[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[S. 2022 Introduced in Senate (IS)]
<DOC>
119th CONGRESS
1st Session
S. 2022
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.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
June 11, 2025
Ms. Cortez Masto (for herself and Ms. Murkowski) 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.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) Short Title.--This Act may be cited as the ``Tribal Tax and
Investment Reform Act of 2025''.
(b) Table of Contents.--The table of contents of this Act is as
follows:
Sec. 1. Short title; table of contents.
Sec. 2. Findings.
Sec. 3. Treatment of Indian tribes as States with respect to excise
taxes and bond issuance.
Sec. 4. Treatment of pension and employee benefit plans maintained by
Tribal Governments.
Sec. 5. Treatment of Tribal foundations and charities like charities
funded and controlled by other governmental
funders and sponsors.
Sec. 6. Improving effectiveness of Tribal child support enforcement
agencies.
Sec. 7. Recognizing Indian tribal governments for purposes of
determining under the adoption credit
whether a child has special needs.
Sec. 8. New markets tax credit for tribal area investments.
Sec. 9. Inclusion of Indian areas as difficult development areas for
purposes of certain buildings.
Sec. 10. Tribal general welfare and trust programs clarification.
Sec. 11. Indian employment tax credit.
Sec. 12. Exclusion from gross income for payments under Indian health
service loan repayment program.
Sec. 13. Exclusion of certain amounts received under Indian Health
Professions Scholarships Program.
SEC. 2. FINDINGS.
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) That Indian Tribes face historic disadvantages in
accessing the underlying capital to build the necessary
infrastructure for job creation, and that 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.
SEC. 3. TREATMENT OF INDIAN TRIBES AS STATES WITH RESPECT TO EXCISE
TAXES AND BOND ISSUANCE.
(a) Repeal of Essential Governmental Function Requirements.--
Section 7871 of the Internal Revenue Code of 1986 is amended by
striking subsections (b) and (e) and redesignating subsections (c),
(d), and (f) as subsections (b), (c), and (d), respectively.
(b) Special Rules for Tax-Exempt Bonds.--
(1) In general.--
(A) Application of private activity bond rules.--
Subsection (b) of section 7871 of such Code, as
redesignated by subsection (a), is amended to read as
follows:
``(b) Special Rules for Tax-Exempt Bonds.--
``(1) Volume cap.--
``(A) In general.--In applying section 146 to bonds
issued by Indian Tribal Governments--
``(i) there shall be a national bond volume
cap for each calendar year equal to
$400,000,000, and
``(ii) the volume cap for any Indian Tribal
Government shall be the portion of such
national bond volume cap which is allocated by
the Secretary (under such regulations as the
Secretary may prescribe) to such Indian Tribal
Government.
``(B) Inflation adjustment.--In the case of a
calendar year after 2026, the $400,000,000 amount in
subparagraph (A)(i)shall be increased by an amount
equal to--
``(i) such dollar amount, multiplied by
``(ii) the cost-of-living adjustment
determined under section 1(f)(3) for such
calendar year by substituting `calendar year
2025' for `calendar year 2016' in subparagraph
(A)(ii) thereof.
If any increase determined under the preceding sentence
is not a multiple of $100,000, such increase shall be
rounded to the nearest multiple of $100,000.
``(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 proceeds from an obligation issued
by an Indian Tribal Government (or subdivision thereof) under
section 103 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 (25
U.S.C. 2703)) 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 recognized governing body
of any Indian or Alaska Native tribe, band, nation,
pueblo, village, community, component band, or
component reservation, individually identified
(including parenthetically) pursuant to section 104 of
the Federally Recognized Indian Tribe List Act of 1994
(25 U.S.C. 5131).
``(B) Intertribal consortia, etc.--Under
regulations prescribed by the Secretary, an Indian
Tribal Government (or a partnership of Indian Tribal
Governments) may authorize an intertribal consortium,
an organization, or a Regional Corporation, Village
Corporation, Urban Corporation, or Group 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,
except that the authorized entity shall have the rights
and responsibilities of the authorizing Indian Tribal
Government (or Indian Tribal Governments) only to the
extent provided in the authorizing resolution.
``(C) Qualified indian lands.--The term `qualified
Indian lands' means--
``(i) Indian lands within the meaning of
section 29(j)(8) of the Stevenson-Wydler
Technology Innovation Act of 1980 (15 U.S.C.
3722b(j)(8)),
``(ii) land held in fee simple by an Indian
Tribal Government,
``(iii) any land located within a region
established pursuant to section 7(a) of the
Alaska Native Claims Settlement Act (43 U.S.C.
1606(a)),
``(iv) Hawai`ian Home Lands (as defined in
section 801 of the Native American Housing
Assistance and Self-Determination Act of 1996
(25 U.S.C. 4221)), and
``(v) under regulations prescribed by the
Secretary, lands 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 lands described in clause
(i), (ii), (iii), or (iv), or
``(II) infrastructure (including
roads, power lines, water systems,
railroad spurs, and communication
facilities) serving lands described in
clause (i), (ii), (iii), or (iv).''.
