ACRE Act of 2023 Access to Credit for our Rural Economy Act of 2023
If enacted, SB2371 would provide significant benefits to rural communities by potentially lowering the cost of borrowing for agricultural operations and rural development projects. This exclusion would apply to interest received by qualified lenders on qualified real estate loans, which are defined as loans secured by rural or agricultural real estate. This legislative change is intended to stimulate economic growth in agricultural sectors and support the sustainability of rural economies.
SB2371, known as the Access to Credit for our Rural Economy Act of 2023, proposes an amendment to the Internal Revenue Code of 1986 to exclude interest income from certain loans secured by rural or agricultural real property from gross income. This bill aims to facilitate better access to credit for rural properties by reducing the taxable burden on financial institutions that operate in these areas.
However, the introduction of SB2371 may not be without contention. Some critics could raise concerns about the potential fiscal implications of reducing tax revenues for the government, as exempting interest income could lead to significant lost revenue. Furthermore, there might be apprehension regarding the definition of 'qualified lenders' and whether the criteria might inadvertently favor larger lending institutions over local banks, thereby impacting local lending dynamics. There may also be discussions regarding the socio-economic disparities that could arise if not all rural areas benefit equally from this bill.