I 
108TH CONGRESS 
1ST SESSION H. R. 2972
To amend the Internal Revenue Code of 1986 to provide incentives for 
rural development, and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
JULY 25, 2003
Mr. SHUSTER introduced the following bill; which was referred to the Com-
mittee on Ways and Means, and in addition to the Committee on Edu-
cation and the Workforce, for a period to be subsequently determined by 
the Speaker, in each case for consideration of such provisions as fall with-
in the jurisdiction of the committee concerned 
A BILL 
To amend the Internal Revenue Code of 1986 to provide 
incentives for rural development, and for other purposes.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Rural Economic 
Growth Act of 2003’’.
TITLE I—RURAL INVESTMENT 
TAX CREDIT 
SEC. 101. RURAL INVESTMENT TAX CREDIT. 
(a) IN GENERAL.—Subpart D of part IV of sub-
chapter A of chapter 1 of the Internal Revenue Code of 
1986 (relating to business related credits) is amended by 
adding at the end the following: 
‘‘SEC. 42A. RURAL INVESTMENT CREDIT. 
‘‘(a) IN GENERAL.—For purposes of section 38, the 
amount of the rural investment credit determined under 
this section for any taxable year in the credit period shall 
be an amount equal to the applicable percentage of the 
eligible basis of each qualified rural investment building. 
‘‘(b) APPLICABLE
PERCENTAGE; 
PERCENT 
PRESENT VALUE CREDIT FOR NEW BUILDINGS; 50 PER-
CENT PRESENT VALUE CREDIT FOR EXISTING BUILD-
INGS.—For purposes of this section—
‘‘(1) IN GENERAL.—The term ‘applicable per-
centage’ means the appropriate percentage pre-
scribed by the Secretary for the earlier of—
‘‘(A) the first month of the credit period 
with respect to a rural investment building, or 
‘‘(B) at the election of the taxpayer, the 
month in which the taxpayer and the rural in-
vestment credit agency enter into an agreement
with respect to such building (which is binding 
on such agency, the taxpayer, and all successors 
in interest) as to the rural investment credit 
dollar amount to be allocated to such building. 
A month may be elected under subparagraph (B) 
only if the election is made not later than the 5th 
day after the close of such month. Such an election, 
once made, shall be irrevocable. 
‘‘(2) METHOD
OF
PRESCRIBING
PERCENT-
AGES.—The percentages prescribed by the Secretary 
for any month shall be percentages which will yield 
over a 10-year period amounts of credit under sub-
section (a) which have a present value equal to—
‘‘(A) 50 percent of the eligible basis of a 
new building, and 
‘‘(B) 50 percent of the eligible basis of an 
existing building. 
‘‘(3) METHOD OF DISCOUNTING.—The present 
value under paragraph (2) shall be determined—
‘‘(A) as of the last day of the 1st year of 
the 10-year period referred to in paragraph (2), 
‘‘(B) by using a discount rate equal to 72 
percent of the average of the annual Federal 
mid-term rate and the annual Federal long-
term rate applicable under section 1274(d)(1)
to the month applicable under subparagraph 
(A) or (B) of paragraph (1) and compounded 
annually, and 
‘‘(C) by assuming that the credit allowable 
under this section for any year is received on 
the last day of such year. 
‘‘(c) ELIGIBLE BASIS; QUALIFIED RURAL INVEST-
MENT BUILDING.—For purposes of this section—
‘‘(1) ELIGIBLE BASIS.—
‘‘(A) IN GENERAL.—The eligible basis of 
any qualified rural investment building for any 
taxable year shall be determined under rules 
similar to the rules under section 42(d), except 
that—
‘‘(i) the determination of the adjusted 
basis of any building shall be made as of 
the beginning of the credit period, and 
‘‘(ii) such basis shall include develop-
ment costs properly attributable to such 
building. 
‘‘(B) DEVELOPMENT
COSTS.—For pur-
poses of subparagraph (A)(ii), the term ‘devel-
opment costs’ includes—
‘‘(i) site preparation costs, 
‘‘(ii) State and local impact fees,
‘‘(iii) reasonable development costs, 
‘‘(iv) professional fees related to basis 
items, 
‘‘(v) construction financing costs re-
lated to basis items other than land, and 
‘‘(vi) on-site and adjacent improve-
ments required by State and local govern-
ments. 
