Water and Agriculture Tax Reform Act of 2016

Bill: 114-hr-4220
Sponsor: full_name: Rep. Buck, Ken [R-CO-4]
Introduced: 2015-12-10
Policy area: Taxation
Subjects: Business investment and capital

Corporate finance and management

Farmland

Financial services and investments

Land transfers

Securities

Tax-exempt organizations

Water use and supply
Latest action: action_date: 2016-12-08
text: Placed on the Union Calendar, Calendar No. 675.

Summaries:
action_date: 2015-12-10
action_desc: Introduced in House
text: <p><strong>Water and Agriculture Tax Reform Act of 2015</strong></p> <p>This bill amends the Internal Revenue Code to permit tax-exempt mutual ditch or irrigation companies to earn income from dispositions of certain real property and stock interests without affecting their tax-exempt status, but&nbsp;requires that such income be used to pay the costs of operations, maintenance, and capital improvements of such a company.</p>

action_date: 2016-12-08
action_desc: Reported to House with amendment(s)
text: <p><strong>Water and Agriculture Tax Reform Act of </strong> <b>2016</b></p> <p>(Sec. 2) This bill amends the Internal Revenue Code to permit tax-exempt mutual ditch or irrigation companies to earn income from dispositions of certain real property and stock interests without affecting their tax-exempt status, but&nbsp;requires that such income be used to pay the costs of operations, maintenance, and capital improvements of such a company.</p> <p>The bill also establishes a rule regarding the organizational governance of mutual ditch or irrigation companies. Where state law provides that such a company may be organized in a manner that permits voting on a basis that is pro rata to share ownership on corporate governance matters, an organization's qualification as a mutual ditch or irrigation company must be determined without taking into account whether its member shareholders have one vote on corporate governance matters per share held in the corporation. </p>

tv_txt: I 114th CONGRESS 1st Session H. R. 4220 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 A BILL To amend the Internal Revenue Code of 1986 to facilitate water leasing and water transfers to promote conservation and efficiency.

1. Short title This Act may be cited as the Water and Agriculture Tax Reform Act of 2015 . 2. Facilitate water leasing and water transfers to promote conservation and efficiency (a) In general Paragraph (12) of section 501(c) of the Internal Revenue Code of 1986 is amended by adding at the end the following new subparagraph: (I) Treatment of mutual ditch irrigation companies (i) In general In the case of a mutual ditch or irrigation company or of a like organization to a mutual ditch or irrigation company, subparagraph (A) shall be applied without taking into account any income received or accrued— (I) from the sale, lease, or exchange of fee or other interests in real and personal property, including interests in water, (II) from the sale or exchange of stock in a mutual ditch or irrigation company (or in a like organization to a mutual ditch or irrigation company) or contract rights for the delivery or use of water, or (III) from the investment of proceeds from sales, leases, or exchanges under subclauses (I) and (II), except that any income received under subclause (I), (II), or (III) which is distributed or expended for expenses (other than for operations, maintenance, and capital improvements) of the mutual ditch or irrigation company or of the like organization to a mutual ditch or irrigation company (as the case may be) shall be treated as nonmember income in the year in which it is distributed or expended. For purposes of the preceding sentence, expenses (other than for operations, maintenance, and capital improvements) include expenses for the construction of conveyances designed to deliver water outside of the system of the mutual ditch or irrigation company or of the like organization. (ii) Treatment of organizational governance In the case of a mutual ditch or irrigation company or of a like organization to a mutual ditch or irrigation company, where State law provides that such a company or organization may be organized in a manner that permits voting on a basis which is pro rata to share ownership on corporate governance matters, subparagraph (A) shall be applied without taking into account whether its member shareholders have one vote on corporate governance matters per share held in the corporation. Nothing in this clause shall be construed to create any inference about the requirements of this subsection for companies or organizations not included in this clause. . (b) Effective date The amendment made by subsection (a) shall apply to taxable years beginning after the date of the enactment of this Act.

tv_txt: IB Union Calendar No. 675 114th CONGRESS 2d Session H. R. 4220 [Report No. 114–862] 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 A BILL To amend the Internal Revenue Code of 1986 to facilitate water leasing and water transfers to promote conservation and efficiency.

1. Short title This Act may be cited as the Water and Agriculture Tax Reform Act of 2016 . 2. Facilitate water leasing and water transfers to promote conservation and efficiency (a) In general Paragraph (12) of section 501(c) of the Internal Revenue Code of 1986 is amended by adding at the end the following new subparagraph: (I) Treatment of mutual ditch irrigation companies (i) In general In the case of a mutual ditch or irrigation company or of a like organization to a mutual ditch or irrigation company, subparagraph (A) shall be applied without taking into account any income received or accrued— (I) from the sale, lease, or exchange of fee or other interests in real and personal property, including interests in water, (II) from the sale or exchange of stock in a mutual ditch or irrigation company (or in a like organization to a mutual ditch or irrigation company) or contract rights for the delivery or use of water, or (III) from the investment of proceeds from sales, leases, or exchanges under subclauses (I) and (II), except that any income received under subclause (I), (II), or (III) which is distributed or expended for expenses (other than for operations, maintenance, and capital improvements) of the mutual ditch or irrigation company or of the like organization to a mutual ditch or irrigation company (as the case may be) shall be treated as nonmember income in the year in which it is distributed or expended. For purposes of the preceding sentence, expenses (other than for operations, maintenance, and capital improvements) include expenses for the construction of conveyances designed to deliver water outside of the system of the mutual ditch or irrigation company or of the like organization. (ii) Treatment of organizational governance In the case of a mutual ditch or irrigation company or of a like organization to a mutual ditch or irrigation company, where State law provides that such a company or organization may be organized in a manner that permits voting on a basis which is pro rata to share ownership on corporate governance matters, subparagraph (A) shall be applied without taking into account whether its member shareholders have one vote on corporate governance matters per share held in the corporation. Nothing in this clause shall be construed to create any inference about the requirements of this subsection for companies or organizations not included in this clause. . (b) Effective date The amendment made by subsection (a) shall apply to taxable years beginning after December 31, 2016.

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