Native American Tax Parity and Relief Act of 2022

Bill: 117-s-5048
Sponsor: full_name: Sen. Cortez Masto, Catherine [D-NV]
Introduced: 2022-09-29
Policy area: Taxation
Latest action: action_date: 2022-09-29
text: Read twice and referred to the Committee on Finance.

Summaries:
action_date: 2022-09-29
action_desc: Introduced in Senate
text: <p> <strong>Native American Tax Parity and Relief Act of 2022 </strong></p> <p>This bill makes changes to the Internal Revenue Code to treat Indian tribal governments in the same manner as their state counterparts for tax purposes. Among other changes, the bill</p> <ul> <li>treats Indian tribes as states for purposes of the issuance of tax-exempt bonds,</li> <li>equalizes the tax treatment of charities funded by Indian tribal governments,</li> <li>enhances the ability of tribal governments to enforce child support orders, </li> <li>expands the special-needs adoption tax credit to apply to adoptions ratified by a tribal court, </li> <li>designates certain Indian areas as difficult development areas for purposes of the low-income housing tax credit,</li> <li>increases the amount of wages and benefits taken into account for purposes of determining the Indian employment tax credit, and </li> <li>creates an annual $175 million New Markets Tax Credit for low-income tribal communities and for projects that serve or employ Tribe members.</li> </ul>

tv_txt: II 117th CONGRESS 2d Session S. 5048 IN THE SENATE OF THE UNITED STATES September 29, 2022 Ms. Cortez Masto (for herself, Mr. Wyden , and Mr. Schatz ) 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 treat Indian tribal governments in the same manner as State governments for certain Federal tax purposes, and for other purposes.

1. Short title This Act may be cited as the Native American Tax Parity and Relief Act of 2022 . 2. Findings The Congress finds the following: (1) There is a unique Federal legal and political relationship between the United States and Indian tribes. (2) Indian tribes have the responsibility and authority to provide governmental programs and services to tribal citizens, develop tribal economies, and build community infrastructure to ensure that Indian reservation lands serve as livable, permanent homes. (3) The United States Constitution, United States Federal Court decisions, Executive orders, and numerous other Federal laws and regulations recognize that Indian tribes are governments, retaining the inherent authority to tax and operate as other governments, including (inter alia) financing projects with government bonds and maintaining eligibility for general tax exemptions via their government status. (4) Codifying tax parity with respect to tribal governments is consistent with Federal treaties recognizing the sovereignty of tribal governments. (5) Indian tribes face historic disadvantages in accessing the underlying capital to build the necessary infrastructure for job creation, and certain statutory restrictions on tribal governance further inhibit tribes’ ability to develop strong governance and economies. (6) Indian tribes are sometimes excluded from the Internal Revenue Code of 1986 in key provisions which results in unfair tax treatment for tribal citizens or unequal enforcement authority for tribal enforcement agencies. (7) Congress is vested with the authority to regulate commerce with Indian tribes, and hereby exercises that authority in a manner which furthers tribal self-governance, and in doing so, further affirms the United States government-to-government relationship with Indian tribes. 3. Treatment of Indian Tribes as States with respect to bond issuance (a) In general Section 7871(c) of the Internal Revenue Code of 1986 is amended to read as follows: (c) Special rules for tax-Exempt bonds (1) In general In applying section 146 to bonds issued by Indian Tribal Governments the Secretary shall annually— (A) establish a national bond volume cap based on the greater of— (i) the State population formula approach in section 146(d)(1)(A) (using national Tribal population estimates supplied annually by the Department of the Interior in consultation with the Census Bureau), and (ii) the minimum State ceiling amount in section 146(d)(1)(B) (as adjusted in accordance with the cost of living provision in section 146(d)(2)), and (B) under regulations prescribed by the Secretary, allocate such national bond volume cap among all Indian Tribal Governments seeking such an allocation in a particular year. (2) Application of geographic restriction In the case of national bond volume cap allocated under paragraph (1), section 146(k)(1) shall not apply to the extent that such cap is used with respect to financing for a facility located on qualified Indian lands. (3) Restriction on financing of certain gaming facilities No portion of the volume cap allocated under this subsection may be used with respect to the financing of any portion of a building in which class II or class III gaming (as defined in section 4 of the Indian Gaming Regulatory Act) is conducted or housed or any property actually used in the conduct of such gaming. (4) Definitions and special rules For purposes of this subsection— (A) Indian Tribal government The term Indian Tribal Government means the governing body of an Indian Tribe, band, nation, or other organized group or community, or of Alaska Natives, which is recognized as eligible for the special programs and services provided by the United States to Indians because of their status as Indians, and also includes any agencies, instrumentalities or political subdivisions thereof. (B) Intertribal consortiums, etc In any case in which an Indian Tribal Government has authorized an intertribal consortium, a Tribal organization, or an Alaska Native regional or village corporation, as defined in, or established pursuant to, the Alaska Native Claims Settlement Act, to plan for, coordinate or otherwise administer services, finances, functions, or activities on its behalf under this subsection, the authorized entity shall have the rights and