I

106TH CONGRESS

2D SESSION H. R. 5244

To provide for the payment of State taxes on the sale of cigarettes and

motor fuel by tribal retail enterprises to persons that are not members

of the tribe, and for other purposes.

IN THE HOUSE OF REPRESENTATIVES

SEPTEMBER 21, 2000

Mr. PETERSON of Pennsylvania (for himself, Mr. TANCREDO, Mr. SIMPSON,

and Mr. DUNCAN) introduced the following bill; which was referred to the

Committee on Resources

A BILL

To provide for the payment of State taxes on the sale of

cigarettes and motor fuel by tribal retail enterprises to

persons that are not members of the tribe, and for other

purposes.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. SHORT TITLE.

4 This Act may be cited as the ‘‘Tribal-State Tax Fair5 ness Act of 2000’’.

6 SEC. 2. DEFINITIONS.

7 For purposes of this Act:
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1 (1) COVERED STATE TAX.—The term ‘‘covered

2 State tax’’ means a lawfully imposed and non3 discriminatory State excise, sales, or transaction tax

4 levied or imposed on purchases, by nonmembers of

5 a tribe, of tobacco products or motor fuels from a

6 tribal retail enterprise, including a non-Indian re7 tailer affiliated with an Indian tribe.

8 (2) INDIAN COUNTRY.—The term ‘‘Indian coun9 try’’ means—

10 (A) all lands within the limits of any In11 dian reservation; and

12 (B) all lands title to which is either held in

13 trust by the United States for the benefit of

14 any Federally recognized Indian tribe or indi15 vidual Indian or held by any Indian tribe or in16 dividual Indian subject to restriction by the

17 United States against alienation and over which

18 an Indian tribe exercises governmental power.

19 (3) INDIAN TRIBE.—The term ‘‘Indian tribe’’

20 has the meaning given that term in section 4(e) of

21 the Indian Self-Determination and Education Assist22 ance Act (25 U.S.C. 450b(e)).

23 (4) PERSON.—The term ‘‘person’’ means indi24 viduals, corporations, partnerships, associations of
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1 persons, State or local governments, or Indian tribal

2 governments.

3 (5) SECRETARY.—The term ‘‘Secretary’’ means

4 the Secretary of the Interior or his or her designee.

5 (6) SERVICE.—The term ‘‘Service’’ means the

6 Federal Mediation and Conciliation Service estab7 lished under section 202 of the National Labor Rela8 tions Act (29 U.S.C. 172).

9 (7) TRIBAL RETAIL ENTERPRISE.—The term

10 ‘‘tribal retail enterprise’’ means a retail store car11 rying on business in Indian country that sells to12 bacco products or motor fuels and is owned or oper13 ated by a person or an Indian tribe or a member of

14 an Indian tribe, or is owned or operated by a person

15 who is not a member of an Indian tribe under a

16 management contract with an Indian tribe or a

17 member of an Indian tribe.

18 (8) TRIBAL-STATE AGREEMENT.—The term

19 ‘‘tribal-State agreement’’ means an agreement or

20 compact between a State and an Indian tribe con21 cerning State taxes on tobacco products or motor

22 fuels that is in effect on the date of enactment of

23 this Act, or was in effect at any time between Janu24 ary 1, 1990, and the date of enactment of this Act.
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1 SEC. 3. APPLICABILITY.

2 (a) IN GENERAL.—Except to the extent that a tribal3 State agreement provides otherwise, this Act shall not

4 apply to any covered State tax for which—

5 (1) a State law specifically exempts, either in

6 whole or in part, the collection or remittance of such

7 taxes;

8 (2) the legal incidence of the otherwise applica9 ble State tax falls on a tribe or its members, thereby

10 subjecting the purchase by a tribal member from a

11 tribal retail enterprise to a State excise, sales, or

12 transaction tax; or

13 (3) the State tax is preempted by the operation

14 of Federal law.