‘‘(2) QUALIFIED
RURAL
INVESTMENT
BUILD-
ING.—The term ‘qualified rural investment building’ 
means any building which is part of a qualified rural 
investment project at all times during the period—
‘‘(A) beginning on the 1st day in the com-
pliance period on which such building is part of 
such an investment project, and 
‘‘(B) ending on the last day of the compli-
ance period with respect to such building. 
‘‘(d) REHABILITATION EXPENDITURES TREATED AS 
SEPARATE NEW BUILDING.—Rehabilitation expenditures 
paid or incurred by the taxpayer with respect to any build-
ing shall be treated for purposes of this section as a sepa-
rate new building under the rules of section 42(e). 
‘‘(e) DEFINITION AND SPECIAL RULES RELATING TO 
CREDIT PERIOD.—
‘‘(1) CREDIT PERIOD DEFINED.—For purposes 
of this section, the term ‘credit period’ means, with 
respect to any building, the period of 10 taxable 
years beginning with the taxable year in which the 
building is first placed in service. 
‘‘(2) SPECIAL RULE FOR 1ST YEAR OF CREDIT 
PERIOD.—
‘‘(A) IN GENERAL.—The credit allowable 
under subsection (a) with respect to any build-
ing for the 1st taxable year of the credit period 
shall be determined by multiplying such credit 
by the fraction—
‘‘(i) the numerator of which is the 
number of full months of such year during 
which such building was in service, and 
‘‘(ii) the denominator of which is 12. 
‘‘(B) DISALLOWED 1ST YEAR CREDIT AL-
LOWED IN 11TH YEAR.—Any reduction by rea-
son of subparagraph (A) in the credit allowable 
(without regard to subparagraph (A)) for the 
1st taxable year of the credit period shall be al-
lowable under subsection (a) for the 1st taxable 
year following the credit period. 
‘‘(3) CREDIT PERIOD FOR EXISTING BUILDINGS 
NOT
TO
BEGIN
BEFORE
REHABILITATION
CREDIT
ALLOWED.—The credit period for an existing build-
ing shall not begin before the 1st taxable year of the 
credit period for rehabilitation expenditures with re-
spect to the building. 
‘‘(f) QUALIFIED
RURAL
INVESTMENT
PROJECT; 
QUALIFYING COUNTY.—For purposes of this section—
‘‘(1) 
QUALIFIED
RURAL
INVESTMENT 
PROJECT.—The term ‘qualified rural investment 
project’ means any investment project of 1 or more 
qualified rural investment buildings located in a 
qualifying county (and, if necessary to the project, 
any contiguous county) and selected by the State ac-
cording to its qualified rural investment plan. 
‘‘(2) QUALIFYING COUNTY.—The term ‘quali-
fying county’ means any county which—
‘‘(A) is outside a metropolitan statistical 
area (defined as such by the Office of Manage-
ment and Budget), and 
‘‘(B) during the 20-year period ending 
with the calendar year preceding the date of the 
enactment of this section, has a net out-migra-
tion of inhabitants from the county of at least 
10 percent of the population of the county at 
the beginning of such period.
‘‘(g) LIMITATION ON AGGREGATE CREDIT ALLOW-
ABLE WITH RESPECT TO INVESTMENT PROJECTS LO-
CATED IN A STATE.—
‘‘(1) CREDIT
MAY
NOT
EXCEED
CREDIT 
AMOUNT ALLOCATED TO BUILDING.—The amount of 
the credit determined under this section for any tax-
able year with respect to any building shall not ex-
ceed the rural investment credit dollar amount allo-
cated to such building under rules similar to the 
rules of section 42(h)(1). 
‘‘(2) ALLOCATED CREDIT AMOUNT TO APPLY 
TO ALL TAXABLE YEARS ENDING DURING OR AFTER 
CREDIT ALLOCATION YEAR.—Any rural investment 
credit dollar amount allocated to any building for 
any calendar year—
‘‘(A) shall apply to such building for all 
taxable years in the credit period ending during 
or after such calendar year, and 
‘‘(B) shall reduce the aggregate rural in-
vestment credit dollar amount of the allocating 
agency only for such calendar year. 
