Tribal Tax and Investment Reform Act of 2019

I 116TH CONGRESS 1ST SESSION H. R. 2484 To amend the Internal Revenue Code of 1986 to treat Indian tribal govern- ments in the same manner as State governments for certain Federal tax purposes, and for other purposes. IN THE HOUSE OF REPRESENTATIVES MAY 2, 2019 Mr. KIND (for himself, Mr. KELLY of Pennsylvania, Ms. HAALAND, Mr. COLE, Ms. DAVIDS of Kansas, Mrs. WALORSKI, Mr. KILMER, Mr. SCHWEIKERT, Ms. MOORE, Mr. COOK, Ms. DELBENE, Mr. MOOLENAAR, and Mr. POCAN) introduced the following bill; which was referred to the Com- mittee on Ways and Means, and in addition to the Committee on Edu- cation and Labor, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned A BILL To amend the Internal Revenue Code of 1986 to treat Indian tribal governments in the same manner as State govern- ments for certain Federal tax purposes, and for other purposes. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. SHORT TITLE. 3 This Act may be cited as the ‘‘Tribal Tax and Invest- 4 ment Reform Act of 2019’’. 5 VerDate Sep 11 2014 23:52 May 08, 2019 Jkt 089200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H2484.IH H2484 pamtmann on DSKBFK8HB2PROD with BILLS 2 •HR 2484 IH SEC. 2. FINDINGS. 1 The Congress finds the following: 2 (1) There is a unique Federal legal and political 3 relationship between the United States and Indian 4 tribes. 5 (2) Indian tribes have the responsibility and au- 6 thority to provide governmental programs and serv- 7 ices to tribal citizens, develop tribal economies, and 8 build community infrastructure to ensure that In- 9 dian reservation lands serve as livable, permanent 10 homes. 11 (3) The United States Constitution, U.S. Fed- 12 eral Court decisions, Executive orders, and numer- 13 ous other Federal laws and regulations recognize 14 that Indian tribes are governments, retaining the in- 15 herent authority to tax and operate as other govern- 16 ments, including (inter alia) financing projects with 17 government bonds and maintaining eligibility for 18 general tax exemptions via their government status. 19 (4) Codifying tax parity with respect to tribal 20 governments is consistent with Federal treaties rec- 21 ognizing the sovereignty of tribal governments. 22 (5) That Indian tribes face historic disadvan- 23 tages in accessing the underlying capital to build the 24 necessary infrastructure for job creation, and that 25 certain statutory restrictions on tribal governance 26 VerDate Sep 11 2014 23:52 May 08, 2019 Jkt 089200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H2484.IH H2484 pamtmann on DSKBFK8HB2PROD with BILLS 3 •HR 2484 IH further inhibit tribes’ ability to develop strong gov- 1 ernance and economies. 2 (6) Indian tribes are sometimes excluded from 3 the Internal Revenue Code of 1986 in key provisions 4 which results in unfair tax treatment for tribal citi- 5 zens or unequal enforcement authority for tribal en- 6 forcement agencies. 7 (7) Congress is vested with the authority to 8 regulate commerce with Indian tribes, and hereby 9 exercises that authority in a manner which furthers 10 tribal self-governance, and in doing so, further af- 11 firms the United States government-to-government 12 relationship with Indian tribes. 13 SEC. 3. TREATMENT OF INDIAN TRIBES AS STATES WITH 14 RESPECT TO BOND ISSUANCE. 15 (a) IN GENERAL.—Subsection (c) of section 7871 of 16 the Internal Revenue Code of 1986 (relating to Indian 17 tribal governments treated as States for certain purposes) 18 is amended to read as follows: 19 ‘‘(c) SPECIAL RULES FOR TAX-EXEMPT BONDS.