15 (b) PROSPECTIVE APPLICABILITY.—This Act shall

16 apply only to covered State taxes due, or amounts due

17 under tribal-State agreements, with respect to purchases

18 completed on or after the date of the enactment of this

19 Act.

20 SEC. 4. COLLECTION OF COVERED STATE TAXES PURSU21 ANT TO STATE PETITIONS.

22 (a) COLLECTION AND REMITTANCE OF TAXES.—Not

23 later than 60 days after receiving a petition from the Gov24 ernor of a State within the borders of which a tribal retail

25 enterprise is located alleging the non-collection of a cov26 ered State tax by the tribal retail enterprise, the Secretary
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1 shall determine whether or not the tribal retail enterprise

2 is collecting and remitting the appropriate amount of cov3 ered State tax according to the laws of such State) (if

4 no tribal-State agreement exists) or the terms of a tribal5 State agreement (if a tribal-State agreement exists). Upon

6 a determination of non-collection and non-remittance, the

7 Secretary shall notify and direct the tribal retail enterprise

8 to collect the covered State tax and remit it to the Sec9 retary pursuant to subsection (b).

10 (b) REMITTANCE TO SECRETARY.—

11 (1) IN GENERAL.—A tribal retail enterprise

12 shall remit to the Secretary covered State taxes col13 lected pursuant to subsection (a) on a monthly basis,

14 by the 15th day following the month in which the

15 taxes were collected.

16 (2) DETERMINATION OF AMOUNT TO BE REMIT17 TED TO SECRETARY.—

18 (A) EXISTENCE OF TRIBAL-STATE AGREE19 MENT.—In the event a tribal-State agreement

20 exists or existed with respect to the tribal retail

21 enterprise or Indian tribe named in a sub22 section (a) petition, then the amount of covered

23 State taxes remitted to the Secretary pursuant

24 to such a petition shall in no event be more

25 than the amount provided for by the terms of
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1 such tribal-State agreement, even if such tribal2 State agreement is no longer in effect at the

3 time of the subsection (a) petition because the

4 agreement has expired or one of the parties to

5 the agreement has terminated the agreement.

6 (B) ABSENCE OF TRIBAL-STATE AGREE7 MENT.—In the event a tribal-State agreement

8 with respect to the tribal retail enterprise or In9 dian tribe named in a subsection (a) petition

10 did not or does not exist, then the Secretary

11 shall consult with a State making the petition

12 under subsection (a) to determine the appro13 priate amount of covered State taxes that

14 should be remitted to the Secretary under this

15 subsection based upon the volume of motor

16 fuels and tobacco products sold to nontribal

17 members at the tribal retail enterprise.

18 (C) MEDIATION.—If necessary to deter19 mine the amount to be remitted under this sub20 section, the Secretary shall consult with the

21 Service and establish a mediation between the

22 Indian tribe and the State for the purposes of

23 determining such amount. The Service shall

24 complete such mediation within 180 days of the

25 initial consultation by the Secretary and render
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1 its determination on the appropriate amount to

2 be remitted to the Secretary immediately. Once

3 the Secretary has received the Service’s deter4 mination, that determination shall be used by

5 the Secretary in establishing the appropriate

6 amount to be remitted under subsection (a).

7 (3) EXCLUSION.—Unless otherwise provided by

8 a tribal-State agreement described in subsection

9 (b)(2)(A), a tribal retail enterprise shall not remit to

10 the Secretary any covered State taxes collected from

11 tribal members from purchases of tobacco products

12 and motor fuels.

13 (c) RETURN OF FUNDS TO APPROPRIATE STATE.—

14 Not later than 30 days after receiving a covered State tax

15 payment from a tribal retail enterprise or Indian tribe

16 under subsection (b), the Secretary shall remit the balance

17 of taxes collected under subsection (b) (after subtracting

18 administrative expenses subject to subsection (d)) to the

19 State fund specified by the Governor in the petition sub20 mitted under subsection (a).

21 (d) ADMINISTRATIVE EXPENSES.—Prior to the re22 turn of funds to the appropriate State under subsection

23 (c), the Secretary shall deduct from the amount remitted

24 from the tribal retail enterprise pursuant to subsection (b)

25 an administrative fee that is equal to the direct cost of
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1 administering this Act. The administrative fee deducted

2 under this subsection shall not exceed one percent of the

3 amounts remitted pursuant to subsection (b).

4 (e) SATISFACTION OF DUTIES UNDER TRIBAL5 STATE AGREEMENT.—Amounts remitted to the Secretary

6 under subsection (b) shall be applied by the State to

7 amounts due under the terms of the tribal-State agree8 ment described in subsection (b)(2)(A).

9 (f) REGULATIONS.—Not later than 180 days after

10 the date of the enactment of this Act, the Secretary shall

11 promulgate regulations providing for the implementation

12 and enforcement of this Act.

