Representatives David Schweikert and Gwen Moore introduced the Tribal Tax Investment and Reform Act, legislation to ensure tribal governments can access, on an equal basis with state and local governments, tax programs and economic incentives to empower tribal nations to better meet the economic needs of their members and communities.  

Upholding tribal sovereignty and self-governance has long been an important priority for me. I know that this is also critical for Wisconsin’s 11 federally recognized tribes because all too often, the federal government has failed to live up to its end of the trust relationship with our tribal brothers and sisters.   And that has left a legacy of inequities faced by Native Americans from health care to education, to housing, and economic opportunities.

This legislation would ensure that tribes have access to the same incentives in our tax code on the same basis as state and local governments in order to bolster their ability to create economic opportunity and help meet pressing needs, including expanding access to jobs, capital, and supporting more affordable housing. 

“I am proud to introduce this legislation and continue supporting our promise to the 22 federally recognized tribes of Arizona,” said Rep. Schweikert. “Provisions in this legislation will empower tribal governments, members, and their families. I look forward to working with my colleagues to advance this important work.”

“For too long, the federal government has put extra steps or additional burdens on tribal nations trying to exercise the same authorities that state and local governments,” said Rep. Moore.

“This legislation is a significant step forward for tribal tax parity, and critical to spur business development in Indian Country. Allowing tribes greater access to tax-free bonds and making a much-needed increase in available credit will help create jobs and economic growth. Additional changes in the legislation, such as those to the New Market Tax Credits or General Welfare, will help bring the federal tax code more in line with the treaty obligations of the federal government. NAFOA strongly supports the ‘Tribal Tax and Investment Reform Act’ introduced by Congresswoman Moore and Congressman Schweikert, and looks forward to working together to ensure its enactment for Indian Country,” said NAFOA Board of Directors President Rodney Butler, Chairman of the Mashantucket Pequot Tribal Nation.

Background

A key provision in this legislation is the repeal of the “essential government function” test which has unfairly prevented tribal governments from being able to use tax-exempt government bonds in the same way state and local governments can.  These bonds are useful tools for financing important economic development activities such as housing, infrastructure, and public parks.

 This legislation also modifies the Low-Income Housing Tax Credit to make all tribal areas “difficult development area” so they automatically qualify for the 30% basis boost – meaning more credits would be available to cover the costs of a housing project in Tribal Nations financed with these tax credits. The Low-Income Tax Credit is our nation’s best tool for increasing the supply of affordable housing and rental units, but tribal governments face systemic barriers to accessing this credit.

The Tribal Tax Investment and Reform Act also creates an annual $175 million New Market Tax Credit, aimed at bringing much-needed capital investment in tribal infrastructure and employment opportunities into Tribal Nations. The New Market Tax Credit was established in 2000 and supports financial investments in economically challenged communities across the country by providing private investors with access to favorable and affordable financing. Every federal dollar invested supports more than $8 in private investment.¹

Lastly, the bill includes a provision from my stand-alone legislation that would ensure that individuals who receive Indian Health Service (IHS) scholarships or loan repayment assistance to provide health care services in tribal communities can receive the same tax-exempt status available in other federal health care workforce programs such as the National Health Service Corps.

Read more on the Tribal Tax Investment and Reform Act here.