[Congressional Record Volume 151, Number 23 (Thursday, March 3, 2005)]
[Senate]
[Pages S2006-S2009]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. COLEMAN (for himself, Mr. Pryor, Mr. DeWine, and Mr. 
        Graham):
  S. 502. A bill to revitalize rural America and rebuild main street, 
and for other purposes; to the Committee on Finance.
  Mr. COLEMAN. Mr. President, traveling throughout rural Minnesota, I 
see a very real need for the revitalization and rebuilding of Main 
Streets, and this is why today I am introducing the Rural Renaissance 
Act with my good friends Senator Pryor of Arkansas, Senator Graham of 
South Carolina, and Senator DeWine of Ohio. This legislation 
acknowledges that rural America needs significant infrastructure 
investment if it is to join with the rest of the Nation in an economic 
recovery, and our bill proposes to apply $50 billion toward this end.
  Many Minnesota cities and towns need help with updating or expanding 
their drinking water supply systems or their wastewater treatment 
systems. The West Central Initiative and the USDA both estimate that 
there is a $1.5 billion gap between available local, State, and Federal 
resources and the amount needed by Minnesota communities. There are 
similar needs in communities throughout the rest of the Nation. 
Decaying physical infrastructure needs to be addressed because it 
impacts more than just health and quality of life. It also impacts the 
ability of a city or town to build housing, provide services, ensure 
access to information, and grow jobs. Throughout rural America, 
progress is being made in many areas, but in others, a lack of funding 
is impacting the ability of communities to address very critical albeit 
basic needs. Here is an example of the physical infrastructure 
challenges facing rural America: The Environmental Protection Agency 
estimates that communities will need an estimated $300 billion to $1 
trillion over the next 20 years to repair, replace, or upgrade drinking 
water and wastewater facilities, accommodate a growing population, and 
meet water quality standards.
  Current residents and businesses of rural communities face a 
challenge when it comes to accessing the Internet. This reality means 
that these cities and towns are set back when it comes to attracting 
new residents and businesses. While the number of broadband subscribers 
has risen dramatically in recent years, studies conducted by the FCC, 
DOC, and USDA all suggest that urban and high-income areas are far 
outpacing deployment in rural and low-income areas. As a result of 
these disparities, rural America suffers adverse economic and social 
consequences. The USDA has reported that in 2000, less than five 
percent of towns with populations of 10,000 or less had access to 
broadband. Likewise, the Commerce Department has found that 21.2 
percent of Internet users in urban areas have access to high-speed 
connections, while only 12.2 percent of Internet users in rural areas 
have this technology.
  Housing is essential if communities want to keep the businesses they 
have or attract new ones. Employers need to know that employees will be 
able to find housing that they can afford in or near the community. 
Housing efforts must emphasize new construction and rehabilitation 
alike. Communities need new units to attract new families and they must 
have the ability to help residents remodel and renovate existing 
housing. Housing in rural America is clearly an economic development 
issue. It is clear that these physical infrastructure needs have 
substantial financial implications for rural America. Some 1.8 million 
homes and apartments are moderately or severely substandard. Our Rural 
Renaissance Act addresses these needs. The impact of doing nothing 
poses great risks for the future of rural cities and towns.
  As you can see, the need for a rural renaissance is clear. Greater 
Minnesota alone needs almost $7 billion over the next 20 years to 
modernize infrastructure, accommodate the increasing population, and 
meet current water quality standards. The cost of bringing high speed 
Internet access to the rest of rural America is estimated at about 
$10.9 billion. These are just a couple of examples but the most vivid, 
I think, are just the closed stores you see up and down our Main 
Streets. We'd like to turn these towns around like we did in St. Paul, 
and we can.
  Our Rural Renaissance Act will fund these infrastructure 
improvements--and also provide for community facilities and farmer-
owned and value-added projects--by sending $50 billion out to rural 
America in one to three years at a cost of about $15 billion over 10 
years. It can be done through Federal bonds,

