I
107TH CONGRESS
1ST SESSION
H. R. 2726
To provide for the payment of State taxes and local taxes collected by
the State on the sale of cigarettes and motor fuel by a tribal retail
enterprise to persons that are not members of the tribe, and for other
purposes.
IN THE HOUSE OF REPRESENTATIVES
AUGUST 2, 2001
Mr. YOUNG of Alaska introduced the following bill; which was referred to the
Committee on Resources
A BILL
To provide for the payment of State taxes and local taxes
collected by the State on the sale of cigarettes and motor
fuel by a tribal retail enterprise to persons that are
not members of the tribe, and for other purposes.
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 ‘‘Tribal-State Tax Fair-
ness Act of 2001’’.
SEC. 2. DEFINITIONS.
For purposes of this Act:
(1) COVERED STATE TAX.—The term ‘‘covered
State tax’’ means a lawfully imposed and non-
discriminatory State or local excise, sales, or trans-
action tax that is collected by the State, levied or
imposed on purchases, by nonmembers of a tribe, of
tobacco products or motor fuels from a tribal retail
enterprise.
(2) INDIAN COUNTRY.—The term ‘‘Indian coun-
try’’ means any land where an Indian tribe may le-
gally assert sovereignty over a tribal retail enter-
prise.
(3) INDIAN TRIBE.—The term ‘‘Indian tribe’’
has the meaning given that term in section 4(e) of
the Indian Self-Determination and Education Assist-
ance Act (25 U.S.C. 450b(e)).
(4) PERSON.—The term ‘‘person’’ includes indi-
viduals, corporations, partnerships, associations of
persons, State or local governments, non-Indian re-
tailers affiliated with one or more Indian tribes, In-
dian tribes, or Indian tribal governments.
(5) PETITION FOR ENFORCEMENT.—The term
‘‘petition for enforcement’’ means a petition sub-
mitted to the Secretary by a Governor of a State
which requires action by the Secretary under section
4(a).
(6) SECRETARY.—The term ‘‘Secretary’’ means
the Secretary of the Interior or a designee of the
Secretary.
(7) SERVICE.—The term ‘‘Service’’ means the
Federal Mediation and Conciliation Service estab-
lished under section 202 of the National Labor Rela-
tions Act (29 U.S.C. 172).
(8) TRIBAL
RETAIL
ENTERPRISE.—The term
‘‘tribal retail enterprise’’ means a person that has
conducted business in Indian country and at the
time that such business was conducted, was owned
or operated (in whole or in part) by one or more of
the following:
(A) An Indian tribe.
(B) A member of an Indian tribe.
(C) A person who is not a member of an
Indian tribe under a management contract with
an Indian tribe or a member of an Indian tribe.
(9) TRIBAL-STATE
AGREEMENT.—The term
‘‘tribal-State agreement’’ means an agreement or
compact between a State and an Indian tribe con-
cerning State taxes on tobacco products, motor
fuels, or both, that is in effect on the date of enact-
ment of this Act, or was in effect at any time be-
tween January 1, 1990, and the date of enactment
of this Act. If there is more than 1 such agreement
or compact, the term ‘‘tribal-State agreement’’
means the agreement or compact that was most re-
cently in effect.
SEC. 3. APPLICABILITY.
(a) IN GENERAL.—Except to the extent that a tribal-
State agreement provides otherwise, this Act shall not
apply to—
(1) that part of any covered State tax for which
a State law specifically exempts, either in whole or
in part, the collection or remittance of such taxes; or
(2) any covered State tax for which, under
State or local law which requires the collection or re-
mittance tax, the legal incidence of the otherwise ap-
plicable State tax falls on a tribe or its members,
thereby subjecting the purchase by a tribal member
from a tribal retail enterprise to a State excise,
sales, or transaction tax.
(b) PROSPECTIVE APPLICABILITY.—This Act shall
apply only to covered State taxes due, or amounts due
under tribal-State agreements, with respect to purchases
completed on or after the date of the enactment of this
Act.
SEC. 4. COLLECTION OF COVERED STATE TAXES PURSU-
ANT TO AN ENFORCEMENT PETITION.
(a) ENFORCEMENT PETITION BY THE GOVERNOR;
DETERMINATION OF VALIDITY BY THE SECRETARY.—Not
later than 60 days after receiving a petition from the Gov-
ernor of a State within the exterior borders of which a
tribal retail enterprise is located alleging the non-collec-
tion, non-remittance, or both, of a covered State tax by
the tribal retail enterprise and requesting action under
this Act by the Secretary, the Secretary shall determine,
through an investigation, audit or other method, whether
or not the tribal retail enterprise is collecting and remit-
ting the appropriate amount of covered State tax.
