II 

108TH CONGRESS 

1ST SESSION S. 1796

To revitalize rural America and rebuild main street, and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

OCTOBER 29, 2003

Mr. COLEMAN (for himself, Mr. GRAHAM of South Carolina, and Mr. 

DEWINE) introduced the following bill; which was read twice and referred 

to the Committee on Finance 

A BILL

To revitalize rural America and rebuild main street, and 

for other purposes.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Rural Renaissance 

5 Act’’. 

6 SEC. 2. RURAL RENAISSANCE CORPORATION. 

7 Subtitle D of the Consolidated Farm and Rural De8 velopment Act (7 U.S.C. 1981 et seq.) is amended by add9 ing at the end the following new section: 
2

•S 1796 IS 

1 ‘‘SEC. 379E. RURAL RENAISSANCE CORPORATION. 

2 ‘‘(a) ESTABLISHMENT AND STATUS.—There is estab3 lished a body corporate to be known as the ‘Rural Renais4 sance Corporation’ (hereafter in this section referred to 

5 as the ‘Corporation’). The Corporation is not a depart6 ment, agency, or instrumentality of the United States 

7 Government, and shall not be subject to title 31, United 

8 States Code. 

9 ‘‘(b) PRINCIPAL OFFICE; APPLICATION OF LAWS.—

10 The principal office and place of business of the Corpora11 tion shall be in the District of Columbia, and, to the extent 

12 consistent with this section, the District of Columbia Busi13 ness Corporation Act (D.C. Code 29–301 et seq.) shall 

14 apply. 

15 ‘‘(c) FUNCTIONS OF CORPORATION.—The Corpora16 tion shall—

17 ‘‘(1) issue rural renaissance bonds for the fi18 nancing of qualified projects as required under sec19 tion 54 of the Internal Revenue Code of 1986, 

20 ‘‘(2) establish an allocation plan as required 

21 under section 54(f)(2)(A) of such Code, 

22 ‘‘(3) establish and operate the Rural Renais23 sance Trust Account as required under section 54(i) 

24 of such Code, 
3

•S 1796 IS 

1 ‘‘(4) perform any other function the sole pur2 pose of which is to carry out the financing of quali3 fied projects through rural renaissance bonds, and 

4 ‘‘(5) not later than February 15 of each year 

5 submit a report to Congress—

6 ‘‘(A) describing the activities of the Cor7 poration for the preceding year, and 

8 ‘‘(B) specifying whether the amounts de9 posited and expected to be deposited in the 

10 Rural Renaissance Trust Account are sufficient 

11 to fully repay at maturity the principal of any 

12 outstanding rural renaissance bonds issued pur13 suant to such section 54. 

14 ‘‘(d) POWERS OF CORPORATION.—The Corpora15 tion—

16 ‘‘(1) may sue and be sued, complain and de17 fend, in its corporate name, in any court of com18 petent jurisdiction, 

19 ‘‘(2) may adopt, alter, and use a seal, which 

20 shall be judicially noticed, 

21 ‘‘(3) may prescribe, amend, and repeal such 

22 rules and regulations as may be necessary for car23 rying out the functions of the Corporation, 

24 ‘‘(4) may make and perform such contracts and 

25 other agreements with any individual, corporation, 
4

•S 1796 IS 

1 or other private or public entity however designated 

2 and wherever situated, as may be necessary for car3 rying out the functions of the Corporation, 

4 ‘‘(5) may determine and prescribe the manner 

5 in which its obligations shall be incurred and its ex6 penses allowed and paid, 

7 ‘‘(6) may, as necessary for carrying out the 

8 functions of the Corporation, employ and fix the 

9 compensation of employees and officers, 

10 ‘‘(7) may lease, purchase, or otherwise acquire, 

11 own, hold, improve, use, or otherwise deal in and 

12 with such property (real, personal, or mixed) or any 

13 interest therein, wherever situated, as may be nec14 essary for carrying out the functions of the Corpora15 tion, 

16 ‘‘(8) may accept gifts or donations of services 

17 or of property (real, personal, or mixed), tangible or 

18 intangible, in furtherance of the purposes of this sec19 tion, and 

20 ‘‘(9) shall have such other powers as may be 

21 necessary and incident to carrying out this section. 

