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House approves bill to address tribal general welfare programs

Wednesday, September 17, 2014

Rep. Tom Cole (R-Oklahoma) submitted a statement in favor of H.R.3043, the Tribal General Welfare Exclusion Act. Photo from Flickr

The House easily passed H.R.3043, the Tribal General Welfare Exclusion Act, by a voice vote on Tuesday night.

Consideration of the measure took less than 10 minutes. But lawmakers said the bill takes an important step by putting tribes on the same level as state and federal governments regarding payments made through general welfare programs.

"With their unique history of tribal sovereignty, Native Americans should not be subjected to arbitrary tax enforcement," Rep. Devin Nunes (R-California) said on the floor yesterday. "This bill would put tribes on par with state and local governments and would end unwarranted intrusions into tribal self-government."

The Internal Revenue Service has been criticized in recent years for going after tribal benefits. The Obama administration finalized new guidance, Application of the General Welfare Exclusion to Indian Tribal Government Programs That Provide Benefits to Tribal Members, in June but the bill establishes a more permanent policy on the matter.

"The bill excludes from taxation income received on tribal general welfare programs, many of which are identical to the tax-exempt federal and state programs in the areas of health care, education, housing, eldercare, emergency assistance, cultural programs, burial assistance, and legal aid, and provides necessary deference and flexibility to these tribal governments so that they can develop programs and determine priorities that promote the general welfare in their own communities," Rep. Ron Kind (D-Wisconsin) said on the floor.

The bill also provides temporary relief to tribes and their members who are being audited by requiring the Department of Treasury to develop new training for agents who work in Indian Country. A Tribal Advisory Committee will be set up to help oversee the training and to advise the Treasury Secretary on taxation issues.

"Field agent decision-making has been at best inconsistent and arbitrary," Rep. Tom Cole (R-Oklahoma), a member of the Chickasaw Nation, said in a statement that was inserted into yesterday's issue of the Congressional Record. "Activities allowed in one audit have been challenged in another. Field agents have conversely given wide deference to federal and state government programs that provide for the general welfare of their citizens."

The Joint Committee on Taxation has given the bill a revenue score of zero dollars, meaning its impact on the federal budget will be minimal. Nearly every major tribal organization supports the measure.

The Senate version of the bill is S.1507 but it has yet to receive a hearing.