Internal Revenue Code:Sec. 103. Interest on State and local bonds
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Location in Internal Revenue Code
TITLE 26 - INTERNAL REVENUE CODE
Subtitle A - Income Taxes
CHAPTER 1 - NORMAL TAXES AND SURTAXES
Subchapter B - Computation of Taxable Income
PART III - ITEMS SPECIFICALLY EXCLUDED FROM GROSS INCOME
Statute
Sec. 103. Interest on State and local bonds
(a) Exclusion
Except as provided in subsection (b), gross income does not
include interest on any State or local bond.
(b) Exceptions
Subsection (a) shall not apply to -
(1) Private activity bond which is not a qualified bond
Any private activity bond which is not a qualified bond (within
the meaning of section 141).
(2) Arbitrage bond
Any arbitrage bond (within the meaning of section 148).
(3) Bond not in registered form, etc.
Any bond unless such bond meets the applicable requirements of
section 149.
(c) Definitions
For purposes of this section and part IV -
(1) State or local bond
The term ''State or local bond'' means an obligation of a State
or political subdivision thereof.
(2) State
The term ''State'' includes the District of Columbia and any
possession of the United States.
Sources
(Aug. 16, 1954, ch. 736, 68A Stat. 29; Pub. L. 90-364, title I,
Sec. 107(a), June 28, 1968, 82 Stat. 266; Pub. L. 90-634, title IV,
Sec. 401(a), Oct. 24, 1968, 82 Stat. 1349; Pub. L. 91-172, title
VI, Sec. 601(a), Dec. 30, 1969, 83 Stat. 656; Pub. L. 92-178, title
III, Sec. 315(a), (b), Dec. 10, 1971, 85 Stat. 529; Pub. L. 94-164,
Sec. 7(a), Dec. 23, 1975, 89 Stat. 976; Pub. L. 94-182, title III,
Sec. 301(a), Dec. 31, 1975, 89 Stat. 1056; Pub. L. 94-455, title
XIX, Sec. 1901(a)(17), (b)(8)(B), 1906(b)(13)(A), title XXI, Sec.
2105(a)-(c), 2137(d), Oct. 4, 1976, 90 Stat. 1765, 1766, 1794,
1834, 1902, 1931; Pub. L. 95-339, title II, Sec. 201(a), Aug. 8,
1978, 92 Stat. 467; Pub. L. 95-600, title III, Sec. 331(a), (b),
332(a), 333(a), 334(a), (b), title VII, Sec. 703(j)(1), (q)(1),
Nov. 6, 1978, 92 Stat. 2839-2841, 2941, 2944; Pub. L. 96-222, title
I, Sec. 107(a)(3)(C), Apr. 1, 1980, 94 Stat. 223; Pub. L. 96-223,
title II, Sec. 241(a), 242(a), 244(a), Apr. 2, 1980, 94 Stat. 281,
283, 286; Pub. L. 96-499, title XI, Sec. 1103, Dec. 5, 1980, 94
Stat. 2669; Pub. L. 97-34, title VIII, Sec. 811(a), (b), 812(a),
Aug. 13, 1981, 95 Stat. 349, 350; Pub. L. 97-248, title II, Sec.
214(a)-(e), 215(a), (b), 217(a)-(d), 219(a), 221(a), (b), (c)(1),
title III, Sec. 310(b)(1), (c)(1), (2), Sept. 3, 1982, 96 Stat.
466-469, 472-474, 477, 478, 596, 599; Pub. L. 97-424, title V, Sec.
547(a), Jan. 6, 1983, 96 Stat. 2199; Pub. L. 97-473, title II, Sec.
202(b)(2), Jan. 14, 1983, 96 Stat. 2609; Pub. L. 98-369, div. A,
title IV, Sec. 474(r)(4), title VI, Sec. 621-624(a), (b)(2), (3),
626(a), 627, 628(a), (c)-(e), (g), 630, July 18, 1984, 98 Stat.
839, 915-922, 924, 926, 928, 931-933; Pub. L. 99-272, title XIII,
Sec. 13209(e), Apr. 7, 1986, 100 Stat. 323; Pub. L. 99-514, title
XIII, Sec. 1301(a), title XVIII, Sec. 1864(a)(1), (b)-(e), 1865(a),
1869(a), (b), 1870, 1871(a)(1), (b), 1899A(2)-(4), Oct. 22, 1986,
100 Stat. 2602, 2885, 2886, 2888, 2890, 2891, 2958; Pub. L.
100-647, title I, Sec. 1013(a)(34)(A), (c)(12)(A), Nov. 10, 1988,
102 Stat. 3544, 3547.)
Miscellaneous
AMENDMENTS
1988 - Subsec. (b)(6)(N). Pub. L. 100-647, Sec. 1013(c)(12)(A),
amended subpar. (N), as in effect on the day before the date of the
enactment of Pub. L. 99-514 (Oct. 22, 1986), by redesignating cls.
(ii) and (iii) as (iii) and (iv), respectively, and by striking out
cl. (i) and inserting in lieu thereof the following new cls.:
''(i) In general. - Except as provided in clause (ii), this
paragraph shall not apply to any obligation issued after December
31, 1986.
