[Congressional Record Volume 145, Number 40 (Monday, March 15, 1999)]
[Senate]
[Pages S2669-S2670]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. CAMPBELL:
  S. 615. A bill to encourage Indian economic development, to provide 
for a framework to encourage and facilitate intergovernmental tax 
agreements, and for other purposes.


              INTER-GOVERNMENTAL TAX AGREEMENT ACT OF 1999

  Mr. CAMPBELL. Mr. President, to encourage states and tribes to 
negotiate and enter fair and binding tax compacts, I introduce today 
the Inter-Governmental Tax Agreement Act of 1999.
  In 1998, I introduced similar legislation to provide a mechanism, 
short of litigation, for the collection of state retail sales taxes. 
The Committee on Indian Affairs held several hearings on the issue of 
taxation involving tribes and sales made on Indian lands and heard from 
tribal leaders, state tax officials, private retailers, and other 
affected parties. Though no resolution was reached, the voluminous 
record developed by the Committee has helped flesh out the issue of 
taxation and has led to a fuller picture being developed.
  Because there is much confusion about Indians and tax matters, I 
should be clear and explain exactly what we are talking about when we 
address these matters. Indian tribal governments, like state 
governments, pay no federal taxes on income earned by the tribe. 
Individual members of Indian tribes pay the same taxes other citizens 
of the United States pay: federal income taxes, Social Security taxes, 
and a host of other taxes.
  What we are focusing on with this bill are state taxes on retail 
sales made to non-Indians on goods such as tobacco and fuel when the 
transaction occurs on Indian lands. As late as 1991, the Supreme Court 
ruled that such taxes are legitimately levied taxes and set out several 
possible remedies available to states including lawsuits against tribal 
officials and negotiating a tax compact. The court was equally clear, 
however, that because of tribal common law immunity from lawsuits, 
tribes cannot be sued to collect the tax revenues.
  Consistent with that opinion, at least 18 states and dozens of Indian 
tribes have chosen to negotiate and enter into tax agreements. At the 
Committee hearing in March 1998, it was estimated that more than 200 
``intergovernmental tax agreements'' are now in place covering a 
variety of retail goods.
  These agreements detail the collection and remittance of tax revenues 
by the tribe to the state on sales to non-members of the tribe, and 
often allow for an ``administrative fee'' paid to the tribe for their 
efforts to collect and remit the tax revenues.
  Two factors were presented to the Committee which are legitimate 
issues for debate in the 106th Congress. First, the question of 
services provided by the state and/or the tribe to Indians and non-
Indians living on tribal lands; and second, the devastating impact on 
Indian economies as a result of ``dual'' state and tribal taxes levied 
on the same transaction.
  This legislation encourages state-tribal agreements by requiring that 
states and tribes attempt to resolve their differences in good faith 
through negotiations aimed at entering into a tax compact.
  If efforts to reach agreement through negotiations and mediation 
fail, under this bill the Interior Secretary may refer the matter to 
the ``Intergovernmental Dispute Resolution Panel'' consisting of 
representatives of the departments of Interior, Justice, and Treasury, 
Indian tribal governments, and State governments.
  Rather than create an entirely new mechanism, the framework provided 
by this bill relies on existing mediation services provided by the 
Federal Mediation and Conciliation Service to assist the Panel in 
carrying out its duties in arriving at fair agreements.
  The history of state-tribal relations is one full of acrimony with 
brief periods of cooperation. The tax issue is an emotional one with a 
long history, Mr. President, but I am hopeful that fair and equitable 
solutions to matters involving states, tribes and taxation can be 
developed with the input of all affected parties.
  I ask unanimous consent that a copy of the bill be printed in the 
Record and urge my colleagues to support this important measure.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 615

       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 ``Intergovernmental Tax 
     Agreement Act of 1999''.

     SEC. 2. FINDINGS; PURPOSES.

