S.B. 247
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7 LONG TITLE
8 General Description:
9 This bill modifies provisions related to public funds and accounts to provide for a
10 Navajo Trust Fund to replace the Utah Navajo Royalties Holding Account.
11 Highlighted Provisions:
12 This bill:
13 . defines terms;
14 . creates the Navajo Trust Fund;
15 . outlines the duties of the Division of Finance, State Treasurer, and State Auditor
16 with regard to the fund;
17 . provides for the board of trustees of the fund;
18 . outlines powers and duties of the board of trustees;
19 . provides for the appointment of a trust administrator and the creation of the Office
20 of Trust Administrator;
21 . outlines powers and duties of the trust administrator;
22 . requires the attorney general to act as legal counsel to the board;
23 . addresses expenditures from the fund;
24 . creates the Dineh Committee and provides for its duties;
25 . repeals provisions related to the Utah Navajo Royalties Holding Account; and
26 . makes technical changes.
27 Money Appropriated in this Bill:
28 None
29 Other Special Clauses:
30 None
31 Utah Code Sections Affected:
32 ENACTS:
33 51-10-101 , Utah Code Annotated 1953
34 51-10-102 , Utah Code Annotated 1953
35 51-10-201 , Utah Code Annotated 1953
36 51-10-202 , Utah Code Annotated 1953
37 51-10-203 , Utah Code Annotated 1953
38 51-10-204 , Utah Code Annotated 1953
39 51-10-205 , Utah Code Annotated 1953
40 51-10-206 , Utah Code Annotated 1953
41 REPEALS:
42 51-9-501 , as enacted by Laws of Utah 2008, Chapter 202
43 51-9-502 , as enacted by Laws of Utah 2008, Chapter 202
44 51-9-503 , as enacted by Laws of Utah 2008, Chapter 202
45 51-9-504 , as last amended by Laws of Utah 2013, Chapter 11
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47 Be it enacted by the Legislature of the state of Utah:
48 Section 1. Section 51-10-101 is enacted to read:
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51 51-10-101. Title.
52 This chapter is known as the "Navajo Trust Fund Act."
53 Section 2. Section 51-10-102 is enacted to read:
54 51-10-102. Definitions.
55 As used in this chapter:
56 (1) "Administrative expenditure" means:
57 (a) an expenditure for professional services;
58 (b) per diem and travel expenses for the Dineh Committee; and
59 (c) expense reimbursements, salaries, and benefits for the trust administrator and the
60 trust administrator's staff.
61 (2) "Assessment" means taking one of the following actions to assess the health,
62 education, and general welfare needs of Navajos:
63 (a) a survey of Navajos that includes:
64 (i) a random sample large enough to secure an accurate representation of their needs;
65 and
66 (ii) a response rate large enough to provide an accurate representation of those needs;
67 (b) at least three public hearings held to survey and solicit Navajo needs that are
68 advertised for two weeks before the hearing by:
69 (i) announcements by the:
70 (A) Utah Navajo Chapters, if allowed by the chapter; and
71 (B) Blue Mountain Dine';
72 (ii) notice posted in the chapter buildings and other public locations, if allowed by the
73 chapter;
74 (iii) notice of the meeting announced by radio or television; and
75 (iv) notice of the meeting published at least once per week for two consecutive weeks
76 in any newspaper of general circulation within the Navajo community; or
77 (c) a physical inventory:
78 (i) conducted by the Office of Trust Administrator;
79 (ii) coordinated with:
80 (A) each Utah Navajo Chapter;
81 (B) the Blue Mountain Dine'; and
82 (C) other sources; and
83 (iii) conducted to determine needs, including:
84 (A) the number and capacity of public facilities;
85 (B) the extent of graveled and paved roads and air strips;
86 (C) the inventory of water resources;
87 (D) the extent of residential electrical power distribution; and
88 (E) the number and condition of housing units.
89 (3) "Assessment analysis results" means the analysis:
90 (a) of the results of the assessment required by Section 51-10-204 ; and
91 (b) that is developed by the trust administrator and the Dineh Committee in accordance
92 with Section 51-10-204 .
93 (4) "Blue Mountain Dine'" means the off-reservation Navajo community organization
94 known as the Blue Mountain Dine'.
95 (5) "Board" means the board of trustees created in Section 51-10-202 .