‘‘(3) RURAL
INVESTMENT
CREDIT
DOLLAR 
AMOUNT FOR AGENCIES.—
‘‘(A) IN GENERAL.—The aggregate rural 
investment credit dollar amount which a rural
investment credit agency may allocate for any 
calendar year is the portion of the State rural 
investment credit ceiling allocated under this 
paragraph for such calendar year to such agen-
cy. 
‘‘(B) STATE
CEILING
INITIALLY
ALLO-
CATED TO STATE RURAL INVESTMENT CREDIT 
AGENCIES.—Except as provided in subpara-
graphs (D) and (E), the State rural investment 
credit ceiling for each calendar year shall be al-
located to the rural investment credit agency of 
such State. If there is more than 1 rural invest-
ment credit agency of a State, all such agencies 
shall be treated as a single agency. 
‘‘(C) STATE RURAL INVESTMENT CREDIT 
CEILING.—The State rural investment credit 
ceiling applicable to any State and any calendar 
year shall be an amount equal to the sum of—
‘‘(i) the unused State rural investment 
credit ceiling (if any) of such State for the 
preceding calendar year, 
‘‘(ii) $1,000,000 for each qualifying 
county in the State,
‘‘(iii) the amount of State rural in-
vestment credit ceiling returned in the cal-
endar year, plus 
‘‘(iv) the amount (if any) allocated 
under subparagraph (D) to such State by 
the Secretary. 
For purposes of clause (i), the unused State 
rural investment credit ceiling for any calendar 
year is the excess (if any) of the sum of the 
amounts described in clauses (ii) through (iv) 
over the aggregate rural investment credit dol-
lar amount allocated for such year. For pur-
poses of clause (iii), the amount of State rural 
investment credit ceiling returned in the cal-
endar year equals the rural investment credit 
dollar amount previously allocated within the 
State to any investment project which fails to 
meet the 10 percent test under section 
42(h)(1)(E)(ii) on a date after the close of the 
calendar year in which the allocation was made 
or which does not become a qualified rural in-
vestment project within the period required by 
this section or the terms of the allocation or to 
any investment project with respect to which an 
allocation is canceled by mutual consent of the
rural investment credit agency and the alloca-
tion recipient. 
‘‘(D) UNUSED RURAL INVESTMENT CREDIT 
CARRYOVERS
ALLOCATED
AMONG
CERTAIN 
STATES.—
‘‘(i) IN GENERAL.—The unused rural 
investment credit carryover of a State for 
any calendar year shall be assigned to the 
Secretary for allocation among qualified 
States for the succeeding calendar year. 
‘‘(ii) UNUSED
RURAL
INVESTMENT 
CREDIT CARRYOVER.—For purposes of this 
subparagraph, the unused rural investment 
credit carryover of a State for any calendar 
year is the excess (if any) of the unused 
State rural investment credit ceiling for 
such year (as defined in subparagraph 
(C)(i)) over the excess (if any) of—
‘‘(I) the unused State rural in-
vestment credit ceiling for the year 
preceding such year, over 
‘‘(II) the aggregate rural invest-
ment credit dollar amount allocated 
for such year.
‘‘(iii) FORMULA FOR ALLOCATION OF 
UNUSED
RURAL
INVESTMENT
CREDIT 
CARRYOVERS
AMONG
QUALIFIED 
STATES.—The amount allocated under this 
subparagraph to a qualified State for any 
calendar year shall be the amount deter-
mined by the Secretary to bear the same 
ratio to the aggregate unused rural invest-
ment credit carryovers of all States for the 
preceding calendar year as such State’s 
population for the calendar year bears to 
the population of all qualified States for 
the calendar year. For purposes of the pre-
ceding sentence, population shall be deter-
mined in accordance with section 146(j). 
‘‘(iv) QUALIFIED
STATE.—For pur-
poses of this subparagraph, the term 
‘qualified State’ means, with respect to a 
calendar year, any State—
‘‘(I) which allocated its entire 
State rural investment credit ceiling 
for the preceding calendar year, and 
‘‘(II) for which a request is made 
(not later than May 1 of the calendar
year) to receive an allocation under 
clause (iii). 
‘‘(E) STATE
MAY
PROVIDE
FOR
DIF-
FERENT
ALLOCATION.—Rules similar to the 
rules of section 146(e) (other than paragraph 
(2)(B) thereof) shall apply for purposes of this 
paragraph. 
