TAX-EXEMPT FINANCING FOR ENVIRONMENTAL ENHANCEMENTS OF HYDROELECTRIC GENERATING FACILITIES.

SEC. 1921. TAX-EXEMPT FINANCING FOR ENVIRONMENTAL ENHANCEMENTS OF HYDROELECTRIC GENERATING FACILITIES. (a) In General.— Subsection (a) of section 142 (relating to exempt facility bonds) is amended— (1) by striking “or” at the end of paragraph (10), (2) by striking the period at the end of paragraph (11) and inserting “, or”, and (3) by adding at the end the following new paragraph: “(12) environmental enhancements of hydroelectric generating facilities.” (b) Definition and Special Rules for Environmental Enhancements of Hydroelectric Generating Facilities.— (1) In general.— Section 142 is amended by adding at the end the following new subsection: “(j) Environmental Enhancements of Hydroelectric Generating Facilities.— “(1) In general.— For purposes of subsection (a)(12), the term ‘environmental enhancements of hydroelectric generating facilities’ means property— “(A) the use of which is related to a federally licensed hydroelectric generating facility owned and operated by a governmental unit, and “(B) which— “(i) protects or promotes fisheries or other wildlife resources, including any fish by-pass facility, fish hatchery, or fisheries enhancement facility, or “(ii) is a recreational facility or other improvement required by the terms and conditions of any Federal licensing permit for the operation of such generating facility. 106 STAT. 3028 “(2) Use of proceeds.— A bond issued as part of an issue described in subsection (a)(12) shall not be considered an exempt facility bond unless at least 80 percent of the net proceeds of the issue of which it is a part are used to finance property described in paragraph (1)(B)(i).” (2) Financed property must be governmentally owned.— Subparagraph (A) of section 142(b)(1) (relating to certain facilities must be governmentally owned) is amended by striking “(2) or (3)” and inserting “(2), (3), or (12)”. (3) Exclusion from volume cap.— Paragraph (3) of section 146(g) (relating to exception for certain bonds) is amended— (A) by striking “or (2)” and inserting (2), or (12)”, and (B) by striking “and docks and wharves” and inserting “, docks and wharves, and environmental enhancements of hydroelectric generating facilities”. (c) Effective Date.— The amendments made by this section shall apply to bonds issued after the date of the enactment of this Act.