Model Legislative Language

Section _____________. Treatment of Indian Tribes

(a)  The term "employer" shall include any Indian tribe for which service in employment as defined under this Act ⁽¹⁾ is performed.

(b)  The term "employment" shall include service performed in the employ of an Indian tribe, as defined in Section 3306(u) of the Federal Unemployment Tax Act (FUTA), provided such service is excluded from "employment" as defined in FUTA solely by reason of Section 3306(c)(7), FUTA, and is not otherwise excluded from "employment" under this Act. For purposes of this section, the exclusions from employment in section [insert provision of State law relating to State and local government exclusions] shall be applicable to services performed in the employ of an Indian tribe.

(c)  Benefits based on service in employment defined in this section shall be payable in the same amount, on the same terms and subject to the same conditions as benefits payable on the basis of other service subject under this Act.

(d)(1)  Indian tribes or tribal units (subdivisions, subsidiaries or business enterprises wholly owned by such Indian tribes) subject to this Act shall pay contributions under the same terms and conditions as all other subject employers, unless they elect to pay into the State unemployment fund amounts equal to the amount of benefits attributable to service in the employ of the Indian tribe.

(2)  Indian tribes electing to make payments in lieu of contributions must make such election in the same manner and under the same conditions as provided in [enter section of State law] pertaining to State and local governments and nonprofit organizations subject to this Act. Indian tribes will determine if reimbursement for benefits paid will be elected by the tribe as a whole, by individual tribal units, or by combinations of individual tribal units.

(3)  Indian tribes or tribal units will be billed for the full amount of benefits attributable to service in the employ of the Indian tribe or tribal unit on the same schedule as other employing units that have elected to make payments in lieu of contributions.

(4)  At the discretion of the commissioner, any Indian tribe or tribal unit that elects to become liable for payments in lieu of contributions shall be required within ______ days after the effective date of its election, to:

(A)  execute and file with the commissioner a surety bond approved by the commissioner or

(B)  deposit with the commissioner money or securities on the same basis as other employers with the same election option.

(e)(1)(A)  Failure of the Indian tribe or tribal unit to make required payments, including assessments of interest and penalty, within 90 days of receipt of the bill will cause the Indian tribe to lose the option to make payments in lieu of contributions, as described in section (d), for the following tax year unless payment in full is received before contribution rates for next tax year are computed.

(B)  Any Indian tribe that loses the option to make payments in lieu of contributions due to late payment or nonpayment, as described in subparagraph (A), shall have such option reinstated if, after a period of one year, all contributions have been made timely, provided no contributions, payments in lieu of contributions for benefits paid, penalties or interest remain outstanding.

(2)(A)  Failure of the Indian tribe or any tribal unit thereof to make required payments, including assessments of interest and penalty, after all collection activities deemed necessary by the commissioner have been exhausted, will cause services performed for such tribe to not be treated as "employment" for purposes of subsection (b).

(B)  The commissioner may determine that any Indian tribe that loses coverage under subparagraph (A), may have services performed for such tribe again included as "employment" for purposes of subsection (b) if all contributions, payments in lieu of contributions, penalties and interest have been paid.

(C)  The commissioner will notify the United States Internal Revenue Service and the United States Department of Labor of any termination or reinstatement of coverage made under subparagraphs (A) and (B).

(f) Notices of payment and reporting delinquency to Indian tribes or their tribal units shall include information that failure to make full payment within the prescribed time frame:

(1)  will cause the Indian tribe to be liable for taxes under FUTA;

(2)  will cause the Indian tribe to lose the option to make payments in lieu of contributions;

(3)  could cause the Indian tribe to be excepted from the definition of "employer," as provided in paragraph (a), and services in the employ of the Indian tribe, as provided in paragraph (b), to be excepted from "employment."

(g) Extended benefits paid that are attributable to service in the employ of an Indian tribe and not reimbursed by the Federal government shall be financed in their entirety by such Indian tribe.

1.  "Act" refers to the State employment security law.