(b) NOTICE UPON FINDING OF VALIDITY OF EN-
FORCEMENT PETITION; REMITTANCE.—
(1) NOTICE.—Not later than 60 days after a
determination of the validity of the allegations in an
Enforcement Petition, the Secretary shall notify the
tribal retail enterprise that is the subject of the En-
forcement Petition of this determination and direct
the tribal retail enterprise to collect the covered
State tax and remit it to the Secretary pursuant to
subsection (c).
(2) REMITTANCE.—A tribal retail enterprise
shall begin remitting funds to the Secretary on the
schedule established in subsection (c) not later than
60 days after the later of the following:
(A) The date that the Secretary notifies
the tribal retail enterprise under paragraph (1).
(B) The date that a determination is made
as a result of a mediation under subsection
(c)(2)(D).
(c) TIMING AND AMOUNT OF REMITTANCE TO SEC-
RETARY.—
(1) IN
GENERAL.—A tribal retail enterprise
shall remit to the Secretary covered State taxes col-
lected pursuant to subsection (b) on a monthly basis,
by the 15th day following the month in which the
taxes were collected.
(2) DETERMINATION OF AMOUNT TO BE REMIT-
TED TO SECRETARY.—
(A) EXISTENCE OF TRIBAL-STATE AGREE-
MENT.—In the event a tribal-State agreement
exists or existed with respect to the tribal retail
enterprise or Indian tribe named in a Enforce-
ment Petition, then the amount of covered
State taxes collected and remitted to the Sec-
retary pursuant to such a Enforcement Petition
shall in no event be more than the amount pro-
vided for by the terms of such tribal-State
agreement, even if such tribal-State agreement
is no longer in effect at the time that the En-
forcement Petition was submitted because the
agreement has expired or one of the parties to
the agreement has terminated the agreement.
(B) ABSENCE
OF
TRIBAL-STATE
AGREE-
MENT.—In the event a tribal-State agreement
with respect to the tribal retail enterprise or In-
dian tribe named in a Enforcement Petition did
not or does not exist, then the Secretary shall
consult with the Governor of the State that sub-
mitted the Enforcement Petition to determine
the appropriate amount of covered State taxes
that should be remitted to the Secretary under
this subsection based upon relevant State law.
(C) CALCULATION OF AMOUNTS TO BE RE-
MITTED.—The Secretary shall collect from the
tribal retail enterprise or Indian tribe named in
an Enforcement Petition all covered State taxes
that the Secretary determines should have been
remitted to the appropriate State since the date
of enactment of this Act, unless the Enforce-
ment Petition specifies a alternative date after
the enactment of this Act.
(D) MEDIATION.—
(i) IN GENERAL.—If the parties can-
not agree on the amount required to be re-
mitted under this subsection, the Secretary
shall contact the Service and request the
establishment of a mediation between the
tribal retail enterprise or the Indian tribe
and the Governor of the State for the pur-
poses of determining such amount.
(ii) DEADLINE
FOR
COMPLETION.—
Not later than 180 days after the initial
contact by the Secretary regarding the me-
diation, the Service shall complete such
mediation and render its determination on
the appropriate amount to be remitted to
the Secretary.
(iii) USE
OF
DETERMINATION.—The
determination of the Service shall be used
by the Secretary in establishing the appro-
priate amount to be remitted.
(iv) REFUSAL
TO
COOPERATE
WITH
MEDIATION.—If a tribal retail enterprise,
Indian tribe, or Governor of a State (or
the designee of the Governor) fails to par-
ticipate in the mediation under this sub-
paragraph or fails to cooperate with the
Service regarding the mediation, the Serv-
ice may make its determination based upon
information available to the Service.
(d) TERMINATION
OF
REMITTANCES
TO
SEC-
RETARY.—Remittances of covered State taxes to the Sec-
retary required under this subsection shall continue until
one of the following occurs:
(1) The Governor of the State submitting the
Enforcement Petition certifies in writing to the Sec-
retary that the Secretary’s involvement is no longer
required.
(2) The Governor of the State submitting the
Enforcement Petition and the appropriate Indian
tribe enter into a binding tribal-State agreement
covering the collection and remittance of covered
State taxes.
(e) RETURN OF FUNDS TO APPROPRIATE STATE.—
Not later than 30 days after receiving a covered State tax
payment from a tribal retail enterprise or Indian tribe
under subsection (c), the Secretary shall remit the balance
of taxes collected under subsection (c) (after subtracting
administrative expenses subject to subsection (f)) to the
State fund specified to the Secretary by the Governor.
