, expend the surplus funds of the Indian for such 
repairs.



Sec. 117.10  Purchase of automotive equipment.

    The superintendent may disburse from the surplus funds of an adult 
Indian not to exceed $2,000 for the purchase of automotive equipment 
when the Indian agrees in writing to carry property and liability 
insurance on the automotive equipment and to reimburse his surplus funds 
account from allowance funds within 24 months. No disbursement of 
surplus funds for the purchase of automotive equipment shall be made if 
the fulfillment of the reimbursable agreement will endanger the payment 
of taxes, insurance or other obligations, or result in the inability of 
the Indian to meet his current living expenses from allowance funds.



Sec. 117.11  Insurance.

    The superintendent may obtain policies of insurance covering the 
restricted property, real or personal, of minor Indians and pay the 
premiums thereon from the funds of the minors. Upon application by an 
adult Indian the superintendent may procure insurance on any restricted 
property, real or personal, owned by the applicant and pay the necessary 
premiums from his surplus or allowance funds. When authorized by the 
Commissioner, the superintendent may also procure insurance on 
restricted property, real or personal, of any adult Indian who neglects 
or refuses to take out such insurance.



Sec. 117.12  Costs of recording and conveyancing.

    The superintendent may expend the surplus funds of an Indian to make 
direct payment of recording fees and costs, of conveyancing, including 
abstracting costs, which are properly payable by the Indian.



Sec. 117.13  Telephone and telegraph messages.

    The superintendent may expend the surplus funds of an Indian to make 
direct payment for telephone and telegraph messages sent by the agency 
or received at the agency at the instance of the Indian or his guardian 
or attorney.

[[Page 350]]



Sec. 117.14  Miscellaneous expenditure of surplus funds.

    Upon application by an adult Indian the superintendent may disburse 
the surplus funds of such Indian for the following purposes:
    (a) Medical, dental, and hospital expenses for the applicant or a 
member of his family, not to exceed one thousand dollars ($1,000) during 
any one fiscal year.
    (b) Funeral expenses, including the funeral feast, of a deceased 
member of his family, in an amount not to exceed one thousand dollars 
($1,000).
    (c) A tombstone or monument to mark the grave of a deceased member 
of his family in amount not to exceed five hundred dollars ($500).
    (d) Court costs in any judicial proceeding to which the applicant is 
a party.
    (e) Bond premiums, except bail and supersedeas bonds.
    (f) For miscellaneous purposes, not to exceed five hundred dollars 
($500) during any one fiscal year.



Sec. 117.15  Collections from insurance companies.

    Moneys collected from insurance companies for loss or damage to 
restricted real or personal property shall be deposited to the credit of 
the Indian owner as surplus funds. Moneys so deposited to the credit of 
an adult Indian may, upon the written application of the Indian, be 
disbursed by the superintendent for the purpose of repairing or 
replacing the property. Moneys collected from insurance companies for 
loss or damage to unrestricted real or personal property shall be paid 
to the Indian for his unrestricted use.



Sec. 117.16  Reimbursement to surplus funds.

    When expenditures have been made from surplus funds upon the 
condition, and with the written agreement of the Indian, that 
reimbursement or repayment shall be made from future allowance funds, 
the superintendent is authorized to withhold from succeeding quarterly 
payments or other allowance funds such amounts as may be necessary to 
effect reimbursement within a period not exceeding 24 months from date 
of the first expenditure under the given authority.



Sec. 117.17  Inactive surplus funds accounts.

    When the balance of surplus funds to the credit of an adult Indian 
is less than $300 and when there is no likelihood of its increase within 
90 days, the superintendent may disburse the entire balance to the 
Indian owner for his unrestricted use.



Sec. 117.18  Withdrawal and payment of segregated trust funds.

    The withdrawal and payment of segregated trust funds will be made 
only upon application and satisfactory evidence that the withdrawal and 
payment of such funds would be to the best interest of the Indian in 
view of all the circumstances shown to exist. The segregated trust funds 
of an Indian under guardianship or an Indian under 21 years of age shall 
not be released and paid except to a guardian appointed by a proper 
court and after the filing of a bond approved by the court conditioned 
upon the faithful handling of the funds. Applications for the withdrawal 
and payment of segregated trust funds must be made upon the forms 
prescribed by the Secretary for that purpose.



Sec. 117.19  Debts of Indians.

    No indebtedness of Indians will be paid from their funds under the 
control or supervision of the Secretary unless authorized in writing and 
obligated against their accounts by the superintendent or some other 
designated employee except in cases of emergency involving the 
protection or preservation of life or property, which emergency must be 
clearly shown. With this exception, no authorization or obligation 
against the account of any Indian for indebtedness incurred by him shall 
be made by the superintendent unless specifically authorized by the 
regulations in this part.



Sec. 117.20  Purchase orders.

    Purchase orders may be issued by the superintendent for expenditures 
authorized by the regulations in this part

[[Page 351]]

or for expenditures specifically authorized by the Commissioner. When 
necessary to prevent hardship or suffering, purchase orders may be 
issued by the superintendent against the future income of an Indian in 
an amount not to exceed 80 percent of the anticipated quarterly payment. 
The payment of purchase orders issued against future income shall be 
contingent upon the availability of funds.



Sec. 117.21  Fees and expenses of attorneys.

    When payment of an attorney fee for services to an Indian is to be 
made from his surplus funds, the employment of the attorney by the 
Indian must be approved in advance. All fees will be determined on a 
quantum merit basis and paid upon completion of the services. The 
superintendent may approve the employment of an attorney, determine the 
fee, and disburse the surplus funds of the Indian in payment thereof 
when the fee does not exceed $500. Upon application by the Indian and 
upon the presentation of properly authenticated vouchers, the 
superintendent may disburse the surplus funds of the Indian in an amount 
not to exceed $200 in payment of necessary expenses incurred by the 
attorney.



Sec. 117.22  Disbursements to legal guardians.

    Any disbursement authorized to be made to an Indian by the 
regulations of this part may, when the Indian is under guardianship, be 
made by the superintendent to the guardian. All expenditures by a 
guardian of the funds of his ward must be approved in writing by the 
court and the superintendent.



Sec. 117.23  Transactions between guardian and ward.

    Business dealings between the guardian and his ward involving the 
sale or purchase of any property, real or personal, by the guardian to 
or from the ward, or to or from any store, company or organization in 
which the guardian has a direct interest or concern or contrary to the 
policy of the Department and shall not be approved by the superintendent 
without specific authority from the Commissioner.



Sec. 117.24  Compensation for guardians and their attorneys.

    (a) The superintendent may approve compensation for services 
rendered by the guardian of an Indian on an annual basis, the amount of 
the compensation to be determined by application of the following 
schedule to the moneys collected by the guardian:

First $1,000 or portion thereof, not to exceed 10 percent.
Second $1,000 or portion thereof, not to exceed 9 percent.
Third $1,000 or portion thereof, not to exceed 8 percent.
Fourth $1,000 or portion thereof, not to exceed 7 percent.
Fifth $1,000 or portion thereof, not to exceed 6 percent.
Sixth $1,000 or portion thereof, not to exceed 5 percent.
Seventh $1,000 or portion thereof, not to exceed 4 percent.
Eighth $1,000 or portion thereof, not to exceed 3 percent.
Ninth $1,000 or portion thereof, not to exceed 2 percent.
All above $9,000 not to exceed 1 percent.

    (b) Balance carried forward from previous reports and moneys 
received by a guardian or his attorney as compensation shall be excluded 
in determining the compensation of the guardian or his attorney.
    (c) The attorney for a guardian shall be allowed compensation in an 
amount equal to one-half of the amount allowed the guardian under the 
foregoing schedule except when such attorney is himself the guardian and 
acting as his own attorney, in which event he shall be allowed a fee of 
not to exceed one-fourth of the amount allowed the guardian under the 
foregoing schedule in addition to the fee as guardian.
    (d) The superintendent may in his discretion permit the guardian to 
collect rentals from restricted city or town properties belonging to his 
ward.



Sec. 117.25  Charges for services to Indians.

    The superintendent shall make the following charges for services to 
Indians: Five per cent of all interest and non-liquidating dividends 
received from all types of securities, including stocks, bonds, and 
mortgages held in trust for individual Indians and interest on group 
investments. Such fees

[[Page 352]]

shall be deposited in the Treasury of the United States to the credit of 
the fund ``Proceeds of Oil and Gas Leases, Royalties, etc., Osage 
Reservation, Oklahoma''.



Sec. 117.26  Expenses incurred pending qualification of an executor or 
administrator.

    Pending the qualification of the executor or administrator of the 
estate of a deceased Indian of one-half or more Indian blood who did not 
have a certificate of competency at the time of his death, the 
superintendent may authorize the extension of credit for the following 
purposes, subject to allowance of claims by the executor or 
administrator and approval thereof by the court:
    (a) Funeral expenses, including the cost of a funeral feast, in an 
amount not to exceed $1,000.
    (b) Necessary expenses in hearings before the Osage Agency involving 
the approval or disapproval of last wills and testaments.
    (c) Expenses necessary to preserve restricted property.



Sec. 117.27  Custody of funds pending administration of estates.

    (a) Estates of Indians of less than one-half Indian blood and 
estates of Indians who had certificates of competency. Upon the death of 
an Indian of less than one-half Indian blood or an Indian who had a 
certificate of competency, the superintendent shall pay to the executor 
or administrator of the estate all moneys and securities, other than 
segregated trust funds to the credit of the Indian and all funds which 
accrue pending administration of the estate.
    (b) Estates of Indians of one-half or more Indian blood who did not 
have certificates of competency. Upon the death of an Indian of one-half 
or more Indian blood who did not have a certificate of competency at the 
time of his death, the following classes of funds, less any amount 
hypothecated for the payment of taxes as provided in Sec. 117.2 shall 
be paid by the superintendent to the executor or administrator of the 
estate:
    (1) Allowance funds to the credit of the Indian.
    (2) Any quarterly payment authorized prior to the death of the 
Indian.
    (3) Interest on segregated trust funds and deposits computed to the 
date of death.
    (4) Rentals and income from restricted lands collected after the 
death of the Indian which were due and payable to the Indian prior to 
his death.

Except as provided in Sec. 117.28, the superintendent shall not pay to 
the executor or administrator any surplus funds to the credit of the 
Indian or any funds, other than those listed in paragraphs (b) (1), (2), 
(3) and (4) of this section which accrue pending administration of the 
estate.



Sec. 117.28  Payment of claims against estates.

    The superintendent may disburse to the executor or administrator of 
the estate of a deceased Indian of one-half or more Indian blood who did 
not have a certificate of competency at the time of his death sufficient 
funds out of the estate to pay the following classes of claims approved 
by the court:
    (a) Debts authorized by the superintendent during the lifetime of 
the Indian.
    (b) Expenses incurred pending the qualifications of an executor or 
administrator under authority contained in Sec. 117.26.
    (c) Expenses of administration, including court costs, premium on 
bond of executor or administrator, transcript fees and appraiser fees.
    (d) Living expenses incurred within 90 days immediately preceding 
the date of death of the Indian.
    (e) Allowance for reasonable living expenses each month for 12 
months to a surviving spouse who is entitled to participate in the 
distribution of the estate and who is in need of such support.
    (f) Allowance for reasonable living expenses each month for 12 
months for each child of the decedent under 21 years of age who is 
entitled to participate in the distribution of the estate and who is in 
need of such support.
    (g) Insurance premiums and license fees on restricted property.
    (h) Not to exceed $1,000 for the preservation and upkeep of 
restricted property including the services of a caretaker when 
necessary.

[[Page 353]]

    (i) Debts incurred during the lifetime of the Indian but not 
authorized by the superintendent, if found by the Commissioner to be 
just and payable. The superintendent shall disburse no funds to an 
executor or administrator for the payment of the foregoing classes of 
claims unless the executor or administrator has no other funds in his 
hands available for the payment of such claims.

[22 FR 10554, Dec. 24, 1957, as amended at 35 FR 10005, June 18, 1970. 
Redesignated at 47 FR 13327, Mar. 30, 1982]



Sec. 117.29  Sale of improvements.

    The superintendent may approve the sale of improvements on 
restricted Indian lands when such improvements are appraised at not more 
than $500 and when the owner has submitted a written request that the 
sale be made and a statement that the improvements can no longer be used 
by him. The proceeds of all such sales shall be deposited to the credit 
of the Indian as surplus funds. Improvements consisting of buildings, 
etc., located on property within the Osage villages of Pawhuska, Hominy, 
and Grayhorse may, upon approval of the superintendent, be disposed of 
to other Osage Indians. The superintendent may disburse the surplus 
funds of the purchaser to consummate the transaction. Sale of such 
improvements to non-Indian or non-Osage Indians must be approved by the 
Commissioner.



Sec. 117.30  Sale of personal property.

    The superintendent may approve the sale of restricted personal 
property other than livestock. The superintendent may also approve the 
sale of livestock when authorized so to do by special or general 
instructions from the Commissioner. The proceeds from the sale of 
personal property other than livestock shall be deposited to the credit 
of the Indian as surplus funds unless the surplus funds from which said 
property was purchased have been reimbursed from allowance funds, in 
which case the proceeds from such sale shall be disbursed as allowance 
funds. If partial reimbursement only has been made, such portion of the 
proceeds of sale as may be necessary to complete the reimbursable 
agreement shall be deposited to the credit of the Indian as surplus 
funds and the balance, if any, shall be disbursed as allowance funds. 
The proceeds from the sale of livestock shall be deposited in conformity 
with general or specific instructions from the Commissioner.



Sec. 117.31  Removal of restrictions from personal property.

    The superintendent may relinquish title to personal property (other 
than livestock) held by the United States in trust for the Indian when 
to do so will enable the Indian to use the property as part payment in 
the purchase of other personal property and when the remainder of the 
purchase price is to be made from other than surplus funds of the 
Indian.



Sec. 117.32  Funds of Indians of other tribes.

    The funds of restricted non-Osage Indians, both adults and minors, 
residing within the jurisdiction of the Osage Agency, derived from 
sources within the Osage Nation and collected through the Osage Agency, 
may be disbursed by the superintendent, subject to the condition that 
all payments to third persons, including taxes and insurance premiums, 
shall be made upon the written authorization of the individual whose 
funds are involved, if an adult, and upon the written authorization of 
the parent or guardian, if a minor. The funds of restricted non-Osage 
Indians who do not reside within the jurisdiction of the Osage Agency 
shall be transferred to the superintendent of the jurisdiction within 
which the Indian resides, to be disbursed under regulations of the 
receiving agency.



Sec. 117.33  Signature of illiterates.

    An Indian who cannot write shall be required to endorse checks 
payable to his order and sign receipts or other documents by making an 
imprint of the ball of the right thumb (or the left, if he has lost his 
right) after his name. This imprint shall be clear and distinct, showing 
the central whorl and striations and witnessed by two reputable persons 
whose addresses shall be given opposite or following their names. An 
Indian may sign by marking ``X'' before two witnesses where he is

[[Page 354]]

unable to attach his thumb mark for physical reasons.



Sec. 117.34  Financial status of Indians confidential.

    The financial status of Indians shall be regarded as confidential 
and shall not be disclosed except to the owner of the account or his 
authorized agent, unless authorized in advance by the Commissioner.



Sec. 117.35  Appeals.

    Any decision by the superintendent may be appealed to the area 
director, any decision by the area director may be appealed to the 
Commissioner, and any decision by the Commissioner may be appealed to 
the Secretary.



PART 122_MANAGEMENT OF OSAGE JUDGMENT FUNDS FOR EDUCATION
--Table of Contents




Sec.
122.1 Purpose and scope.
122.2 Definitions.
122.3 Information collection.
122.4 Establishment of the Osage Tribal Education Committee.
122.5 Selection/nomination process for committee members.
122.6 Duties of the Osage Tribal Education Committee.
122.7 Budget.
122.8 Administrative costs for management of the fund.
122.9 Annual report.
122.10 Appeal.
122.11 Applicability.

    Authority: 86 Stat. 1295, 98 Stat. 3103 (25 U.S.C. 331 note).

    Source: 54 FR 34155, Aug. 18, 1989, unless otherwise noted.



Sec. 122.1  Purpose and scope.

    (a) The purpose of this part is to set forth procedures and 
guidelines to govern the use of authorized funds in education programs 
for the benefit of Osage Tribal members, along with application 
requirements and procedures used by those eligible persons.
    (b) The Osage Tribe by act of Congress, October 27, 1972 (25 U.S.C. 
883, 86 Stat. 12950, as amended by Pub. L. 98-605) on October 30, 1984, 
provides that $1 million, together with other funds which revert to the 
Osage Tribe, may be advanced, expended, invested, or reinvested for the 
purpose of financing an education program of benefit to the Osage Tribe 
of Indians of Oklahoma, with said program to be administered as 
authorized by the Secretary of the Interior.



Sec. 122.2  Definitions.