       (a) Findings.--Congress finds that--
       (1) Indian tribal governments exercise governmental 
     authority and powers over persons and activities that occur 
     on Indian lands;
       (2) a dual State-tribal tax burden on transactions by 
     Indian tribes and members of Indian tribes with non-Indian 
     persons and entities undermines the ability of Indian tribes 
     to finance governmental functions and programs of those 
     Indian tribes;
       (3) the apportionment of taxes from commercial activities 
     occurring on Indian lands should take into account the 
     government services provided by the State and the Indian 
     tribe involved to members of that Indian tribe and other 
     individuals residing on those lands;
       (4) the governments of Indian tribes and States have 
     negotiated and entered into more than 200 tax compacts, and 
     those compacts cover a variety of commodities and retail 
     taxes;
       (5) in cases in which a tax compact between an Indian tribe 
     and a State is not in effect, conflicts between the State and 
     Indian tribe may require the active involvement of the United 
     States in the role of the United States as a trustee for the 
     Indian tribe;
       (6) alternative dispute resolution--
       (A) has been used to resolve successfully disputes in the 
     public and private sectors;
       (B) results in expedited decisionmaking; and
       (C) is less costly and less contentious than litigation; 
     and
       (7) it is necessary to facilitate intergovernmental 
     agreements between Indian tribes and States and political 
     subdivisions thereof.
       (b) Purposes.--The purposes of this Act are as follows:
       (1) To strengthen the economies of Indian tribes.
       (2) To encourage and facilitate tax agreements between the 
     governments of Indian tribes and State governments.

     SEC. 3. DEFINITIONS.

       In this Act:
       (1) Compact.--The term ``compact'' means a written 
     agreement between a State and an Indian tribe concerning the 
     collection and remittance of--
       (A) applicable State taxes on retail commercial 
     transactions involving non-Indians on Indian lands of that 
     Indian tribe; or
       (B) covered tribal equivalency taxes.
       (2) Covered tribal equivalency tax.--The term ``covered 
     tribal equivalency tax'' means a tribal equivalency tax--
       (A) with a rate that is equal to or greater than the rate 
     of an applicable State sales or excise tax for transactions 
     for which the tax is imposed; and
       (B)(i) that is used to--
       (I) fund tribal government operations or programs;
       (II) provide for the general welfare of the Indian tribe 
     and the members of that Indian tribe;
       (III) promote the economic development of that Indian 
     tribe; or
       (IV) assist in funding operations of local governmental 
     agencies; or
       (ii) that is a fuel or highway tax, with respect to which 
     the revenues derived from the tax are used only for highway 
     and transportation purposes.
       (3) Indian lands.--The term ``Indian lands'' means, with 
     respect to an Indian tribe--
       (A) lands within the reservation of that Indian tribe; and
       (B) other lands over which the Indian tribe exercises 
     governmental jurisdiction.
       (4) 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)).
       (5) Non-indian.--The term ``non-Indian'' means a person who 
     is not--
       (A) an Indian tribe;
       (B) comprised of members of an Indian tribe; or
       (C) a member of an Indian tribe.
       (6) Panel.--The term ``Panel'' means the Intergovernmental 
     Dispute Resolution Panel established under section 5.
       (7) Secretary.--The term ``Secretary'' means the Secretary 
     of the Interior.
       (8) State.--The term ``State'' means each of the 50 States.
       (9) Tribal equivalency tax.--The term ``tribal equivalency 
     tax'' means a tax that--
       (A) is imposed by the tribal government of an Indian tribe 
     on retail commercial transactions that involve non-Indians on 
     Indian

[[Page S2670]]

     lands within the jurisdiction of that Indian tribe; and
       (B) is in addition to any State tax that may be imposed.

     SEC. 4. INTERGOVERNMENTAL TAX AGREEMENTS.

