§ 7871. Indian tribal governments treated as States for certain purposes

Legislative history

Reconstructed from this section’s Code source credit and amendment notes, resolved against the local Statutes at Large. Editorial notes are evidence, not the law that made the change.

1. 1983

   Indian Tribal Governmental Tax Status Act of 1982

   Pub. L. 97–473 title II § 202(a) · 96 Stat. 2605

   Enacted · 26 U.S.C. § 7871

   Added Pub. L. 97–473, title II, § 202(a), Jan. 14, 1983, 96 Stat. 2608

   Source evidence

   Code source credit
   Added Pub. L. 97–473, title II, § 202(a), Jan. 14, 1983, 96 Stat. 2608

   Enacted provision · exact public law section
   (a) General Rule.— Chapter 80 (relating to general rules) is amended by adding at the end thereof the following new subchapter “Subchapter C— Provisions Affecting More than One Subtitle “Sec. 7871. Indian tribal governments treated as States for certain purposes. “SEC. 7871. INDIAN TRIBAL GOVERNMENTS TREATED AS STATES FOR CERTAIN PURPOSES. “(a) General Rule.— An Indian tribal government shall be treated as a State— “(1) for purposes of determining whether and in what amount any contribution or transfer to or for the use of such government (or a political subdivision thereof) is deductible under— “(A) 26 USC 4041 et seq.26 USC 4061 et seq.26 USC 4251.26 USC 4481. section 170 (relating to income tax deduction for charitable, etc., contributions and gifts), “(B) sections 2055 and 2106(a)(2) (relating to estate tax deduction for transfers of public, charitable, and religious uses), or “(C) section 2522 (relating to gift tax deduction for charitable and similar gifts); “(2) subject to subsection (b), for purposes of any exemption from, credit or refund of, or payment with respect to, an excise tax imposed by— “(A) chapter 31 (relating to tax on special fuels), “(B) chapter 32 (relating to manufacturers excise taxes), “(C) subchapter B of chapter 33 (relating to communications excise tax), or “(D) subchapter D of chapter 36 (relating to tax on use of certain highway vehicles); “(3) for purposes of section 164 (relating to deduction for taxes); “(4) subject to subsection (c), for purposes of section 103 (relating to interest on certain governmental obligations); “(5) for purposes of section 511(a)(2)(B) (relating to the taxation of colleges and universities which are agencies or instrumentalities of governments or their political subdivisions); “(6) for purposes of— “(A) section 37(e)(9)(A) (relating to certain public retirement systems), “(B) section 41(c)(4) (defining State for purposes of credit for contribution to candidates for public offices), “(C) section 117(b)(2)(A) (relating to scholarships and fellowship grants), and “(D) section 403(b)(1)(A)(ii) (relating to the taxation of contributions of certain employers for employee annuities); and “(7) for purposes of— “(A) 26 USC 4911 et seq. chapter 41 (relating to tax on excess expenditures to influence legislation), and “(B) 26 USC 4940. subchapter A of chapter 42 (relating to private foundations). “(b) Additional Requirements for Excise Tax Exemptions.— Paragraph (2) of subsection (a) shall apply with respect to any transaction only if, in addition to any other requirement of this title applicable to similar transactions involving a State or political subdivision thereof, the transaction involves the exercise of an essential governmental function of the Indian tribal government. “(c) Additional Requirements for Tax-Exempt Bonds.— “(1) In general.— Subsection (a) of section 103 shall apply to any obligation (not described in paragraph (2)) issued by an Indian tribal government (or subdivision thereof) only if such obligation is part of an issue substantially sill of the proceeds of which are to be used in the exercise of any essential governmental function. “(2) No exemption for certain private-activity bonds.— Subsection (a) of section 103 shall not apply to any of the following issued by an Indian tribal government (or subdivision thereof): “(A) An industrial development bond (as defined in section 103(b)(2)). “(B) An obligation described in section 103(l)(1)(A) (relating to scholarship bonds). “(C) A mortgage subsidy bond (as defined in paragraph (1) of section 103A(b) without regard to paragraph (2) thereof). “(d) Treatment of Subdivisions of Indian Tribal Governments as Political Subdivisions.— For the purposes specified in subsection (a), a subdivision of an Indian tribal government shall be treated as a political subdivision of a State if (and only if) the Secretary determines (after consultation with the Secretary of the Interior) that such subdivision has been delegated the right to exercise one or more of the substantial governmental functions of the Indian tribal government.”