[[Page S2007]]

just as we helped pay for the costs of World War II and as State and 
locals pay for many infrastructure developments. The key, however, is 
that these monies will be made available to States and locals, as well 
as farmer-owned coops and other eligible entities, in the form of 
grants and low interest loans.
  We have seen tremendous support from groups back home and across the 
country who share a commitment to revitalizing rural America and 
rebuilding our Main Streets. Those supporting this bill include, the 
Association of Minnesota Counties, the League of Minnesota Cities, the 
Minnesota Rural Water Association, the Independent Community Bankers of 
Minnesota, the Minnesota Rural Electric Association, the University of 
Minnesota, the Rural Broadband Coalition, the National Council of 
Farmer Cooperatives, the Telecommunications Industry Association, the 
American Sugarbeet Growers Association, Land O' Lakes, the Minnesota 
Corn Growers Association, the AgCountry Farm Credit Services, the 
AgStar Financial Services, the Farm Credit Services of Grand Forks, the 
Farm Credit Services of Minnesota Valley, AgriBank, the Minnesota 
Association of Wheat Growers, the Minnesota Association of 
Cooperatives, the Wisconsin Federation of Cooperatives, the Minnesota 
Barley Growers Association, the Minnesota Soybean Growers Association, 
the Minnesota Nursery and Landscape Association, the America Soybean 
Association, the Minnesota Association of Townships, the Minnesota 
Chapter of the National Association of Housing and Redevelopment 
Officials, and the Red River Valley Sugarbeet Growers Association.
  These groups and many others agree with us when we say that we need 
the Rural Renaissance Act. And we look forward to working with them on 
this legislation. Together, we can create economic opportunity in rural 
America and grow jobs.
  I ask unanimous consent that the text of the Rural Renaissance Act be 
printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 502

       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 ``Rural Renaissance Act''.

     SEC. 2. RURAL RENAISSANCE CORPORATION.

       Subtitle D of the Consolidated Farm and Rural Development 
     Act (7 U.S.C. 1981 et seq.) is amended by adding at the end 
     the following new section:

     ``SEC. 379E. RURAL RENAISSANCE CORPORATION.

