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July 15, 2019

King Seeking to Open Door for Rural Communities to Access Broadband Grants, Disaster Assistance

Cosponsoring effort allowing cooperative organizations to receive government grants and assistance without losing non-profit status

WASHINGTON, D.C. – Today, U.S. Senator Angus King (I-Maine) announced his support for the Revitalizing Underdeveloped Rural Areas and Lands (RURAL) Act, a bipartisan bill that will fuel innovation, preserve jobs and encourage infrastructure development by ensuring that tax-exempt electrical cooperatives can access government grants and assistance – including rural broadband grants and FEMA disaster relief.  Under a provision of the current tax code instituted by the 2017 tax bill, acceptance of a government grant could imperil an electrical cooperative’s tax-exempt status – and, accordingly, imperil its ability to provide electrical service to rural customers. This legislation provides certainty for 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.

“Rural Maine communities need resources to provide accessible high-speed broadband and reliable grid infrastructure in order to thrive economically, educationally, and socially,” said Senator King. “Tax-exempt co-ops do a significant amount of work to address these basic needs, and we should be incentivizing them to explore every avenue to accomplish these goals – not punishing them for using the resources designed to aid their efforts.”

“We greatly appreciate Senator King’s support of this legislation, which will correct an unintended and harmful consequence of the recent tax bill,” said Scott Hallowell, CEO of Eastern Maine Electric Cooperative. “This legislation will make sure an electric cooperative’s tax status will not be placed jeopardy after receiving a reimbursement for important work that helps communities recover after harmful storms. By allowing us to access the full value of government grants, we will be able to continue our efforts to support Eastern Maine.” 

Specifically, the RURAL Act would amend the Internal Revenue Code (IRC) to ensure tax-exempt cooperative organizations’ do not lose their tax-exempt status when they use of certain government grants, contributions, and assistance, including rural broadband grants and FEMA disaster relief. The legislation is also supported by Senators Rob Portman (R-Ohio), Tina Smith (D-Minn.), Joni Ernst (R-Iowa), John Boozman (R-Ark.), Mike Rounds (R-S.D.), Kyrsten Sinema (D-Ariz.), Roy Blunt (R-Mo.), Kevin Cramer (R-N.D.), Steve Daines (R-Mont.), Amy Klobuchar (D-Minn.), Marco Rubio (R-Fla.), Tom Udall (D-N.M.), Martha McSally (R-Ariz.), Gary Peters (D-Mich.), Michael Bennet (D-Colo.), Marsha Blackburn (R-Tenn.), Rick Scott (R-Fla.), and Mazie Hirono (D-Hawaii).


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