Tribal Tax and Investment Reform Act of 2025

This bill amends the Internal Revenue Code of 1986 to treat Indian Tribal Governments similarly to State governments for certain federal tax purposes, and makes related changes to other laws. It aims to provide tax parity for tribes in areas such as bond issuance, pension plans, charities, child support enforcement, adoption credits, tax credits for investments and employment, and exclusions for certain health program payments.

Sec. 3, Treatment of Indian tribes as States with respect to excise taxes and bond issuance: This section repeals the essential governmental function requirement for Indian tribes under current law. It establishes a national bond volume cap of $400,000,000 per year (adjusted for inflation after 2026) for bonds issued by Indian Tribal Governments, with allocation by the Secretary. It restricts use of bond proceeds for class II or III gaming facilities and defines key terms like 'Indian Tribal Government' and 'qualified Indian lands.'

Sec. 4, Treatment of pension and employee benefit plans maintained by Tribal Governments: This section amends several Code sections to include Indian tribal governments in definitions of 'qualified public safety employee,' 'governmental plan,' and 'exempt governmental deferred compensation plan.' It grandfathers certain existing tribal deferred compensation plans and provides an enforcement moratorium related to the Pension Protection Act of 2006 for tribal plans until regulations are issued. It also adds a new section on uniform protections and fiduciary standards for tribal pension plans.

Sec. 5, Treatment of Tribal foundations and charities like charities funded and controlled by other governmental funders and sponsors: This section amends the Code to treat Indian tribal governments as 'governmental units' for purposes of charitable contribution deductions and supporting organizations. The changes apply to taxable years beginning after enactment.

Sec. 6, Improving effectiveness of Tribal child support enforcement agencies: This section amends the Social Security Act to apply certain child support enforcement provisions to Indian tribes or tribal organizations eligible for grants, and amends the Internal Revenue Code to include such tribes or organizations as 'States' for purposes of tax refund offset for child support.

Sec. 7, Recognizing Indian tribal governments for purposes of determining under the adoption credit whether a child has special needs: This section amends the adoption credit definition of 'child with special needs' to include determinations by Indian tribal governments. Applies to taxable years beginning after enactment.

Sec. 8, New markets tax credit for tribal area investments: This section creates an additional new markets tax credit limitation of $175,000,000 per year after 2025 for qualified tribal area investments, allocated by the Secretary. It defines 'qualified tribal area investment' and 'qualified active tribal community business,' and includes carryover rules for unused limitation.

Sec. 9, Inclusion of Indian areas as difficult development areas for purposes of certain buildings: This section amends the low-income housing tax credit rules to include Indian areas as difficult development areas, with a special rule that buildings in such areas must be assisted under the Native American Housing Assistance and Self-Determination Act or sponsored by an Indian tribe or tribally designated housing entity. Applies to buildings placed in service after December 31, 2025.

Sec. 10, Tribal general welfare and trust programs clarification: This section amends the Social Security Act to exclude Indian general welfare benefits from income and resources for purposes of Supplemental Security Income, and excludes certain grantor trusts established by Indian tribes from resources for a 9-month period.

Sec. 11, Indian employment tax credit: This section extends the Indian employment tax credit by striking its sunset provision, modifies the calculation of the credit amount based on average qualified wages and health insurance costs over the two prior years, and increases the per-employee annual limitation from $20,000 to $30,000. Applies to taxable years beginning after December 31, 2025.

Sec. 12, Exclusion from gross income for payments under Indian Health Service loan repayment program: This section adds the Indian Health Service loan repayment program under the Indian Health Care Improvement Act to the list of programs for which loan repayments are excluded from gross income. Applies to payments made after enactment.

Sec. 13, Exclusion of certain amounts received under Indian Health Professions Scholarships Program: This section adds the Indian Health Professions Scholarships Program to the list of scholarships excluded from gross income. Applies to amounts received in taxable years beginning after December 31, 2025.