November 21, 2016

Legislative Opportunities for Tribal Governments Under the Trump Administration

Holland & Knight Alert
Philip Baker-Shenk | Nicole M. Elliott | Kayla Gebeck Carroll


  • While it always is important to defend tribal sovereignty and protect the gains tribes have achieved, it also is important for tribal advocates to take advantage of opportunities for advancing tribal government parity that the new Trump Administration will present.
  • Three key legislative opportunities made possible by the new Administration's promises and priorities are worth discussion.

With the advent of a Republican-controlled White House and Congress, many who work in Washington, D.C., on behalf of Indian tribes may be tempted to adopt a defensive posture. But while it always is important to defend tribal sovereignty and protect the gains tribes have achieved, it also is important for tribal advocates to take advantage of opportunities for advancing tribal government parity that the new Administration will present. Below is an overview of three key legislative opportunities made possible by the new Administration's promises and priorities.

1. Tribal Labor Sovereignty: Restoring the Treatment of Tribal Governments as Governmental Employers

During the 114th Congress, Rep. Todd Rokita (R-Ind.) introduced H.R. 511, the Tribal Labor Sovereignty Act (TLSA), to restore nearly 70 years of precedence in which the National Labor Relations Board (NLRB) interpreted the National Labor Relations Act (NLRA) to include tribes and on-reservation tribal government enterprises within its definition of sovereign governmental employers, thus excluding tribes from the NLRB's jurisdiction. Rokita's bill passed the House on Nov. 17, 2015, by a vote of 249-177, and its Senate companion, S. 248, introduced by Sen. Jerry Moran (R-Kan.), is pending floor consideration.

Prior to this summer's recess, Sen. Moran offered an amendment to include the TLSA in the 2017 National Defense Authorization Act, but the amendment was blocked by a Democratic objection to his unanimous consent request. While the FY 2017 House Labor-Health and Human Services appropriations bill includes similar language, efforts are underway to secure the support of a sufficient number of Democratic senators to enable a successful vote on the TLSA as a stand-alone bill during the lame-duck session.

If tribes are unable to muster enough Senate Democratic votes during the 114th Congress, it is expected that Republican leadership will succeed in securing passage and signing it into law next year. Earlier this year, the GOP in its national Republican Platform called for tribal governments and their enterprises to be recognized as governmental employers which are exempted by NLRA.

For any questions concerning TLSA, please contact Phil Baker-Shenk or Kayla Gebeck.

2. Tax Reform: Treatment of Tribal Governments on Par with State Governments

In June, Republicans led by House Speaker Paul Ryan (R-Wis.), released a tax reform blueprint calling for a number of changes to the nation's tax code including, but not limited to, the simplification of existing income tax brackets, reducing corporate tax rates and restructuring the international tax code by adopting a destination-based consumption tax. An overriding goal of the reform, which aligns with those of President-Elect Donald Trump's priorities, is to level the playing field for American businesses.

While Trump was at odds with Speaker Ryan throughout his presidential campaign, the President-Elect has adjusted many of his tax priorities to align with the House GOP tax-reform blueprint that likely is to be introduced by House Ways and Means Chairman Kevin Brady (R-Texas) in early 2017. Brady has touted the bill as being pro-growth and pro-employment. In order to balance the rate reduction and simplification goals, the House package likely is to include the repeal of many special interest provisions. The Senate also is committed to Tax Reform (on a bipartisan basis), but it is less clear what the Senate bill will contain.

At this juncture, without an introduced bill, no one knows for sure how the bill will be paid for and what special tax credits and deductions are likely to be repealed. Potential tax measures on the chopping block include the low-income housing credit, deductions for state and local taxes, deductions for interest on business loans, some forms of tax-exempt financing (e.g., private activity bonds) and certain tax measures associated with the Affordable Care Act (ACA).  

