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H.C.R. 11

This document includes House Committee Amendments incorporated into the bill on Wed, Mar 6, 2013 at 3:54 PM by jeyring. -->              1     

CONCURRENT RESOLUTION SUPPORTING THE TRANSFER

             2     
OF ADMINISTRATION OF THE UTAH NAVAJO TRUST

             3     
FUND TO THE DINÉH COMMITTEE

             4     
2013 GENERAL SESSION

             5     
STATE OF UTAH

             6     
Chief Sponsor: Michael E. Noel

             7     
Senate Sponsor: ____________

             8     
             9      LONG TITLE
             10      General Description:
             11          This concurrent resolution of the Legislature and the Governor expresses the
             12      Legislature's and the Governor's H. [ intent to ] support for the .H transfer H. of .H all
             12a      H. [ Utah Navajo Trust Fund ] oil and gas royalties .H
             13      administrative and fiduciary obligations to the Utah Dinéh Corporation under specified
             14      conditions.
             15      Highlighted Provisions:
             16          This resolution:
             17          .    expresses the Legislature's and the Governor's H. [ intent to transfer all Utah Navajo
             18      Trust Fund
] support for the transfer of all oil and gas royalties .H
administrative and fiduciary
             18a      obligations to the Utah Dinéh Corporation
             19      subject to federal action;
             20          .    declares that any transfer pursuant to federal action of Utah Navajo Trust Fund
             21      administrative and fiduciary obligations to the Utah Dinéh Corporation must also
             22      indemnify and hold harmless the state of Utah from any and all legal and equitable
             23      claims arising from future Utah Navajo Trust Fund administration by the Utah
             24      Dinéh Corporation and for litigation costs related to any claims;
             25          .    declares that transfer of Utah Navajo Trust Fund administrative and fiduciary
             26      obligations to the Utah Dinéh Corporation should require that the value of fixed and
             27      monetary Utah Navajo Trust Fund assets remain at least at current levels so that


             28      funds will be available to promote future generations of Utah Navajo Trust Fund beneficiaries'
             29      health, education, and general welfare; and
             30          .    declares that, if the foregoing objectives are ensured, the transfer of Utah Navajo
             31      Trust Fund administrative and fiduciary obligations to the Utah Dinéh Corporation
             32      should occur by federal action.
             33      Special Clauses:
             34          None
             35     
             36      Be it resolved by the Legislature of the state of Utah, the Governor concurring therein:
             37          WHEREAS, in 1933, Congress enacted 47 Stat. 1418, which expanded the boundaries
             38      of the Navajo Reservation north of the San Juan River, in San Juan County, Utah, referred to as
             39      the "Aneth Extension," and directed that 37.5% of all royalties from oil and gas extracted from
             40      certain portions of the Aneth Extension "shall be expended by the State of Utah in the Tuition
             41      of Indian children in white schools and/or in the building or maintenance of roads across the
             42      [Aneth Extension], or for the benefit of the Indians residing therein";
             43          WHEREAS, in 1968, Congress enacted Public Law 90-306, 82 Stat. 121, which
             44      expanded the beneficiary class to include all Navajo residing in San Juan County, Utah, (Utah
             45      Dinéh), and which redefined the purposes of the Utah Navajo Trust Fund (UNTF) to include
             46      the beneficiaries' "health, education and general welfare";
             47          WHEREAS, the 1933 act and the 1968 expansion of the beneficiary (Federal Acts)
             48      class effectively created a common law discretionary trust whereby the United States is the
             49      settlor, Utah is the trustee, and all Utah Dinéh residing in San Juan County, Utah are
             50      beneficiaries;
             51          WHEREAS, pursuant to the Federal Acts, Utah H. [ must ] is directed to .H administer
             51a      the H. [ UNTF ] oil and gas royalties .H for the
             52      health, education, and general welfare of the Navajo Indians residing in San Juan County;
             53          WHEREAS, oil and gas were first extracted in paying quantities from the Aneth
             54      Extension during or about the late 1950s;
             55          WHEREAS, in 2008, the Legislature of the state of Utah enacted H.B. 352,
             56      Amendments Related to Monies Derived from Navajo Nation Reservation Lands in Utah,
             57      which in part declared, "It is the purpose of this chapter to provide for a transitional process
             58      until congressional action designates a new recipient of the Utah Navajo royalties";


