Native American tribal governments are frequently excluded from tax-exempt government bonds because they often fail the "essential government function" test, stymieing their economic development. As a result, Representative David Schweikert (R-AZ) recently introduced a bipartisan bill with Representative Gwen Moore (D-WI) to remove this requirement so tribal governments can access these bonds.
The Tribal Tax Investment and Reform Act, a testament to the power of bipartisan collaboration, is not just about removing barriers. It also includes provisions that automatically designate tribal areas as 'difficult development areas,' a move that could significantly boost tax credits for housing projects, as described in the Low-Income Housing Tax Credit.
Moreover, the bill creates a $175 million New Market Tax Credit, which the federal government initially developed in 2000 and designed to give private investors access to favorable financing in economically challenged areas, which, in the case of these tribal areas, could potentially bring "much-needed capital investment in tribal infrastructure and employment opportunities into Tribal Nations," as Rep. Schweikert described.
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Finally, the Tribal Tax Investment and Reform Act would give recipients of Indian Health Service (IHS) scholarships and loan repayment assistance, as medical providers in these tribal areas, the same tax-exempt status that other federal healthcare workers get.
In his press release, Schweikert said, "I am proud to introduce this legislation and continue supporting our promise to the 22 federally recognized tribes of Arizona. Provisions in this legislation will empower tribal governments, members, and their families. I look forward to working with my colleagues to advance this important work."
Similarly, Rep. Moore was quoted as saying, "My bill would ensure that tribes have access to the same incentives in our tax code on the same basis as state and local governments in order to bolster their ability to create economic opportunity and help meet pressing needs, including expanding access to jobs, capital, and supporting more affordable housing. For too long, the federal government has put extra steps or additional burdens on tribal nations trying to exercise the same authorities that state and local governments."
