II 

117TH CONGRESS 

1ST SESSION S. 2523 

To amend the Internal Revenue Code of 1986 to modify the rules for tribal 

economic development bonds. 

IN THE SENATE OF THE UNITED STATES 

JULY 28, 2021 

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 modify 

the rules for tribal economic development bonds. 

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 Economic De5 velopment Act of 2021’’. 

6 SEC. 2. MODIFICATIONS RELATED TO TRIBAL ECONOMIC 

7 DEVELOPMENT BONDS. 

8 (a) INCREASE IN NATIONAL LIMITATION.—Subpara9 graph (B) of section 7871(f)(1) of the Internal Revenue 


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1 Code of 1986 is amended by striking ‘‘$2,000,000,000’’ 

2 and inserting ‘‘$4,000,000,000’’. 

3 (b) OTHER MODIFICATIONS.— 

4 (1) IN GENERAL.—Paragraph (2) of section 

5 7871(f) of the Internal Revenue Code of 1986 is 

6 amended to read as follows: 

7 ‘‘(2) BONDS TREATED AS EXEMPT FROM

8 TAX.—Notwithstanding any other provision of this 

9 title, gross income shall not include interest on any 

10 tribal economic development bond.’’. 

11 (2) MODIFICATION OF DEFINITION OF TRIBAL

12 ECONOMIC DEVELOPMENT BOND.—Section 

13 7871(f)(3) of the Internal Revenue Code of 1986 is 

14 amended to read as follows: 

15 ‘‘(3) TRIBAL ECONOMIC DEVELOPMENT

16 BOND.— 

17 ‘‘(A) IN GENERAL.—For purposes of this 

18 section, the term ‘tribal economic development 

19 bond’ means any bond issued by an Indian trib20 al government (or a subdivision thereof)— 

21 ‘‘(i) which is part of an issue 95 per22 cent or more of the proceeds of which are 

23 to be used— 

24 ‘‘(I) by a qualified Native user, 

25 and 


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1 ‘‘(II) to promote the economic 

2 development of any Indian tribe or 

3 Native Corporation (including through 

4 loans by any Indian tribal government 

5 or a subdivision thereof to a qualified 

6 Native user), 

7 ‘‘(ii) except as provided in subpara8 graph (D), which is not an arbitrage bond 

9 (within the meaning of section 148), 

10 ‘‘(iii) which meets the applicable re11 quirements of section 149 (other than sub12 sections (b), (d), and (g) thereof), and 

13 ‘‘(iv) which is designated by the In14 dian tribal government as a tribal eco15 nomic development bond for purposes of 

16 this subsection. 

17 ‘‘(B) EXCEPTION.—Such term shall not in18 clude any bond issued as part of an issue if any 

19 portion of the proceeds of such issue are used 

20 to finance any portion of a building in which 

21 class II or class III gaming (as defined in sec22 tion 4 of the Indian Gaming Regulatory Act) is 

23 conducted or housed or any other property ac24 tually used in the conduct of such gaming. 


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1 ‘‘(C) LIMITATION ON AMOUNT OF BONDS

2 DESIGNATED.—The maximum aggregate face 

3 amount of bonds which may be designated by 

4 any Indian tribal government under subpara5 graph (A) shall not exceed the amount of na6 tional tribal economic development bond limita7 tion allocated to such government under para8 graph (1). 

9 ‘‘(D) LOANS TO QUALIFIED NATIVE USERS

10 PERMITTED.— 

11 ‘‘(i) IN GENERAL.—For purposes of 

12 applying section 148 to this paragraph, the 

13 term ‘arbitrage bond’ shall not include a 

14 bond issued as part of an issue the pro15 ceeds of which are used to provide a loan 

16 described in clause (ii) to a qualified Na17 tive user notwithstanding whether the in18 terest rate on such loan produces a yield 

19 which is higher than the yield on such 

20 issue. 

21 ‘‘(ii) LOAN DESCRIBED.—A loan is de22 scribed in this clause if the terms of the 

23 loan prevent the borrower of such loan 

24 from making further loans with the pro25 ceeds of such loan. 


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1 ‘‘(E) QUALIFIED NATIVE USER.—For pur2 poses of this paragraph, the term ‘qualified Na3 tive user’ means— 

4 ‘‘(i) an Indian tribal government (or a 

5 subdivision thereof), 

6 ‘‘(ii) a Native Corporation, or 

7 ‘‘(iii) any other entity if— 

8 ‘‘(I) in the case of a corporation, 

9 not less than two-thirds of the out10 standing stock are owned by one or 

11 more entities described in clauses (i) 

12 or (ii), and 

13 ‘‘(II) in the case of any entity 

14 other than a corporation, not less 

15 than two-thirds of the capital and 

16 profits interests are owned by one or 

17 more entities described in clauses (i) 

18 or (ii). 

19 ‘‘(F) OTHER DEFINITIONS.—For purposes 

20 of this paragraph— 

21 ‘‘(i) NATIVE CORPORATION.—The 

22 term ‘Native Corporation’ has the meaning 

23 given such term under section 646(h)(2). 


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1 ‘‘(ii) INDIAN TRIBE.—The term ‘In2 dian tribe’ has the meaning given such 

3 term under subsection (c)(3)(E)(ii). 

4 ‘‘(G) COORDINATION WITH THIRD-PARTY

5 REPAYMENT, ETC.—A bond shall not fail to be 

6 treated as a tribal economic development bond 

7 solely because a person other than the Indian 

8 tribal government (or subdivision thereof) 

9 issuing the bond has guaranteed the repayment 

10 of, is otherwise obligated to repay, or in fact re11 pays, any portion of the principal or interest of 

12 such bond.’’. 

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

14 this section shall apply to obligations issued after the date 

15 of the enactment of this Act. 

Æ 


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