I

103D CONGRESS

1ST SESSION H. R. 1624

To amend the Indian Gaming Regulatory Act, and for other purposes.

IN THE HOUSE OF REPRESENTATIVES

APRIL 1, 1993

Mr. HOAGLAND (for himself, Mr. MACHTLEY, and Mr. STUMP) introduced the

following bill; which was referred jointly to the Committees on Natural

Resources and Ways and Means

A BILL

To amend the Indian Gaming Regulatory Act, 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. INDIAN GAMING RESTRICTED.

4 (a) REGULATION OF CLASS II GAMING.—Section

5 11(b) of the Act (25 U.S.C. 2710(b)) is amended—

6 (1) in paragraph (1)—

7 (A) in subparagraph (A)—

8 (i) by inserting ‘‘(i)’’ after ‘‘(A)’’;

9 (ii) in clause (i), as designated by

10 clause (i) of this subparagraph, by striking
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1 ‘‘any purpose’’ and all that follows through

2 ‘‘law), and’’ and inserting ‘‘a commercial

3 purpose by any person, organization or en4 tity, or’’; and

5 (iii) by inserting after clause (i), as

6 designated by clause (i) of this subpara7 graph, the following:

8 ‘‘(ii) such Indian gaming is for charitable pur9 poses and is located within a State that permits

10 such gaming for charitable purposes by a person, or11 ganization or entity,’’;

12 (B) by redesignating subparagraph (B) as

13 subparagraph (D) and inserting the following:

14 ‘‘(B) such gaming is not otherwise specifically

15 prohibited on Indian lands by Federal law,

16 ‘‘(C) permissible gaming is limited to the spe17 cific forms of, and methods of play for, gaming ac18 tivities expressly authorized by the law of the State,

19 and’’; and

20 (2) in paragraph (2)—

21 (A) in subparagraph (E), by striking

22 ‘‘and’’ at the end;

23 (B) in subparagraph (F), by striking the

24 period and inserting ‘‘; and’’; and

25 (C) by adding at the end the following:
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1 ‘‘(G) all gaming activities shall be conducted in

2 conformity with those laws and regulations (if any)

3 of the State regarding specific games allowed and

4 methods of play, including, but not limited to, peri5 ods of operation, limitation on wagers, pot sizes, and

6 losses.’’.

7 (b) REGULATION OF CLASS III GAMING.—Section

8 11(d)(1) of the Act (25 U.S.C. 2710(d)(1)) is amended—

9 (1) by amending subparagraph (B) to read as

10 follows:

11 ‘‘(B) located in a State that permits such gam12 ing for any purpose by any person, organization, or

13 entity which conducts the authorized gaming activity

14 as part of a commercial, for-profit business enter15 prise; except that a Tribal-State compact may per16 mit any other class III gaming authorized by a State

17 if conducted in accordance with State law;’’; and

18 (2) by redesignating subparagraph (C) as sub19 paragraph (D) and inserting after subparagraph (B)

20 the following new subparagraph:

21 ‘‘(C) limited to the specific forms of, and meth22 ods of play for, gaming activities expressly author23 ized by the law of the State; and’’.

24 SEC. 2. DEFINITION OF CLASS III GAMING.

25 Section 4 of the Act (25 U.S.C. 2703) is amended—
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1 (1) in paragraph (7)(A)(i), by inserting after

2 ‘‘therewith)’’ the following: ‘‘except video bingo’’;

3 and

4 (2) in paragraph (8), by inserting before the pe5 riod at the end the following: ‘‘including, but not

6 limited to, slot machines (as such term is defined in

7 subsection (a)(1) of the first section of the Act of

8 January 2, 1951 (Chapter 1194; 64 Stat. 1134)),

9 electronic or electromechanical facsimiles of any

10 game of chance, and any and all forms of electronic

11 video games or devices, such as video bingo, video

12 pull-tabs, video keno, and video blackjack’’.

13 SEC. 3. COMPACT NEGOTIATION.

14 (a) BURDEN OF PROOF.—Section 11(d)(7)(B)(ii) of

15 the Act (25 U.S.C. 2710(d)(7)(B)(ii)) is amended by

16 striking ‘‘burden of proof shall be upon the State to prove

17 that the State’’ and inserting ‘‘burden of proof shall be

18 upon the Indian tribe to prove that the State’’.