    Act means Osage Tribe by Act of Congress, October 27, 1972 (25 
U.S.C. 883, 86 Stat. 1295), as amended by Pub. L. 98-605.
    Allottee means a person whose name appears on the roll of Osage 
Tribe of Indians approved by the Secretary of the Interior on April 11, 
1908, pursuant to the Act of June 28, 1906 (34 Stat. 539).
    Assistant Secretary means the Assistant Secretary--Indian Affairs.
    Osage Tribal Education Committee means the committee selected to 
administer the provisions of this part as specified by Sec. 122.6.
    Reverted funds means the unpaid portions of the per capita 
distribution fund, as provided by the Act, which were not distributed 
because the funds were:
    (1) Unclaimed within the period specified by the Act; or
    (2) For an amount totaling less than $20 due an individual from one 
or more shares of one or more Osage allottees.
    Secretary means the Secretary of the Department of the Interior or 
his/her authorized representative.



Sec. 122.3  Information collection.

    (a) The information collection requirements contained in Sec. Sec. 
122.6 and 122.9 have been approved by the Office of Management and 
Budget under U.S.C. 3501 et seq. and assigned clearance numbers 1076-
0098 and 1076-0106, respectively. The information collected in Sec. 
122.6 is used to determine the eligibility of Osage Indian student 
applicants for educational assistance grants. The information collected 
in Sec. 122.9 provides summary review for program evaluation and 
program planning. Response to the information collections is required to 
obtain a benefit in accordance with 25 U.S.C. 883.
    (b) Public reporting burden for this information collection is 
estimated to average 30 minutes per response, including the time for 
reviewing instructions, searching existing data sources,

[[Page 355]]

gathering and maintaining the data needed, and completing and reviewing 
the collection of information. Send comments regarding this burden 
estimate or any other aspect of this collection of information, 
including suggestions for reducing the burden, to the Bureau of Indian 
Affairs, Information Collection Clearance Officer, Room 337 SIB, 18th & 
C Streets, NW., Washington, DC 20240; and the Office of Management and 
Budget, Paperwork Reduction Project (1076-0106), Washington DC 20503.



Sec. 122.4  Establishment of the Osage Tribal Education Committee.

    (a) The Osage Tribe, to maintain its right of Tribal autonomy, 
shall, at the direction of the Bureau of Indian Affairs, establish the 
Osage Tribal Education Committee (OTEC) to fulfill the responsibilities 
and provisions of this part as set out in Sec. 122.6.
    (b) This committee shall be composed of seven (7) members. Five (5) 
of the members shall be of Osage blood or descendents of Osage, and two 
(2) from the education staff of the Bureau of Indian Affairs.
    (1) Of the five Osage members, at least three shall be legal 
residents and/or live within a 20-mile radius of one of the three Osage 
Indian villages. Of these, at least one member shall reside within the 
specified radius of the Pawhuska Indian village; at least one member 
shall reside within the specified radius of the Hominy Indian village; 
and at least one member shall reside within the specified radius of the 
Greyhorse Indian village.
    (2) The two remaining Osage committee members will be members at 
large.



Sec. 122.5  Selection/nomination process for committee members.

    (a) Selection of the five (5) OTEC members shall be made by the 
Assistant Secretary in accordance with the following:
    (1) Any adult person of Osage Indian blood who is an allottee or a 
descendant of an allottee is eligible to serve on the Osage Tribal 
Education Committee.
    (2) Nominees for committee membership shall include a brief 
statement of interest and qualifications for serving on the committee.
    (b) Nominations may be made by any Osage organization, including the 
Osage village communities of Greyhorse, Hominy and Pawhuska, by 
requesting its candidates to follow procedures outlined in paragraph 
(a)(2) of this section.
    (c) Nominations shall be delivered by registered mail to the 
following address: Osage Tribal Education Committee, c/o Area Education 
Programs Administrator, Bureau of Indian Affairs, Muskogee Area Office--
Room 152, 5th & W, Okmulgee, Muskogee, Oklahoma 74401.
    (d) A Nominee Selection Committee composed of OTEC members so 
designated by the Assistant Secretary will review all nominations. Upon 
completion of this process, the Nominee Selection Committee will forward 
its recommendations for final consideration to the Assistant Secretary.
    (e) Each member shall be sworn in for a four year term. At the 
discretion of the Assistant Secretary, members may succeed themselves 
with a recommendation for reappointment from the Nominee Selection 
Committee.
    (f) The Assistant Secretary may, until a vacancy is filled, appoint 
an individual to serve for a temporary period not to exceed 120 days.



Sec. 122.6  Duties of the Osage Tribal Education Committee.

    (a) For the purpose of providing financial assistance to eligible 
Osage applicants for educational assistance, the Osage Tribal Education 
Committee shall maintain an office and retain all official records at 
the Bureau of Indian Affairs offices located at the Federal Building, 
Muskogee, Oklahoma.
    (b) The Osage Tribal Education Committee shall be responsible for 
implementing an overall plan of operation consistent with the policy of 
Indian self-determination which incorporates a systematic sequential 
process whereby all student applications for financial aid are rated and 
ranked simultaneously to enable a fair distribution of available funds.
    (1) All applicants shall be rated by a point system appropriate to 
applications for education assistance. After all

[[Page 356]]

applications are rated, the Osage Tribal Education Committee will rank 
the applications in a descending order for award purposes. No awards 
shall be made until all applications are rated against the point system.
    (2) Monetary awards shall be for fixed amounts as determined by the 
Osage Tribal Education Committee. The fixed amounts shall be itemized in 
the committee's annual budgetary request, and the monetary award amounts 
shall be consistent with the fixed amounts itemized in the approved 
budget.
    (3) Payment of the monetary awards shall be made directly to the 
student, with half of the amount payable on or before September 15 and 
the second half payable on or before February 15, provided the student 
is successfully enrolled in an accredited institution of higher 
education and meeting the institution's requirement for passing work.
    (4) No student will be funded beyond 10 semesters or five academic 
years, not to include summer sessions, nor shall any student with a 
baccalaureate degree be funded for an additional undergraduate degree.



Sec. 122.7  Budget.

    (a) By August 1 of each year, the Osage Tribal Education Committee 
will submit a proposed budget to the Assistant Secretary or to his/her 
designated representative for formal approval. Unless the Assistant 
Secretary or his/her designated representative informs the committee in 
writing of budget restrictions by September 1, the proposed budget is 
considered to be accepted.
    (b) The investment principal, composed of the one million dollars 
appropriated by the Act and reverted funds, must be invested in a 
federally insured banking or savings institution or invested in 
obligations of the Federal Government. There are no provisions in this 
part which shall limit the right of the Osage Tribal Education Committee 
to withdraw interest earned from the investment principal; however, 
expenditures shall be made against only the interest generated from 
investment principal and reverted funds.
    (c) All funds deposited will accumulate interest at a rate not less 
than that generally available for similar funds deposited at the same 
banking or savings institution or invested in the same obligations of 
the United States Government for the same period of time.



Sec. 122.8  Administrative costs for management of the fund.

    Funds available for expenditures may be used by the Osage Tribal 
Education Committee in the performance of its duties and 
responsibilities. Recordkeeping is required and proposed expenditures 
are to be attached with the August 1 proposed annual budget to the 
Assistant Secretary or his/her designated representative.



Sec. 122.9  Annual report.

    The Osage Tribal Education Committee shall submit an annual report 
on OMB approved Form 1076-0106, Higher Education Annual Report, to the 
Assistant Secretary or his/her designated representative on or before 
November 1, for the preceding 12 month period.



Sec. 122.10  Appeal.

    The procedure for appealing any decision regarding the awarding of 
funds under this part shall be made in accordance with 25 CFR part 2, 
Appeals from Administrative Action.



Sec. 122.11  Applicability.

    These regulations shall cease upon determination of the legal and 
appropriate body to administer the fund and upon the establishment of 
succeeding regulations.



PART 124_PROCEDURES FOR DEPOSITING FUNDS TO THE CREDIT OF 14X6140-DEPOSITS 
OF PROCEEDS OF LANDS WITHDRAWN FOR NATIVE SELECTION, BIA--Table of Contents




Sec.
124.1 Purpose.
124.2 Proceeds received by Federal agencies.
124.3 Proceeds received by the State of Alaska.

    Authority: 89 Stat. 1145.

[[Page 357]]


    Source: 42 FR 32229, June 24, 1977, unless otherwise noted. 
Redesignated at 47 FR 13327, Mar. 30, 1982.



Sec. 124.1  Purpose.

    The purpose of the regulations in this part is to describe the 
procedures to be used by all Departments and Agencies of the Federal 
Government and the State of Alaska for the deposit of proceeds derived 
from contracts, leases, permits, and rights-of-way or easements 
pertaining to affected lands or resources in affected lands withdrawn 
for Native selection pursuant to the Alaska Native Claims Settlement 
Act.



Sec. 124.2  Proceeds received by Federal agencies.

    (a) Direct deposits. (1) Agency will prepare Deposit Ticket (SF 
215), using Agency Accounting Station Code 14-20-0650.
    (2) In Block (6) Fund Symbol 14X6140 will be inserted as well as the 
following:

Credit to Bureau of Indian Affairs, Branch of Finance and Accounting, 
P.O. Box 127, Albuquerque, New Mexico 87103.

    (3) Memorandum copy and confirmed copy of Deposit Ticket will be 
mailed to above address, immediately upon completion and confirmation.
    (4) Agency will provide information (lease, contract or other 
identification) which will permit depositing agency to identify deposit 
with particular plot of land at time distribution of the funds is to be 
made. This information can be shown in Block (6) if space permits, or on 
an attached listing.
    (b) Periodic deposits. (1) In some circumstances, collection from 
Withdrawn Lands will be in such small amounts and such frequency as to 
be administratively burdensome to make individual deposits to the fund, 
or collections may be mixed with collections to be credited to other 
funds. In such instances depositing agencies may initially deposit the 
collections to their own suspense accounts. Such deposits will then be 
transferred to Fund 14X6140 no less frequently than monthly. The ``Pay 
to'' side of the SF 1081 will be completed as follows:

Department, Interior.
Bureau, Indian Affairs.
Agency Station Symbol, 14-20-0650.
Address, Albuquerque, NM 87103.
Appropriation or Fund Symbol, 14X6140.


and will be supported by sufficient detail to permit future 
identification by depositing agency. An advance copy of the SF 1081, 
with supporting documentation will be forwarded to the BIA at 
Albuquerque immediately.
    (2) Agencies not using the SF 1081 procedures will issue a check 
made payable to the Treasurer of the United States, and forward it to:

Juneau Area Office, Bureau of Indian Affairs, P.O. Box 8000--B, Juneau, 
Alaska 99802.


accompanied by a listing in sufficient detail to permit the collecting 
agency to identify the collections with each parcel of land at the time 
distribution of the funds is to be made.



Sec. 124.3  Proceeds received by the State of Alaska.

    The State agency responsible for making collections will deposit the 
proceeds to the credit of the State of Alaska. A check will then be 
issued, payable to the Treasurer of the United States, and will be 
forwarded to the Juneau Area Office, Bureau of Indian Affairs, 
accompanied by a detailed listing providing information which will 
permit identification of the funds with each particular parcel of land 
at the time distribution of the funds is to be made. The Juneau Area 
Office will deposit all such receipts to the credit of Fund Symbol 
14X6140, forwarding the memorandum copy to the Branch of Finance and 
Accounting immediately, together with a copy of the detail provided by 
the State of Alaska.



PART 134_PARTIAL PAYMENT CONSTRUCTION CHARGES ON INDIAN IRRIGATION 
PROJECTS--Table of Contents




Sec.
134.1 Partial reimbursement of irrigation charges; 5 percent per annum 
          of cost of system, June 30, 1920.
134.2 Landowners financially unable to pay.
134.3 Period for payments extended.
134.4 Annual payment reduced.
134.4a Assessment and collection of additional construction costs.
134.5 Payments to disbursing officer.

[[Page 358]]

134.6 ``Owner'' defined.
134.7 Modifications.

    Authority: Secs. 1, 3, 36 Stat. 270, 272, as amended; 25 U.S.C. 385. 
Interpret or apply sec. 1, 41 Stat. 409; 25 U.S.C. 386.

    Source: 22 FR 10643, Dec. 24, 1957, unless otherwise noted. 
Redesignated at 47 FR 13327, Mar. 30, 1982.



Sec. 134.1  Partial reimbursement of irrigation charges; 5 percent 
per annum of cost of system, June 30, 1920.

    In pursuance of the act of February 14, 1920 (41 Stat. 409; 25 
U.S.C. 386), regulations governing partial payment of construction 
charges on Indian irrigation projects, with the exception of certain 
ones mentioned therein, where approved by the Department June 21, 1920, 
and require that each owner of irrigable land under any irrigation 
system constructed for the benefit of Indians under provisions of law 
requiring reimbursement of the cost of such system and to which land, 
water for irrigation purposes can be delivered from such system, shall 
pay, on or before November 15, 1920, a sum equal to 5 percent of the per 
acre cost, as of June 30, 1920, of the construction of the system under 
which such land is situated. The per acre cost of a given system as of 
June 30, 1920, shall be determined by dividing the total amount expended 
for construction purposes on such system up to that day by the total 
area of land to which water for irrigation purposes can be delivered on 
that date; and on November 15 of each year following the year 1920, 
until further notice, the land owners, as therein prescribed, shall pay 
5 percent of the per acre construction cost as of June 30, of the 
current year, such per acre cost to be determined by dividing the cost 
of the system to June 30 of that year by the total area of land to which 
water for irrigation purposes can be delivered from the system on that 
date. Provision is contained that no payments shall be required under 
the regulations in behalf of lands still in process of allotment or 
prior to the issuance of the first or trust patent therefor, nor for 
lands reserved for school, agency, or other administrative purposes 
where the legal title still remains in the United States.



Sec. 134.2  Landowners financially unable to pay.

    Considerable difficulty has been encountered in collecting charges 
under the regulations in this part owing to the fact that Indians have 
been financially unable to pay the charges, the result being that the 
construction charges have accrued against the lands and in cases where 
the land is sold for the benefit of the allottee or his heirs under the 
regulations, the purchaser is to pay the accrued and future irrigation 
charges which make it difficult in some instances, to sell the land at 
as favorable terms as might otherwise be secured.



Sec. 134.3  Period for payments extended.

    Furthermore, in recent legislation dealing with specific projects in 
the Bureau and also all reclamation projects the policy has been to 
extend the payment of such charges over a longer period of years.



Sec. 134.4  Annual payment reduced.

    In view of these conditions the regulations governing this matter 
are hereby modified so as to distribute the unaccrued installments over 
a period of time so that 2\1/2\ percent of the total amount yet due 
shall be due and payable on November 15 of each year until further 
notice. You shall accordingly ascertain the per acre cost after 
deducting the amount of the accrued charges and take 2\1/2\ percent of 
that amount and a like sum each year so that the amount of the annual 
installments will be the same each year. Superintendents are obligated 
to submit all proposed lists of sales involving allotments containing 
irrigable allotments to the project or supervising engineer for 
checking, as to the irrigable acreage and amounts of unpaid 
construction, operation, and maintenance charges against such 
allotments. Each sale forwarded to the Bureau for action shall be 
accompanied by contract executed on Form 5-462b where irrigable acreage 
is involved and after approval thereof a copy of contract on said form 
shall be sent to the project engineer for his records and the charges 
paid by the purchaser shall be turned over to the disbursing agent for 
credit and deposit as instructed in the next paragraph.

[[Page 359]]

The regulations in this part shall not apply to lands in the Wapato 
project, on the Yakima Indian Reservation, nor to the irrigation 
projects on the Blackfeet, Fort Peck, Flathead, and Crow Reservations, 
Montana, for which special regulations have been issued nor to the Fort 
Hall Reservation, Idaho, or the San Carlos project, Arizona.\1\
---------------------------------------------------------------------------

    \1\ The special regulations for Wapato, Fort Peck, and Flathead, 
were not codified. Operations of the Blackfeet project were discontinued 
by the Bureau, July 20, 1938, effective September 30, 1933.

    Cross References: For special regulations applying to San Carlos 
project, see part 137 of this chapter. For further information 
concerning Form 5-462b, see part 159 of this chapter.



Sec. 134.4a  Assessment and collection of additional construction costs.

    (a) Upon the completion of the construction of an Indian irrigation 
proj ect, or unit thereof, subsequent to the determination of the 
partial per acre construction assessment rate which was fixed prior to 
July 1, 1957, pursuant to Sec. 134.4 the Secretary of the Interior or 
his authorized representative shall determine such additional 
construction cost and distribute that cost on a per acre basis against 
all of the irrigable lands of the project, or unit thereof, and \1/40\th 
of such per acre additional construction cost thus determined shall be 
assessed and collected annually from the non-Indian landowner of the 
project, or unit, thereof. The first installment shall be due and 
payable on November 15 of the year following the completion of such 
additional construction work or, if such additional construction work on 
the project, or unit thereof, has been completed prior to July 1, 1957, 
and the per acre annual rate determined, the first installment of the 
additional construction cost to be repaid by such non-Indian landowners 
shall be due and payable on November 15, 1958. This annual per acre rate 
shall be in addition to, and run concurrently with, the per acre 
construction rate assessed annually under Sec. 134.4.
    (b) Project lands in Indian ownership are not subject to assessment 
for their proportionate share of the per acre construction cost of the 
project, or unit thereof, until after the Indian title to the land has 
been extinguished. At that time the total annual per acre assessment 
rate against non-Indian lands of the project, or unit thereof, shall be 
assessed against the former Indian lands for each and every acre of 
irrigable land to which water can be delivered through the project 
works, beginning on November 15 of the year following the extinguishment 
of the Indian title to the land and on November 15 of each year 
thereafter over a forty year period. In cases where the Indian title to 
project land was extinguished prior to July 1, 1957, the assessment rate 
shall be due and payable on November 15, 1958.



