[Congressional Bills 103th Congress]
[From the U.S. Government Publishing Office]
[H.R. 1846 Introduced in House (IH)]
103d CONGRESS
1st Session
H. R. 1846
To require the Secretary of the Interior to pay interest on Indian
funds invested, to authorize demonstrations of new approaches for the
management of Indian trust funds, to clarify the trust responsibility
of the United States with respect to Indians, to establish a program
for the training and recruitment of Indians in the management of trust
funds, to account for daily and annual balances on and to require
periodic statements for Indian trust funds, and for other purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
April 22, 1993
Mr. Synar introduced the following bill; which was referred to the
Committee on Natural Resources
_______________________________________________________________________
A BILL
To require the Secretary of the Interior to pay interest on Indian
funds invested, to authorize demonstrations of new approaches for the
management of Indian trust funds, to clarify the trust responsibility
of the United States with respect to Indians, to establish a program
for the training and recruitment of Indians in the management of trust
funds, to account for daily and annual balances on and to require
periodic statements for Indian trust funds, and for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Native American Trust Fund
Accounting and Management Reform Act of 1993''.
SEC. 2. DEFINITIONS.
For purposes of this Act--
(1) the term ``Secretary'' means the Secretary of the
Interior; and
(2) the term ``Bureau'' means the Bureau of Indian Affairs
of the Department of the Interior.
TITLE I--TRUST FUND INTEREST PAYMENTS
SEC. 101. PAYMENT OF INTEREST ON FUNDS INVESTED.
(a) Payment of Interest.--(1) The fourth proviso of subsection (a)
of the first section of the Act of June 24, 1938 (25 U.S.C. 162a), is
amended by striking ``may invest'' and inserting ``shall invest''.
(2) The first section of the Act of June 24, 1938 (25 U.S.C. 162a),
is amended by adding at the end the following new subsection:
``(d) Amounts deposited or invested under subsection (a) shall earn
interest at the appropriate rates, taking into consideration the type
of deposit or investment. The Secretary shall periodically pay such
interest to the appropriate Indian tribe or individual Indian or, at
the election of the Indian tribe or individual Indian, add such
interest to the principal so deposited or invested.''.
(b) Technical Correction.--The second subsection (b) of the first
section of the Act of June 24, 1938 (25 U.S.C. 162a), as added by
section 302 of Public Law 101-644 (104 Stat. 4667), is hereby
redesignated as subsection (c).
(c) Repeal of Limitation on United States Liability.--Paragraph (2)
of subsection (c) of the first section of the Act of June 24, 1938, as
amended by subsection (b), is amended to read as follows:
``(2) Amounts deposited or invested under this subsection shall
generate earnings at the appropriate rates, taking into consideration
the type of investment concerned. The Secretary shall periodically pay
such earnings to the appropriate Indian tribe or individual Indian or,
at the election of the Indian tribe or individual Indian, add such
earnings to the principal of such funds so invested.''.
(d) Effective Date.--The amendments made by this section shall
apply to interest earned on amounts deposited or invested on or after
the date of the enactment of this Act.
SEC. 102. AUTHORITY FOR PAYMENT OF CLAIMS FOR INTEREST OWED.
The Secretary is authorized to make payments to an Indian tribe or
an individual Indian--
(1) in full satisfaction of any claim of such Indian tribe
or individual Indian for interest on amounts deposited or
invested on behalf of such Indian tribe or individual Indian
before the date of enactment of this Act under the Act of June
24, 1938 (25 U.S.C. 162a), and who was not paid the appropriate
amount of interest on such funds; and
(2) in an amount equal to the interest which would have
been earned if funds of such Indian tribe or individual Indians
which were subject to the Act of June 24, 1938 (25 U.S.C.
162a), had been deposited or invested in accordance with such
Act.
TITLE II--INDIAN TRUST FUND MANAGEMENT DEMONSTRATION PROGRAM
SEC. 201. PURPOSE.
The purpose of this title is to demonstrate new approaches for the
management of tribal and individual Indian funds held in trust by the
United States and managed by the Secretary through the Bureau, that,
consistent with the trust responsibility of the United States and the
principles of self-determination, will--
(1) give Indian tribal governments and individual Indian
account holders greater control over the management of such
trust funds;
(2) pursuant to tribal instructions, involve investment of
such trust funds by the Secretary in a manner that will also
help to promote economic development in Indian communities; or
(3) otherwise demonstrate how the principles of self-
determination can work with respect to the management of such
trust funds, in a manner consistent with the trust
responsibility of the United States.
SEC. 202. DEFINITION.
For the purposes of this title, except for the purposes of section
208, the terms ``Indian tribe'' and ``tribe'' mean--
(1) an Indian tribe;
(2) a consortia of Indian tribes; or
(3) an association of Indians holding individual Indian
trust fund accounts managed by the Secretary through the
Bureau.
SEC. 203. DEMONSTRATION PLANS.
