[Congressional Bills 105th Congress]
[From the U.S. Government Publishing Office]
[S. 2498 Introduced in Senate (IS)]







105th CONGRESS
  2d Session
                                S. 2498

To amend the Internal Revenue Code of 1986 to clarify the tax treatment 
 of agricultural cooperatives and to allow declaratory judgment relief 
                         for such cooperatives.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                           September 18, 1998

    Mr. Grassley (for himself and Ms. Moseley-Braun) introduced the 
 following bill; which was read twice and referred to the Committee on 
                                Finance

_______________________________________________________________________

                                 A BILL


 
To amend the Internal Revenue Code of 1986 to clarify the tax treatment 
 of agricultural cooperatives and to allow declaratory judgment relief 
                         for such cooperatives.

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

SECTION 1. COOPERATIVE MARKETING INCLUDES VALUE-ADDED PROCESSING 
              THROUGH ANIMALS.

    (a) In General.--Section 1388 of the Internal Revenue Code of 1986 
(relating to definitions and special rules) is amended by adding at the 
end the following:
    ``(k) Cooperative Marketing Includes Value-Added Processing Through 
Animals.--For purposes of section 521 and this subchapter, `marketing 
the products of members or other producers' includes feeding the 
products of members or other producers to cattle, hogs, fish, chickens, 
or other animals and selling the resulting animals or animal 
products.''
    (b) Effective Date.--The amendment made by this section shall apply 
to taxable years beginning after the date of the enactment of this Act.

SEC. 2. DECLARATORY JUDGMENT RELIEF FOR SECTION 521 COOPERATIVES.

    (a) In General.--Section 7428(a)(1) of the Internal Revenue Code of 
1986 (relating to declaratory judgments of tax exempt organizations) is 
amended by striking ``or'' at the end of subparagraph (B) and by adding 
at the end the following:
                    ``(D) with respect to the initial qualification or 
                continuing qualification of a cooperative as described 
                in section 521(b) which is exempt from tax under 
                section 521(a), or''.
    (b) Effective Date.--The amendments made by this section shall 
apply with respect to pleadings filed after the date of the enactment 
of this Act but only with respect to determinations (or requests for 
determinations) made after January 1, 1998.
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