22 ‘‘(e) NONPROFIT ENTITY; RESTRICTION ON USE OF

23 MONEYS; CONFLICT OF INTERESTS; INDEPENDENT AU24 DITS.—
5

•S 1796 IS 

1 ‘‘(1) NONPROFIT ENTITY.—The Corporation 

2 shall be a nonprofit corporation and shall have no 

3 capital stock. 

4 ‘‘(2) RESTRICTION.—No part of the Corpora5 tion’s revenue, earnings, or other income or property 

6 shall inure to the benefit of any of its directors, offi7 cers, or employees, and such revenue, earnings, or 

8 other income or property shall only be used for car9 rying out the purposes of this section. 

10 ‘‘(3) CONFLICT OF INTERESTS.—No director, 

11 officer, or employee of the Corporation shall in any 

12 manner, directly or indirectly participate in the de13 liberation upon or the determination of any question 

14 affecting his or her personal interests or the inter15 ests of any corporation, partnership, or organization 

16 in which he or she is directly or indirectly interested. 

17 ‘‘(4) INDEPENDENT AUDITS.—An independent 

18 certified public accountant shall audit the financial 

19 statements of the Corporation each year. The audit 

20 shall be carried out at the place at which the finan21 cial statements normally are kept and under gen22 erally accepted auditing standards. A report of the 

23 audit shall be available to the public and shall be in24 cluded in the report required under subsection 

25 (c)(5).
6

•S 1796 IS 

1 ‘‘(f) TAX EXEMPTION.—The Corporation, including 

2 its franchise and income, is exempt from taxation imposed 

3 by the United States, by any territory or possession of 

4 the United States, or by any State, county, municipality, 

5 or local taxing authority. 

6 ‘‘(g) MANAGEMENT OF CORPORATION.—

7 ‘‘(1) BOARD OF DIRECTORS; MEMBERSHIP; DES8 IGNATION OF CHAIRPERSON AND VICE CHAIR9 PERSON; APPOINTMENT CONSIDERATIONS; TERM; 

10 VACANCIES.—

11 ‘‘(A) BOARD OF DIRECTORS.—The man12 agement of the Corporation shall be vested in a 

13 board of directors composed of 7 members ap14 pointed by the President, by and with the ad15 vice and consent of the Senate. 

16 ‘‘(B) CHAIRPERSON AND VICE CHAIR17 PERSON.—The President shall designate 1 

18 member of the Board to serve as Chairperson 

19 of the Board and 1 member to serve as Vice 

20 Chairperson of the Board. 

21 ‘‘(C) INDIVIDUALS FROM PRIVATE LIFE.—

22 Five members of the Board shall be appointed 

23 from private life. 

24 ‘‘(D) FEDERAL OFFICERS AND EMPLOY25 EES.—Two members of the Board shall be ap-
7

•S 1796 IS 

1 pointed from among officers and employees of 

2 agencies of the United States concerned with 

3 rural development. 

4 ‘‘(E) APPOINTMENT CONSIDERATIONS.—

5 All members of the Board shall be appointed on 

6 the basis of their understanding of and sensi7 tivity to rural development processes. Members 

8 of the Board shall be appointed so that not 

9 more than 4 members of the Board are mem10 bers of any 1 political party. 

11 ‘‘(F) TERMS.—Members of the Board shall 

12 be appointed for terms of 3 years, except that 

13 of the members first appointed, as designated 

14 by the President at the time of their appoint15 ment, 2 shall be appointed for terms of 1 year 

16 and 2 shall be appointed for terms of 2 years. 

17 ‘‘(G) VACANCIES.—A member of the 

18 Board appointed to fill a vacancy occurring be19 fore the expiration of the term for which that 

20 member’s predecessor was appointed shall be 

21 appointed only for the remainder of that term. 

