Page:United States Statutes at Large Volume 96 Part 2.djvu/1247

 PUBLIC LAW 97-473—JAN. 14, 1983

96 STAT. 2609

applicable to similar transactions involving a State or political subdivision thereof, the transaction involves the exercise of an essential governmental function of the Indian tribal government. "(c) ADDITIONAL REQUIREMENTS FOR TAX-EXEMPT BONDS.—

"(1) IN GENERAL.—Subsection (a) of section 103 shall apply to any obligation (not described in paragraph (2)) issued by an Indian tribal government (or subdivision thereof) only if such obligation is part of an issue substantially all of the proceeds of which are to be used in the exercise of any essential governmental function. "(2) N o EXEMPTION FOR CERTAIN PRIVATE-ACTIVrrY BONDS.—

Subsection (a) of section 103 shall not apply to any of the following issued by an Indian tribal government (or subdivision thereof): "(A) An industrial development bond (as defined in section 103(b)(2)). "(B) An obligation described in section 103(1)(1)(A) (relating to scholarship bonds). "(C) A mortgage subsidy bond (as defined in paragraph (1) of section 103A(b) without regard to paragraph (2) thereof). "(d) TREATMENT OF SUBDIVISIONS OF INDIAN TRIBAL GOVERNMENTS AS POLITICAL SUBDIVISIONS.—For the purposes specified in subsec-

tion (a), a subdivision of an Indian tribal government shall be treated as a political subdivision of a State if (and only if) the Secretary determines (after consultation with the Secretary of the Interior) that such subdivision has been delegated the right to exercise one or more of the substantial governmental functions of the Indian tribal government." (b) CONFORMING AMENDMENTS RELATING TO CROSS REFERENCES.—

(1) Subsection (d) of section 41 is amended to read as follows: 26 USC 41. "(d) CROSS REFERENCES.— "(1) For disallowance of credits to estates and trusts, see section 642(a)(2). "(2) For treatment of Indian tribal governments as States (and the political subdivisions of Indian tribal governments as political subdivisions of States), see section 7871."

(2) Subsection (m) of section 103 is amended to read as follows: 26 USC 103. "(m) CROSS REFERENCES.— "For provisions relating to the taxable status of— "(1) Certain obligations issued by Indian tribal governments (or their subdivisions), see section 7871. "(2) Exempt interest dividends of regulated investment companies, see section 852(b)(5)(B). "(3) Puerto Rican bonds, see section 3 of the Act of March 2, 1917, as amended (48 U.S.C. 745). "(4) Virgin Islands insular and municipal bonds, see section 1 of the Act of October 27, 1919 (48 U.S.C. 1403). "(5) Certain obligations issued under title I of the Housing Act of 1949, see section 102(g) of title I of such Act (42 U.S.C. 1452(g))."

(3) Section 164(f) is amended by adding at the end thereof the 26 USC 164. following new paragraph. "(3) For treatment of taxes imposed by Indian tribal governments (or their subdivisions), see section 7871."

(4) Section 170(k) is amended by adding at the end thereof the 26 USC 170. following new paragraph:

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