19 (b) CERTAIN EVIDENCE.—Section 11(d)(7)(B)(iii) of

20 the Act (25 U.S.C. 2710(d)(7)(B)(iii)) is amended—

21 (1) in subclause (I), by striking ‘‘, and’’ and in22 serting a semicolon;

23 (2) in subclause (II), by striking the period and

24 inserting ‘‘; and’’; and

25 (3) by adding at the end the following:
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1 ‘‘(III) except as provided in clause

2 (ii), shall not consider as evidence that the

3 State has not negotiated in good faith a

4 demand by the State that the gaming ac5 tivities contemplated by the compact be

6 conducted on the same basis as gaming ac7 tivities which may be conducted by any

8 other person or entity under the terms of

9 relevant State law.’’.

10 SEC. 4. NATIONAL INDIAN GAMING COMMISSION.

11 (a) ADDITIONAL MEMBERS.—Section 5(b)(1) of the

12 Act (25 U.S.C. 2704(b)(1)) is amended—

13 (1) in the material preceding subparagraph (A),

14 by striking ‘‘three’’ and inserting ‘‘five’’;

15 (2) in subparagraph (A), by striking ‘‘and’’;

16 (3) in subparagraph (B), by striking the period

17 at the end and inserting ‘‘; and’’; and

18 (4) by adding at the end the following:

19 ‘‘(C) two associate members who shall be

20 appointed by the President, with the advice and

21 consent of the Senate, from among State offi22 cials.’’.

23 (b) COMPOSITION.—Section 5(b)(3) of the Act (25

24 U.S.C. 2704(b)(3)) is amended in the first sentence by

25 striking ‘‘two’’ and inserting ‘‘three’’.
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1 (c) QUORUM.—Section 5(d) of the Act (25 U.S.C.

2 2704(d)) is amended by striking ‘‘two’’ and inserting

3 ‘‘three’’.

4 (d) EFFECTIVE DATE; TRANSITION RULES.—(1) Ex5 cept as required for paragraph (2), the amendments made

6 by this section shall take effect at the end of the 90-day

7 period beginning on the date of enactment of this Act and

8 shall apply with respect to any action taken by the Na9 tional Indian Gaming Commission after the end of such

10 period.

11 (2) Not later than 90 days after the date of enact12 ment of this Act, the President shall make the initial ap13 pointments of the associate members of the National In14 dian Gaming Commission, as required by the amendments

15 made by subsection (a) of this section, in accordance with

16 the Indian Gaming Regulatory Act, as amended by this

17 Act.

18 SEC. 5. GAMING ON AFTER ACQUIRED LANDS.

19 Section 20(b)(1)(A) of the Act (25 U.S.C.

20 2719(b)(1)(A)) is amended—

21 (1) by striking ‘‘and appropriate State and local

22 officials, including officials of other nearby Indian

23 tribes,’’ and inserting the following: ‘‘, appropriate

24 State and local officials (including officials of other

25 nearby Indian tribes), and officials of other nearby
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1 communities (including communities across State

2 borders that would be directly affected by gaming

3 conducted on such lands),’’; and

4 (2) by striking ‘‘community’’ and inserting

5 ‘‘communities (including communities across State

6 borders that would be directly affected by gaming

7 conducted on such lands)’’.

8 SEC. 6. INDIAN EMPLOYMENT CREDIT.

9 (a) ALLOWANCE OF INDIAN EMPLOYMENT CRED10 IT.—Section 38(b) of the Internal Revenue Code of 1986

11 (relating to general business credits) is amended by strik12 ing ‘‘plus’’ at the end of paragraph (7), by striking the

13 period at the end of paragraph (8) and inserting ‘‘, plus’’,

14 and by adding after paragraph (8) the following new para15 graph:

16 ‘‘(9) the Indian employment credit as deter17 mined under section 45A(a).’’.

18 (b) AMOUNT OF INDIAN EMPLOYMENT CREDIT.—

19 Subpart D of Part IV of subchapter A of chapter 1 of

20 such Code (relating to business related credits) is amended

21 by adding at the end thereof the following new section:

22 ‘‘SEC. 45A. INDIAN EMPLOYMENT CREDIT.