22 Upon the expiration of a member’s term, the 

23 member shall continue to serve until a successor 

24 is appointed and is qualified. 
8

•S 1796 IS 

1 ‘‘(2) COMPENSATION, ACTUAL, NECESSARY, 

2 AND TRANSPORTATION EXPENSES.—Members of the 

3 Board shall serve without additional compensation, 

4 but may be reimbursed for actual and necessary ex5 penses not exceeding $100 per day, and for trans6 portation expenses, while engaged in their duties on 

7 behalf of the Corporation. 

8 ‘‘(3) QUORUM.—A majority of the Board shall 

9 constitute a quorum. 

10 ‘‘(4) PRESIDENT OF CORPORATION.—The 

11 Board of Directors shall appoint a president of the 

12 Corporation on such terms as the Board may deter13 mine.’’. 

14 SEC. 3. CREDIT TO HOLDERS OF RURAL RENAISSANCE 

15 BONDS. 

16 (a) IN GENERAL.—Part IV of subchapter A of chap17 ter 1 of the Internal Revenue Code of 1986 (relating to 

18 credits against tax) is amended by adding at the end the 

19 following new subpart: 

20 ‘‘Subpart H—Nonrefundable Credit for Holders of 

21 Rural Renaissance Bonds

‘‘Sec. 54. Credit to holders of rural renaissance bonds.
9

•S 1796 IS 

1 ‘‘SEC. 54. CREDIT TO HOLDERS OF RURAL RENAISSANCE 

2 BONDS. 

3 ‘‘(a) ALLOWANCE OF CREDIT.—In the case of a tax4 payer who holds a rural renaissance bond on a credit al5 lowance date of such bond which occurs during the taxable 

6 year, there shall be allowed as a credit against the tax 

7 imposed by this chapter for such taxable year an amount 

8 equal to the sum of the credits determined under sub9 section (b) with respect to credit allowance dates during 

10 such year on which the taxpayer holds such bond. 

11 ‘‘(b) AMOUNT OF CREDIT.—

12 ‘‘(1) IN GENERAL.—The amount of the credit 

13 determined under this subsection with respect to any 

14 credit allowance date for a rural renaissance bond is 

15 25 percent of the annual credit determined with re16 spect to such bond. 

17 ‘‘(2) ANNUAL CREDIT.—The annual credit de18 termined with respect to any rural renaissance bond 

19 is the product of—

20 ‘‘(A) the applicable credit rate, multiplied 

21 by 

22 ‘‘(B) the outstanding face amount of the 

23 bond. 

24 ‘‘(3) APPLICABLE CREDIT RATE.—For purposes 

25 of paragraph (2), the applicable credit rate with re26 spect to an issue is the rate equal to an average 
10

•S 1796 IS 

1 market yield (as of the day before the date of sale 

2 of the issue) on outstanding long-term corporate 

3 debt obligations (determined in such manner as the 

4 Secretary prescribes). 

5 ‘‘(4) CREDIT ALLOWANCE DATE.—For purposes 

6 of this section, the term ‘credit allowance date’ 

7 means—

8 ‘‘(A) March 15, 

9 ‘‘(B) June 15, 

10 ‘‘(C) September 15, and 

11 ‘‘(D) December 15. 

12 Such term includes the last day on which the bond 

13 is outstanding. 

14 ‘‘(5) SPECIAL RULE FOR ISSUANCE AND RE15 DEMPTION.—In the case of a bond which is issued 

16 during the 3-month period ending on a credit allow17 ance date, the amount of the credit determined 

18 under this subsection with respect to such credit al19 lowance date shall be a ratable portion of the credit 

20 otherwise determined based on the portion of the 3-

21 month period during which the bond is outstanding. 

22 A similar rule shall apply when the bond is re23 deemed. 

24 ‘‘(c) LIMITATION BASED ON AMOUNT OF TAX.—
11

•S 1796 IS 

1 ‘‘(1) IN GENERAL.—The credit allowed under 

2 subsection (a) for any taxable year shall not exceed 

3 the excess of—

4 ‘‘(A) the sum of the regular tax liability 

5 (as defined in section 26(b)) plus the tax im6 posed by section 55, over 

7 ‘‘(B) the sum of the credits allowable 

8 under this part (other than this subpart and 

9 subpart C). 

