[Congressional Bills 107th Congress]
[From the U.S. Government Publishing Office]
[H.R. 2726 Introduced in House (IH)]







107th CONGRESS
  1st Session
                                H. R. 2726

To provide for the payment of State taxes and local taxes collected by 
 the State on the sale of cigarettes and motor fuel by a tribal retail 
enterprise to persons that are not members of the tribe, and for other 
                               purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             August 2, 2001

 Mr. Young of Alaska introduced the following bill; which was referred 
                     to the Committee on Resources

_______________________________________________________________________

                                 A BILL


 
To provide for the payment of State taxes and local taxes collected by 
 the State on the sale of cigarettes and motor fuel by a tribal retail 
enterprise to persons that are not members of the tribe, and for other 
                               purposes.

    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 ``Tribal-State Tax Fairness Act of 
2001''.

SEC. 2. DEFINITIONS.

    For purposes of this Act:
            (1) Covered state tax.--The term ``covered State tax'' 
        means a lawfully imposed and nondiscriminatory State or local 
        excise, sales, or transaction tax that is collected by the 
        State, levied or imposed on purchases, by nonmembers of a 
        tribe, of tobacco products or motor fuels from a tribal retail 
        enterprise.
            (2) Indian country.--The term ``Indian country'' means any 
        land where an Indian tribe may legally assert sovereignty over 
        a tribal retail enterprise.
            (3) Indian tribe.--The term ``Indian tribe'' has the 
        meaning given that term in section 4(e) of the Indian Self-
        Determination and Education Assistance Act (25 U.S.C. 450b(e)).
            (4) Person.--The term ``person'' includes individuals, 
        corporations, partnerships, associations of persons, State or 
        local governments, non-Indian retailers affiliated with one or 
        more Indian tribes, Indian tribes, or Indian tribal 
        governments.
            (5) Petition for enforcement.--The term ``petition for 
        enforcement'' means a petition submitted to the Secretary by a 
        Governor of a State which requires action by the Secretary 
        under section 4(a).
            (6) Secretary.--The term ``Secretary'' means the Secretary 
        of the Interior or a designee of the Secretary.
            (7) Service.--The term ``Service'' means the Federal 
        Mediation and Conciliation Service established under section 
        202 of the National Labor Relations Act (29 U.S.C. 172).
            (8) Tribal retail enterprise.--The term ``tribal retail 
        enterprise'' means a person that has conducted business in 
        Indian country and at the time that such business was 
        conducted, was owned or operated (in whole or in part) by one 
        or more of the following:
                    (A) An Indian tribe.
                    (B) A member of an Indian tribe.
                    (C) A person who is not a member of an Indian tribe 
                under a management contract with an Indian tribe or a 
                member of an Indian tribe.
            (9) Tribal-state agreement.--The term ``tribal-State 
        agreement'' means an agreement or compact between a State and 
        an Indian tribe concerning State taxes on tobacco products, 
        motor fuels, or both, that is in effect on the date of 
        enactment of this Act, or was in effect at any time between 
        January 1, 1990, and the date of enactment of this Act. If 
        there is more than 1 such agreement or compact, the term 
        ``tribal-State agreement'' means the agreement or compact that 
        was most recently in effect.

SEC. 3. APPLICABILITY.

    (a) In General.--Except to the extent that a tribal-State agreement 
provides otherwise, this Act shall not apply to--
            (1) that part of any covered State tax for which a State 
        law specifically exempts, either in whole or in part, the 
        collection or remittance of such taxes; or
            (2) any covered State tax for which, under State or local 
        law which requires the collection or remittance tax, the legal 
        incidence of the otherwise applicable State tax falls on a 
        tribe or its members, thereby subjecting the purchase by a 
        tribal member from a tribal retail enterprise to a State 
        excise, sales, or transaction tax.
    (b) Prospective Applicability.--This Act shall apply only to 
covered State taxes due, or amounts due under tribal-State agreements, 
with respect to purchases completed on or after the date of the 
enactment of this Act.

SEC. 4. COLLECTION OF COVERED STATE TAXES PURSUANT TO AN ENFORCEMENT 
              PETITION.