       ``(a) Establishment and Status.--There is established a 
     body corporate to be known as the `Rural Renaissance 
     Corporation' (hereafter in this section referred to as the 
     `Corporation'). The Corporation is not a department, agency, 
     or instrumentality of the United States Government, and shall 
     not be subject to title 31, United States Code.
       ``(b) Principal Office; Application of Laws.--The principal 
     office and place of business of the Corporation shall be in 
     the District of Columbia, and, to the extent consistent with 
     this section, the District of Columbia Business Corporation 
     Act (D.C. Code 29-301 et seq.) shall apply.
       ``(c) Functions of Corporation.--The Corporation shall--
       ``(1) issue rural renaissance bonds for the financing of 
     qualified projects as required under section 54 of the 
     Internal Revenue Code of 1986,
       ``(2) establish an allocation plan as required under 
     section 54(f)(2)(A) of such Code,
       ``(3) establish and operate the Rural Renaissance Trust 
     Account as required under section 54(i) of such Code,
       ``(4) perform any other function the sole purpose of which 
     is to carry out the financing of qualified projects through 
     rural renaissance bonds, and
       ``(5) not later than February 15 of each year submit a 
     report to Congress--
       ``(A) describing the activities of the Corporation for the 
     preceding year, and
       ``(B) specifying whether the amounts deposited and expected 
     to be deposited in the Rural Renaissance Trust Account are 
     sufficient to fully repay at maturity the principal of any 
     outstanding rural renaissance bonds issued pursuant to such 
     section 54.
       ``(d) Powers of Corporation.--The Corporation--
       ``(1) may sue and be sued, complain and defend, in its 
     corporate name, in any court of competent jurisdiction,
       ``(2) may adopt, alter, and use a seal, which shall be 
     judicially noticed,
       ``(3) may prescribe, amend, and repeal such rules and 
     regulations as may be necessary for carrying out the 
     functions of the Corporation,
       ``(4) may make and perform such contracts and other 
     agreements with any individual, corporation, or other private 
     or public entity however designated and wherever situated, as 
     may be necessary for carrying out the functions of the 
     Corporation,
       ``(5) may determine and prescribe the manner in which its 
     obligations shall be incurred and its expenses allowed and 
     paid,
       ``(6) may, as necessary for carrying out the functions of 
     the Corporation, employ and fix the compensation of employees 
     and officers,
       ``(7) may lease, purchase, or otherwise acquire, own, hold, 
     improve, use, or otherwise deal in and with such property 
     (real, personal, or mixed) or any interest therein, wherever 
     situated, as may be necessary for carrying out the functions 
     of the Corporation,
       ``(8) may accept gifts or donations of services or of 
     property (real, personal, or mixed), tangible or intangible, 
     in furtherance of the purposes of this section, and
       ``(9) shall have such other powers as may be necessary and 
     incident to carrying out this section.
       ``(e) Nonprofit Entity; Restriction on Use of Moneys; 
     Conflict of Interests; Independent Audits.--
       ``(1) Nonprofit entity.--The Corporation shall be a 
     nonprofit corporation and shall have no capital stock.
       ``(2) Restriction.--No part of the Corporation's revenue, 
     earnings, or other income or property shall inure to the 
     benefit of any of its directors, officers, or employees, and 
     such revenue, earnings, or other income or property shall 
     only be used for carrying out the purposes of this section.
       ``(3) Conflict of interests.--No director, officer, or 
     employee of the Corporation shall in any manner, directly or 
     indirectly participate in the deliberation upon or the 
     determination of any question affecting his or her personal 
     interests or the interests of any corporation, partnership, 
     or organization in which he or she is directly or indirectly 
     interested.
       ``(4) Independent audits.--An independent certified public 
     accountant shall audit the financial statements of the 
     Corporation each year. The audit shall be carried out at the 
     place at which the financial statements normally are kept and 
     under generally accepted auditing standards. A report of the 
     audit shall be available to the public and shall be included 
     in the report required under subsection (c)(5).
       ``(f) Tax Exemption.--The Corporation, including its 
     franchise and income, is exempt from taxation imposed by the 
     United States, by any territory or possession of the United 
     States, or by any State, county, municipality, or local 
     taxing authority.
       ``(g) Management of Corporation.--
       ``(1) Board of directors; membership; designation of 
     chairperson and vice chairperson; appointment considerations; 
     term; vacancies.--
       ``(A) Board of directors.--The management of the 
     Corporation shall be vested in a board of directors composed 
     of 7 members appointed by the President, by and with the 
     advice and consent of the Senate.
       ``(B) Chairperson and vice chairperson.--The President 
     shall designate 1 member of the Board to serve as Chairperson 
     of the Board and 1 member to serve as Vice Chairperson of the 
     Board.
       ``(C) Individuals from private life.--Five members of the 
     Board shall be appointed from private life.
       ``(D) Federal officers and employees.--Two members of the 
     Board shall be appointed from among officers and employees of 
     agencies of the United States concerned with rural 
     development.
       ``(E) Appointment considerations.--All members of the Board 
     shall be appointed on the basis of their understanding of and 
     sensitivity to rural development processes. Members of the 
     Board shall be appointed so that not more than 4 members of 
     the Board are members of any 1 political party.
       ``(F) Terms.--Members of the Board shall be appointed for 
     terms of 3 years, except that of the members first appointed, 
     as designated by the President at the time of their 
     appointment, 2 shall be appointed for terms of 1 year and 2 
     shall be appointed for terms of 2 years.
       ``(G) Vacancies.--A member of the Board appointed to fill a 
     vacancy occurring before the expiration of the term for which 
     that member's predecessor was appointed shall be appointed 
     only for the remainder of that term. Upon the expiration of a 
     member's term, the member shall continue to serve until a 
     successor is appointed and is qualified.
       ``(2) Compensation, actual, necessary, and transportation 
     expenses.--Members of the Board shall serve without 
     additional compensation, but may be reimbursed for actual and 
     necessary expenses not exceeding $100 per day, and for 
     transportation expenses, while engaged in their duties on 
     behalf of the Corporation.
       ``(3) Quorum.--A majority of the Board shall constitute a 
     quorum.
       ``(4) President of corporation.--The Board of Directors 
     shall appoint a president of the Corporation on such terms as 
     the Board may determine.''.