10 ‘‘(2) CARRYOVER OF UNUSED CREDIT.—If the 

11 credit allowable under subsection (a) exceeds the 

12 limitation imposed by paragraph (1) for such taxable 

13 year, such excess shall be carried to the succeeding 

14 taxable year and added to the credit allowable under 

15 subsection (a) for such taxable year. 

16 ‘‘(d) CREDIT INCLUDED IN GROSS INCOME.—Gross 

17 income includes the amount of the credit allowed to the 

18 taxpayer under this section (determined without regard to 

19 subsection (c)) and the amount so included shall be treat20 ed as interest income. 

21 ‘‘(e) RURAL RENAISSANCE BOND.—For purposes of 

22 this part, the term ‘rural renaissance bond’ means any 

23 bond issued as part of an issue if—

24 ‘‘(1) 95 percent or more of the proceeds from 

25 the sale of such issue are to be used—
12

•S 1796 IS 

1 ‘‘(A) for expenditures incurred after the 

2 date of the enactment of this section for any 

3 qualified project, or 

4 ‘‘(B) for deposit in the Rural Renaissance 

5 Trust Account for repayment of rural renais6 sance bonds at maturity, 

7 ‘‘(2) the bond is issued by the Rural Renais8 sance Corporation, is in registered form, and meets 

9 the rural renaissance bond limitation requirements 

10 under subsection (f), 

11 ‘‘(3) except for bonds issued in accordance with 

12 subsection (f)(4), the term of each bond which is 

13 part of such issue does not exceed 30 years, 

14 ‘‘(4) the payment of principal with respect to 

15 such bond is the obligation of the Rural Renaissance 

16 Corporation, and 

17 ‘‘(5) the issue meets the requirements of sub18 section (g) (relating to arbitrage). 

19 ‘‘(f) LIMITATION ON AMOUNT OF BONDS DES20 IGNATED.—

21 ‘‘(1) NATIONAL LIMITATION.—There is a rural 

22 renaissance bond limitation for each calendar year. 

23 Such limitation is—

24 ‘‘(A) for 2004—
13

•S 1796 IS 

1 ‘‘(i) with respect to bonds described in 

2 subsection (e)(1)(A), $50,000,000,000, 

3 plus 

4 ‘‘(ii) with respect to bonds described 

5 in subsection (e)(1)(B), such amount (not 

6 to exceed $15,000,000,000) as determined 

7 necessary by the Rural Renaissance Cor8 poration to provide funds in the Rural 

9 Renaissance Trust Account for the repay10 ment of rural renaissance bonds at matu11 rity, and 

12 ‘‘(B) except as provided in paragraph (3), 

13 zero thereafter. 

14 ‘‘(2) LIMITATION ALLOCATED TO QUALIFIED

15 PROJECTS AMONG STATES.—

16 ‘‘(A) IN GENERAL.—Subject to subpara17 graph (B), the limitation applicable under para18 graph (1)(A)(i) for any calendar year shall be 

19 allocated by the Rural Renaissance Corporation 

20 for qualified projects among the States under 

21 an allocation plan established by the Corpora22 tion and submitted to Congress for consider23 ation. 

24 ‘‘(B) MINIMUM ALLOCATIONS TO

25 STATES.—In establishing the allocation plan 
14

•S 1796 IS 

1 under subparagraph (A), the Rural Renaissance 

2 Corporation shall ensure that the aggregate 

3 amount allocated for qualified projects located 

4 in each State under such plan is not less than 

5 $500,000,000. 

6 ‘‘(3) CARRYOVER OF UNUSED LIMITATION.—If 

7 for any calendar year—

8 ‘‘(A) the rural renaissance bond limitation 

9 amount, exceeds 

10 ‘‘(B) the amount of bonds issued during 

11 such year by the Rural Renaissance Corpora12 tion, 

13 the rural renaissance bond limitation amount for the 

14 following calendar year shall be increased by the 

15 amount of such excess. Any carryforward of a rural 

16 renaissance bond limitation amount may be carried 

17 only to calendar year 2005 or 2006. 