2. 1983

   Pub. L. 98–21 title I § 122(c)(6) · 97 Stat. 65

   1. Redesignated · 26 U.S.C. § 7871(a)(6)

      Pub. L. 98–21 redesignated subpars. (B) to (D) as (A) to (C), respectively

   2. Struck · 26 U.S.C. § 7871(a)(6)

      Pub. L. 98–21 struck out former subpar. (A), which referred to section 37(e)(9)(A) (relating to certain public retirement systems)

   Source evidence

   Code amendment note
   Subsec. (a)(6). Pub. L. 98–21 redesignated subpars. (B) to (D) as (A) to (C), respectively, and struck out former subpar. (A), which referred to section 37(e)(9)(A) (relating to certain public retirement systems).

   Enacted provision · exact public law section
   (6) Paragraph (6) of section 7871(a) of such Code is amended by 96 Stat. 2608. 26 USC 7871. striking out subparagraph (A), and by redesignating subparagraphs (B), (C), and (D) as subparagraphs (A), (B), and (C), respectively.

3. 1984

   Tax Reform Act of 1984

   Pub. L. 98–369 § 474(r)(41) · 98 Stat. 494

   Substituted · 26 U.S.C. § 7871(a)(6)(A)

   Pub. L. 98–369, § 474(r)(41), substituted “section 24(c)(4)” for “section 41(c)(4)”

   Source evidence

   Code amendment note
   Subsec. (a)(6)(A). Pub. L. 98–369, § 474(r)(41), substituted “section 24(c)(4)” for “section 41(c)(4)”.

   Enacted provision · exact public law section
   (41) Section 7871.— Subparagraph (A) of section 7871(a)(6) is amended by striking out “section 41(c)(4)” and inserting in lieu thereof “section 24(c)(4)”.

4. 1984

   Tax Reform Act of 1984

   Pub. L. 98–369 § 1065(b) · 98 Stat. 494

   1. Amended · 26 U.S.C. § 7871(a)(6)(B)(F)

      Pub. L. 98–369, § 1065(b), as amended by Pub. L. 99–514, § 1878(i)

   2. Added · 26 U.S.C. § 7871(a)(6)(B)(F)

      Pub. L. 98–369, § 1065(b), as added subpars. (B), (D), and (F)

   3. Redesignated · 26 U.S.C. § 7871(a)(6)(B)(F)

      Pub. L. 98–369, § 1065(b), as redesignated former subpars. (B) and (C) as (C) and (E), respectively

   Source evidence

   Code amendment note
   Subsec. (a)(6)(B) to (F). Pub. L. 98–369, § 1065(b), as amended by Pub. L. 99–514, § 1878(i), added subpars. (B), (D), and (F), and redesignated former subpars. (B) and (C) as (C) and (E), respectively.

   Enacted provision · exact public law section
   (b) Treatment as State Expanded for Certain Purposes.— 97 Stat. 87 26 USC 7871. Paragraph (6) of section 7871 (relating to Indian tribal governments treated as States for certain purposes) is amended by striking out subparagraphs (B) and (C) and inserting in lieu thereof the following: “(B) section 105(e) (relating to accident and health plans), “(C) section 117(b)(2)(A) (relating to scholarships and fellowship grants), “(D) section 162(e) (relating to appearances, etc., with respect to legislation) “(E) section 403(b)(1)(A)(ii) (relating to the taxation of contributions of certain employers for employee annuities), and “(F) section 454(b)(2) (relating to discount obligations),

5. 1986

   Tax Reform Act of 1986

   Pub. L. 99–514 § 1301(j)(6) · 100 Stat. 2085

   Substituted · 26 U.S.C. § 7871(a)(4)

   Pub. L. 99–514, § 1301(j)(6), substituted “(relating to State and local bonds)” for “(relating to interest on certain governmental obligations)”

   Source evidence

   Code amendment note
   Subsec. (a)(4). Pub. L. 99–514, § 1301(j)(6), substituted “(relating to State and local bonds)” for “(relating to interest on certain governmental obligations)”.