     SEC. 3. CREDIT TO HOLDERS OF RURAL RENAISSANCE BONDS.

       (a) In General.--Part IV of subchapter A of chapter 1 of 
     the Internal Revenue Code of 1986 (relating to credits 
     against tax) is amended by adding at the end the following 
     new subpart:

[[Page S2008]]

  ``Subpart H--Nonrefundable Credit for Holders of Rural Renaissance 
                                 Bonds

``Sec. 54. Credit to holders of rural renaissance bonds.

     ``SEC. 54. CREDIT TO HOLDERS OF RURAL RENAISSANCE BONDS.

       ``(a) Allowance of Credit.--In the case of a taxpayer who 
     holds a rural renaissance bond on a credit allowance date of 
     such bond which occurs during the taxable year, there shall 
     be allowed as a credit against the tax imposed by this 
     chapter for such taxable year an amount equal to the sum of 
     the credits determined under subsection (b) with respect to 
     credit allowance dates during such year on which the taxpayer 
     holds such bond.
       ``(b) Amount of Credit.--
       ``(1) In general.--The amount of the credit determined 
     under this subsection with respect to any credit allowance 
     date for a rural renaissance bond is 25 percent of the annual 
     credit determined with respect to such bond.
       ``(2) Annual credit.--The annual credit determined with 
     respect to any rural renaissance bond is the product of--
       ``(A) the applicable credit rate, multiplied by
       ``(B) the outstanding face amount of the bond.
       ``(3) Applicable credit rate.--For purposes of paragraph 
     (2), the applicable credit rate with respect to an issue is 
     the rate equal to an average market yield (as of the day 
     before the date of sale of the issue) on outstanding long-
     term corporate debt obligations (determined in such manner as 
     the Secretary prescribes).
       ``(4) Credit allowance date.--For purposes of this section, 
     the term `credit allowance date' means--
       ``(A) March 15,
       ``(B) June 15,
       ``(C) September 15, and
       ``(D) December 15.

