A bill to amend the Internal Revenue Code of 1986 to improve the treatment of pension and employee benefit plans maintained by tribal governments.

Summary: This bill amends the Internal Revenue Code and the Employee Retirement Income Security Act of 1974 (ERISA) to treat employee benefit or pension plans maintained by Indian tribes and domestic relations orders issued pursuant to tribal law in the same manner as plans maintained by states and domestic relations orders issued pursuant to state law.

SECTION 1. TREATMENT OF PENSION AND EMPLOYEE BENEFIT PLANS MAINTAINED 
              BY TRIBAL GOVERNMENTS.

    (a) Amendments to the Internal Revenue Code of 1986.--
            (1) Qualified public safety employee.--Section 72(t)(10)(B) 
        of the Internal Revenue Code of 1986 (defining qualified public 
        safety employee) is amended by--
                    (A) striking ``or political subdivision of a 
                State'' and inserting ``, political subdivision of a 
                State, or Indian tribe''; and
                    (B) striking ``such State or political 
                subdivision'' and inserting ``such State, political 
                subdivision, or tribe''.
            (2) 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.''.
            (3) Domestic relations order.--Section 414(p)(1)(B)(ii) of 
        such Code (defining domestic relations order) is amended by 
        inserting ``or tribal'' after ``State''.
            (4) 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,''.
            (5) Grandfather of certain deferred compensation plans.--
        Section 457 of the Internal Revenue 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).''.
    (b) Amendments to the Employee Retirement Income Security Act of 
1974.--
            (1) 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.''.
            (2) 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''.
            (3) Conforming amendments.--
                    (A) 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.''.
                    (B) 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.
    (c) Effective Date.--The amendments made by this section shall 
apply to years beginning after the date of the enactment of this Act.