Sec. 134.5  Payments to disbursing officer.

    Payments under this part shall be made to the disbursing officer for 
the supervising engineer of the Indian Irrigation Service having 
jurisdiction over the irrigation system under which the land for which 
payment is made may lie. The sum so collected will then, after proper 
credit has been made to the land for which collected, be deposited in 
the Treasury of the United States to the credit of the respective funds 
used in constructing irrigation systems toward which reimbursement shall 
have been made.



Sec. 134.6  ``Owner'' defined.

    The word ``owner'' as used in this part shall be construed to 
include any person, Indian or white, or any firm, partnership, 
corporation, association, or other organization to whom title to the 
land capable of irrigation, as provided in the act of February 14, 1920 
(41 Stat. 409; 25 U.S.C. 386), has passed, either by fee or trust 
patent, or otherwise.



Sec. 134.7  Modifications.

    The act of July 1, 1932 (47 Stat. 564; 25 U.S.C. 386a), cancelled 
all irrigation assessments for construction costs against lands in 
Indian ownership which were unpaid at that date and deferred all future 
assessments for construction costs until the Indian title to the land 
shall have been extinguished.

[[Page 360]]



PART 135_CONSTRUCTION ASSESSMENTS, CROW INDIAN IRRIGATION PROJECT
--Table of Contents




      Subpart A_Charges Assessed Against Irrigation District Lands

Sec.
135.1 Contracts.
135.2 Annual rate of assessments.
135.3 Annual assessments.
135.4 Time of payment.
135.5 Penalty.
135.6 Refusal of water delivery.

 Subpart B_Charges Assessed Against Non-Indian Lands Not Included in an 
                           Irrigation District

135.20 Private contract lands; assessments.
135.21 Time of payment.
135.22 Penalty.
135.23 Refusal of water delivery.

    Authority: Sec. 15, 60 Stat. 338.

    Source: 22 FR 10644, Dec. 24, 1957, unless otherwise noted. 
Redesignated at 47 FR 13327, Mar. 30, 1982.



      Subpart A_Charges Assessed Against Irrigation District Lands



Sec. 135.1  Contracts.

    Under provisions of the act of Congress approved June 28, 1946 (60 
Stat. 333-338), contracts were executed June 28, 1951, by the United 
States with the Lower Little Horn and Lodge Grass Irrigation District 
and the Upper Little Horn Irrigation District providing for the payment, 
over a period of 40 years, by each of the Districts of its respective 
share of the sum of $210,726 expended for the construction of the Willow 
Creek storage works on account of non-Indian lands within the Districts 
entitled to share in the storage water, directly or by substitution.



Sec. 135.2  Annual rate of assessments.

    Within the Lower Little Horn and Lodge Grass Irrigation District 
there are 3,196.8 acres for which the District is obligated by contract 
to pay its proper share of the total construction costs. Within the 
Upper Little Horn Irrigation District there are 1,554.7 acres for which 
the District is obligated by contract to pay its proper share of the 
total construction costs. There are 3,237.6 acres, more or less, covered 
by contracts with private landowners, obligating such owners to pay 
their proper share of such construction costs. The total per acre charge 
against all such lands is $26.38. This amounts to an annual per acre 
rate of $0.6595. For the purpose of this notice the annual per acre rate 
is hereby fixed at $0.66. This annual per acre rate of assessment will 
continue for a 40-year period within which the total amount of 
construction costs of $210,726 is to be repaid without interest. The 
amount of each annual installment chargeable against each of the 
Districts for the acreage covered by their respective contracts shall be 
determined by multiplying the total acreage, under each contract 
entitled to Willow Creek storage rights, either directly or by 
subsituation, by the per acre annual rate.



Sec. 135.3  Annual assessments.

    Notice is hereby given of an annual assessment of $2,108.05 to be 
repaid by the Lower Little Horn and Lodge Grass Irrigation District for 
the 3,196.8 acres of irrigable land of the District, and an annual 
assessment of $1,025.06 to be repaid by the Upper Little Horn Irrigation 
District for the 1,554.7 acres of irrigable land of the District. 
Against the amounts due annually by the Districts under this notice, 
there shall be allowed any credits due under section 6 of the act of 
June 28, 1946. Credits due on behalf of any land shall be reflected by 
the respective Districts when placing against such land the annual 
assessment on the tax rolls.



Sec. 135.4  Time of payment.

    Annual assessments shall be paid by the Districts to the United 
States, one-half thereof on or before February 1 and one-half thereof on 
or before July 1 following, of each year commencing with the calendar 
year 1952.



Sec. 135.5  Penalty.

    To all assessments not paid on the due date, there shall be added a 
penalty of one-half of one percent per month or fraction thereof, from 
the due date so long as the delinquency continues.



Sec. 135.6  Refusal of water delivery.

    The right is reserved to the United States to refuse the delivery of 
water

[[Page 361]]

to each of the said Irrigation Districts in the event of default in the 
payment of assessments, including penalties on account of delinquencies.



 Subpart B_Charges Assessed Against Non-Indian Lands Not Included in an 
                           Irrigation District



Sec. 135.20  Private contract lands; assessments.

    In addition to 4,751.5 acres of non-Indian land included within the 
two irrigation Districts dealt with in subpart A, there are 3,237.6 
acres of land, more or less, in non-Indian ownership under private 
ditches, covered by repayment contracts executed pursuant to the act of 
June 28, 1946 (60 Stat. 333-338), obligating such owners to pay their 
proper share of such construction costs. The total per acre charge 
against all such lands is $26.38. This amounts to an annual per acre 
rate of $0.6595. For the purposes of this notice the annual per acre 
rate is hereby fixed at $0.66. This annual rate of assessment will 
continue for a 40-year period within which the total amount of 
construction cost of $210,726 is to be repaid without interest. The 
amount of each annual installment chargeable against the lands covered 
by each of the several contracts with individual landowners whose lands 
are served under private ditches, shall be determined by multiplying the 
total acreage, under each contract entitled to Willow Creek storage 
rights, either directly or by substitution, by the per acre annual rate. 
Against the amounts due annually by the individual landowners whose 
lands are served by private ditches, under this notice there shall be 
allowed any credits due under section 6 of the act of June 28, 1946. 
Credits due on behalf of any land shall be reflected in any statement 
submitted to the landowners.



Sec. 135.21  Time of payment.

    The amount of each annual installment, payable under the private 
landowner contracts, determined as provided in this part shall be paid 
by the landowners to the United States, on or before November 15 of each 
year commencing with the calendar year 1951.



Sec. 135.22  Penalty.

    To all assessments not paid on the due date there shall be added a 
penalty of one-half of one percent per month or fraction thereof, from 
the due date so long as the delinquency continues.



Sec. 135.23  Refusal of water delivery.

    The right is reserved to refuse the delivery of water to any 
landowner in the event of default in the payment of assessments, 
including penalties on account of delinquencies.



PART 136_FORT HALL INDIAN IRRIGATION PROJECT, IDAHO--Table of Contents




Sec.
136.1 Repayment contracts.
136.2 Construction costs.
136.3 Repayment of construction costs.

    Authority: Sec. 9, 46 Stat. 1063.

    Source: 22 FR 10645, Dec. 24, 1957, unless otherwise noted. 
Redesignated at 47 FR 13327, Mar. 30, 1982.



Sec. 136.1  Repayment contracts.

    A rehabilitation program was established on the Fort Hall Unit of 
the Fort Hall Project in 1936. Based upon the estimated construction 
costs, contracts were signed by all non-Indian landowners within the 
project, including such landowners within the Little Indian Unit, now a 
part of the Fort Hall Unit. Under the terms of their contracts, the 
landowners agreed to repay to the Government their pro rata share, on an 
acreage basis, of all expenditures for construction and other necessary 
improvements for carrying out the approved program, payments not to 
exceed $7.50 per acre, based upon an estimated expenditure of 
$450,000.00 for a project then considered as covering approximately 
60,000 acres.



Sec. 136.2  Construction costs.

    The program of rehabilitation has now been completed at a cost of 
$419,186.52. This amount, chargeable on an equal per acre basis against 
60,000 acres, amounts to a rate of $6.986 per acre, which rate is hereby 
determined to be the per acre cost to be repaid to the United States 
under the 1936 contracts.

[[Page 362]]



Sec. 136.3  Repayment of construction costs.

    Under the terms of the contracts, the landowners agreed to repay the 
construction cost in forty (40) equal annual installments. Therefore, 
the annual per acre installment is hereby fixed at seventeen and one-
half cents (17\1/2\ cents) per acre, due and payable on December 1st of 
each year, the first payment being due on December 1, 1955. Under 
section 4 of the repayment contracts of the landowners and the act of 
March 10, 1928 (45 Stat. 210), the charges remain a lien against the 
lands until paid.



PART 137_REIMBURSEMENT OF CONSTRUCTION COSTS, SAN CARLOS INDIAN IRRIGATION 
PROJECT, ARIZONA--Table of Contents




Sec.
137.1 Water supply.
137.2 Availability of water.
137.3 Construction charges.
137.4 Future charges.
137.5 Construction costs limited.
137.6 Power development.
137.7 Private ownership defined.
137.8 Indian lands excluded.

    Authority: Sec. 5, 43 Stat. 476.

    Source: 22 FR 10645, Dec. 24, 1957, unless otherwise noted. 
Redesignated at 47 FR 13327, Mar. 30, 1982.



Sec. 137.1  Water supply.

    The engineering report dealt with in section 1 of the act of June 7, 
1924 (43 Stat. 475) and other available records show that the storage 
capacity of the San Carlos reservoir created by the Coolidge Dam and the 
water supply therefor over a period of years will provide for the 
irrigation of only 80,000 acres of lands in Indian and public or private 
ownership within the San Carlos irrigation project, the balance of the 
water supply needed for the additional 20,000 acres of the proj ect to 
be provided for by recaptured and return flow water and by means of 
pumping the underground supply. The cost of providing the proposed 
supply and of operating the works for this latter acreage to be equally 
distributed over the entire 100,000 acres of the project regardless of 
where the works are placed and operated.



Sec. 137.2  Availability of water.

    Pursuant to section 3 of the act of June 7, 1924 (43 Stat. 475), 
requiring the Secretary of the Interior by public notice to announce 
when water is actually available for lands in private ownership under 
the project and the amount of the construction charges per irrigable 
acre against the same which charges shall be payable in annual 
installments as provided for therein, this public notice, of which Sec. 
137.1 is made a part hereof, is hereby given:
    The date when a reasonable water supply is actually available for 
lands in private ownership under the San Carlos irrigation project is 
hereby declared to be the 1st day of December 1932.



Sec. 137.3  Construction charges.

    Each acre of land in private ownership of said project is hereby 
charged with $95.25 of construction cost assessable thereto at the date 
hereof (Dec. 1, 1932), which sum is based upon 50,000 acres of such 
privately owned lands, making a total charge or assessment due from the 
owners thereof of $4,762,250 on this date (Dec. 1, 1932), excluding the 
cost of operation and maintenance for the calendar year of 1933 which 
may be carried into construction cost as provided for by section 3 of 
the act of June 7, 1924 (43 Stat. 476), and also excluding interest at 
the rate of 4 percent which is charged against such lands by said act. 
Of the 50,000 acres constituting the lands in private ownership within 
the said project only 46,107.49 acres have at this date (Dec. 1, 1932) 
actually been designated as coming within the project. Should this 
present designated area be not increased within a reasonable time 
herefrom and prior to the due date of the first installment of the 
charge fixed in this section, namely, on December 1, 1935, so as to 
bring the total designated area up to the 50,000 acres, the per acre 
charge fixed in this section shall be proportionately increased against 
the then designated area so as to assure reimbursement of the total 
indebtedness due the Government by the owners of the lands in private 
ownership from the lesser designated acreage.

[[Page 363]]



Sec. 137.4  Future charges.

    The payment of said construction cost and costs of future operation 
and maintenance of said project as provided for in said section 3 of the 
act of June 7, 1924 (43 Stat. 476), as supplemented or amended and such 
contingent project liabilities which may be incurred in accordance with 
the provisions of said repayment contract shall be made in accordance 
with the provisions of said act of June 7, 1924, as supplemented or 
amended and the repayment contract by and between the San Carlos 
irrigation and drainage district and the Secretary of the Interior 
bearing date of June 8, 1931; the said construction cost incurred 
subsequent to this public notice assessable against the lands in private 
ownership and costs of operation and maintenance assessed against such 
privately owned lands within the project for the first year after this 
public notice to be included in the construction cost and such 
contingent project liabilities which may be incurred in accordance with 
provisions of the repayment contract shall also be repaid to the 
Government pursuant to the terms of said act of June 7, 1924, as 
supplemented or amended, and the repayment contract and this public 
notice.



Sec. 137.5  Construction costs limited.

    The repayment contract \1\ with the San Carlos irrigation and 
drainage district, page 13 thereof, contains the following:
---------------------------------------------------------------------------

    \1\ Contract available at the Bureau of Indian Affairs, Washington, 
D.C.

    In accordance with the foregoing the costs of the San Carlos project 
as fixed by the public notice to be issued as aforesaid, unless further 
sums shall be agreed to by the Secretary of the Interior and the 
district after the execution of this instrument, may amount to but shall 
not exceed the sum of $9,556,313.77, except that said total may be 
exceeded by the inclusion of any sums expended to safeguard the project 
as hereinabove provided for, and any sums expended on account of 
contingent liabilities as in the next paragraph hereof provided.
    The foregoing and subsequent statements of project costs, the 
district's shares of which are to be repaid hereunder, unless otherwise 
provided by Congress more favorably to the lands of the project, may be 
increased by the addition of sums not now fixed as project charges but 
which possibly constitute contingent project liabilities incurred after 
the date of the San Carlos Act of June 7, 1924 (43 Stat. 476), or 
incurred on account of the Florence-casa Grande project, and so may 
become project charges by the judgment of courts of competent 
jurisdiction or of other proper authority.
    The limitations therein fixed has approximately been reached, there 
remaining but $32,815.02 yet to be expended on project works before 
reaching that limitation. Upon the expenditure of this additional sum 
there shall be no further expenditures of funds for construction, 
operation and maintenance of the San Carlos project so far as the 
private lands are concerned until the San Carlos irrigation and drainage 
district shall, through appropriate action, authorize pursuant to the 
terms of the said repayment contract such additional expenditures. This 
limitation does not apply to project expenditures for the extension of 
the distributing and pumping system regardless of where they may arise. 
This class of expenditures being excepted from the limitation on 
expenditures contained in the said repayment contract by section 14, 
page 10, thereof, which section is known as the ``Equalization of 
Expenditures.''



Sec. 137.6  Power development.

    The cost of the power development at the Coolidge Dam is hereby 
fixed at $735,000. The net revenues derived from the operation of this 
power development shall be disposed of as required by the terms and 
conditions of the act of March 7, 1928 (45 Stat. 210) as supplemented or 
amended.



Sec. 137.7  Private ownership defined.

    The term ``private ownership'' used in this public notice includes 
all lands of the San Carlos irrigation project that have or may be 
designated by the Secretary of the Interior that are situated outside of 
the boundaries of the Gila River Indian Reservation.



Sec. 137.8  Indian lands excluded.

    This public notice, with the exception of that part dealing with 
payment in advance each year of operation and maintenance charges 
against lands in Indian ownership operated under lease, does not apply 
in so far as payments are concerned to Indian lands within the project. 
The act of July 1, 1932 (47

[[Page 364]]

Stat. 564; 25 U.S.C. 386a) defers the collection of construction costs 
from Indian owned lands so long as the title to such lands remains in 
the Indian ownership.



PART 138_REIMBURSEMENT OF CONSTRUCTION COSTS, AHTANUM UNIT, WAPATO 
INDIAN IRRIGATION PROJECT, WASHINGTON--Table of Contents




Sec.
138.1 Construction costs and assessable acreage.
138.2 Repayment of construction costs.
138.3 Payments.
138.4 Deferment of assessments on lands remaining in Indian ownership.
138.5 Assessments after the Indian title has been extinguished.

    Authority: Secs. 1, 3, 36 Stat. 270, 272, as amended; 25 U.S.C. 385.

    Source: 22 FR 10646, Dec. 24, 1957, unless otherwise noted. 
Redesignated at 47 FR 13327, Mar. 30, 1982.



Sec. 138.1  Construction costs and assessable acreage.

    The construction program has been completed on the Ahtanum Unit of 
the Wapato Indian Irrigation Project and the construction costs have 
been established as $79,833.64. The area benefited by this development 
has been established at 4,765.2 acres. Under the requirements of the 
acts of February 14, 1920 (41 Stat. 409) and March 7, 1928 (45 Stat. 
210), these costs are to be repaid to the United States Treasury by the 
owners of the lands benefited.



Sec. 138.2  Repayment of construction costs.