             59          WHEREAS, H.C.R. 4, Concurrent Resolution Encouraging Congressional Action to
             60      Designate a New Recipient of Royalties from Navajo Reservation Lands in Utah, also passed
             61      by the Utah Legislature in 2008, noted that "the state first received monies from the 37.5% of
             62      the oil and gas royalties in 1959 and litigation related to those royalties began almost
             63      immediately" and that "the litigious environment surrounding the state's administration of the
             64      oil and gas royalties harms the relationship between the state and the San Juan Navajos and
             65      complicates all parties' ability to meet the needs of the San Juan Navajos";
             66          WHEREAS, H.B. 352 incrementally reduced expenditures under the trust duties;
             67          WHEREAS, H.B. 352 resulted in the establishment of what became known as the
             68      Navajo Royalty Holding Fund (NRHF) no later than July 1, 2008, into which all H. [ UNTF ] oil
             68a      and gas royalties .H
             69      monetary assets and future royalty payments would be placed;
             70          WHEREAS, Utah law, established by H.B. 352, was amended in 2012 by S.B. 155,
             71      Transition for Repealed Navajo Trust Fund Act, to allow expenditures from the NRHF for the
             72      education of certain beneficiaries up to January 1, 2014;
             73          WHEREAS, on June 30, 2010, net assets then being held by the state of Utah in the
             74      NRHF totaled $51,352,590;
             75          WHEREAS, this includes a $33,000,000 court settlement, the final installment of
             76      which is to be paid by the state of Utah in 2013;
             77          WHEREAS, litigation is now pending in United States District Court seeking to force
             78      the state of Utah to resume active administration of the H. [ UNTF ] oil and gas royalties .H for
             78a      the health, education, and
             79      general welfare of the beneficiaries;
             80          WHEREAS, the health, education, and general welfare of the beneficiaries would be
             81      improved by continuing projects previously funded, wholly or partially, with H. [ UNTF ] oil and
             81a      gas .H funds,
             82      including housing, water development, range improvement, delivery of education, healthcare,
             83      and other social services;
             84           H. [ WHEREAS, although funded in part with NRHF expenditures, the subsequent cutoff of
             85      funding has left nonmonetary assets, including partially built houses, exposed to the extreme
             86      elements of southeastern Utah;
] .H

             87          WHEREAS, beneficiaries seeking secondary education are currently unsure whether
             88      college financial aid will continue to be available through the NRHF;
             89          WHEREAS, in certain carefully selected instances, and in partnership with other


             90      governmental and private financial institutions, the beneficiaries would benefit from the
             91      expenditure of H. [ UNTF ] oil and gas royalty .H money for economic development in
             91a      San Juan County;
             92          WHEREAS, the H. [ UNTF ] oil and gas royalties .H should be actively administered
             92a      in these areas of need for the
             93      health, education, and general welfare of the beneficiaries;
             94          WHEREAS, the Federal Acts provide no mechanism for the state of Utah to resign as
             95      H. [ UNTF ].H trustee H. of the oil and gas royalties .H ;
             96          WHEREAS, legislation to amend the Federal Acts to name a successor trustee was
             97      introduced in the 111th and 112th Congress, but did not become law;
             98          WHEREAS, no legislation to amend the Federal Acts to name a successor trustee has
             99      been introduced in the 113th Congress;
             100          WHEREAS, the Legislature of the state of Utah and the Governor stated in H.C.R. 4
             101      that the "removal of the state as a go-between provides an opportunity for Navajos";
             102          WHEREAS, the Utah Dinéh Corporation (UDC) is a nonprofit organization formed
             103      under the Utah Revised Nonprofit Corporation Act;
             104          WHEREAS, the UDC is organized exclusively for charitable, religious, educational,
             105      and scientific purposes, including the making of distributions to organizations that qualify as
             106      exempt organizations under IRC Section 501(c) of the Internal Revenue Code;
             107          WHEREAS, UDC's proposed amended bylaws ensure transparency and accountability
             108      at every level of corporate administration and prohibits real and apparent conflicts of interest,
             109      including nepotism, at every level of corporate administration;
             110          WHEREAS, the UDC's proposed amended bylaws position the Utah Dinéh to play
             111      important roles in H. [ UNTF ] oil and gas royalties .H administration and oversight, require
             111a      that the overall value of the
             112      H. [ UNTF ] oil and gas royalties' assets .H , currently estimated at approximately $55,000,000,
             112a      be maintained and, if consistent with
             113      applicable law and H. [ UNTF ] oil and gas royalties .H purposes, grown;
             114          WHEREAS, the UDC's proposed amended bylaws require that any H. [ UNTF ] oil and
             114a      gas .H assets made
             115      available for economic development be limited in amount, comprise only a minor portion of
             116      any single funding package, be partnered with loans from other charted financial institutions,
             117      be offered only as loans at current market rates for any amount over $300, and occur only after
             118      it is expressly determined that the expenditure will actually promote the beneficiaries' health,
             119      education, or general welfare;
             120          WHEREAS, the UDC's proposed amended bylaws provide that if all Utah Navajo Trust