18 ‘‘(4) ISSUANCE OF SMALL DENOMINATION

19 BONDS.—From the rural renaissance bond limitation 

20 for each year, the Rural Renaissance Corporation 

21 shall issue a limited quantity of rural renaissance 

22 bonds in small denominations suitable for purchase 

23 as gifts by individual investors wishing to show their 

24 support for investing in rural America. 

25 ‘‘(g) SPECIAL RULES RELATING TO ARBITRAGE.—
15

•S 1796 IS 

1 ‘‘(1) IN GENERAL.—Subject to paragraph (2), 

2 an issue shall be treated as meeting the require3 ments of this subsection if as of the date of 

4 issuance, the Rural Renaissance Corporation reason5 ably expects—

6 ‘‘(A) to spend at least 95 percent of the 

7 proceeds from the sale of the issue for 1 or 

8 more qualified projects within the 3-year period 

9 beginning on such date, 

10 ‘‘(B) to incur a binding commitment with 

11 a third party to spend at least 10 percent of the 

12 proceeds from the sale of the issue, or to com13 mence construction, with respect to such 

14 projects within the 6-month period beginning on 

15 such date, and 

16 ‘‘(C) to proceed with due diligence to com17 plete such projects and to spend the proceeds 

18 from the sale of the issue. 

19 ‘‘(2) RULES REGARDING CONTINUING COMPLI20 ANCE AFTER 3-YEAR DETERMINATION.—If at least 

21 95 percent of the proceeds from the sale of the issue 

22 is not expended for 1 or more qualified projects 

23 within the 3-year period beginning on the date of 

24 issuance, but the requirements of paragraph (1) are 

25 otherwise met, an issue shall be treated as con-
16

•S 1796 IS 

1 tinuing to meet the requirements of this subsection 

2 if either—

3 ‘‘(A) the Rural Renaissance Corporation 

4 uses all unspent proceeds from the sale of the 

5 issue to redeem bonds of the issue within 90 

6 days after the end of such 3-year period, or 

7 ‘‘(B) the following requirements are met: 

8 ‘‘(i) The Rural Renaissance Corpora9 tion spends at least 75 percent of the pro10 ceeds from the sale of the issue for 1 or 

11 more qualified projects within the 3-year 

12 period beginning on the date of issuance.

13 ‘‘(ii) The Rural Renaissance Corpora14 tion spends at least 95 percent of the pro15 ceeds from the sale of the issue for 1 or 

16 more qualified projects within the 4-year 

17 period beginning on the date of issuance, 

18 and uses all unspent proceeds from the 

19 sale of the issue to redeem bonds of the 

20 issue within 90 days after the end of the 

21 4-year period beginning on the date of 

22 issuance. 

23 ‘‘(h) RECAPTURE OF PORTION OF CREDIT WHERE

24 CESSATION OF COMPLIANCE.—
17

•S 1796 IS 

1 ‘‘(1) IN GENERAL.—If any bond which when 

2 issued purported to be a rural renaissance bond 

3 ceases to be such a qualified bond, the Rural Renais4 sance Corporation shall pay to the United States (at 

5 the time required by the Secretary) an amount equal 

6 to the sum of—

7 ‘‘(A) the aggregate of the credits allowable 

8 under this section with respect to such bond 

9 (determined without regard to subsection (c)) 

10 for taxable years ending during the calendar 

11 year in which such cessation occurs and the 2 

12 preceding calendar years, and 

13 ‘‘(B) interest at the underpayment rate 

14 under section 6621 on the amount determined 

15 under subparagraph (A) for each calendar year 

16 for the period beginning on the first day of 

17 such calendar year. 

