To amend the Internal Revenue Code of 1986 to provide for the treatment of certain amounts received by cooperative telephone companies.

Amends the Internal Revenue Code with respect to the tax-exempt status of a cooperative telephone company to provide for the tax treatment of income received from a nonmember telephone company for services by the cooperative which are indirectly paid for by members of the cooperative. Includes billing and collection services for a nonmember telephone company under such treatment.

Provides for the tax treatment of account reserve income that does not exceed a specified percentage of the company's total income. Subjects a portion of such investment income to unrelated business income tax.