‘‘(F) POPULATION.—For purposes of this 
paragraph, population shall be determined in 
accordance with section 146(j). 
‘‘(G) COST-OF-LIVING ADJUSTMENT.—
‘‘(i) IN GENERAL.—In the case of a 
calendar year after 2003, the $1,000,000 
amount in subparagraph (C) shall be in-
creased by an amount equal to—
‘‘(I) such dollar amount, multi-
plied by 
‘‘(II) the cost-of-living adjust-
ment determined under section 1(f)(3) 
for such calendar year by substituting 
‘calendar year 2002’ for ‘calendar 
year 1992’ in subparagraph (B) there-
of. 
‘‘(ii) ROUNDING.—Any increase under 
clause (i) which is not a multiple of $5,000
shall be rounded to the next lowest mul-
tiple of $5,000. 
‘‘(4) PORTION
OF
STATE
CEILING
SET-ASIDE 
FOR
CERTAIN
INVESTMENT
PROJECTS
INVOLVING 
QUALIFIED NONPROFIT ORGANIZATIONS.—
‘‘(A) IN GENERAL.—At least 10 percent of 
the State rural investment credit ceiling for any 
State for any calendar year shall be allocated to 
qualified rural investment projects described in 
subparagraph (B). 
‘‘(B) INVESTMENT
PROJECTS
INVOLVING 
QUALIFIED
NONPROFIT
ORGANIZATIONS.—For 
purposes of subparagraph (A), a qualified rural 
investment project is described in this subpara-
graph if a qualified nonprofit organization is to 
materially participate (within the meaning of 
section 469(h)) in the development and oper-
ation of the investment project throughout the 
compliance period. 
‘‘(C) QUALIFIED
NONPROFIT
ORGANIZA-
TION.—For purposes of this paragraph, the 
term ‘qualified nonprofit organization’ means 
any organization if—
‘‘(i) such organization is described in 
any paragraph of section 501(c) and is ex-
empt from tax under section 501(a), 
‘‘(ii) such organization is determined 
by the State rural investment credit agency 
not to be affiliated with or controlled by a 
for-profit organization; and 
‘‘(iii) 1 of the exempt purposes of 
such organization includes the fostering of 
rural investment. 
‘‘(D) TREATMENT
OF
CERTAIN
SUBSIDI-
ARIES.—
‘‘(i) IN
GENERAL.—For purposes of 
this paragraph, a qualified nonprofit orga-
nization shall be treated as satisfying the 
ownership and material participation test 
of subparagraph (B) if any qualified cor-
poration in which such organization holds 
stock satisfies such test. 
‘‘(ii) QUALIFIED CORPORATION.—For 
purposes of clause (i), the term ‘qualified 
corporation’ means any corporation if 100 
percent of the stock of such corporation is 
held by 1 or more qualified nonprofit orga-
nizations at all times during the period 
such corporation is in existence. 
‘‘(E) STATE
MAY
NOT
OVERRIDE
SET-
ASIDE.—Nothing in subparagraph (F) of para-
graph (3) shall be construed to permit a State 
not to comply with subparagraph (A) of this 
paragraph. 
‘‘(F) CREDITS FOR QUALIFIED NONPROFIT 
ORGANIZATIONS.—
‘‘(i) ALLOWANCE
OF
CREDIT.—Any 
credit which would be allowable under sub-
section (a) with respect to a qualified rural 
investment building of a qualified nonprofit 
organization if such organization were not 
exempt from tax under this chapter shall 
be treated as a credit allowable under sub-
part C to such organization. 
‘‘(ii) USE
OF
CREDIT.—A qualified 
nonprofit organization may assign, trade, 
sell, or otherwise transfer any credit allow-
able to such organization under clause (i) 
to any taxpayer. 
‘‘(iii) CREDIT NOT INCOME.—A trans-
fer under clause (ii) of any credit allowable
under clause (i) shall not result in income 
for purposes of section 511. 
‘‘(5) SPECIAL RULES.—
‘‘(A) BUILDING MUST BE LOCATED WITH-
IN JURISDICTION OF CREDIT AGENCY.—A rural 
investment credit agency may allocate its aggre-
gate rural investment credit dollar amount only 
to buildings located in the jurisdiction of the 
governmental unit of which such agency is a 
part. 