    The cost per acre under Sec. 138.1 is, therefore, established at 
$16.7535. Under the provisions of the acts of February 14, 1920 (41 
Stat. 409) and March 7, 1928 (45 Stat. 210) is based on forty equal 
annual payments, the annual per acre assessment is hereby fixed at $0.42 
per acre for the year 1957 and each succeeding year until the entire 
cost for each tract shall have been repaid to the United States 
Treasury. On those tracts where payments have been made pursuant to part 
134 of this chapter, annual assessments beginning with the year 1957 at 
the rate of $0.42 per acre will be made until the entire cost of 
$16.7535 per acre shall have been repaid to the United States Treasury. 
Landowners may pay at any time the total of the then remaining 
indebtedness. Under the act of March 10, 1928 (45 Stat. 210) the unpaid 
charges stand as a lien against the lands until paid.

[22 FR 10646, Dec. 24, 1957. Redesignated at 47 FR 13327, Mar. 30, 1982; 
48 FR 13414, Mar. 31, 1983]



Sec. 138.3  Payments.

    Payments are due on December 31 of each year and shall be made to 
the official in charge of collections for the project.



Sec. 138.4  Deferment of assessments on lands remaining in Indian ownership.

    In conformity with the act of July 1, 1932 (47 Stat. 564); 25 U.S.C. 
386(a) no assessment shall be made on behalf of construction costs 
against Indian-owned land within the project until the Indian title 
thereto has been extinguished.



Sec. 138.5  Assessments after the Indian title has been extinguished.

    Indian-owned lands passing to non-Indian ownership shall be assessed 
for construction costs and the first assessment shall be due on December 
31 of the year that Indian title is extinguished. Assessments against 
this land will be at the annual rate of $0.42 per acre and shall be due 
as provided in Sec. 138.3, and payable promptly thereafter until the 
total construction cost of $16.7535 per acre chargeable against the land 
has been paid in full.



PART 139_REIMBURSEMENT OF CONSTRUCTION COSTS, WAPATO-SATUS UNIT, WAPATO 
INDIAN IRRIGATION PROJECT, WASHINGTON--Table of Contents




Sec.
139.1 Construction costs and assessable acreage.
139.2 Repayment of construction costs.
139.3 Payments.
139.4 Deferment of assessments on lands remaining in Indian ownership.
139.5 Assessments after the Indian title has been extinguished.


[[Page 365]]


    Authority: Sec. 1, 41 Stat. 409, 45 Stat. 210; 25 U.S.C. 386, 387.

    Source: 28 FR 6536, June 26, 1963, unless otherwise noted. 
Redesignated at 47 FR 13327, Mar. 30, 1982.



Sec. 139.1  Construction costs and assessable acreage.

    The construction program has been completed on the Wapato-Satus Unit 
of the Wapato Indian Irrigation Proj ect, and the construction costs 
have been established by Designation Report dated August 1962 as 
$7,903,823.12 for the project and $1,499,073.62 for the ``B'' lands 
share of the construction costs in the Bureau of Reclamation reservoirs 
on the Yakima River. The area benefited by this development has been 
established at 136,559.59 acres divided into 79,025.68 acres of ``A'' 
land and 57,533.91 acres of ``B'' land. Under the requirements of the 
acts of February 14, 1920 (41 Stat. 409), and March 7, 1928 (45 Stat. 
210), these costs are to be repaid to the U.S. Treasury by the owners of 
the lands benefited.



Sec. 139.2  Repayment of construction costs.

    The cost per acre of the construction under Sec. 139.1 is, 
therefore, calculated at $57.8782 for ``A'' lands and $83.9337 for ``B'' 
lands in non-Indian ownership as established by Designation Report dated 
August 1962. Under the provisions of the acts cited in Sec. 139.1 the 
annual per acre assessment for forty equal annual payments, is hereby 
fixed at $1.45 per acre for ``A'' lands and $2.10 per acre for ``B'' 
lands for the year 1962 and each succeeding year, until the entire cost 
for each tract shall have been repaid to the U.S. Treasury. On those 
tracts where payments have been made pursuant to uncodified special 
regulations, annual assessments beginning with the year 1962 at the rate 
of $1.45 per acre for ``A'' lands and $2.10 per acre for ``B'' lands 
will be made until the entire cost of $57.8782 per acre for ``A'' lands 
and $83.9337 per acre for ``B'' lands shall have been repaid to the U.S. 
Treasury. Landowners may pay at any time the total of the then remaining 
indebtedness. Under the act of March 10, 1928 (45 Stat. 210), the unpaid 
charges stand as a lien against the lands until paid.



Sec. 139.3  Payments.

    Payments are due on December 31 of each year and shall be made to 
the official in charge of collections for the project.



Sec. 139.4  Deferment of assessments on lands remaining in Indian 
ownership.

    In conformity with the act of July 1, 1932 (47 Stat. 564; U.S.C. 
386(a)), no assessment shall be made on behalf of construction costs 
against Indian-owned land within the project until the Indian title 
thereto has been extinguished.



Sec. 139.5  Assessments after the Indian title has been extinguished.

    Indian-owned lands passing to non-Indian ownership shall be assessed 
for construction costs and the first assessment shall be due on December 
31 of the year that the Indian title is extinguished. The construction 
costs against this land will be established as provided by section 5 of 
the act of September 26, 1961 (75 Stat. 680). The annual per acre 
assessment rate will be determined by dividing the established 
construction cost per acre into forty equal payments. ``B'' lands will 
also be assessed for reservoir construction costs in the annual per-acre 
rate as established in the Designation Report dated August 1962. 
Assessments against this land will continue until the entire established 
construction costs shall have been repaid to the U.S. Treasury. 
Landowners may pay at any time the total of the then remaining 
indebtedness. Under the act of March 10, 1928 (45 Stat. 210), the unpaid 
charges stand as a lien against the lands until paid.



PART 140_LICENSED INDIAN TRADERS--Table of Contents




Sec.
140.1 Sole power to appoint.
140.2 Presidential prohibition.
140.3 Forfeiture of goods.
140.5 Bureau of Indian Affairs employees not to contract or trade with 
          Indians except in certain cases.
140.9 Application for license.
140.11 License period.
140.12 License renewal.
140.13 Power to close unlicensed stores.
140.14 Trade limited to specified premises.

[[Page 366]]

140.15 License applicable for trading only by original licensee.
140.16 Trade in annuities or gratuities prohibited.
140.17 Tobacco sales to minors.
140.18 Intoxicating liquors.
140.19 Drugs.
140.21 Gambling.
140.22 Inspection of traders' prices.
140.23 Credit at trader's risk.
140.24 Cash payments only to Indians.
140.25 Trade in antiquities prohibited.
140.26 Infectious plants.

    Authority: Sec. 5, 19 Stat. 200, sec. 1, 31 Stat. 1066 as amended; 
25 U.S.C. 261, 262; 94 Stat. 544, 18 U.S.C. 437; 25 U.S.C. 2 and 9, and 
5 U.S.C. 301, unless otherwise noted.

    Cross References: For law and order regulations on Indian 
Reservations, see part 11 of this chapter. For regulations pertaining to 
business practices on Navajo, Hopi and Zuni reservations, see part 141 
of this chapter. For additional regulation of certain employees trading 
with Indians, see 43 CFR part 20.735-28 and 29.

    Source: 22 FR 10670, Dec. 24, 1957, unless otherwise noted. 
Redesignated at 47 FR 13327, Mar. 30, 1982.



Sec. 140.1  Sole power to appoint.

    The Commissioner of Indian Affairs shall have the sole power and 
authority to appoint traders to the Indian tribes. Any person desiring 
to trade with the Indians on any reservation may, upon establishing the 
fact, to the satisfaction of the Commissioner of Indian Affairs, that he 
is a proper person to engage in such trade, be permitted to do so under 
such rules and regulations as the Commissioner of Indian Affairs may 
prescribe.



Sec. 140.2  Presidential prohibition.

    The President is authorized, whenever in his opinion the public 
interest may require, to prohibit the introduction of goods, or of any 
particular articles, into the country belonging to any Indian tribe, and 
to direct that all licenses to trade with such tribe be revoked, and all 
applications therefor rejected. No trader shall, so long as such 
prohibition exists, trade with any Indians of or for said tribe.

(R.S. 2132; 25 U.S.C. 263)



Sec. 140.3  Forfeiture of goods.

    Any person other than an Indian of the full blood who shall attempt 
to reside in the Indian country, or on any Indian reservation, as a 
trader, or to introduce goods, or to trade therein, without a license, 
shall forfeit all merchandise offered for sale to the Indians or found 
in his possession, and shall moreover be liable to a penalty of $500: 
Provided, That this section shall not apply to any person residing among 
or trading with the Choctaws, Cherokee, Chickasaws, Creeks, or 
Seminoles, commonly called the Five Civilized Tribes: And provided 
further, That no white person shall be employed as a clerk by any Indian 
trader, except as such trade with said Five Civilized Tribes, unless 
first authorized so to do by the Commissioner of Indian Affairs.

(R.S. 2133, as amended; 25 U.S.C. 264)



Sec. 140.5  Bureau of Indian Affairs employees not to contract or trade 
with Indians except in certain cases.

    (a) Definitions of terms as used in this part:
    (1) Indian means any member of an Indian tribe recognized as 
eligible for the services provided by the Bureau of Indian Affairs who 
is residing on a Federal Indian Reservation, on land held in trust by 
the United States for Indians, or on land subject to a restriction 
against alienation imposed by the United States. The term shall also 
include any such tribe and any Indian owned or controlled organization 
located on such a reservation or land.
    (2) Bureau or the ``Bureau of Indian Affairs'' means the Bureau of 
Indian Affairs and the Office of the Assistant Secretary for Indian 
Affairs, both in the Department of the Interior.
    (3) Employee means an officer, employee, or agent of the Bureau of 
Indian Affairs.
    (4) Secretary means the Secretary of the Interior.
    (5) Contract means any agreement made or under negotiation with any 
Indian for the purchase, transportation or delivery of goods or 
supplies.
    (6) Trading means buying, selling, bartering, renting, leasing, 
permitting and any other transaction involving the acquisition of 
property or services.
    (7) Commercial trading means any trading transaction where an 
employee engages in the business of buying or

[[Page 367]]

selling services or items which he/she is trading.
    (b) With the exceptions provided in subsection (b) of section 437 of 
title 18 U.S. Code, section 437 provides that whoever, being an officer, 
employee, or agent of the Bureau of Indian Affairs, has (other than as a 
lawful respresentative of the United States) any interest, in such 
officer, employee, or agent's name, or in the name of another person 
where such officer, employee, or agent benefits or appears to benefit 
from such interest:
    (1) In any contract made or under negotiation with any Indian, for 
the purchase, transportation or delivery of goods or supplies for any 
Indian, or
    (2) In any purchase or sale of any service or real or personal 
property (or any interest therein) from or to any Indian, or colludes 
with any person attempting to obtain any such contract, purchase, or 
sale, shall be fined not more than $5,000 or imprisoned not more than 
six months or both, and shall be removed from office, notwithstanding 
any other provision of law concerning termination from Federal 
employment.
    (c) The further subsections of this section authorize certain 
employees contracting and trading with Indians as authorized by the 
exceptions in section 437 of title 18 U.S. Code. All such contracting 
and trading is subject to the express provision of section 437 that none 
of the sales or purchases so authorized may be made if the purpose of 
any such sale, trade, or purchase is that of commercially selling, 
reselling, trading, or bartering such property.
    (d)(1) Under authority granted by section 437(b)(1) of title 18 U.S. 
Code, employees of the Bureau of Indian Affairs may with the approval of 
an authorized officer of the Bureau, as designated in paragraph (d)(2) 
of this section, purchase from or sell to an Indian any service or any 
real or personal property, not held in trust by the United States or 
subject to a restriction against alienation imposed by the United 
States, or any interest in such property. In addition, employees may 
purchase from Indians without approval from an authorized officer of the 
Bureau any non-trust or unrestricted personal property for home use or 
consumption the value of which property does not exceed $1000. Where the 
purchase or sale price is less than $1,000, employees may also purchase 
motor vehicles for their personal use from Indians or sell their 
personal motor vehicles to Indians without obtaining approval of such 
purchases or sales from an authorized officer of the Bureau. Approval 
must be obtained if the purchase or sale price is $1,000 or more.
    (2) As used in paragraph (d)(1) of this section an authorized 
officer of the Bureau of Indian Affairs for employees on reservations 
and in agencies or in field service units shall be the superintendent or 
other officer in charge of the unit in which the employee is employed. 
The authorized officer for the superintendent or officer in charge is 
his or her immediate supervisor. The authorized officer for employees in 
area offices is the Area Director, and the authorized officer for an 
Area Director is his or her immediate supervisor. The authorized officer 
for employees in the Central Office is the Deputy Assistant Secretary--
Indian Affairs (Operations).
    (e) No employee of the Bureau of Indian Affairs may have any 
interest in any purchase or sale involving property or funds which are 
either held in trust by the United States for Indians or which are 
purchased, sold, utilized, or received in connection with a contract or 
grant to an Indian from the Bureau if such employee is employed in the 
office or installation of the Bureau which recommends, approves, 
executes, or administers such transaction, grant, or contract on behalf 
of the United States, except that, as authorized by section 437(b)(1) of 
title 18 U.S. Code an employee of the Bureau may have such an interest 
if such purchase or sale is approved by an authorized officer of the 
Bureau, as designated in paragraphs (e) (3) to (5) of this section, and 
the conditions in (e) (1) and (2) of this section are satisfied to the 
extent to which they are applicable to the transaction concerned:
    (1) The conveyance or granting of any interest in property held in 
trust or subject to restriction against alienation imposed by the United 
States is otherwise authorized by law.

[[Page 368]]

    (2) Trading by employees with Indians which involves property or 
funds which are either held in trust by the United States or are subject 
to restrictions against alienation imposed by the United States must be 
conducted on the basis of sealed bid or public auction. If the trading 
involves leases or sales of trust or restricted Indian land it must be 
conducted on the basis of sealed bids. Such requirements for sealed bid 
or public auction may only be waived by the Assistant Secretary for 
Indian Affairs on the basis of a full report showing:
    (i) The need for the transaction,
    (ii) The benefits accruing to both parties,
    (iii) That the consideration for the proposed transaction shall be 
not less than the fair market value of the trust or restricted property 
or interest therein, unless the employee is involved in a transaction in 
accordance with Sec. 152.25(c) or (d) or Sec. 162.5(b)(1), (2), or (3) 
of this title or the employee is the recipient of a benefit for tribal 
members for which a uniform charge to all members is made, and
    (iv) An affidavit as follows shall accompany each proposed 
transaction: ``I (name) (title), swear (or affirm) that I have not 
exercised any undue influence nor used any special knowledge received by 
reason of my employment in the Bureau in obtaining the (grantor's, 
purchaser's, vendor's) consent to the instant transaction.''
    (3) The authorized officer of the Bureau for employees employed on 
reservations, in agencies or service units is one who is not a relative 
by blood or marriage of the employee, and is not employed at the 
employee's reservation, agency or service unit. That officer must also 
be employed at not less than one grade level higher than such employee 
at the Wahington, District of Columbia, Central Office or at an Area 
Office other than that with authority over the employee's reservation, 
agency, or service unit.
    (4) The authorized officer of the Bureau for employees employed in 
Area offices is one who is not a relative by blood or marriage of the 
employee, is not employed at the employee's area office, and must be 
employed at not less than one grade level higher than the employee at 
the Washington, District of Columbia, Central Office.
    (5) The authorized officer of the Bureau for employees employed at 
the Washington, District of Columbia, Central Office is the Secretary.
    (f) Except as provided in subsection (b)(2) of section 437 of title 
18 U.S. Code as implemented by this section, nothing in the cited law 
shall be construed as preventing any employee of the Bureau who is an 
Indian, of whatever degree of Indian blood, from obtaining or receiving 
any benefit or benefits made available to Indians generally or to any 
member of his or her particular tribe, under any Act of Congress, nor to 
prevent any such employee who is an Indian from being a member of or 
receiving benefits by reason of his or her membership in any Indian 
tribe, corporation, or cooperative association organized by Indians, 
when authorized under such rules and regulations as the Secretary or 
his/her designee has prescribed or shall prescribe.

[49 FR 25434, June 21, 1984]



Sec. 140.9  Application for license.

    (a) Application for license must be made in writing on Form 5-052, 
setting forth the full name and residence of the applicant; if a firm, 
the firm name and the name of each member thereof; the place where it is 
proposed to carry on the trade; the capital to be invested; the names of 
the clerks to be employed; and the business experience of the applicant. 
The application must be forwarded through the Superintendent to the 
Commissioner of Indian Affairs, accompanied by two satisfactory 
testimonials on Form 2-077 as to the character of the applicant and his 
employees and their fitness to be in the Indian country, and by an 
affidavit of the Superintendent on Form 5-053 that neither he nor any 
person for him has any interest, direct or indirect, present or 
prospective, in the proposed business or the profits arising therefrom, 
and that no arrangement for any benefit to himself or to any other 
person on his behalf is contemplated in case the license is granted. 
Licensed traders will be held responsible for the conduct of their 
employees.
    (b) Itinerant peddlers or purveyors of foodstuffs and other 
merchandise shall

[[Page 369]]

be considered as traders and shall obtain a license or permit from the 
Superintendent setting forth the class of trade or peddling to be 
carried on, furnishing such character or credit references, or both, as 
may be required by the Superintendent. The period of the license for 
such itinerant peddlers shall be determined by the Superintendent.
    (c) When a license or permit to trade is issued under the 
regulations in this part 140, a fee of $5, payable when the license is 
issued, shall be levied against the licensee.

