The Tribal General Welfare Exclusion Act of 2013 passed the house and senate in Washington, DC last week. The bill requires that tribal government programs, services and benefits be excluded from income as a general welfare exclusion.
The US Constitution recognizes Native American tribes as sovereign nations. In 1924, Congress granted citizenship to non-citizen Native Americans through the Indian Citizenship Act, which stated that citizenship does not hinder a Native American’s right to tribal or other property. Because of the reserved powers of tribal governments, Native American tribes have the right to provide government programs and services to tribal citizens.
The HR 3043 Tribal General Welfare Exclusion Act was introduced to the US house in August of 2013. Executive vice president for external affairs for Arctic Slope Regional Corporation Tara Sweeney says the US Chamber of Commerce was the only non-Indian entity to support the bill.
“The IRS has challenged tribal government general welfare programs where many of them were identical to tax exempt programs provided by federal and state programs. And what they were challenging were programs like health care, education, housing, elder care, emergency assistance, cultural programs, burial assistance and legal aide. And the act mandates that tribal government programs and services provided by the tribe for tribal members, spouses and their dependents-- those services are excluded from income as a general welfare exclusion. And so basically if a tribe provides services to a tribal member, their spouse or dependents those services are not included as income and therefore are tax exempt.”
HR 3043 will also require that the IRS trains field agents on Native American law. Sweeney says that’s a big win for the community.
“Because many of the field agents within the IRS have no understanding or little understanding of Indian law and so this act directs the Secretary of the Treasury to require that training.”
The Chamber established the Native American Enterprise Initiative in recognition of entrepreneurship in the American Indian and Alaska Native communities. Sweeney says the NAEI focuses on seven groups that the organization advocates for.
“Those include contract support costs, tribal sovereignty, tribal energy, tax fairness like the General Welfare Exclusion Act, NAHASDA Reauthorization, Carcieri fix and Indian Trust Asset Reform.”
NAEI supports the passing of HR 3043 because it believes this legislation would remove regulatory roadblocks to their economic success.
The bill will also establish a national Tribal Advisory Committee within the Department of Treasury to advise the Secretary of Treasury on matters of Indian tax policy. The committee would comprise of three members appointed by the Secretary.
There are dozens of organizations supporting HR 3043 including the Alaska Federation of Natives. The bill was presented to President Obama on Tuesday and awaits his signature.