An Indian tribe may submit to the Secretary a plan to demonstrate a
new approach for the management of tribal or individual Indian funds
held in trust by the United States for such tribe or the members of
such tribe, and as of the date of the enactment of this Act, managed by
the Secretary through the Bureau. Such plan may provide for the
following:
(1) Management of such funds directly by the Indian tribe
in financial institutions selected by the tribe, subject to
supervision and oversight by the Secretary. For the purposes of
this section, the term ``management'' may include one or more
of the functions carried out, as of the date of the enactment
of this Act, by the Secretary through the Bureau in managing
such funds, such as collection, disbursement, and investment
functions.
(2) Management of such funds by the Secretary in a manner
that--
(A) involves investment of such funds in financial
institutions on or near the reservation;
(B) increases tribal access to such institutions;
(C) promotes economic development activities on the
reservation; or
(D) otherwise promotes tribal priorities.
(3) Management of such funds at the local level through
contracts with local financial institutions that meet the
purposes of this title.
(4) Such other approaches, as determined by the Secretary,
that meet the purpose of this title.
SEC. 204. APPROVAL OF PLANS BY THE SECRETARY.
(a) In General.--The Secretary shall approve and implement, or
provide for the implementation by an Indian tribe of, a plan that meets
the following conditions:
(1) Such plan has been approved by the appropriate Indian
tribe, as follows:
(A) For a plan involving tribal trust funds, such
plan is accompanied by a resolution from the tribal
governing body approving the plan.
(B) For a plan submitted by an Indian tribe (as
defined in paragraphs (1) and (2) of section 202)
involving individual Indian money accounts, where most
or all of the account holders are members of the
submitting tribe, it is accompanied by a resolution
from the tribal governing body approving the plan,
along with a certification that the tribe held no fewer
than 2 public meetings to provide an opportunity for
account holders to comment on the plan.
(C) For a plan submitted by an Indian tribe (as
defined in paragraph (3) of section 202), it is
accompanied by a written approval signed by each
participating account holder, along with a
certification that the tribe on whose reservation the
trust asset that is the source of the funds is located,
has been consulted regarding the plan.
(2) The Secretary determines such plan to be consistent
with standards of reasonable prudence, after considering all
appropriate factors, including but not limited to the
following:
(A) The capability and experience of the
individuals or institutions that will be managing the
trust funds.
(B) The protection against substantial loss of
principal.
(C) The rate of return, provided that the plan need
not produce the highest rate of return possible if the
Indian tribe chooses to accept a lower rate in return
for other benefits such as the benefits from investing
in local financial institutions.
(D) The ability of the Secretary to effectively
monitor the demonstration, pursuant to the trust
responsibility of the United States as specified in
section 205.
(3) The duration of the plan does not exceed 5 years.
(b) Investment in Equities.--Nothing in this section shall prohibit
an Indian tribe submitting a plan for a demonstration under this
section from providing in such plan for the investment of its trust
funds in equities, if the Secretary determines that such plan meets the
standard of reasonable prudence under subsection (a)(2).
SEC. 205. FEDERAL TRUST RESPONSIBILITY.
(a) In General.--If an Indian tribe assumes management of trust
funds pursuant to a demonstration under this title, the trust
responsibility of the United States with respect to such funds shall,
for the duration of the demonstration, be limited to the following:
(1) The exercise of reasonable prudence by the Secretary in
approving the plan for the demonstration.
(2) An annual audit provided by the Secretary, directly or
by contract, to determine that the tribe is performing in
conformance with the plan for the demonstration.
(3) If the Secretary finds, through such audits, that the
tribe is not in compliance with the terms of the plan, the
Secretary shall--
(A) terminate the demonstration; or
(B) prescribe remedial action to be taken by the
tribe to achieve compliance with the plan.
(b) Decrease in Interest and Loss of Principal.--If a plan for a
demonstration submitted under this title and approved by the Secretary
provides for the implementation of such demonstration by the Secretary,
the United States shall not be liable, during the period of such
demonstration, for any decrease in interest rate or any loss of
principal that is proximately caused by the Secretary's prudent
implementation of such demonstration.
(c) Agreement.--Prior to the implementation of any demonstration
under this title, the Indian tribe involved shall sign a written
statement indicating that it understands and accepts the limitations on
the trust responsibility of the United States as provided in this
section.
SEC. 206. TECHNICAL AND FINANCIAL ASSISTANCE.
The Secretary shall, directly or by contract, provide Indian tribes
with technical and financial assistance in developing, implementing,
and managing plans for demonstrations under this title.
SEC. 207. NO INCOME TAX CONSEQUENCES.
Funds managed pursuant to a demonstration program under this title,
and distributions made from such funds, shall, for purposes of the
Internal Revenue Code of 1986, be treated in the same manner as such
funds would be treated if such funds were managed directly by the
Secretary, through the Bureau.
SEC. 208. VOLUNTARY WITHDRAWAL FROM TRUST FUND PROGRAM.
(a) In General.--An Indian tribe may, in accordance with this
section, submit a plan to withdraw some or all funds held in trust for
such tribe by the United States and managed by the Secretary through
the Bureau.