''(ii) Certain refundings. - This paragraph shall apply to any
obligation (or series of obligations) issued to refund an
obligation issued on or before December 31, 1986, if -
''(I) the average maturity date of the issue of which the
refunding obligation is a part is not later than the average
maturity date of the obligations to be refunded by such issue,
''(II) the amount of the refunding obligation does not exceed
the outstanding amount of the refunded obligation, and
''(III) the proceeds of the refunding obligation are used to
redeem the refunded obligation not later than 90 days after the
date of the issuance of the refunding obligation.
For purposes of subclause (I), average maturity shall be determined
in accordance with subsection (b)(14)(B)(i).''
Subsec. (c)(7). Pub. L. 100-647, Sec. 1013(a)(34)(A), amended
par. (7), as in effect on the day before the date of the enactment
of Pub. L. 99-514 (Oct. 22, 1986), by substituting ''necessary''
for ''necessary''.
1986 - Pub. L. 99-514, Sec. 1301(a), in amending section
generally, substituted ''Interest on State and local bonds'' for
''Interest on certain governmental obligations'' in section
catchline.
Subsec. (a). Pub. L. 99-514, Sec. 1301(a), substituted
''Exclusion'' for ''General rule'' in heading and amended text
generally. Prior to amendment, text read as follows: ''Gross
income does not include interest on -
''(1) the obligations of a State, a Territory, or a possession
of the United States, or any political subdivision of any of the
foregoing, or of the District of Columbia; and
''(2) qualified scholarship funding bonds.''
Subsec. (b). Pub. L. 99-514, Sec. 1301(a), in amending section
generally, substituted provision relating to exceptions for
provision relating to industrial development bonds.
Subsec. (b)(11). Pub. L. 99-272 struck out par. (11) relating to
pollution control facilities acquired by regional pollution control
authorities.
Subsec. (b)(13), (14)(A). Pub. L. 99-514, Sec. 1871(b),
substituted ''and (6)'' for ''(6), and (7)''.
Subsec. (b)(16)(A). Pub. L. 99-514, Sec. 1870, substituted
''clause (ii)'' for ''clause (i)''.
Subsec. (b)(17)(A). Pub. L. 99-514, Sec. 1871(b), substituted
''and (6)'' for ''(6), and (7)''.
Subsec. (c). Pub. L. 99-514, Sec. 1301(a), in amending section
generally, substituted provision relating to definitions for
provision relating to arbitrage.
Subsecs. (d) to (g). Pub. L. 99-514, Sec. 1301(a), in amending
section generally, struck out subsecs. (d) to (g) which related to
certain irrigation dams, qualified scholarship funding bonds,
certain federally guaranteed obligations, and qualified
steam-generating or alcohol-producing facilities, respectively.
Subsec. (h). Pub. L. 99-514, Sec. 1301(a), in amending section
generally, struck out subsec. (h) which provided that obligations
must not be guaranteed.
Subsec. (h)(2)(A). Pub. L. 99-514, Sec. 1899A(2), substituted
''guaranteed'' for ''guaranted''.
Subsec. (h)(5)(A). Pub. L. 99-514, Sec. 1865(a), struck out ''the
United States,'' after ''program of''.
Subsecs. (i) to (k). Pub. L. 99-514, Sec. 1301(a), in amending
section generally, struck out subsecs. (i) to (k) which related to
obligations of certain volunteer fire departments, provided that
obligations must be in registered form to be tax-exempt, and
required public approval for industrial development bonds,
respectively.
Subsec. (l). Pub. L. 99-514, Sec. 1301(a), in amending section
generally, struck out subsec. (l) which related to information
reporting requirements for certain bonds.
Subsec. (l)(2)(F). Pub. L. 99-514, Sec. 1864(d), added subpar.
(F) which read: ''if such obligation is a private activity bond (as
defined in subsection (n)(7)), such information as the Secretary
may require for purposes of determining whether the requirements of
subsection (n) are met with respect to such obligation.''
Subsec. (m). Pub. L. 99-514, Sec. 1301(a), in amending section
generally, struck out subsec. (m) which related to obligations
exempt other than under this title.
Subsec. (m)(1). Pub. L. 99-514, Sec. 1871(a)(1), substituted
''(j), (k), (l), (n), and (o)'' for ''(k), (l), and (n)''.
Subsec. (m)(3)(B). Pub. L. 99-514, Sec. 1899A(3), substituted
''608(a)(6)(A)'' for ''608(6)(A)''.
Subsec. (n). Pub. L. 99-514, Sec. 1301(a), in amending section
generally, struck out subsec. (n) which related to limitation on
aggregate amount of private activity bonds issued during any
calendar year.
Subsec. (n)(6)(A), (B)(i). Pub. L. 99-514, Sec. 1864(b),
substituted ''governmental units or other authorities'' for
''governmental units''.
Subsec. (n)(7)(C)(i). Pub. L. 99-514, Sec. 1864(c), substituted
''all of the property to be financed by the obligation'' for ''the
property described in such paragraph''.
