Introduction of the American Indian Veterans Pay Restoration Act

INTRODUCTION OF THE AMERICAN INDIAN VETERANS PAY RESTORATION ACT-HON. TOM UDALL (Extensions of Remarks - October 10, 2004)

Mr. UDALL of New Mexico. Mr. Speaker, this week, as thousands of Native Americans from all over the country convene in Washington to celebrate the opening of the newest museum on the National Mall, I rise to introduce a bill that will restore justice to many of our Nation's Native American veterans, the American Indian Veterans Pay Restoration Act.

Prior to 2001, Native Americans who served their country in the armed forces had their active duty pay taxed by the state, despite claiming the reservation as their home. The law is now well established that this policy was wrong and, in keeping with tribal sovereignty, the policy of withholding states taxes on these soldiers' pay was changed. This position is reflected in administrative opinions, Fatt v. Utah, 884 P2d 1233 (Utah 1994), a 2000 Department of Justice (DOJ) opinion, a Department of Defense (DOD) policy instituted in 2001, and most recently, in Public Law 108-189, a law that passed this House unanimously.

However, while these changes stopped the improper practice of withholding taxes, the changes do not apply retroactively. Current federal law provides that statutes of limitations toll during a member's service, but the ability to recover withheld taxes is still limited by state statute of limitations on filing for refunds. The result is that hundreds, or perhaps thousands, of tribal members whose state taxes were improperly withheld during their service to our country are unable to recover the money that is owed to them.

The American Indian Veterans Pay Restoration Act remedies this situation by creating a program within DOD to return these erroneously withheld taxes to qualifying Native American veterans. This program will centralize and facilitate distribution of funds and recovery of funds from the states. Veterans seeking to recover their money will submit an application to DOD providing evidence of military service, improper taxation, and domicile on a reservation. In addition to veterans, the program will serve Native Americans who were on active duty prior to 2001 and who remain on active duty.

Nearly 16 percent of the Native population 16 years and older are veterans. Native Americans have the highest rate of service to our country of any ethnic group in the U.S. We are daily reminded of the sacrifice made by those who choose to don the uniform and serve our country, and this week we have also been reminded, of the importance of preserving and honoring Native American cultures and traditions. The introduction of this bill serves as a timely effort to keep our promise to our Nation's Native American veterans, and I ask the support of my colleagues.

I would like to thank the original cosponsors of the bill-Representative GEORGE MILLER, who led the effort to change the Pentagon's policy on withholding state taxes on Native American servicemembers in 2000, Representative NICK RAHALL, the Ranking Member of the House Resources Committee, and Representative DALE KILDEE, a co-chair of the Native American Caucus. I look forward to working with my colleagues to pass this common sense bill.