A bill to amend the Internal Revenue Code of 1986 to exclude micro-grants for food security from gross income.
- Sponsor
- Sen. Murkowski, Lisa [R-AK]
- Committees
- Finance Committee (primary)
- Last action
- Jun 15, 2026
Bottom line
This bill makes federal micro-grants aimed at improving food security tax-exempt for eligible recipient organizations, ensuring the full value of the grants supports their intended purpose.
What it actually does
This bill amends the Internal Revenue Code of 1986 to create a new section, 139M, which excludes micro-grants for food security from gross income. Specifically, it states that any subgrant or financial assistance received by an eligible entity under section 4206 of the Agriculture Improvement Act of 2018 (7 U.S.C. 7518) shall not be included in their gross income for tax purposes. The amendments apply to amounts received in taxable years beginning after the date of enactment.
Proponents argue
Supporters argue that this exclusion maximizes the impact of federal funding dedicated to combating food insecurity by ensuring that the full amount of micro-grants reaches the intended recipients. This reduces the financial and administrative burden on often small, community-based organizations, allowing them to dedicate more resources directly to food security initiatives rather than tax compliance.
Opponents contend
Critics might contend that while the intent is laudable, creating specific tax exclusions for particular grants can add complexity to the tax code and potentially reduce the federal tax base. They may also argue that existing tax provisions for non-profit organizations might already address much of this, making a specific exclusion less necessary, or that any reduction in federal revenue, however small, should be carefully weighed.
The bill is exceptionally short and clear, making it very accessible for any reader to understand its direct impact.
Section 1(a) and 1(b)
Exclusion of Micro-Grants for Food Security from Gross Income
This provision amends Part III of subchapter B of chapter 1 of the Internal Revenue Code of 1986 by inserting a new section 139M. This new section clarifies that 'eligible entities,' as defined by the Agriculture Improvement Act of 2018 (7 U.S.C. 7518), will not have to include any subgrant or financial assistance received under that Act's food security micro-grant program in their gross income. This effectively makes these specific grants tax-exempt at the federal level.
Supporters argue
Supporters argue that this exclusion ensures that every dollar of a food security micro-grant directly supports its intended purpose, rather than being diminished by taxation. This maximizes the effectiveness of federal funding aimed at combating food insecurity and reduces the administrative burden on small, often community-based, eligible entities.
Critics contend
Opponents might argue that while the goal is laudable, creating specific tax exclusions for particular grants can complicate the tax code and set precedents for other types of grants. They may also point to the potential, albeit likely small, reduction in federal tax revenue.
Tradeoffs
The primary tradeoff is between maximizing the direct impact of food security grants for recipients and maintaining a broader, simpler tax base. It balances the desire to support specific social programs with the general principle of taxing income, and the administrative ease for recipients versus potential tax code complexity.
The bill defines 'eligible entity' and the specific grants covered by cross-referencing subsection (b)(1) of section 4206 of the Agriculture Improvement Act of 2018 (7 U.S.C. 7518). This means the scope of the tax exclusion is entirely dependent on the definitions and programs established in that external statute.
Section 1(a)
Why it matters:This is standard legislative practice to avoid redundancy and ensure consistency with existing law. It is not intended to be evasive but requires external research for full comprehension.
Case for: Referencing existing law streamlines the bill and ensures that the tax exclusion applies precisely to the grants and entities already defined and targeted by the Agriculture Improvement Act of 2018, avoiding new, potentially conflicting definitions.
Case against: A reader unfamiliar with 7 U.S.C. 7518 would not immediately know the specific types of entities or grants covered, requiring additional research to fully grasp the bill's scope and who precisely benefits.
Estimated impact: The impact is limited to the scope and funding levels of the micro-grant program established under 7 U.S.C. 7518, which focuses on small-scale, local food security initiatives.