As Prepared for Delivery
Good afternoon, Committee members, Tribal leaders, and attendees.
It’s a privilege to meet again with the Treasury Tribal Advisory Committee. We appreciate your collective expertise and commitment to government-to-government engagement. Today, I want to briefly highlight the work we’re doing.
Last year, TTAC provided Treasury with a report on challenges Tribal governments experience regarding maintenance of pensions. The Committee requested that Treasury engage in consultation with the report, which we held in March. In response to the Committee’s request at the January public meeting, we are also holding a consultation this Friday on a Notice of Proposed Rulemaking for Long-Term, Part-Time Employee Rules for Cash and Deferred Arrangements Under Section 401(k).
Beyond these important pension issues, we know the Committee has raised multiple important tax issues. First, I know Tribes are awaiting the promulgation of Tribal tax guidance from the implementation of the Tribal General Welfare Exclusion Act. We are continuing to work on these matters. I can affirm that it remains our goal to advance tax guidance that recognizes the distinct trust and treaty relationship between Tribal Nations and the United States by this summer.
We have also been focused on increasing Tribal access to the Inflation Reduction Tax credits. The IRA includes $720 million in direct set-asides to Tribal Nations and can unlock billions in financing for Tribal energy development through tax credits. Typically, governments are ineligible for tax credits because they do not have a tax liability. The IRA, however, removes this barrier through a process known as elective pay or commonly called “direct pay.” This historic provision allows Tribes to receive a tax credit for a qualifying energy project, ranging from utility scale energy development to installation of an electric charging station at a Tribe’s hotel.
To date, we’ve hosted six Tribal consultations on proposed IRA guidance and participated in over 30 Tribal engagement sessions to provide training on these new opportunities. We have strived to integrate Tribal feedback into guidance where possible. For example, we issued elective pay Final Rules in March 2024 and, in response to Tribal feedback, confirmed that certain entities chartered under the Indian Reorganization Act and the Oklahoma Indian Welfare Act are eligible for Elective Pay. Further, in response to feedback on the challenges of self-financing projects, we proposed rules on certain joint ownership arrangements that would provide Tribes and other elective pay entities more financing options and more clarity and flexibility. We included a Tribal fact pattern in this guidance and recently held a Tribal consultation and look forward to review of Tribal feedback.
In addition to our tax work, I want to thank the TTAC and Tribal leaders for their partnership on the State and Local Fiscal Recovery Fund in the American Rescue Plan Act. This year is the obligation deadline for this program’s historic $20 billion Tribal set aside. At the last TTAC meeting, members shared how Tribes were working towards obligation and provided feedback on clarifications that were needed regarding recipient obligations. Last month, Treasury released Frequently Asked Questions that provide clarity for all eligible governments on the obligation deadline and also released a Tribal FAQ that tailors this guidance for Tribes based on their distinct governmental structures.
There is a resolution under consideration in Congress that would overturn Treasury’s guidance on obligating State and Local Fiscal Recovery Funds. The guidance gave state, local, territorial, and Tribal governments the clarity and flexibility they needed to work toward completing projects, from expanding internet access to building affordable housing. If the guidance is overturned, critical projects—such as hundreds of Tribal infrastructure projects—may not have the funding they need. It’s crucial that Tribal Nations be able to move these projects forward to improve the lives of their citizens.
Our work on SLFRF and on the IRA demonstrate that government-to-government engagement with Tribal Nations is not just mandatory federal policy, it is good policy. Good policy that makes programs more equitable and makes federal assistance accessible. We are committed to bringing this approach to our work on longstanding Tribal tax issues and I look forward to hearing from you today.
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