S.Amdt. 3379

SA 3379. Mr. NELSON of Florida (for himself and Mr. Ensign) submitted
an amendment intended to be proposed to amendment SA 3336 proposed by
Mr. Baucus to the bill H.R. 4213, to amend the Internal Revenue Code of
1986 to extend certain expiring provisions, and for other purposes;
which was ordered to lie on the table; as follows:

On page 268, between lines 11 and 12, insert the following:

SEC. ___. CLEAN RENEWABLE WATER SUPPLY BONDS.

(a) In General.--Subpart I of 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 section:

``SEC. 54G. CLEAN RENEWABLE WATER SUPPLY BONDS.

``(a) Clean Renewable Water Supply Bonds.--For purposes of
this subpart, the term `clean renewable water supply bond'
means any bond issued as part of an issue if--
``(1) 100 percent of the available project proceeds of such
issue are to be used for capital expenditures incurred by
qualified borrowers for 1 or more qualified projects,
``(2) the bond is issued by a qualified issuer,
``(3) the issuer designates such bond for purposes of this
section, and
``(4) in the case of a bond issued by a qualified issuer
before 2019, the bond is issued--
``(A) pursuant to an allocation by the Secretary to such
issuer of a portion of the national clean renewable water
supply bond limitation under subsection (b), and
``(B) not later than 6 months after the date that such
qualified issuer receives an allocation under subsection (b).

``Any allocation under subsection (b) not used within the 6-
month period described in paragraph (4)(B) shall be applied
to increase the national clean renewable water supply bond
limitation for the next succeeding application period under
subsection (b)(2)(B).
``(b) National Limitation on Amount of Bonds Designated.--
``(1) In general.--There is a national clean renewable
water supply bond limitation for each calendar year before
2019. Such limitation is--
``(A) $0 for 2009,
``(B) $100,000,000 for 2010,
``(C) $150,000,000 for 2011,
``(D) $200,000,000 for 2012,
``(E) $250,000,000 for 2013,
``(F) $500,000,000 for 2014,
``(G) $750,000,000 for 2015,
``(H) $1,000,000,000 for 2016,
``(I) $1,500,000,000 for 2017, and
``(J) $1,750,000,000 for 2018.
``(2) Allocation of limitation.--
``(A) In general.--The limitation under paragraph (1) shall
be allocated by the Secretary among qualified projects as
provided in this paragraph.
``(B) Method of allocation.--For each calendar year after
2009 for which there is a national clean renewable water
supply bond limitation, the Secretary shall publish a notice
soliciting applications by qualified issuers for allocations
of such limitation to qualified projects. Such notice shall
specify a 3-month application period in the calendar year
during which the Secretary will accept such applications.
Within 30 days after the end of such application period, and
subject to the requirements of subparagraph (C), the
Secretary shall allocate such limitation to qualified
projects on a first-come, first-served basis, based on the
order in which such applications are received from qualified
issuers.
``(C) Allocation requirements.--
``(i) Certifications regarding regulatory approvals.--No
portion of the national clean renewable water supply bond
limitation shall be allocated to a qualified project unless
the qualified issuer has certified in its application for
such allocation that as of the date of such application the
qualified issuer or qualified borrower has received all
Federal and State regulatory approvals necessary to construct
the qualified project.
``(ii) Restriction on allocations to large projects or to
individual projects.--

``(I) In general.--Except as provided in subclause (III),
for any calendar year the Secretary shall not allocate more
than 60 percent of the national clean renewable water supply
bond limitation to 1 or more large projects, more than 18
percent of such limitation to any single project that is a
large project, or more than 12 percent of such limitation to
any single project that is not a large project.
``(II) Definition of large project.--For purposes of
subclause (I), the term `large project' means a qualified
project that is designed to deliver more than 10,000,000
gallons of water per day.
``(III) Exception to restriction.--Subclause (I) shall not
apply to the extent its application would cause any portion
of the national clean renewable water supply bond limitation
for the calendar year to remain unallocated, based on
applications for allocations of such limitation received by
the Secretary during the application period referred to in
subparagraph (B).

