II 

115TH CONGRESS 

1ST SESSION S. 1698 

To amend the Internal Revenue Code of 1986 to clarify the treatment of 

contributions to Alaska Native Settlement Trusts, and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

AUGUST 1, 2017 

Ms. MURKOWSKI (for herself and Mr. SULLIVAN) introduced the following bill; 

which was read twice and referred to the Committee on Finance 

A BILL 

To amend the Internal Revenue Code of 1986 to clarify 

the treatment of contributions to Alaska Native Settlement Trusts, 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 ‘‘Settlement Trust Im5 provement Act of 2017’’. 

6 SEC. 2. EXCLUSION FOR ANCSA PAYMENTS ASSIGNED TO 

7 ALASKA NATIVE SETTLEMENT TRUSTS. 

8 (a) IN GENERAL.—Part III of subchapter B of chap9 ter 1 of the Internal Revenue Code of 1986 is amended 

10 by inserting before section 140 the following new section: 


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1 ‘‘SEC. 139G. ASSIGNMENTS TO ALASKA NATIVE SETTLE2 MENT TRUSTS. 

3 ‘‘(a) IN GENERAL.—In the case of a Native Corpora4 tion, gross income shall not include the value of any pay5 ments that would otherwise be made, or treated as being 

6 made, to such Native Corporation pursuant to, or as re7 quired by, any provision of the Alaska Native Claims Set8 tlement Act (43 U.S.C. 1601 et seq.), including any pay9 ment that would otherwise be made to a Village Corpora10 tion pursuant to section 7(j) of the Alaska Native Claims 

11 Settlement Act (43 U.S.C. 1606(j)), provided that any 

12 such payments— 

13 ‘‘(1) are assigned in writing to a Settlement 

14 Trust, and 

15 ‘‘(2) were not received by such Native Corpora16 tion prior to the assignment described in paragraph 

17 (1). 

18 ‘‘(b) INCLUSION IN GROSS INCOME.—In the case of 

19 a Settlement Trust which has been assigned payments de20 scribed in subsection (a), gross income shall include such 

21 payments as and when such payments are received by such 

22 Settlement Trust pursuant to the assignment and shall 

23 have the same character as if such payments were received 

24 by the Native Corporation. 

25 ‘‘(c) AMOUNT AND SCOPE OF ASSIGNMENT.—The 

26 amount and scope of any assignment under subsection (a) 


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1 shall be described with reasonable particularity and may 

2 either be in a percentage of one or more such payments 

3 or in a fixed dollar amount. 

4 ‘‘(d) DURATION OF ASSIGNMENT; REVOCABILITY.— 

5 Any assignment under subsection (a) shall specify— 

6 ‘‘(1) a duration either in perpetuity or for a pe7 riod of time, and 

8 ‘‘(2) whether such assignment is revocable. 

9 ‘‘(e) PROHIBITION ON DEDUCTION.—Notwith10 standing section 250, no deduction shall be allowed to a 

11 Native Corporation for purposes of any amounts described 

12 in subsection (a). 

13 ‘‘(f) DEFINITIONS.—For purposes of this section, the 

14 terms ‘Native Corporation’ and ‘Settlement Trust’ have 

15 the same meaning given such terms under section 

16 646(h).’’. 

17 (b) CONFORMING AMENDMENT.—The table of sec18 tions for part III of subchapter B of chapter 1 of such 

19 Code is amended by inserting before the item relating to 

20 section 140 the following new item: 

‘‘Sec. 139G. Assignments to Alaska Native Settlement Trusts.’’. 

21 (c) EFFECTIVE DATE.—The amendments made by 

22 this section shall apply to taxable years beginning after 

23 December 31, 2016. 


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1 SEC. 3. DEDUCTION OF CONTRIBUTIONS TO ALASKA NA2 TIVE SETTLEMENT TRUSTS. 

3 (a) IN GENERAL.—Part VIII of subchapter B of 

4 chapter 1 of the Internal Revenue Code of 1986 is amend5 ed by adding at the end the following new section: 

6 ‘‘SEC. 250. CONTRIBUTIONS TO ALASKA NATIVE SETTLE7 MENT TRUSTS. 