Subsec. (n)(10)(B). Pub. L. 99-514, Sec. 1864(e), substituted
''identify project'' for ''specify project'' in heading and
''identify (with reasonable specificity) the project'' for
''specify the project'' in text of subpar. (B)(i).
Subsec. (n)(10)(D). Pub. L. 99-514, Sec. 1864(e)(2), substituted
''any identification or specification'' for ''any specification''.
Subsec. (n)(13). Pub. L. 99-514, Sec. 1864(a)(1), added par.
(13).
Subsec. (o). Pub. L. 99-514, Sec. 1301(a), in amending section
generally, struck out subsec. (o) relating to consumer loan bonds.
Pub. L. 99-514, Sec. 1869(a), (b)(1), substituted ''Private loan
bonds'' for ''Consumer loan bonds'' in subsection and par. (2)
headings, ''private loan bond'' for ''consumer loan bond'' in text
of pars. (1), (2)(A) and (B), and ''subsection (c)(6)(H)(i)'' for
''subsection (c)(6)(G)(i)'' in par. (2)(C)(ii).
Pub. L. 99-514, Sec. 1869(b)(2), redesignated subsec. (o),
relating to cross references, as (p).
Subsec. (p). Pub. L. 99-514, Sec. 1301(a), in amending section
generally, struck out subsec. (p) which related to cross
references.
Pub. L. 99-514, Sec. 1869(b)(2), redesignated former subsec. (o),
relating to cross references, as (p).
Subsec. (p)(4). Pub. L. 99-514, Sec. 1899A(4), substituted
''October 27, 1949 (48 U.S.C. 1403)'' for ''October 27, 1919 (48
U.S.C. 1403)''.
1984 - Subsec. (b)(4). Pub. L. 98-369, Sec. 628(e), inserted
''For purposes of subparagraph (A), any property shall not be
treated as failing to be residential rental property merely because
part of the building in which such property is located is used for
purposes other than residential rental purposes.''
Subsec. (b)(6)(F)(iv). Pub. L. 98-369, Sec. 474(r)(4),
substituted ''section 30(b)(2)(A)'' for ''section 44F(b)(2)(A)''.
Subsec. (b)(6)(N). Pub. L. 98-369, Sec. 630, designated existing
provisions as cl. (i) and added cls. (ii) and (iii).
Subsec. (b)(6)(P). Pub. L. 98-369, Sec. 628(c), added subpar.
(P).
Subsec. (b)(7). Pub. L. 98-369, Sec. 628(g), repealed par. (7)
which related to advance refunding of qualified public facilities.
Subsec. (b)(13). Pub. L. 98-369, Sec. 628(d), inserted ''For
purposes of this paragraph - (A) a partnership and each of its
partners (and their spouses and minor children) shall be treated as
related persons, and (B) an S corporation and each of its
shareholders (and their spouses and minor children) shall be
treated as related persons.''
Subsec. (b)(15). Pub. L. 98-369, Sec. 623, added par. (15).
Subsec. (b)(16) to (18). Pub. L. 98-369, Sec. 627, added pars.
(16) to (18).
Subsec. (c). Pub. L. 98-369, Sec. 624(b)(2), struck out ''bonds''
after ''Arbitrage'' in heading.
Subsec. (c)(1). Pub. L. 98-369, Sec. 624(b)(3), inserted ''to
arbitrage bonds'' in heading.
Subsec. (c)(6), (7). Pub. L. 98-369, Sec. 624(a), added par. (6)
and redesignated former par. (6) as (7).
Subsec. (h). Pub. L. 98-369, Sec. 622, amended subsec. (h)
generally, in par. (1) substituting provisions that obligations are
not included in the section if they are federally guaranteed for
provisions which excluded obligations guaranteed, in whole or part,
by the U.S. under a program to conserve energy, or under other
Federal or State programs, in par. (2) substituting provisions
defining ''federally guaranteed'' for provisions setting forth
obligations to which this subsection applies, and adding pars. (3)
to (5).
Subsec. (m)(1). Pub. L. 98-369, Sec. 628(a)(1), inserted ''In the
case of an obligation issued after December 31, 1983, such
obligation shall not be treated as described in this paragraph
unless the appropriate requirements of subsections (b), (c), (h),
(k), (l), and (n) of this section and section 103A are met with
respect to such obligation. For purposes of applying such
requirements, a possession of the United States shall be treated as
a State; except that clause (ii) of subsection (n)(4)(A) shall not
apply.''
Subsec. (m)(2)(B). Pub. L. 98-369, Sec. 628(a)(2), substituted
''is exempt from tax under this title without regard to any
provision of law which is not contained in this title and which is
not contained in a revenue Act'' for ''is exempt from taxation
under any provision of this title''.
Subsec. (m)(3). Pub. L. 98-369, Sec. 628(a)(3), added par. (3).
Subsec. (n). Pub. L. 98-369, Sec. 621, added subsec. (n). Former
subsec. (n), relating to cross references, redesignated (o).
Subsec. (o). Pub. L. 98-369, Sec. 626(a), added subsec. (o)
relating to consumer loan bonds.
Pub. L. 98-369, Sec. 621, redesignated subsec. (n), relating to
cross references, as (o).
