I

104TH CONGRESS

1ST SESSION H. R. 838

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

FEBRUARY 6, 1995

Mr. PETERSON of Minnesota 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 Amendments of

6 1995’’.
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1 SEC. 2. TREATMENT OF INDIAN TRIBAL GOVERNMENTS

2 UNDER FEDERAL UNEMPLOYMENT TAX ACT.

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

4 Revenue Code of 1986 (defining employment) is amend5 ed—

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

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

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

9 (2) by inserting ‘‘or Indian tribes’’ after ‘‘whol10 ly owned by one or more States or political subdivi11 sions’’.

12 (b) PAYMENTS IN LIEU OF CONTRIBUTIONS.—Sec13 tion 3309 of the Internal Revenue Code of 1986 (relating

14 to State law coverage of services performed for nonprofit

15 organizations or governmental entities) is amended—

16 (1) in subsection (a)(2) by inserting ‘‘, includ17 ing an Indian tribe,’’ after ‘‘the State law shall pro18 vide that a governmental entity’’;

19 (2) in subsection (b)(3)(B) by inserting ‘‘, or of

20 an Indian tribe’’ after ‘‘of a State or political sub21 division thereof’’;

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

23 tribe’s’’ after ‘‘the State’’; and

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

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

26 subdivision thereof’’.
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1 (c) STATE LAW COVERAGE.—Section 3309 of the In2 ternal Revenue Code of 1986 (relating to State law cov3 erage of services performed for nonprofit organizations or

4 governmental entities) is amended by adding at the end

5 the following new subsection:

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

7 shall provide that an Indian tribe may elect to make con8 tributions for employment as if the employment is within

9 the meaning of section 3306 of the Internal Revenue Code

10 of 1986 or to make payments in lieu of contributions

11 under this section, and shall provide that an Indian tribe

12 may make separate elections for itself and each subdivi13 sion, subsidiary, or business enterprise chartered and

14 wholly owned by such Indian tribe.’’

15 (d) DEFINITIONS.—Section 3306 of the Internal Rev16 enue Code of 1986 (relating to definitions) is amended by

17 adding at the end the following new subsection:

18 ‘‘(t) INDIAN TRIBE.—For purposes of this chapter,

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

20 by section 4(e) of the Indian Self-Determination and Edu21 cation Assistance Act (25 U.S.C. 450b(e)), and includes

22 any subdivision, subsidiary, or business enterprise char23 tered and wholly owned by such an Indian tribe.’’

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

25 Unemployment Tax Act, service performed in the employ
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1 of an Indian tribe (as defined in section 3306(t) of the

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

3 shall not be treated as employment (within the meaning

4 of section 3306 of such Code) if—

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

6 date of enactment of this Act and with respect to

7 which the tax imposed under the Federal Unemploy8 ment Tax Act has not been paid, and

9 (2) such Indian tribe reimburses a State unem10 ployment fund for unemployment benefits paid for

11 service attributable to such tribe for such period.

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