   Enacted provision · exact public law section
   (6) Sections 4940(c)(o), 4942(f)(2)(A), and 7871(a)(4) are each amended by striking out “(relating to interest on certain governmental obligations)” and inserting in lieu thereof “(relating to State and local bonds)”.

6. 1986

   Tax Reform Act of 1986

   Pub. L. 99–514 § 123(b)(3) · 100 Stat. 2085

   1. Redesignated · 26 U.S.C. § 7871(a)(6)

      Pub. L. 99–514, § 123(b)(3), redesignated subpars. (C) to (E), as previously redesignated by section 112(b)(4) of Pub. L. 99–514, as (B) to (D), respectively

   2. Redesignated · 26 U.S.C. § 7871(a)(6)

      Pub. L. 99–514, § 123(b)(3), struck out previously redesignated subpar. (B), which read as follows: “section 117(b)(2)(A) (relating to scholarships and fellowship grants),”

   Source evidence

   Code amendment note
   Subsec. (a)(6). Pub. L. 99–514, § 123(b)(3), redesignated subpars. (C) to (E), as previously redesignated by section 112(b)(4) of Pub. L. 99–514, as (B) to (D), respectively, and struck out previously redesignated subpar. (B), which read as follows: “section 117(b)(2)(A) (relating to scholarships and fellowship grants),”.

   Enacted provision · exact public law section
   (3) Paragraph (6) of section 7871(a) (relating to Indian tribal governments treated as States for certain purposes), as amended by section 112, is amended by striking out subparagraph (B) and by redesignating subparagraphs (C), (D), and (E) as subparagraphs (B), (C), and (D), respectively.

7. 1986

   Tax Reform Act of 1986

   Pub. L. 99–514 § 112(b)(4) · 100 Stat. 2085

   1. Redesignated · 26 U.S.C. § 7871(a)(6)

      Pub. L. 99–514, § 112(b)(4), redesignated subpars. (B) to (F) as (A) to (E), respectively

   2. Struck · 26 U.S.C. § 7871(a)(6)

      Pub. L. 99–514, § 112(b)(4), struck out former subpar. (A) which read as follows: “section 24(c)(4) (defining State for purposes of credit for contribution to candidates for public offices),”

   Target inherited from the preceding amendment note.

   Source evidence

   Code amendment note
   Pub. L. 99–514, § 112(b)(4), redesignated subpars. (B) to (F) as (A) to (E), respectively, and struck out former subpar. (A) which read as follows: “section 24(c)(4) (defining State for purposes of credit for contribution to candidates for public offices),”.

   Enacted provision · exact public law section
   (4) Paragraph (6) of section 7871(a) (relating to Indian tribal governments treated as States for certain purposes) is amended by striking out subparagraph (A) and by redesignating subparagraphs (B), (C), (D), (E), and (F) as subparagraphs (A), (B), (C), (D), and (E), respectively.

8. 1986

   Tax Reform Act of 1986

   Pub. L. 99–514 § 1878(i) · 100 Stat. 2085

   Changed · 26 U.S.C. § 7871(a)(6)

   Pub. L. 99–514, § 1878(i), made technical amendment to directory language of Pub. L. 98–369, § 1065(b). See 1984 Amendment note below

   Target inherited from the preceding amendment note.

   Source evidence

   Code amendment note
   Pub. L. 99–514, § 1878(i), made technical amendment to directory language of Pub. L. 98–369, § 1065(b). See 1984 Amendment note below.

