[Congressional Bills 105th Congress]
[From the U.S. Government Publishing Office]
[H.R. 1554 Introduced in House (IH)]







105th CONGRESS
  1st Session
                                H. R. 1554

    To amend the Internal Revenue Code of 1986 to provide that the 
commercial activities of an Indian tribal organization shall be subject 
                 to the unrelated business income tax.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                              May 8, 1997

 Mr. Hutchinson (for himself, Mr. Blunt, Mr. Sandlin, and Mr. Edwards) 
 introduced the following bill; which was referred to the Committee on 
                             Ways and Means

_______________________________________________________________________

                                 A BILL


 
    To amend the Internal Revenue Code of 1986 to provide that the 
commercial activities of an Indian tribal organization shall be subject 
                 to the unrelated business income tax.

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

SECTION 1. TREATMENT OF INDIAN COMMERCIAL ACTIVITIES UNDER UNRELATED 
              BUSINESS INCOME TAX.

    (a) In General.--Paragraph (2) of section 511(a) of the Internal 
Revenue Code of 1986 (relating to imposition of tax on unrelated 
business income of charitable, etc., organizations) is amended by 
adding at the end the following new subparagraph:
                    ``(C) Commercial activities of indian tribes.--
                            ``(i) In general.--Except as provided in 
                        clause (ii), the tax imposed by paragraph (1) 
                        shall apply in the case of any Indian tribal 
                        organization.
                            ``(ii) Exception for certain activities.--
                        Clause (i) shall not apply to any trade or 
                        business--
                                    ``(I) more than half the income of 
                                which is normally derived (directly or 
                                indirectly) from members of the Indian 
                                tribe involved, and
                                    ``(II) which does not compete with 
                                any trade or business subject to tax 
                                under this chapter (determined without 
                                regard to this subparagraph).
                            ``(iii) Indian tribal organization.--For 
                        purposes of this subparagraph, the term `Indian 
                        tribal organization' means any Indian tribe and 
                        any organization which is exempt from tax under 
                        this subtitle solely by reason of being owned 
                        or controlled by an Indian tribe.''
    (b) Treatment of Amounts Paid for Charitable Purposes, Etc., By 
Reason of State or Federal Law.--Subsection (b) of section 512 of such 
Code is amended by adding at the end the following new paragraph:
            ``(18) In the case of an Indian tribal organization (as 
        defined in section 511(a)(2)(C)), if, by reason of State or 
        Federal law or of a contract with the United States or any 
        State or local government, such organization is required to use 
        any portion of the net proceeds of any activity for specified 
        purposes, the deduction for so using such proceeds shall be 
        treated as allowed under section 170 for purposes of applying 
        paragraph (10). The preceding sentence shall not apply to such 
        proceeds which are paid as general revenues to the United 
        States or any State or local government.''
    (c) Effective Date.--The amendments made by this section shall take 
effect on the date of the enactment of this Act.
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