Washington (Aug. 25, 2003) -- Sen. Chuck Grassley has scheduled a field hearing of the Finance Committee, set for August 26 at the Dallas Center in Iowa, to examine a number of tax initiatives designed to enhance the rural economy.

The hearing will consider legislation to repeal the dividend allocation rule for farmer cooperatives. This tax penalizes farmer cooperatives relative to other types of cooperatives and limits the ability of farmer cooperatives to raise the equity capital needed to modernize and expand.

In addition, the hearing will examine legislation sponsored by Grassley to override an Internal Revenue Service position that now prevents tax-exempt cooperatives from including processes that add value through animals in their marketing activities. For example, the legislation would allow cooperatives to market eggs laid by chickens that are fed corn received by the cooperative from member farmers.

Finally, the hearing will consider the ethanol excise tax exemption so that ethanol-blended fuels make the same contribution to the highway trust fund as regular gasoline, while extending the ethanol tax incentive to 2010 and making biodiesel eligible for the excise tax credit.

-- WebCPA staff

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