18 ‘‘(2) FAILURE TO PAY.—If the Rural Renais19 sance Corporation fails to timely pay the amount re20 quired by paragraph (1) with respect to such bond, 

21 the tax imposed by this chapter on each holder of 

22 any such bond which is part of such issue shall be 

23 increased (for the taxable year of the holder in which 

24 such cessation occurs) by the aggregate decrease in 

25 the credits allowed under this section to such holder 
18

•S 1796 IS 

1 for taxable years beginning in such 3 calendar years 

2 which would have resulted solely from denying any 

3 credit under this section with respect to such issue 

4 for such taxable years. 

5 ‘‘(3) SPECIAL RULES.—

6 ‘‘(A) TAX BENEFIT RULE.—The tax for 

7 the taxable year shall be increased under para8 graph (2) only with respect to credits allowed 

9 by reason of this section which were used to re10 duce tax liability. In the case of credits not so 

11 used to reduce tax liability, the carryforwards 

12 and carrybacks under section 39 shall be appro13 priately adjusted. 

14 ‘‘(B) NO CREDITS AGAINST TAX.—Any in15 crease in tax under paragraph (2) shall not be 

16 treated as a tax imposed by this chapter for 

17 purposes of determining—

18 ‘‘(i) the amount of any credit allow19 able under this part, or 

20 ‘‘(ii) the amount of the tax imposed 

21 by section 55. 

22 ‘‘(i) RURAL RENAISSANCE TRUST ACCOUNT.—

23 ‘‘(1) IN GENERAL.—The following amounts 

24 shall be held in a Rural Renaissance Trust Account 

25 by the Rural Renaissance Corporation: 
19

•S 1796 IS 

1 ‘‘(A) The proceeds from the sale of all 

2 bonds issued under this section. 

3 ‘‘(B) The amount of any matching con4 tributions with respect to such bonds. 

5 ‘‘(C) The investment earnings on proceeds 

6 from the sale of such bonds. 

7 ‘‘(D) Any earnings on any amounts de8 scribed in subparagraph (A), (B), or (C). 

9 ‘‘(2) USE OF FUNDS.—Amounts in the Rural 

10 Renaissance Trust Account may be used only to pay 

11 costs of qualified projects, redeem rural renaissance 

12 bonds, and fund the operations of the Rural Renais13 sance Corporation, except that amounts withdrawn 

14 from the Rural Renaissance Trust Account to pay 

15 costs of qualified projects may not exceed the aggre16 gate proceeds from the sale of rural renaissance 

17 bonds described in subsection (e)(1)(A). 

18 ‘‘(3) USE OF REMAINING FUNDS IN RURAL

19 RENAISSANCE TRUST ACCOUNT.—Upon the redemp20 tion of all rural renaissance bonds issued under this 

21 section, any remaining amounts in the Rural Renais22 sance Trust Account shall be available to the Rural 

23 Renaissance Corporation for any qualified project. 

24 ‘‘(j) QUALIFIED PROJECT.—For purposes of this sec25 tion—
20

•S 1796 IS 

1 ‘‘(1) IN GENERAL.—Subject to paragraph (3), 

2 the term ‘qualified project’ means a project which—

3 ‘‘(A) includes 1 or more of the projects de4 scribed in paragraph (2), 

5 ‘‘(B) is located in a rural area, and 

6 ‘‘(C) is proposed by a State and approved 

7 by the Rural Renaissance Corporation. 

8 ‘‘(2) PROJECTS DESCRIBED.—A project de9 scribed in this paragraph is—

10 ‘‘(A) a water or waste treatment project, 

11 ‘‘(B) a conservation project, including any 

12 project to protect water quality or air quality 

13 (including odor abatement), any project to pre14 vent soil erosion, and any project to protect 

15 wildlife habitat, including any project to assist 

16 agricultural producers in complying with Fed17 eral, State, or local regulations, 

18 ‘‘(C) an affordable housing project, 

19 ‘‘(D) a community facility project, includ20 ing hospitals, fire and police stations, and nurs21 ing and assisted-living facilities, 

22 ‘‘(E) a value-added agriculture or renew23 able energy facility project for agricultural pro24 ducers or farmer-owned entities, including any 

25 project to promote the production or processing 
21

•S 1796 IS 

1 of ethanol, biodiesel, animal waste, biomass, 

2 raw commodities, or wind as a fuel, 

3 ‘‘(F) a rural venture capital project for, 

4 among others, farmer-owned entities, 

5 ‘‘(G) a distance learning or telemedicine 

6 project, 

7 ‘‘(H) a project to expand broadband tech8 nology, and 

9 ‘‘(I) a rural teleworks project. 