responsibilities of the authorizing Indian Tribal Government only to the extent provided in the Authorizing resolution. (C) Qualified indian lands The term qualified Indian lands shall mean an Indian reservation as defined in section 3(d) of the Indian Financing Act of 1974 ( 25 U.S.C. 1452(d) ), including lands which are within the jurisdictional area of an Oklahoma Indian Tribe (as determined by the Secretary of the Interior) and shall include lands outside a reservation where the facility is to be placed in service in connection with— (i) the active conduct of a trade or business by an Indian Tribe on, contiguous to, within reasonable proximity of, or with a substantial connection to, an Indian reservation or Alaska Native village, or (ii) infrastructure (including roads, power lines, water systems, railroad spurs, and communication facilities) serving an Indian reservation or Alaska Native village. . (b) Conforming amendment Subparagraph (B) of section 45(c)(9) of the Internal Revenue Code of 1986 is amended to read as follows: (B) Indian tribe For purposes of this paragraph, the term Indian tribe means any Indian tribe, band, nation, or other organized group or community which is recognized as eligible for the special programs and services provided by the United States to Indians because of their status as Indians. . (c) Effective date The amendments made by this section shall apply to obligations issued in calendar years beginning after the date of the enactment of this Act. 4. Treatment of tribal foundations and charities like charities funded and controlled by other governmental funders and sponsors (a) In general Section 170(b)(1) of the Internal Revenue Code of 1986 is amended by adding at the end the following subparagraph: (I) Treatment of charities substantially funded by Indian tribal governments For purposes of subparagraph (A)(vi), the term governmental unit includes an Indian tribal government, an agency, instrumentality, or subdivision of an Indian tribal government, or an entity established under Federal, State, or tribal law which is wholly owned or controlled by any of the foregoing. . (b) Certain supporting organizations Section 509(a) of such Code is amended by adding at the end the following: For purposes of paragraph (3), an organization described in paragraph (2) shall be deemed to include an Indian tribal government, an agency, instrumentality, or subdivision of an Indian tribal government, or an entity established under Federal, State, or tribal law which is wholly owned or controlled by any of the foregoing. . (c) Effective date The amendments made by this section shall apply to taxable years beginning after the date of the enactment of this Act. 5. Improving effectiveness of tribal child support enforcement agencies by parity of access to the Federal parent locator service and Federal tax refund offsets (a) Access to federal parent locator service Section 453(c) of the Social Security Act ( 42 U.S.C. 653(c) ) is amended— (1) by striking and at the end of paragraph (4); (2) by striking the period at the end of paragraph (5) and inserting ; and ; and (3) by adding at the end the following: (6) the child support enforcement agency of an Indian tribe or tribal organization that is eligible for a grant under section 455(f). . (b) Improving the collection of past-Due child support from federal tax refunds (1) Amendment to the social security act Section 464 of the Social Security Act ( 42 U.S.C. 664 ) is amended by adding at the end the following: (d) Applicability to indian tribes and tribal organizations eligible for a grant under this part This section, except for the requirement to distribute amounts in accordance with section 457, shall apply to an Indian tribe or tribal organization eligible for a grant under section 455(f) in the same manner in which this section applies to a State with a plan approved under this part. . (2) Amendment to the internal revenue code Subsection (c) of section 6402 of the Internal Revenue Code of 1986 is amended by adding at the end the following: For purposes of this subsection, any reference to a State shall include a reference to any Indian tribe or tribal organization described in section 464(d) of the Social Security Act. . 6. Recognizing indian tribal governments for purposes of determining under the adoption credit whether a child has special needs (a) In general Section 23(d)(3) of the Internal Revenue Code of 1986 is amended— (1) in subparagraph (A), by inserting or Indian tribal government after a State ; and (2) in subparagraph (B), by inserting or Indian tribal government after such State . (b) Effective date The amendments made by this section shall apply to taxable years beginning after the date of the enactment of this Act. 7. Inclusion of Indian areas as difficult development areas for purposes of certain buildings (a) In general Subclause (I) of section 42(d)(5)(B)(iii) of the Internal Revenue Code of 1986 is amended by inserting before the period the following: , and any Indian area . (b) Indian area Clause (iii) of section 42(d)(5)(B) of the Internal Revenue Code of 1986 is amended by redesignating subclause (II) as subclause (IV) and by inserting after subclause (I) the following new subclauses: (II) Indian area For purposes of subclause (I), the term Indian area means any Indian area (as defined in section 4(11) of the Native American Housing Assistance and Self Determination Act of 1996 ( 25 U.S.C. 4103(11) )). (III) Special rule for buildings in Indian areas In the case of an area which is a difficult development area solely because it is an Indian area, a building shall not be treated as located in such area unless such building is assisted or financed under the Native American Housing Assistance and Self Determination Act of 1996 ( 25 U.S.C. 4101 et seq. ) or the project sponsor is an Indian tribe (as defined in section 45A(c)(6)), a tribally designated housing entity (as defined in section 4(22) of such Act ( 25 U.S.C. 4103(22) )), or wholly owned or controlled by such an Indian tribe or tribally designated housing entity. . (c) Effective date The amendments made by this section shall apply to buildings placed in service after December 31, 2021. 