[HISTORY: Adopted by the Tribal Council of the Nottawaseppi Huron Band of the Potawatomi 1-18-2018 by Res. No. 01-18-18-07; amended in its entirety 4-19-2018 by Res. No. 04-19-18-08. Subsequent amendments noted where applicable.
§ 2.3-4 General Welfare Doctrine and IRS Revenue Procedure 2014-35/Tribal General Welfare Exclusion Act of 2014.
For purposes of this Title, the following words and phrases shall have the meanings set forth below:
- ADMINISTRATIVE ENTITY(S)
- A department of the tribal government that is authorized and funded, through a Tribal Council-approved budget, to administer and provide assistance under an approved program under this Title.
- An enrolled member of the Tribe who is 18 years of age or older or an enrolled member of the Tribe who is under 18 years of age and who has been emancipated (i.e., whose parents' or guardians' rights to custody, control, services and earnings has/have been terminated) by a court of competent jurisdiction.
- APPROVED PROGRAM(S) OR PROGRAM
- Any program or programs approved by the Tribal Council to provide general welfare assistance to applicants that is intended to qualify for treatment under the General Welfare Doctrine, as defined herein. It includes, for example, the payment of benefits related to housing, education, elder or disabled status, cultural and religious programs or for other qualifying assistance, such as transportation costs, funeral costs, and other benefits intended to improve the health and general welfare of the Tribe and its members.
- An enrolled member of the Nottawaseppi Huron Band of the Potawatomi, or a qualified nonmember, entitled to receive general welfare benefit payments or services pursuant to this Title.
- BENEFIT COMMITTEE
- A committee consisting of directors or managers from the administrative entities administering approved programs under this Title who are appointed by the Tribal Council. The Assistance Committee is responsible for monitoring the effectiveness of approved programs and proposing to the Tribal Council, for approval, the guidelines for approved programs, including, but not limited to, participants' eligibility, assistance levels, policies and procedures for approving benefits and, if necessary, the forfeiting of such benefits.
- BENEFIT or BENEFITS
- Benefits or payments under an approved program, which are paid to or on behalf of a beneficiary pursuant to this Title, provided, that such benefit shall be owed back to the Tribe from the tribal member recipient in the event the benefit is deemed forfeited as provided for in §§ 2.3-11 and 2.3-15 of this Title.
- The Internal Revenue Code of 1986, as amended.
- COUNCIL or TRIBAL COUNCIL
- The duly elected governing body of the Nottawaseppi Huron Band of the Potawatomi, a federally recognized Indian tribal government.
- Any person whose support and maintenance is contingent upon the aid of such person's spouse, parent or guardian, including any person who otherwise meets the definition of "dependent" in 26 U.S.C. § 139E(c)(2).
- DISABILITY or DISABLED
- As used for purposes of programs covered by this Title shall refer to the inability of an individual to care for him- or herself due to physical or mental limitations in accordance with tribal law.
- An enrolled member of the Tribe who is 50 years of age or older.
- GENERAL TEST
- The continuing ability of governments (including tribal governments) to provide general welfare benefits on a tax-free basis consistent with case law and IRS guidance predating or otherwise not relying upon IRS Code Section 139E and the Safe Harbor rules. In general, these rules require that benefits are:
- GENERAL WELFARE DOCTRINE
- The doctrine, as recognized by the Internal Revenue Service, permitting a sovereign tribal government, subject to certain conditions, to provide benefits to its members without the benefits subjecting the recipients to federal income tax liabilities.
- An individual, other than a parent, assigned by a court of competent jurisdiction to have a legal duty and authority to provide care, control and manage the affairs of a child or legally incompetent adult who is an enrolled member of the Tribe.
- The Tribal Member General Welfare Benefits Program Guide including any addendum to the guidelines or any later attachments, changes or deletions thereto after the adoption of the guidelines.
- HOUSEHOLD MEMBER
- A spouse, parent, child, live-in-partner, or any other member of the immediate family who regularly and lawfully resides in the household of an enrolled member of the Tribe.
- IDENTIFIED GROUP
- Tribal members and qualified nonmembers who are members of an identified group, such as veterans, who are made eligible for benefits under any approved program.
- IMMEDIATE FAMILY
- A person who is a parent, sibling, step-sibling, grandparent, aunt, uncle, niece, nephew, first cousin, second cousin, or other kinship relation recognized by the head of household.
- IRS CODE SECTION 139E
- The Tribal General Welfare Exclusion Act of 2017, codified at 26 U.S.C. § 139E.
