Tribal Economic Development Act of 2020

I 116TH CONGRESS 2D SESSION H. R. 8066 To amend the Internal Revenue Code of 1986 to modify the rules for tribal economic development bonds. IN THE HOUSE OF REPRESENTATIVES AUGUST 14, 2020 Mr. YOUNG (for himself, Ms. SCHRIER, Ms. CASTOR of Florida, and Ms. KUSTER of New Hampshire) introduced the following bill; which was re- ferred to the Committee on Ways and Means A BILL To amend the Internal Revenue Code of 1986 to modify the rules for tribal economic development bonds. 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 Economic De- 4 velopment Act of 2020’’. 5 SEC. 2. MODIFICATIONS RELATED TO TRIBAL ECONOMIC 6 DEVELOPMENT BONDS. 7 (a) INCREASE IN NATIONAL LIMITATION.—Subpara- 8 graph (B) of section 7871(f)(1) of the Internal Revenue 9 VerDate Sep 11 2014 01:37 Sep 03, 2020 Jkt 099200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H8066.IH H8066 pbinns on DSKJLVW7X2PROD with BILLS 2 •HR 8066 IH Code of 1986 is amended by striking ‘‘$2,000,000,000’’ 1 and inserting ‘‘$4,000,000,000.’’ 2 (b) OTHER MODIFICATIONS.— 3 (1) IN GENERAL.—Paragraph (2) of section 4 7871(f) of the Internal Revenue Code of 1986 is 5 amended to read as follows: 6 ‘‘(2) BONDS TREATED AS EXEMPT FROM 7 TAX.—Notwithstanding any other provision of this 8 title, gross income shall not include interest on any 9 tribal economic development bond.’’. 10 (2) MODIFICATION OF DEFINITION OF TRIBAL 11 ECONOMIC DEVELOPMENT BOND.—Section 12 7871(f)(3) of the Internal Revenue Code of 1986 is 13 amended to read as follows: 14 ‘‘(3) TRIBAL ECONOMIC DEVELOPMENT 15 BOND.— 16 ‘‘(A) IN GENERAL.—For purposes of this 17 section, the term ‘tribal economic development 18 bond’ means any bond issued by an Indian trib- 19 al government (or a subdivision thereof)— 20 ‘‘(i) which is part of an issue 95 per- 21 cent or more of the proceeds of which are 22 to be used— 23 ‘‘(I) by a qualified Native user, 24 and 25 VerDate Sep 11 2014 01:37 Sep 03, 2020 Jkt 099200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H8066.IH H8066 pbinns on DSKJLVW7X2PROD with BILLS 3 •HR 8066 IH ‘‘(II) to promote the economic 1 development of any Indian tribe or 2 Native Corporation (including through 3 loans by any Indian tribal government 4 or a subdivision thereof to a qualified 5 Native user), 6 ‘‘(ii) except as provided in subpara- 7 graph (D), which is not an arbitrage bond 8 (within the meaning of section 148), 9 ‘‘(iii) which meets the applicable re- 10 quirements of section 149 (other than sub- 11 sections (b), (d), and (g) thereof), and 12 ‘‘(iv) which is designated by the In- 13 dian tribal government as a tribal eco- 14 nomic development bond for purposes of 15 this subsection. 16 ‘‘(B) EXCEPTION.—Such term shall not in- 17 clude any bond issued as part of an issue if any 18 portion of the proceeds of such issue are used 19 to finance any portion of a building in which 20 class II or class III gaming (as defined in sec- 21 tion 4 of the Indian Gaming Regulatory Act) is 22 conducted or housed or any other property ac- 23 tually used in the conduct of such gaming. 24 VerDate Sep 11 2014 01:37 Sep 03, 2020 Jkt 099200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H8066.IH H8066 pbinns on DSKJLVW7X2PROD with BILLS 4 •HR 8066 IH ‘‘(C) LIMITATION ON AMOUNT OF BONDS 1 DESIGNATED.—The maximum aggregate face 2 amount of bonds which may be designated by 3 any Indian tribal government under subpara- 4 graph (A) shall not exceed the amount of na- 5 tional tribal economic development bond limita- 6 tion allocated to such government under para- 7 graph (1). 8 ‘‘(D) LOANS TO QUALIFIED NATIVE USERS 9 PERMITTED.— 10 ‘‘(i) IN GENERAL.—For purposes of 11 applying section 148 to this paragraph, the 12 term ‘arbitrage bond’ shall not include a 13 bond issued as part of an issue the pro- 14 ceeds of which are used to provide a loan 15 described in clause (ii) to a qualified Na- 16 tive user notwithstanding whether the in- 17 terest rate on such loan produces a yield 18 which is higher than the yield on such 19 issue. 20 ‘‘(ii) LOAN DESCRIBED.—A loan is de- 21 scribed in this clause if the terms of the 22 loan prevent the borrower of such loan 23 from making further loans with the pro- 24 ceeds of such loan. 25 VerDate Sep 11 2014 01:37 Sep 03, 2020 Jkt 099200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H8066.IH H8066 pbinns on DSKJLVW7X2PROD with BILLS 5 •HR 8066 IH ‘‘(E) QUALIFIED NATIVE USER.—For pur- 1 poses of this paragraph, the term ‘qualified Na- 2 tive user’ means— 3 ‘‘(i) an Indian tribal government (or a 4 subdivision thereof), 5 ‘‘(ii) a Native Corporation, or 6 ‘‘(iii) any other entity if— 7 ‘‘(I) in the case of a corporation, 8 not less than two-thirds of the out- 9 standing stock are owned by one or 10 more entities described in clauses (i) 11 or (ii), and 12 ‘‘(II) in the case of any entity 13 other than a corporation, not less 14 than two-thirds of the capital and 15 profits interests are owned by one or 16 more entities described in clauses (i) 17 or (ii). 18 ‘‘(F) OTHER DEFINITIONS.—For purposes 19 of this paragraph— 20 ‘‘(i) NATIVE CORPORATION.—The 21 term ‘Native Corporation’ has the meaning 22 given such term under section 646(h)(2). 23 VerDate Sep 11 2014 01:37 Sep 03, 2020 Jkt 099200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H8066.IH H8066 pbinns on DSKJLVW7X2PROD with BILLS 6 •HR 8066 IH ‘‘(ii) INDIAN TRIBE.—The term ‘In- 1 dian tribe’ has the meaning given such 2 term under subsection (c)(3)(E)(ii). 3 ‘‘(G) COORDINATION WITH THIRD PARTY 4 REPAYMENT, ETC.—A bond shall not fail to be 5 treated as a tribal economic development bond 6 solely because a person other than the Indian 7 tribal government (or subdivision thereof) 8 issuing the bond has guaranteed the repayment 9 of, is otherwise obligated to repay, or in fact re- 10 pays, any portion of the principal or interest of 11 such bond.’’. 12 (c) EFFECTIVE DATE.—The amendments made by 13 this section shall apply to obligations issued after the date 14 of the enactment of this Act. 15 Æ VerDate Sep 11 2014 01:37 Sep 03, 2020 Jkt 099200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6301 E:\BILLS\H8066.IH H8066 pbinns on DSKJLVW7X2PROD with BILLS