1983 - Subsec. (m). Pub. L. 97-424, Sec. 547(a), added subsec.
(m). Former subsec. (m) redesignated (n).
Pub. L. 97-473 amended subsec. (m) generally, adding pars. (1)
and (2), redesignating former pars. (1) to (3) as (3) to (5),
respectively, and striking out par. (24) which had provided
reference regarding exempt-interest dividends to section
852(b)(5)(B.) See section 722(b) of Pub. L. 98-369, set out as a
note below.
Subsec. (n). Pub. L. 97-424, Sec. 547(a), redesignated former
subsec. (m), relating to cross references, as (n).
1982 - Subsec. (b)(2). Pub. L. 97-248, Sec. 215(b)(2),
substituted ''For purposes of this section'' for ''For purposes of
this subsection''.
Subsec. (b)(4). Pub. L. 97-248, Sec. 217(a)(1), (b), 221(a),
(c)(1), 310(c)(1), in subpar. (A) substituted ''if at all times
during the qualified project period'' for ''if each obligation
issued pursuant to the issue is in registered form and if'' after
''residential rental property'', and struck out ''(within the
meaning of section 167(k)(3)(B))'' after ''low or moderate
income'', added subpar. (J), struck out provision that for purposes
of subpar. (A), ''targeted area project'' meant a project located
in a qualified census tract (within the meaning of section
103A(k)(2)) or an area of chronic economic distress (within the
meaning of section 103A(k)(3)) and, in last sentence, substituted
''electric energy or gas from'' for ''electric energy from''.
Subsec. (b)(6)(C). Pub. L. 97-248, Sec. 217(a)(3), substituted
''paragraph (13)'' for ''paragraph (7)''.
Subsec. (b)(6)(F)(iv). Pub. L. 97-248, Sec. 214(d), added cl.
(iv).
Subsec. (b)(6)(K) to (O). Pub. L. 97-248, Sec. 214(a)-(c), (e),
added subpars. (K) to (O).
Subsec. (b)(9)(A). Pub. L. 97-248, Sec. 217(c), inserted
''ferry,'' after ''rail car'' in provisions preceding cl. (i), and
in cl. (ii), inserted ''(or, in the case of a ferry, mass
transportation services)'' after ''mass commuting services''.
Subsec. (b)(10). Pub. L. 97-248, Sec. 217(a)(2), added par. (10).
Former par. (10) redesignated (13).
Subsec. (b)(11). Pub. L. 97-248, Sec. 217(d), added par. (11).
Subsec. (b)(12). Pub. L. 97-248, Sec. 221(b), added par. (12).
(Provisions of par. (12)(A) were formerly contained, as
undesignated provisions, in par. (4).)
Subsec. (b)(13). Pub. L. 97-248, Sec. 217(a)(2), redesignated
former par. (10) as (13).
Subsec. (b)(14). Pub. L. 97-248, Sec. 219(a), added par. (14).
Subsec. (h). Pub. L. 97-248, Sec. 310(c)(2), substituted ''must
not be guaranteed or subsidized'' for ''must be in registered form
and not guaranteed or subsidized'' in heading, and in par. (1)
struck out subpar. (A) reading ''such obligation is not issued in
registered form'', and redesignated subpars. (B) and (C) as (A) and
(B), respectively.
Subsec. (j). Pub. L. 97-248, Sec. 310(b)(1), added subsec. (j).
Former subsec. (j), relating to cross references, redesignated (m).
Subsec. (k). Pub. L. 97-248, Sec. 215(a), added subsec. (k).
Subsec. (l). Pub. L. 97-248, Sec. 215(b)(1), added subsec. (l).
Subsec. (m). Pub. L. 97-248, Sec. 215(a), (b)(1), 310(b)(1),
redesignated former subsec. (j), relating to cross references, as
(m).
1981 - Subsec. (b)(4)(I). Pub. L. 97-34, Sec. 811(a), added
subpar. (I).
Subsec. (b)(9), (10). Pub. L. 97-34, Sec. 811(b), added par. (9)
and redesignated former par. (9) as (10).
Subsecs. (i), (j). Pub. L. 97-34, Sec. 812(a), added subsec. (i)
and redesignated former subsec. (i) as (j).
1980 - Subsec. (b)(4). Pub. L. 96-499, Sec. 1103(b), inserted
before last sentence provisions defining ''targeted area project''
for purposes of subpar. (A).
Subsec. (b)(4)(A). Pub. L. 96-499, Sec. 1103(a), substituted
provisions relating to low or moderate income residential rental
property for provisions relating to residential real property for
family units.
Subsec. (b)(4)(H). Pub. L. 96-223, Sec. 242(a)(1), added subpar.
(H).
Subsec. (b)(6)(J). Pub. L. 96-499, Sec. 1103(c), added subpar.
(J).
Subsec. (b)(8), (9). Pub. L. 96-223, Sec. 242(a)(2), added par.
(8) and redesignated former par. (8) as (9).
Subsec. (c)(5). Pub. L. 96-222, Sec. 107(a)(3)(C), amended the
directory language of Pub. L. 96-500, Sec. 703(q)(1). See 1978
Amendment note below for subsec. (c)(5).
