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Farm Bureau calls for quick passage of rural electric co-op bill

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A new bill was introduced by Sen. Rob Portman to preserve jobs and encourage infrastructure development by expanding tax-exempt cooperative organizations’ access to government grants and assistance, including rural broadband grants and FEMA disaster relief. This legislation provides certainty for rural electric co-ops looking to utilize government resources to provide critical services to their members, such as broader access to high-speed internet or repairs to the electrical grid.

According to the American Farm Bureau Federation, Congress should quickly approve the Revitalizing Under-developed Rural Areas and Lands (RURAL) Act (H.R. 2147, S. 1032). The recently introduced legislation will ensure that electric cooperatives will not jeopardize their tax-exempt status when they accept government grants for activities like expanding broadband or restoring power after storms and disasters.

Most electric cooperatives are tax-exempt organizations that must receive at least 85% of their income from members to maintain their tax-exempt status. However, an unintended consequence of the Tax Cuts and Jobs Act, which re-characterized grants as income, is making it harder for cooperatives to meet the tax-exempt test.

“Farm Bureau works hand-in-hand with rural electric cooperatives on the shared goal of ensuring that rural America and the farmers and ranchers who live there have access to reliable power and high-speed internet. We encourage lawmakers to act quickly on this important measure to allow rural electric cooperatives to continue their critical work without risking their tax-exempt status,” said AFBF President Zippy Duvall.

“In today’s technology-dependent world, we must do more to bring high-speed internet and stronger grid infrastructure to the rural areas of our country. Tax-exempt rural co-ops provide these important services to parts of the country where access to reliable electricity and high-speed internet is the most limited, and they rely heavily on grants to perform these services. Without this legislation, many co-ops may miss out on grant income or disaster assistance, hurting our efforts to promote economic development and job creation in these rural areas,” said Portman.

 

Any views or opinions expressed in this article are those of the author and do not reflect those of AGDAILY. Comments on this article reflect the sole opinions of their writers.
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