II 

110TH CONGRESS 

1ST SESSION S. 1850 

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

of Indian tribal governments as State governments for purposes of 

issuing tax-exempt governmental bonds, and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

JULY 23, 2007 

Mr. SMITH (for himself and Mr. BAUCUS) 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 provide 

for the treatment of Indian tribal governments as State 

governments for purposes of issuing tax-exempt governmental bonds, 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 Parity Act of 2007’’. 


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1 SEC. 2. MODIFICATIONS OF AUTHORITY OF INDIAN TRIBAL 

2 GOVERNMENTS TO ISSUE TAX-EXEMPT 

3 BONDS. 

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

5 the Internal Revenue Code of 1986 (relating to Indian 

6 tribal governments treated as States for certain purposes) 

7 is amended to read as follows: 

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

9 BONDS.— 

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

11 103 shall apply to any obligation issued by an In12 dian tribal government (or subdivision thereof) only 

13 if— 

14 ‘‘(A) such obligation is part of an issue 95 

15 percent or more of the net proceeds of which 

16 are to be used to finance any facility located on 

17 the Indian reservation of such Indian tribal 

18 government, or 

19 ‘‘(B) such obligation is part of an issue 

20 substantially all of the proceeds of which are to 

21 be used in the exercise of any essential govern22 mental function. 

23 ‘‘(2) EXCLUSION OF GAMING.—An obligation 

24 described in subparagraph (A) or (B) of paragraph 

25 (1) may not be used to finance any portion of a 

26 building in which class II or III gaming (as defined 


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1 in section 4 of the Indian Gaming Regulatory Act 

2 (25 U.S.C. 2702)) is conducted or housed or any 

3 other property actually used in the conduct of such 

4 gaming. 

5 ‘‘(3) DEFINITIONS.—For purposes of this sub6 section— 

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

8 tribe’ means any Indian tribe, band, nation, or 

9 other organized group or community which is 

10 recognized as eligible for the special programs 

11 and services provided by the United States to 

12 Indians because of their status as Indians. 

13 ‘‘(B) INDIAN RESERVATION.—The term 

14 ‘Indian reservation’ means a reservation, as de15 fined in section 4(10) of the Indian Child Wel16 fare Act of 1978 (25 U.S.C. 1903(10)).’’. 

17 SEC. 3. ESSENTIAL GOVERNMENTAL FUNCTION. 

18 Subsection (e) of section 7871 of the Internal Rev19 enue Code of 1986 (defining essential governmental func20 tion) is amended to read as follows: 

21 ‘‘(e) ESSENTIAL GOVERNMENTAL FUNCTION.—The 

22 term ‘essential governmental function’ includes any func23 tion which is performed by a State or local government 

24 with general taxing powers.’’. 


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1 SEC. 4. EXEMPTION FROM REGISTRATION REQUIREMENTS. 

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

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

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

5 (within the meaning of section 7871 of the Internal Rev6 enue Code of 1986),’’ after ‘‘or Territories,’’. 

7 SEC. 5. EFFECTIVE DATE. 

8 The amendments made by this Act shall apply to obli9 gations issued after the date of the enactment of this Act. 

Æ 


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