WASHINGTON, D.C. — Last Thursday, Representative Xavier Becerra (CA-31), Assistant to the Speaker of the House and the only congressional member from Southern California on the Ways and Means Committee, introduced H.R. 6005, the Tribal Charities Fairness Act of 2008.
“This modest bill would repair far-reaching inequities in the tax code,” Rep. Becerra said after introducing the legislation. “By simply recognizing Indian tribal governments as local government entities, tribes would finally be free to fund public charities that serve the needs of their communities. It’s a question of equality, and tribes deserve to be treated the same as any local government.”
Charitable organizations under section 501(c)(3) of the tax code are classified as either public charities or private foundations. Organizations are deemed “public charities” when they receive “public support” from local, state, or federal governments. When an organization does not receive public support, it is deemed a “private foundation” and is subject to more stringent tax rules and regulations to ensure they remain dedicated to their mission to serve the public good.The Tribal Charities Fairness Act would allow Indian tribes to be treated the same as state and local governments when they provide support to tax-exempt charitable organizations – thus allowing tribal-funded charities that serve their communities to be deemed public charities.
Passage of Rep. Becerra’s legislation would free numerous nonprofit charities funded by Indian tribes – from health clinics and wellness centers to tribal museums and cultural centers – from additional tax rules aimed at regulating private foundations, not public charities.
“The aim of these tribal-funded nonprofits is to serve the public good of their communities, just like public charities in any other community in America,” Rep. Becerra said. “We owe it to them to fix this glitch in the tax code and give them equal treatment.”
Five of Rep. Becerra’s colleagues joined him as original cosponsors of the bill, including Ways and Means Chairman Charlie Rangel (NY-15).
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