Tribes don't want to be left behind as Washington turns to tax policy reform

Thursday, October 26, 2017  

With Indian Country's standing within the Trump administration still in flux, tribal leaders are turning to Congress to include them in tax reform efforts.

A bill introduced in the Senate furthers that goal. By addressing some long-standing issues, S.2012, the Tribal Economic Assistance Act, seeks to help tribes stimulate their economies.

“As Congress tackles tax reform, it’s important that Indian Country is included in the conversation,” Sen. John Hoeven (R-North Dakota), the chairman of the Senate Committee on Indian Affairs, said on Thursday.

“This bill promotes partnership, investment and development in tribal communities by extending and enhancing critical tax credits," said Hoeven, who introduced S.2012 on Wednesday. "It also expands financing options for infrastructure projects, such as tribal schools and educational facilities. Reducing regulatory burdens will jumpstart economic growth and ensure tax relief is working for all Americans, including Indian tribes.”

One significant provision of the Tribal Economic Assistance Act resolves a disparity regarding tax-exempt bonds. Tribes have faced intense scrutiny when they issue bonds for hotels, civic centers, golf courses and other economic projects, whereas states and local governments are able to finance the same types of endeavors without much question.

"States and local governments are able to borrow money much more cheaply than tribes are able to do because they don't pay taxes on the debt," John Dossett, the general counsel of the National Congress of American Indians, said during the organization's 74th annual convention last week.

S.2012 addresses the problem by eliminating the so-called "essential government function" test that tripped up tribal projects in the past. The provision essentially levels the playing field for tribes, states and local governments.

A repeal of the "essential government function" test is also included in a tax reform bill that was introduced in the House over the summer. H.R.3138, the Tribal Tax and Investment Reform Act, enjoys bipartisan support but tribes are working to line up more co-sponsors.

"We’re hoping to move this forward," Lianna Onnen, the chairwoman of the Prairie Band Potawatomi Nation, said last Thursday during NCAI's conference in Milwaukee, Wisconsin.

Tax reform is one of the biggest priorities for President Donald Trump, who has repeatedly made significant promises about potential changes. But whether it's health care or immigration, his legislative agenda has largely fallen flat on Capitol Hill.

"This will be the biggest TAX CUT in the history of our country - and we need it!" the president wroter on Twitter on Wednesday.

It is largely up to Congress to enact tax changes, and Republican leaders are hoping to take action by the end of the year in order to help their party and Trump score a policy win. To achieve that goal, there's been talk of extending the legislative schedule as close to the Christmas holiday in December as possible.

"They're asking me to comment on what the rest of the year looks like," Rep. Gwen Moore (D-Wisconsin), whose district includes Milwaukee, told tribal leaders last Monday.

"Who the hell knows," Moore said to applause and laughter.

"Anytime we have tax reform on the table, you know that we have to continue to remind them of the position of sovereignty and Native peoples," Moore added. "You know how the expression goes: if you're not at the table, you're on the menu."

S.2012, which counts one Republican and one Democratic co-sponsor in addition to Hoeven, has been referred to the Senate Committee on Finance. H.R.3138, which has 10 sponsors and co-sponsors from both parties, has been referred to the House Committee on Ways and Means and the House Committee on Education and the Workforce. While the bills contain similar provisions, they are not identical.