- LAVISH and/or EXTRAVAGANT
- Shall have the meaning determined by the Tribal Council in its sole discretion based on all facts and circumstances, taking into account needs unique to the Tribe as well as the social purpose being served by the particular benefit at hand, except as otherwise may be required for compliance with final guidance issued under IRS Code Section 139E following consultation between the Tribe and the IRS.
- LEGALLY INCOMPETENT
- An individual whose mind is unsound, deranged, and/or impaired in function as defined by a court having proper jurisdiction;
- MEMBER or TRIBAL MEMBER
- An individual who is enrolled in the Tribe.
- An individual who is the biological, adoptive or step-parent of one or more minor child(ren) who is/are enrolled members of the Tribe and who either:
- An enrolled tribal member or qualified nonmember who is eligible to participate and receive benefits under this Title. It also includes an "identified group," as defined above.
- PLAN YEAR
- The twelve-consecutive-month period from January 1 through December 31 or other plan year as adopted by the Tribal Council for purposes of operation of such program.
- QUALIFIED NONMEMBER
- An individual who is a spouse, parent, guardian, child or dependent, or household member of a tribal member, who is not himself/herself an enrolled member of the Tribe or identified groups of tribal members, who are made eligible for direct or indirect benefits under any approved program.
- SAFE HARBOR PROGRAM
- An approved program that meets the safe harbor requirements set forth herein and IRS Revenue Procedure 2014-35, as the same may hereafter be amended. Need shall be presumed for benefits provided under a Safe Harbor program.
- For purposes of this code only:
- A. Persons who are legally married under the law of any state or tribe, including same-sex spouses;
- B. Persons who are in a marital-like relationship that is recognized as a lawful civil union under the laws of any state or tribe, including same-sex relationships; and
- C. Persons who have one or more children in common and reside in the same household, but only for so long as such persons continue to reside in the same household.
- The General Welfare Title as established by this document.
- TRIBAL BENEFIT ACCOUNT
- The balance of a participant's tribal member benefits account, as of the applicable date.
- TRIBE or BAND
- The Nottawesppi Huron Band of the Potawatomi.
The Tribe provides benefits to participants and desires to affirm its sovereign right to do so on a nontaxable basis, pursuant to the General Welfare Doctrine. Both the United States Congress, through its enactment of the Tribal General Welfare Exclusion Act of 2014, and the Internal Revenue Service, through its traditional application of the general welfare doctrine and subsequent guidance, has recognized the sovereign right of Indian tribal governments to provide financial assistance to its members under certain circumstances on a nontaxable basis. The purpose of this Title is to establish guidelines for participation in approved programs and tribal staff making eligibility determinations for benefits. Further, it is the intent of the Tribal Council that all benefits provided under this Title:
Are made under an approved program;
Are available to any participants who satisfy the program guidelines, subject to budgetary restraints;
Are made under an approved program that does not discriminate in favor of members of the Tribal Council;
Are not provided as compensation for goods and/or services; and
Are not lavish or extravagant under the facts and circumstances, as determined by the Tribal Council.
The Tribal Council, acting as the legislative body of the Tribe and through its duly elected members, has traditionally exercised the Tribe's sovereign right to provide benefits in order to promote the general welfare and best interests of the Tribe, its members and its families;
The enactment of this Title shall not be construed in a manner to invalidate any prior acts and exercises of the sovereign authority of the Tribe in providing benefits prior to the effective date of this Title, and the Tribal Council hereby specifically ratifies its prior acts providing benefits;
The Tribal Council hereby further finds that all such need-based benefits provided to promote the general welfare of the Tribe, its members and families are, and have been, intended to reflect the sovereign act of a legislative body under the General Welfare Doctrine; and
This Title, therefore, does not create or establish new general welfare benefit rights or any related program. It merely memorializes, confirms and codifies existing procedures used by the Tribe in administering its benefit programs and services, which are hereby declared to be an inherent right of tribal sovereignty exercised by the Council. Finally, it is intended to establish a framework to improve the coordination and accomplishment of compliance with the General Welfare Doctrine when providing benefits.
§ 2.3-4 General Welfare Doctrine and IRS Revenue Procedure 2014-35/Tribal General Welfare Exclusion Act of 2014.
