Statutory Guidelines [Appendix A(5) Tres. Regs 1.46B and 1.46B-1 to B-5] regarding designated settlement funds and qualified settlement funds.
Oklahoma Designated Settlement Funds (DSS) are established under Treasury Regulations 1.468 and 1.468B.1 through 1.468B.5. These regulations are crucial for understanding the legalities surrounding DSS in Oklahoma. DSS are commonly used in the context of mass tort settlements, where many claimants seek compensation for damages resulting from a common injury or event. These funds act as a mechanism to efficiently distribute settlement funds among the claimants, ensuring fairness and reducing administrative burden. Under Oklahoma Designated Settlement Funds Treasury Regulation 1.468, requirements and procedures are outlined for creating and managing these funds. This regulation sets forth the criteria for a fund to be qualified as a DSF, ensuring that it meets the necessary legal standards. It further establishes guidelines for valuation, investment, and income distributions related to these funds. Within the broader framework of Treasury Regulation 1.468, specific provisions are detailed in sections 1.468B.1 through 1.468B.5. These sections address various aspects of DSS, providing additional insights into their functioning. Different types or subsections of DSS may fall under these provisions, depending on the specifics of the settlement agreement and the needs of the claimants. Subsection 1.468B.1 includes provisions regarding the establishment and qualification requirements for DSS. It outlines the process for obtaining approval from the Internal Revenue Service (IRS) to ensure tax-exempt status for the fund. Compliance with these provisions is essential for the fund to enjoy tax benefits and meet federal tax code requirements. Further details regarding funding options, contribution calculations, and procedures related to the creation of DSS are covered in subsection 1.468B.2. This section accounts for the different ways settlement funds can be deposited into the designated fund and how distributions to claimants occur. Subsection 1.468B.3 addresses the valuation of the fund, outlining the acceptable methodologies for determining the fair market value of the assets in the fund. This provision ensures transparency and fairness in the valuation process, creating a level playing field for all claimants involved. The investment of DSF assets is subject to subsection 1.468B.4, which details the permissible investment options and restrictions. It provides guidelines on prudent investment practices and risk management to safeguard the fund's assets while aiming to maximize returns. Lastly, subsection 1.468B.5 elaborates on the requirements for income distributions from DSS. It specifies the tax implications, citing how income earned by the fund should be allocated among the claimants and how tax reporting should be carried out. By abiding by the regulations outlined in Treasury Regulations 1.468 and its respective subsections, Oklahoma DSS operate within a defined framework, ensuring proper administration of settlement funds, equitable distribution to claimants, and compliance with tax laws. These regulations seek to promote efficiency, transparency, and fairness in the management of these funds within the state.
