Section 1 Short title
This Act may be cited as the “Tribal Tax and Investment Reform Act of 2017”.
Tribal Tax and Investment Reform Act of 2017
A BILL
To amend the Internal Revenue Code of 1986 to treat Indian tribal governments in the same manner as State governments for certain Federal tax purposes, and for other purposes.
Sec. 2 Findings
The Congress finds the following:
There is a unique Federal legal and political relationship between the United States and Indian tribes.
Indian tribes have the responsibility and authority to provide governmental programs and services to tribal citizens, develop tribal economies, and build community infrastructure to ensure that Indian reservation lands serve as livable, permanent homes.
The United States Constitution, U.S. Federal Court decisions, Executive orders, and numerous other Federal laws and regulations recognize that Indian tribes are governments, retaining the inherent authority to tax and operate as other governments, including (inter alia) financing projects with government bonds and maintaining eligibility for general tax exemptions via their government status.
Codifying tax parity with respect to tribal governments is consistent with Federal treaties recognizing the sovereignty of tribal governments.
That Indian tribes face historic disadvantages in accessing the underlying capital to build the necessary infrastructure for job creation, and that certain statutory restrictions on tribal governance further inhibit tribes’ ability to develop strong governance and economies.
Indian tribes are sometimes excluded from the Internal Revenue Code of 1986 in key provisions which results in unfair tax treatment for tribal citizens or unequal enforcement authority for tribal enforcement agencies.
Congress is vested with the authority to regulate commerce with Indian tribes, and hereby exercises that authority in a manner which furthers tribal self-governance, and in doing so, further affirms the United States government-to-government relationship with Indian tribes.
Sec. 3 Treatment of Indian tribes as States with respect to bond issuance
In general— Subsection (c) of section 7871 of the Internal Revenue Code of 1986 (relating to Indian tribal governments treated as States for certain purposes) is amended to read as follows:
“(c) Special rules for tax-Exempt bonds—In applying section 146 to bonds issued by Indian tribal governments (or subdivisions thereof), the Secretary shall annually—
“(1) establish a national bond volume cap based on the greater of—
“(A) the State population formula approach in section 146(d)(1)(A) (using national tribal population estimates supplied annually by the Department of the Interior in consultation with the Census Bureau), and
“(B) the minimum State ceiling amount in section 146(d)(1)(B) (as adjusted in accordance with the cost of living provision in section 146(d)(2)), and
“(2) allocate such national bond volume cap among all Indian tribal governments seeking such an allocation in a particular year under regulations prescribed by the Secretary.”
Repeal of essential governmental function requirements— Section 7871 of such Code is further amended by striking subsections (b) and (e).
Effective date—
Subsection (a)— The amendment made by subsection (a) shall apply to obligations issued in calendar years beginning after the date of the enactment of this Act.
Subsection (b)— The repeals made by subsection (b) shall apply to transactions after, and obligations issued in calendar years beginning after, the date of the enactment of this Act.
Sec. 4 Treatment of pension and employee benefit plans maintained by tribal governments
Amendments to the Internal Revenue Code of 1986—
Qualified public safety employee— Section 72(t)(10)(B) of the Internal Revenue Code of 1986 (defining qualified public safety employee) is amended by—
striking “or political subdivision of a State” and inserting “, political subdivision of a State, or Indian tribe”; and
striking “such State or political subdivision” and inserting “such State, political subdivision, or tribe”.
Governmental plan— The last sentence of section 414(d) of such Code (defining governmental plan) is amended to read as follows: “The term governmental plan includes a plan established or maintained for its employees by an Indian tribal government (as defined in section 7701(a)(40)), a subdivision of an Indian tribal government (determined in accordance with section 7871(d)), an agency, instrumentality, or subdivision of an Indian tribal government, or an entity established under Federal, State, or tribal law which is wholly owned or controlled by any of the foregoing.”.
Domestic relations order— Section 414(p)(1)(B)(ii) of such Code (defining domestic relations order) is amended by inserting “or tribal” after “State”.
Exempt governmental deferred compensation plan— Section 3121(v)(3) of such Code (defining governmental deferred compensation plan) is amended by inserting “by an Indian tribal government or subdivision thereof,” after “political subdivision thereof,”.
Grandfather of certain deferred compensation plans— Section 457 of such Code is amended by adding at the end the following new subsection:
“(h) Certain Tribal Government Plans Grandfathered—Plans established before the date of enactment of this subsection and maintained by an Indian tribal government (as defined in section 7701(a)(40)), a subdivision of an Indian tribal government (determined in accordance with section 7871(d)), an agency, instrumentality, or subdivision of an Indian tribal government, or an entity established under Federal, State, or tribal law which is wholly owned or controlled by any of the foregoing, in compliance with subsection (b) or (f) shall be treated as if established by an eligible employer under subsection (e)(1)(A).”