96 (6) "Business enterprise" means a sole proprietorship, partnership, corporation, limited
97 liability company, or other private entity organized to provide goods or services for a profit.
98 (7) "Capital" means an investment by the owner of a business enterprise:
99 (a) in:
100 (i) cash;
101 (ii) equipment;
102 (iii) land; or
103 (iv) other asset similar to that described in Subsections (7)(a)(i) through (iii); and
104 (b) that is pledged to be used in the operation of the business enterprise.
105 (8) "Dineh Committee" means the committee created in Section 51-10-206 .
106 (9) "Fund" means the Navajo Trust Fund created in Section 51-10-201 .
107 (10) "Income" means the revenues from investments made by the state treasurer of the
108 fund principal.
109 (11) "Navajos" means San Juan County, Utah Navajos.
110 (12) "Office of Trust Administrator" means the office created in Section 51-10-203 .
111 (13) "Principal" means:
112 (a) the balance of the fund as of May 13, 2014; and
113 (b) the revenue to the fund from whatever source except income.
114 (14) "Service provider" means any of the following that provides a good or service to
115 Navajos:
116 (a) a business enterprise;
117 (b) a private nonprofit organization; or
118 (c) a government entity.
119 (15) "Trust administrator" means the administrator appointed as provided in
120 Subsection 51-10-202 (2).
121 (16) "Utah Navajo Chapter" means the following chapters of the Navajo Nation:
122 (a) Aneth Chapter;
123 (b) Mexican Water Chapter;
124 (c) Navajo Mountain Chapter;
125 (d) Oljato Chapter;
126 (e) Dennehotso Chapter;
127 (f) Red Mesa Chapter; and
128 (g) Teec Nos Pos Chapter.
129 Section 3. Section 51-10-201 is enacted to read:
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131 51-10-201. Fund created.
132 (1) There is created a private-purpose trust fund entitled the "Navajo Trust Fund."
133 (2) The fund consists of:
134 (a) revenue received by the state that represents the 37-1/2% of the net oil royalties
135 from the Aneth Extension of the Navajo Indian Reservation required by P.L. 72-403, 47 Stat.
136 141, to be paid to the state;
137 (b) money received by the trust administrator from a contract executed by:
138 (i) the trust administrator; or
139 (ii) the board;
140 (c) appropriations made to the fund by the Legislature, if any;
141 (d) income;
142 (e) money related to litigation, including settlement of litigation related to the royalties
143 described in Subsection (2)(a);
144 (f) the balance of the Utah Navajo Royalty Holding Fund as of May 13, 2014, which
145 shall be transferred to the fund; and
146 (g) other revenue received from other sources.
147 (3) The Division of Finance shall account for the receipt and expenditures of fund
148 money.
149 (4) (a) The state treasurer shall invest fund money by following Title 51, Chapter 7,
150 State Money Management Act.
151 (b) (i) The fund shall earn interest.
152 (ii) The state treasurer shall deposit the interest or other revenue earned from
153 investment of the fund into the fund.
154 (5) The state auditor shall:
155 (a) conduct an annual audit of the fund's finances, internal controls, and compliance
156 with statutes, rules, and policies in accordance with Title 67, Chapter 3, Auditor; and
157 (b) deliver a copy of the annual audit report to the:
158 (i) board;
159 (ii) trust administrator;
160 (iii) Dineh Committee;
161 (iv) Office of Legislative Research and General Counsel for presentation to the Native
162 American Legislative Liaison Committee, created in Section 36-22-1 ;
163 (v) governor's office;
164 (vi) Division of Indian Affairs;
165 (vii) Navajo Nation;
166 (viii) United States Bureau of Indian Affairs; and
167 (ix) United States Secretary of the Interior.
168 Section 4. Section 51-10-202 is enacted to read:
169 51-10-202. Board of trustees of the fund -- Trust administrator.
170 (1) (a) There is created a board of trustees of the fund composed of the following three
171 members:
172 (i) the state treasurer;
173 (ii) the director of the Division of Finance; and
174 (iii) the director of the Governor's Office of Management and Budget.
175 (b) The state treasurer is chair of the board.
176 (c) Three members of the board is a quorum.
177 (2) (a) The board shall hire a qualified person to act as trust administrator and, when
178 not provided for by this chapter, define the trust administrator's powers and duties.