‘‘(B) AGENCY ALLOCATIONS IN EXCESS OF 
LIMIT.—If the aggregate rural investment cred-
it dollar amounts allocated by a rural invest-
ment credit agency for any calendar year exceed 
the portion of the State rural investment credit 
ceiling allocated to such agency for such cal-
endar year, the rural investment credit dollar 
amounts so allocated shall be reduced (to the 
extent of such excess) for buildings in the re-
verse of the order in which the allocations of 
such amounts were made. 
‘‘(C) Credit reduced if allocated credit dol-
lar amount is less than credit which would be 
allowable without regard to sales convention, 
etc.—
‘‘(i) IN
GENERAL.—The amount of 
the credit determined under this section 
with respect to any building shall not ex-
ceed the clause (ii) percentage of the 
amount of the credit which would (but for 
this subparagraph) be determined under 
this section with respect to such building. 
‘‘(ii) DETERMINATION
OF
PERCENT-
AGE.—For purposes of clause (i), the 
clause (ii) percentage with respect to any 
building is the percentage which—
‘‘(I) the rural investment credit 
dollar amount allocated to such build-
ing bears to 
‘‘(II) the credit amount deter-
mined in accordance with clause (iii). 
‘‘(iii) DETERMINATION
OF
CREDIT 
AMOUNT.—The credit amount determined 
in accordance with this clause is the 
amount of the credit which would (but for 
this subparagraph) be determined under 
this section with respect to the building if 
this section were applied without regard to 
paragraph (2)(A) of subsection (e).
‘‘(D) RURAL INVESTMENT CREDIT AGENCY 
TO
SPECIFY
APPLICABLE
PERCENTAGE
AND 
MAXIMUM
ELIGIBLE
BASIS.—In allocating a 
rural investment credit dollar amount to any 
building, the rural investment credit agency 
shall specify the applicable percentage and the 
maximum eligible basis which may be taken 
into account under this section with respect to 
such building. The applicable percentage and 
maximum eligible basis so specified shall not ex-
ceed the applicable percentage and eligible basis 
determined under this section without regard to 
this subsection. 
‘‘(6) OTHER
DEFINITIONS.—For purposes of 
this subsection—
‘‘(A) RURAL INVESTMENT CREDIT AGEN-
CY.—The term ‘rural investment credit agency’ 
means any agency authorized to carry out this 
subsection. 
‘‘(B) POSSESSIONS TREATED AS STATES.—
The term ‘State’ includes a possession of the 
United States. 
‘‘(7) PORTION
OF
STATE
CEILING
SET-ASIDE 
FOR QUALIFIED RURAL SMALL BUSINESS INVEST-
MENT CREDITS.—Not more than 20 percent of the
State rural investment credit ceiling for any State 
for any calendar year may be allocated to qualified 
rural small business investment credits under section 
42B. 
‘‘(h) DEFINITIONS AND SPECIAL RULES.—For pur-
poses of this section—
‘‘(1) COMPLIANCE PERIOD.—The term ‘compli-
ance period’ means, with respect to any building, the 
period of 10 taxable years beginning with the 1st 
taxable year of the credit period with respect there-
to. 
‘‘(2) NEW BUILDING.—The term ‘new building’ 
means a building the original use of which begins 
with the taxpayer. 
‘‘(3) EXISTING BUILDING.—The term ‘existing 
building’ means any building which is not a new 
building. 
‘‘(4) APPLICATION TO ESTATES AND TRUSTS.—
In the case of an estate or trust, the amount of the 
credit determined under subsection (a) and any in-
crease in tax under subsection (i) shall be appor-
tioned between the estate or trust and the bene-
ficiaries on the basis of the income of the estate or 
trust allocable to each. 
‘‘(i) RECAPTURE OF CREDIT.—If—
‘‘(1) as of the close of any taxable year in the 
compliance period, the amount of the eligible basis 
of any building with respect to the taxpayer is less 
than 
‘‘(2) the amount of such basis as of the close 
of the preceding taxable year, 
then the taxpayer’s tax under this chapter for the 
taxable year shall be increased by the credit recap-
ture amount determined under rules similar to the 
rules of section 42(j). 
