II 109th CONGRESS 1st Session S. 157 IN THE SENATE OF THE UNITED STATES January 25, 2005 Mr. Kohl introduced the following bill; which was read twice and referred to the Committee on Finance A BILL To amend the Internal Revenue Code of 1986 to permit interest on Federally guaranteed water, wastewater, and essential community facilities loans to be tax exempt.

1.

Tax-exempt interest on federally guaranteed water, wastewater, and federally guaranteed essential community facilities loans

(a)

In general

Section 149(b)(3)(A) of the Internal Revenue Code 1986 (relating to certain insurance programs) is amended by striking or at the end of clause (ii), by striking period at the end of clause (iii) and inserting , or, and by adding at the end the following new clause: (iv)any guarantee by the Secretary of Agriculture pursuant to section 306(a)(1) of the Consolidated Farm and Rural Development Act (7 U.S.C. 1926(a)(1)) to finance water, wastewater, and essential community facilities. . (b)

Effective date

The amendments made by this section shall apply to bonds issued after the date of the enactment of this Act.