   Enacted provision · exact public law section
   (i) Amendment Related to Section 1065 of the Act.— Subsection (b) of section 1065 of the Tax Reform Act of 1984 (relating to rules treating Indian tribal governments as States) is amended by striking out “section 7871” and inserting in lieu thereof “section 7871(a)”.

9. 1986

   Tax Reform Act of 1986

   Pub. L. 99–514 § 1899A(65) · 100 Stat. 2085

   Substituted · 26 U.S.C. § 7871(a)(6)(D)

   Pub. L. 99–514, § 1899A(65), substituted “; and” for period at end

   Source evidence

   Code amendment note
   Subsec. (a)(6)(D). Pub. L. 99–514, § 1899A(65), substituted “; and” for period at end.

   Enacted provision · exact public law section
   (65) Subparagraph (F) of section 7871(a)(6) is amended by striking out the period at the end thereof and inserting in lieu thereof and”.

10. 1986

    Tax Reform Act of 1986

    Pub. L. 99–514 § 1301(j)(7) · 100 Stat. 2085

    Amended · 26 U.S.C. § 7871(c)(2)

    Pub. L. 99–514, § 1301(j)(7), amended par. (2) generally. Prior to amendment, par. (2) read as follows: “Subsection (a) of section 103 shall not apply to any of the following issued by an Indian tribal government (or subdivision thereof):

    Source evidence

    Code amendment note
    Subsec. (c)(2). Pub. L. 99–514, § 1301(j)(7), amended par. (2) generally. Prior to amendment, par. (2) read as follows: “Subsection (a) of section 103 shall not apply to any of the following issued by an Indian tribal government (or subdivision thereof):

    “(A) An industrial development bond (as defined in section 103(b)(2)). “(B) An obligation described in section 103(l)(1)(A) (relating to scholarship bonds). “(C) A mortgage subsidy bond (as defined in paragraph (1) of section 103A(b) without regard to paragraph (2) thereof).”

    Enacted provision · exact public law section
    (7) Paragraph (2) of section 7871(c) (relating to no exemption for certain private activity bonds) is amended to read as follows: “(2) No exemption for private activity bonds.— Subsection (a) of section 103 shall not apply to any private activity bond (as defined in section 141(a)) issued by an Indian tribal government (or subdivision thereof).”

11. 1987

    Pub. L. 100–203 § 10632(b)(2) · 101 Stat. 1330

    Substituted · 26 U.S.C. § 7871(c)(2)

    Pub. L. 100–203, § 10632(b)(2), substituted “Except as provided in paragraph (3), subsection (a)” for “Subsection (a)”

    Source evidence

    Code amendment note
    Subsec. (c)(2). Pub. L. 100–203, § 10632(b)(2), substituted “Except as provided in paragraph (3), subsection (a)” for “Subsection (a)”.

    Enacted provision · exact public law section
    (2) Technical amendment.— Paragraph (2) of section 7871(c) is amended by striking out “Subsection (a)” and inserting in lieu thereof “Except as provided in paragraph (3), subsection (a)”,

12. 1987

    Pub. L. 100–203 § 10632(b)(1) · 101 Stat. 1330

    Added · 26 U.S.C. § 7871(c)(3)

    Pub. L. 100–203, § 10632(b)(1), added par. (3)

    Source evidence

    Code amendment note
    Subsec. (c)(3). Pub. L. 100–203, § 10632(b)(1), added par. (3).

