WASHINGTON, D.C. - U.S. Rep. Ron Lewis today introduced H.R. 1959, legislation to permit interest on federally guaranteed water, wastewater, and other essential community facility loans to also qualify to be tax exempt.
“Many rural communities continue to face challenges in accessing basic needs,” said Lewis. “We can improve this situation by supporting the development of necessary infrastructure such as dependable water and wastewater systems, and essential community facilities like schools, hospitals, and police and fire stations.”
Rural communities often finance essential community projects by issuing tax-exempt bonds. Alternatively, some communities utilize federal loan guarantees to finance these projects. Under current law, however, rural communities are not allowed to combine these two mechanisms to further reduce financing costs.
H.R. 1959 would allow local project sponsors to utilize both federal loan guarantees and tax-exempt bonds to achieve lower financing costs. Expanded assistance would improve the viability of rural lenders and reduce tax burdens on local residents.
Lewis introduced similar legislation in the 109th Congress.
“The incentives offered in this bill will allow small and rural communities better opportunities to receive increased credit to finance community facility projects,” said Lewis. “More financing options will encourage infrastructure improvements necessary to attract new business and stimulate economic activity.”
Lewis is also the sponsor of The Rural Communities Investment Act (H.R. 833), legislation that would provide tax incentives for banks to facilitate lower-cost financing options for farm real estate and certain rural housing loans.
###