8 ‘‘(a) IN GENERAL.—In the case of a Native Corpora9 tion, there shall be allowed a deduction for any contribu10 tions made by such Native Corporation to a Settlement 

11 Trust (regardless of whether an election under section 646 

12 is in effect for such Settlement Trust) for which the Na13 tive Corporation has made an annual election under sub14 section (e). 

15 ‘‘(b) AMOUNT OF DEDUCTION.—The amount of the 

16 deduction under subsection (a) shall be equal to— 

17 ‘‘(1) in the case of a cash contribution (regard18 less of the method of payment, including currency, 

19 coins, money order, or check), the amount of such 

20 contribution, or 

21 ‘‘(2) in the case of a contribution not described 

22 in paragraph (1), the Native Corporation’s adjusted 

23 basis in the property contributed. 

24 ‘‘(c) LIMITATION AND CARRYOVER.— 

25 ‘‘(1) IN GENERAL.—Subject to paragraph (2), 

26 the deduction allowed under subsection (a) for any 


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1 taxable year shall not exceed the taxable income of 

2 the Native Corporation for the taxable year in which 

3 the contribution was made. 

4 ‘‘(2) CARRYOVER.—If the aggregate amount of 

5 contributions described in subsection (a) for any tax6 able year exceeds the limitation under paragraph 

7 (1), such excess shall be treated as a contribution 

8 described in subsection (a) in each of the 15 suc9 ceeding years in order of time. 

10 ‘‘(d) DEFINITIONS.—For purposes of this section, the 

11 terms ‘Native Corporation’ and ‘Settlement Trust’ have 

12 the same meaning given such terms under section 646(h). 

13 ‘‘(e) MANNER OF MAKING ELECTION.— 

14 ‘‘(1) IN GENERAL.—For each taxable year, a 

15 Native Corporation may elect to have this section 

16 apply for such taxable year on the income tax return 

17 or amended income tax return of the Native Cor18 poration, with such election to have effect solely for 

19 such taxable year. 

20 ‘‘(2) REVOCATION.—Any election made by a 

21 Native Corporation pursuant to this subsection may 

22 be revoked pursuant to an amended income tax re23 turn which has been timely filed by such Native Cor24 poration. 

25 ‘‘(f) ADDITIONAL RULES.— 


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1 ‘‘(1) EARNINGS AND PROFITS.—Notwith2 standing section 646(d)(2), in the case of a Native 

3 Corporation which claims a deduction under this sec4 tion for any taxable year, the earnings and profits 

5 of such Native Corporation for such taxable year 

6 shall be reduced by the amount of such deduction. 

7 ‘‘(2) GAIN OR LOSS.—No gain or loss shall be 

8 recognized by the Native Corporation with respect to 

9 a contribution of property for which a deduction is 

10 allowed under this section. 

11 ‘‘(3) INCOME.—Subject to subsection (g), a Set12 tlement Trust shall report income in the amount of 

13 any deduction allowed under this section in the tax14 able year in which the Settlement Trust actually re15 ceives such contribution. 

16 ‘‘(4) PERIOD.—In determining the period that 

17 a Settlement Trust has held property for which a de18 duction is allowed under this section, the period the 

19 Native Corporation has held such property shall be 

20 included. 

21 ‘‘(5) BASIS.—The basis that a Settlement Trust 

22 has for which a deduction is allowed under this sec23 tion shall be equal to the adjusted basis of the Na24 tive Corporation in such property immediately before 

25 such contribution. 


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1 ‘‘(6) PROHIBITION.—No deduction shall be al2 lowed under this section with respect to any con3 tributions made to a Settlement Trust which are in 

4 violation of subsection (a)(2) or (c)(2) of section 39 

5 of the Alaska Native Claims Settlement Act (43 

6 U.S.C. 1629e). 

7 ‘‘(g) ELECTION BY SETTLEMENT TRUST TO DEFER

8 INCOME RECOGNITION.— 

9 ‘‘(1) IN GENERAL.—In the case of a contribu10 tion which consists of property other than cash, a 

11 Settlement Trust may elect to defer recognition of 

12 any income related to such property until the sale or 

13 exchange of such property, in whole or in part, by 

14 the Settlement Trust. 