179 (b) The board may hire, or authorize the trust administrator to hire, other persons
180 necessary to assist the trust administrator and the board to perform the duties required by this
181 chapter.
182 (3) The board shall:
183 (a) on behalf of the state, act as trustee of the fund and exercise the state's fiduciary
184 responsibilities;
185 (b) meet at least once every other month;
186 (c) review and approve the policies, projections, rules, criteria, procedures, forms,
187 standards, and performance goals established by the trust administrator;
188 (d) review and approve the fund budget prepared by the trust administrator;
189 (e) review the progress reports from programs financed by the fund;
190 (f) review financial records of the fund, including fund receipts, expenditures, and
191 investments; and
192 (g) do any other things necessary to perform the state's fiduciary obligations under the
193 fund.
194 (4) The attorney general shall:
195 (a) act as legal counsel and provide legal representation to the board; and
196 (b) attend or direct an attorney from the attorney general's office to attend each meeting
197 of the board.
198 Section 5. Section 51-10-203 is enacted to read:
199 51-10-203. Office of Trust Administrator.
200 (1) There is created an Office of Trust Administrator.
201 (2) (a) The trust administrator shall administer the office.
202 (b) The board and the Office of Trust Administrator shall assume the functions,
203 powers, duties, rights, and responsibilities of:
204 (i) the Commission of State Indian Affairs;
205 (ii) the Board of Indian Affairs;
206 (iii) the Dineh Committee, except as provided in this chapter; and
207 (iv) the Division of Indian Affairs, on the matters connected with the fund or its
208 proceeds.
209 Section 6. Section 51-10-204 is enacted to read:
210 51-10-204. Trust administrator duties.
211 (1) Under the direction of the board, the trust administrator shall:
212 (a) review the documents and decisions highlighting the history of the fund, including:
213 (i) the Nelson report, prepared as part of the Bigman v. Utah Navajo Development
214 Council, Inc. C77-0031;
215 (ii) the November 1991 performance audit of the fund by the legislative auditor
216 general;
217 (iii) Sakezzie v. Utah Indian Affairs Commission, 198 F. Supp. 218 (1961);
218 (iv) Sakezzie v. Utah Indian Affairs Commission, 215 F. Supp. 12 (1963);
219 (v) the September 8, 1977, consent decree, the stipulation dated November 29, 1984,
220 modifying the consent decree, and the court's memorandum opinion dated September 25, 1978,
221 in Bigman v. Utah Navajo Development Council, Inc. C77-0031; and
222 (vi) rulings related to Pelt v. Utah;
223 (b) review all potential sources of fund revenues;
224 (c) prepare annual projections of money that will be available for Navajo programs;
225 (d) identify the property owned by the fund;
226 (e) establish and maintain a record system to retain records relating to the fund's
227 property;
228 (f) review the existing and proposed programs financed by the fund;
229 (g) evaluate whether the programs described in Subsection (1)(f) are the most practical
230 and cost-efficient means to provide the desired benefit to Navajos;
231 (h) consult regularly with the administrators of the programs financed by the fund to
232 obtain progress reports on the programs;
233 (i) attend all meetings of:
234 (i) the Dineh Committee; and
235 (ii) the board;
236 (j) certify that the expenditures of the fund:
237 (i) comply with the state's fiduciary responsibilities as trustee of the fund; and
238 (ii) are consistent with this section;
239 (k) make an annual report:
240 (i) to the:
241 (A) board;
242 (B) governor; and
243 (C) Native American Legislative Liaison Committee, created in Section 36-22-1 ; and
244 (ii) that:
245 (A) identifies the source and amount of the revenue received by the fund;
246 (B) identifies the recipient, purpose, and amount of the expenditures from the fund;
247 (C) identifies specifically each of the fund's investments and the actual return and the
248 rate of return from each investment; and
249 (D) recommends any necessary statutory changes to improve administration of the fund
250 or to protect the state from liability as trustee;
251 (l) establish, in conjunction with the state treasurer, the state auditor, and the Division
252 of Finance, appropriate accounting practices for the fund receipts, expenditures, and
253 investments according to generally accepted accounting principles;
254 (m) provide summary records of fund receipts, expenditures, and investments to the
255 board and to the Dineh Committee at each of their meetings;
256 (n) pay administrative expenses from the fund;
257 (o) report monthly to the board about:
258 (i) the trust administrator's activities; and
259 (ii) the status of the fund; and
260 (p) call additional meetings of the Dineh Committee when necessary.
