relationship with Indian tribes. 3. Treatment of Indian tribes as States with respect to bond issuance (a) In general Subsection (c) of section 7871 of the Internal Revenue Code of 1986 (relating to Indian tribal governments treated as States for certain purposes) is amended to read as follows: (c) Special rules for tax-Exempt bonds In applying section 146 to bonds issued by Indian tribal governments (or subdivisions thereof) the Secretary of the Treasury shall annually— (1) establish a national bond volume cap based on the greater of— (A) the State population formula approach in section 146(d)(1)(A) (using national tribal population estimates supplied annually by the Department of the Interior in consultation with the Census Bureau), and (B) the minimum State ceiling amount in section 146(d)(1)(B) (as adjusted in accordance with the cost of living provision in section 146(d)(2)), and (2) allocate such national bond volume cap among all Indian tribal governments seeking such an allocation in a particular year under regulations prescribed by the Secretary. . (b) Repeal of essential governmental function requirements Section 7871 of such Code is further amended by striking subsections (b) and (e). (c) Conforming amendment Subparagraph (B) of section 45(c)(9) of such Code is amended to read as follows: (B) Indian tribe For purposes of this paragraph, the term Indian tribe means any Indian tribe, band, nation, or other organized group or community which is recognized as eligible for the special programs and services provided by the United States to Indians because of their status as Indians. . (d) Effective date (1) Subsection (a) The amendment made by subsection (a) shall apply to obligations issued in calendar years beginning after the date of the enactment of this Act. (2) Subsection (b) The repeals made by subsection (b) shall apply to transactions after, and obligations issued in calendar years beginning after, the date of the enactment of this Act. 4. Treatment of pension and employee benefit plans maintained