[Congressional Record Volume 142, Number 48 (Tuesday, April 16, 1996)]
[Senate]
[Pages S3402-S3403]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. FAIRCLOTH (for himself and Mr. Helms):
  S. 1676. A bill to permit the current refunding of certain tax-exempt 
bonds; to the Committee on Finance.


            the eastern band of cherokee indians act of 1996

  Mr. FAIRCLOTH. Mr. President, I rise today to introduce legislation 
for the Eastern Band of Cherokee Indians in my home State of North 
Carolina.
  In 1982, the Congress passed legislation that would allow Indian 
tribes to issue tax exempt bonds just like other units of governments, 
such as States, counties, and cities. The 1982 act acknowledged that 
Indian tribes are in fact legitimate units of government with wide 
ranging responsibilities.
  Using the act, the Cherokee Indians in my State issued $31 million in 
tax-exempt bonds to purchase the Carolina Mirror Co. The tribal 
leadership viewed the purchase of Carolina Mirror Co. as a means to 
promote jobs and economic development for their tribe and its members.
  In 1986, however, the Congress passed new legislation that narrowed 
the interpretation of the original act so that tax exempt bonds could 
only be used to finance ``essential governmental functions.''
  Mr. President, the Cherokee Tribe in my State would like to take 
advantage of lower interest rates and refinance the bonds. Under a 
``green eye shade'' view of the law, the IRS has ruled that a 
refinancing would be a reissue, and the tribe could not issue tax 
exempt bonds again. By reissuing bonds at a lower rate, the company 
could save nearly $1 million a year--or nearly half of its annual 
profit.
  In my view, this is as great a savings that can be attained for this 
company,

[[Page S3403]]

but for this narrow interpretation of the law.
  The legislation that I am introducing today is a technical bill that 
would allow Indian tribes to refinance tax-exempt bonds issued on or 
before October 13, 1987. This bill has safeguards to ensure that the 
temporary tax-exempt status of the bonds are not taken advantage of. 
Most importantly, this bill would be revenue neutral.
  It is my hope that the Senate could consider this legislation.
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