Litigation

Stimulus Bill provides opportunities in Indian Country

By Rob Roy Smith

The American Recovery and Reinvestment Act of 2009, otherwise known as the the Stimulus Bill, provides tribal governments and Indian-owned businesses access to more than just the $2.5 billion in tribal-specific appropriations. Tribes and their business partners can take advantage of numerous grant and bond programs as well.

Tribes have been made eligible for a number of interesting grant programs, including Tribal Clean Water Grants and grant opportunities to extend broadband service through a program operated by the Department of Commerce. 

In addition, the Act provides an important expansion of tax-exempt bond authority for tribes.  Generally, tribes are limited to tax exempt financing for ?essential government functions,? which has been narrowly interpreted by the IRS as a function that is customarily performed by a state or local unit of government with general taxing powers. The Act amends the Internal Revenue Code to allow tribes to issue ?Tribal Economic Development Bonds", defined as a bond issued by a tribe whose interest would be exempt from taxation if issued by a state or local government.  The bonds cannot be used to finance any portion of a building in which Class II and Class III gaming is conducted, or any property used in the conduct of gaming; proceeds must be used to finance facilities located on the reservation; and must not exceed in the aggregate for all tribes $2 billion, which must be allocated among tribal governments in the manner deemed appropriate by the Secretaries of Treasury and Interior.  Despite these limitations, tribes should be able to take advantage of increased tax exempt financing for a wide variety of on-reservation economic development projects.  This will increase opportunities for businesses engaged in Indian Country.

Full post as published by Northwest Business Litigation Blog on February 20, 2009 (boomark / email).