The Internal Revenue Service recognizes that benefits to participants under a legislatively provided approved program for the promotion of the general welfare of the Tribe is excludable from the gross income of those participants. In addition, the Service, in IRS Revenue Procedure 2014-35, provided for safe harbor programs under which, if approved and in writing, need would be presumed, and benefits would be excluded. The benefits authorized by this Title are intended to qualify for such favorable tax treatment under the General Welfare Doctrine to the fullest extent permitted at law. All amounts budgeted by the Tribe for benefits shall remain general assets of the Tribe until such payments are disbursed. Further, benefits authorized by this Title shall be an unfunded arrangement and shall be limited to funds appropriated, at the discretion of the Council. Finally, benefits are not subject to information reporting by the Tribe to the Internal Revenue Service.
Without limitation, the following benefits shall be treated as nontaxable hereunder:
Benefits that satisfy the requirements for the exemption under the Tribal General Welfare Exclusion Act of 2014, codified at IRS Code Section 139E;
Benefits that are provided under an IRS Safe Harbor Program;
Benefits that qualify for exclusion under the IRS General Test of General Welfare exclusion; or
Benefits that meet another express exemption under the Internal Revenue Code, such as the exemption provided for tribal medical expenses under Internal Revenue Code Section 139D, or that meet other recognized exemptions, including, for example, resource or land-based exemptions under 25 U.S.C. §§ 117a-b, 1407 and 1408.
Funding for approved programs that provide benefits to participants is appropriated from the general fund accounts of the tribal government. All payments to participants requesting benefits from approved programs are subject to the availability of budgeted tribal government funds, and the Tribe does not guarantee benefits under this Title. Benefits are paid on the basis of need and shall not be treated as a resource of a participant for any purpose. The Council reserves the right to cancel, adjust, modify or revoke any such benefit that is treated as a resource of a participant.
All the rights and liabilities associated with the enactment of this Title, or the benefits made hereunder, shall be construed and enforced according to the laws of the Tribe and applicable federal law. Nothing in this Title or the related policies or procedures adopted for its implementation, if any, shall be construed to make applicable to the Tribe any laws or regulations:
The Tribe reserves the right to provide benefits in circumstances where federal funding is insufficient to operate federal programs designed to benefit participants and when federal funding is insufficient to adequately and consistently fulfill federal trust obligations. The Tribe's adoption of its approved programs is not intended to relieve or diminish the federal government of its funding and trust responsibilities. Nothing herein shall waive the Tribe's right to seek funding shortfalls or to enforce the trust rights of the Tribe and its members. The Tribe shall be entitled to government-to-government consultation and coordination rights in regard to this Title with the federal government.
The Tribal Council shall designate approved programs for which funds will be budgeted each fiscal year, consistent with the purposes of this Title. Each approved program shall be consistent with the General Welfare Doctrine as to purpose, eligibility, and funding.
Each approved program shall be limited to purposes consistent with treatment under the General Welfare Doctrine.
An approved program must be established and operated to promote the general welfare of the Tribe, its members and families, including programs designed to enhance the promotion of health, education, self-sufficiency, self-determination, tribal image and the maintenance of culture and tradition, entrepreneurship, and employment.
Benefits intended to qualify for General Welfare Doctrine treatment shall be limited to enrolled members of the Tribe and qualified nonmembers. Each approved program shall set forth the specific eligibility rules and limitations applied to that program. The Benefit Committee shall present program descriptions, which include eligibility rules and limitations, along with procedures, to the Tribal Council for approval in accordance with this Title. Only those descriptions and procedures that are so approved by the Council shall be considered to be in force and effect.
All benefits must be used for the purpose stated in the approved program description. In the event that benefits are used or pledged for a purpose inconsistent with the purpose set forth in an approved program, the payment will be deemed forfeited. The administrative entity responsible for the approved program under which the misused benefit was made may take measures to secure repayment from the participant. The administrative entity is also authorized to offset any other payments owed to such a participant, if an offset is necessary to secure repayment of benefits under this Title.
Programs that qualify under IRS Code Section 139E or the IRS Safe Harbor shall not require a showing of individual need or means testing in order to achieve nontaxable treatment under the general welfare exclusion. The Tribe also reserves the right to provide community-based programs and programs based on nonfinancial need under the general test under which no individual means testing is required. The Tribe recognizes that means testing can, in certain contexts, distort certain tribal cultural and community values. However, the Tribe can have some approved programs which are financial-need based in order to help those most in need of benefits.
The Council shall adopt guidelines establishing the maximum benefit payments to be made to participants for certain specified purposes, based on recommendations of the Benefit Committee. Such guidelines shall also include factors to be used in determining whether the Council should deviate from the payment limitations in certain circumstances and limitations with respect to the scheduled frequency benefits.