[30 FR 8267, June 29, 1965. Redesignated at 47 FR 13327, Mar. 30, 1982]



Sec. 140.11  License period.

    Licenses to trade shall not be issued unless the proposed licensee 
has a right to the use of the land on which the business is to be 
conducted. The license period shall correspond to the period of the 
lease or permit held by the licensee on restricted Indian land, except 
that where the proposed licensee is the owner or beneficial owner or 
holds a use right to the land on which the business is to be conducted, 
the license period shall be fixed by the Commissioner of Indian Affairs 
or his authorized representative, but in no case shall the license 
period exceed 25 years.

[30 FR 8268, June 29, 1965. Redesignated at 47 FR 13327, Mar. 30, 1982]



Sec. 140.12  License renewal.

    Application for renewal of license must be made to the Commissioner 
of Indian Affairs on Form 5-054, through the superintendent, at least 30 
days prior to the expiration of the existing license, and the 
superintendent must report as to the record the applicant has made as a 
trader and his fitness to continue as such under a new license.



Sec. 140.13  Power to close unlicensed stores.

    If persons carry on trade within a reservation with the Indians 
without a license, or continue to trade after expiration of the license 
without applying for renewal, the superintendent will immediately report 
the facts in the case to the Commissioner of Indian Affairs, who may, if 
necessary, direct the superintendent to close the stores of such 
traders.



Sec. 140.14  Trade limited to specified premises.

    No trade with Indians is permitted at any other place than that 
specified in the license. Licenses to not cover branch stores. A 
separate license and bond must be furnished for each such store. The 
business of a licensed trader must be managed by the bonded principal, 
who must habitually reside upon the reservation, and not by an unbonded 
subordinate.



Sec. 140.15  License applicable for trading only by original licensee.

    No trader will be allowed to lease, sublet, rent, or sell any of the 
buildings which he occupies, for any purpose to any other person or 
concern, without the approval of the Commissioner of Indian Affairs. A 
license to trade with Indians does not confer upon the trader any right 
or privileges in respect to the herding or raising of livestock upon the 
reservation. The use of reservation lands, whether tribal or allotted, 
for such purposes can be obtained by a trader only upon the terms and 
under the restrictions which apply to other persons. His license gives 
him no advantage over others in this respect.



Sec. 140.16  Trade in annuities or gratuities prohibited.

    Traders are forbidden to buy, trade for, or have in their possession 
any annuity or other goods of any description which have been purchased 
or furnished by the Government for the use or welfare of the Indians. 
Livestock or their increase purchased by the Government and in 
possession or control of the Indians may not be purchased by any trader, 
not a member of the tribe to which the owners or possessors of the 
cattle belong, except with the written consent of the agent of said 
tribe.



Sec. 140.17  Tobacco sales to minors.

    No trader shall sell tobacco, cigars, or cigarettes to any Indian 
under 18 years of age.

[[Page 370]]



Sec. 140.18  Intoxicating liquors.

    No trader shall use or permit to be used his premises for any 
unlawful conduct or purpose whatsoever. No trader shall use of permit to 
be used any part of his premises for the manufacture, sale, gift, 
transportation, drinking or storage of intoxicating liquors or beverages 
in violation of existing laws relating thereto. Violation of this 
section will subject the trader to criminal prosecution, revocation of 
license and such other action as may be necessary.



Sec. 140.19  Drugs.

    Traders shall not keep for sale, or sell, give away, or use any 
opium, chloral, cocaine, peyote or mescal bean, hashish or Indian hemp 
or marihuana, or any compound containing either ingredient, and for 
violation hereof the trader's license shall be revoked.



Sec. 140.21  Gambling.

    Gambling, by dice, cards, or in any way whatever, is strictly 
prohibited in any licensed trader's store or on the premises.



Sec. 140.22  Inspection of traders' prices.

    It is the duty of the superintendent to see that the prices charged 
by licensed traders are fair and reasonable. To this end the traders 
shall on request submit to the superintendent or inspecting officials 
the original invoice, showing cost, together with a statement of 
transportation charges, retail price of articles sold by them, the 
amount of Indian accounts carried on their books, the total annual 
sales, the value of buildings, livestock owned on reservation, the 
number of employees, and any other business information such officials 
may desire. The quality of all articles kept on sale must be good and 
merchantable.



Sec. 140.23  Credit at trader's risk.

    Credit given Indians will be at the trader's own risk, as no 
assistance will be given by Government officials in the collection of 
debts against Indians. Traders shall not accept pawns or pledges of 
personal property by Indians to obtain credit or loans.



Sec. 140.24  Cash payments only to Indians.

    Traders must not pay Indians in tokens, tickets, store orders, or 
anything else of that character. Payment must be made in money, or in 
credit if the Indian is indebted to the trader.



Sec. 140.25  Trade in antiquities prohibited.

    Traders shall not deal in objects of antiquity removed from any 
historic or prehistoric ruin or monument on land owned or controlled by 
the United States.

    Cross Reference: For regulations pertaining to archaeological 
resources, see part 262 of this chapter. For regulations of the Bureau 
of Land Management regarding antiquities, see 43 CFR part 3.



Sec. 140.26  Infectious plants.

    Traders shall not introduce into, sell, or spread within Indian 
reservations any plant, plant product, seed, or any type of vegetation, 
which is infested, or infected or which might act as a carrier of any 
pests of infectious, transmissible, or contagious diseases, as 
determined by the laws and regulations of the State for plant quarantine 
and pest control. For the purpose of enforcement of this provision State 
officers may enter Indian reservations, with the consent of the 
superintendent, to inspect the premises of such traders and otherwise to 
execute such State laws and regulations.



PART 141_BUSINESS PRACTICES ON THE NAVAJO, HOPI AND ZUNI RESERVATIONS
--Table of Contents




            Subpart A_Interpretation and Construction Guides

Sec.
141.1 Purpose.
141.2 Scope.
141.3 Definitions.
141.4 Interpretation and construction.

             Subpart B_Licensing Requirements and Procedures

141.5 Reservation business license required.
141.6 Approval or denial of license application.
141.7 Bond requirement for a reservation business.

[[Page 371]]

141.8 License period for reservation businesses.
141.9 Application for license renewal.
141.10 License fees for reservation businesses.
141.11 Tribal fees, taxes, and enforcement.
141.12 Peddler's permits.
141.13 Amusement company licenses.
141.14 Trade in livestock restricted.
141.15 Consent to jurisdiction of Hopi and Zuni tribal courts.

                  Subpart C_General Business Practices

141.16 Price marking.
141.17 Health and sanitation requirements.
141.18 Availability of employee authorized to transact business.
141.19 Check cashing.
141.20 Payment for purchase of Indian goods or services.
141.21 Trade confined to premises.
141.22 Subleasing prohibited.
141.23 Posted statement of ownership.
141.24 Attendance at semi-annual meetings.
141.25 Withholding of mail prohibited.
141.26 Trade in antiquities prohibited.
141.27 Trade in imitation Indian crafts prohibited.
141.28 Gambling prohibited.
141.29 Political contributions restricted.
141.30 Retaliation prohibited.
141.31 Trade by Indian Affairs employees restricted.

                     Subpart D_Pawnbroker Practices

141.32 Reservation pawnbroker license required.
141.33 Fees for pawnbroker license.
141.34 Pawnbroker records.
141.35 Pawnbroker disclosure requirements.
141.36 Maximum finance charges on pawn transactions.
141.37 Prepayment.
141.38 Pawn loans, period, notice and sale.
141.39 Sale and redemption of pawn.
141.40 Proceeds of sale.
141.41 Refinancing transaction.
141.42 Lost pawn receipts or tickets.
141.43 Outstanding obligations owed to pledgee.
141.44 Insurance on pawn.

         Subpart E_Consumer Credit Transactions Other Than Pawn

141.45 Consumer credit applications.
141.46 Credit disclosure statements.
141.47 Monthly billing statement.
141.48 Translation of disclosure statements.
141.49 Usury prohibited.

          Subpart F_Enforcement Powers, Procedures and Remedies

141.50 Penalty and forfeiture of merchandise.
141.51 Authority to close unlicensed reservation businesses.
141.52 Revocation of license and lease and recovery on bond.
141.53 Cease and desist orders.
141.54 Periodic review of performance.
141.55 Price monitoring and control.
141.56 Show cause procedures.
141.57 Procedures to cancel liability on bond.
141.58 Records, reports, and obligations of reservation business owners.
141.59 Customer complaint procedures.

    Authority: 5 U.S.C. 301; 25 U.S.C. 2, 9.

    Source: 40 FR 39835, Aug. 29, 1975, unless otherwise noted. 
Redesignated at 47 FR 13327, Mar. 30, 1982.



            Subpart A_Interpretation and Construction Guides



Sec. 141.1  Purpose.

    The purpose of the regulations of this part is to prescribe rules 
for the regulation of reservation businesses for the protection of 
Indian consumers on the Navajo, Hopi and Zuni Reservations as required 
by 25 U.S.C. 261, 262, 263, and 264.



Sec. 141.2  Scope.

    The regulations of this part apply to all non-members of the Navajo, 
Hopi and Zuni Tribes, who engage in retail businesses on the above 
respective reservations. These regulations do not apply to businesses 
that are wholly owned and operated by either the Navajo, Hopi or Zuni 
Tribes, or by individual tribal members within their respective 
reservations.

[45 FR 64906, Oct. 1, 1980. Redesignated at 47 FR 13327, Mar. 30, 1982]



Sec. 141.3  Definitions.

    For the purposes of this part--
    (a) Annual percentage rate means the annual percentage rate of 
finance charge determined in accordance with 12 CFR 226.5, which defines 
annual percentage rates.
    (b) Consumer credit transaction means a grant of credit or a loan 
that is made by a person regularly engaged in the business of making 
loans or granting credit primarily for a personal, family, household, or 
agricultural purpose.
    (c) Draft means a writing that is a direction to pay that:

[[Page 372]]

    (1) Identifies the person to pay with reasonable certainty;
    (2) Is signed by the drawer;
    (3) Contains an unconditional order to pay a sum certain in money 
and no other promise, order, obligation or power given by the drawer;
    (4) Is payable on demand or at a definite time; and
    (5) Is payable to order.
    (d) Finance charge means the cost of credit determined in accordance 
with 12 CFR 226.4, which defines ``finance charge''.
    (e) Firm means a corporation or a partnership.
    (f) Gross receipts include the following:
    (1) All cash received from the conduct and operation of the 
licensee's business at the premises described in the application for 
license.
    (2) Receipts from both wholesale and retail transactions.
    (3) Receipts resulting from transactions concluded off the 
reservation that originate from the conduct and operation of the 
licensee's business on the reservation.
    (4) The market value of all property taken in trade on the date when 
received and either held by the licensee for purposes other than resale 
or credited on any account in payment for merchandise.
    (5) Proceeds from the sale of any goods bought from Indians 
regardless of where the sale takes place.
    (6) Finance charge received on loans, but not the return of 
principal.
    (g) Open end credit means consumer credit transactions made on an 
account by a plan under which:
    (1) The creditor may permit the customer to make purchases or obtain 
loans, from time to time, directly from the creditor or indirectly by 
use of a credit card, check, or other device, as the plan may provide;
    (2) The customer has the privilege of paying the balance in full or 
in installments; and
    (3) A finance charge may be computed by the creditor from time to 
time on an outstanding unpaid balance.
    (h) Pawnbroker means a person whose business includes lending money 
secured by personal property deposited with the lender.
    (i) Peddler means a person who offers goods for sale within the 
exterior boundaries of the Hopi, Navajo or Zuni Reservations, but does 
not do business from a fixed location or site on any of those 
reservations.
    (j) Person includes a natural person, a corporation, trust, estate, 
partnership, cooperative or association.
    (k) Replacement value means the present cost to the owner of 
replacing an item with one having the same quality and usefulness.
    (l) Reservation business means a person that engages at a fixed 
location or site within the exterior boundaries of the Navajo, Hopi or 
Zuni Reservations in the sale or purchase of goods or services or in 
consumer credit transactions with Indians and is not a bank, saving 
bank, trust company, savings or building and loan association or credit 
union operating under the laws of the United States or the laws of New 
Mexico, Arizona or Utah, a business on the Hopi Reservation that is 
wholly owned and operated by members of the Hopi Tribe, or a business on 
the Zuni Reservation that is wholly owned and operated by members of the 
Zuni Tribe.



Sec. 141.4  Interpretation and construction.

    (a) Area Director refers to the Area Director of the Bureau of 
Indian Affairs or the Administrator of the Joint Use Area of the Bureau 
of Indian Affairs who has jurisdiction over the land on which a person 
does business or intends to do business with Indians.
    (b) Commissioner refers to the Commissioner of Indian Affairs or a 
person to whom the Commissioner of Indian Affairs has delegated 
authority under this part or under 25 U.S.C. 261, 262, 263, or 264.
    (c) Superintendent refers to the Superintendent of the Bureau of 
Indian Affairs who has jurisdiction over the land on which a person does 
business or intends to do business with Indians.
    (d) Tribe refers to the tribe that has jurisdiction over the land on 
which a person does business or intends to do business with Indians.

[[Page 373]]



             Subpart B_Licensing Requirements and Procedures



Sec. 141.5  Reservation business license required.

    (a) No person may own or lease a reservation business without a 
license issued under the provisions of this subpart.
    (b) The applicant shall apply in writing on a form provided by the 
Commissioner setting forth the following:
    (1) The full name and residence of the applicant.
    (2) Three (3) responsible references.
    (3) The firm name and the name of each member of the board of 
directors if the applicant is a firm.
    (4) Satisfactory evidence as to the character, experience and 
business ability of the applicant and the employees of the applicant.
    (5) Satisfactory evidence of the general fitness of the applicant 
and employees of the applicant to reside on the Indian reservation.
    (c) Upon the request of the Commissioner, the applicant shall 
furnish the following:
    (1) The capital invested or to be invested and, of this, the amount 
of capital owned and the amount borrowed or to be borrowed.
    (2) The name of the lender of any borrowed capital, the date due, 
the rate of interest to be paid, and the names of any endorsers and 
security.
    (3) A copy of any contract or trade agreement whether oral or 
written with creditors or financing individuals or institutions, 
including any stipulations whereby financing fees are to be paid.
    (d) Information that if released might adversely affect the 
competitive position of the applicant shall remain confidential.

[40 FR 39837, Aug. 29, 1975, as amended at 41 FR 3288, Jan. 22, 1976. 
Redesignated at 47 FR 13327, Mar. 30, 1982]



Sec. 141.6  Approval or denial of license application.

    (a) The Commissioner shall approve or deny each license application 
and notify the applicant no later than thirty (30) days after receipt of 
a completed application.
    (b) No application is complete until any clearance or tribal council 
approval required by tribal or Federal regulations has been obtained.
    (c) The Commissioner may not deny a license to an applicant for the 
purpose of limiting competition.
    (d) If the application is approved the license shall be issued on a 
form provided by the Commissioner.
    (e) If the Commissioner denies the license application the applicant 
may appeal under the provisions of part 2 of this title no later than 
thirty (30) days after the date on which notice of denial of the 
application was sent.



Sec. 141.7  Bond requirement for a reservation business.

    (a) An applicant for a license or renewal of a license to operate a 
reservation business shall at the time the application is submitted 
furnish a bond on a form provided by the Commissioner in the name of the 
applicant in the amount of ten thousand dollars ($10,000) or such larger 
sum as the Commissioner may designate, with two (2) on more sureties 
approved by the Commissioner or with a guaranty company qualified under 
the Act of August 13, 1894 (28 Stat. 279; 6 U.S.C. 6-13). The bond shall 
be for the same period covered by the license. No licensee may trade 
without a bond. Except as provided in paragraph (d) of this section, no 
surety may be released from liability until the license expires.
    (b) The bond shall be in favor of the United States for the benefit 
of the United States and any customer of the licensee who recovers a 
judgment for damages resulting from violation of any law or regulation 
affecting or relating to reservation businesses. Any customer who 
recovers such a judgment may bring suit on the bond in his or her own 
name. The bond shall be conditioned on payment by the licensee of all 
judgments for damages resulting from violations of the regulations of 
this part.
    (c) Any surety for a reservation business on the Hopi or Zuni 
Reservation shall agree in writing to submit itself voluntarily to the 
jurisdiction of the tribal court for the purpose of adjudicating any 
claim arising under the bond.

[[Page 374]]

    (d) Any surety on the bond of a licensed reservation business may be 
relieved from liabilities by complying with the provisions of Sec. 
141.57 of this title.

[40 FR 39837, Aug. 29, 1975, as amended at 41 FR 22937, June 8, 1976. 
Redesignated at 47 FR 13327, Mar. 30, 1982]



Sec. 141.8  License period for reservation businesses.