23 ‘‘(a) AMOUNT OF CREDIT.—

24 ‘‘(1) IN GENERAL.—For purposes of section 38,

25 the amount of the Indian employment credit deter-
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1 mined under this section with respect to any em2 ployer for any taxable year is 10 percent (30 percent

3 in the case of an employer with at least 85 percent

4 Indian employees throughout the taxable year) of

5 the sum of—

6 ‘‘(A) the qualified wages paid or incurred

7 during such taxable year, plus

8 ‘‘(B) qualified employee health insurance

9 costs paid or incurred during such taxable year.

10 In no event shall the amount of the Indian employ11 ment credit for any taxable year exceed the credit

12 limitation amount determined under subsection (e)

13 for such taxable year.

14 ‘‘(2) INDIAN EMPLOYEE.—For purposes of

15 paragraph (1), the term ‘Indian employee’ means an

16 employee who is an enrolled member of an Indian

17 tribe or the spouse of such a member.

18 ‘‘(b) QUALIFIED WAGES; QUALIFIED EMPLOYEE

19 HEALTH INSURANCE COSTS.—For purposes of this sec20 tion—

21 ‘‘(1) QUALIFIED WAGES.—

22 ‘‘(A) IN GENERAL.—The term ‘qualified

23 wages’ means any wages paid or incurred by an

24 employer for services performed by an employee

25 while such employee is a qualified employee.
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1 ‘‘(B) COORDINATION WITH TARGETED

2 JOBS CREDIT.—The term ‘qualified wages’ shall

3 not include wages attributable to service ren4 dered during the 1-year period beginning with

5 the day the individual begins work for the em6 ployer if any portion of such wages is taken

7 into account in determining the credit under

8 section 51.

9 ‘‘(2) QUALIFIED EMPLOYEE HEALTH INSUR10 ANCE COSTS.—

11 ‘‘(A) IN GENERAL.—The term ‘qualified

12 employee health insurance costs’ means any

13 amount paid or incurred by an employer for

14 health insurance to the extent such amount is

15 attributable to coverage provided to any em16 ployee while such employee is a qualified em17 ployee.

18 ‘‘(B) EXCEPTION FOR AMOUNTS PAID

19 UNDER SALARY REDUCTION ARRANGEMENTS.—

20 No amount paid or incurred for health insur21 ance pursuant to a salary reduction arrange22 ment shall be taken into account under sub23 paragraph (A).

24 ‘‘(c) QUALIFIED EMPLOYEE.—For purposes of this

25 section—
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1 ‘‘(1) IN GENERAL.—Except as otherwise pro2 vided in this subsection, the term ‘qualified em3 ployee’ means, with respect to any period, any em4 ployee of an employer if—

5 ‘‘(A) substantially all of the services per6 formed during such period by such employee for

7 such employer are performed within an Indian

8 reservation,

9 ‘‘(B) the principal place of abode of such

10 employee while performing such services is on

11 or near the reservation in which the services are

12 performed, and

13 ‘‘(C) the employee began work for such

14 employer on or after January 1, 1994.

15 ‘‘(2) CREDIT ALLOWED ONLY FOR FIRST 7

16 YEARS.—An employee shall not be treated as a

17 qualified employee for any period after the date 7

18 years after the day on which such employee first

19 began work for the employer.

20 ‘‘(3) INDIVIDUALS RECEIVING WAGES IN EX21 CESS OF $30,000 NOT ELIGIBLE.—An employee shall

22 not be treated as a qualified employee for any tax23 able year of the employer if the total amount of the

24 wages paid or incurred by such employer to such

25 employee during such taxable year (whether or not
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1 for services within an Indian reservation) exceeds

2 the amount determined at an annual rate of

3 $30,000. The Secretary shall adjust the $30,000

4 amount contained in the preceding sentence for

5 years beginning after 1993 at the same time and in

6 the same manner as under section 415(d).

7 ‘‘(4) EMPLOYMENT MUST BE TRADE OR BUSI8 NESS EMPLOYMENT.—An employee shall be treated

9 as a qualified employee for any taxable year of the

10 employer only if more than 50 percent of the wages

11 paid or incurred by the employer to such employee

12 during such taxable year are for services performed

13 in a trade or business of the employer. Any deter14 mination as to whether the preceding sentence ap15 plies with respect to any employee for any taxable

16 year shall be made without regard to subsection

17 (f)(2).