10 ‘‘(3) SPECIAL RULES.—For purposes of this 

11 subsection—

12 ‘‘(A) any project described in subpara13 graph (E) or (F) of paragraph (2) for a farmer14 owned entity may be considered a qualified 

15 project if such entity is located in a rural area, 

16 or in the case of a farmer-owned entity the 

17 headquarters of which are located in a nonrural 

18 area, if the project is located in a rural area, 

19 and 

20 ‘‘(B) any project for a farmer-owned entity 

21 which is a facility described in paragraph 

22 (2)(E) for agricultural producers may be con23 sidered a qualified project regardless of whether 

24 the facility is located in a rural or nonrural 

25 area.
22

•S 1796 IS 

1 ‘‘(4) APPROVAL GUIDELINES AND CRITERIA.—

2 Not later than 60 days after the date of the enact3 ment of this section, the Rural Renaissance Corpora4 tion shall consult with the appropriate committees of 

5 Congress regarding the development of guidelines 

6 and criteria for the approval by the Corporation of 

7 projects as qualified projects for inclusion in the al8 location plan established under subsection (f)(2)(A) 

9 and shall submit such guidelines and criteria to such 

10 committees. 

11 ‘‘(k) OTHER DEFINITIONS AND SPECIAL RULES.—

12 For purposes of this section—

13 ‘‘(1) BOND.—The term ‘bond’ includes any ob14 ligation. 

15 ‘‘(2) RURAL AREA.—The term ‘rural area’ 

16 means any area other than—

17 ‘‘(A) a city or town which has a population 

18 of greater than 50,000 inhabitants, or 

19 ‘‘(B) the urbanized area contiguous and 

20 adjacent to such a city or town. 

21 ‘‘(3) RURAL RENAISSANCE CORPORATION.—The 

22 term ‘Rural Renaissance Corporation’ means the 

23 Rural Renaissance Corporation established under 

24 section 379E of the Consolidated Farm and Rural 

25 Development Act. 
23

•S 1796 IS 

1 ‘‘(4) TREATMENT OF CHANGES IN USE.—For 

2 purposes of subsection (e)(1)(A), the proceeds from 

3 the sale of an issue shall not be treated as used for 

4 a qualified project to the extent that the Rural Ren5 aissance Corporation takes any action within its con6 trol which causes such proceeds not to be used for 

7 a qualified project. The Secretary shall specify reme8 dial actions that may be taken (including conditions 

9 to taking such remedial actions) to prevent an action 

10 described in the preceding sentence from causing a 

11 bond to fail to be a rural renaissance bond. 

12 ‘‘(5) PARTNERSHIP; S CORPORATION; AND

13 OTHER PASS-THRU ENTITIES.—In the case of a 

14 partnership, trust, S corporation, or other pass-thru 

15 entity, rules similar to the rules of section 41(g) 

16 shall apply with respect to the credit allowable under 

17 subsection (a). 

18 ‘‘(6) BONDS HELD BY REGULATED INVEST19 MENT COMPANIES.—If any rural renaissance bond is 

20 held by a regulated investment company, the credit 

21 determined under subsection (a) shall be allowed to 

22 shareholders of such company under procedures pre23 scribed by the Secretary. 

24 ‘‘(7) CREDITS MAY BE STRIPPED.—Under regu25 lations prescribed by the Secretary— 
24

•S 1796 IS 

1 ‘‘(A) IN GENERAL.—There may be a sepa2 ration (including at issuance) of the ownership 

3 of a rural renaissance bond and the entitlement 

4 to the credit under this section with respect to 

5 such bond. In case of any such separation, the 

6 credit under this section shall be allowed to the 

7 person who on the credit allowance date holds 

8 the instrument evidencing the entitlement to 

9 the credit and not to the holder of the bond. 

