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Rural Electrification Act

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Mr. Hughes, for himself, with special thanks to Mr. Wilson, submits the following:

A BILL

To amend the Internal Revenue Code of 1986 to make it easier for tax-exempt bonds to be issued to provide electric power facilities for rural areas.

Be it enacted by the Senate and House of Representatives of the United

States of America in Congress assembled,

SECTION 1. RULES RELATING TO ELECTRIC POWER FACILITIES FOR RURAL AREAS.

(a) IN GENERAL- Subsection (b) of section 141 of the Internal Revenue Code of 1986 (relating to private business tests) is amended by redesignating paragraphs (6) through (9) as paragraphs (7) through (10), respectively, and by inserting after paragraph (5) the following new paragraph:

  `(6) SPECIAL RULES FOR ELECTRIC POWER FACILITIES FOR RURAL AREAS-

  `(A) IN GENERAL- In the case of an issue 95 percent or more of the net  proceeds of which are to be used to provide a rural electric power facility--

  `(i) paragraphs (4) and (5) shall not apply, and

  `(ii) paragraphs (1) and (2) shall be applied by substituting `25 percent' for `10 percent' each place it appears.


  `(B) RURAL ELECTRIC POWER FACILITY- For purposes of subparagraph (A), the term `rural electric power facility' means a facility for furnishing electric energy if--

  `(i) the facility is to be owned by 1 or more rural governmental units or by a State or a political subdivision thereof,

  `(ii) at least 75 percent of the facility's name-plate electric capacity is reasonably expected to be furnished within the jurisdictions of 1 or more rural governmental units,

  `(iii)(I) the closest distance between the jurisdiction of each rural governmental unit to be served by the facility and the jurisdiction of each other rural governmental unit to be served by the facility is at least 25 miles, or

  `(II) if such closest distance is not at least 25 miles, the aggregate population of all of the rural governmental units to be served by the facility is less than 50,000, and


  `(iv) in the case of a facility no portion of which is to be owned directly by any rural governmental unit, the closest distance between the jurisdiction of each rural governmental unit to be served by the facility and the service area of any substantial tax-exempt entity furnishing electric energy is at least 25 miles.

  `(C) SUBSTANTIAL TAX-EXEMPT ENTITY FURNISHING ELECTRIC ENERGY- For purposes of subparagraph (B), a substantial tax-exempt entity furnishing electric energy is a governmental unit or other entity exempt from tax under this chapter which furnishes electric energy if it is reasonable to expect that--

  `(i) such entity will acquire (at project costs) at least 15 percent of the name-plate capacity of the facility being financed, or

  `(ii) such entity will purchase (at project costs) at least 15 percent of the electric energy to be provided by the facility being financed.

  `(D) RURAL GOVERNMENTAL UNIT- For purposes of this paragraph, the term `rural governmental unit' means a municipal governmental unit having within its jurisdiction a population of less than 35,000.

  `(E) POPULATION- For purposes of this paragraph, population shall be  determined in accordance with section 146(j) for the calendar year in which the date of issuance of the original issue occurs.'

  (b) EFFECTIVE DATE- The amendment made by subsection (a) shall apply to bonds issued after the date of the enactment of this Act.

PES: Raises the exemption level of bonds issued for rural electrification projects and energy corporations serving rural areas.

 

 

72 Hours to Debate

 

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(sorry, I missed this somehow)

 

UC recognized, 24 hours to object.

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The Senate passes the bill via unanimous consent.

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