Subsec. (g). Pub. L. 96-223, Sec. 241(a), added subsec. (g).
Former subsec. (g) redesignated (i).
Subsec. (h). Pub. L. 96-223, Sec. 244(a), added subsec. (h).
Subsec. (i). Pub. L. 96-223, Sec. 241(a), 244(a), redesignated
former subsec. (g) as (i).
1978 - Subsec. (b)(1). Pub. L. 95-600, Sec. 703(j)(1)(A),
substituted ''subsection (a)(1) or (2)'' for ''subsection (a)(1)''
in heading.
Subsec. (b)(4). Pub. L. 95-600, Sec. 332(a), 333(a), in subpar.
(G)(i) inserted reference to electric utility, industrial,
agricultural, or commercial users and added subpar. (G)(ii) and
provision following subpar. (G)(ii) relating to the local
furnishing of electric energy.
Subsec. (b)(6)(D). Pub. L. 95-600, Sec. 331(a), substituted in
heading and cl. (i) ''$10,000,000'' for ''$5,000,000''.
Subsec. (b)(6)(I). Pub. L. 95-600, Sec. 331(b), added subpar.
(I).
Subsec. (b)(7), (8). Pub. L. 95-600, Sec. 334(a), (b), added par.
(7), redesignated former par. (7) as (8) and, as so redesignated,
substituted ''(6), and (7)'' for ''and (6)''.
Subsec. (c)(1). Pub. L. 95-600, Sec. 703(j)(1)(B), substituted in
heading and text ''(a)(1) or (2)'' for ''(a)(1) or (4)''.
Subsec. (c)(2)(A). Pub. L. 95-600, Sec. 703(j)(1)(C), substituted
''subsection (a)(1) or (2)'' for ''subsection (a)(1) or (2) or
(4)''.
Subsec. (c)(5). Pub. L. 95-600, Sec. 703(j)(1)(D), (q)(1), as
amended by Pub. L. 96-222, Sec. 107(a)(3)(C), substituted ''section
438 of the Higher Education Act of 1965'' for ''section 2 of the
Emergency Insured Student Loan Act of 1969'' and ''paragraph
(2)(A)'' for ''subsection (d)(2)(A)''.
Subsec. (d). Pub. L. 95-600, Sec. 703(j)(1)(E), substituted
''subsection (b)(4)(G)'' for ''subsection (c)(4)(G)''.
Subsec. (e). Pub. L. 95-339 redesignated second subsec. (e),
relating to cross references, as (g).
Subsec. (f). Pub. L. 95-339 added subsec. (f).
Subsec. (g). Pub. L. 95-339 redesignated second subsec. (e),
relating to cross references, as (g).
1976 - Subsec. (a). Pub. L. 94-455, Sec. 1901(a)(17)(A), 2105(a),
added par. (2) relating to qualified scholarship funding bonds.
Former pars. (2) and (3), relating to obligations of the United
States and to the obligations of corporations organized under an
Act of Congress, were struck out.
Subsec. (b). Pub. L. 94-455, Sec. 1901(a)(17)(B), (C),
redesignated subsec. (c) as (b) and in par. (1) of subsec. (b) as
so redesignated substituted ''subsection (a)(1) or (2)'' for
''subsection (a)(1)''. Former subsec. (b), which created an
exception to the rule that gross income did not include interest on
obligations of the United States, by providing that the exception
did not apply to obligations of the United States (with specified
exceptions) unless under the authorizing Acts such interest is
wholly exempt from the taxes imposed by this subtitle, was struck
out.
Subsec. (c). Pub. L. 94-455, Sec. 1901(a)(17)(B), (D), (b)(8)(B),
1906(b)(13)(A), 2105(c), redesignated subsec. (d) as (c) and, in
subsec. (c) as so redesignated, substituted ''(a)(1) or (4)'' for
''(a)(1)'' in par. (1) and ''(a)(1) or (2) or (4)'' for ''(a)(1)''
in par. (2)(A), substituted ''educational organization described in
section 170(b)(1)(A)(ii)'' for ''educational institution (within
the meaning of section 151(e)(4))'' in par. (3)(A), added par. (5),
redesignated former par. (5) as (6), and in par. (6) as so
redesignated substituted ''Secretary'' for ''Secretary or his
delegate''. Former subsec. (c) redesignated (b). See Codification
note above.
Subsec. (d). Pub. L. 94-455, Sec. 1901(a)(17)(B), redesignated
subsec. (e) as (d). Former subsec. (d) redesignated (c).
Subsec. (e). Pub. L. 94-455, Sec. 1901(a)(17)(B), (E), 2105(b),
2137(d), added subsec. (e) relating to qualified scholarship
funding bonds, redesignated former subsec. (f) relating to cross
references as a second subsec. (e), reduced the number of cross
references in subsec. (e) as so redesignated from twenty-three
(which made reference to various obligations of the United States
and of corporations organized under Acts of Congress) to three,
relating, respectively, to Puerto Rican bonds, Virgin Islands
insular and municipal bonds, and certain obligations issued under
title I of the Housing Act of 1949, and inserted a fourth cross
reference, designated as par. (24) relating to the treatment of
exempt-interest dividends. Former subsec. (e) redesignated (d).