18 ‘‘(5) CERTAIN EMPLOYEES NOT ELIGIBLE.—

19 The term ‘qualified employee’ shall not include—

20 ‘‘(A) any individual described in subpara21 graph (A), (B), or (C) of section 51(i)(1),

22 ‘‘(B) any 5-percent owner (as defined in

23 section 416(i)(1)(B)),
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1 ‘‘(C) any individual who is neither an en2 rolled member of an Indian tribe nor the spouse

3 of an enrolled member of an Indian tribe, and

4 ‘‘(D) any individual if the services per5 formed by such individual for the employer in6 volve the conduct of class I, II, or III gaming

7 as defined in section 4 of the Indian Gaming

8 Regulatory Act (25 U.S.C. 2703), or are per9 formed in a building housing such gaming

10 activity.

11 ‘‘(6) INDIAN TRIBE DEFINED.—The term ‘In12 dian tribe’ means any Indian tribe, band, nation,

13 pueblo, or other organized group or community, in14 cluding any Alaska Native village, or regional or vil15 lage corporation, as defined in, or established pursu16 ant to, the Alaska Native Claims Settlement Act (43

17 U.S.C. 1601 et seq.) which is recognized as eligible

18 for the special programs and services provided by

19 the United States to Indians because of their status

20 as Indians.

21 ‘‘(7) INDIAN RESERVATION DEFINED.—The

22 term ‘Indian reservation’ means a reservation, as de23 fined in—

24 ‘‘(A) section 3(d) of the Indian Financing

25 Act of 1974 (25 U.S.C. 1452(d)), or
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1 ‘‘(B) section 4(10) of the Indian Child

2 Welfare Act of 1978 (25 U.S.C. 1903 (10)).

3 ‘‘(d) EARLY TERMINATION OF EMPLOYMENT BY EM4 PLOYER.—

5 ‘‘(1) IN GENERAL.—If the employment of any

6 employee is terminated by the taxpayer before the

7 day 1 year after the day on which such employee

8 began work for the employer—

9 ‘‘(A) no wages (or qualified employee

10 health insurance costs) with respect to such em11 ployee shall be taken into account under sub12 section (a) for the taxable year in which such

13 employment is terminated, and

14 ‘‘(B) the tax under this chapter for the

15 taxable year in which such employment is ter16 minated shall be increased by the aggregate

17 credits (if any) allowed under section 38(a) for

18 prior taxable years by reason of wages (or

19 qualified employee health insurance costs) taken

20 into account with respect to such employee.

21 ‘‘(2) CARRYBACKS AND CARRYOVERS AD22 JUSTED.—In the case of any termination of employ23 ment to which paragraph (1) applies, the carrybacks

24 and carryovers under section 39 shall be properly

25 adjusted.
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1 ‘‘(3) SUBSECTION NOT TO APPLY IN CERTAIN

2 CASES.—

3 ‘‘(A) IN GENERAL.—Paragraph (1) shall

4 not apply to—

5 ‘‘(i) a termination of employment of

6 an employee who voluntarily leaves the em7 ployment of the taxpayer,

8 ‘‘(ii) a termination of employment of

9 an individual who before the close of the

10 period referred to in paragraph (1) be11 comes disabled to perform the services of

12 such employment unless such disability is

13 removed before the close of such period

14 and the taxpayer fails to offer reemploy15 ment to such individual, or

16 ‘‘(iii) a termination of employment of

17 an individual if it is determined under the

18 applicable State unemployment compensa19 tion law that the termination was due to

20 the misconduct of such individual.

21 ‘‘(B) CHANGES IN FORM OF BUSINESS.—

22 For purposes of paragraph (1), the employment

23 relationship between the taxpayer and an em24 ployee shall not be treated as terminated—
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1 ‘‘(i) by a transaction to which section

2 381(a) applies if the employee continues to

3 be employed by the acquiring corporation,

4 or

5 ‘‘(ii) by reason of a mere change in

6 the form of conducting the trade or busi7 ness of the taxpayer if the employee con8 tinues to be employed in such trade or

9 business and the taxpayer retains a sub10 stantial interest in such trade or business.

11 ‘‘(4) SPECIAL RULE.—Any increase in tax

12 under paragraph (1) shall not be treated as a tax

13 imposed by this chapter for purposes of—

14 ‘‘(A) determining the amount of any credit

15 allowable under this chapter, and

16 ‘‘(B) determining the amount of the tax

17 imposed by section 55.

