Overview
The NAFOA Board of Directors conducted a successful fly-in event to Capitol Hill in July, advocating for the passage of S. 2022, the Tribal Tax and Investment Reform Act. The event included a briefing for House and Senate staff and over two dozen meetings with congressional member offices to highlight the importance of this legislation for Tribal economies and rural America.
Key Advocacy Messages
Tribal Nations as Economic Powerhouses
NAFOA emphasized that Tribal Nations govern over 56 million acres and serve as cornerstone economic engines across rural America. Tribal governments function as the largest employers and primary economic drivers in regions where market forces alone cannot sustain robust economic activity, generating billions in economic activity that extends far beyond reservation boundaries.
Addressing Tax Code Inequities
NAFOA highlighted decades of disadvantages in the federal tax code that limit Tribal governments’ ability to finance essential infrastructure and provide governmental services. The current “essential governmental function test” requirement restricts Tribal bond issuance in ways that state and local governments do not face, undermining the government-to-government relationship and contradicting federal treaties recognizing Tribal sovereignty.
Transformative Economic Impact
NAFOA presented compelling data showing that S. 2022 would:
- Unlock unprecedented economic development opportunities by eliminating the “essential governmental function” test.
- Enable comprehensive infrastructure development, including healthcare facilities, educational institutions, and community centers.
- Provide access to a national $400 million private activity bond volume cap for manufacturing, technology, and tourism infrastructure.
- Create thousands of construction jobs during project development and hundreds of permanent positions in ongoing operations.
Critical Legislative Components
Bond Issuance Parity: Placing Tribal governments on equal footing with state and local governments for bond issuance, enabling critical infrastructure investments.
New Markets Tax Credits: Creating a dedicated $175 million annual allocation for Tribal areas, addressing the historic inequity where Indian Country has received less than 1% of these investments despite representing some of the nation’s most economically distressed communities.
Employment Incentives: Permanently extending and enhancing the Indian Employment Tax Credit, increasing the wage limitation from $20,000 to $30,000 to provide meaningful long-term employment incentives in communities with unemployment rates significantly exceeding national averages.
Housing Development: Classifying Indian areas as “difficult development areas” for Low-Income Housing Tax Credit purposes, addressing severe housing shortages exceeding 40% in many Tribal communities.
Workforce Benefits: Treating Tribal pension and employee benefit plans like state government plans, ensuring over 100,000 Tribal employees nationwide receive the same retirement security protections as their governmental counterparts.
Congressional Engagement
NAFOA’s advocacy efforts reached over two dozen congressional offices, emphasizing that this legislation represents more than tax policy—it affirms the fundamental principle of Tribal self-determination while recognizing that strong Tribal economies are essential to America’s rural economic vitality. NAFOA stressed that by providing Tribal governments with the same tools available to other governments, this legislation enables Tribes to exercise their inherent sovereignty more effectively and build stronger, more sustainable economies.
Next Steps
NAFOA urged swift action on the Tribal Tax and Investment Reform Act, emphasizing that the legislation enjoys broad support across Indian Country. It addresses persistent barriers to economic development while respecting Tribal sovereignty and recognizing the vital role Tribal Nations play in strengthening America’s economic foundation.
The fly-in event reinforced NAFOA’s commitment to growing Tribal economies and strengthening Tribal finance through strategic federal policy advocacy that promotes economic parity and recognizes Tribal sovereignty.
