[Congressional Bills 104th Congress]
[From the U.S. Government Publishing Office]
[S. 1305 Introduced in Senate (IS)]







104th CONGRESS
  1st Session
                                S. 1305

 To amend the Internal Revenue Code of 1986 to treat for unemployment 
 compensation purposes Indian tribal governments the same as State or 
        local units of government or as nonprofit organizations.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                            October 10, 1995

 Mr. McCain (for himself, Mr. Baucus, Mr. Campbell, Mr. Domenici, Mr. 
Inouye, Mr. Kyl, Mr. Stevens, and Mr. Thomas) 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 for unemployment 
 compensation purposes Indian tribal governments the same as State or 
        local units of government or as nonprofit organizations.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Indian Tribal Government 
Unemployment Compensation Act Tax Relief Amendments of 1995''.

SEC. 2. TREATMENT OF INDIAN TRIBAL GOVERNMENTS UNDER FEDERAL 
              UNEMPLOYMENT TAX ACT.

    (a) In General.--Section 3306(c)(7) of the Internal Revenue Code of 
1986 (defining employment) is amended--
            (1) by inserting ``or in the employ of an Indian tribe,'' 
        after ``service performed in the employ of a State, or any 
        political subdivision thereof,''; and
            (2) by inserting ``or Indian tribes'' after ``wholly owned 
        by one or more States or political subdivisions''.
    (b) Payments in Lieu of Contributions.--Section 3309 of the 
Internal Revenue Code of 1986 (relating to State law coverage of 
services performed for nonprofit organizations or governmental 
entities) is amended--
            (1) in subsection (a)(2) by inserting ``, including an 
        Indian tribe,'' after ``the State law shall provide that a 
        governmental entity'';
            (2) in subsection (b)(3)(B) by inserting ``, or of an 
        Indian tribe'' after ``of a State or political subdivision 
        thereof'';
            (3) in subsection (b)(3)(E) by inserting ``or the tribe's'' 
        after ``the State''; and
            (4) in subsection (b)(5) by inserting ``or of an Indian 
        tribe'' after ``an agency of a State or political subdivision 
        thereof''.
    (c) State Law Coverage.--Section 3309 of the Internal Revenue Code 
of 1986 (relating to State law coverage of services performed for 
nonprofit organizations or governmental entities) is amended by adding 
at the end the following new subsection:
    ``(d) Election by Indian Tribe.--The State law shall provide that 
an Indian tribe may elect to make contributions for employment as if 
the employment is within the meaning of section 3306 of the Internal 
Revenue Code of 1986 or to make payments in lieu of contributions under 
this section, and shall provide that an Indian tribe may make separate 
elections for itself and each subdivision, subsidiary, or business 
enterprise chartered and wholly owned by such Indian tribe. State law 
may require an electing tribe to post a payment bond or take other 
reasonable measures to assure the making of payments in lieu of 
contributions under this section.''.
    (d) Definitions.--Section 3306 of the Internal Revenue Code of 1986 
(relating to definitions) is amended by adding at the end the following 
new subsection:
    ``(t) Indian Tribe.--For purposes of this chapter, the term `Indian 
tribe' has the meaning given to such term by section 4(e) of the Indian 
Self-Determination and Education Assistance Act (25 U.S.C. 450b(e)), 
and includes any subdivision, subsidiary, or business enterprise 
chartered and wholly owned by such an Indian tribe.''
    (e) Transition Rule.--For purposes of the Federal Unemployment Tax 
Act, service performed in the employ of an Indian tribe (as defined in 
section 3306(t) of the Internal Revenue Code of 1986 (as added by this 
Act)) shall not be treated as employment (within the meaning of section 
3306 of such Code) if--
            (1) it is service which is performed before the date of 
        enactment of this Act and with respect to which the tax imposed 
        under the Federal Unemployment Tax Act has not been paid; and
            (2) such Indian tribe reimburses a State unemployment fund 
        for unemployment benefits paid for service attributable to such 
        tribe for such period.
                                 <all>