[Congressional Record Volume 150, Number 129 (Sunday, October 10, 2004)]
[Extensions of Remarks]
[Page E1860]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




    INTRODUCTION OF THE AMERICAN INDIAN VETERANS PAY RESTORATION ACT

                                 ______
                                 

                             HON. TOM UDALL

                             of new mexico

                    in the house of representatives

                       Thursday, October 7, 2004

  Mr. UDALL of New Mexico. Mr. Speaker, this week, as thousands of 
Native Americans from all over the country convene in Washington to 
celebrate the opening of the newest museum on the National Mall, I rise 
to introduce a bill that will restore justice to many of our Nation's 
Native American veterans, the American Indian Veterans Pay Restoration 
Act.
  Prior to 2001, Native Americans who served their country in the armed 
forces had their active duty pay taxed by the state, despite claiming 
the reservation as their home. The law is now well established that 
this policy was wrong and, in keeping with tribal sovereignty, the 
policy of withholding states taxes on these soldiers' pay was changed. 
This position is reflected in administrative opinions, Fatt v. Utah, 
884 P2d 1233 (Utah 1994), a 2000 Department of Justice (DOJ) opinion, a 
Department of Defense (DOD) policy instituted in 2001, and most 
recently, in Public Law 108-189, a law that passed this House 
unanimously.
  However, while these changes stopped the improper practice of 
withholding taxes, the changes do not apply retroactively. Current 
federal law provides that statutes of limitations toll during a 
member's service, but the ability to recover withheld taxes is still 
limited by state statute of limitations on filing for refunds. The 
result is that hundreds, or perhaps thousands, of tribal members whose 
state taxes were improperly withheld during their service to our 
country are unable to recover the money that is owed to them.
  The American Indian Veterans Pay Restoration Act remedies this 
situation by creating a program within DOD to return these erroneously 
withheld taxes to qualifying Native American veterans. This program 
will centralize and facilitate distribution of funds and recovery of 
funds from the states. Veterans seeking to recover their money will 
submit an application to DOD providing evidence of military service, 
improper taxation, and domicile on a reservation. In addition to 
veterans, the program will serve Native Americans who were on active 
duty prior to 2001 and who remain on active duty.
  Nearly 16 percent of the Native population 16 years and older are 
veterans. Native Americans have the highest rate of service to our 
country of any ethnic group in the U.S. We are daily reminded of the 
sacrifice made by those who choose to don the uniform and serve our 
country, and this week we have also been reminded, of the importance of 
preserving and honoring Native American cultures and traditions. The 
introduction of this bill serves as a timely effort to keep our promise 
to our Nation's Native American veterans, and I ask the support of my 
colleagues.
  I would like to thank the original cosponsors of the bill--
Representative George Miller, who led the effort to change the 
Pentagon's policy on withholding state taxes on Native American 
servicemembers in 2000, Representative Nick Rahall, the Ranking Member 
of the House Resources Committee, and Representative Dale Kildee, a co-
chair of the Native American Caucus. I look forward to working with my 
colleagues to pass this common sense bill.

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