IB 

Union Calendar No. 675 

114TH CONGRESS 

2D SESSION H. R. 4220 

[Report No. 114–862] 

To amend the Internal Revenue Code of 1986 to facilitate water leasing 

and water transfers to promote conservation and efficiency. 

IN THE HOUSE OF REPRESENTATIVES 

DECEMBER 10, 2015 

Mr. BUCK (for himself, Mr. GOSAR, Mr. BISHOP of Utah, Mrs. LUMMIS, Mrs. 

LOVE, and Mr. TIPTON) introduced the following bill; which was referred 

to the Committee on Ways and Means 

DECEMBER 8, 2016 

Additional sponsors: Mr. COFFMAN, Mr. SIMPSON, Mr. LAMBORN, and Mr. 

POLIS

DECEMBER 8, 2016 

Reported with an amendment, committed to the Committee of the Whole 

House on the State of the Union, and ordered to be printed 

[Strike out all after the enacting clause and insert the part printed in italic] 

[For text of introduced bill, see copy of bill as introduced on December 10, 2015] 


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•HR 4220 RH

A BILL 

To amend the Internal Revenue Code of 1986 to facilitate 

water leasing and water transfers to promote conservation and efficiency. 


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•HR 4220 RH

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Water and Agriculture 

5 Tax Reform Act of 2016’’. 

6 SEC. 2. FACILITATE WATER LEASING AND WATER TRANS7 FERS TO PROMOTE CONSERVATION AND EF8 FICIENCY. 

9 (a) IN GENERAL.—Paragraph (12) of section 501(c) 

10 of the Internal Revenue Code of 1986 is amended by adding 

11 at the end the following new subparagraph: 

12 ‘‘(I) TREATMENT OF MUTUAL DITCH IRRI13 GATION COMPANIES.— 

14 ‘‘(i) IN GENERAL.—In the case of a 

15 mutual ditch or irrigation company or of a 

16 like organization to a mutual ditch or irri17 gation company, subparagraph (A) shall be 

18 applied without taking into account any in19 come received or accrued— 

20 ‘‘(I) from the sale, lease, or ex21 change of fee or other interests in real 

22 and personal property, including inter23 ests in water, 

24 ‘‘(II) from the sale or exchange of 

25 stock in a mutual ditch or irrigation 


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•HR 4220 RH

1 company (or in a like organization to 

2 a mutual ditch or irrigation company) 

3 or contract rights for the delivery or 

4 use of water, or 

5 ‘‘(III) from the investment of pro6 ceeds from sales, leases, or exchanges 

7 under subclauses (I) and (II), 

8 except that any income received under sub9 clause (I), (II), or (III) which is distributed 

10 or expended for expenses (other than for op11 erations, maintenance, and capital im12 provements) of the mutual ditch or irriga13 tion company or of the like organization to 

14 a mutual ditch or irrigation company (as 

15 the case may be) shall be treated as non16 member income in the year in which it is 

17 distributed or expended. For purposes of the 

18 preceding sentence, expenses (other than for 

19 operations, maintenance, and capital im20 provements) include expenses for the con21 struction of conveyances designed to deliver 

22 water outside of the system of the mutual 

23 ditch or irrigation company or of the like 

24 organization. 


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•HR 4220 RH

1 ‘‘(ii) TREATMENT OF ORGANIZATIONAL

2 GOVERNANCE.—In the case of a mutual 

3 ditch or irrigation company or of a like or4 ganization to a mutual ditch or irrigation 

5 company, where State law provides that 

6 such a company or organization may be or7 ganized in a manner that permits voting on 

8 a basis which is pro rata to share owner9 ship on corporate governance matters, sub10 paragraph (A) shall be applied without tak11 ing into account whether its member share12 holders have one vote on corporate govern13 ance matters per share held in the corpora14 tion. Nothing in this clause shall be con15 strued to create any inference about the re16 quirements of this subsection for companies 

17 or organizations not included in this 

18 clause.’’. 

19 (b) EFFECTIVE DATE.—The amendment made by sub20 section (a) shall apply to taxable years beginning after De21 cember 31, 2016. 


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Union Calendar No. 675 

114TH CONGRESS 

2D SESSION H. R. 4220 

[Report No. 114–862] 

A BILL 

To amend the Internal Revenue Code of 1986 to 

promote conservation and efficiency. facilitate water leasing and water transfers to 

DECEMBER 8, 2016 

Reported with an amendment, committed to the Comand ordered to be printed mittee of the Whole House on the State of the Union, 


rfrederick on DSKBCBPHB2PROD with BILLS