[Congressional Bills 106th Congress]
[From the U.S. Government Publishing Office]
[H.R. 5259 Introduced in House (IH)]







106th CONGRESS
  2d Session
                                H. R. 5259

  To amend the Internal Revenue Code of 1986 to clarify the treatment 
under the tax-exempt bond rules of prepayments for certain commodities 
                  and of mineral production payments.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                           September 21, 2000

  Mr. Norwood (for himself and Mr. Collins) introduced the following 
      bill; which was referred to the Committee on Ways and Means

_______________________________________________________________________

                                 A BILL


 
  To amend the Internal Revenue Code of 1986 to clarify the treatment 
under the tax-exempt bond rules of prepayments for certain commodities 
                  and of mineral production payments.

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Municipal Utility Reliability Act of 
2000''.

SEC. 2. ARBITRAGE RULES NOT TO APPLY TO PREPAYMENTS FOR NATURAL GAS AND 
              OTHER COMMODITIES.

    (a) In General.--Subsection (b) of section 148 of the Internal 
Revenue Code of 1986 (defining higher yielding investments) is amended 
by adding at the end the following new paragraph:
            ``(4) Exception for certain prepayments to ensure commodity 
        supply.--The term `investment property' shall not include a 
        prepayment by an issuer of bonds in order to ensure the supply 
        of a commodity necessary to, and used in a business of, a 
        governmental unit.''
    (b) Effective Date.--The amendment made by this section shall take 
effect as if included in the amendments made by section 1301 of the Tax 
Reform Act of 1986.

SEC. 3. MINERAL PRODUCTION PAYMENTS NOT TREATED AS LOANS.

    (a) Exception From Private Loan Financing Test.--Paragraph (2) of 
section 141(c) of the Internal Revenue Code of 1986 (relating to 
private loan financing test) is amended by striking ``or'' at the end 
of subparagraph (A), by striking the period at the end of subparagraph 
(B) and inserting ``, or'', and by adding at the end the following new 
subparagraph:
                    ``(C) is a production payment (within the meaning 
                of section 636).''
    (b) Exception From Arbitrage Rules.--Subparagraph (B) of section 
148(b)(2) of such Code (defining investment property) is amended to 
read as follows:
                    ``(B) any obligation other than production payment 
                (within the meaning of section 636),''.
    (c) Effective Date.--The amendments made by this section shall take 
effect as if included in the amendments made by section 1301 of the Tax 
Reform Act of 1986.
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