text: SECTION 1. SHORT TITLE.
  
      This Act may be cited as the ``Treatment of Indian Tribal Natural 
  Resource Income Act of 2001''.
  
  SEC. 2. FEDERAL TAX TREATMENT OF INCOME DERIVED BY INDIANS FROM NATURAL 
                RESOURCES-RELATED ACTIVITIES.
  
      (a) In General.--Subchapter C of chapter 80 of the Internal Revenue 
  Code of 1986 (relating to provisions affecting more than one subtitle) 
  is amended by adding at the end the following new section:
  
  ``SEC. 7874. FEDERAL TAX TREATMENT OF INCOME DERIVED BY INDIANS FROM 
                THE HARVEST OF TRIBALLY OWNED NATURAL RESOURCES.
  
      ``(a) In General.--
              ``(1) Income and self-employment taxes.--No tax shall be 
          imposed by subtitle A on income derived from a natural 
          resources-related activity conducted--
                      ``(A) by a member of an Indian tribe directly or 
                  through a qualified Indian entity, or
                      ``(B) by a qualified Indian entity.
              ``(2) Employment taxes.--No tax shall be imposed by 
          subtitle C on remuneration paid for services performed in 
          natural resources-related activity by one member of a tribe for 
          another member of such tribe or for a qualified Indian entity.
      ``(b) Definitions.--For purposes of this section:
              ``(1) Natural resources-related activity.--
                      ``(A) In general.--The term `natural resources-
                  related activity' means, with respect to an Indian 
                  tribe, any activity directly related to cultivating, 
                  harvesting, processing, extracting, or transporting 
                  natural resources held in trust by the United States 
                  for the benefit of such tribe or directly related to 
                  selling such natural resources but only if 
                  substantially all of the selling activity is performed 
                  by members of such tribe.
                      ``(B) Extraction of minerals, etc. excluded.--Such 
                  term shall not include any activity directly related to 
                  extracting minerals, ores, oil, or gas.
              ``(2) Qualified indian entity.--
                      ``(A) In general.--The term `qualified Indian 
                  entity' means an entity--
                              ``(i) engaged in a natural resources-
                          related activity of one or more Indian tribes,
                              ``(ii) all of whose equity interests are 
                          owned by such tribes or members of such tribes, 
                          and
                              ``(iii) substantially all of the management 
                          functions of the entity are performed by 
                          members of such tribes.
                      ``(B) Entities engaged in processing or 
                  transportation.--Except as provided in regulations 
                  similar to regulations in effect under section 
                  7873(b)(3)(A)(iii) on the date of the enactment of this 
                  section, if an entity is engaged to any extent in any 
                  processing or transporting of natural resources, the 
                  term `qualified Indian entity' shall also include an 
                  entity whose annual gross receipts are 90 percent or 
                  more derived from natural resources-related activities 
                  of one or more Indian tribes each of which owns at 
                  least 10 percent of the equity interests in the entity. 
                  For purposes of this subparagraph, equity interests 
                  owned by a member of such a tribe shall be treated as 
                  owned by the tribe.
      ``(c) Special Rules.--
              ``(1) Distributions from qualified indian entity.--For 
          purposes of this section, any distribution with respect to an 
          equity interest in a qualified Indian entity of one or more 
          Indian tribes to a member of one of such tribes shall be 
          treated as derived by such member from a natural resources-
          related activity to the extent such distribution is 
          attributable to income derived by such entity from a natural 
          resources-related activity.
              ``(2) De minimis unrelated amounts may be excluded.--If, 
          but for this paragraph, all but a de minimis amount derived by 
          a qualified Indian tribal entity or by a tribal member through 
          such entity, or paid to an individual for services, would be 
          entitled to the benefits of subsection (a), then the entire 
          amount shall be so entitled.
      ``(d) No Inference Created.--Nothing in this title shall create any 
  inference as to the existence or non-existence or scope of any 
  exemption from tax for income derived from tribal rights secured as of 
  January 1, 2001, by any treaty, law, or Executive Order.''.
      (b) Conforming Amendment.--The table of sections for subchapter C 
  of chapter 80 of the Internal Revenue Code of 1986 is amended by adding 
  at the end the following new item:
  
  ``Sec. 7874. Federal tax treatment of income derived by Indians from 
                              the harvest of tribally owned natural 
                              resources.''.
      (c) Effective Date.--The amendments made by this section shall 
  apply to periods before, on, or after the date of the enactment of this 
  Act.
target: Treatment of Indian Tribal Natural Resource Income Act of 2001 - Amends the Internal Revenue Code to prohibit the imposition of income taxes or income derived from a natural resources-related activity conducted by: (1) a member of an Indian tribe directly or through a qualified Indian entity; or (2) a qualified Indian entity.Prohibits the imposition of employment taxes on remuneration paid for services performed in natural resources-related activity by one member of a tribe for another member of such tribe or for a qualified Indian entity.
feat_title: A bill to amend the Internal Revenue Code of 1986 to exempt from income taxation income derived from natural resources-related activity by a member of an Indian tribe directly or through a qualified Indian entity.