Water and Agriculture Tax Reform Act of 2018

“(J) 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—

“(I) any income received or accrued from the sale, lease, or exchange of fee or other interests in real and personal property, including interests in water (other than income derived from the sale, lease, or transfer of water to nonmembers outside the river basin or basins within which the mutual ditch or irrigation company operates),

“(II) any income received or accrued 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) any income received or accrued from the investment of income described in subclause (I) or (II),

“(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.”