‘‘(j) CERTIFICATIONS AND OTHER REPORTS TO SEC-
RETARY.—
‘‘(1) CERTIFICATION
WITH
RESPECT
TO
1ST 
YEAR OF CREDIT PERIOD.—Following the close of 
the 1st taxable year in the credit period with respect 
to any qualified rural investment building, the tax-
payer shall certify to the Secretary (at such time 
and in such form and in such manner as the Sec-
retary prescribes)—
‘‘(A) the taxable year, and calendar year, 
in which such building was first placed in serv-
ice, 
‘‘(B) the eligible basis of such building as 
of the beginning of the credit period,
‘‘(C) the maximum applicable percentage 
and eligible basis permitted to be taken into ac-
count by the appropriate rural investment cred-
it agency under subsection (g), 
‘‘(D) the election made under subsection 
(f) with respect to the qualified rural invest-
ment project of which such building is a part, 
and 
‘‘(E) such other information as the Sec-
retary may require. 
In the case of a failure to make the certification re-
quired by the preceding sentence on the date pre-
scribed therefor, unless it is shown that such failure 
is due to reasonable cause and not to willful neglect, 
no credit shall be allowable by reason of subsection 
(a) with respect to such building for any taxable 
year ending before such certification is made. 
‘‘(2) ANNUAL REPORTS TO THE SECRETARY.—
The Secretary may require taxpayers to submit an 
information return (at such time and in such form 
and manner as the Secretary prescribes) for each 
taxable year setting forth—
‘‘(A) the eligible basis for the taxable year 
of each qualified rural investment building of 
the taxpayer,
‘‘(B) the information described in para-
graph (1)(C) for the taxable year, and 
‘‘(C) such other information as the Sec-
retary may require. 
The penalty under section 6652(j) shall apply to any 
failure to submit the return required by the Sec-
retary under the preceding sentence on the date pre-
scribed therefor. 
‘‘(3) ANNUAL REPORTS FROM RURAL INVEST-
MENT CREDIT AGENCIES.—Each agency which allo-
cates any rural investment credit amount to any 
building for any calendar year shall submit to the 
Secretary (at such time and in such manner as the 
Secretary shall prescribe) an annual report speci-
fying—
‘‘(A) the amount of rural investment credit 
amount allocated to each building for such year, 
‘‘(B) sufficient information to identify each 
such building and the taxpayer with respect 
thereto, and 
‘‘(C) such other information as the Sec-
retary may require. 
The penalty under section 6652(j) shall apply to any 
failure to submit the report required by the pre-
ceding sentence on the date prescribed therefor.
‘‘(k) RESPONSIBILITIES
OF RURAL INVESTMENT 
CREDIT AGENCIES.—
‘‘(1) PLANS
FOR
ALLOCATION
OF
CREDIT 
AMONG INVESTMENT PROJECTS.—
‘‘(A) IN GENERAL.—Notwithstanding any 
other provision of this section, the rural invest-
ment credit dollar amount with respect to any 
building shall be zero unless—
‘‘(i) such amount was allocated pursu-
ant to a qualified rural investment plan of 
the agency which is approved by the gov-
ernmental unit (in accordance with rules 
similar to the rules of section 147(f)(2) 
(other than subparagraph (B)(ii) thereof)) 
of which such agency is a part, 
‘‘(ii) such agency notifies the chief ex-
ecutive officer (or the equivalent) of the 
local jurisdiction within which the building 
is located of such investment project and 
provides such individual a reasonable op-
portunity to comment on the investment 
project, 
‘‘(iii) a comprehensive market study 
of the development needs of individuals in 
the qualifying county to be served by the
investment project is conducted before the 
credit allocation is made and at the devel-
oper’s expense by a disinterested party who 
is approved by such agency, and 
‘‘(iv) a written explanation is available 
to the general public for any allocation of 
a rural investment credit dollar amount 
which is not made in accordance with es-
tablished priorities and selection criteria of 
the rural investment credit agency. 
