Pass the "Tribal General Welfare Exclusion Act” in 2014

As Congress returns to work this month, what better way to kick off a substantive legislative session than by passing a truly bipartisan bill that will positively affect many Native Americans and not appreciably affect the budget of the United States; the Tribal General Welfare Exclusion Act is one such bill.

In August, Rep. Devin Nunes (R-Calif.) introduced H.R. 3043, the "Tribal General Welfare Exclusion Act of 2013." In a bipartisan manner, the bill was introduced with 14 original cosponsors; eight Republicans and six Democrats.  The bill also has the support of both members of Congress of American Indian decent, U.S. Reps. Tom Cole (R-Okla.) and Markwayne Mullin (R-Okla.).

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In five short months, the bill now has over 40 cosponsors in the House – and in September, U.S. Sens. Jerry Moran (R-Kan.) and Heidi Heitkamp (D-N.D.) introduced the bipartisan companion bill S.1507 in the U.S. Senate.

“By excessively taxing critical programs and services provided by American Indian tribes to their members, the IRS is discouraging the tribes’ self-reliance and fostering dependence on the federal government,” the bill’s main sponsor, Rep. Nunes, told Indian Country Today Media Network recently in an e-mail. “This bill will rectify the situation by allowing tribes more leeway to administer programs at an effective, local level.”

While Congress will continue in 2014 to wrestle with big ticket and often contentious issues such as the Affordable Care Act, the continuing resolution (CR), the appropriations spending bills, the debt ceiling, and numerous tax reform proposals, hundreds of Native American tribes across the country are encouraging the congressional leadership, in both chambers of Congress, to act on and pass examples of sound legislation, excellent policy, and bipartisan ideas, like the Tribal General Welfare Exclusion Act.

We ask Congress to pass the Tribal General Welfare Exclusion Act as a substantial and visible showing of bipartisan and smart leadership in 2014.

The cost?  The Joint Committee on Taxation has scored H.R. 3043 at no cost to the U.S. federal government.

In a show of strong support for H.R. 3043 and S. 1507, tribes across the country are asking Congress to codify and broaden the General Welfare Exclusion (GWE).  The IRS has consistently exempted Tribes from federal taxation of tribal social benefit programs that serve to promote the general welfare of the tribe.  However, the IRS has increasingly attempted to tax such tribal benefits and services. This legislation would codify the tribal exclusion in the Internal Revenue Code to protect tribal members from this taxation.  It promotes tribal self-determination and carries no additional cost to the U.S. taxpayer.

Specifically, H.R. 3043 and S. 1507 would clarify that payments, programs or services provided by tribal governments for the general welfare of their people are excluded from federal income tax.

Secondly, the Act would clarify that benefits that are items of cultural significance, reimbursement of costs, or cash honoraria provided by tribal governments for cultural purposes or participation in cultural events do not represent compensation for services and will be excluded from federal income tax.

Lastly, the Act would suspend all audits pertaining to tribal government-provided benefits and services until the Act is fully implemented.

The bill would also go far in reforming the IRS as it relates to tribes.

The Act would establish a Tribal Advisory Committee which will establish a mandatory education and training program for IRS field agents to learn about Indian law.

In 2014, Congress has some very substantial, often combative, issues to debate.  This is not one of them.  The Tribal General Welfare Exclusion Act is bipartisan.  It will pass both chambers.  And it will have an immediate and positive impact on Native Americans in the United States. 

The key to any successful legislative body is to find those areas where there is common agreement – the low-hanging fruit, as it’s called – and pass those bills.  Passing such legislation is good for the country and it builds trust among colleagues in legislative bodies to tackle the big, controversial, issues of our time.  Passing the Tribal General Welfare Exclusion Act would be an excellent example of common agreement and bipartisanship that can help mark 2014 as a very positive and productive legislative session.

Shepherd is the tribal chairman of Sisseton Wahpeton Oyate on the Lake Traverse Reservation, located at Sisseton, South Dakota. He is currently the secretary of the National Congress of American Indians, co-chair of the Tribal Interior Budget Council, the secretary/Treasurer of the United Tribes Technical College Board of Directors and vice-chairman of the Great Plains Tribal Chairman’s Association.

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