    Enacted provision · exact public law section
    (1) In general.— Subsection (c) of section 7871 (relating to additional requirements for tax-exempt bonds) is amended by adding at the end thereof the following new paragraph: “(3) Exception for certain private activity bonds.— “(A) In general.— In the case of an obligation to which this paragraph applies— “(i) paragraph (2) shall not apply, “(ii) such obligation shall be treated for purposes of this title as a qualified small issue bond, and “(iii) section 146 shall not apply. “(B) Obligations to which paragraph applies.— This paragraph shall apply to any obligation issued as part of an issue if— “(i) 95 percent or more of the net proceeds of the issue are to be used for the acquisition, construction, reconstruction, or improvement of property which is of a character subject to the allowance for depreciation and which is part of a manufacturing facility (as defined in section 144(a)(12)(C)), “(ii) such issue is issued by an Indian tribal government or a subdivision thereof, “(iii) 95 percent or more of the net proceeds of the issue are to be used to finance property which— “(I) is to be located on land which, throughout the 5-year period ending on the date of issuance of such issue, is part of the qualified Indian lands of the issuer, and “(II) is to be owned and operated by such issuer, “(iv) such obligation would not be a private activity bond without regard to subparagraph (C), “(v) it is reasonably expected (at the time of issuance of the issue) that the employment requirement of subparagraph (D)(i) will be met with respect to the facility to be financed by the net proceeds of the issue, and “(vi) no principal user of such facility will be a person (or group of persons) described in section 144(a)(6)(B). For purposes of clause (iii), section 150(a)(5) shall apply. “(C) Private activity bond rules to apply.— An obligation to which this paragraph applies (other than an obligation described in paragraph (1)) shall be treated for purposes of this title as a private activity bond. “(D) Employment requirements.— “(i) In general.— The employment requirements of this subparagraph are met with respect to a facility financed by the net proceeds of an issue if, as of the close of each calendar year in the testing period, the aggregate face amount of all outstanding tax-exempt private activity bonds issued to provide financing for the establishment which includes such facility is not more than 20 times greater than the aggregate wages (as defined by section 3121(a)) paid during the preceding calendar year to individuals (who are enrolled members of the Indian tribe of the issuer or the spouse of any such member) for services rendered at such establishment. “(ii) Failure to meet requirements.— “(I) In general.— If, as of the close of any calendar year in the testing period, the requirements of this subparagraph are not met with respect to an establishment, section 103 shall cease to apply to interest received or accrued (on all private activity bonds issued to provide financing for the establishment) after the close of such calendar year. “(II) Exception.— Subclause (I) shall not apply if the requirements of this subparagraph would be met if the aggregate face amount of all tax-exempt private activity bonds issued to provide financing for the establishment and outstanding at the close of the 90th day after the close of the calender year were substituted in clause (i) for such bonds outstanding at the close of such calendar year. “(iii) Testing period.— For purposes of this subparagraph, the term ‘testing period’ means, with respect to an issue, each calendar year which begins more than 2 years after the date of issuance of the issue (or, in the case of a refunding obligation, the date of issuance of the original issue). “(E) Definitions.— For purposes of this paragraph— “(i) Qualified Indian lands.— The term ‘qualified Indian lands’ means land which is held in trust by the United States for the benefit of an Indian tribe. “(ii) Indian tribe.— The term ‘Indian tribe’ means any Indian tribe, band, nation, or other organized group or community which is recognized as eligible for the special programs and services provided by the United States to Indians because of their status as Indians. “(iii) Net proceeds.— The term ‘net proceeds’ has the meaning given such term by section 150(a)(3).”

13. 1987

    Pub. L. 100–203 § 10632(a) · 101 Stat. 1330

    Added · 26 U.S.C. § 7871(e)

    Pub. L. 100–203, § 10632(a), added subsec. (e)

    Source evidence

    Code amendment note
    Subsec. (e). Pub. L. 100–203, § 10632(a), added subsec. (e).

    Enacted provision · exact public law section
    (a) In General.— Section 7871 is amended by adding at the end thereof the following new subsection: “(e) Essential Governmental Function.— For purposes of this section, the term ‘essential governmental function’ shall not include any function which is not customarily performed by State and local governments with general taxing powers.”