    (a) Enforcement Petition by the Governor; Determination of Validity 
by the Secretary.--Not later than 60 days after receiving a petition 
from the Governor of a State within the exterior borders of which a 
tribal retail enterprise is located alleging the non-collection, non-
remittance, or both, of a covered State tax by the tribal retail 
enterprise and requesting action under this Act by the Secretary, the 
Secretary shall determine, through an investigation, audit or other 
method, whether or not the tribal retail enterprise is collecting and 
remitting the appropriate amount of covered State tax.
    (b) Notice Upon Finding of Validity of Enforcement Petition; 
Remittance.--
            (1) Notice.--Not later than 60 days after a determination 
        of the validity of the allegations in an Enforcement Petition, 
        the Secretary shall notify the tribal retail enterprise that is 
        the subject of the Enforcement Petition of this determination 
        and direct the tribal retail enterprise to collect the covered 
        State tax and remit it to the Secretary pursuant to subsection 
        (c).
            (2) Remittance.--A tribal retail enterprise shall begin 
        remitting funds to the Secretary on the schedule established in 
        subsection (c) not later than 60 days after the later of the 
        following:
                    (A) The date that the Secretary notifies the tribal 
                retail enterprise under paragraph (1).
                    (B) The date that a determination is made as a 
                result of a mediation under subsection (c)(2)(D).
    (c) Timing and Amount of Remittance to Secretary.--
            (1) In general.--A tribal retail enterprise shall remit to 
        the Secretary covered State taxes collected pursuant to 
        subsection (b) on a monthly basis, by the 15th day following 
        the month in which the taxes were collected.
            (2) Determination of amount to be remitted to secretary.--
                    (A) Existence of tribal-state agreement.--In the 
                event a tribal-State agreement exists or existed with 
                respect to the tribal retail enterprise or Indian tribe 
                named in a Enforcement Petition, then the amount of 
                covered State taxes collected and remitted to the 
                Secretary pursuant to such a Enforcement Petition shall 
                in no event be more than the amount provided for by the 
                terms of such tribal-State agreement, even if such 
                tribal-State agreement is no longer in effect at the 
                time that the Enforcement Petition was submitted 
                because the agreement has expired or one of the parties 
                to the agreement has terminated the agreement.
                    (B) Absence of tribal-state agreement.--In the 
                event a tribal-State agreement with respect to the 
                tribal retail enterprise or Indian tribe named in a 
                Enforcement Petition did not or does not exist, then 
                the Secretary shall consult with the Governor of the 
                State that submitted the Enforcement Petition to 
                determine the appropriate amount of covered State taxes 
                that should be remitted to the Secretary under this 
                subsection based upon relevant State law.
                    (C) Calculation of amounts to be remitted.--The 
                Secretary shall collect from the tribal retail 
                enterprise or Indian tribe named in an Enforcement 
                Petition all covered State taxes that the Secretary 
                determines should have been remitted to the appropriate 
                State since the date of enactment of this Act, unless 
                the Enforcement Petition specifies a alternative date 
                after the enactment of this Act.
                    (D) Mediation.--
                            (i) In general.--If the parties cannot 
                        agree on the amount required to be remitted 
                        under this subsection, the Secretary shall 
                        contact the Service and request the 
                        establishment of a mediation between the tribal 
                        retail enterprise or the Indian tribe and the 
                        Governor of the State for the purposes of 
                        determining such amount.
                            (ii) Deadline for completion.--Not later 
                        than 180 days after the initial contact by the 
                        Secretary regarding the mediation, the Service 
                        shall complete such mediation and render its 
                        determination on the appropriate amount to be 
                        remitted to the Secretary.
                            (iii) Use of determination.--The 
                        determination of the Service shall be used by 
                        the Secretary in establishing the appropriate 
                        amount to be remitted.
                            (iv) Refusal to cooperate with mediation.--
                        If a tribal retail enterprise, Indian tribe, or 
                        Governor of a State (or the designee of the 
                        Governor) fails to participate in the mediation 
                        under this subparagraph or fails to cooperate 
                        with the Service regarding the mediation, the 
                        Service may make its determination based upon 
                        information available to the Service.
    (d) Termination of Remittances to Secretary.--Remittances of 
covered State taxes to the Secretary required under this subsection 
shall continue until one of the following occurs:
            (1) The Governor of the State submitting the Enforcement 
        Petition certifies in writing to the Secretary that the 
        Secretary's involvement is no longer required.
            (2) The Governor of the State submitting the Enforcement 
        Petition and the appropriate Indian tribe enter into a binding 
        tribal-State agreement covering the collection and remittance 
        of covered State taxes.
    (e) Return of Funds to Appropriate State.--Not later than 30 days 
after receiving a covered State tax payment from a tribal retail 
enterprise or Indian tribe under subsection (c), the Secretary shall 
remit the balance of taxes collected under subsection (c) (after 
subtracting administrative expenses subject to subsection (f)) to the 
State fund specified to the Secretary by the Governor.
    (f) Administrative Expenses.--Prior to remitting funds to the 
appropriate State fund under subsection (e), the Secretary shall deduct 
from the amount remitted from the tribal retail enterprise pursuant to 
subsection (c) an administrative fee that is equal to the lesser of the 
following:
            (1) The direct cost of administering this Act.
            (2) One percent of the amounts remitted pursuant to 
        subsection (c).
    (g) Satisfaction of Obligations.--Amounts remitted to the Secretary 
under subsection (c) or paid pursuant to a judgment under section 6 
shall be applied by the State to amounts due under the terms of the 
tribal-State agreement or the covered State tax obligation of the 
relevant tribal retail enterprise.