A key member of the Trump transition team for tax reform and other issues is Rep. Devin Nunes (R-Calif.) who earlier this year introduced H.R. 4377, the American Business Competitiveness Act, to simplify business taxation and pave the way for a territorial system of international taxation. Some fear this proposal may come under scrutiny by the World Trade Organization. It is unclear how tribal governments and tribal enterprises would be able to preserve their present-law tax immunities under this new system.  

As Congress proceeds, it is important that tribal priorities are not only preserved, but advanced. A key number of important provisions concerning tribal government parity were embedded in a bill introduced by Rep. Ron Kind (D-Wis.) earlier this year. H.R. 4943, the Tribal Tax and Investment Reform Act of 2016, would amend the Internal Revenue Code of 1986 to treat Indian tribal governments in the same manner as state governments with respect to bond issuance, excise taxes, pension and employee benefit plans. The bill also would treat tribal foundations and charities the same as other government-controlled charities, give tribal child support enforcement agencies equal access to the federal parent locator service and federal tax refund offsets, and recognize the determinations of tribal adoption agencies for adoption tax credit purposes.

The Native American Finance Officers Association and the National Congress of American Indians (NCAI) also have advocated for other needed corrections, such as the repeal of the "kiddie tax" penalty on tribal financial distributions to tribal members, governmental parity for tribes under proposed federal legislation to facilitate the collection of state taxes on mail-order and internet sales transactions, and the extension of economic incentives for investment and job creation in Indian Country. Tax Reform presents an opportunity to address all of these issues if they are framed in a manner that is consistent with the priorities and guiding principles of the Trump Administration and Republican-controlled Congress.

For any questions concerning Tax Reform, please contact Kayla Gebeck.

3. Affordable Care Act: Repeal and Replace

A key component of the Trump campaign was to repeal and replace the Affordable Care Act (ACA). Among the first decision federal policymakers will face in 2017 is whether to repeal, retain or replace the current law. Here is an overview of the likelihood of several scenarios:

Repeal: It is unlikely that the ACA will be fully repealed for several reasons. While the Senate remains in Republican control, with an expected 52 votes, Republicans do not have a filibuster-proof majority and likely may need some compromise. Instead, Republican leadership is expected to pursue partial repeal of the ACA through the budget reconciliation process, which allows for expedited consideration of certain tax, spending and debt limit legislation that can be passed by a simple majority without being subject to a filibuster. Some provisions that do not have a budgetary impact may be trickier for the Republicans to repeal or amend as Senate rules prohibit inclusion of provisions that do not have a budgetary impact in budget reconciliation legislation. Democratic opposition to any effort to repeal, not surprisingly, is mounting.

Retain: While not often openly discussed, there are a number of ACA provisions that many Republicans support, such as prohibiting the denial of health insurance coverage because of preexisting conditions and allowing children to stay on their parent's plan until age 26. In addition, it is unclear what the Republican appetite will be for repealing certain coverage provisions without a period of transition and a solid replacement proposal.

Replace: There is no agreement yet between the House, Senate and the incoming Trump Administration on exactly what a "replace" option will look like. It is crucial that tribal governments engage early with policymakers to address widespread concern over the ACA's employer mandate which currently applies to tribes. While it is likely that this provision will be repealed, some of the replacement options likewise will impact tribal government employers. In addition, it is critical that tribes prepare to address repeal-and-replace options that have widespread impact, such as rolling back Medicaid expansion, block grants to states to fund Medicaid and a possible threat to repeal the Indian Health Care Improvement Act which was reauthorized in the ACA. 

For any questions concerning the ACA, please contact Nicole Elliott.   

Information contained in this alert is for the general education and knowledge of our readers. It is not designed to be, and should not be used as, the sole source of information when analyzing and resolving a legal problem. Moreover, the laws of each jurisdiction are different and are constantly changing. If you have specific questions regarding a particular fact situation, we urge you to consult competent legal counsel.

Related Insights