Saturday, July 20, 2024

OBA-introduced ACRE bill passes state House, moves to Senate

HB 4092, Rep. Trey Caldwell’s state-level ACRE bill, passed the full House and is now headed to the Senate in the hands of Sen. Darcy Jech. We will keep you posted on this OBA-introduced bill and its progress through the process.

Thank you to all who reached out and contacted your state representative about this important bill.

More about HB 4092 (the ACRE Act):

What does the ACRE Act actually do?

• The ACRE Act will lower the cost of credit by removing the taxation on interest earned from ag real estate loans, rural home loans and operating loans in rural communities with a population of 5,000 or fewer.
• The ACRE Act will benefit farmers, ranchers and rural homeowners who do business with their local community bank. Other lenders, including the Farm Credit System, already have this exact same tax benefit. The ACRE Act simply levels the playing field so farmers, ranchers and rural homeowners who choose to utilize their hometown bank can receive the lowest possible interest rates.

Why is the ACRE Act needed?

• Inflation is contributing to a rise in input costs and higher interest rates, which is driving ag producers to rely more heavily on credit to finance their operations.
• This is making it increasingly difficult for agricultural producers to acquire low-cost credit which is critically important to the long-term sustainability of every ag operation.
• Rapidly rising home mortgage interest rates are making home ownership in rural Oklahoma less affordable. Many potential rural homeowners now struggle to qualify for a home loan or they simply can’t afford an inflated mortgage loan payment.

How does the ACRE Act solve this?

• If adopted, banks across Oklahoma will be able to lower interest rates to ag producers and rural homeowners.
• Oklahoma banks want to be as competitive as possible so they can offer the most competitive (low-cost) rates to their ag and rural borrowers.
• If a bank doesn’t pass along these tax savings by lowering interest rates, they won’t be competitive and will lose market share.
• The ACRE Act will help sustain the long-term presence of rural community banks by making them more competitive.
• Sustaining local access to credit is important for the long-term stability of every rural Oklahoma community.
• The ACRE Act will help deter bank consolidation and maintain the local investment and leadership community banks provide in rural towns across Oklahoma.