II 

115TH CONGRESS 

1ST SESSION S. 1935 

To amend the Internal Revenue Code of 1986 to treat Indian tribal governments in the same manner as State governments for certain Federal 

tax purposes, and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

OCTOBER 5, 2017 

Mr. MORAN 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 treat Indian 

tribal governments in the same manner as State governments for certain Federal tax purposes, 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 Tax and Invest5 ment Reform Act of 2017’’. 

6 SEC. 2. FINDINGS. 

7 The Congress finds the following: 


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1 (1) There is a unique Federal legal and political 

2 relationship between the United States and Indian 

3 tribes. 

4 (2) Indian tribes have the responsibility and au5 thority to provide governmental programs and serv6 ices to tribal citizens, develop tribal economies, and 

7 build community infrastructure to ensure that In8 dian reservation lands serve as livable, permanent 

9 homes. 

10 (3) The United States Constitution, U.S. Fed11 eral Court decisions, Executive orders, and numer12 ous other Federal laws and regulations recognize 

13 that Indian tribes are governments, retaining the in14 herent authority to tax and operate as other govern15 ments, including (inter alia) financing projects with 

16 government bonds and maintaining eligibility for 

17 general tax exemptions via their government status. 

18 (4) Codifying tax parity with respect to tribal 

19 governments is consistent with Federal treaties rec20 ognizing the sovereignty of tribal governments. 

21 (5) That Indian tribes face historic disadvan22 tages in accessing the underlying capital to build the 

23 necessary infrastructure for job creation, and that 

24 certain statutory restrictions on tribal governance 


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1 further inhibit tribes’ ability to develop strong gov2 ernance and economies. 

3 (6) Indian tribes are sometimes excluded from 

4 the Internal Revenue Code of 1986 in key provisions 

5 which results in unfair tax treatment for tribal citi6 zens or unequal enforcement authority for tribal en7 forcement agencies. 

8 (7) Congress is vested with the authority to 

9 regulate commerce with Indian tribes, and hereby 

10 exercises that authority in a manner which furthers 

11 tribal self-governance, and in doing so, further af12 firms the United States government-to-government 

13 relationship with Indian tribes. 

14 SEC. 3. TREATMENT OF INDIAN TRIBES AS STATES WITH 

15 RESPECT TO BOND ISSUANCE. 

16 (a) IN GENERAL.—Subsection (c) of section 7871 of 

17 the Internal Revenue Code of 1986 (relating to Indian 

18 tribal governments treated as States for certain purposes) 

19 is amended to read as follows: 

20 ‘‘(c) SPECIAL RULES FOR TAX-EXEMPT BONDS.—In 

21 applying section 146 to bonds issued by Indian tribal gov22 ernments (or subdivisions thereof), the Secretary shall an23 nually— 

24 ‘‘(1) establish a national bond volume cap based 

25 on the greater of— 


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1 ‘‘(A) the State population formula ap2 proach in section 146(d)(1)(A) (using national 

3 tribal population estimates supplied annually by 

4 the Department of the Interior in consultation 

5 with the Census Bureau), and 

6 ‘‘(B) the minimum State ceiling amount in 

7 section 146(d)(1)(B) (as adjusted in accordance 

8 with the cost of living provision in section 

9 146(d)(2)), and 

10 ‘‘(2) allocate such national bond volume cap 

11 among all Indian tribal governments seeking such an 

12 allocation in a particular year under regulations pre13 scribed by the Secretary.’’. 

14 (b) REPEAL OF ESSENTIAL GOVERNMENTAL FUNC15 TION REQUIREMENTS.—Section 7871 of such Code is fur16 ther amended by striking subsections (b) and (e). 

17 (c) EFFECTIVE DATE.— 

18 (1) SUBSECTION (a).—The amendment made 

19 by subsection (a) shall apply to obligations issued in 

20 calendar years beginning after the date of the enact21 ment of this Act. 

22 (2) SUBSECTION (b).—The repeals made by 

23 subsection (b) shall apply to transactions after, and 

24 obligations issued in calendar years beginning after, 

25 the date of the enactment of this Act. 


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1 SEC. 4. TREATMENT OF PENSION AND EMPLOYEE BENEFIT 

2 PLANS MAINTAINED BY TRIBAL GOVERN3 MENTS. 

4 (a) AMENDMENTS TO THE INTERNAL REVENUE

5 CODE OF 1986.— 

6 (1) QUALIFIED PUBLIC SAFETY EMPLOYEE.— 

7 Section 72(t)(10)(B) of the Internal Revenue Code 

8 of 1986 (defining qualified public safety employee) is 

9 amended by— 

10 (A) striking ‘‘or political subdivision of a 

11 State’’ and inserting ‘‘, political subdivision of 

12 a State, or Indian tribe’’; and 

13 (B) striking ‘‘such State or political sub14 division’’ and inserting ‘‘such State, political 

15 subdivision, or tribe’’. 