Amendments to the Employee Retirement Income Security Act of 1974—
In general— The last sentence of section 3(32) of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1002(32)) is amended to read as follows: “The term governmental plan includes a plan established or maintained for its employees by an Indian tribal government (as defined in section 7701(a)(40) of the Internal Revenue Code of 1986), a subdivision of an Indian tribal government (determined in accordance with section 7871(d) of such Code), an agency, instrumentality, or subdivision of an Indian tribal government, or an entity established under Federal, State, or tribal law which is wholly owned or controlled by any of the foregoing.”.
Domestic relations order— Section 206(d)(3)(B)(ii)(II) of such Act (29 U.S.C. 1056(d)(3)(B)(ii)(II)) is amended by inserting “or tribal” after “State”.
Conforming amendments—
Section 4021(b) of such Act (29 U.S.C. 1321(b)) is amended by striking “or” at the end of paragraph (12), by striking the period at the end of paragraph (13) and inserting “; or”, and by inserting after paragraph (13) the following new paragraph:
“(14) established or maintained for its employees by an Indian tribal government (as defined in section 7701(a)(40) of the Internal Revenue Code of 1986), a subdivision of an Indian tribal government (determined in accordance with section 7871(d) of such Code), an agency, instrumentality, or subdivision of an Indian tribal government, or an entity established under Federal, State, or tribal law which is wholly owned or controlled by any of the foregoing.”
Section 4021(b)(2) of such Act (29 U.S.C. 1321(b)(2)) is amended by striking “, or which is described in the last sentence of section 3(32)” and inserting a comma.
Effective date— The amendments made by this section shall apply to years beginning after the date of the enactment of this Act.
Sec. 5 Treatment of tribal foundations and charities like charities funded and controlled by other governmental funders and sponsors
In general— Section 170(b)(1)(A) of the Internal Revenue Code of 1986 is amended by adding at the end the following: “For purposes of clause (vi), the term governmental unit includes an Indian tribal government (determined in accordance with section 7871(d)), an agency, instrumentality, or subdivision of an Indian tribal government, or an entity established under Federal, State, or tribal law which is wholly owned or controlled by any of the foregoing.”.
Certain supporting organizations— Section 509(a) of such Code is amended by adding at the end the following: “For purposes of paragraph (3), an organization described in paragraph (2) shall be deemed to include an Indian tribal government (determined in accordance with section 7871(d)), an agency, instrumentality, or subdivision of an Indian tribal government, or an entity established under Federal, State, or tribal law which is wholly owned or controlled by any of the foregoing.”.
Effective date— The amendments made by this section shall apply to taxable years beginning after the date of the enactment of this Act.
Sec. 6 Improving effectiveness of tribal child support enforcement agencies by parity of access to the Federal parent locator service and Federal tax refund offsets
Access to federal parent locator service— Section 453(c) of the Social Security Act (42 U.S.C. 653(c)) is amended—
by striking “and” at the end of paragraph (4);
by striking the period at the end of paragraph (5) and inserting “; and”; and
by adding at the end the following:
“(6) the child support enforcement agency of an Indian tribe or tribal organization that is eligible for a grant under section 455(f).”
Improving the collection of past-Due child support from Federal tax refunds—
Amendment to the Social Security Act— Section 464 of the Social Security Act (42 U.S.C. 664) is amended by adding at the end the following:
“(d) Applicability to Indian tribes and tribal organizations eligible for a grant under this part—This section, except for the requirement to distribute amounts in accordance with section 457, shall apply to an Indian tribe or tribal organization eligible for a grant under section 455(f) in the same manner in which this section applies to a State with a plan approved under this part.”
Amendment to the Internal Revenue Code— Subsection (c) of section 6402 of the Internal Revenue Code of 1986 is amended by adding at the end the following: “For purposes of this subsection, any reference to a State shall include a reference to any Indian tribe or tribal organization described in section 464(d) of the Social Security Act.”.
Sec. 7 Recognizing Indian tribal governments for purposes of determining under the adoption credit whether a child has special needs
In general— Section 23(d)(3) of the Internal Revenue Code of 1986 (defining child with special needs) is amended—
in subparagraph (A), by inserting “or Indian tribal government” after “a State”; and
in subparagraph (B), by inserting “or Indian tribal government” after “such State”.
Effective date— The amendments made by this section shall apply to taxable years beginning after the date of the enactment of this Act.