Skip to main content

Nunes: Improve tax laws to encourage Indian community development

In 1982, the U.S. Congress passed the Indian Tribal Governmental Tax Status Act. This new law was intended to provide tribal governments with fair treatment in relation to our nation's tax laws. At the time, tribes were not afforded basic tax privileges possessed by all other state and local governments. It is one glaring example of unfairness related to tax-exempt bonding authority, which is an essential financial tool used for community and economic development.

Unfortunately, congressional efforts to remedy this situation fell short in 1982. Instead of treating tribal governments equitably, the law created a system that is highly discriminatory. In particular, Congress failed to provide true tax-exempt bond parity. Thanks in part to unfair federal laws, it has been reported that there is more than $50 billion in unmet infrastructure needs associated with tribal lands. Clean water, sanitation, affordable housing and roads are among the urgent needs throughout Indian country.

Most Americans probably do not appreciate how tax-exempt bonding authority impacts their community. Government services and infrastructure are largely taken for granted in our country. It should come as no surprise, however, that state and local governments are using tax-exempt bonding authority for a large array of community projects. These projects include traditional infrastructure improvements as well as community development projects, such as golf courses, hotels, convention centers, baseball stadiums and horse racing tracks.

Congress gave tax-exempt bonding authority to tribal governments in 1982. However, as I mentioned earlier, the law is discriminatory and the resulting regulations have been highly restrictive. Tribal governments may issue bonds only for projects defined as ''essential government services.'' Furthermore, essential government services have been narrowly defined. These restrictions are not placed on state or local governments, making current law unfair. If Congress is willing to allow local governments to build baseball stadiums with tax-exempt bonds, the question must be asked: ''Why can't tribal governments build affordable housing?'' In fact, given the economic conditions and poverty facing most tribal governments, shouldn't we view any economic development or community improvement project as an essential government service? If the conditions faced by many American Indians were more clearly understood, I believe there would be outrage and shock across this country.

In my view, the need to improve tax-exempt bonding authority for tribal governments is compelling and should result in strong bipartisan support in Congress. Tribal leaders face unique challenges that make attracting investment throughout Indian country a daunting task. In the face of these challenges, we find enormous poverty, with rates 10 times those of the national average. Tribal leaders are left with few options. With virtually no tax base, where can they find the money needed to improve their communities?

Scroll to Continue

Read More

After learning of this problem, I introduced H.R. 3164, the Tribal Government Tax Exempt Bond Parity Act. While the changes I propose are not a miracle cure to the challenges American Indians face, clearly Congress got it wrong in 1982 and the least we can do is recognize this inequity and fix the law. When combined with more investments by the federal government, tax-exempt bonding authority will help provide the infrastructure needed to allow our tribal communities to thrive.

Critics of expanding tax-exempt bonding authority for tribal governments may question whether these funds would be used to construct and expand gaming operations. In recognition of these concerns, my legislation specifically bans the use of tax-exempt bonds to build casinos. However, it is important to recognize that many tribes are not interested in gaming and for a host of reasons are unable to pursue such a venture even if they wanted to. A few tribes located near large urban centers have been successful at gaming, but they do not represent the circumstances of the average tribe.

In conclusion, I believe Congress can and must act on this bill soon. We have an obligation to do so. I am doing my part but if you want to help, I encourage you to share your support with members of Congress and the Senate.

Devin Nunes, R-Calif., has been a member of the U.S. House of Representatives since 2003 and represents the state's 21st District.