       (a) In General.--The consent of the United States is 
     granted to States and Indian tribes to enter into compacts 
     and agreements in accordance with this Act.
       (b) Compact Negotiations.--An Indian tribe may request the 
     Secretary to initiate negotiations on the part of that Indian 
     tribe with a State for the purpose of entering into a tax 
     compact under this section. A State may request the Secretary 
     to initiate negotiations between an Indian tribe and the 
     State to enter into such a tax compact.
       (c) Notification.--The Secretary shall notify each affected 
     Indian tribe or State of any request made under subsection 
     (b).
       (d) Requirements for Request for Initiation of 
     Negotiations.--
       (1) Written request.--A request by an Indian tribe or State 
     under subsection (a) shall be in writing.
       (2) Response.--Not later than 30 days after receiving a 
     request referred to in paragraph (1), the Secretary shall 
     issue a written response to the Indian tribe or State that 
     submitted the request.
       (e) Commencement of Negotiations; Completion of 
     Negotiations.--
       (1) Commencement of negotiations.--Not later than 30 days 
     after the date specified in subsection (d), the Secretary 
     shall commence negotiations with respect to the tax compact 
     that is the subject of the request submitted by the Indian 
     tribe or State.
       (2) Completion of negotiations.--Not later than 120 days 
     after the commencement of the negotiations under paragraph 
     (1), the parties shall complete the negotiations, unless the 
     parties agree to an extension of the period of time for 
     completion of the negotiations.
       (f) Mediation.--The Secretary shall initiate a mediation 
     process, with the goal of achieving a tax compact, if--
       (1) by the date specified in subsection (e)(1), the party 
     that was requested to enter into negotiations, failed to 
     respond to that request; or
       (2) upon the completion of an applicable period for 
     negotiations, as determined under subsection (e)(2), the 
     parties have failed to execute a compact.

     SEC. 5. INTERGOVERNMENTAL DISPUTE RESOLUTION PANEL.

       (a) Establishment.--There is established the 
     Intergovernmental Dispute Resolution Panel.
       (b) Membership of the Panel.--
       (1) In general.--The Panel shall consist of--
       (A) 1 representative from the Department of the Interior;
       (B) 1 representative from the Department of Justice;
       (C) 1 representative from the Department of the Treasury;
       (D) 1 representative of State governments; and
       (E) 1 representative of tribal governments of Indian 
     tribes.
       (2) Chairperson.--The members of the Panel shall select a 
     Chairperson from among the members of the Panel.
       (c) Duties of Panel.--To the extent allowable by law, the 
     Panel may consider and render a decision on the following:
       (1) If negotiations and mediation conducted under section 4 
     do not result in the execution of a compact, a dispute 
     between the State and Indian tribe that is referred to the 
     Panel at the discretion of the Secretary.
       (2) Any claim involving the legitimacy of a claim for the 
     collection or payment of retail taxes claimed by a State with 
     respect to transactions conducted on Indian lands (including 
     counterclaims, setoffs, or related claims submitted or filed 
     by an Indian tribe in question regarding an original claim 
     involving that Indian tribe).
       (d) Federal Mediation Conciliation Service.--
       (1) In general.--In a manner consistent with this Act, the 
     Panel shall consult with the Federal Mediation Conciliation 
     Service (referred to in this subsection as the ``Service'') 
     established under section 202 of the National Labor Relations 
     Act (29 U.S.C. 172).
       (2) Duties of service.--The Service shall, upon request of 
     the Panel and in a manner consistent with applicable law, 
     provide services to the Panel to aid in resolving disputes 
     brought before the Panel.

     SEC. 6. JUDICIAL ENFORCEMENT.

       (a) In General.--Except as provided in subsections (b) and 
     (c), the district courts of the United States shall have 
     original jurisdiction with respect to--
       (1) the enforcement of any compact entered into under this 
     Act; and
       (2) any civil action, claim, counterclaim, or setoff, 
     brought by any party with respect to a compact entered into 
     under this Act to secure equitable relief, including 
     injunctive and declaratory relief.
       (b) Damages.--No action to recover damages arising out of 
     or in connection with an agreement or compact entered into 
     under this Act may be brought, except as specifically 
     provided for in that agreement or compact.
       (c) Consent to Suit.--Each compact entered into under this 
     Act shall specify that each party to the compact--
       (1) consents to litigation to enforce the compact; and
       (2) to the extent necessary to enforce that compact, waives 
     any defense of sovereign immunity.
                                 ______