—In 20 applying section 146 to bonds issued by Indian tribal gov- 21 ernments (or subdivisions thereof) the Secretary of the 22 Treasury shall annually— 23 ‘‘(1) establish a national bond volume cap based 24 on the greater of— 25 VerDate Sep 11 2014 23:52 May 08, 2019 Jkt 089200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H2484.IH H2484 pamtmann on DSKBFK8HB2PROD with BILLS 4 •HR 2484 IH ‘‘(A) the State population formula ap- 1 proach in section 146(d)(1)(A) (using national 2 tribal population estimates supplied annually by 3 the Department of the Interior in consultation 4 with the Census Bureau), and 5 ‘‘(B) the minimum State ceiling amount in 6 section 146(d)(1)(B) (as adjusted in accordance 7 with the cost of living provision in section 8 146(d)(2)), and 9 ‘‘(2) allocate such national bond volume cap 10 among all Indian tribal governments seeking such an 11 allocation in a particular year under regulations pre- 12 scribed by the Secretary.’’. 13 (b) REPEAL OF ESSENTIAL GOVERNMENTAL FUNC- 14 TION REQUIREMENTS.—Section 7871 of such Code is fur- 15 ther amended by striking subsections (b) and (e). 16 (c) CONFORMING AMENDMENT.—Subparagraph (B) 17 of section 45(c)(9) of such Code is amended to read as 18 follows: 19 ‘‘(B) INDIAN TRIBE.—For purposes of this 20 paragraph, the term ‘Indian tribe’ means any 21 Indian tribe, band, nation, or other organized 22 group or community which is recognized as eli- 23 gible for the special programs and services pro- 24 VerDate Sep 11 2014 23:52 May 08, 2019 Jkt 089200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H2484.IH H2484 pamtmann on DSKBFK8HB2PROD with BILLS 5 •HR 2484 IH vided by the United States to Indians because 1 of their status as Indians.’’. 2 (d) EFFECTIVE DATE.— 3 (1) SUBSECTION (a).—The amendment made 4 by subsection (a) shall apply to obligations issued in 5 calendar years beginning after the date of the enact- 6 ment of this Act. 7 (2) SUBSECTION (b).—The repeals made by 8 subsection (b) shall apply to transactions after, and 9 obligations issued in calendar years beginning after, 10 the date of the enactment of this Act. 11 SEC. 4. TREATMENT OF PENSION AND EMPLOYEE BENEFIT 12 PLANS MAINTAINED BY TRIBAL GOVERN- 13 MENTS. 14 (a) AMENDMENTS TO THE INTERNAL REVENUE 15 CODE OF 1986.— 16 (1) QUALIFIED PUBLIC SAFETY EMPLOYEE.— 17 Section 72(t)(10)(B) of the Internal Revenue Code 18 of 1986 (defining qualified public safety employee) is 19 amended by— 20 (A) striking ‘‘or political subdivision of a 21 State’’ and inserting ‘‘, political subdivision of 22 a State, or Indian tribe’’; and 23 VerDate Sep 11 2014 23:52 May 08, 2019 Jkt 089200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H2484.IH H2484 pamtmann on DSKBFK8HB2PROD with BILLS 6 •HR 2484 IH (B) striking ‘‘such State or political sub- 1 division’’ and inserting ‘‘such State, political 2 subdivision, or Indian tribe’’. 3 (2) GOVERNMENTAL PLAN.—The last sentence 4 of section 414(d) of such Code (defining govern- 5 mental plan) is amended to read as follows: ‘‘The 6 term ‘governmental plan’ includes a plan established 7 or maintained for its employees by an Indian tribal 8 government (as defined in section 7701(a)(40)), a 9 subdivision of an Indian tribal government (deter- 10 mined in accordance with section 7871(d)), an agen- 11 cy, instrumentality, or subdivision of an Indian trib- 12 al government, or an entity established under Fed- 13 eral, State, or tribal law which is wholly owned or 14 controlled by any of the foregoing.’’. 15 (3) DOMESTIC RELATIONS ORDER.—Section 16 414(p)(1)(B)(ii) of such Code (defining domestic re- 17 lations order) is amended by inserting ‘‘or tribal’’ 18 after ‘‘State’’. 19 (4) EXEMPT GOVERNMENTAL DEFERRED COM- 20 PENSATION PLAN.