(b) Approval of Plan.--The Secretary shall approve a plan under
this section that meets the requirements specified in section 204(a)(1)
and subparagraphs (A) and (B) of section 204(a)(2).
(c) Termination of Trust Responsibility.--Beginning on the date
funds are withdrawn pursuant to this section, any trust responsibility
of the United States with respect to such funds shall terminate.
SEC. 209. REPORT TO CONGRESS.
The Secretary shall, beginning one year after the date of the
enactment of this Act, submit an annual report to the Congress on the
implementation of demonstration programs under this title. Such report
shall include recommendations for changes necessary to effectively
implement the purpose of this title.
TITLE III--RECOGNITION OF TRUST RESPONSIBILITY
SEC. 301. AFFIRMATIVE ACTION REQUIRED.
The first section of the Act of June 24, 1938 (25 U.S.C. 162a), as
amended by section 101(a)(2), is amended by adding at the end the
following new subsection:
``(e) The Secretary shall properly discharge the trust
responsibilities of the United States under this section by--
``(1) providing adequate systems for accounting for and
reporting trust fund balances;
``(2) providing adequate controls over receipts and
disbursements;
``(3) providing periodic, timely reconciliations to assure
the accuracy of accounts;
``(4) determining accurate cash balances;
``(5) preparing and supplying account holders with
meaningful periodic statements of their account balances;
``(6) establishing consistent, written policies and
procedures for trust fund management and accounting; and
``(7) providing adequate staffing, supervision, and
training for trust fund management and accounting.''.
SEC. 302. TRUST RESPONSIBILITY WITH RESPECT TO NATURAL RESOURCES.
The Congress recognizes that the trust responsibility of the United
States extends to tribal and individual Indian owners of natural
resources located within the boundaries of Indian reservations and
trust lands. This includes the fiduciary responsibility to manage funds
held in trust by the United States for Indian tribes and individual
Indians derived from actions including, but not limited to, the use and
sale of leased lands, judgments, mineral leases, oil and gas leases,
timber permits and sales, and water resources.
TITLE IV--TRAINING AND PERSONNEL
SEC. 401. TRAINING.
(a) Training Program.--The Secretary shall establish a program to
assist Indians, including, but not limited to, employees of the Bureau
and members and employees of Indian tribes, to obtain expertise in the
management of trust funds. Components of such program may include the
following:
(1) An outreach program to encourage and assist Indians to
obtain employment with private financial institutions.
(2) Agreements with financial institutions and other
entities under which such entities would provide classroom
training, on-the-job training, internships, and employment
opportunities not to exceed 2 years, for employees and
prospective employees of the Bureau.
(b) Recruitment.--
(1) Employment descriptions.--The Secretary shall ensure
that the employment description for any Federal position
related to the management of Indian trust funds contains
requirements necessary to ensure that a person filling such
position would have the necessary skills, based on industry
standards, to fully perform the position's responsibilities in
a manner consistent with the responsibility of the United
States to properly manage Indian trust funds.
(2) Pay.--The Secretary, in consultation with the Office of
Personnel Management, shall establish the rate of pay payable
for a position related to the management of Indian trust funds
at a level of the General Schedule appropriate for such
position.
(c) Indian Preference.--Nothing in this title shall authorize or
permit any waiver of Indian preference laws as such term is defined in
section 2(f)(2) of Public Law 96-135 (25 U.S.C. 472 et seq.).
TITLE V--RESPONSIBILITY TO ACCOUNT FOR INDIAN TRUST FUNDS
SEC. 501. RESPONSIBILITY OF SECRETARY TO ACCOUNT FOR THE DAILY AND
ANNUAL BALANCES OF INDIAN TRUST FUNDS.
(a) Requirement to Account.--The Secretary shall account for the
daily and annual balance of all funds held in trust by the United
States for the benefit of an Indian tribe or an individual Indian which
are deposited or invested pursuant to the Act of June 24, 1938 (25
U.S.C. 162a).
(b) Periodic Statement of Performance.--Not later than 10 business
days after the close of a calendar month, the Secretary shall provide a
statement of performance to each Indian tribe and individual with
respect to whom funds are deposited or invested pursuant to the Act of
June 24, 1938 (25 U.S.C. 162a). The statement, for the period
concerned, shall--
(1) identify the source, type, and status of the funds;
(2) the beginning balance;
(3) the earnings and losses; and
(4) the ending balance.
(c) Annual Audit.--The Secretary shall cause to be conducted an
annual audit on a fiscal year basis of all funds held in trust by the
United States for the benefit of an Indian tribe or an individual
Indian which are deposited or invested pursuant to the Act of June 24,
1938 (25 U.S.C. 162a), and shall include a letter relating to the audit
in the first statement of performance provided under subsection (b)
after the completion of the audit.
(d) Effective Date.--This section shall take effect October 1,
1993, but shall only apply with respect to earnings and losses
occurring on or after October 1, 1993, on funds held in trust by the
United States for the benefit of an Indian tribe or an individual
Indian.
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HR 1846 IH----2