When applicable per program requirements, the Council shall annually designate those funding sources that are available for approved programs as part of the annual budgeting process. Notwithstanding anything to the contrary, the benefits authorized hereunder shall be unfunded for tax purposes, and no participant shall have an interest in or right to any funds budgeted for or set aside for approved programs until paid. Benefit funds shall remain assets of the Tribe until distributed, and the approved programs shall be administered at all times to avoid triggering of the doctrines of constructive receipt and/or economic benefit.
Notwithstanding anything herein to the contrary, the Benefit Committee, acting on behalf of the Council, may forfeit benefits to any participant who is found by the Committee to have violated the terms of this Title, or the policies and procedures for any approved program. The Benefit Committee may also forfeit benefits should said benefits be treated as a resource detrimental to the Tribe or a participant. In the event of any such forfeiture, all benefits provided to the participant pursuant to this Title shall be deemed a loan and shall be enforceable as such.
A participant's right to receive benefits is not subject to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance, attachment or garnishment by creditors of the participant.
Eligible tribal members experiencing an immediate and large financial need that otherwise qualifies for payment or reimbursement under any approved program shall be eligible to receive a lump sum distribution of benefits ahead of the program's regular monthly or other periodic funding schedule. The Tribe, or its designees, in its discretion, shall determine when a distribution shall be made pursuant to this Section. For these purposes, an unforeseeable hardship or extraordinary expense may include any circumstance in which an eligible tribal member or other beneficiary can demonstrate that he/she requires lump sum distribution of benefits that exceed the maximum monthly benefit available to such eligible tribal member relating to a purpose that qualifies for payment or reimbursement under an approved program such as expenses related to qualifying repairs or improvements to a primary residence, medical expenses incurred by a qualified beneficiary, payment of balance of installment loan or annual insurance premium, or any severe financial privation resulting from an illness or accident of the member or other qualified beneficiary, loss of the member's primary residence or automobile due to casualty, or other similar extraordinary and unforeseeable circumstances. The Tribe or its designee may look to IRS Code Section 409A for additional guidance.
General. Each approved program shall be administered by the administrative entity to which it has been assigned by the Tribal Council. All the powers and duties conferred on each respective administrative entity shall be exercised or performed by it in the exercise of its discretion regardless of whether the provision conferring such power or imposing such duty specifically refers to its discretion. All decisions of a given administrative entity regarding an approved program, within the scope of its authority, shall be binding and conclusive upon all participants under the approved program.
Program guidelines. Guidelines for approved programs shall be developed by the respective department staff responsible for a given benefit program, coordinated with the Benefit Committee, if applicable, and approved by the Tribal Council. At a minimum, such guidelines shall satisfy the requirements of this Title, including the following:
Indian General Welfare Benefits (IRS Code Section 139E) programs that meet the following criteria for exemption under IRS Code Section 139E shall be treated as nontaxable benefits under the general welfare exclusion without the participant having to demonstrate individual need:
The program is administered under specified guidelines and does not discriminate in favor of the members of the Tribal Council;
Program benefits are available to any tribal member who meets such guidelines;
Program benefits are for the promotion of the general welfare;
Program benefits are not lavish or extravagant; and
Program benefits are not compensation for services.
Ceremonial activities. Any items of cultural significance, reimbursement of costs or cash honorarium for participation in cultural or ceremonial activities for the transmission of tribal culture shall not be treated as compensation for services.
Safe Harbor programs. Programs that meet the following general criteria for safe harbor treatment, and provide qualifying safe harbor benefits, shall be treated as nontaxable benefits under the general welfare exclusion without the participant having to demonstrate individual need:
General criteria for Safe Harbor treatment.
The benefit is provided under a specific approved program of the Tribe;
The program has written guidelines specifying how individuals may qualify for the benefit;
The benefit is available to any tribal member, identified group of tribal members, or qualified nonmember who satisfies the program guidelines, subject to budgetary restraints;
The distribution of benefits from the program does not discriminate in favor of the governing body of the Tribe;
The benefit is not compensation for goods or services; and
The benefit is not lavish or extravagant under the facts and circumstances, as determined by the Tribal Council.
Specific Safe Harbors. The following benefits may be provided under a Safe Harbor program (Note: the benefits listed in the parenthetical language herein are for example purposes only, and are not an exhaustive list):
Housing programs. Programs relating to principal residences and ancillary structures that are not used in any trade or business, or for investment purposes that:
Pay mortgage payments, down payments, or rent payments (including, but not limited to, security deposits) for principal residences;
Enhance habitability of housing, such as by remedying water, sewage, or sanitation service, safety issues (including, but not limited to, mold remediation), or heating or cooling issues;
Provide basic housing repairs or rehabilitation (including, but not limited to, roof repair and replacement);
Pay utility bills and charges (including, but not limited to, water, electricity, gas, and basic communications services such as phone, Internet, and cable); or
Pay property taxes or make payments in lieu of taxes (PILOTs).
