I
105TH CONGRESS
1ST SESSION
H. R. 294
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
JANUARY 7, 1997
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 gov-
ernments the same as State or local units of government
or as nonprofit organizations.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ‘‘Indian Tribal Govern-
ment Unemployment Compensation Act Tax Relief
Amendments of 1997’’.
SEC. 2. TREATMENT OF INDIAN TRIBAL GOVERNMENTS
UNDER FEDERAL UNEMPLOYMENT TAX ACT.
(a) IN GENERAL.—Section 3306(c)(7) of the Internal
Revenue Code of 1986 (defining employment) is
amended—
(1) by inserting ‘‘or in the employ of an Indian
tribe,’’ after ‘‘service performed in the employ of a
State, or any political subdivision thereof,’’; and
(2) by inserting ‘‘or Indian tribes’’ after ‘‘whol-
ly owned by one or more States or political subdivi-
sions’’.
(b) PAYMENTS IN LIEU OF CONTRIBUTIONS.—Sec-
tion 3309 of the Internal Revenue Code of 1986 (relating
to State law coverage of services performed for nonprofit
organizations or governmental entities) is amended—
(1) in subsection (a)(2) by inserting ‘‘, includ-
ing an Indian tribe,’’ after ‘‘the State law shall pro-
vide that a governmental entity’’;
(2) in subsection (b)(3)(B) by inserting ‘‘, or of
an Indian tribe’’ after ‘‘of a State or political sub-
division thereof’’;
(3) in subsection (b)(3)(E) by inserting ‘‘or the
tribe’s’’ after ‘‘the State’’; and
(4) in subsection (b)(5) by inserting ‘‘or of an
Indian tribe’’ after ‘‘an agency of a State or political
subdivision thereof’’.
(c) STATE LAW COVERAGE.—Section 3309 of the In-
ternal Revenue Code of 1986 (relating to State law cov-
erage of services performed for nonprofit organizations or
governmental entities) is amended by adding at the end
the following new subsection:
‘‘(d) ELECTION BY INDIAN TRIBE.—The State law
shall provide that an Indian tribe may elect to make con-
tributions for employment as if the employment is within
the meaning of section 3306 or to make payments in lieu
of contributions under this section, and shall provide that
an Indian tribe may make separate elections for itself and
each subdivision, subsidiary, or business enterprise char-
tered and wholly owned by such Indian tribe. State law
may require an electing tribe to post a payment bond or
take other reasonable measures to assure the making of
payments in lieu of contributions under this section. An
election under this subsection may not be made except by
an Indian tribe within the meaning of section 4(e) of the
Indian Self-Determination and Education Assistance Act
(25 U.S.C. 450b(e)).’’.
(d) DEFINITIONS.—Section 3306 of the Internal Rev-
enue Code of 1986 (relating to definitions) is amended by
adding at the end the following new subsection:
‘‘(u) INDIAN TRIBE.—For purposes of this chapter,
the term ‘Indian tribe’ has the meaning given to such term
by section 4(e) of the Indian Self-Determination and Edu-
cation Assistance Act (25 U.S.C. 450b(e)), and includes
any subdivision, subsidiary, or business enterprise char-
tered and wholly owned by such an Indian tribe.’’
(e) TRANSITION RULE.—For purposes of the Federal
Unemployment Tax Act, service performed in the employ
of an Indian tribe (as defined in section 3306(u) of the
Internal Revenue Code of 1986 (as added by this Act))
shall not be treated as employment (within the meaning
of section 3306 of such Code) if—
(1) it is service which is performed before the
date of enactment of this Act and with respect to
which the tax imposed under the Federal Unemploy-
ment Tax Act has not been paid; and
(2) such Indian tribe reimburses a State unem-
ployment fund for unemployment benefits paid for
service attributable to such tribe for such period.
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