I

106TH CONGRESS

1ST SESSION H. R. 1943

To amend the Internal Revenue Code of 1986 to treat for unemployment

compensation purposes Indian tribal governments the same as State

or local units of government or as nonprofit organizations.

IN THE HOUSE OF REPRESENTATIVES

MAY 26, 1999

Mr. SHADEGG introduced the following bill; which was referred to the

Committee on Ways and Means

A BILL

To amend the Internal Revenue Code of 1986 to treat for

unemployment compensation purposes Indian tribal governments the same as State or local units of government

or as nonprofit organizations.

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 ‘‘Indian Tribal Govern5 ment Unemployment Compensation Act Tax Relief

6 Amendments of 1999’’.
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1 SEC. 2. CONSTITUTIONAL AUTHORITY.

2 The Constitutional authority upon which this Act

3 rests is the power of Congress to lay and collect taxes and

4 to regulate commerce with foreign nations and among the

5 several States and with the Indian tribes, as set forth in

6 section 8 of Article I of the United States Constitution.

7 SEC. 3. TREATMENT OF INDIAN TRIBAL GOVERNMENTS

8 UNDER FEDERAL UNEMPLOYMENT TAX ACT.

9 (a) IN GENERAL.—Section 3306(c)(7) of the Internal

10 Revenue Code of 1986 (defining employment) is

11 amended—

12 (1) by inserting ‘‘or in the employ of an Indian

13 tribe,’’ after ‘‘service performed in the employ of a

14 State, or any political subdivision thereof,’’; and

15 (2) by inserting ‘‘or Indian tribes’’ after ‘‘whol16 ly owned by one or more States or political subdivi17 sions’’.

18 (b) PAYMENTS IN LIEU OF CONTRIBUTIONS.—Sec19 tion 3309 of the Internal Revenue Code of 1986 (relating

20 to State law coverage of services performed for nonprofit

21 organizations or governmental entities) is amended—

22 (1) in subsection (a)(2) by inserting ‘‘, includ23 ing an Indian tribe,’’ after ‘‘the State law shall pro24 vide that a governmental entity’’;
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1 (2) in subsection (b)(3)(B) by inserting ‘‘, or of

2 an Indian tribe’’ after ‘‘of a State or political sub3 division thereof’’;

4 (3) in subsection (b)(3)(E) by inserting ‘‘or the

5 tribe’s’’ after ‘‘the State’’; and

6 (4) in subsection (b)(5) by inserting ‘‘or of an

7 Indian tribe’’ after ‘‘an agency of a State or political

8 subdivision thereof’’.

9 (c) STATE LAW COVERAGE.—Section 3309 of the In10 ternal Revenue Code of 1986 (relating to State law cov11 erage of services performed for nonprofit organizations or

12 governmental entities) is amended by adding at the end

13 the following new subsection:

14 ‘‘(d) ELECTION BY INDIAN TRIBE.—The State law

15 shall provide that an Indian tribe may elect to make con16 tributions for employment as if the employment is within

17 the meaning of section 3306 or to make payments in lieu

18 of contributions under this section, and shall provide that

19 an Indian tribe may make separate elections for itself and

20 each subdivision, subsidiary, or business enterprise char21 tered and wholly owned by such Indian tribe. State law

22 may require an electing tribe to post a payment bond or

23 take other reasonable measures to assure the making of

24 payments in lieu of contributions under this section. An

25 election under this subsection may not be made except by
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1 an Indian tribe within the meaning of section 4(e) of the

2 Indian Self-Determination and Education Assistance Act

3 (25 U.S.C. 450b(e)).’’.

4 (d) DEFINITIONS.—Section 3306 of the Internal Rev5 enue Code of 1986 (relating to definitions) is amended by

6 adding at the end the following new subsection:

7 ‘‘(u) INDIAN TRIBE.—For purposes of this chapter,

8 the term ‘Indian tribe’ has the meaning given to such term

9 by section 4(e) of the Indian Self-Determination and Edu10 cation Assistance Act (25 U.S.C. 450b(e)), and includes

11 any subdivision, subsidiary, or business enterprise char12 tered and wholly owned by such an Indian tribe.’’

13 (e) TRANSITION RULE.—For purposes of the Federal

14 Unemployment Tax Act, service performed in the employ

15 of an Indian tribe (as defined in section 3306(u) of the

16 Internal Revenue Code of 1986 (as added by this Act))

17 shall not be treated as employment (within the meaning

18 of section 3306 of such Code) if—

19 (1) it is service which is performed before the

20 date of enactment of this Act and with respect to

21 which the tax imposed under the Federal Unemploy22 ment Tax Act has not been paid; and
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1 (2) such Indian tribe reimburses a State unem2 ployment fund for unemployment benefits paid for

3 service attributable to such tribe for such period.

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