261 (2) In conjunction with the Dineh Committee and under the direction of the board, the
262 trust administrator shall:
263 (a) subject to Subsection (4), conduct an assessment at least every two years of the
264 needs of Navajos;
265 (b) before the beginning of each fiscal year, on the basis of the assessment required by
266 Subsection (2)(a), develop assessment analysis results that allow the establishment of a list of
267 the needs of Navajos for that year to be used for the annual budget;
268 (c) before the beginning of each fiscal year, develop and approve an annual budget for
269 the fund;
270 (d) develop an ethics and conflict of interest policy that emphasizes the need to avoid
271 even the appearance of conflict of interest or impropriety that is to apply to:
272 (i) the trust administrator;
273 (ii) the trust administrator's staff; and
274 (iii) the Dineh Committee;
275 (e) require the trust administrator, each of the trust administrator's staff, and each
276 member of the Dineh Committee to sign and keep on file written documentation that
277 acknowledges:
278 (i) their receipt of the ethics and conflict of interest policy described in Subsection
279 (2)(d); and
280 (ii) their willingness to abide by the ethics and conflict of interest policy described in
281 Subsection (2)(d); and
282 (f) make expenditures from the fund "for the health, education, and general welfare of
283 the Navajo Indians residing in San Juan County" as required by:
284 (i) P.L. 72-403, 47 Stat. 1418 (1933);
285 (ii) P.L. 90-306, 82 Stat. 121 (1968); and
286 (iii) this chapter.
287 (3) The trust administrator, under direction of the board, may:
288 (a) contract with public and private entities; and
289 (b) unless prohibited by law or this chapter, acquire and hold money and other property
290 received in the administration of the fund.
291 (4) (a) Notwithstanding Subsection (2), the trust administrator shall ensure that at least
292 every six years the assessment includes:
293 (i) a survey as described in Subsection 51-10-102 (2)(a); or
294 (ii) public hearings as described in Subsection 51-10-102 (2)(b).
295 (b) Subsection (2)(a) does not prohibit the trust administrator from conducting a
296 physical inventory as defined in Subsection 51-10-102 (2)(c) during the same year a survey or
297 public hearing is required.
298 Section 7. Section 51-10-205 is enacted to read:
299 51-10-205. Expenditures from the fund.
300 (1) (a) Under the direction of the board, the trust administrator may make expenditures
301 to invest in a business enterprise:
302 (i) as authorized and limited by this section; and
303 (ii) giving consideration to the advice of the Dineh Committee.
304 (b) When making expenditures to invest in a business enterprise, the trust
305 administrator:
306 (i) may expend fund money only on a business enterprise located in San Juan County;
307 (ii) may expend fund money only:
308 (A) to invest in a joint business enterprise; and
309 (B) when the other party's capital investment is larger than the fund's expenditure; and
310 (iii) may not continue to make expenditures to or in support of a business enterprise if
311 the business enterprise fails to show a profit within three years.
312 (2) (a) Before making any expenditures from the fund to a business enterprise or
313 service provider, the trust administrator shall:
314 (i) comply with Title 63G, Chapter 6a, Utah Procurement Code; and
315 (ii) review and approve the business enterprise's or service provider's entire budget.
316 (b) The trust administrator may require that a business enterprise or service provider
317 modify its budget or meet other conditions precedent established by the trust administrator
318 before the business enterprise or service provider may receive expenditures from the fund.
319 (3) The trust administrator shall make an expenditure from the fund that is not an
320 administrative expenditure by:
321 (a) preparing a written document that:
322 (i) defines specifically how the expenditure from the fund may be used;
323 (ii) establishes any conditions precedent to use of the expenditure; and
324 (iii) requires the recipient of fund money to provide the trust administrator with
325 progress reports detailing how the money has been expended; and
326 (b) obtaining the signature of the recipient on that document before releasing any
327 money from the fund.