15 ‘‘(2) TREATMENT.—In the case of property de16 scribed in paragraph (1), any income or gain re17 ceived by the Settlement Trust upon sale or ex18 change of such property shall be treated as— 

19 ‘‘(A) for such amount of the income or 

20 gain as is equal to or less than the amount of 

21 income deferred pursuant to this subsection, or22 dinary income, and 

23 ‘‘(B) for any amounts of the income or 

24 gain which are in excess of the amount of in25 come deferred pursuant to this subsection, havVerDate Sep 11 2014 00:01 Aug 16, 2017 Jkt 069200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\S1698.IS S1698

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1 ing the same character as if this subsection did 

2 not apply. 

3 ‘‘(3) ELECTION.— 

4 ‘‘(A) IN GENERAL.—For each taxable year, 

5 a Settlement Trust may elect to apply this sub6 section for any property described in paragraph 

7 (1) which was contributed during such year. 

8 Any property to which the election applies shall 

9 be identified and described with reasonable par10 ticularity on the income tax return or amended 

11 income tax return of the Settlement Trust, with 

12 such election to have effect solely for such tax13 able year. 

14 ‘‘(B) REVOCATION.—Any election made by 

15 a Settlement Trust pursuant to this subsection 

16 may be revoked pursuant to an amended in17 come tax return which has been timely filed by 

18 such Settlement Trust. 

19 ‘‘(C) CERTAIN DISPOSITIONS.— 

20 ‘‘(i) IN GENERAL.—In the case of any 

21 property for which an election is in effect 

22 under this subsection and which is dis23 posed of within the first taxable year sub24 sequent to the taxable year in which such 


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1 property was contributed to the Settlement 

2 Trust— 

3 ‘‘(I) such election shall be voided 

4 as to such property, 

5 ‘‘(II) the Settlement Trust shall 

6 be required to file an amended return 

7 for the taxable year in which such 

8 property was contributed, and 

9 ‘‘(III) the Settlement Trust shall 

10 pay any tax applicable to such prop11 erty, including interest and a penalty 

12 equal to 10 percent of the amount of 

13 such tax. 

14 ‘‘(ii) ASSESSMENT.—Notwithstanding 

15 section 6501(a), any amount described in 

16 subclause (III) of clause (i) may be as17 sessed, or a proceeding in court with re18 spect to such amount may be initiated 

19 without assessment, within 4 years after 

20 the date on which the return making the 

21 election under this subsection for such 

22 property was filed.’’. 

23 (b) CONFORMING AMENDMENT.—The table of sec24 tions for part VIII of subchapter B of chapter 1 of the 


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1 Internal Revenue Code of 1986 is amended by adding at 

2 the end the following new item: 

‘‘Sec. 250. Contributions to Alaska Native Settlement Trusts.’’. 

3 (c) PERMISSIVE AMENDMENTS TO TRUST AGREE4 MENTS ESTABLISHING SETTLEMENT TRUSTS.— 

5 (1) IN GENERAL.—Notwithstanding any provi6 sion of law, including any provision of the Alaska 

7 Native Claims Settlement Act (43 U.S.C. 1601 et 

8 seq.), Alaska State law, or the terms of any trust 

9 agreement of a Settlement Trust (as defined under 

10 section 3(t) of the Alaska Native Claims Settlement 

11 Act (43 U.S.C. 1602(t))), the terms of any trust 

12 agreement of a Settlement Trust may, within the 1- 

13 year period following the date of the enactment of 

14 this Act, be amended as necessary to allow such 

15 Trust to make an election described in subsection 

16 (g) of section 250 of the Internal Revenue Code of 

17 1986 (as added by subsection (a)). 

18 (2) AMENDMENT.—An amendment described in 

19 paragraph (1) shall be enacted pursuant to one or 

20 more agreements between the Native Corporation 

21 that established the Settlement Trust and the trust22 ees of such Trust and shall not require any vote by 

23 the beneficiaries of such Trust or the shareholders 

24 of such Native Corporation. 