    A license to operate a reservation business may not be issued unless 
the applicant has a right to use the land on which the business is to be 
conducted. The license period shall correspond to the period of the 
lease held by the licensee. The license period in no event may exceed 
twenty-five (25) years.



Sec. 141.9  Application for license renewal.

    (a) An applicant for renewal of the license to trade shall file an 
application on a form provided by the Commissioner with the Area 
Director not less than three (3) months prior to the expiration of the 
existing license. The Area Director shall report in writing to the 
Commissioner on the record the applicant has made as a reservation 
business owner and the applicant's present fitness to reside on the 
Indian reservation.
    (b) The Commissioner may issue a temporary permit for three (3) 
months pending consideration of application for license renewal.
    (c) Prior to expiration of the existing license or, if issued, the 
temporary permit, the Commissioner shall approve or deny the application 
for license renewal and notify the applicant.
    (d) No license may be renewed until any clearance or tribal council 
approval required by tribal or other federal regulations has been 
obtained.
    (e) If the Commissioner denies the application for renewal, the 
applicant may appeal under the provisions of part 2 of this title.



Sec. 141.10  License fees for reservation businesses.

    (a) Prior to the issuance of an initial license, each licensee who 
is not a member of the Navajo tribe shall pay the following amount:
    (1) If the license is issued before July 1, the licensee shall pay 
fifty dollars ($50).
    (2) If the license is issued on or after July 1, the licensee shall 
pay twenty-five dollars ($25).
    (b) Each licensed business owner who is not a member of the Navajo 
tribe shall pay on or before January 10 of each year an annual license 
fee determined as follows based on the licensee's most recent annual 
report:
    (1) If the licensee's gross receipts are less than one hundred 
thousand dollars ($100,000) for the year or the licensee has not yet 
been required to file its first annual report, the license fee is fifty 
dollars ($50).
    (2) If the licensee's gross receipts for the year are at least one 
hundred thousand dollars ($100,000) but not more than four hundred and 
ninety-nine thousand nine hundred and ninety-nine dollars ($499,999) the 
fee is one hundred dollars ($100).
    (3) If the licensee's gross receipts for the year are at least five 
hundred thousand dollars ($500,000) but not more than seven hundred and 
forty-nine thousand nine hundred and ninety-nine dollars ($749,999), the 
fee is two hundred dollars ($200).
    (4) If the licensee's gross receipts for the year are seven hundred 
fifty thousand dollars ($750,000) or more, the fee is three hundred 
dollars ($300).
    (c) The Navajo Area Director shall determine the annual license fee 
payable by licensees who are enrolled members of the Navajo Tribe. The 
license fee for an enrolled member of the Navajo Tribe may not be less 
than twenty percent (20%) nor greater than one hundred percent (100 
percent) of the amount the licensee would be required to pay if the 
licensee were not a tribal member.
    (d) All fees are payable to the Area Director and shall be deposited 
to the credit of the account ``Special Deposits.''

[40 FR 39835, Aug. 29, 1975, as amended at 59 FR 54502, Oct. 31, 1994]



Sec. 141.11  Tribal fees, taxes, and enforcement.

    (a) The regulations in this part do not preclude the Hopi, Navajo, 
or Zuni

[[Page 375]]

tribal councils from assessing and collecting such fees or taxes as they 
may deem appropriate from reservation businesses.
    (b) Nothing in the regulations of this part may be construed to 
preclude tribal enforcement of these regulations or consistent tribal 
ordinances.

[40 FR 39837, Aug. 29, 1975, as amended at 41 FR 3288, Jan. 22, 1976. 
Redesignated at 47 FR 13327, Mar. 30, 1982]



Sec. 141.12  Peddler's permits.

    (a) Except as provided in paragraph (b) of this section, no peddler 
may offer goods for sale within the exterior boundaries of the Hopi, 
Navajo, or Zuni reservations without a peddler's permit. The permit 
shall state on its face the class of goods that may be offered for sale. 
No peddler may offer for sale any class of goods other than those listed 
on the face of the permit.
    (b) No peddler who is an enrolled member of a federally recognized 
Indian tribe is required to obtain a peddler's permit for offering to 
sell the following items:
    (1) Coal and wood for non-commercial use,
    (2) Homegrown fresh products,
    (3) Meat products raised locally by the peddler, or
    (4) Arts and crafts made by the peddler or the peddler's family.
    (c) The applicant shall apply for a permit in writing on a form 
provided by the Commissioner.
    (d) Peddlers shall pay such fee and post such surety bond on a form 
provided by the Commissioner as the Commissioner requires. The surety 
bond required may not be less than five hundred dollars ($500) nor more 
than ten thousand dollars ($10,000).
    (e) Any surety on the bond of a peddler may be relieved of liability 
by complying with the provisions of Sec. 141.57.

(25 U.S.C. 261 et seq.)

[43 FR 27826, June 27, 1978. Redesignated at 47 FR 13327, Mar. 30, 1982]



Sec. 141.13  Amusement company licenses.

    (a) No person may operate a portable dance pavilion, mechanical 
amusement device such as a ferris wheel or carousel, or commercial games 
of skill within the exterior boundaries of the Navajo, Hopi, or Zuni 
Reservations without a license from the Commissioner.
    (b) The licensee shall pay such fee as the Commissioner requires. 
The fee shall be not less than five dollars ($5) nor more than twenty-
five dollars ($25) per unit.
    (c) The licensee shall post a surety bond on a form provided by the 
Commissioner in an amount not exceeding ten thousand dollars ($10,000) 
and a personal injury and property damage liability bond of not less 
than five thousand dollars ($5,000) nor more than fifty thousand dollars 
($50,000) as may be required by the Commissioner.
    (d) The provisions of this section do not apply to amusement 
companies where the contract between the tribe and the amusement company 
provides for the payment of a fee to the tribe and for the protection of 
the public against personal injury and property damage by bond in the 
amounts specified in paragraph (c) of this section.
    (e) Any surety on a bond under this section may be relieved of 
liability by complying with the provisions of Sec. 141.57.



Sec. 141.14  Trade in livestock restricted.

    (a) No person other than an enrolled member of the tribe or any 
association, partnership, corporation or business entity wholly owned by 
enrolled members of the tribe may purchase livestock from tribal members 
without a special permit issued by the Commissioner.
    (b) The Commissioner shall issue a permit to each applicant who 
establishes to the Commissioner's satisfaction that the applicant is a 
fit person to engage in the purchase of livestock and who posts a bond 
on a form provided by the Commissioner in the amount of ten thousand 
dollars ($10,000). This paragraph does not require a person who has 
posted a bond of ten thousand dollars ($10,000) or more under other 
provisions of this part to post an additional bond to obtain a permit 
under this section.
    (c) Any surety on a bond under this section may be relieved of 
liability by complying with the provisions of Sec. 141.57.

[[Page 376]]

    (d) The provisions of this section do not apply to purchases of 
livestock made at an organized public auction.

[40 FR 39837, Aug. 29, 1975, as amended at 41 FR 22937, June 8, 1976. 
Redesignated at 47 FR 13327, Mar. 30, 1982]



Sec. 141.15  Consent to jurisdiction of Hopi and Zuni tribal courts.

    As a condition to doing business on the Hopi or the Zuni Reservation 
each applicant for license under this part shall, in accordance with the 
constitutions of those tribes, voluntarily submit the applicant and the 
applicant's employees or agents to the jurisdiction of the tribal court 
for the purpose of the adjudication of any dispute, claim or obligation 
arising under tribal ordinance relating to commerce carried out by the 
licensee.



                  Subpart C_General Business Practices



Sec. 141.16  Price marking.

    The price of each article offered for sale shall be marked on the 
article, its containers or in any other manner that is plain and visible 
to the customer and that affords the customer a reasonable opportunity 
to learn the price of the article prior to purchase.



Sec. 141.17  Health and sanitation requirements.

    (a) Each licensee shall keep both the premises and the place of 
business in a clean and sanitary condition at all times and shall avoid 
exposure of foodstuffs to contamination. No licensee may offer for sale 
any goods that are banned for health or sanitation reasons from retail 
sale by any Federal agency or by the tribe or, where not in conflict 
with the tribal regulations, by the State or by any State agency. No 
licensee may knowingly offer for sale any food that is contaminated.
    (b) All weights and measure shall conform to standards set by the 
National Bureau of Standards and to standards, if any, set by the tribe 
and, if not in conflict with tribal regulations, to the standards set by 
the State.
    (c) If training in foodhandling is available from the Indian Health 
Service, each person working in a reservation business shall complete 
the foodhandler training offered by the Indian Health Service before 
handling any food sold by a reservation business.
    (d) Any person whom the Service Unit Director of the Indian Health 
Service determines is infected with or is a carrier of any communicable 
disease in a stage likely to be communicable to persons exposed as a 
result of the infected employee's normal duties as a foodhandler may not 
be employed by a reservation business.
    (e) Each business shall comply with all Federal health regulations 
and with all tribal health regulations that are consistent with Federal 
regulations. Each business shall comply with State health regulations 
that are consistent with tribal and Federal health regulations.
    (f) Except as otherwise provided herein, nothing in this section may 
be construed as a grant of enforcement powers to any agency of a State 
or its subdivisions.
    (g) It is the duty of the health officers of the Indian Health 
Service to make periodic inspections, recommend improvements, and report 
thereon to the Commissioner.



Sec. 141.18  Availability of employee authorized to transact business.

    Each licensee shall provide during normal business hours an employee 
authorized in writing to engage in all business transactions that the 
licensee normally offers to customers.



Sec. 141.19  Check cashing.

    (a) A reservation business may give a fully negotiable check in 
addition to U.S. currency when cashing a draft, check or money order. A 
reservation business may not give scrip, credit or other substitute for 
U.S. currency when cashing a draft, check or money order.
    (b) A reservation business owner or employee may advise a customer 
cashing checks, money orders or drafts of the amount due on the 
customer's credit accounts, pawn accounts or any other obligation the 
customer owes to the business, but in no event may the owner or employee 
withhold the proceeds of the check, money order or

[[Page 377]]

draft from the customer on the basis of existing credit obligations.

[40 FR 39837, Aug. 29, 1975, as amended at 41 FR 3288, Jan. 22, 1976. 
Redesignated at 47 FR 13327, Mar. 30, 1982]



Sec. 141.20  Payment for purchase of Indian goods or services.

    (a) A reservation business shall pay for the purchase of Indian 
goods or services with cash or a fully negotiable check. A reservation 
business may not pay for Indian goods or services with trade slips or 
future credit. In any transaction involving the purchase of Indian goods 
on the Navajo Reservation, the reservation business shall furnish a bill 
of sale indicating the name of the seller, a description of the goods, 
the amount paid for the goods, the date of sale, and the signature of 
both parties and shall retain a copy of the bill of sales in its 
business records.
    (b) A reservation business owner or employee may advise a customer 
selling Indian goods or services of the amount due on the customer's 
credit accounts, pawn accounts or any other obligation the customer owes 
to the business, but in no event may the owner or employee withhold the 
proceeds of the sale from the customer on the basis of existing credit 
obligations.



Sec. 141.21  Trade confined to premises.

    The licensee shall confine all trade on the reservation to the 
premises specified in the license, except, where permitted under Sec. 
141.14, the buying and selling of livestock and livestock products.



Sec. 141.22  Subleasing prohibited.

    No licensee may lease, sublet, rent, or sell any building that the 
licensee occupies for any purpose to any person without the approval of 
the Commissioner and the consent of the tribe.



Sec. 141.23  Posted statement of ownership.

    The licensee of a reservation business shall display in a prominent 
place a notice that is legible to customers stating the form of the 
business entity, the names and addresses of all other reservation 
businesses owned in whole or in part by the business entity, and if the 
licensee is not a corporation, the names and addresses of the owner or 
owners of the business. If the licensee is a corporation the notice 
shall list the names and addresses of the members of the Board of 
Directors.



Sec. 141.24  Attendance at semi-annual meetings.

    Upon the request of a tribal official designated by the governing 
body, each licensee shall attend a semi-annual public meeting of a 
tribal governing body to respond to customer inquiries.



Sec. 141.25  Withholding of mail prohibited.

    No owner or employee of a reservation business may open, withhold, 
or otherwise delay the delivery of mail.



Sec. 141.26  Trade in antiquities prohibited.

    No licensee may knowingly buy, sell, rent or lease any artifact 
created before 1930 that was removed from an historic ruin or monument.



Sec. 141.27  Trade in imitation Indian crafts prohibited.

    No person may introduce or possess for disposition or sale within 
the exterior boundaries of the Hopi, Navajo or Zuni Reservations any 
object that is represented to be an Indian handicraft unless the object 
was produced by an Indian or Indians with the help of only such devices 
as allow the manual skill of the maker to condition the shape and design 
of each individual's product.



Sec. 141.28  Gambling prohibited.

    No licensee may permit any person to gamble by dice, cards, or in 
any way whatever, including the use of any mechanical device, on the 
premises of any licensed business.



Sec. 141.29  Political contributions restricted.

    No reservation business owner who is ineligible to vote in a Navajo 
tribal election may grant or donate any money or goods to any candidate 
for election to Navajo tribal office.



Sec. 141.30  Retaliation prohibited.

    No licensee may refuse service to any customer for the purpose of 
retaliating against that customer for enforcing or

[[Page 378]]

attempting to enforce the regulations of this part.



Sec. 141.31  Trade by Indian Affairs employees restricted.

    (a) Except as authorized in this section, no person employed by the 
U.S. Government in Indian Affairs may have any interest in any trade 
with an Indian or an Indian organization. Employees of the U.S. 
Government may trade with an Indian or Indian organization for any 
purpose other than to engage in a profit-making activity under the 
following conditions:
    (1) Where the amount involved is $500 or less a U.S. Government 
employee may purchase goods or services from an Indian or Indian 
organization.
    (2) Where the amount involved is greater than $500 a U.S. Government 
employee may, with the approval of the Secretary of the Interior, 
purchase goods or services from any Indian or Indian organization.
    (b) Lease or sale of home sites or allotments on trust or restricted 
Indian land to or from Indian employees of the U.S. Government shall be 
made on sealed bids, unless the Commissioner waives this requirement on 
the basis of a report showing:
    (1) The need for the transaction,
    (2) The benefits accruing to both parties, and
    (3) That the consideration for the proposed transaction is not less 
than the appraised value of the land or leasehold interest unless the 
Indian employee qualifies and is intending a transaction in accordance 
with Sec. 152.5 (b) and (c) of this chapter or Sec. 162.5(b)(1), (2) 
and (3) of this chapter.

An affidavit, as follows, shall accompany each proposed land 
transaction:

I,----------------------------(Name)

----------------------------(Title)

swear (or affirm) that I have not exercised any undue influence nor used 
any special knowledge received by reason of my office in obtaining the 
(grantor's, purchaser's, vendor's) consent to the instant transaction.

    (c) This section does not prohibit any reservation business from 
contracting with the Federal Government to provide postal services to 
Indian communities in which Government postal service is unavailable.
    (d) Nothing in this section prohibits an Indian employee from 
receiving benefits by reason of membership in a tribe or corporation or 
cooperative association organized by and operated for Indians.
    (e) U.S. Government employees who violate this section are liable to 
a penalty of five thousand dollars ($5,000) and shall be removed from 
office, see 25 U.S.C. 68.

[40 FR 39837, Aug. 29, 1975, as amended at 41 FR 3288, Jan. 22, 1976. 
Redesignated at 47 FR 13327, Mar. 30, 1982]



                     Subpart D_Pawnbroker Practices



Sec. 141.32  Reservation pawnbroker license required.

    (a) No person may accept pawns or pledges of personal property as 
security for monies or accounts due by an Indian within the exterior 
boundaries of the Navajo, Hopi or Zuni Reservations unless such person 
is an agent of a bank, saving bank, trust company, savings or building 
and loan association, or credit union operating under the laws of the 
United States or the laws of New Mexico, Arizona, or Utah or unless such 
person--
    (1) Holds a valid license to operate a reservation business,
    (2) Holds a valid reservation pawnbroker license, and
    (3) Posts a bond on a form provided by the commissioner in the name 
of the licensee in the amount of twenty-five thousand dollars ($25,000) 
or such larger sum as may be designated by the Commissioner with two (2) 
or more sureties approved by the Commissioner or with a guaranty company 
qualified under the Act of August 13, 1894 (28 Stat. 279; 6 U.S.C. 6-
13).
    (b) An applicant for a reservation pawnbroker license shall apply in 
writing on a form provided by the Commissioner.
    (c) The bond required by paragraph (a) of this section shall be in 
favor of the United States for the benefits of the customers of the 
licensee and shall specifically indemnify all customers who have 
recovered judgment against the licensee for destroyed, lost, misplaced 
or misappropriated pawn or other property. Any customer recovering such 
a judgment may bring suit

[[Page 379]]

on the bond in his or her own name. The bond shall be for the same 
period as the license.
    (d) Any surety on a bond under this section may be relieved of 
liability by complying with the provisions of Sec. 141.57.
    (e) No person may accept pawns or pledges of personal property as 
security for monies or accounts due by an Indian after the effective 
date of a tribal ordinance banning the acceptance of pawn on the 
reservation.