Subsec. (f). Pub. L. 94-455, Sec. 1901(a)(17)(B), redesignated
subsec. (f), relating to cross references, as (e).
1975 - Subsecs. (e), (f). Pub. L. 94-182 and Pub. L. 94-164 made
identical amendments, adding subsec. (e) and redesignating former
subsec. (e) as (f).
1971 - Subsec. (c)(4)(E). Pub. L. 92-178, Sec. 315(a)(1),
substituted ''energy or gas,'' for ''energy, gas, or water or''.
Subsec. (c)(4)(F). Pub. L. 92-178, Sec. 315(a)(2), substituted
'', or'' for a period.
Subsec. (c)(4)(G). Pub. L. 92-178, Sec. 315(a)(3), added subpar.
(G).
Subsec. (c)(6)(F)(iii). Pub. L. 92-178, Sec. 315(b), substituted
''$1,000,000'' for ''$250,000''.
1969 - Subsecs. (d), (e). Pub. L. 91-172 added subsec. (d) and
redesignated former subsec. (d) as (e).
1968 - Subsec. (c). Pub. L. 90-364 added subsec. (c). Former
subsec. (c) redesignated (d).
Subsec. (c)(6)(D) to (H). Pub. L. 90-634 added subpars. (D) to
(H).
Subsec. (d). Pub. L. 90-364 redesignated former subsec. (c) as
(d).
EFFECTIVE DATE OF 1988 AMENDMENT
Section 1013(a)(34)(B) of Pub. L. 100-647 provided that:
''Subparagraph (A) (amending this section) shall apply to
obligations sold after May 2, 1978, and to which Treasury
regulation section 1.103-13 (1979) was provided to apply.''
EFFECTIVE DATE OF 1986 AMENDMENT
Amendment by section 1301(a) of Pub. L. 99-514 applicable to
bonds issued after Aug. 15, 1986, except as otherwise provided, see
sections 1311 to 1318 of Pub. L. 99-514, set out as an Effective
Date; Transitional Rules note under section 141 of this title.
Amendment by sections 1864(b)-(e), 1865(a), 1869(a), (b), 1870,
and 1871(b) of Pub. L. 99-514 effective, except as otherwise
provided, as if included in the provisions of the Tax Reform Act of
1984, Pub. L. 98-369, div. A, to which such amendment relates, see
section 1881 of Pub. L. 99-514, set out as a note under section 48
of this title.
Section 1864(a)(2) of Pub. L. 99-514 provided that:
''(A) Except as provided in subparagraph (B), the amendment made
by paragraph (1) (amending this section) shall apply to obligations
issued after the date of the enactment of this Act (Oct. 22, 1986)
in taxable years ending after such date.
''(B) At the election of the issuer (made at such time and in
such manner as the Secretary of the Treasury or his delegate shall
prescribe), the amendment made by paragraph (1) shall apply to any
obligation issued on or before the date of the enactment of this
Act.''
Section 1871(a)(2) of Pub. L. 99-514 provided that: ''The
amendment made by paragraph (1) (amending this section) shall apply
to obligations issued after March 28, 1985, in taxable years ending
after such date.''
EFFECTIVE DATE OF 1984 AMENDMENT
Amendment by section 474(r)(4) of Pub. L. 98-369 applicable to
taxable years beginning after Dec. 31, 1983, and to carrybacks from
such years, see section 475(a) of Pub. L. 98-369, set out as a note
under section 21 of this title.
Section 624(c) of Pub. L. 98-369, as amended by Pub. L. 99-514,
title XVIII, Sec. 1867(a), Oct. 22, 1986, 100 Stat. 2888, provided
that:
''(1) In general. - Except as otherwise provided in this
subsection, the amendments made by this section (amending this
section and section 103A of this title) shall apply with respect to
bonds issued after December 31, 1984.
''(2) Exception. - The amendments made by this section shall not
apply to obligations issued for the Essex County New Jersey
Resource Recovery Project authorized by the Port Authority of New
York and New Jersey on November 10, 1983, as part of an agreement
approved by Essex County, New Jersey, on July 7, 1981, and approved
by the State of New Jersey on December 31, 1981. The aggregate face
amount of bonds to which this paragraph applies shall not exceed
$350,000,000.''
Section 626(b) of Pub. L. 98-369, as amended by Pub. L. 99-514,
Sec. 2, title XIII, Sec. 1317(22), title XVIII, Sec. 1869(c)(5),
Oct. 22, 1986, 100 Stat. 2095, 2698, 2890; Pub. L. 100-647, title
I, Sec. 1013(g)(24), Nov. 10, 1988, 102 Stat. 3554, provided that:
''(1) In general. - Except as otherwise provided in this
subsection the amendment made by subsection (a) (amending this
section) shall apply to obligations issued after the date of
enactment of this Act (July 18, 1984).