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1 (3) REGISTRATION STATEMENT.—Any Settle2 ment Trust which was registered in accordance with 

3 Alaska State law prior to the date of the enactment 

4 of an amendment described in paragraph (1) shall 

5 not be required to file a new or amended registration 

6 statement to reflect such amendment. 

7 (d) EFFECTIVE DATE.— 

8 (1) IN GENERAL.—The amendments made by 

9 this section shall apply to taxable years for which 

10 the period of limitation on refund or credit under 

11 section 6511 of the Internal Revenue Code of 1986 

12 has not expired. 

13 (2) ONE-YEAR WAIVER OF STATUTE OF LIMITA14 TIONS.—If the period of limitation on a credit or re15 fund resulting from the amendments made by sub16 section (a) expires before the end of the 1-year pe17 riod beginning on the date of the enactment of this 

18 Act, refund or credit of such overpayment (to the ex19 tent attributable to such amendments) may, never20 theless, be made or allowed if claim therefor is filed 

21 before the close of such 1-year period. 


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1 SEC. 4. INFORMATION REPORTING FOR DEDUCTIBLE CON2 TRIBUTIONS TO ALASKA NATIVE SETTLE3 MENT TRUSTS. 

4 (a) IN GENERAL.—Section 6039H of the Internal 

5 Revenue Code of 1986 is amended— 

6 (1) in the heading, by striking ‘‘SPON7 SORING’’, and 

8 (2) by adding at the end the following new sub9 section: 

10 ‘‘(e) DEDUCTIBLE CONTRIBUTIONS BY NATIVE COR11 PORATIONS TO ALASKA NATIVE SETTLEMENT TRUSTS.— 

12 ‘‘(1) IN GENERAL.—Any Native Corporation (as 

13 defined in subsection (m) of section 3 of the Alaska 

14 Native Claims Settlement Act (43 U.S.C. 1602(m))) 

15 which has made a contribution to a Settlement 

16 Trust (as defined in subsection (t) of such section) 

17 to which an election under subsection (e) of section 

18 250 applies shall provide such Settlement Trust with 

19 a statement regarding such election not later than 

20 January 31 of the calendar year subsequent to the 

21 calendar year in which the contribution was made. 

22 ‘‘(2) CONTENT OF STATEMENT.—The state23 ment described in paragraph (1) shall include— 

24 ‘‘(A) the total amount of contributions to 

25 which the election under subsection (e) of sec26 tion 250 applies, 


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1 ‘‘(B) for each contribution, whether such 

2 contribution was in cash, 

3 ‘‘(C) for each contribution which consists 

4 of property other than cash, the date that such 

5 property was acquired by the Native Corpora6 tion and the adjusted basis of such property on 

7 the date such property was contributed to the 

8 Settlement Trust, 

9 ‘‘(D) the date on which each contribution 

10 was made to the Settlement Trust, and 

11 ‘‘(E) such information as the Secretary de12 termines to be necessary or appropriate for the 

13 identification of each contribution and the accu14 rate reporting of income relating to such con15 tributions by the Settlement Trust.’’. 

16 (b) CONFORMING AMENDMENT.—The item relating 

17 to section 6039H in the table of sections for subpart A 

18 of part III of subchapter A of chapter 61 of the Internal 

19 Revenue Code of 1986 is amended to read as follows: 

‘‘Sec. 6039H. Information With Respect to Alaska Native Settlement Trusts 

and Native Corporations.’’. 

20 (c) EFFECTIVE DATE.—The amendments made by 

21 this section shall apply to taxable years beginning after 

22 December 31, 2016. 


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1 SEC. 5. STATUTORY CONSTRUCTION. 

2 This Act is remedial Indian legislation enacted under 

3 the plenary authority of the Congress under the Constitu4 tion of the United States to regulate Indian affairs, and 

5 any ambiguities in section 139F or 250 of the Internal 

6 Revenue Code of 1986, as added by this Act, shall be re7 solved in favor of Native Corporations attempting to ex8 clude income or claim a deduction thereunder. 

Æ 


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