text: SECTION 1. SHORT TITLE.
  
      This Act may be cited as the ``Settlement Trust Improvement Act of 
  2017''.
  
  SEC. 2. EXCLUSION FOR ANCSA PAYMENTS ASSIGNED TO ALASKA NATIVE 
                SETTLEMENT TRUSTS.
  
      (a) In General.--Part III of subchapter B of chapter 1 of the 
  Internal Revenue Code of 1986 is amended by inserting before section 
  140 the following new section:
  
  ``SEC. 139G. ASSIGNMENTS TO ALASKA NATIVE SETTLEMENT TRUSTS.
  
      ``(a) In General.--In the case of a Native Corporation, gross 
  income shall not include the value of any payments that would otherwise 
  be made, or treated as being made, to such Native Corporation pursuant 
  to, or as required by, any provision of the Alaska Native Claims 
  Settlement Act (43 U.S.C. 1601 et seq.), including any payment that 
  would otherwise be made to a Village Corporation pursuant to section 
  7(j) of the Alaska Native Claims Settlement Act (43 U.S.C. 1606(j)), 
  provided that any such payments--
              ``(1) are assigned in writing to a Settlement Trust, and
              ``(2) were not received by such Native Corporation prior to 
          the assignment described in paragraph (1).
      ``(b) Inclusion in Gross Income.--In the case of a Settlement Trust 
  which has been assigned payments described in subsection (a), gross 
  income shall include such payments as and when such payments are 
  received by such Settlement Trust pursuant to the assignment and shall 
  have the same character as if such payments were received by the Native 
  Corporation.
      ``(c) Amount and Scope of Assignment.--The amount and scope of any 
  assignment under subsection (a) shall be described with reasonable 
  particularity and may either be in a percentage of one or more such 
  payments or in a fixed dollar amount.
      ``(d) Duration of Assignment; Revocability.--Any assignment under 
  subsection (a) shall specify--
              ``(1) a duration either in perpetuity or for a period of 
          time, and
              ``(2) whether such assignment is revocable.
      ``(e) Prohibition on Deduction.--Notwithstanding section 250, no 
  deduction shall be allowed to a Native Corporation for purposes of any 
  amounts described in subsection (a).
      ``(f) Definitions.--For purposes of this section, the terms `Native 
  Corporation' and `Settlement Trust' have the same meaning given such 
  terms under section 646(h).''.
      (b) Conforming Amendment.--The table of sections for part III of 
  subchapter B of chapter 1 of such Code is amended by inserting before 
  the item relating to section 140 the following new item:
  
  ``Sec. 139G. Assignments to Alaska Native Settlement Trusts.''.
      (c) Effective Date.--The amendments made by this section shall 
  apply to taxable years beginning after December 31, 2016.
  
  SEC. 3. DEDUCTION OF CONTRIBUTIONS TO ALASKA NATIVE SETTLEMENT TRUSTS.
  
      (a) In General.--Part VIII of subchapter B of chapter 1 of the 
  Internal Revenue Code of 1986 is amended by adding at the end the 
  following new section:
  
  ``SEC. 250. CONTRIBUTIONS TO ALASKA NATIVE SETTLEMENT TRUSTS.
  