     Such term includes the last day on which the bond is 
     outstanding.
       ``(5) Special rule for issuance and redemption.--In the 
     case of a bond which is issued during the 3-month period 
     ending on a credit allowance date, the amount of the credit 
     determined under this subsection with respect to such credit 
     allowance date shall be a ratable portion of the credit 
     otherwise determined based on the portion of the 3-month 
     period during which the bond is outstanding. A similar rule 
     shall apply when the bond is redeemed.
       ``(c) Limitation Based on Amount of Tax.--
       ``(1) In general.--The credit allowed under subsection (a) 
     for any taxable year shall not exceed the excess of--
       ``(A) the sum of the regular tax liability (as defined in 
     section 26(b)) plus the tax imposed by section 55, over
       ``(B) the sum of the credits allowable under this part 
     (other than this subpart and subpart C).
       ``(2) Carryover of unused credit.--If the credit allowable 
     under subsection (a) exceeds the limitation imposed by 
     paragraph (1) for such taxable year, such excess shall be 
     carried to the succeeding taxable year and added to the 
     credit allowable under subsection (a) for such taxable year.
       ``(d) 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.
       ``(e) Rural Renaissance Bond.--For purposes of this part, 
     the term `rural renaissance bond' means any bond issued as 
     part of an issue if--
       ``(1) 95 percent or more of the proceeds from the sale of 
     such issue are to be used--
       ``(A) for expenditures incurred after the date of the 
     enactment of this section for any qualified project, or
       ``(B) for deposit in the Rural Renaissance Trust Account 
     for repayment of rural renaissance bonds at maturity,
       ``(2) the bond is issued by the Rural Renaissance 
     Corporation, is in registered form, and meets the rural 
     renaissance bond limitation requirements under subsection 
     (f),
       ``(3) except for bonds issued in accordance with subsection 
     (f)(4), the term of each bond which is part of such issue 
     does not exceed 30 years,
       ``(4) the payment of principal with respect to such bond is 
     the obligation of the Rural Renaissance Corporation, and
       ``(5) the issue meets the requirements of subsection (g) 
     (relating to arbitrage).
       ``(f) Limitation on Amount of Bonds Designated.--
       ``(1) National limitation.--There is a rural renaissance 
     bond limitation for each calendar year. Such limitation is--
       ``(A) for 2006--
       ``(i) with respect to bonds described in subsection 
     (e)(1)(A), $50,000,000,000, plus
       ``(ii) with respect to bonds described in subsection 
     (e)(1)(B), such amount (not to exceed $15,000,000,000) as 
     determined necessary by the Rural Renaissance Corporation to 
     provide funds in the Rural Renaissance Trust Account for the 
     repayment of rural renaissance bonds at maturity, and
       ``(B) except as provided in paragraph (3), zero thereafter.
       ``(2) Limitation allocated to qualified projects among 
     states.--
       ``(A) In general.--Subject to subparagraph (B), the 
     limitation applicable under paragraph (1)(A)(i) for any 
     calendar year shall be allocated by the Rural Renaissance 
     Corporation for qualified projects among the States under an 
     allocation plan established by the Corporation and submitted 
     to Congress for consideration.
       ``(B) Minimum allocations to states.--In establishing the 
     allocation plan under subparagraph (A), the Rural Renaissance 
     Corporation shall ensure that the aggregate amount allocated 
     for qualified projects located in each State under such plan 
     is not less than $500,000,000.
       ``(3) Carryover of unused limitation.--If for any calendar 
     year--
       ``(A) the rural renaissance bond limitation amount, exceeds
       ``(B) the amount of bonds issued during such year by the 
     Rural Renaissance Corporation, the rural renaissance bond 
     limitation amount for the following calendar year shall be 
     increased by the amount of such excess. Any carryforward of a 
     rural renaissance bond limitation amount may be carried only 
     to calendar year 2007 or 2008.
       ``(4) Issuance of small denomination bonds.--From the rural 
     renaissance bond limitation for each year, the Rural 
     Renaissance Corporation shall issue a limited quantity of 
     rural renaissance bonds in small denominations suitable for 