‘‘(B) 
QUALIFIED
RURAL
INVESTMENT 
PLAN.—For purposes of this section, the term 
‘qualified rural investment plan’ means any 
plan—
‘‘(i) which sets forth selection criteria 
to be used to determine priorities of the 
rural investment credit agency which are 
appropriate to qualifying counties, 
‘‘(ii) which also gives preference in al-
locating rural investment credit dollar 
amounts 
among 
selected 
investment 
projects to—
‘‘(I) investment projects that tar-
get those small rural counties with
consistently high rates of net out-mi-
gration, 
‘‘(II) investment projects that 
link the economic development and job 
creation efforts of 2 or more small 
rural counties with high rates of net 
out-migration, and 
‘‘(III) investment projects that 
link the economic development and job 
creation efforts of 1 or more small 
rural counties in the State with high 
rates of net out-migration to related 
efforts in regions of such State experi-
encing economic growth, and 
‘‘(iii) which provides a procedure that 
the agency (or an agent or other private 
contractor of such agency) will follow in 
monitoring for noncompliance with the 
provisions of this section and in notifying 
the Internal Revenue Service of such non-
compliance which such agency becomes 
aware of and in monitoring for noncompli-
ance through regular site visits.
‘‘(C) CERTAIN SELECTION CRITERIA MUST 
BE USED.—The selection criteria set forth in a 
qualified rural investment plan must include—
‘‘(i) investment project location, 
‘‘(ii) technology and transportation in-
frastructure needs, and 
‘‘(iii) private development trends. 
‘‘(2) CREDIT ALLOCATED TO BUILDING NOT TO 
EXCEED AMOUNT NECESSARY TO ASSURE INVEST-
MENT PROJECT FEASIBILITY.—
‘‘(A) IN GENERAL.—The rural investment 
credit dollar amount allocated to an investment 
project shall not exceed the amount the rural 
investment credit agency determines is nec-
essary for the financial feasibility of the invest-
ment project and its viability as a qualified 
rural investment project throughout the compli-
ance period. 
‘‘(B) AGENCY
EVALUATION.—In making 
the determination under subparagraph (A), the 
rural investment credit agency shall consider—
‘‘(i) the sources and uses of funds and 
the total financing planned for the invest-
ment project,
‘‘(ii) any proceeds or receipts expected 
to be generated by reason of tax benefits, 
‘‘(iii) the percentage of the rural in-
vestment credit dollar amount used for in-
vestment project costs other than the cost 
of intermediaries, and 
‘‘(iv) the reasonableness of the devel-
opmental and operational costs of the in-
vestment project. 
Clause (iii) shall not be applied so as to impede 
the development of investment projects in hard-
to-develop areas. 
‘‘(C) DETERMINATION MADE WHEN CRED-
IT AMOUNT APPLIED FOR AND WHEN BUILDING 
PLACED IN SERVICE.—
‘‘(i) IN
GENERAL.—A determination 
under subparagraph (A) shall be made as 
of each of the following times: 
‘‘(I) The application for the rural 
investment credit dollar amount. 
‘‘(II) The allocation of the rural 
investment credit dollar amount. 
‘‘(III) The date the building is 
first placed in service.
‘‘(ii) CERTIFICATION AS TO AMOUNT 
OF OTHER SUBSIDIES.—Prior to each de-
termination under clause (i), the taxpayer 
shall certify to the rural investment credit 
agency the full extent of all Federal, State, 
and local subsidies which apply (or which 
the taxpayer expects to apply) with respect 
to the building. 
‘‘(l) REGULATIONS.—The Secretary shall prescribe 
such regulations as may be necessary or appropriate to 
carry out the purposes of this section, including regula-
tions—
‘‘(1) dealing with—
‘‘(A) investment projects which include 
more than 1 building or only a portion of a 
building, 
‘‘(B) buildings which are sold in portions, 
‘‘(2) providing for the application of this section 
to short taxable years, 
‘‘(3) preventing the avoidance of the rules of 
this section, and 
‘‘(4) providing the opportunity for rural invest-
ment credit agencies to correct administrative errors 
and omissions with respect to allocations and record 
keeping within a reasonable period after their dis-
(d) LIMIT
ON ADMINISTRATIVE EXPENSES.—The 
Secretary of Labor may use not more than 5 percent of 
the amounts made available to carry out this section to 
pay the Federal administrative costs associated with 
awarding grants under this section. 
(e) AUTHORIZATION
OF APPROPRIATIONS.—There 
are authorized to be appropriated to carry out this section 
$10,000,000 for each of fiscal years 2004 through 2008.
Æ