13 (g) SPECIFIC PRICES.—No provision of this Act shall

14 require any tribal retail enterprise to sell motor fuels or

15 tobacco products at any specific price.

16 SEC. 5. MEDIATION OF DISPUTES BETWEEN TRIBES AND

17 STATES UNDER TRIBAL-STATE AGREEMENTS.

18 (a) IN GENERAL.—A State or an Indian tribe may

19 petition the Secretary to mediate disputes between a State

20 and an Indian tribe regarding compliance with the terms

21 of a tribal-State agreement in effect on the date of such

22 petition.

23 (b) MEDIATION.—Within 60 days of receiving a peti24 tion under subsection (a), the Secretary shall either con25 vene a mediation of the State and the Indian tribe to re-
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1 solve the dispute or consult with the Service and establish

2 a mediation between the Indian tribe and the State for

3 the purposes of determining such amount. The Service

4 shall report its conclusions regarding the dispute con5 tained in a subsection (a) within 180 days of the initial

6 consultation by the Secretary. Once the Secretary or the

7 Service has made a determination regarding the issue in

8 dispute, the Secretary shall notify the parties to the sub9 section (a) petition of the determination and urge the

10 adoption of the determination by such parties.

11 SEC. 6. ENFORCEMENT.

12 (a) NOTICE OF VIOLATION.—If a tribal retail enter13 prise fails to comply within 60 days with section 4(a) once

14 the Secretary has made a determination under section

15 4(b), the Secretary shall notify the tribal retail enterprise

16 of this violation and demand immediate compliance with

17 the determination.

18 (b) REFERRAL OF VIOLATION TO DEPARTMENT OF

19 JUSTICE.—If a tribal retail enterprise is not in compliance

20 with section 4 within 30 days of the notification under

21 subsection (a), the Secretary shall refer the matter within

22 15 days to the Department of Justice.

23 (c) COMMENCEMENT OF CIVIL ENFORCEMENT AC24 TION.—
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1 (1) IN GENERAL.—Not later than 60 days after

2 a referral under subsection (b), the Department of

3 Justice shall initiate a civil enforcement action in

4 Federal district court against the tribal retail enter5 prise.

6 (2) TRIBAL-OWNED RETAIL ENTERPRISE.—If

7 the tribal retail enterprise named in such a civil en8 forcement action is owned or operated by an Indian

9 tribe, then the civil action shall include requests for

10 injunctive relief against the tribal retail enterprise

11 and the appropriate Indian tribal government and

12 for the payment to the Secretary of all covered State

13 taxes, as determined under section 4(b), owed by the

14 tribal retail enterprise from the date of the enact15 ment of this Act.

16 (3) TRIBAL MEMBER-OWNED RETAIL ENTER17 PRISE.—If the tribal retail enterprise named in such

18 a civil enforcement action is owned or operated by

19 a member of an Indian tribe, then the civil action

20 shall include requests for injunctive relief and civil

21 penalties in the amount of 3 times the covered State

22 taxes, as determined under section 4(b), owed by the

23 tribal retail enterprise from the date of enactment of

24 this Act.

25 (d) CHALLENGE TO COMPLIANCE.—
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1 (1) INFORMATION.—

2 (A) IN GENERAL.—Any person, including

3 but not limited to a State, that has information

4 indicating that a tribe is not remitting the ap5 propriate covered State tax to the Secretary

6 under section 4(b), may submit such informa7 tion to the Secretary. Not later than 30 days

8 after receipt of such information, the Secretary

9 shall commence an administrative action to de10 termine the validity of this information. Such

11 administrative action shall be concluded within

12 60 days. If, after this administrative action, the

13 Secretary concludes that the tribal retail enter14 prise is in violation of this Act, then the Sec15 retary shall issue a notice of violation under

16 subsection (a).

17 (B) LIMITATION.—The Secretary shall

18 commence an administrative action under sub19 paragraph (A) only if the information sub20 mitted by a person under subparagraph (A) di21 rectly relates to covered State tax amounts due

22 as a result of the Secretary’s action on a peti23 tion submitted under section 4(a).

24 (2) JUDICIAL REVIEW.—A person may chal25 lenge the Secretary’s conclusions under this sub-
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1 section by commencing an action in Federal district

2 court; provided, that if the challenge is not sustained

3 by the court, the challenging person shall be liable

4 to the Secretary for attorney’s fees and court costs.

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