     purchase as gifts by individual investors wishing to show 
     their support for investing in rural America.
       ``(g) Special Rules Relating to Arbitrage.--
       ``(1) In general.--Subject to paragraph (2), an issue shall 
     be treated as meeting the requirements of this subsection if 
     as of the date of issuance, the Rural Renaissance Corporation 
     reasonably expects--
       ``(A) to spend at least 95 percent of the proceeds from the 
     sale of the issue for 1 or more qualified projects within the 
     3-year period beginning on such date,
       ``(B) to incur a binding commitment with a third party to 
     spend at least 10 percent of the proceeds from the sale of 
     the issue, or to commence construction, with respect to such 
     projects within the 6-month period beginning on such date, 
     and
       ``(C) to proceed with due diligence to complete such 
     projects and to spend the proceeds from the sale of the 
     issue.
       ``(2) Rules regarding continuing compliance after 3-year 
     determination.--If at least 95 percent of the proceeds from 
     the sale of the issue is not expended for 1 or more qualified 
     projects within the 3-year period beginning on the date of 
     issuance, but the requirements of paragraph (1) are otherwise 
     met, an issue shall be treated as continuing to meet the 
     requirements of this subsection if either--
       ``(A) the Rural Renaissance Corporation uses all unspent 
     proceeds from the sale of the issue to redeem bonds of the 
     issue within 90 days after the end of such 3-year period, or
       ``(B) the following requirements are met:
       ``(i) The Rural Renaissance Corporation spends at least 75 
     percent of the proceeds from the sale of the issue for 1 or 
     more qualified projects within the 3-year period beginning on 
     the date of issuance.
       ``(ii) The Rural Renaissance Corporation spends at least 95 
     percent of the proceeds from the sale of the issue for 1 or 
     more qualified projects within the 4-year period beginning on 
     the date of issuance, and uses all unspent proceeds from the 
     sale of the issue to redeem bonds of the issue within 90 days 
     after the end of the 4-year period beginning on the date of 
     issuance.
       ``(h) Recapture of Portion of Credit Where Cessation of 
     Compliance.--
       ``(1) In general.--If any bond which when issued purported 
     to be a rural renaissance bond ceases to be such a qualified 
     bond, the Rural Renaissance Corporation shall pay to the 
     United States (at the time required by the Secretary) an 
     amount equal to the sum of--
       ``(A) the aggregate of the credits allowable under this 
     section with respect to such bond (determined without regard 
     to subsection (c)) for taxable years ending during the 
     calendar year in which such cessation occurs and the 2 
     preceding calendar years, and
       ``(B) interest at the underpayment rate under section 6621 
     on the amount determined under subparagraph (A) for each 
     calendar year for the period beginning on the first day of 
     such calendar year.
       ``(2) Failure to pay.--If the Rural Renaissance Corporation 
     fails to timely pay the amount required by paragraph (1) with 
     respect to such bond, the tax imposed by this chapter on each 
     holder of any such bond which is part of such issue shall be 
     increased (for the taxable year of the holder in which such 
     cessation occurs) by the aggregate decrease in the credits 
     allowed under this section to such holder for taxable years 
     beginning in such 3 calendar years which would have resulted 
     solely from denying any credit under this section with 
     respect to such issue for such taxable years.
       ``(3) Special rules.--
       ``(A) Tax benefit rule.--The tax for the taxable year shall 
     be increased under paragraph (2) only with respect to credits 
     allowed by reason of this section which were used to reduce 
     tax liability. In the case of credits not so used to reduce 
     tax liability, the carryforwards and carrybacks under section 
     39 shall be appropriately adjusted.
       ``(B) No credits against tax.--Any increase in tax under 
     paragraph (2) shall not be treated as a tax imposed by this 
     chapter for purposes of determining--
       ``(i) the amount of any credit allowable under this part, 
     or
       ``(ii) the amount of the tax imposed by section 55.
       ``(i) Rural Renaissance Trust Account.--
       ``(1) In general.--The following amounts shall be held in a 
     Rural Renaissance Trust