''(2) Exceptions for certain student loan programs. -
''(A) In general. - The amendments made by this section
(amending this section) shall not apply to obligations issued by
a program described in the following table to the extent the
aggregate face amount of such obligations does not exceed the
amount of allowable obligations specified in the following table
with respect to such program:
---------------------------------------------------------------------
Program Amount of Allowable Obligations
---------------------------------------------------------------------
Colorado Student Obligation Bond $60 million
Authority
Connecticut Higher Education $15.5 million
Supplementary Loan Authority
District of Columbia $50 million
Illinois Higher Education $70 million
Authority
State of Iowa $16 million
Louisiana Public Facilities $75 million
Authority
Maine Health and Higher Education $5 million
Facilities Authority
Maryland Higher Education $24 million
Supplemental Loan Program
Massachusetts College Student $90 million
Loan Authority
Minnesota Higher Education $60 million
Coordinating Board
New Hampshire Higher Education $39 million
and Health Facilities Authority
New York Dormitory Authority $120 million
Pennsylvania Higher Education $300 million
Assistance Agency
Georgia Private Colleges and $31 million
University Authority
Wisconsin State Building $60 million
Commission
South Dakota Health and $6 million
Educational Facilities Authority
-------------------------------
''(B) Pennsylvania higher education assistance agency. -
Subparagraph (A) shall apply to obligations issued by the
Pennsylvania Higher Education Assistance Agency only if such
obligations are issued solely for the purpose of refunding
student loan bonds outstanding on March 15, 1984.
''(3) Certain tax-exempt mortgage subsidy bonds. - For purposes
of applying section 103(o) of the Internal Revenue Code of 1986
(formerly I.R.C. 1954), the term 'consumer loan bond' shall not
include any mortgage subsidy bond (within the meaning of section
103A(b) of such Code) to which the amendments made by section 1102
of the Mortgage Subsidy Bond Tax Act of 1980 (enacting section 103A
of this title) do not apply.
''(4) Refunding exception. - The amendments made by this section
(amending this section) shall not apply to any obligation or series
of obligations the proceeds of which are used exclusively to refund
obligations issued before March 15, 1984, except that -
''(A) the amount of the refunding obligations may not exceed
101 percent of the aggregate face amount of the refunded
obligations, and
''(B) the maturity date of any refunding obligation may not be
later than the date which is 17 years after the date on which the
refunded obligation was issued (or, in the case of a series of
refundings, the date on which the original obligation was
issued).
''(5) Exception for certain established programs. - The
amendments made by this section (amending this section) shall not
apply to any obligation substantially all of the proceeds of which
are used to carry out a program established under State law which
has been in effect in substantially the same form during the
30-year period ending on the date of enactment of this Act (July
18, 1984), but only if such proceeds are used to make loans or to
fund similar obligations -
''(A) in the same manner in which,
''(B) in the same (or lesser) amount per participant, and
''(C) for the same purposes for which,
such program was operated on March 15, 1984. This subparagraph
shall not apply to obligations issued on or after March 15, 1987.
''(6) Certain bonds for renewable energy property. - The
amendments made by this section (amending this section) shall not
apply to any obligations described in section 243 of the Crude Oil
Windfall Profit Tax Act of 1980 (Pub. L. 96-223, set out as a note
below).
''(7) Exception for certain downtown redevelopment project. - The
amendments made by this section (amending this section) shall not
apply to any obligation which is issued as part of an issue 95
percent or more of the proceeds of which are to be used to provide
a project to acquire and redevelop a downtown area if -
''(A) on August 15, 1985, a downtown redevelopment authority
adopted a resolution to issue obligations for such project,
''(B) before September 26, 1985, the city expended, or entered
into binding contracts to expend, more than $10,000,000 in
connection with such project, and
''(C) the State supreme court issued a ruling regarding the
proposed financing structure for such project on December 11,
1985.
The aggregate face amount of obligations to which this paragraph
applies shall not exceed $85,000,000 and such obligations must be
issued before January 1, 1992.''
Section 631 of Pub. L. 98-369, as amended by Pub. L. 99-514, Sec.
2, title XIII, Sec. 1316(j), 1317(43), title XVIII, Sec.
1872(a)-(c)(1), Oct. 22, 1986, 100 Stat. 2095, 2670, 2708, 2891,
2892; Pub. L. 100-647, title I, Sec. 1013(f)(8), (g)(40), Nov. 10,
1988, 102 Stat. 3549, 3557, provided that:
''(a) Private Activity Bond Cap. -
''(1) In general. - Except as otherwise provided in this
subsection, the amendment made by section 621 (amending this
section) shall apply to obligations issued after December 31,
1983.
''(2) Inducement resolution before june 19, 1984. - The
amendment made by section 621 shall not apply to any issue of
obligations if -
''(A) there was an inducement resolution (or other comparable
preliminary approval) for the issue before June 19, 1984, and
''(B) the issue is issued before January 1, 1985.