``(3) Carryover of unused limitation.--If the clean
renewable water supply bond limitation for any calendar year
exceeds the aggregate amount allocated under paragraph (2)
for such year, such limitation for the succeeding calendar
year shall be increased by the amount of such excess.
``(c) Maturity Limitation.--
``(1) In general.--A bond shall not be treated as a clean
renewable water supply bond if the maturity of such bond
exceeds 20 years.
``(2) Coordination with section 54a.--The maturity
limitation in section 54A(d)(5) shall not apply to any clean
renewable water supply bond.
``(d) Refinancing Rules.--For purposes of paragraph (a)(1),
a qualified project may be refinanced with proceeds of a
clean renewable water supply bond only if the indebtedness
being refinanced (including any obligation directly or
indirectly refinanced by such indebtedness) was originally
incurred by a qualified borrower after the date of the
enactment of this section.
``(e) Definitions.--For purposes of this section--
``(1) Governmental body.--The term `governmental body'
means any State or Indian tribal government, or any political
subdivision thereof.
``(2) Local water company.--The term `local water company'
means any entity responsible for providing water service to
the general public (including electric utility, industrial,
agricultural, commercial, or residential users) pursuant to
State or tribal law.
``(3) Qualified borrower.--The term `qualified borrower'
means a governmental body or a local water company.
``(4) Qualified desalination facility.--The term `qualified
desalination facility' means any facility that is used to
produce new water supplies by desalinating seawater,
groundwater, or surface water if the facility's source water
includes chlorides or total dissolved solids that, either
continuously or seasonally, exceed maximum permitted levels
for primary or secondary drinking water under Federal or
State law (as in effect on the date of issuance of the
issue).
``(5) Qualified groundwater remediation facility.--The term
`qualified groundwater remediation facility' means any
facility that is used to reclaim contaminated or naturally
impaired groundwater for direct delivery for potable use if
the facility's source water includes constituents that exceed
maximum contaminant levels regulated under the Safe Drinking
Water Act (as in effect on the date of the enactment of this
section).
``(6) Qualified issuer.--The term `qualified issuer'
means--
``(A) a governmental body, or
``(B) in the case of a State or political subdivision
thereof (as defined for purposes of section 103), any entity
qualified to issue tax-exempt bonds under section 103 on
behalf of such State or political subdivision.
``(7) Qualified project.--
``(A) In general.--The term `qualified project' means any
facility owned by a qualified borrower which is a--
``(i) qualified desalination facility,
``(ii) qualified recycled water facility,
``(iii) qualified groundwater remediation facility, or
``(iv) facility that is functionally related or subordinate
to a facility described in clause (i), (ii), or (iii).
``(B) Environmental impact.--A project shall not be treated
as a qualified project under subparagraph (A) unless such
project is designed to comply with regulations issued under
subsection (f) relating to the minimization of the
environmental impact of the project.
``(8) Qualified recycled water facility.--
``(A) In general.--The term `qualified recycled water
facility' means any wastewater treatment or distribution
facility which--
``(i) exceeds the requirements for the treatment and
disposal of wastewater under the Clean Water Act and any
other Federal or State water pollution control standards for
the discharge and disposal of wastewater to surface water,
land, or groundwater (as such requirements and standards are
in effect on the date of issuance of the issue), and
``(ii) except as provided in subparagraph (B), is used to
reclaim wastewater produced by the general public (including
electric utility, industrial, agricultural, commercial, or
residential users) to the extent such reclaimed wastewater is
used for a beneficial use that the issuer reasonably expects
as of the date of issuance of the issue otherwise would have
been satisfied with potable water supplies.
``(B) Impermissible uses.--Reclaimed wastewater is not used
for a use described in subparagraph (A)(ii) to the extent
such reclaimed wastewater is--
``(i) discharged into a waterway or used to meet waterway
discharge permit requirements and not used to supplement
potable water supplies,
``(ii) used to restore habitat,
``(iii) used to provide once-through cooling for an
electric generation facility, or

[[Page S1098]]

``(iv) intentionally introduced into the groundwater and
not used to supplement potable water supplies.
``(f) Regulations.--The Secretary shall prescribe such
regulations as are necessary to carry out the purposes of
this section, including regulations promulgated in
consultation with the Administrator of the Environmental
Protection Agency to ensure the environmental impact of
qualified facilities is minimized.''.
(b) Conforming Amendments.--
(1) Paragraph (1) of section 54A(d) of the Internal Revenue
Code of 1986 is amended by striking ``or'' at the end of
subparagraph (D), by inserting ``or'' at the end of
subparagraph (E), and by inserting after subparagraph (E) the
following new subparagraph:
``(F) a clean renewable water supply bond,''.
(2) Subparagraph (C) of section 54A(d)(2) of such Code is
amended by striking ``and'' at the end of clause (iv), by
striking the period at the end of clause (v) and inserting
``, and'', and by adding at the end the following new clause:
``(vi) in the case of a clean renewable water supply bond,
a purpose specified in section 54G(a)(1).''.
(3) The table of sections for subpart I of part IV of
subchapter A of chapter 1 of such Code is amended by adding
at the end the following new item:

``Sec. 54G. Clean renewable water supply bonds.''.

(c) Effective Date.--The amendments made by this section
shall apply to obligations issued after December 31, 2008.
______