18 ‘‘(e) CREDIT LIMITATION AMOUNT.—For purposes of

19 this section—

20 ‘‘(1) CREDIT LIMITATION AMOUNT.—The credit

21 limitation amount for a taxable year shall be an

22 amount equal to the credit rate (10 or 30 percent

23 as determined under subsection (a)) multiplied by

24 the increased credit base.
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1 ‘‘(2) INCREASED CREDIT BASE.—The increased

2 credit base for a taxable year shall be the excess

3 of—

4 ‘‘(A) the sum of any qualified wages and

5 qualified employee health insurance costs paid

6 or incurred by the employer during the taxable

7 year with respect to employees whose wages

8 (paid or incurred by the employer) during the

9 taxable year do not exceed the amount deter10 mined under paragraph (3) of subsection (c),

11 over

12 ‘‘(B) the sum of any qualified wages and

13 qualified employee health insurance costs paid

14 or incurred by the employer (or any prede15 cessor) during calendar year 1993 with respect

16 to employees whose wages (paid or incurred by

17 the employer or any predecessor) during 1993

18 did not exceed $30,000.

19 ‘‘(3) SPECIAL RULE FOR SHORT TAXABLE

20 YEARS.—For any taxable year having less than 12

21 months—

22 ‘‘(A) the amounts paid or incurred by the

23 employer shall be annualized for purposes of de24 termining the increased credit base, and
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1 ‘‘(B) the credit limitation amount shall be

2 multiplied by a fraction, the numerator of which

3 is the number of days in the taxable year and

4 the denominator of which is 365.

5 ‘‘(f) OTHER DEFINITIONS AND SPECIAL RULES.—

6 For purposes of this section—

7 ‘‘(1) WAGES.—The term ‘wages’ has the same

8 meaning given to such term in section 51.

9 ‘‘(2) CONTROLLED GROUPS.—

10 ‘‘(A) All employers treated as a single em11 ployer under section (a) or (b) of section 52

12 shall be treated as a single employer for pur13 poses of this section.

14 ‘‘(B) The credit (if any) determined under

15 this section with respect to each such employer

16 shall be its proportionate share of the wages

17 and qualified employee health insurance costs

18 giving rise to such credit.

19 ‘‘(3) CERTAIN OTHER RULES MADE APPLICA20 BLE.—Rules similar to the rules of section 51(k)

21 and subsections (c), (d), and (e) of section 52 shall

22 apply.

23 ‘‘(4) COORDINATION WITH NONREVENUE

24 LAWS.—Any reference in this section to a provision

25 not contained in this title shall be treated for pur-
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1 poses of this section as a reference to such provision

2 as in effect on the date of the enactment of this

3 paragraph.’’.

4 (c) DENIAL OF DEDUCTION FOR PORTION OF WAGES

5 EQUAL TO INDIAN EMPLOYMENT CREDIT.—

6 (1) Subsection (a) of section 280C of such Code

7 (relating to rule for targeted jobs credit) is amended

8 by striking ‘‘51(a)’’ and inserting ‘‘45A(a), 51(a),

9 and’’.

10 (2) Subsection (c) of section 196 of such Code

11 (relating to deduction for certain unused business

12 credits) is amended by striking ‘‘and’’ at the end of

13 paragraph (4), by striking the period at the end of

14 paragraph (5) and inserting ‘‘, and’’, and by adding

15 at the end the following new paragraph:

16 ‘‘(6) the Indian employment credit determined

17 under section 45A(a).’’.

18 (d) DENIAL OF CARRYBACKS TO PREENACTMENT

19 YEARS.—Subsection (d) of section 39 of such Code is

20 amended by adding at the end thereof the following new

21 paragraph:

22 ‘‘(4) NO CARRYBACK OF SECTION 45A CREDIT

23 BEFORE ENACTMENT.—No portion of the unused

24 business credit for any taxable year which is attrib25 utable to the Indian employment credit determined
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1 under section 45A may be carried to a taxable year

2 ending before the date of the enactment of section

3 45A.’’.

4 (e) CLERICAL AMENDMENT.—The table of sections

5 for subpart D of part IV of subchapter A of chapter 1

6 of such Code is amended by adding at the end thereof

7 the following:

‘‘Sec. 45A. Indian employment credit.’’.

8 (f) EFFECTIVE DATE.—The amendments made by

9 this section shall apply to wages paid or incurred after

10 December 31, 1993.

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