[Congressional Record Volume 151, Number 70 (Tuesday, May 24, 2005)]
[Senate]
[Pages S5855-S5856]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Ms. MURKOWSKI (for herself and Mr. Johnson):
  S. 1115. A bill to amend the Internal Revenue Code of 1986 to allow 
Indian tribes to receive charitable contributions of inventory; to the 
Committee on Finance.
  Ms. MURKOWSKI. Mr. President, I rise to introduce a bill that will 
help increase the amount of food donations going to American Indians 
and Alaska Natives nationwide. I am pleased to have Mr. Johnson join me 
in introducing this important legislation.
  Despite reports from the Census Bureau that show stable income levels 
for many Americans, the poverty rate for the 4.4 million American 
Indians and Alaska Natives living throughout the United States remains 
nearly three times that of non-Hispanic whites. Not only do Natives 
face greater challenges in securing basic household necessities, but in 
securing food as well.
  According to a U.S. Department of Agriculture report released in late 
2004, nearly 36 million Americans face challenges in getting enough 
food to eat. This includes nearly 13 million children. Of these 
statistics, Natives constitute a disproportionate number due to the 
higher poverty rate among this group.
  And yet, charitable organizations that provide hunger relief are 
unable to meet the basic needs of Natives due to an oversight in the 
Federal tax code. Section 170(e)(3) of the Internal Revenue Code allows 
corporations to take an enhanced tax deduction for donations of food 
inventory; however, the food must be distributed to 501(c)(3) nonprofit 
organizations, such as food banks. Nonprofit organizations cannot then 
transfer such donations to tribes. Although many donations to tribes 
are tax deductible under section 7871 of the Internal Revenue Code, 
tribes are not among the organizations listed under section 501(c)(3) 
of the Internal Revenue Code. To clarify, section 170(e)(3) does not 
allow tribes to be eligible recipients of corporate food donations to 
nonprofit organizations since they are not listed under section 
501(c)(3) as an eligible entity.

[[Page S5856]]

  With this legislation, we intend to make a simple correction to the 
tax code that clearly indicates that tribes are eligible recipients of 
food donated under section 170(e)(3) of the Internal Revenue Code. This 
correction is long overdue and would remedy an egregious inequity in 
the Federal tax code that affects Natives nationwide.

  Please allow me to provide a few examples of how this legislation 
could foster positive change. In Alaska, approximately half of the food 
donated to the Food Bank of Alaska from corporations could go to tribes 
throughout Alaska. Much of this food would go to villages that are only 
accessible by air or water. In South Dakota, roughly 30 percent of the 
food the Community Food Banks of South Dakota distributes would go to 
reservations. In North Dakota, the amount of food donated to the Great 
Plains Food Bank could double if this legislation were enacted. The 
Montana Food Bank Network projects that food donations could increase 
by 16 percent. A food bank based in Albuquerque, NM estimates that 
their food donations could triple in the first year alone.
  It is imperative that we address this important issue expeditiously. 
The health and well-being of low income American Indians and Alaska 
Natives across the Nation is at stake.
  I ask unanimous consent that the text of this bill be printed in the 
Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 1115

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

     SECTION 1. CHARITABLE CONTRIBUTIONS OF INVENTORY TO INDIAN 
                   TRIBES .

       (a) In General.--Section 170(e)(3) of the Internal Revenue 
     Code of 1986 (relating to special rule for contributions of 
     inventory and other property) is amended by adding at the end 
     the following new subparagraph:
       ``(D) Special rule for indian tribes.--
       ``(i) In general.--For purposes of this paragraph, an 
     Indian tribe (as defined in section 7871(c)(3)(E)(ii)) shall 
     be treated as an organization eligible to be a donee under 
     subparagraph (A).
       ``(ii) Use of property.--For purposes of subparagraph 
     (A)(i), if the use of the property donated is related to the 
     exercise of an essential governmental function of the Indian 
     tribal government (within the meaning of section 7871), such 
     use shall be treated as related to the purpose or function 
     constituting the basis for the organization's exemption.''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to taxable years beginning after December 31, 
     2005.

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