(f) ADMINISTRATIVE EXPENSES.—Prior to remitting
funds to the appropriate State fund under subsection (e),
the Secretary shall deduct from the amount remitted from
the tribal retail enterprise pursuant to subsection (c) an
administrative fee that is equal to the lesser of the fol-
lowing:
(1) The direct cost of administering this Act.
(2) One percent of the amounts remitted pursu-
ant to subsection (c).
(g) SATISFACTION OF OBLIGATIONS.—Amounts re-
mitted to the Secretary under subsection (c) or paid pur-
suant to a judgment under section 6 shall be applied by
the State to amounts due under the terms of the tribal-
State agreement or the covered State tax obligation of the
relevant tribal retail enterprise.
SEC. 5. MEDIATION OF DISPUTES BETWEEN TRIBES AND
STATES UNDER TRIBAL-STATE AGREEMENTS.
(a) IN GENERAL.—Not later than 60 days after re-
ceiving a request from the Governor of a State or an In-
dian tribe for the Secretary to mediate a dispute between
a the Governor of the State and an Indian tribe regarding
compliance with the terms of a tribal-State agreement in
effect on the date of an Enforcement Petition, the Sec-
retary shall initiate a mediation, or direct the Service to
initiate a mediation, for the Governor of the State and
the Indian tribe to resolve the dispute.
(b) COMPLETION OF MEDIATION.—Not later than
210 days after a request for mediation is received by the
Secretary under subsection (a), the Secretary shall ensure
that the mediation is concluded and notify the parties to
the mediation of the resulting determination by the Sec-
retary or the Service and urge the adoption of the deter-
mination by such parties.
SEC. 6. ENFORCEMENT.
(a) NOTICE OF VIOLATION—If a tribal retail enter-
prise fails to comply with section 4(b)(2), the Secretary
shall notify the tribal retail enterprise of this violation and
demand immediate compliance.
(b) REFERRAL OF VIOLATION TO DEPARTMENT OF
JUSTICE.—If a tribal retail enterprise is not in compliance
with section 4(b)(2) within 30 days of the notification
under subsection (a), the Secretary shall refer the matter
within 15 days to the Department of Justice.
(c) COMMENCEMENT OF CIVIL ENFORCEMENT AC-
TION.—
(1) IN GENERAL.—Not later than 60 days after
a referral under subsection (b), the Department of
Justice shall initiate a civil enforcement action in
Federal district court against the tribal retail enter-
prise that is the subject of the referral.
(2) TRIBAL-OWNED
RETAIL
ENTERPRISE.—If
the tribal retail enterprise named in such a civil en-
forcement action is owned or operated by an Indian
tribe, then the civil action shall include requests for
injunctive relief against the tribal retail enterprise
and for the payment to the Secretary of all covered
State taxes, as determined under section 4 (and in-
terest as permitted by the State law of State regard-
ing which the Enforcement Petition was submitted)
owed by the tribal retail enterprise from the date of
the enactment of this Act.
(3) TRIBAL
MEMBER-OWNED
RETAIL
ENTER-
PRISE.—If the tribal retail enterprise named in such
a civil enforcement action is owned or operated by
a member of an Indian tribe, then the civil action
shall include requests for injunctive relief and civil
penalties in the amount of 3 times the covered State
taxes, as determined under section 4, (and interest
as permitted by the State law of the State regarding
which the Enforcement Petition was submitted)
owed by the tribal retail enterprise from the date of
enactment of this Act.
(d) POSTING OF BOND DURING APPEAL.—If the
tribal retail enterprise appeals the decision of the Federal
district court in an action pursuant to subsection (c), then
the tribal retail enterprise shall post a bond for the
amount of the covered State taxes and interest that was
the subject of the action until a final determination has
been made in the action.
SEC. 7. JUDICIAL REVIEW.
The Governor of a State that has filed an enforce-
ment petition, or a tribal retail enterprise that has been
named in such an enforcement petition, may challenge the
Secretary’s conclusions under Section 4 by commencing
an action in Federal district court. If the challenge is not
sustained by the court, the challenging State or tribal re-
tail enterprise shall be liable to the Secretary for attor-
ney’s fees and court costs.
SEC. 8. REGULATIONS.
Not later than 180 days after the date of the enact-
ment of this Act, the Secretary shall promulgate regula-
tions providing for the implementation and enforcement
of this Act.
SEC. 9. EFFECTIVE DATE.
This Act shall take effect 180 days after the date of
the enactment of this Act, regardless of whether regula-
tions have been issued under section 7.
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