Tribal Tax and Investment Reform Act (H.R. 4943)

Governance and Economic Opportunities

The Tribal Tax and Investment Reform Act (H.R. 4943) is co-sponsored by House Ways & Means Committee members Congressman Ron Kind (D-WI) and Congresswoman Lynn Jenkins (R-KS). The bill amends the Internal Revenue Code to ensure that Indian tribal governments are treated in the same way as state governments for a number of tax and finance purposes. NAFOA believes that H.R. 4943 will positively affirm the role of tribal governments by removing language that holds tribal governments to different standards than state and local governments when raising capital or providing retirement security for government employees. The bill would remove the “essential government function” test that every other government in America is exempt from meeting. Removing this test would be a long-overdue win for tribal sovereignty and self-determination. The bill, summarized below, has been drafted to have a minimum cost so that it has the greatest support for moving forward.

  • Section 3: Treatment of Tribes as States with Respect to Bond Issuances and Excise Taxes - This section establishes private activity bond volume cap rules to enable tribal governments to issue private activity bonds for economic development purposes. This section also includes language to repeal the “essential government function” test.
  • Section 4: Treatment of Pension and Employee Benefit Plans Maintained by Tribal Governments - This section amends the Internal Revenue Code to treat tribal government pension and employee benefit plans in the same way as state government plans. It also removes the “essential government function” and “commercial” activity test that applies to tribal plans. Additionally, language is included to amend the Employee Retirement Income Security Act so that tribal plans will be treated as governmental plans regardless of whether the employee is engaged in a governmental or commercial activity.
  • Section 5: Treatment of Tribal Foundations and Charities like Charities Funded and Controlled by Other Governmental Funders and Sponsors - This section includes provisions to treat tribal government-funded and controlled foundations and charities the same way as organizations formed to support state and local governments.
  • Section 6: Improving Effectiveness of Tribal Child Support Enforcement Agencies by Parity of Access to the Federal Parent Locator Service and Federal Tax Refund Offsets - This section includes provisions that will authorize access to parent locator services, which are currently only available to state and local governments, for Indian tribes and tribal organizations. It also includes language that will permit tribal child support enforcement agencies to enforce past due obligations through federal income tax returns.
  • Section 7: Recognizing Indian Tribal Governments for Purposes of Determining Under the Adoption Tax Credit Whether a Child Has Special Needs - This section authorizes tribes to have jurisdiction over Indian adoptions. The language would permit adopting parents to receive an Adoption Tax Credit when a tribe has made a determination that a child has special needs.

Current Status and Action:

NAFOA member tribes should consider reaching out to House Ways & Means members to co-sponsor the bill. NAFOA is currently working to introduce a companion bill in the Senate Committee on Finance and is actively broadening a coalition to support the measure, including gaining support from the U.S. Chamber of Commerce.