113 
tions specifying remedial actions that may be 
taken (including conditions to taking such re-
medial actions) to prevent an action described 
in the preceding sentence from causing a bond 
to fail to be a rural renaissance bond. 
‘‘(e) MATURITY LIMITATIONS.— 
‘‘(1) DURATION OF TERM.—A bond shall not be 
treated as a rural renaissance bond if the maturity 
of such bond exceeds the maximum term determined 
by the Secretary under paragraph (2) with respect 
to such bond. 
‘‘(2) MAXIMUM TERM.—During each calendar 
month, the Secretary shall determine the maximum 
term permitted under this paragraph for bonds 
issued during the following calendar month. Such 
maximum term shall be the term which the Sec-
retary estimates will result in the present value of 
the obligation to repay the principal on the bond 
being equal to 50 percent of the face amount of such 
bond. Such present value shall be determined with-
out regard to the requirements of paragraph (3) and 
using as a discount rate the average annual interest 
rate of tax-exempt obligations having a term of 10 
years or more which are issued during the month. If 
the term as so determined is not a multiple of a 
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whole year, such term shall be rounded to the next 
highest whole year. 
‘‘(3) RATABLE PRINCIPAL AMORTIZATION RE-
QUIRED.—A bond shall not be treated as a rural 
renaissance bond unless it is part of an issue which 
provides for an equal amount of principal to be paid 
by the qualified issuer during each calendar year 
that the issue is outstanding. 
‘‘(f) LIMITATION
ON AMOUNT
OF BONDS DES-
IGNATED.— 
‘‘(1) NATIONAL LIMITATION.—There is a rural 
renaissance bond limitation of $200,000,000. 
‘‘(2) ALLOCATION
BY
SECRETARY.—The Sec-
retary shall allocate the amount described in para-
graph (1) among qualified projects in such manner 
as the Secretary determines appropriate. 
‘‘(g) CREDIT INCLUDED IN GROSS INCOME.—Gross 
income includes the amount of the credit allowed to the 
taxpayer under this section (determined without regard to 
subsection (c)) and the amount so included shall be treat-
ed as interest income. 
‘‘(h) SPECIAL
RULES
RELATING
TO
EXPENDI-
TURES.— 
‘‘(1) IN GENERAL.—An issue shall be treated as 
meeting the requirements of this subsection if, as of 
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115 
the date of issuance, the qualified issuer reasonably 
expects— 
‘‘(A) at least 95 percent of the proceeds 
from the sale of the issue are to be spent for 
1 or more qualified projects within the 5-year 
period beginning on the date of issuance of the 
rural renaissance bond, 
‘‘(B) a binding commitment with a third 
party to spend at least 10 percent of the pro-
ceeds from the sale of the issue will be incurred 
within the 6-month period beginning on the 
date of issuance of the rural renaissance bond 
or, in the case of a rural renaissance bond, the 
proceeds of which are to be loaned to 2 or more 
borrowers, such binding commitment will be in-
curred within the 6-month period beginning on 
the date of the loan of such proceeds to a bor-
rower, and 
‘‘(C) such projects will be completed with 
due diligence and the proceeds from the sale of 
the issue will be spent with due diligence. 
‘‘(2) EXTENSION
OF
PERIOD.—Upon submis-
sion of a request prior to the expiration of the period 
described in paragraph (1)(A), the Secretary may 
extend such period if the qualified issuer establishes 
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that the failure to satisfy the 5-year requirement is 
due to reasonable cause and the related projects will 
continue to proceed with due diligence. 
‘‘(3) FAILURE TO SPEND REQUIRED AMOUNT 
OF BOND PROCEEDS WITHIN 5 YEARS.—To the ex-
tent that less than 95 percent of the proceeds of 
such issue are expended by the close of the 5-year 
period beginning on the date of issuance (or if an 
extension has been obtained under paragraph (2), by 
the close of the extended period), the qualified issuer 
shall redeem all of the nonqualified bonds within 90 
days after the end of such period. For purposes of 
this paragraph, the amount of the nonqualified 
bonds required to be redeemed shall be determined 
in the same manner as under section 142. 
‘‘(i) SPECIAL RULES RELATING TO ARBITRAGE.—A 
bond which is part of an issue shall not be treated as a 
rural renaissance bond unless, with respect to the issue 
of which the bond is a part, the qualified issuer satisfies 
the arbitrage requirements of section 148 with respect to 
proceeds of the issue. 
‘‘(j) QUALIFIED ISSUER.—For purposes of this sec-
tion— 
‘‘(1) IN GENERAL.—The term ‘qualified issuer’ 
means any not-for-profit cooperative lender which 
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