      ``(a) In General.--In the case of a Native Corporation, there shall 
  be allowed a deduction for any contributions made by such Native 
  Corporation to a Settlement Trust (regardless of whether an election 
  under section 646 is in effect for such Settlement Trust) for which the 
  Native Corporation has made an annual election under subsection (e).
      ``(b) Amount of Deduction.--The amount of the deduction under 
  subsection (a) shall be equal to--
              ``(1) in the case of a cash contribution (regardless of the 
          method of payment, including currency, coins, money order, or 
          check), the amount of such contribution, or
              ``(2) in the case of a contribution not described in 
          paragraph (1), the Native Corporation's adjusted basis in the 
          property contributed.
      ``(c) Limitation and Carryover.--
              ``(1) In general.--Subject to paragraph (2), the deduction 
          allowed under subsection (a) for any taxable year shall not 
          exceed the taxable income of the Native Corporation for the 
          taxable year in which the contribution was made.
              ``(2) Carryover.--If the aggregate amount of contributions 
          described in subsection (a) for any taxable year exceeds the 
          limitation under paragraph (1), such excess shall be treated as 
          a contribution described in subsection (a) in each of the 15 
          succeeding years in order of time.
      ``(d) Definitions.--For purposes of this section, the terms `Native 
  Corporation' and `Settlement Trust' have the same meaning given such 
  terms under section 646(h).
      ``(e) Manner of Making Election.--
              ``(1) In general.--For each taxable year, a Native 
          Corporation may elect to have this section apply for such 
          taxable year on the income tax return or amended income tax 
          return of the Native Corporation, with such election to have 
          effect solely for such taxable year.
              ``(2) Revocation.--Any election made by a Native 
          Corporation pursuant to this subsection may be revoked pursuant 
          to an amended income tax return which has been timely filed by 
          such Native Corporation.
      ``(f) Additional Rules.--
              ``(1) Earnings and profits.--Notwithstanding section 
          646(d)(2), in the case of a Native Corporation which claims a 
          deduction under this section for any taxable year, the earnings 
          and profits of such Native Corporation for such taxable year 
          shall be reduced by the amount of such deduction.
              ``(2) Gain or loss.--No gain or loss shall be recognized by 
          the Native Corporation with respect to a contribution of 
          property for which a deduction is allowed under this section.
              ``(3) Income.--Subject to subsection (g), a Settlement 
          Trust shall report income in the amount of any deduction 
          allowed under this section in the taxable year in which the 
          Settlement Trust actually receives such contribution.
              ``(4) Period.--In determining the period that a Settlement 
          Trust has held property for which a deduction is allowed under 
          this section, the period the Native Corporation has held such 
          property shall be included.
              ``(5) Basis.--The basis that a Settlement Trust has for 
          which a deduction is allowed under this section shall be equal 
          to the adjusted basis of the Native Corporation in such 
          property immediately before such contribution.
              ``(6) Prohibition.--No deduction shall be allowed under 
          this section with respect to any contributions made to a 
          Settlement Trust which are in violation of subsection (a)(2) or 
          (c)(2) of section 39 of the Alaska Native Claims Settlement Act 
          (43 U.S.C. 1629e).
      ``(g) Election by Settlement Trust To Defer Income Recognition.--
              ``(1) In general.--In the case of a contribution which 
          consists of property other than cash, a Settlement Trust may 
          elect to defer recognition of any income related to such 
          property until the sale or exchange of such property, in whole 
          or in part, by the Settlement Trust.
              ``(2) Treatment.--In the case of property described in 
          paragraph (1), any income or gain received by the Settlement 
          Trust upon sale or exchange of such property shall be treated 
          as--
                      ``(A) for such amount of the income or gain as is 
                  equal to or less than the amount of income deferred 
                  pursuant to this subsection, ordinary income, and
                      ``(B) for any amounts of the income or gain which 
                  are in excess of the amount of income deferred pursuant 
                  to this subsection, having the same character as if 
                  this subsection did not apply.
              ``(3) Election.--
                      ``(A) In general.--For each taxable year, a 
                  Settlement Trust may elect to apply this subsection for 
                  any property described in paragraph (1) which was 
                  contributed during such year. Any property to which the 
                  election applies shall be identified and described with 
                  reasonable particularity on the income tax return or 
                  amended income tax return of the Settlement Trust, with 
                  such election to have effect solely for such taxable 
                  year.
                      ``(B) Revocation.--Any election made by a 
                  Settlement Trust pursuant to this subsection may be 
                  revoked pursuant to an amended income tax return which 
                  has been timely filed by such Settlement Trust.
                      ``(C) Certain dispositions.--
                              ``(i) In general.--In the case of any 
                          property for which an election is in effect 
                          under this subsection and which is disposed of 
                          within the first taxable year subsequent to the 
                          taxable year in which such property was 
                          contributed to the Settlement Trust--
                                      ``(I) such election shall be voided 
                                  as to such property,
                                      ``(II) the Settlement Trust shall 
                                  be required to file an amended return 
                                  for the taxable year in which such 
                                  property was contributed, and
                                      ``(III) the Settlement Trust shall 
                                  pay any tax applicable to such 
                                  property, including interest and a 
                                  penalty equal to 10 percent of the 
                                  amount of such tax.
                              ``(ii) Assessment.--Notwithstanding section 
                          6501(a), any amount described in subclause 
                          (III) of clause (i) may be assessed, or a 
                          proceeding in court with respect to such amount 
                          may be initiated without assessment, within 4 
                          years after the date on which the return making 
                          the election under this subsection for such 
                          property was filed.''.
      (b) Conforming Amendment.--The table of sections for part VIII of 
  subchapter B of chapter 1 of the Internal Revenue Code of 1986 is 
  amended by adding at the end the following new item:
  
