U.S. Rep. Greg Walden (R-OR) advocated for approval by Congress of a proposed bill to permit electric cooperatives to rebuild energy infrastructure and for certain utilities to expand rural broadband access following a disaster.
“Electric cooperatives and other consumer-owned utilities play an important role in delivering affordable power to rural communities across Oregon and our nation,” Rep. Walden wrote in a May 30 letter sent to leaders of the U.S. House Ways and Means Committee and the U.S. Senate Finance Committee. “As Congress works toward expanding our nation’s infrastructure, I urge you to bring the RURAL Act up for a vote in the House and Senate.”
Both committees are considering the bipartisan Revitalizing Underdeveloped Rural Areas and Lands (RURAL) Act of 2019, H.R. 2147, cosponsored on May 3 by Rep. Walden, who is among 43 other cosponsors of the bill led by U.S. Rep. Terri Sewell (D-AL). S. 1032 was introduced by U.S. Sens. Rob Portman (R-OH) and Tina Smith (D-MN) along with 10 cosponsors in the Senate.
Under current law, any federal disaster assistance provided to electric cooperatives counts as revenue, which potentially puts them at risk of losing their tax-exempt status, according to Rep. Walden’s letter.
“This leaves the cooperative in a difficult place: choosing between burdening consumers with the costs of repairing the damage or with the costs of the long-term tax implications of taking the assistance,” Rep. Walden wrote. “The RURAL Act would ensure this cooperative and others can rebuild after a disaster without chaining their consumers to increased tax costs into the future.”
If enacted the measure would modify the definition of income for purposes of determining the tax-exempt status of certain mutual or cooperative telephone or electric companies, according to the congressional record.
Rep. Walden added that current law also puts consumer-owned utilities at risk of losing their tax-exempt status if they accept federal funds to build out broadband into rural areas.
“This legislation would help ensure our consumer-owned utilities can navigate costly natural disasters and utilize funding to continue meeting the growing demands of their members and communities,” he wrote.