SA 3716. Mr. HARKIN submitted an amendment intended to be proposed to amendment SA 3500 proposed by Mr. Harkin (for himself, Mr. Chambliss, Mr. Baucus, and Mr. Grassley) to the bill H.R. 2419, to provide for the continuation of agricultural programs through fiscal year 2012, and for other purposes; which was ordered to lie on the table; as follows:

Beginning on page 1511, line 25, strike all through page 1517, line 19, and insert the following:
``(2) ALLOCATION BY SECRETARY.--
``(A) IN GENERAL.--In accordance with subparagraph (B), the Secretary shall allocate the amount described in paragraph (1) among at least 20 qualified projects, or such lesser number of qualified projects--
``(i) with proper applications filed after 12 months after the adoption of the selection process under subparagraph (B), and
``(ii) for purposes provided for in regional investment strategies for which regional innovation grants are awarded under section 385F of subtitle I of the Consolidated Farm and Rural Development Act.
``(B) SELECTION PROCESS.--In consultation with the Secretary of Agriculture, the Secretary shall adopt a process to select projects described in subparagraph (A). Under such process, the Secretary shall not allocate more than 15 percent of the allocation under subparagraph (A) to qualified projects within a single State.
``(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 treated as interest income.
``(h) Special Rules Relating to Expenditures.--
``(1) IN GENERAL.--An issue shall be treated as meeting the requirements of this subsection if, as of 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 proceeds 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 qualified borrowers, such binding commitment will be incurred within the 6-month period beginning on the date of the loan of such proceeds to a qualified borrower, 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 submission 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 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 extent 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) Definitions and Special Rules Relating to Issuers and Borrowers.--For purposes of this section--
``(1) QUALIFIED ISSUER.--The term `qualified issuer' means--
``(A) a rural renaissance bond lender,
``(B) a cooperative electric company, or
``(C) a governmental body.
``(2) QUALIFIED BORROWER.--The term `qualified borrower' means--
``(A) a mutual or cooperative electric company described in section 501(c)(12) or 1381(a)(2)(C), or
``(B) a governmental body.
``(3) RURAL RENAISSANCE BOND LENDER.--The term `rural renaissance bond lender' means a lender which is a cooperative which is owned by, or has outstanding loans to, 100 or more cooperative electric companies and is in existence on February 1, 2002, and shall include any affiliated entity which is controlled by such lender.
``(4) COOPERATIVE ELECTRIC COMPANY.--The term `cooperative electric company' means a mutual or cooperative electric company described in section 501(c)(12) or section 1381(a)(2)(C), or a not-for-profit electric utility which has received a loan or loan guarantee under the Rural Electrification Act.
``(5) GOVERNMENTAL BODY.--The term `governmental body' means any State, territory, possession of the United States, the District of Columbia, Indian tribal government, and any political subdivision thereof.
``(k) Special Rules Relating to Pool Bonds.--No portion of a pooled financing bond may be allocable to loan unless the borrower has entered into a written loan commitment for such portion prior to the issue date of such issue.
``(l) Other Definitions and Special Rules.--For purposes of this section--
``(1) BOND.--The term `bond' includes any obligation.
``(2) POOLED FINANCING BOND.--The term `pooled financing bond' shall have the meaning given such term by section 149(f)(4)(A).
``(3) RURAL AREA.--The term `rural area' shall have the meaning given such term by section 1393(a)(2).
``(4) PARTNERSHIP; S CORPORATION; AND OTHER PASS-THRU ENTITIES.--
``(A) IN GENERAL.--Under regulations prescribed by the Secretary, in the case of a partnership, trust, S corporation, or other pass-thru entity, rules similar to the rules of section 41(g) shall apply with respect to the credit allowable under subsection (a).
``(B) NO BASIS ADJUSTMENT.--In the case of a bond held by a partnership or an S corporation, rules similar to the rules under section 1397E(i) shall apply.
``(5) BONDS HELD BY REGULATED INVESTMENT COMPANIES.--If any rural renaissance bond is held by a regulated investment company, the credit determined under subsection (a) shall be allowed to shareholders of such company under procedures prescribed by the Secretary.
``(6) REPORTING.--Issuers of rural renaissance bonds shall submit reports similar to the reports required under section 149(e).
``(7) TERMINATION.--This section shall not apply with respect to any bond issued after December 31, 2008.''.


(As printed in the Congressional Record for the Senate on Nov 15, 2007.)