SEC. 5. MEDIATION OF DISPUTES BETWEEN TRIBES AND STATES UNDER TRIBAL-
              STATE AGREEMENTS.

    (a) In General.--Not later than 60 days after receiving a request 
from the Governor of a State or an Indian tribe for the Secretary to 
mediate a dispute between a the Governor of the State and an Indian 
tribe regarding compliance with the terms of a tribal-State agreement 
in effect on the date of an Enforcement Petition, the Secretary shall 
initiate a mediation, or direct the Service to initiate a mediation, 
for the Governor of the State and the Indian tribe to resolve the 
dispute.
    (b) Completion of Mediation.--Not later than 210 days after a 
request for mediation is received by the Secretary under subsection 
(a), the Secretary shall ensure that the mediation is concluded and 
notify the parties to the mediation of the resulting determination by 
the Secretary or the Service and urge the adoption of the determination 
by such parties.

SEC. 6. ENFORCEMENT.

    (a) Notice of Violation--If a tribal retail enterprise fails to 
comply with section 4(b)(2), the Secretary shall notify the tribal 
retail enterprise of this violation and demand immediate compliance.
    (b) Referral of Violation to Department of Justice.--If a tribal 
retail enterprise is not in compliance with section 4(b)(2) within 30 
days of the notification under subsection (a), the Secretary shall 
refer the matter within 15 days to the Department of Justice.
    (c) Commencement of Civil Enforcement Action.--
            (1) In general.--Not later than 60 days after a referral 
        under subsection (b), the Department of Justice shall initiate 
        a civil enforcement action in Federal district court against 
        the tribal retail enterprise that is the subject of the 
        referral.
            (2) Tribal-owned retail enterprise.--If the tribal retail 
        enterprise named in such a civil enforcement action is owned or 
        operated by an Indian tribe, then the civil action shall 
        include requests for injunctive relief against the tribal 
        retail enterprise and for the payment to the Secretary of all 
        covered State taxes, as determined under section 4 (and 
        interest as permitted by the State law of State regarding which 
        the Enforcement Petition was submitted) owed by the tribal 
        retail enterprise from the date of the enactment of this Act.
            (3) Tribal member-owned retail enterprise.--If the tribal 
        retail enterprise named in such a civil enforcement action is 
        owned or operated by a member of an Indian tribe, then the 
        civil action shall include requests for injunctive relief and 
        civil penalties in the amount of 3 times the covered State 
        taxes, as determined under section 4, (and interest as 
        permitted by the State law of the State regarding which the 
        Enforcement Petition was submitted) owed by the tribal retail 
        enterprise from the date of enactment of this Act.
    (d) Posting of Bond During Appeal.--If the tribal retail enterprise 
appeals the decision of the Federal district court in an action 
pursuant to subsection (c), then the tribal retail enterprise shall 
post a bond for the amount of the covered State taxes and interest that 
was the subject of the action until a final determination has been made 
in the action.

SEC. 7. JUDICIAL REVIEW.

    The Governor of a State that has filed an enforcement petition, or 
a tribal retail enterprise that has been named in such an enforcement 
petition, may challenge the Secretary's conclusions under Section 4 by 
commencing an action in Federal district court. If the challenge is not 
sustained by the court, the challenging State or tribal retail 
enterprise shall be liable to the Secretary for attorney's fees and 
court costs.

SEC. 8. REGULATIONS.

    Not later than 180 days after the date of the enactment of this 
Act, the Secretary shall promulgate regulations providing for the 
implementation and enforcement of this Act.

SEC. 9. EFFECTIVE DATE.

    This Act shall take effect 180 days after the date of the enactment 
of this Act, regardless of whether regulations have been issued under 
section 7.
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