[[Page S2009]]

     Account by the Rural Renaissance Corporation:
       ``(A) The proceeds from the sale of all bonds issued under 
     this section.
       ``(B) The amount of any matching contributions with respect 
     to such bonds.
       ``(C) The investment earnings on proceeds from the sale of 
     such bonds.
       ``(D) Any earnings on any amounts described in subparagraph 
     (A), (B), or (C).
       ``(2) Use of funds.--Amounts in the Rural Renaissance Trust 
     Account may be used only to pay costs of qualified projects, 
     redeem rural renaissance bonds, and fund the operations of 
     the Rural Renaissance Corporation, except that amounts 
     withdrawn from the Rural Renaissance Trust Account to pay 
     costs of qualified projects may not exceed the aggregate 
     proceeds from the sale of rural renaissance bonds described 
     in subsection (e)(1)(A).
       ``(3) Use of remaining funds in rural renaissance trust 
     account.--Upon the redemption of all rural renaissance bonds 
     issued under this section, any remaining amounts in the Rural 
     Renaissance Trust Account shall be available to the Rural 
     Renaissance Corporation for any qualified project.
       ``(j) Qualified Project.--For purposes of this section--
       ``(1) In general.--Subject to paragraph (3), the term 
     `qualified project' means a project which--
       ``(A) includes 1 or more of the projects described in 
     paragraph (2),
       ``(B) is located in a rural area, and
       ``(C) is proposed by a State and approved by the Rural 
     Renaissance Corporation.
       ``(2) Projects described.--A project described in this 
     paragraph is--
       ``(A) a water or waste treatment project,
       ``(B) a conservation project, including any project to 
     protect water quality or air quality (including odor 
     abatement), any project to prevent soil erosion, and any 
     project to protect wildlife habitat, including any project to 
     assist agricultural producers in complying with Federal, 
     State, or local regulations,
       ``(C) an affordable housing project,
       ``(D) a community facility project, including hospitals, 
     fire and police stations, and nursing and assisted-living 
     facilities,
       ``(E) a value-added agriculture or renewable energy 
     facility project for agricultural producers or farmer-owned 
     entities, including any project to promote the production or 
     processing of ethanol, biodiesel, animal waste, biomass, raw 
     commodities, or wind as a fuel,
       ``(F) a rural venture capital project for, among others, 
     farmer-owned entities,
       ``(G) a distance learning or telemedicine project,
       ``(H) a project to expand broadband technology, and
       ``(I) a rural teleworks project.
       ``(3) Special rules.--For purposes of this subsection--
       ``(A) any project described in subparagraph (E) or (F) of 
     paragraph (2) for a farmer-owned entity may be considered a 
     qualified project if such entity is located in a rural area, 
     or in the case of a farmer-owned entity the headquarters of 
     which are located in a nonrural area, if the project is 
     located in a rural area, and
       ``(B) any project for a farmer-owned entity which is a 
     facility described in paragraph (2)(E) for agricultural 
     producers may be considered a qualified project regardless of 
     whether the facility is located in a rural or nonrural area.
       ``(4) Approval guidelines and criteria.--
       ``(A) In general.--Not later than 60 days after the date of 
     the enactment of this section, the Rural Renaissance 
     Corporation shall consult with the appropriate committees of 
     Congress regarding the development of guidelines and criteria 
     for the approval by the Corporation of projects as qualified 
     projects for inclusion in the allocation plan established 
     under subsection (f)(2)(A) and shall submit such guidelines 
     and criteria to such committees.
       ``(B) Appropriate committees of congress.--For purposes of 
     subparagraph (A), the term `appropriate committees of 
     Congress' means the Committee on Agriculture, Nutrition, and 
     Forestry, the Committee on Commerce, Science, and 
     Transportation, and the Committee on Finance of the Senate 
     and the Committee on Agriculture, the Committee on Energy and 
     Commerce, and the Committee on Ways and Means of the House of 
     Representatives.
       ``(k) Other Definitions and Special Rules.--For purposes of 
     this section--
       ``(1) Bond.--The term `bond' includes any obligation.
       ``(2) Rural area.--The term `rural area' means any area 
     other than--
       ``(A) a city or town which has a population of greater than 
     50,000 inhabitants, or
       ``(B) the urbanized area contiguous and adjacent to such a 
     city or town.