[40 FR 39837, Aug. 29, 1975, as amended at 41 FR 3288, Jan. 22, 1976; 41 
FR 22937, June 8, 1976. Redesignated at 47 FR 13327, Mar. 30, 1982]



Sec. 141.33  Fees for pawnbroker license.

    (a) Prior to the issuance of an initial pawnbroker license, each 
licensee who is not a member of the Navajo Tribe shall pay the following 
amount:
    (1) If the license is issued before July 1, the licensee shall pay 
two hundred dollars ($200).
    (2) If the license is issued on or after July 1, the licensee shall 
pay one hundred dollars ($100).
    (b) Each licensed pawnbroker who is not a member of the Navajo Tribe 
shall pay on or before January 10 of each year an annual license fee of 
two hundred dollars ($200).
    (c) The Area Director shall determine the annual license fee payable 
by licensees who are enrolled members of the Navajo Tribe. The license 
fee for a member of the Navajo Tribe may not be less than twenty percent 
(20 percent) nor greater than one hundred percent (100 percent) of the 
amount the licensee would be required to pay if the licensee were not 
tribal member.
    (d) All fees are payable to the Area Director and shall be deposited 
to the credit of the account ``Special Deposits.''

[40 FR 39837, Aug. 29, 1975, as amended at 41 FR 3288, Jan. 22, 1976. 
Redesignated at 47 FR 13327, Mar. 30, 1982; 59 FR 54502, Oct. 31, 1994]



Sec. 141.34  Pawnbroker records.

    Each pawnbroker shall keep a written record of the following 
information:
    (a) Transaction number.
    (b) Name of pledgor.
    (c) Address of pledgor.
    (d) Census number or social security number of pledgor.
    (e) Date of transaction.
    (f) Replacement value of pawn.
    (g) Description of pawned item.
    (h) Amount loaned in cash.
    (i) Amount loaned as credit.
    (j) Finance charge.
    (k) Amount financed.
    (l) Date and amount of payments made by pledgor.
    (m) Date notice of default sent to pledgor.
    (n) Date pawned item sold.
    (o) Name and address of purchaser.
    (p) Amount received upon sale.
    (q) Amount of any surplus returned to the pledgor.
    (r) Such other information as the Commissioner may require.



Sec. 141.35  Pawnbroker disclosure requirements.

    In all transactions in which pawn is taken the lender shall give the 
borrower a written ticket or receipt disclosing the following 
information to the extent applicable:
    (a) Clear identification of the property pledged.
    (b) The date of the transaction.
    (c) Amount of the loan.
    (d) Name and social security or census number of the pledgor.
    (e) Replacement value of the pawn as agreed upon by the pledgor and 
pledgee.
    (f) Date on which loan is due.
    (g) The amount, expressed as a dollar amount, of any finance 
charges.
    (h) The finance charges expressed as an annual percentage rate and 
computed in accordance with the provisions of 12 CFR 226.5(b).
    (i) The amount, or method of computing the amount, of any charges to 
be assessed after the date the loan is due.
    (j) A statement of the conditions of default and the pledgor's 
rights upon default, as defined by this part.
    (k) Identification of the method of computing any unearned portion 
of the finance charges in the event of prepayment of the obligation.

[[Page 380]]



Sec. 141.36  Maximum finance charges on pawn transactions.

    No pawnbroker may impose an annual finance charge greater than 
twenty-four percent (24 percent) of the unpaid balance for the period of 
the loan nor assess late charges or delinquency charges on any loan.



Sec. 141.37  Prepayment.

    (a) Subject to the provisions of paragraph (b) of this section, the 
pledgor may prepay in full or in any part the unpaid balance of a loan 
at any time without penalty.
    (b) When a loan is prepaid the lender may collect the earned portion 
of the finance charge or may charge an administrative fee not to exceed 
ten percent (10 percent) of the unearned finance charge or two dollars 
($2) whichever is greater.



Sec. 141.38  Pawn loans, period, notice and sale.

    (a) The proceeds of all loans secured by pawn and for which a 
finance charge is imposed shall be paid only in cash or with a fully 
negotiable check.
    (b) The period of all such loans shall be no less than twelve (12) 
months, subject to the provisions of paragraph (c).
    (c) Thirty (30) days prior to the end of the loan period the pledgee 
may make a declaration of intention to proceed with sale of the pawned 
item by sending notice of intent to the pledgor.
    (d) The notice required in paragraph (c) of this section shall be 
sent to the pledgor and proof of delivery obtained and shall contain a 
description of the item pawned, a statement of the principal and finance 
charge owed, a statement of the intention to sell, the date of the sale, 
and the procedure for redemption.
    (e) Nothing in this section requires the business owner to proceed 
with notice and sale if the business owner desires to hold the pawn for 
a period longer than the loan period stated in the original agreement.
    (f) Unless notice is given under paragraph (c) of this section, or 
the loan is refinanced under the provisions of Sec. 141.41, no finance 
charge may be imposed for the time the loan remains unpaid after the end 
of the loan period stated on the pawn ticket.



Sec. 141.39  Sale and redemption of pawn.

    (a) If the retention period has expired and notice as required under 
Sec. 141.38 of this part has been sent and received, the pledgee may 
proceed with the sale of the pawn.
    (b) The pawn shall be sold no sooner than thirty (30) days but no 
later than twelve (12) months after notice of intent to sell has been 
given. The sale shall be a public sale, with notice of the time, place, 
and manner to be given in a tribal newspaper of general circulation not 
less than fourteen (14) days prior to the sale, or in the absence of 
such a newspaper, in a commercially reasonable manner. The sale itself 
shall also be conducted in a commercially reasonable manner.
    (c) A pledgor may redeem pawn which has been put up for sale at any 
time before the day it is to be sold by tendering to the pledgee the 
face amount of the loan, plus the finance charge assessed on the 
original loan. The pledgee may also collect an additional charge 
covering the period between the date due and the date of redemption, 
provided that the rate of charge does not exceed the finance charge on 
the original loan.
    (d) The pledgee may buy at the pledgee's own sale if the collateral 
is of a type customarily sold in a recognized market or which is the 
subject of widely distributed standard price quotations.
    (e) Pawn held for more than twelve (12) months after notice of 
intent to sell has been given may not be sold, but the pledgor may 
redeem the pawn at any time by tendering to the pledgee the face amount 
of the loan, plus the finance charge that accrued before the end of the 
sale period provided in paragraph (b) of this section.

[40 FR 39837, Aug. 29, 1975, as amended at 41 FR 3288, Jan. 22, 1976. 
Redesignated at 47 FR 13327, Mar. 30, 1982]



Sec. 141.40  Proceeds of sale.

    (a) The following items shall be deducted from the proceeds of the 
sale of pawned items in the following order of priority:
    (1) The expense of advertising and conducting the sale, not to 
exceed ten percent (10%) of the amount loaned.

[[Page 381]]

    (2) The principal amount of the loan, plus any accrued finance 
charges.
    (3) The finance charge calculated at the annual percentage rate of 
the original loan on the unpaid balance of the loan for the period from 
the date of default to the date of sale.
    (b) Within ten (10) days after the sale of the pledge under this 
section, the pledgee shall send a notice to the pledgor informing the 
pledgor of the date of the sale, the proceeds of the sale, the allowable 
costs of the sale, any additional finance charges, and the amount of any 
surplus realized. The pledgee shall obtain proof that the notice was 
delivered.
    (c) Any proceeds of the sale remaining after the deductions 
authorized in paragraph (a) of this section are deemed to be ``surplus'' 
and shall be paid over to the pledgor or the pledgor's estate in U.S. 
currency.
    (d) The sale of pledged goods and the application of the proceeds in 
accordance with this section extinguishes all rights of action of the 
pledgee for any unpaid principal or finance charge on the original loan.



Sec. 141.41  Refinancing transaction.

    (a) Any pawn agreement may be refinanced, either with or without an 
increase in the principal amount of the loan, prior to or following the 
date of expiration of the original period of the loan upon agreement 
between the parties.
    (b) Such refinancing constitutes a new transaction for purposes of 
all disclosure and record keeping requirements of this part and requires 
the issuance of a new ticket or receipt.
    (c) The rate of the additional finance charge imposed as part of the 
refinancing agreement may not exceed the maximum rate imposed by Sec. 
141.36.
    (d) The total finance charges in a refinancing agreement may not 
exceed the sum of the following amounts:
    (1) The finance charge that the pledgor would have been required to 
pay upon prepayment on the date of refinancing under Sec. 141.37 of 
this part, except that, for the purpose of computing this amount, no 
minimum finance charge or administrative fee may be included, and
    (2) Such additional finance charge as is permissible on the balance 
of the loan over the remaining period of the loan as extended.
    (e) The default and sale procedures of this part apply to a 
refinanced pawn transaction in the same manner as they apply to an 
original pawn transaction.



Sec. 141.42  Lost pawn receipts or tickets.

    (a) Redemption may not be denied on the sole ground that the pledgor 
is unable to produce a receipt or pawn ticket, provided the pledgor 
gives a reasonable description of the pawned item or makes an actual 
identification of the item. The pledgee may require the pledgor to sign 
a receipt for the redeemed pawn. No person other than the pledgor may 
redeem pawn without a ticket.
    (b) No additional charges may be imposed for the loss of a pawn 
receipt or ticket.



Sec. 141.43  Outstanding obligations owed to pledgee.

    If the pledgor tenders payment to be applied toward redemption of a 
pawned item, it shall be so applied by the pledgee, irrespective of 
other outstanding obligations owed by the pledgor to the pledgee. The 
pledgee may not deny the pledgor the right to redeem the pawn.



Sec. 141.44  Insurance on pawn.

    (a) Any licensee under this part who lends money or extends credit 
with personal property as security and holds such property as a pledge 
shall maintain invault all risk insurance coverage running in favor of 
the pledgor for such property in amounts based upon a report issued 
monthly to the insurer. Such monthly report shall be an amount not less 
than the total agreed replacement value of all pawned items then held by 
the licensee.
    (b) A copy of the insurance policy shall be available for inspection 
at the licensee's place of business and a copy shall be filed with the 
Commissioner.

[[Page 382]]



         Subpart E_Consumer Credit Transactions Other Than Pawn



Sec. 141.45  Consumer credit applications.

    Any reservation business offering credit which is not secured by 
pawn shall provide an application for credit to any customer requesting 
credit. Within thirty (30) days of the date of application, the lender 
shall act upon the application and notify the customer in writing of the 
decision with the reason therefor. A business owner who reduces the 
amount of credit available to a customer or terminates a credit account 
shall provide written notice to the customer stating the reason for the 
reduction or termination of such credit.



Sec. 141.46  Credit disclosure statements.

    Upon approval of a credit application the lender shall give the 
applicant the following information where applicable in a written 
disclosure statement:
    (a) The maximum credit limit of the account.
    (b) The conditions under which a finance charge may be imposed.
    (c) The period in which payment may be made without incurring a 
finance charge.
    (d) The method used in determining the balance on which the finance 
charge is calculated.
    (e) The method used to calculate the finance charge.
    (f) The periodic rates used and the range of balances to which each 
rate applies.
    (g) The conditions under which additional charges may be made and 
the method for calculating those charges.
    (h) A description of any lien that may be acquired on a customer's 
property.
    (i) The minimum payment that must be made on each billing.



Sec. 141.47  Monthly billing statement.

    On all credit accounts on which a finance charge may be imposed and 
for all other credit accounts when requested by the customer, a licensee 
shall issue a monthly billing statement to the customer stating the 
following information where applicable:
    (a) The unpaid balance at the start of the billing period.
    (b) The amount and date of each extension of credit and 
identification of each item costing more than ten dollars ($10).
    (c) Payments made by a customer and other credits, including 
returns, rebates, and adjustments.
    (d) The finance charge shown in dollars and cents.
    (e) The rates used in calculating the finance charge plus the range 
of balances to which the finance charge was calculated.
    (f) The closing date of the billing cycle.
    (g) The unpaid balance at that time.



Sec. 141.48  Translation of disclosure statements.

    Disclosure required by Sec. Sec. 141.46 and 141.47 shall be made in 
writing regardless of the customer's ability to speak, read, or write 
the English language. Disclosure to non-English speaking persons shall 
be translated orally into the appropriate language.



Sec. 141.49  Usury prohibited.

    No reservation business may take or receive money, goods, or other 
things of value for a loan or forbearance on a debt that exceeds in 
value the principal plus twenty-four percent (24 percent) per annum 
finance charge. Any reservation business contracting for, reserving, or 
receiving directly or indirectly, any greater amount shall forfeit the 
finance charge.



          Subpart F_Enforcement Powers, Procedures and Remedies



Sec. 141.50  Penalty and forfeiture of merchandise.

    Any person other than an enrolled member of the tribe who either 
resides as a reservation business owner within the exterior boundaries 
of the Navajo, Hopi, or Zuni Reservations or introduces or attempts to 
introduce goods or to trade therein without a license shall forfeit all 
merchandise offered for sale to the Indians or found in the person's 
possession and is liable to a penalty of five hundred dollars ($500). 
This section may be enforced by commencing an action in the appropriate 
United States District Court under the provisions of 28 U.S.C. 1345.

[[Page 383]]



Sec. 141.51  Authority to close unlicensed reservation businesses.

    The Commissioner shall close any reservation business subject to the 
provisions of this part that does not hold a valid license or temporary 
permit.



Sec. 141.52  Revocation of license and lease and recovery on bond.

    The reservation business owner is subject to revocation of license 
and lease and recovery on the bond in whole or in part in the event of 
any violation of the regulations of this part after a show cause 
proceeding according to the provisions of Sec. 141.56.

[41 FR 22937, June 8, 1976. Redesignated at 47 FR 13327, Mar. 30, 1982]



Sec. 141.53  Cease and desist orders.

    (a) If the Commissioner believes that violation of the regulations 
in this part is occurring, the Commissioner may order the person 
believed to be in violation to show cause according to the provisions of 
Sec. 141.56 why a cease and desist order should not be issued.
    (b) If the person accused of the violations fails to show cause at 
the hearing why such an order should not issue, the Commissioner shall 
issue the order.
    (c) A person subject to a cease and desist order issued under this 
section who violates the order is liable to revocation of license after 
a show cause proceeding according to the provisions of Sec. 141.56 of 
this part.



Sec. 141.54  Periodic review of performance.

    (a) The Commissioner shall review licenses at ten (10) year 
intervals to determine whether or not the business is operating in 
accordance with these regulations and all other applicable laws and 
regulations and whether the business is adequately serving the economic 
needs of the community.
    (b) If, as a result of the review provided in paragraph (a) of this 
section, the Commissioner finds that the licensee has repeatedly 
violated these regulations, the Commissioner may order the licensee to 
show cause according to the provisions of Sec. 141.56 why the 
licensee's license should not be revoked.
    (c) If the licensee fails to show cause why the license should not 
be revoked, the Commissioner shall revoke the license.



Sec. 141.55  Price monitoring and control.

    (a) A reservation business may not charge its customers unfair or 
unreasonable prices. To insure compliance with this section, the 
Commissioner shall perform audits as provided in Sec. 141.58. In 
performing those audits the Commissioner may inspect all original books, 
records, and other evidences of the cost of doing business. In addition, 
at least once a year the Commissioner shall cause to be made a survey of 
the prices of flour, sugar, fresh eggs, lard, coffee, ground beef, 
bread, cheese, fresh milk, canned fruit, and such other goods as the 
Commissioner deems appropriate in all stores licensed under these 
regulations and in a representative number of similar stores located in 
communities immediately adjoining the reservations. The results of the 
survey shall be posted publicly, sent to each licensed business, and 
made available to the appropriate agency of the tribal government. 
Copies of the survey shall be available at the office of the Area 
Director.
    (b) If the Commissioner finds that a reservation business is 
charging higher prices, especially for basic consumer commodities, than 
those charged on the average based on the studies conducted under the 
provisions of paragraph (a) of this section, the Commissioner may order 
the business owner to show cause under the provisions of Sec. 141.56 
why an order should not be issued to reduce prices. If the Commissioner 
determines that the prices charged by the business are not economically 
justified, based on all of the information, then the Commissioner may 
order the business to reduce its price on all items determined to be 
priced too high to a reasonable price as determined by the Commissioner, 
but in no event to a lower price than the cost of the item increased by 
a reasonable mark-up.



Sec. 141.56  Show cause procedures.

    (a) When the Commissioner believes there has been a violation of 
this part

[[Page 384]]

the Commissioner shall serve the licensee with written notice setting 
forth in detail the nature of the alleged violation and stating what 
remedial action the Commissioner proposes to take.
    (b) The licensee shall have ten (10) days from the date of receipt 
of notice in which to show cause why the contemplated remedial action 
should not be ordered.
    (c) If within the ten (10) day period the Commissioner determines 
that the violation may be corrected and the licensee agrees to take the 
necessary corrective measure, the licensee shall be given the 
opportunity to take the necessary corrective measures.
    (d) If the licensee fails within a reasonable time to correct the 
violation or to show cause why the contemplated remedial action should 
not be ordered, the Commissioner shall order the appropriate remedial 
action.
    (e) If the Commissioner orders remedial action the licensee may 
appeal under the provisions of part 2 of this title not later than 
thirty (30) days after the date on which the remedial action is ordered.