8. Indian employment tax credit (a) Extension Section 45A of the Internal Revenue Code of 1986 is amended by striking subsection (f). (b) Modification of determination of amount of credit Paragraph (2) of section 45A(a) of the Internal Revenue Code of 1986 is amended to read as follows: (2) the quotient of— (A) the sum of the qualified wages and qualified employee health insurance costs which were paid or incurred by the employer (or any predecessor) during the two most recent calendar years ending before the beginning of such taxable year, divided by (B) 2. . (c) Increased limitation Section 45A(b)(3) of the Internal Revenue Code of 1986 is amended by striking $20,000 and inserting $30,000 . (d) Effective date The amendments made by this section shall apply to taxable years beginning after December 31, 2021. 9. New markets tax credit for tribal statistical areas (a) Additional allocations for tribal statistical areas Section 45D(f) of the Internal Revenue Code of 1986 is amended by adding at the end the following new paragraph: (4) Additional allocations for tribal statistical areas (A) In general In the case of each calendar year after 2021, there is (in addition to any limitation under any other paragraph of this subsection) a new markets tax credit limitation of $175,000,000 which shall be allocated by the Secretary as provided in paragraph (2) except that such limitation may only be allocated with respect to Tribal Statistical Areas. (B) Carryover of unused tribal statistical area limitation (i) In general If the credit limitation under subparagraph (A) for any calendar year exceeds the amount of such limitation allocated by the Secretary for such calendar year, such limitation for the succeeding calendar year shall be increased by the amount of such excess. (ii) Limitation on carryover No amount of credit limitation may be carried under clause (i) past the 5th calendar year following the calendar year in which such amount of credit limitation arose. (iii) Transfer of expired tribal statistical area limitation to general limitation In the case of any amount of credit limitation which would (but for clause (ii)) be carried under clause (i) to the 6th calendar year following the calendar year in which such amount of credit limitation arose, the new market tax credit limitation under paragraph (1) for such 6th calendar year shall be increased by the amount of such credit limitation. (C) Tribal Statistical Area For purposes of this paragraph, the term Tribal Statistical Area means— (i) any low-income community which is located in any Tribal Census Tract, Oklahoma Tribal Statistical Area, Tribal-Designated Statistical Area, Alaska Native Village Statistical Area, or Hawaiian Home Land, and (ii) any low-income community described in subsection (e)(1)(B). . (b) Eligibility of certain businesses serving tribal members Section 45D(e)(1) of the Internal Revenue Code of 1986 is amended to read as follows: (1) In general The term low-income community means any area— (A) comprising a population census tract if— (i) the poverty rate for such tract is at least 20 percent, or (ii) (I) in the case of a tract not located within a metropolitan area, the median family income for such tract does not exceed 80 percent of statewide median family income, or (II) in the case of a tract located within a metropolitan area, the median family income for such tract does not exceed 80 percent of the greater of statewide median family income or the metropolitan area median family income, or (B) which is used for a qualified active low-income community business which— (i) services a significant population of Tribal or Alaska Native Village members who are residents of a low-income community described in subsection (f)(5)(C)(i), and (ii) obtains a written statement from the relevant Indian Tribal Government (within the meaning of section 7871(c)) that documents the eligibility of such qualified active low-income community business with respect to the requirement of clause (i). Subparagraph (A)(ii) shall be applied using possession wide median family income in the case of census tracts located within a possession of the United States. . (c) Regulatory authority Section 45D(i) of the Internal Revenue Code of 1986 is amended by striking and at the end of paragraph (5), by striking the period at the end of paragraph (6) and inserting , and , and by adding at the end the following new paragraph: (7) which provide documentation requirements for the written statement required under subsection (e)(1)(B)(ii), and (8) which provide procedures for identifying qualified low-income community businesses which meet the requirements of subsection (e)(1)(B)(i) (taking into account the location need of such businesses, especially with businesses that serve multiple tribal or Alaska Native Village communities. . (d) Effective date The amendments made by this section shall apply to new markets tax credit limitation determined for calendar years after December 31, 2021. 10. Tribal general welfare programs clarification (a) In general Section 1612(b) of the Social Security Act ( 42 U.S.C. 1382a(b) ) is amended by striking ; and at the end of paragraph (25), by striking the period at the end of paragraph (26) and inserting ; and , and by adding at the end the following new paragraph: (27) any Indian general welfare benefit (as defined in section 139E of the Internal Revenue Code of 1986). . (b) Exclusion from resources Section 1613(a) of the Social Security Act ( 42 U.S.C. 1382b(a) ) is amended by striking ; and at the end of paragraph (16), by striking the period at the end of paragraph (17) and inserting ; and , and by inserting after paragraph (17) the following new paragraph: (18) for the 9-month period beginning after the month in which received, any Indian general welfare benefit (within the meaning of section 139E of the Internal Revenue Code of 1986). .