16 (2) GOVERNMENTAL PLAN.—The last sentence 

17 of section 414(d) of such Code (defining govern18 mental plan) is amended to read as follows: ‘‘The 

19 term ‘governmental plan’ includes a plan established 

20 or maintained for its employees by an Indian tribal 

21 government (as defined in section 7701(a)(40)), a 

22 subdivision of an Indian tribal government (deter23 mined in accordance with section 7871(d)), an agen24 cy, instrumentality, or subdivision of an Indian trib25 al government, or an entity established under FedVerDate Sep 11 2014 04:03 Oct 11, 2017 Jkt 079200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\S1935.IS S1935

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1 eral, State, or tribal law which is wholly owned or 

2 controlled by any of the foregoing.’’. 

3 (3) DOMESTIC RELATIONS ORDER.—Section 

4 414(p)(1)(B)(ii) of such Code (defining domestic re5 lations order) is amended by inserting ‘‘or tribal’’ 

6 after ‘‘State’’. 

7 (4) EXEMPT GOVERNMENTAL DEFERRED COM8 PENSATION PLAN.—Section 3121(v)(3) of such Code 

9 (defining governmental deferred compensation plan) 

10 is amended by inserting ‘‘by an Indian tribal govern11 ment or subdivision thereof,’’ after ‘‘political subdivi12 sion thereof,’’. 

13 (5) GRANDFATHER OF CERTAIN DEFERRED

14 COMPENSATION PLANS.—Section 457 of such Code 

15 is amended by adding at the end the following new 

16 subsection: 

17 ‘‘(h) CERTAIN TRIBAL GOVERNMENT PLANS GRAND18 FATHERED.—Plans established before the date of enact19 ment of this subsection and maintained by an Indian tribal 

20 government (as defined in section 7701(a)(40)), a subdivi21 sion of an Indian tribal government (determined in accord22 ance with section 7871(d)), an agency, instrumentality, or 

23 subdivision of an Indian tribal government, or an entity 

24 established under Federal, State, or tribal law which is 

25 wholly owned or controlled by any of the foregoing, in comVerDate Sep 11 2014 04:03 Oct 11, 2017 Jkt 079200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\S1935.IS S1935

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1 pliance with subsection (b) or (f) shall be treated as if 

2 established by an eligible employer under subsection 

3 (e)(1)(A).’’. 

4 (b) AMENDMENTS TO THE EMPLOYEE RETIREMENT

5 INCOME SECURITY ACT OF 1974.— 

6 (1) IN GENERAL.—The last sentence of section 

7 3(32) of the Employee Retirement Income Security 

8 Act of 1974 (29 U.S.C. 1002(32)) is amended to 

9 read as follows: ‘‘The term ‘governmental plan’ in10 cludes a plan established or maintained for its em11 ployees by an Indian tribal government (as defined 

12 in section 7701(a)(40) of the Internal Revenue Code 

13 of 1986), a subdivision of an Indian tribal govern14 ment (determined in accordance with section 

15 7871(d) of such Code), an agency, instrumentality, 

16 or subdivision of an Indian tribal government, or an 

17 entity established under Federal, State, or tribal law 

18 which is wholly owned or controlled by any of the 

19 foregoing.’’. 

20 (2) DOMESTIC RELATIONS ORDER.—Section 

21 206(d)(3)(B)(ii)(II) of such Act (29 U.S.C. 

22 1056(d)(3)(B)(ii)(II)) is amended by inserting ‘‘or 

23 tribal’’ after ‘‘State’’. 

24 (3) CONFORMING AMENDMENTS.— 


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1 (A) Section 4021(b) of such Act (29 

2 U.S.C. 1321(b)) is amended by striking ‘‘or’’ at 

3 the end of paragraph (12), by striking the pe4 riod at the end of paragraph (13) and inserting 

5 ‘‘; or’’, and by inserting after paragraph (13) 

6 the following new paragraph: 

7 ‘‘(14) established or maintained for its employ8 ees by an Indian tribal government (as defined in 

9 section 7701(a)(40) of the Internal Revenue Code of 

10 1986), a subdivision of an Indian tribal government 

11 (determined in accordance with section 7871(d) of 

12 such Code), an agency, instrumentality, or subdivi13 sion of an Indian tribal government, or an entity es14 tablished under Federal, State, or tribal law which 

15 is wholly owned or controlled by any of the fore16 going.’’. 