—Section 3121(v)(3) of such Code 21 (defining governmental deferred compensation plan) 22 is amended by inserting ‘‘by an Indian tribal govern- 23 ment or subdivision thereof,’’ after ‘‘political subdivi- 24 sion thereof,’’. 25 VerDate Sep 11 2014 23:52 May 08, 2019 Jkt 089200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\H2484.IH H2484 pamtmann on DSKBFK8HB2PROD with BILLS 7 •HR 2484 IH (5) GRANDFATHER OF CERTAIN DEFERRED 1 COMPENSATION PLANS.—Section 457 of such Code 2 is amended by adding at the end the following new 3 subsection: 4 ‘‘(h) CERTAIN TRIBAL GOVERNMENT PLANS GRAND- 5 FATHERED.—Plans established before the date of enact- 6 ment of this subsection and maintained by an Indian tribal 7 government (as defined in section 7701(a)(40)), a subdivi- 8 sion of an Indian tribal government (determined in accord- 9 ance with section 7871(d)), an agency, instrumentality, or 10 subdivision of an Indian tribal government, or an entity 11 established under Federal, State, or tribal law which is 12 wholly owned or controlled by any of the foregoing, in com- 13 pliance with subsection (b) or (f) shall be treated as if 14 established by an eligible employer under subsection 15 (e)(1)(A).’’. 16 (b) AMENDMENTS TO THE EMPLOYEE RETIREMENT 17 INCOME SECURITY ACT OF 1974.— 18 (1) IN GENERAL.—The last sentence of section 19 3(32) of the Employee Retirement Income Security 20 Act of 1974 (29 U.S.C. 1002(32)) is amended to 21 read as follows: ‘‘The term ‘governmental plan’ in- 22 cludes a plan established or maintained for its em- 23 ployees by an Indian tribal government (as defined 24 in section 7701(a)(40) of the Internal Revenue Code 25 VerDate Sep 11 2014 23:52 May 08, 2019 Jkt 089200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\H2484.IH H2484 pamtmann on DSKBFK8HB2PROD with BILLS 8 •HR 2484 IH of 1986), a subdivision of an Indian tribal govern- 1 ment (determined in accordance with section 2 7871(d) of such Code), an agency, instrumentality, 3 or subdivision of an Indian tribal government, or an 4 entity established under Federal, State, or tribal law 5 which is wholly owned or controlled by any of the 6 foregoing.’’. 7 (2) DOMESTIC RELATIONS ORDER.—Section 8 206(d)(3)(B)(ii)(II) of such Act (29 U.S.C. 9 1056(d)(3)(B)(ii)(II)) is amended by inserting ‘‘or 10 tribal’’ after ‘‘State’’. 11 (3) CONFORMING AMENDMENTS.— 12 (A) Section 4021(b) of such Act (29 13 U.S.C. 1321(b)) is amended by striking ‘‘or’’ at 14 the end of paragraph (12), by striking the pe- 15 riod at the end of paragraph (13) and inserting 16 ‘‘; or’’, and by inserting after paragraph (13) 17 the following new paragraph: 18 ‘‘(14) established or maintained for its employ- 19 ees by an Indian tribal government (as defined in 20 section 7701(a)(40) of the Internal Revenue Code of 21 1986), a subdivision of an Indian tribal government 22 (determined in accordance with section 7871(d) of 23 such Code), an agency, instrumentality, or subdivi- 24 sion of an Indian tribal government, or an entity es- 25 VerDate Sep 11 2014 23:52 May 08, 2019 Jkt 089200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\H2484.IH H2484 pamtmann on DSKBFK8HB2PROD with BILLS 9 •HR 2484 IH tablished under Federal, State, or tribal law which 1 is wholly owned or controlled by any of the fore- 2 going.’’. 3 (B) Section 4021(b)(2) of such Act (29 4 U.S.C. 1321(b)(2)) is amended by striking ‘‘, or 5 which is described in the last sentence of sec- 6 tion 3(32)’’ and inserting a comma. 7 (c) EFFECTIVE DATE.—The amendments made by 8 this section shall apply to years beginning after the date 9 of the enactment of this Act. 10 SEC. 5. TREATMENT OF TRIBAL FOUNDATIONS AND CHAR- 11 ITIES LIKE CHARITIES FUNDED AND CON- 12 TROLLED BY OTHER GOVERNMENTAL 13 FUNDERS AND SPONSORS. 