  ``Sec. 250. Contributions to Alaska Native Settlement Trusts.''.
      (c) Permissive Amendments to Trust Agreements Establishing 
  Settlement Trusts.--
              (1) In general.--Notwithstanding any provision of law, 
          including any provision of the Alaska Native Claims Settlement 
          Act (43 U.S.C. 1601 et seq.), Alaska state law, or the terms of 
          any trust agreement of a Settlement Trust (as defined under 
          section 3(t) of the Alaska Native Claims Settlement Act, (43 
          U.S.C. 1602(t))), the terms of any trust agreement of a 
          Settlement Trust may, within the 1-year period following the 
          date of the enactment of this Act, be amended as necessary to 
          allow such Trust to make an election described in subsection 
          (g) of section 250 of the Internal Revenue Code of 1986 (as 
          added by subsection (a)).
              (2) Amendment.--An amendment described in paragraph (1) 
          shall be enacted pursuant to one or more agreements between the 
          Native Corporation that established the Settlement Trust and 
          the trustees of such Trust and shall not require any vote by 
          the beneficiaries of such Trust or the shareholders of such 
          Native Corporation.
              (3) Registration statement.--Any Settlement Trust which was 
          registered in accordance with Alaska state law prior to the 
          date of the enactment of an amendment described in paragraph 
          (1) shall not be required to file a new or amended registration 
          statement to reflect such amendment.
      (d) Effective Date.--
              (1) In general.--The amendments made by this section shall 
          apply to taxable years for which the period of limitation on 
          refund or credit under section 6511 of the Internal Revenue 
          Code of 1986 has not expired.
              (2) One-year waiver of statute of limitations.--If the 
          period of limitation on a credit or refund resulting from the 
          amendments made by subsection (a) expires before the end of the 
          1-year period beginning on the date of the enactment of this 
          Act, refund or credit of such overpayment (to the extent 
          attributable to such amendments) may, nevertheless, be made or 
          allowed if claim therefor is filed before the close of such 1-
          year period.
  
  SEC. 4. INFORMATION REPORTING FOR DEDUCTIBLE CONTRIBUTIONS TO ALASKA 
                NATIVE SETTLEMENT TRUSTS.
  
      (a) In General.--Section 6039H of the Internal Revenue Code of 1986 
  is amended--
              (1) in the heading, by striking ``sponsoring''; and
              (2) by adding at the end the following new subsection:
      ``(e) Deductible Contributions by Native Corporations to Alaska 
  Native Settlement Trusts.--
              ``(1) In general.--Any Native Corporation (as defined in 
          subsection (m) of section 3 of the Alaska Native Claims 
          Settlement Act (43 U.S.C. 1602(m))) which has made a 
          contribution to a Settlement Trust (as defined in subsection 
          (t) of such section) to which an election under subsection (e) 
          of section 250 applies shall provide such Settlement Trust with 
          a statement regarding such election not later than January 31 
          of the calendar year subsequent to the calendar year in which 
          the contribution was made.
              ``(2) Content of statement.--The statement described in 
          paragraph (1) shall include--
                      ``(A) the total amount of contributions to which 
                  the election under subsection (e) of section 250 
                  applies,
                      ``(B) for each contribution, whether such 
                  contribution was in cash,
                      ``(C) for each contribution which consists of 
                  property other than cash, the date that such property 
                  was acquired by the Native Corporation and the adjusted 
                  basis of such property on the date such property was 
                  contributed to the Settlement Trust,
                      ``(D) the date on which each contribution was made 
                  to the Settlement Trust, and
                      ``(E) such information as the Secretary determines 
                  to be necessary or appropriate for the identification 
                  of each contribution and the accurate reporting of 
                  income relating to such contributions by the Settlement 
                  Trust.''.
      (b) Conforming Amendment.--The item relating to section 6039H in 
  the table of sections for subpart A of part III of subchapter A of 
  chapter 61 of the Internal Revenue Code of 1986 is amended to read as 
  follows:
  
  ``Sec. 6039H. Information With Respect to Alaska Native Settlement 
                              Trusts and Native Corporations.''.
      (c) Effective Date.--The amendments made by this section shall 
  apply to taxable years beginning after December 31, 2016.
  
  SEC. 5. STATUTORY CONSTRUCTION.
  
      This Act is remedial Indian legislation enacted under the plenary 
  authority of the Congress under the Constitution of the United States 
  to regulate Indian affairs, and any ambiguities in section 139F or 250 
  of the Internal Revenue Code of 1986, as added by this Act, shall be 
  resolved in favor of Native Corporations attempting to exclude income 
  or claim a deduction thereunder.
target: Settlement Trust Improvement Act of 2017  This bill amends the Internal Revenue Code, with respect to the tax treatment of Alaska Native Settlement Trusts, to: (1) allow an Alaska Native Corporation to assign certain payments referenced in the Alaska Native Claims Settlement Act to a trust without including the payments in the gross income of the corporation, (2) allow the corporation to elect annually to deduct contributions made to a trust, (3) allow a trust to elect to defer the recognition of gains related to contributions of property other than cash until the sale or exchange of the property, and (4) establish information reporting requirements for deductible contributions to a trust. 
feat_title: Settlement Trust Improvement Act of 2017