328 (4) The trust administrator shall:
329 (a) make rules in accordance with Subsection (6) that:
330 (i) establish policies and criteria for expenditure of fund money that take into account
331 the assessment analysis results; and
332 (ii) establish performance evaluation criteria with which to evaluate the success of
333 expenditures from the fund after they are made;
334 (b) develop procedures, forms, and standards for persons seeking distribution of fund
335 money that implement the policies and criteria established by rule;
336 (c) evaluate the requests for expenditures of fund money against:
337 (i) the policies and criteria established by rule; and
338 (ii) the requestor's success in meeting performance evaluation criteria and goals in any
339 prior receipt of fund money;
340 (d) develop performance goals for each fund expenditure that implement the
341 performance evaluation criteria established in rule; and
342 (e) monitor and evaluate each fund expenditure based upon the performance goals and
343 performance evaluation criteria created under this Subsection (4).
344 (5) The trust administrator may expend fund money for per diem and expenses incurred
345 by the Dineh Committee in performance of official duties.
346 (6) The trust administrator shall make a rule described in Subsection (4)(a):
347 (a) in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act;
348 (b) with the input and recommendation of the Dineh Committee; and
349 (c) with the approval of the board.
350 Section 8. Section 51-10-206 is enacted to read:
351 51-10-206. Dineh Committee.
352 (1) There is created the Dineh Committee.
353 (2) (a) The governor, with the consent of the Senate, shall appoint nine members to the
354 Dineh Committee.
355 (b) In making an appointment under Subsection (2)(a), the governor shall ensure that:
356 (i) each member of the committee is an individual:
357 (A) who is an enrolled member of the Navajo Nation; and
358 (B) whose name and tribal number are contained in the fund's population database; and
359 (ii) the Dineh Committee includes:
360 (A) two registered members of the Aneth Chapter of the Navajo Nation who reside in
361 San Juan County, Utah;
362 (B) one registered member of the Blue Mountain Dine' who resides in San Juan
363 County, Utah;
364 (C) one registered member of the Mexican Water Chapter of the Navajo Nation who
365 resides in San Juan County, Utah;
366 (D) one registered member of the Navajo Mountain Chapter of the Navajo Nation who
367 resides in San Juan County, Utah;
368 (E) subject to Subsection (4), two members who reside in San Juan County, Utah, one
369 of whom is a registered member of the Oljato Chapter of the Navajo Nation, and one of whom
370 is a registered member of either the Oljato Chapter or the Dennehotso Chapter of the Navajo
371 Nation;
372 (F) one registered member of the Red Mesa Chapter of the Navajo Nation who resides
373 in San Juan County, Utah; and
374 (G) one registered member of the Teec Nos Pos Chapter of the Navajo Nation who
375 resides in San Juan County, Utah.
376 (3) (a) (i) Each of the Utah Navajo Chapters, except the Aneth, Oljato, and Dennehotso
377 chapters, shall submit to the governor the names of three nominees to the Dineh Committee
378 chosen by the chapter.
379 (ii) The governor shall select one of the three persons whose names are submitted
380 under Subsection (3)(a)(i) as that chapter's representative on the Dineh Committee.
381 (b) (i) The Blue Mountain Dine' shall submit to the governor the names of three
382 nominees to the Dineh Committee.
383 (ii) The governor shall select one of the three persons whose names are submitted
384 under Subsection (3)(b)(i) as the Blue Mountain Dine' representative on the Dineh Committee.
385 (c) (i) The Aneth Chapter shall submit to the governor the names of six nominees to
386 the Dineh Committee chosen by the chapter.
387 (ii) The governor shall select two of the six persons whose names are submitted under
388 Subsection (3)(c)(i) to be the Aneth Chapter's representatives on the Dineh Committee.
389 (d) (i) The Oljato Chapter shall submit to the governor the names of six nominees to
390 the Dineh Committee chosen by the chapter.
391 (ii) One of the six names submitted under Subsection (3)(d)(i) may be a registered
392 member of the Dennehotso Chapter.
393 (iii) The governor shall select two of the six persons whose names are submitted under
394 Subsection (3)(d)(i) to be the representatives on the Dineh Committee of the Oljato and
395 Dennehotso chapters.
396 (4) If both members appointed under Subsection (2)(b)(ii)(E) are registered members
397 of the Oljato Chapter, the two members shall attend Dennehotso Chapter meetings as
398 practicable.