14 (a) IN GENERAL.—Section 170(b)(1)(A) of the Inter- 15 nal Revenue Code of 1986 is amended by adding at the 16 end the following: ‘‘For purposes of clause (vi), the term 17 ‘governmental unit’ includes an Indian tribal government 18 (determined in accordance with section 7871(d) of such 19 Code), an agency, instrumentality, or subdivision of an In- 20 dian tribal government, or an entity established under 21 Federal, State, or tribal law which is wholly owned or con- 22 trolled by any of the foregoing.’’. 23 (b) CERTAIN SUPPORTING ORGANIZATIONS.—Sec- 24 tion 509(a) of such Code is amended by adding at the 25 VerDate Sep 11 2014 23:52 May 08, 2019 Jkt 089200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\H2484.IH H2484 pamtmann on DSKBFK8HB2PROD with BILLS 10 •HR 2484 IH end the following: ‘‘For purposes of paragraph (3), an or- 1 ganization described in paragraph (2) shall be deemed to 2 include an Indian tribal government (determined in ac- 3 cordance with section 7871(d) of such Code), an agency, 4 instrumentality, or subdivision of an Indian tribal govern- 5 ment, or an entity established under Federal, State, or 6 tribal law which is wholly owned or controlled by any of 7 the foregoing.’’. 8 (c) EFFECTIVE DATE.—The amendments made by 9 this section shall apply to taxable years beginning after 10 the date of the enactment of this Act. 11 SEC. 6. IMPROVING EFFECTIVENESS OF TRIBAL CHILD 12 SUPPORT ENFORCEMENT AGENCIES BY PAR- 13 ITY OF ACCESS TO THE FEDERAL PARENT LO- 14 CATOR SERVICE AND FEDERAL TAX REFUND 15 OFFSETS. 16 (a) ACCESS TO FEDERAL PARENT LOCATOR SERV- 17 ICE.—Section 453(c) of the Social Security Act (42 U.S.C. 18 653(c)) is amended— 19 (1) by striking ‘‘and’’ at the end of paragraph 20 (4); 21 (2) by striking the period at the end of para- 22 graph (5) and inserting ‘‘; and’’; and 23 (3) by adding at the end the following: 24 VerDate Sep 11 2014 23:52 May 08, 2019 Jkt 089200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\H2484.IH H2484 pamtmann on DSKBFK8HB2PROD with BILLS 11 •HR 2484 IH ‘‘(6) the child support enforcement agency of an 1 Indian tribe or tribal organization that is eligible for 2 a grant under section 455(f).’’. 3 (b) IMPROVING THE COLLECTION OF PAST-DUE 4 CHILD SUPPORT FROM FEDERAL TAX REFUNDS.— 5 (1) AMENDMENT TO THE SOCIAL SECURITY 6 ACT.—Section 464 of the Social Security Act (42 7 U.S.C. 664) is amended by adding at the end the 8 following: 9 ‘‘(d) APPLICABILITY TO INDIAN TRIBES AND TRIBAL 10 ORGANIZATIONS ELIGIBLE FOR A GRANT UNDER THIS 11 PART.—This section, except for the requirement to dis- 12 tribute amounts in accordance with section 457, shall 13 apply to an Indian tribe or tribal organization eligible for 14 a grant under section 455(f) in the same manner in which 15 this section applies to a State with a plan approved under 16 this part.’’. 17 (2) AMENDMENT TO THE INTERNAL REVENUE 18 CODE.—Subsection (c) of section 6402 of the Inter- 19 nal Revenue Code of 1986 is amended by adding at 20 the end the following: ‘‘For purposes of this sub- 21 section, any reference to a State shall include a ref- 22 erence to any Indian tribe or tribal organization de- 23 scribed in section 464(d) of the Social Security 24 Act.’’. 25 VerDate Sep 11 2014 23:52 May 08, 2019 Jkt 089200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6201 E:\BILLS\H2484.IH H2484 pamtmann on DSKBFK8HB2PROD with BILLS 12 •HR 2484 IH SEC. 7. RECOGNIZING INDIAN TRIBAL GOVERNMENTS FOR 1 PURPOSES OF DETERMINING UNDER THE 2 ADOPTION CREDIT WHETHER A CHILD HAS 3 SPECIAL NEEDS. 4 (a) IN GENERAL.—Secti [Text truncated for display. Full text available on Congress.gov.]