17 (B) Section 4021(b)(2) of such Act (29 

18 U.S.C. 1321(b)(2)) is amended by striking ‘‘, or 

19 which is described in the last sentence of sec20 tion 3(32)’’ and inserting a comma. 

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

22 this section shall apply to years beginning after the date 

23 of the enactment of this Act. 


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1 SEC. 5. TREATMENT OF TRIBAL FOUNDATIONS AND CHAR2 ITIES LIKE CHARITIES FUNDED AND CON3 TROLLED BY OTHER GOVERNMENTAL 

4 FUNDERS AND SPONSORS. 

5 (a) IN GENERAL.—Section 170(b)(1)(A) of the Inter6 nal Revenue Code of 1986 is amended by adding at the 

7 end the following: ‘‘For purposes of clause (vi), the term 

8 ‘governmental unit’ includes an Indian tribal government 

9 (determined in accordance with section 7871(d)), an agen10 cy, instrumentality, or subdivision of an Indian tribal gov11 ernment, or an entity established under Federal, State, 

12 or tribal law which is wholly owned or controlled by any 

13 of the foregoing.’’. 

14 (b) CERTAIN SUPPORTING ORGANIZATIONS.—Sec15 tion 509(a) of such Code is amended by adding at the 

16 end the following: ‘‘For purposes of paragraph (3), an or17 ganization described in paragraph (2) shall be deemed to 

18 include an Indian tribal government (determined in ac19 cordance with section 7871(d)), an agency, instrumen20 tality, or subdivision of an Indian tribal government, or 

21 an entity established under Federal, State, or tribal law 

22 which is wholly owned or controlled by any of the fore23 going.’’. 

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

25 this section shall apply to taxable years beginning after 

26 the date of the enactment of this Act. 


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1 SEC. 6. IMPROVING EFFECTIVENESS OF TRIBAL CHILD 

2 SUPPORT ENFORCEMENT AGENCIES BY PAR3 ITY OF ACCESS TO THE FEDERAL PARENT LO4 CATOR SERVICE AND FEDERAL TAX REFUND 

5 OFFSETS. 

6 (a) ACCESS TO FEDERAL PARENT LOCATOR SERV7 ICE.—Section 453(c) of the Social Security Act (42 U.S.C. 

8 653(c)) is amended— 

9 (1) by striking ‘‘and’’ at the end of paragraph 

10 (4); 

11 (2) by striking the period at the end of para12 graph (5) and inserting ‘‘; and’’; and 

13 (3) by adding at the end the following: 

14 ‘‘(6) the child support enforcement agency of an 

15 Indian tribe or tribal organization that is eligible for 

16 a grant under section 455(f).’’. 

17 (b) IMPROVING THE COLLECTION OF PAST-DUE

18 CHILD SUPPORT FROM FEDERAL TAX REFUNDS.— 

19 (1) AMENDMENT TO THE SOCIAL SECURITY

20 ACT.—Section 464 of the Social Security Act (42 

21 U.S.C. 664) is amended by adding at the end the 

22 following: 

23 ‘‘(d) APPLICABILITY TO INDIAN TRIBES AND TRIBAL

24 ORGANIZATIONS ELIGIBLE FOR A GRANT UNDER THIS

25 PART.—This section, except for the requirement to dis26 tribute amounts in accordance with section 457, shall 


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1 apply to an Indian tribe or tribal organization eligible for 

2 a grant under section 455(f) in the same manner in which 

3 this section applies to a State with a plan approved under 

4 this part.’’. 

5 (2) AMENDMENT TO THE INTERNAL REVENUE

6 CODE.—Subsection (c) of section 6402 of the Inter7 nal Revenue Code of 1986 is amended by adding at 

8 the end the following: ‘‘For purposes of this sub9 section, any reference to a State shall include a ref10 erence to any Indian tribe or tribal organization de11 scribed in section 464(d) of the Social Security 

12 Act.’’. 

13 SEC. 7. RECOGNIZING INDIAN TRIBAL GOVERNMENTS FOR 

14 PURPOSES OF DETERMINING UNDER THE 

15 ADOPTION CREDIT WHETHER A CHILD HAS 

16 SPECIAL NEEDS. 

17 (a) IN GENERAL.—Section 23(d)(3) of the Internal 

18 Revenue Code of 1986 (defining child with special needs) 

19 is amended— 

20 (1) in subparagraph (A), by inserting ‘‘or In21 dian tribal government’’ after ‘‘a State’’; and 

22 (2) in subparagraph (B), by inserting ‘‘or In23 dian tribal government’’ after ‘‘such State’’. 


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1 (b) EFFECTIVE DATE.—The amendments made by 

2 this section shall apply to taxable years beginning after 

3 the date of the enactment of this Act. 

Æ 


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