(B) Conforming amendments.--
(i) Section 7871(a) of such Code is
amended--
(I) in paragraph (2) by striking
``subject to subsection (b),'', and
(II) in paragraph (4) by striking
``subsection (c)'' and inserting
``subsection (b)''.
(ii) Subparagraph (B) of section 45(c)(9)
of such Code 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.''.
(2) Alaska native corporation economic development bonds.--
(A) In general.--Section 7871 of the Internal
Revenue Code of 1986, as amended by subsection (a), is
amended by inserting at the end the following new
subsection:
``(e) Alaska Native Corporation Economic Development Bonds.--
``(1) National limitation.--
``(A) In general.--There is a national Alaska
Native Corporation economic development bond limitation
for each calendar year. Such limitation shall be equal
to the amount $45,000,000.
``(B) Inflation adjustment.--In the case of a
calendar year after 2026, the $45,000,000 amount in
subparagraph (A) shall be increased by an amount equal
to--
``(i) such dollar amount, multiplied by
``(ii) the cost-of-living adjustment
determined under section 1(f)(3) for such
calendar year by substituting `calendar year
2025' for `calendar year 2016' in subparagraph
(A)(ii) thereof.
If any increase determined under the preceding sentence
is not a multiple of $100,000, such increase shall be
rounded to the nearest multiple of $100,000.
``(C) Allocation.--
``(i) In general.--The Secretary shall
allocate the national Alaska Native Corporation
economic development bond limitation among the
Alaska Native Corporations selected by the
Secretary, in consultation with the Secretary
of the Interior.
``(ii) Eligibility.--The Secretary shall
not make any allocation under clause (i) to an
Alaska Native Corporation unless such Alaska
Native corporation provides the Secretary with
a written certification that any project
undertaken using the proceeds of an Alaska
Native Corporation economic development bond
will promote the economic, social, or cultural
well-being of the corporation's shareholders.
``(2) Bonds treated as exempt from tax.--In the case of an
Alaska Native Corporation economic development bond--
``(A) such bond shall be treated for purposes of
this title in the same manner as if such bond were
issued by a State,
``(B) the Alaska Native Corporation issuing such
bond shall be treated as a State for purposes of
section 141, and
``(C) section 146 shall not apply.
``(3) Alaska native corporation economic development
bond.--
``(A) In general.--For purposes of this section,
the term `Alaska Native Corporation economic
development bond' means any bond issued by an Alaska
Native Corporation--
``(i) the interest on which would be exempt
from tax under section 103 if issued by a State
or local government,
``(ii) substantially all of the net
proceeds of which are used--
``(I) with respect to facilities on
land located within a region
established pursuant to section 7(a) of
the Alaska Native Claims Settlement Act
(43 U.S.C. 1606(a)), or
``(II) to provide facilities within
Alaska or services to residents of
Alaska,
``(iii) none of the net proceeds of which
are used for any project or activity if the
proceeds of a bond to which subsection (b)
applies has also been used for such project or
activity, and
``(iv) which is designated by the Alaska
Native Corporation as an Alaska Native
Corporation economic development bond for
purposes of this subsection.
``(B) Exceptions.--Such term shall not include any
bond issued as part of an issue if any portion of the
proceeds of such issue are used to finance--
``(i) 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 other property
actually used in the conduct of such gaming, or
``(ii) any portion of the proceeds of such
issue is to be used to provide (including the
provision of land for) any private or
commercial golf course, country club, massage
parlor, hot tub facility, suntan facility,
racetrack or other facility used for gambling,
or any store the principal business of which is
the sale of alcoholic beverages for consumption
off premises.
``(C) Limitation on amount of bonds designated.--
The maximum aggregate face amount of bonds which may be
designated by any Alaska Native Corporation under
subparagraph (A) shall not exceed the amount of
national Alaska Native Corporation economic development
bond limitation allocated to such corporation under
paragraph (1).
``(4) Alaska native corporation.--For purposes of this
subsection, the term `Alaska Native Corporation' means any
Regional Corporation, any Village Corporation, any Urban
Corporation, and any Group Corporation (as such terms are
defined in section 3 of the Alaska Native Claims Settlement
Act).''.
(B) Termination of tribal economic development
bonds.--Section 7871(d)(3), as redesignated by
subsection (a), is amended by adding at the end the
following new subparagraph:
``(D) Termination.--No bond which is issued after
December 31, 2028, may be designated as a tribal
economic bond under subparagraph (A).''.
(c) Effective Date.--
(1) In general.--Except as provided in paragraph (2), the
amendments made by this section shall apply to obligations
issued in calendar years beginning after the date of the
enactment of this Act.
(2) Excise taxes.--T