### Question
How does TAX EXEMPTION REQUIREMENTS FOR STATE AND LOCAL BONDS define qualified natural gas supply contract?


### Answer
Under *26 U.S.C. § 148*, **qualified natural gas supply contract** is defined as:

> any contract to acquire natural gas for resale by a utility owned by a governmental unit if the amount of gas permitted to be acquired under the contract by the utility during any year does not exceed the sum of—


(i) the annual average amount during the testing period of natural gas purchased (other than for resale) by customers of such utility who are located within the service area of such utility, and


(ii) the amount of natural gas to be used to transport the prepaid natural gas to the utility during such year

#### Citation:
  - *26 U.S.C. § 148*
  - Heading: **Subtitle A-Income Taxes > CHAPTER 1-NORMAL TAXES AND SURTAXES > Subchapter B-Computation of Taxable Income > PART IV-TAX EXEMPTION REQUIREMENTS FOR STATE AND LOCAL BONDS > Subpart B-Requirements Applicable to All State and Local Bonds**