             121      Fund administrative and fiduciary obligations are transferred to the Utah Dinéh Corporation, a
             122      Request For Proposal addressed to large, charted financial institutions will be issued
             123      immediately, and every three years thereafter, for performing fund management, investing, and
             124      auditing services;
             125          WHEREAS, the members of each Utah chapter of the Navajo Nation have previously
             126      resolved to support the UDC's effort to become the H. [ UNTF ] .H trustee H. of the oil and
             126a      gas royalties .H ;
             127          WHEREAS, this support will again be ensured by means deemed reasonable and
             128      reliable prior to any transfer of H. [ UNTF ] oil and gas royalties .H administration to the UDC;
             129          WHEREAS, the San Juan County Board of Commissioners unanimously supports
             130      transfer of administrative and fiduciary obligations for the H. [ UNTF ] oil and gas royalties .H
             130a      to the UDC;
             131          WHEREAS, the UDC Board of Directors will include representatives elected from each
             132      Utah chapter of the Navajo Nation and from one chapter organized to represent Utah Dinéh
             133      that currently does not reside within Navajo Reservation boundaries;
             134          WHEREAS, the UDC intends to administer the H. [ UNTF ] oil and gas royalties .H
             134a      pursuant to all applicable laws
             135      and regulations, including the common law of Indian trusts that imposes strict and exacting
             136      fiduciary obligations upon any trustee administering the property of Native Americans; and
             137          WHEREAS, any transfer of H. [ UNTF ] oil and gas royalties .H administrative and
             137a      fiduciary obligations to the UDC
             138      must ensure that the state of Utah is indemnified and held harmless for any liability, damages,
             139      or litigation costs resulting from H. [ UNTF ] oil and gas royalties .H administration:
             140          NOW, THEREFORE, BE IT RESOLVED that the Legislature of the state of Utah, the
             141      Governor concurring therein, expresses its H. [ intent to ] support for the .H transfer all
             141a      H. [ Utah Navajo Trust Fund ] oil and gas royalties .H
             142      administrative and fiduciary obligations to the Utah Dinéh Corporation conditioned on removal
             143      of the state as trustee, by an act of Congress H. or a federal court order that can then be used to
             143a      encourage congressional action and that indemnifies and holds harmless the state of Utah from
             143b      any and all legal and equitable claims .H .
             144          BE IT FURTHER RESOLVED that the Legislature and the Governor declare that any
             145      transfer of H. [ Utah Navajo Trust Fund ] oil and gas royalties .H administrative and fiduciary
             145a      obligations to the Utah Dinéh
             146      Corporation by Congressional act H. or federal court order .H must also indemnify and


             146a      hold harmless the state of Utah
             147      from any and all legal and equitable claims arising from future H. [ Utah Navajo Trust Fund ] oil
             147a      and gas royalties .H
             148      administration by the Utah Dinéh Corporation and for litigation costs related to any claims.
             149          BE IT FURTHER RESOLVED that the Legislature and the Governor declare that any
             150      transfer of Utah Navajo Trust Fund administrative and fiduciary obligations to the Utah Dinéh
             151      Corporation should require that the value of fixed and monetary Utah Navajo Trust Fund assets


             152      remain at least at current levels so that funds will be available to promote future generations of
             153      Utah Navajo Trust Fund beneficiaries' health, education, and general welfare H. and that the
             153a      Utah Dineh Corporation should operate under bylaws that have the protections described in
             153b      this resolution .H .
             154          BE IT FURTHER RESOLVED that the Legislature and the Governor declare that, if
             155      the foregoing objectives are ensured, the Legislature and the Governor support action by
             156      Congress H. or a federal court order .H to transfer the H. [ Utah Navajo Trust Fund's ] oil
             156a      and gas royalties .H administrative and fiduciary obligations to
             157      the Utah Dinéh Corporation.
             158          BE IT FURTHER RESOLVED that a copy of this resolution be sent to the Navajo Utah
             159      Commission, the President of the Navajo Nation, the Speaker of the Navajo Nation Council,
             160      the elected secretary of each Utah Dinéh chapter, the San Juan County Board of
             161      Commissioners, the current administrator of the Navajo Royalty Holding Fund, the secretary of
             162      the United States Department of the Interior, the United States Attorney General, and the
             163      members of Utah's congressional delegation.




Legislative Review Note
    as of 2-27-13 10:37 AM


Office of Legislative Research and General Counsel


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