       ``(3) Rural renaissance corporation.--The term `Rural 
     Renaissance Corporation' means the Rural Renaissance 
     Corporation established under section 379E of the 
     Consolidated Farm and Rural Development Act.
       ``(4) Treatment of changes in use.--For purposes of 
     subsection (e)(1)(A), the proceeds from the sale of an issue 
     shall not be treated as used for a qualified project to the 
     extent that the Rural Renaissance Corporation takes any 
     action within its control which causes such proceeds not to 
     be used for a qualified project. The Secretary shall specify 
     remedial actions that may be taken (including conditions to 
     taking such remedial actions) to prevent an action described 
     in the preceding sentence from causing a bond to fail to be a 
     rural renaissance bond.
       ``(5) Partnership; s corporation; and other pass-thru 
     entities.--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).
       ``(6) 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.
       ``(7) Credits may be stripped.--Under regulations 
     prescribed by the Secretary--
       ``(A) In general.--There may be a separation (including at 
     issuance) of the ownership of a rural renaissance bond and 
     the entitlement to the credit under this section with respect 
     to such bond. In case of any such separation, the credit 
     under this section shall be allowed to the person who on the 
     credit allowance date holds the instrument evidencing the 
     entitlement to the credit and not to the holder of the bond.
       ``(B) Certain rules to apply.--In the case of a separation 
     described in subparagraph (A), the rules of section 1286 
     shall apply to the rural renaissance bond as if it were a 
     stripped bond and to the credit under this section as if it 
     were a stripped coupon.
       ``(8) Reporting.--The Rural Renaissance Corporation shall 
     submit reports similar to the reports required under section 
     149(e).''.
       (b) Amendments to Other Code Sections.--
       (1) Reporting.--Subsection (d) of section 6049 of the 
     Internal Revenue Code of 1986 (relating to returns regarding 
     payments of interest) is amended by adding at the end the 
     following new paragraph:
       ``(8) Reporting of credit on rural renaissance bonds.--
       ``(A) In general.--For purposes of subsection (a), the term 
     `interest' includes amounts includible in gross income under 
     section 54(d) and such amounts shall be treated as paid on 
     the credit allowance date (as defined in section 54(b)(4)).
       ``(B) Reporting to corporations, etc.--Except as otherwise 
     provided in regulations, in the case of any interest 
     described in subparagraph (A), subsection (b)(4) shall be 
     applied without regard to subparagraphs (A), (H), (I), (J), 
     (K), and (L)(i) of such subsection.
       ``(C) Regulatory authority.--The Secretary may prescribe 
     such regulations as are necessary or appropriate to carry out 
     the purposes of this paragraph, including regulations which 
     require more frequent or more detailed reporting.''.
       (2) Treatment for estimated tax purposes.--
       (A) Individual.--Section 6654 of such Code (relating to 
     failure by individual to pay estimated income tax) is amended 
     by redesignating subsection (m) as subsection (n) and by 
     inserting after subsection (l) the following new subsection:
       ``(m) Special Rule for Holders of Rural Renaissance 
     Bonds.--For purposes of this section, the credit allowed by 
     section 54 to a taxpayer by reason of holding a rural 
     renaissance bond on a credit allowance date shall be treated 
     as if it were a payment of estimated tax made by the taxpayer 
     on such date.''.
       (B) Corporate.--Subsection (g) of section 6655 of such Code 
     (relating to failure by corporation to pay estimated income 
     tax) is amended by adding at the end the following new 
     paragraph:
       ``(5) Special rule for holders of rural renaissance 
     bonds.--For purposes of this section, the credit allowed by 
     section 54 to a taxpayer by reason of holding a rural 
     renaissance bond on a credit allowance date shall be treated 
     as if it were a payment of estimated tax made by the taxpayer 
     on such date.''.
       (c) Clerical Amendments.--
       (1) The table of subparts for part IV of subchapter A of 
     chapter 1 of the Internal Revenue Code of 1986 is amended by 
     adding at the end the following new item:

  ``Subpart H. Nonrefundable Credit for Holders of Rural Renaissance 
                               Bonds.''.

       (2) Section 6401(b)(1) of such Code is amended by striking 
     ``and G'' and inserting ``G, and H''.
       (d) Effective Date.--The amendments made by this section 
     shall apply to obligations issued after December 31, 2005.
                                 ______