14. 1993

    Revenue Reconciliation Act of 1993

    Pub. L. 103–66 title XIII § 13222(d) · 107 Stat. 312

    1. Redesignated · 26 U.S.C. § 7871(a)(6)(B)(D)

       Pub. L. 103–66 redesignated former subpars. (C) and (D) as (B) and (C), respectively

    2. Struck · 26 U.S.C. § 7871(a)(6)(B)(D)

       Pub. L. 103–66 struck out former subpar. (B) which read as follows: “section 162(e) (relating to appearances, etc., with respect to legislation),”

    Source evidence

    Code amendment note
    Subsec. (a)(6)(B) to (D). Pub. L. 103–66 redesignated former subpars. (C) and (D) as (B) and (C), respectively, and struck out former subpar. (B) which read as follows: “section 162(e) (relating to appearances, etc., with respect to legislation),”.

    Enacted provision · exact public law section
    (d) Conforming Amendment.— Section 7871(a)(6) is amended 26 USC 7871. by striking subparagraph (B) and by redesignating subparagraphs (C) and (D) as subparagraphs (B) and (C), respectively.

15. 2009

    American Recovery and Reinvestment Act of 2009

    Pub. L. 111–5 div. B title I § 1402(a) · 123 Stat. 115

    Added · 26 U.S.C. § 7871(f)

    Pub. L. 111–5 added subsec. (f)

    Source evidence

    Code amendment note
    Subsec. (f). Pub. L. 111–5 added subsec. (f).

    Enacted provision · exact public law section
    (a) In General.— Section 7871 26 USC 7871. is amended by adding at the end the following new subsection: “(f) Tribal Economic Development Bonds.— “(1) Allocation of limitation.— “(A) In general.— The Secretary shall allocate the national tribal economic development bond limitation among the Indian tribal governments in such manner as the Secretary, in consultation with the Secretary of the Interior, determines appropriate. “(B) National limitation.— There is a national tribal economic development bond limitation of $2,000,000,000. “(2) Bonds treated as exempt from tax.— In the case of a tribal economic development bond— “(A) notwithstanding subsection (c), such bond shall be treated for purposes of this title in the same manner as if such bond were issued by a State, “(B) the Indian tribal government issuing such bond and any instrumentality of such Indian tribal government shall be treated as a State for purposes of section 141, and “(C) section 146 shall not apply. “(3) Tribal economic development bond.— “(A) In general.— For purposes of this section, the term ‘tribal economic development bond’ means any bond issued by an Indian tribal government— “(i) the interest on which would be exempt from tax under section 103 if issued by a State or local government, and “(ii) which is designated by the Indian tribal government as a tribal economic development bond for purposes of this subsection. “(B) Exceptions.— Such term shall not include any bond issued as part of an issue if any portion of the proceeds of such issue are used to finance— “(i) any portion of a building in which class II or class III gaming (as defined in section 4 of the Indian Gaming Regulatory Act) is conducted or housed or any other property actually used in the conduct of such gaming, or “(ii) any facility located outside the Indian reservation (as defined in section 168(j)(6)). “(C) Limitation on amount of bonds designated.— The maximum aggregate face amount of bonds which may be designated by any Indian tribal government under subparagraph (A) shall not exceed the amount of national tribal economic development bond limitation allocated to such government under paragraph (1).” .

    Effective date note
    Pub. L. 111–5, div. B, title I, § 1402(c), Feb. 17, 2009, 123 Stat. 352, provided that: “The amendment made by subsection (a) [amending this section] shall apply to obligations issued after the date of the enactment of this Act [Feb. 17, 2009].”

16. 2018

    Energy and Water Development and Related Agencies Appropriations Act, 2018

    Pub. L. 115–141 div. U title IV § 401(a)(337) · 132 Stat. 348

    Substituted · 26 U.S.C. § 7871(c)(3)(D)(ii)(II)

    Pub. L. 115–141 substituted “the calendar year” for “the calender year”

    Source evidence

    Code amendment note
    Subsec. (c)(3)(D)(ii)(II). Pub. L. 115–141 substituted “the calendar year” for “the calender year”.

    Enacted provision · exact public law section
    Sec. 401. The Nuclear Regulatory Commission shall comply with the July 5, 2011, version of Chapter VI of its Internal Commission Procedures when responding to Congressional requests for information.

22 of 22 references resolved to an enrolled provision