10 ‘‘(B) CERTAIN RULES TO APPLY.—In the 

11 case of a separation described in subparagraph 

12 (A), the rules of section 1286 shall apply to the 

13 rural renaissance bond as if it were a stripped 

14 bond and to the credit under this section as if 

15 it were a stripped coupon. 

16 ‘‘(8) REPORTING.—The Rural Renaissance Cor17 poration shall submit reports similar to the reports 

18 required under section 149(e).’’. 

19 (b) AMENDMENTS TO OTHER CODE SECTIONS.—

20 (1) REPORTING.—Subsection (d) of section 

21 6049 of the Internal Revenue Code of 1986 (relating 

22 to returns regarding payments of interest) is amend23 ed by adding at the end the following new para24 graph: 
25

•S 1796 IS 

1 ‘‘(8) REPORTING OF CREDIT ON RURAL RENAIS2 SANCE BONDS.—

3 ‘‘(A) IN GENERAL.—For purposes of sub4 section (a), the term ‘interest’ includes amounts 

5 includible in gross income under section 54(d) 

6 and such amounts shall be treated as paid on 

7 the credit allowance date (as defined in section 

8 54(b)(4)). 

9 ‘‘(B) REPORTING TO CORPORATIONS, 

10 ETC.—Except as otherwise provided in regula11 tions, in the case of any interest described in 

12 subparagraph (A), subsection (b)(4) shall be 

13 applied without regard to subparagraphs (A), 

14 (H), (I), (J), (K), and (L)(i) of such subsection. 

15 ‘‘(C) REGULATORY AUTHORITY.—The Sec16 retary may prescribe such regulations as are 

17 necessary or appropriate to carry out the pur18 poses of this paragraph, including regulations 

19 which require more frequent or more detailed 

20 reporting.’’. 

21 (2) TREATMENT FOR ESTIMATED TAX PUR22 POSES.—

23 (A) INDIVIDUAL.—Section 6654 of such 

24 Code (relating to failure by individual to pay es25 timated income tax) is amended by redesig-
26

•S 1796 IS 

1 nating subsection (m) as subsection (n) and by 

2 inserting after subsection (l) the following new 

3 subsection: 

4 ‘‘(m) SPECIAL RULE FOR HOLDERS OF RURAL REN5 AISSANCE BONDS.—For purposes of this section, the cred6 it allowed by section 54 to a taxpayer by reason of holding 

7 a rural renaissance bond on a credit allowance date shall 

8 be treated as if it were a payment of estimated tax made 

9 by the taxpayer on such date.’’. 

10 (B) CORPORATE.—Subsection (g) of sec11 tion 6655 of such Code (relating to failure by 

12 corporation to pay estimated income tax) is 

13 amended by adding at the end the following 

14 new paragraph: 

15 ‘‘(5) SPECIAL RULE FOR HOLDERS OF RURAL

16 RENAISSANCE BONDS.—For purposes of this section, 

17 the credit allowed by section 54 to a taxpayer by 

18 reason of holding a rural renaissance bond on a 

19 credit allowance date shall be treated as if it were 

20 a payment of estimated tax made by the taxpayer on 

21 such date.’’. 

22 (c) CLERICAL AMENDMENTS.—

23 (1) The table of subparts for part IV of sub24 chapter A of chapter 1 of the Internal Revenue Code 
27

•S 1796 IS 

1 of 1986 is amended by adding at the end the fol2 lowing new item:

‘‘Subpart H. Nonrefundable Credit for Holders of Rural Renaissance Bonds.’’.

3 (2) Section 6401(b)(1) of such Code is amend4 ed by striking ‘‘and G’’ and inserting ‘‘G, and H’’. 

5 (d) EFFECTIVE DATE.—The amendments made by 

6 this section shall apply to obligations issued after the date 

7 of the enactment of this Act.

Æ