II 110th CONGRESS 1st Session S. 672 IN THE SENATE OF THE UNITED STATES February 16, 2007 Mr. Salazar (for himself and Mr. Smith) 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 tax-exempt financing for qualified renewable energy facilities, and for other purposes.

1.

Short title

This Act may be cited as the Rural Community Renewable Energy Bonds Act.

2.

Tax-exempt financing of qualified renewable energy facilities

(a)

In general

Subsection (a) of section 142 of the Internal Revenue Code of 1986 (relating to exempt facility bond) is amended— (1)by striking or at the end of paragraph (14), (2)by striking the period at the end of paragraph (15) and inserting , or, and (3)by inserting at the end the following new paragraph: (16)qualified renewable energy facilities. . (b)

Definition

Section 142 of the Internal Revenue Code of 1986 is amended by inserting at the end the following new subsection: (n)

Qualified renewable energy facilities

For purposes of subsection (a)(16)— (1)

In general

The term qualified renewable energy facility means any facility— (A)described in paragraph (1), (2), (3), (4), (5), (6), or (9) of section 45(d) (relating to facilities using wind, closed-loop biomass, open-loop biomass, geothermal, solar, small irrigation, land fill gas, or qualified hydropower to produce electricity), (B)except in the case of a facility described in section 45(d)(5), the nameplate capacity rating of which is not more than 40 megawatts, and (C)at least— (i)49 percent of which is owned and controlled, including unrestricted voting rights, by 1 or more persons who are residents of the State in which such facility is located, and (ii)10 percent of which is owned and controlled, including unrestricted voting rights, by 1 or more persons who are residents of the local area in which such facility is located. (2)

Determination of ownership

For purposes of paragraph (1)(C), ownership sufficient to meet the requirement of clause (ii) thereof may be taken into account for purposes of determining if the requirement of clause (i) thereof is met. (3)

Definitions

For purposes of this subsection— (A)

Resident

The term resident means— (i)in the case of an individual, an individual whose primary residence is in the State or local area in which the facility is located, and (ii)in the case of an entity, at least 50 percent of such entity is owned by individuals who are treated as residents of such State or local area under clause (i). For purposes of clause (ii), section 318 (relating to constructive ownership of stock), as modified by section 382(l)(3)(A), shall apply for purposes of determining ownership of stock in a corporation. Similar principles shall apply for purposes of determining ownership of interests in any other entity.(B)

Local area

The term local area means, with respect to any facility, an area within the 200-mile radius of such facility. . (c)

Exemption from volume cap

Paragraph (3) of section 146(g) of the Internal Revenue Code of 1986 (exempting certain exempt facility bonds from the state volume caps) is amended by striking or (15) and inserting (15), or (16). (d)

Effective date

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