[Congressional Bills 110th Congress]
[From the U.S. Government Publishing Office]
[S. 1910 Introduced in Senate (IS)]







110th CONGRESS
  1st Session
                                S. 1910

  To amend the Internal Revenue Code of 1986 to provide that amounts 
derived from Federal grants and State matching funds in connection with 
   revolving funds established in accordance with the Federal Water 
   Pollution Control Act and the Safe Drinking Water Act will not be 
treated as proceeds or replacement proceeds for purposes of section 148 
                             of such Code.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             August 1, 2007

     Mr. Reed (for himself, Ms. Snowe, Mr. Kerry, and Mr. Kennedy) 
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 provide that amounts 
derived from Federal grants and State matching funds in connection with 
   revolving funds established in accordance with the Federal Water 
   Pollution Control Act and the Safe Drinking Water Act will not be 
treated as proceeds or replacement proceeds for purposes of section 148 
                             of such Code.

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

SECTION 1. TREATMENT OF FEDERAL GRANTS AND STATE MATCHING FUNDS IN 
              CONNECTION WITH REVOLVING FUNDS ESTABLISHED IN ACCORDANCE 
              WITH FEDERAL WATER POLLUTION CONTROL ACT AND SAFE 
              DRINKING WATER ACT.

    (a) In General.--Section 148(a) of the Internal Revenue Code of 
1986 (defining arbitrage bond) is amended by adding at the end the 
following new sentence: ``For purposes of determining whether a bond is 
an `arbitrage bond' under this section, any amount derived from an 
investment of any Federal grant or related State match made in 
connection with any revolving fund established in accordance with title 
VI of the Federal Water Pollution Control Act or section 1452 of the 
Safe Drinking Water Act (or subsequent reauthorizations of such Acts) 
shall not be taken into account.''.
    (b) Effective Date.--The amendment made by this section shall apply 
to obligations issued or outstanding after the date of the enactment of 
this Act, but only with respect to amounts earned on outstanding 
obligations after such date of enactment.
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