I

107TH CONGRESS

1ST SESSION H. R. 178

To amend the Internal Revenue Code of 1986 to provide for the issuance

of tax-exempt bonds by Indian tribal governments, and for other purposes.

IN THE HOUSE OF REPRESENTATIVES

JANUARY 3, 2001

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 provide

for the issuance of tax-exempt bonds by Indian tribal

governments, 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 Government

5 Tax-Exempt Bond Authority Amendments Act of 2001’’.

6 SEC. 2. CONSTITUTIONAL AUTHORITY.

7 The Constitutional authority upon which this Act

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

9 to regulate commerce with foreign nations and among the
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1 several States and with the Indian tribes, as set forth in

2 section 8 of article I of the United States Constitution.

3 SEC. 3. MODIFICATIONS OF AUTHORITY OF INDIAN TRIBAL

4 GOVERNMENTS TO ISSUE TAX-EXEMPT

5 BONDS.

6 (a) GENERAL PROVISION.—Subsection (c) of section

7 7871 of the Internal Revenue Code of 1986 (relating to

8 Indian tribal governments treated as States for certain

9 purposes) is amended to read as follows:

10 ‘‘(c) ADDITIONAL REQUIREMENTS FOR TAX-EXEMPT

11 BONDS.—

12 ‘‘(1) IN GENERAL.—Subsection (a) of section

13 103 shall apply to any obligation issued by an In14 dian tribal government (or subdivision thereof) only

15 if such obligation is part of an issue 95 percent or

16 more of the net proceeds of which are to be used to

17 finance facilities located on land within or in close

18 proximity to the exterior boundaries of an Indian

19 reservation.

20 ‘‘(2) PRIVATE ACTIVITY BONDS.—Any private

21 activity bond (as defined in section 141(a)) issued by

22 an Indian tribal government (or subdivision thereof)

23 shall be treated as a qualified bond for purposes of

24 section 103(b)(1) to which section 146 does not

25 apply if—
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1 ‘‘(A) GENERAL RESTRICTIONS.—The re2 quirements of section 144(a)(8)(B) and section

3 147 are met with respect to the issue.

4 ‘‘(B) SPECIFIC RESTRICTIONS.—

5 ‘‘(i) OWNERSHIP.—In the case of an

6 issue the net proceeds of which exceed

7 $500,000, 50 percent or more of the prof8 its or capital interests in the facilities to be

9 financed thereby (or in the entity owning

10 the facilities) are owned either by an In11 dian tribe, a subdivision thereof, a corpora12 tion chartered under section 17 of the In13 dian Reorganization Act of 1934 (25

14 U.S.C. 477) or section 3 of the Oklahoma

15 Welfare Act (25 U.S.C. 503), individual

16 enrolled members of an Indian Tribe, an

17 entity wholly-owned by any of the fore18 going, or any combination thereof.

19 ‘‘(ii) EMPLOYMENT TEST.—It is rea20 sonably expected (at the time of issuance

21 of the obligations) that for each $100,000

22 of net proceeds of the issue at least 1 em23 ployee rendering services at the financed

24 facilities is an enrolled member of an In-
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1 dian tribe or the spouse of an enrolled

2 member of an Indian tribe.

3 ‘‘(iii) GAMING.—No part of the issue

4 of which such bond is a part is used for

5 property (or any portion thereof) placed in

6 service for purposes of conducting or hous7 ing class I, II, or III gaming (as defined

8 in section 4 of the Indian Gaming Regu9 latory Act (25 U.S.C. 2703)).

10 ‘‘(3) DEFINITIONS.—For purposes of this

11 subsection—

12 ‘‘(A) INDIAN TRIBE.—The term ‘Indian

13 tribe’ means any Indian tribe, band, nation,

14 pueblo, or other organized group or community,

15 including any Alaska Native village, or regional

16 or village corporation, as defined in, or estab17 lished pursuant to, the Alaska Native Claims

18 Settlement Act (43 U.S.C. 1601 et seq.), which

19 is recognized as eligible for the special pro20 grams and services provided by the United

21 States to Indians because of their status as In22 dians.

23 ‘‘(B) INDIAN RESERVATION.—The term

24 ‘Indian reservation’ means a reservation, as de25 fined in—
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1 ‘‘(i) section 3(d) of the Indian Financ2 ing Act of 1974 (25 U.S.C. 1452(d)); or

3 ‘‘(ii) section 4(10) of the Indian Child

4 Welfare Act of 1978 (25 U.S.C.

5 1903(10)).

6 ‘‘(C) IN CLOSE PROXIMITY TO.—The term

7 ‘in close proximity to’ means—

8 ‘‘(i) in the case of an Indian reserva9 tion, or portion thereof, located within a

10 metropolitan statistical area (within the

11 meaning of section 143(k)(2)(B)), within 1

12 mile of the boundaries of such reservation,

13 or portion thereof; and

14 ‘‘(ii) in the case of an Indian reserva15 tion, or portion thereof, located within a

16 nonmetropolitan area (as defined in section

17 42(d)(5)(C)(iv)(IV)), within 15 miles of

18 the boundaries of such reservation, or por19 tion thereof.

20 ‘‘(D) NET PROCEEDS.—The term ‘net pro21 ceeds’ has the meaning given such term by sec22 tion 150(a)(3).’’

23 (b) CONFORMING AMENDMENT.—Paragraph (3) of

24 section 149(b) of the Internal Revenue Code of 1986 (re25 lating to federally guaranteed bond is not exempt) is
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1 amended by redesignating subparagraph (D) as subpara2 graph (E) and by inserting after subparagraph (C) the

3 following new subparagraph:

4 ‘‘(D) EXCEPTION FOR BONDS ISSUED BY

5 INDIAN TRIBAL GOVERNMENTS.—Paragraph (1)

6 shall not apply to any bond issued by an Indian

7 tribal government (or subdivision thereof) un8 less such bond is federally guaranteed within

9 the meaning of paragraph (2)(B)(ii).’’

10 SEC. 4. EXEMPTION FROM REGISTRATION REQUIREMENTS.

11 The first sentence of section 3(a)(2) of the Securities

12 Act of 1933 (15 U.S.C. 77c(a)(2)) is amended by inserting

13 ‘‘or by any Indian tribal government or subdivision thereof

14 (within the meaning of section 7871 of the Internal Rev15 enue Code of 1986),’’ after ‘‘or Territories,’’.

16 SEC. 5. EFFECTIVE DATE.

17 The amendments made by this Act shall apply to obli18 gations issued after the date of the enactment of this Act.

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