Sec. 141.57  Procedures to cancel liability on bond.

    (a) Any surety who wishes to be relieved from liability arising on a 
bond issued under this part shall file with the Commissioner a statement 
in writing setting forth the desire of the surety to be relieved of 
liability and the reasons therefor.
    (b) The surety shall mail a copy of the statement by certified mail, 
return receipt requested, to the last known address of the licensee 
named in the bond.
    (c) Twenty (20) days after the statement required in paragraph (b) 
of this section is mailed to the licensee and the statement required in 
paragraph (a) of this section is filed with the Commissioner, the surety 
from all liability thereafter arising on the bond.
    (d) If the licensee does not have other bond sufficient to meet the 
requirements of this part or has not executed and filed a new or 
substitute bond within twenty (20) days after the service of the 
statement, the Commissioner shall declare the license and lease void.
    (e) No surety is released from liability under the bond for claims 
which arose prior to the issuance of the Commissioner's order releasing 
the surety.

[40 FR 39837, Aug. 29, 1975, as amended at 41 FR 3288, Jan. 22, 1976; 41 
FR 22937, June 8, 1976. Redesignated at 47 FR 13327, Mar. 30, 1982]



Sec. 141.58  Records, reports, and obligations of reservation business owners.

    (a) The Commissioner may, in consultation with interested persons 
and agencies, promulgate a model bookkeeping system for use in 
reservation businesses. Until such model bookkeeping system is 
promulgated, each business owner shall keep records in accordance with 
generally accepted accounting principles.
    (b) Each reservation business owner shall file with the Area 
Director an annual report on or before April 15 in a form approved by 
the Commissioner. Reports shall be subject to a yearly audit. The 
reports shall contain the names and respective interests of all persons 
participating in the business.
    (c) The business owner or an employee shall record all sales and 
purchases whether for cash or credit. If the business is on the Navajo 
Reservation the owner or an employee shall supply the customer with a 
copy of the sale transaction containing a description of the article 
purchased or sold, the date of the transaction, and the price. A cash 
register receipt complies with this paragraph for grocery or dry goods 
purchases for cash.
    (d) The licensee shall keep a duplicate copy of any writing required 
by paragraph (c) of this section for a period of not less than three (3) 
years and shall provide the customer or the customer's representative 
one copy of those writings upon request.

[40 FR 39837, Aug. 29, 1975, as amended at 41 FR 3288, Jan. 22, 1976; 41 
FR 13937, Apr. 1, 1976. Redesignated at 47 FR 13327, Mar. 30, 1982]



Sec. 141.59  Customer complaint procedures.

    (a) Any customer of a licensee may file a complaint with the 
Commissioner alleging that the licensee has committed a violation of 
this part.

[[Page 385]]

    (b) Upon receipt of a customer complaint the Commissioner shall 
initiate show cause proceedings under the provisions of Sec. 141.56 of 
this part.
    (c) If the Commissioner fails to order remedial action within forty 
(40) days from the date the complaint is filed, the complainant may 
appeal under the provisions of part 2 of this title not later than 
seventy (70) days after the date the complaint is filed.
    (d) If the Commissioner orders remedial action, the complainant may 
appeal under the provisions of part 2 of this title not later than 
thirty (30) days after the date on which the remedial action is ordered.



PART 142_ALASKA RESUPPLY OPERATION--Table of Contents




Sec.
142.1 Definitions.
142.2 What is the purpose of the Alaska Resupply Operation?
142.3 Who is responsible for the Alaska Resupply Operation?
142.4 For whom is the Alaska Resupply Operation operated?
142.5 Who determines the rates and conditions of service of the Alaska 
          Resupply Operation?
142.6 How are the rates and conditions for the Alaska Resupply Operation 
          established?
142.7 How are transportation and scheduling determined?
142.8 Is economy of operation a requirement for the Alaska Resupply 
          Operation?
142.9 How are orders accepted?
142.10 How is freight to be prepared?
142.11 How is payment made?
142.12 What is the liability of the United States for loss or damage?
142.13 Information collection.

    Authority: 5 U.S.C. 301; R.S. 463; 25 U.S.C. 2; R.S. 465; 25 U.S.C. 
9; 42 Stat. 208; 25 U.S.C. 13; 38 Stat. 586.

    Source: 62 FR 18516, Apr. 16, 1997, unless otherwise noted.



Sec. 142.1  Definitions.

    Area Director means the Area Director, Juneau Area Office, Bureau of 
Indian Affairs.
    Bureau means Bureau of Indian Affairs.
    Department means Department of the Interior.
    Manager means Manager of the Seattle Support Center.
    Must is used in place of shall and indicates a mandatory or 
imperative act or requirement.
    Indian means any individual who is a member of an Indian tribe.
    Indian tribe means an Indian or Alaska Native tribe, band, nation, 
pueblo, village, or community that the Secretary of the Interior 
acknowledges to exist as an Indian tribe pursuant to Public Law 103-454, 
108 Stat. 4791.
    Alaska Native means a member of an Alaska Native village or a Native 
shareholder in a corporation as defined in or established pursuant to 
the Alaska Native Claims Settlement Act, 43 U.S.C. 1601 et seq.



Sec. 142.2  What is the purpose of the Alaska Resupply Operation?

    The Alaska Resupply Operation provides consolidated purchasing, 
freight handling and distribution, and necessary transportation services 
from Seattle, Washington to and from other points in Alaska or en route 
in support of the Bureau's mission and responsibilities.



Sec. 142.3  Who is responsible for the Alaska Resupply Operation?

    The Seattle Support Center, under the direction of the Juneau Area 
Office, is responsible for the operation of the Alaska Resupply 
Operation, including the management of all facilities and equipment, 
personnel, and procurement of goods and services.
    (a) The Seattle Support Center is responsible for publishing the 
rates and conditions that must be published in a tariff.
    (b) All accounts receivable and accounts payable are handled by the 
Seattle Support Center.
    (c) The Manager must make itineraries for each voyage in conjunction 
with contracted carriers. Preference is to be given to the work of the 
Bureau.
    (d) The Area Director is authorized to direct the Seattle Support 
Center to perform special services that may arise and to act in any 
emergency.



Sec. 142.4  For whom is the Alaska Resupply Operation operated?

    The Manager is authorized to purchase and resell food, fuel, 
clothing,

[[Page 386]]

supplies and materials, and to order, receive, stage, package, store and 
transport these goods and materials for:
    (a) Alaska Native Tribes, Alaska Natives, Indian or Native owned 
businesses, profit or nonprofit Alaska Native corporations, Native 
cooperatives or organizations, or such other groups or individuals as 
may be sponsored by any Native or Indian organization.
    (b) Other Federal agencies and the State of Alaska and its 
subsidiaries, as long as the ultimate beneficiaries are the Alaska 
Natives or their communities.
    (c) Non-Indians and Non-Natives and commercial establishments that 
economically or materially benefit Alaska Natives or Indians.
    (d) The Manager must make reasonable efforts to restrict competition 
with private enterprise.



Sec. 142.5  Who determines the rates and conditions of service of the 
Alaska Resupply Operation?

    The general authority of the Assistant Secretary--Indian Affairs to 
establish rates and conditions for users of the Alaska Resupply 
Operation is delegated to the Area Director.
    (a) The Manager must develop a tariff that establishes rates and 
conditions for charging users.
    (1) The tariff must be approved by the Area Director.
    (2) The tariff must be published on or before March 1 of each year.
    (3) The tariff must not be altered, amended, or published more 
frequently than once each year, except in an extreme emergency.
    (4) The tariff must be published, circulated and posted throughout 
Alaska, particularly in the communities commonly and historically served 
by the resupply operation.
    (b) The tariff must include standard freight categories and rate 
structures that are recognized within the industry, as well as any 
appropriate specialized warehouse, handling and storage charges.
    (c) The tariff must specify rates for return cargo and cargo hauled 
between ports.
    (1) The rates and conditions for the Bureau, other Federal agencies, 
the State of Alaska and its subsidiaries must be the same as that for 
Native entities.
    (2) Different rates and conditions may be established for non-Indian 
and non-Native commercial establishments, if those establishments do not 
meet the standard in Sec. 142.4(c) and no other service is available to 
that location.



Sec. 142.6  How are the rates and conditions for the Alaska Resupply 
Operation established?

    The Manager must develop tariff rates using the best modeling 
techniques available to ensure the most economical service to the Alaska 
Natives, Indian or Native owned businesses, profit or nonprofit Alaska 
Native corporations, Native cooperatives or organizations, or such other 
groups or individuals as may be sponsored by any Native or Indian 
organization, without enhancing the Federal treasury.
    (a) The Area Director's approval of the tariff constitutes a final 
action for the Department for the purpose of establishing billing rates.
    (b) The Bureau must issue a supplemental bill to cover excess cost 
in the event that the actual cost of a specific freight substantially 
exceeds the tariff price.
    (c) If the income from the tariff substantially exceeds actual 
costs, a prorated payment will be issued to the shipper.



Sec. 142.7  How are transportation and scheduling determined?

    (a) The Manager must arrange the most economical and efficient 
transportation available, taking into consideration lifestyle, timing 
and other needs of the user. Where practical, shipping must be by 
consolidated shipment that takes advantage of economies of scale and 
consider geographic disparity and distribution of sites.
    (b) Itineraries and scheduling for all deliveries must be in keeping 
with the needs of the users to the maximum extent possible. Planned 
itineraries with dates set as to the earliest and latest

[[Page 387]]

anticipated delivery dates must be provided to users prior to final 
commitment by them to utilize the transportation services. Each shipping 
season the final departure and arrival schedules must be distributed 
prior to the commencement of deliveries.



Sec. 142.8  Is economy of operation a requirement for the Alaska Resupply 
Operation?

    Yes. The Manager must ensure that purchasing, warehousing and 
transportation services utilize the most economical delivery. This may 
be accomplished by memoranda of agreement, formal contracts, or 
cooperative arrangements. Whenever possible joint arrangements for 
economy will be entered into with other Federal agencies, the State of 
Alaska, Alaska Native cooperatives or other entities providing services 
to rural Alaska communities.



Sec. 142.9  How are orders accepted?

    (a) The Manager must make a formal determination to accept an order, 
for goods or services, and document the approval by issuing a permit or 
similar instrument.
    (b) The Seattle Support Center must prepare proper manifests of the 
freight accepted at the facility or other designated location. The 
manifest must follow industry standards to ensure a proper legal 
contract of carriage is executed, upon which payment can be exacted upon 
the successful delivery of the goods and services.



Sec. 142.10  How is freight to be prepared?

    All freight must be prepared in accordance with industry standards, 
unless otherwise specified, for overseas shipment, including any pickup, 
delivery, staging, sorting, consolidating, packaging, crating, boxing, 
containerizing, and marking that may be deemed necessary by the Manager.



Sec. 142.11  How is payment made?

    (a) Unless otherwise provided in this part, all regulations 
implementing the Financial Integrity Act, Anti-Deficiency Act, Prompt 
Payments Act, Debt Collection Act of 1982, 4 CFR Ch. II--Federal Claims 
Collection Standards, and other like acts apply to the Alaska Resupply 
Operation.
    (b) Payment for all goods purchased and freight or other services 
rendered by the Seattle Support Center are due and payable upon final 
receipt of the goods or services. If payment is not received within the 
time specified on the billing document, interest and penalty fees at the 
current treasury rate will be charged, and handling and administrative 
fees may be applied.
    (c) Where fuel and other goods are purchased on behalf of commercial 
enterprises, payment for those goods must be made within 30 days of 
delivery to the Seattle Support Center Warehouse. Payment for freight 
must be made within 30 days from receipt of the goods by the shipper.



Sec. 142.12  What is the liability of the United States for loss or damage?

    (a) The liability of the United States for any loss or damage to, or 
non-delivery of freight is limited by 46 U.S.C. 746 and the Carriage of 
Goods by Sea Act (46 U.S.C. 1300 et seq.). The terms of such limitation 
of liability must be contained in any document of title relating to the 
carriage of goods by sea. This liability may be further restricted in 
specialized instances as specified in the tariff.
    (b) In addition to the standards of conduct and ethics applicable to 
all government employees, the employees of the Seattle Support Center 
shall not conduct any business with, engage in trade with, or accept any 
gifts or items of value from any shipper or permittee.
    (c) The Seattle Support Center will continue to function only as 
long as the need for assistance to Native village economies exits. To 
that end, a review of the need for the serve must be conducted every 
five years.



Sec. 142.13  Information collection.

    In accordance with Office of Management and Budget regulations in 5 
CFR 1320.4, approval of information collections contained in this 
regulation is not required.



PART 143_CHARGES FOR GOODS AND SERVICES PROVIDED TO NON-FEDERAL USERS
--Table of Contents




Sec.
143.1 Definitions.

[[Page 388]]

143.2 Purpose.
143.3 Procedures.
143.4 Charges.
143.5 Payment.

    Authority: 31 U.S.C. 9701; 25 U.S.C. 2, 13, 413.

    Source: 55 FR 19621, May 10, 1990, unless otherwise noted.



Sec. 143.1  Definitions.

    As used in this part:
    (a) Assistant Secretary means the Assistant Secretary--Indian 
Affairs, Department of the Interior, or other employee to whom authority 
has been delegated.
    (b) Reservation means any bounded geographical area established or 
created by treaty, statute, executive order, or interpreted by court 
decision and over which a federally recognized Indian Tribal entity may 
exercise certain jurisdiction.
    (c) Flat fee is the amount prorated to each user based on the total 
costs incurred by the Government for the goods/services being provided.
    (d) Non-Federal users are persons not employed by the Federal 
Government who receive goods/services provided by the BIA.
    (e) Goods/Services for the purpose of these regulations are those 
provided or performed at the request of an indentifiable recipient and 
are above and beyond those which accrue to the public at large.



Sec. 143.2  Purpose.

    (a) The purpose of the regulations in this part is to establish 
procedures for the assessment, billing, and collection of charges for 
goods/services provided to non-Federal users.
    (b) The Assistant Secretary may sell or contract to sell to non-
Federal users within, or in the immediate vicinity of an Indian 
Reservation (or former Reservation), any of the following goods/services 
if it is determined that the goods/services are not available from 
another local source or providing that goods/services is in the best 
interest of the Indian tribes or individual Indians. The goods/services 
include, but are not limited to:
    (1) Electric power;
    (2) Water;
    (3) Sewage operations;
    (4) Landfill operations;
    (5) Steam;
    (6) Compressed air;
    (7) Telecommunications;
    (8) Natural, manufactured, or mixed gas;
    (9) Fuel oil;
    (10) Landscaping; and
    (11) Garbage collections.



Sec. 143.3  Procedures.

    (a) All non-Federal users who receive the above listed goods/
services must sign a standard agreement adopted by the Assistant 
Secretary for the goods/services. This agreement shall contain the 
following statement:

    ``Application for ---------- (specify good(s)/service(s)) is hereby 
requested at the noted address. In exchange for receiving the requested 
good(s)/service(s), the applicant agrees to accept and abide by all 
applicable rules, regulations, and rate schedules, including any future 
amendments, additions, or changes thereto. If the applicant should fail 
to comply with any of the rules, regulations, or rate schedules, the 
cost incurred by the United States Government for enforcement of same 
shall be charged to the applicant.''

    (b) Lack of a signed agreement does not invalidate payment 
requirements. Any user will be responsible for payment of actual goods/
services received or delivered.



Sec. 143.4  Charges.

    (a) Charges shall be established by the Assistant Secretary and 
shall be based upon the total costs (including both direct and indirect) 
of goods/services to the Government at that locale. A schedule of 
charges will be made available to the public upon request.
    (b) All documentation used in establishing charges must be 
maintained at the appropriate Bureau of Indian Affairs agency or Area 
Office and shall be made available for review by the public upon 
request.
    (c) Established charges may be reviewed, amended, and adjusted 
monthly, but not less than annually.
    (d) A flat fee may be charged where it is impractical to measure 
actual usage by recipients.
    (e) Security deposits are authorized under this regulation at the 
discretion of the Assistant Secretary. The deposit

[[Page 389]]

may not exceed the amount of one billing cycle. All deposits will be 
applied to the final bill.



Sec. 143.5  Payment.

    (a) The Assistant Secretary--Indian Affairs will establish a billing 
cycle that is appropriate to the goods/services being provided.
    (b) Payment is due within 30 days after the billing date.
    (c) Upon non-payment by the non-Federal user, the Assistant 
Secretary may discontinue service. Service may be discontinued after 
proper notification by letter. Proper notification shall include:
    (1) Written notice to user that payment is due. Such notice shall 
afford the user the opportunity to challenge payment or excuse non-
payment within 14 days of the date on the notification letter.
    (2) Following the expiration of the 14 day deadline for response, 
and after consideration of any such response, the Assistant Secretary--
Indian Affairs may notify the user by letter that if payment is not 
received within 10 days of the date on the letter, the service will be 
discontinued.
    (d) The Assistant Secretary has the discretion to continue services 
for health and safety reasons. However, the non-Federal user is still 
responsible for payment for goods/services provided.
    (e) Once service has been discontinued based on deliquency of 
payment, the discontinuance may be appealed under part 2 of this title.

[[Page 390]]