399 (5) The governor may not appoint a person who is currently, or who, within the last 12
400 months, has been an officer, director, employee, or contractor of a business enterprise or
401 service provider that solicits, accepts, or receives a benefit from an expenditure of:
402 (a) the Division of Indian Affairs; or
403 (b) the fund.
404 (6) (a) Except as provided in Subsection (6)(b) and other than the amount authorized
405 by this section for Dineh Committee member expenses, a person appointed to the Dineh
406 Committee may not solicit, accept, or receive any benefit from an expenditure of:
407 (i) the Division of Indian Affairs;
408 (ii) the fund; or
409 (iii) the Division of Indian Affairs or fund as an officer, director, employee, or
410 contractor of any business enterprise or service provider that solicits, accepts, or receives a
411 benefit from the expenditure of:
412 (A) the Division of Indian Affairs; or
413 (B) the fund.
414 (b) A member of the Dineh Committee may receive a benefit from an expenditure of
415 the fund if:
416 (i) when the benefit is discussed by the Dineh Committee:
417 (A) the member discloses that the member may receive the benefit;
418 (B) the member physically leaves the room in which the Dineh Committee is
419 discussing the benefit; and
420 (C) the Dineh Committee approves the member receiving the benefit by a unanimous
421 vote of the members present at the meeting discussing the benefit;
422 (ii) a Utah Navajo Chapter requests that the benefit be received by the member;
423 (iii) the member is in compliance with the ethics and conflict of interest policy required
424 under Subsection 51-10-204 (2)(d);
425 (iv) (A) the expenditure from the fund is made in accordance with this chapter; and
426 (B) the benefit is no greater than the benefit available to members of the Navajo Nation
427 whose name and tribal number are contained in the fund's population database; and
428 (v) the member is not receiving the benefit as an officer, director, employee, or
429 contractor of a business entity or service provider.
430 (7) (a) (i) Except as required in Subsection (7)(a)(ii), as terms of current committee
431 members expire, the governor shall appoint each new member or reappointed member to a
432 four-year term.
433 (ii) The governor shall, at the time of appointment or reappointment, adjust the length
434 of terms to ensure that the terms of committee members are staggered so that approximately
435 half of the Dineh Committee is appointed every two years.
436 (b) Except as provided in Subsection (7)(c), a committee member shall serve until the
437 committee member's successor is appointed and qualified.
438 (c) If a committee member is absent from three consecutive committee meetings, or if
439 the committee member violates the ethical or conflict of interest policies established by statute
440 or the Dineh Committee:
441 (i) the committee member's appointment is terminated;
442 (ii) the position is vacant; and
443 (iii) the governor shall appoint a replacement.
444 (d) When a vacancy occurs in the membership for any reason, the governor shall
445 appoint a replacement for the unexpired term according to the procedures of this section.
446 (8) (a) The committee members shall select a chair and vice chair from committee
447 membership each two years subsequent to the appointment of new committee members.
448 (b) Five members of the Dineh Committee is a quorum for the transaction of business.
449 (c) The Dineh Committee shall:
450 (i) comply with Title 52, Chapter 4, Open and Public Meetings Act;
451 (ii) ensure that its meetings are held at or near:
452 (A) a chapter house or meeting hall of a Utah Navajo Chapter; or
453 (B) other places in Utah that the Dineh Committee considers practical and appropriate;
454 and
455 (iii) ensure that its meetings are public hearings at which a resident of San Juan
456 County, Utah, may appear and speak.
457 (9) A committee member may not receive compensation or benefits for the committee
458 member's service, but may receive per diem and travel expenses in accordance with:
459 (a) Section 63A-3-106 ;
460 (b) Section 63A-3-107 ; and
461 (c) rules made by the Division of Finance pursuant to Sections 63A-3-106 and
462 63A-3-107 .
463 (10) The Office of Trust Administrator shall staff the Dineh Committee.
464 (11) The Dineh Committee shall advise the trust administrator about the expenditure of
465 fund money.
466 Section 9. Repealer.
467 This bill repeals:
468 Section 51-9-501 , Title.
469 Section 51-9-502 , Definitions.
470 Section 51-9-503 , Purpose statement.
471 Section 51-9-504 , Utah Navajo royalties and related issues.
Legislative Review Note
as of 2-24-14 12:19 PM