Educational programs. Programs to:
Provide students (including, but not limited to, post-secondary students) transportation to and from school, tutors, and supplies (including, but not limited to, clothing, backpacks, laptop computers, musical instruments, and sports equipment) for use in school activities and extracurricular activities;
Provide tuition payments for students (including, but not limited to, allowances for room and board on or off campus for the student, spouse, domestic partner, and dependents) to attend preschool, school, college or university, online school, educational seminars, vocational education, technical education, adult education, continuing education, or alternative education;
Provide for the care of children away from their homes to help their parents or other relatives responsible for their care to be gainfully employed or to pursue education; and
Provide job counseling and programs for which the primary objective is job placement or training, including, but not limited to, allowances for expenses for interviewing or training away from home (including, but not limited to, travel, auto expenses, lodging, and food); tutoring; and appropriate clothing for a job interview or training (including, but not limited to, an interview suit or a uniform required during a period of training).
Elder and disabled programs. Programs for individuals who have reached age 50 or are mentally or physically disabled (as defined under applicable law, including but not limited to, tribal government disability codes or laws) that provide:
Meals through home-delivered meal programs or at a community center or similar facility;
Home care such as assistance with preparing meals or doing chores, or day care outside the home;
Local transportation assistance; and
Improvements to adapt housing to special needs (including, but not limited to, grab bars and ramps).
Cultural and religious programs. Programs to:
Pay expenses (including, but not limited to, admission fees, transportation, food, and lodging) to attend or participate in an Indian tribe's cultural, social, religious, or community activities such as pow-wows, ceremonies, and traditional dances;
Pay expenses (including, but not limited to, admission fees, transportation, food, and lodging) to visit sites that are culturally or historically significant for the Tribe, including but not limited to, other Indian reservations;
Pay the costs of receiving instruction about an Indian tribe's culture, history, and traditions (including, but not limited to, traditional language, music, and dances);
Pay funeral and burial expenses and expenses of hosting or attending wakes, funerals, burials, other bereavement events, and subsequent honoring events; and
Pay transportation costs and admission fees to attend educational, social, or cultural programs offered or supported by the Tribe or anther tribe.
Other qualifying benefits programs. Programs to:
Pay transportation costs such as rental cars, substantiated mileage, and fares for bus, taxi, and public transportation between an Indian reservation, service area, or service unit area and facilities that provide essential services to the public (such as medical facilities and grocery stores);
Pay for the cost of transportation, temporary meals, and lodging of a tribal member or qualified nonmember while the individual is receiving medical care away from home;
Provide assistance to individuals in exigent circumstances (including, but not limited to, victims of abuse), including, but not limited to, the costs of food, clothing, shelter, transportation, auto repair bills, and similar expenses;
Pay costs for temporary relocation and shelter for individuals displaced from their homes (including, but not limited to, situations in which a home is destroyed by a fire, flood, or natural disaster);
Provide assistance for transportation emergencies (for example, when stranded away from home) in the form of transportation costs, a hotel room, and meals; and
Pay the cost of nonprescription drugs (including, but not limited to, traditional Indian tribal medicines).
Nothing in this Title or the Tribe's use of the IRS Safe Harbor as guidance shall limit the Tribe's right to provide benefits that differ or vary from scope or description of programs described or included within the IRS Safe Harbor rules or guidance. The Tribe specifically reserves the right to develop approved programs that provide tax-free benefits under expanded authority extended to tribes under IRS Code Section 139E and the General Test.
Notwithstanding anything herein to the contrary, the Tribe reserves the right to provide benefits that may qualify for tax exemptions outside of the general welfare exclusion, including tax exemptions under Title 25 or 26 of the United States Code so long as the conditions for exemption are met. Without limitation, this includes tribal member medical benefits exempt under Section 9021 of the Patient Protection and Affordable Care Act of 2010 (IRS Code Section 139D) and nongaming per-capita expenses exempt under 25 U.S.C. Sections 1407 and 1408.
All rights and liabilities associated with the enactment of this Title, or the benefit payments made hereunder, shall be construed and enforced according to the laws of the Tribe. Nothing herein shall be construed as a waiver of the Tribe's sovereign immunity.
If any provision of this General Welfare Title is held to be invalid, the remainder of this Title shall not be affected.