''(3) Certain projects preliminarily approved before october
19, 1983, given approval. - If -
''(A) there was an inducement resolution (or other comparable
preliminary approval) for a project before October 19, 1983, by
any issuing authority,
''(B) a substantial user of such project notifies the issuing
authority within 30 days after the date of the enactment of
this Act (July 18, 1984) that it intends to claim its rights
under this paragraph, and
''(C) construction of such project began before October 19,
1983, or the substantial user was under a binding contract on
such date to incur significant expenditures with respect to
such project,
such issuing authority shall allocate its share of the limitation
under section 103(n) of such Code for the calendar year during
which the obligations were to be issued pursuant to such
resolution (or other approval) first to such project. If the
amount of obligations required by all projects which meet the
requirements of the preceding sentence exceeds the issuing
authority's share of the limitation under section 103(n) of such
Code, priority under the preceding sentence shall be provided
first to those projects for which substantial expenditures were
incurred before October 19, 1983. If any issuing authority fails
to meet the requirements of this paragraph, the limitation under
section 103(n) of such Code for the issuing authority for the
calendar year following such failure shall be reduced by the
amount of obligations with respect to which such failure
occurred.
''(3) ((4)) Exception for certain bonds for a convention center
and resource recovery project. - In the case of any city, if -
''(A) the city council of such city authorized a feasibility
study for a convention center on June 10, 1982, and
''(B) on November 4, 1983, a municipal authority acting for
such city accepted a proposal for the construction of a
facility that is capable of generating steam and electricity
through the combustion of municipal waste,
the amendment made by section 621 shall not apply to any issue,
issued during 1984, 1985, 1986, or 1987 and substantially all of
the proceeds of which are to be used to finance the convention
center (or access ramps and parking facilities therefor)
described in subparagraph (A) or the facility described in
subparagraph (B).
''(b) Property Financed With Tax-Exempt Bonds Required To Be
Depreciated on Straight-Line Basis. -
''(1) In general. - Except as otherwise provided in this
section, the amendments made by section 628(b) (amending section
168 of this title) shall apply to property placed in service
after December 31, 1983, to the extent such property is financed
by the proceeds of an obligation (including a refunding
obligation) issued after October 18, 1983.
''(2) Exceptions. -
''(A) Construction or binding agreement. - The amendments
made by section 628(b) shall not apply with respect to
facilities -
''(i) the original use of which commences with the taxpayer
and the construction, reconstruction, or rehabilitation of
which began before October 19, 1983, or
''(ii) with respect to which a binding contract to incur
significant expenditures was entered into before October 19,
1983.
''(B) Refunding. -
''(i) In general. - Except as provided in clause (ii), in
the case of property placed in service after December 31,
1983, which is financed by the proceeds of an obligation
which is issued solely to refund another obligation which was
issued before October 19, 1983, the amendments made by
section 628(b) shall apply only with respect to an amount
equal to the basis in such property which has not been
recovered before the date such refunded obligation is issued.
''(ii) Significant expenditures. - In the case of
facilities the original use of which commences with the
taxpayer and with respect to which significant expenditures
are made before January 1, 1984, the amendments made by
section 628(b) shall not apply with respect to such
facilities to the extent such facilities are financed by the
proceeds of an obligation issued solely to refund another
obligation which was issued before October 19, 1983.
''(C) Facilities. - In the case of an inducement resolution
or other comparable preliminary approval adopted by an issuing
authority before October 19, 1983, for purposes of applying
subparagraphs (A)(i) and (B)(ii) with respect to obligations
described in such resolution, the term 'facilities' means the
facilities described in such resolution.
''(c) Other Provisions Relating to Tax-Exempt Bonds. -
''(1) In general. - Except as otherwise provided in this
subtitle, the amendments made by sections 622, 623, 627, and
628(c), (d), and (e) (and the provisions of sections 625(c),
628(f), and 629(b)) (amending this section and enacting
provisions set out as notes under this section) shall apply to
obligations issued after December 31, 1983.
''(2) Obligations invested in federally insured deposits. -
Notwithstanding any other provision of this section, clause (ii)
of section 103(h)(2)(B) of the Internal Revenue Code of 1986
(formerly I.R.C. 1954) (as amended by this subtitle) shall apply
to obligations issued after April 14, 1983; except that such
clause shall not apply to any obligation issued pursuant to a
binding contract in effect on March 4, 1983.
''(3) Exceptions. -
''(A) Construction or binding agreement. - The amendments
(and provisions) referred to in paragraph (1) shall not apply
to obligations with respect to facilities -
''(i) the original use of which commences with the taxpayer
and the construction, reconstruction, or rehabilitation of
which began before October 19, 1983, and was completed on or
after such date,
''(ii) the original use of which commences with the
taxpayer and with respect to which a binding contract to
incur significant expenditures for construction,
reconstruction, or rehabilitation was entered into before
October 19, 1983, and some of such expenditures are incurred
on or after such date, or
''(iii) acquired after October 19, 1983, pursuant to a
binding contract entered into on or before such date.
''(B) Facilities. - Subparagraph (C) of subsection (b)(2)
shall apply for purposes of subparagraph (A) of this paragraph.
''(C) Exception. - Subparagraph (A) shall not apply with
respect to the amendment made by section 628(e) and the
provisions of sections 628(f) and 629(b) (amending this section
and enacting provisions set out as notes under this section).
''(4) Repeal of advance refunding of qualified public
facilities. - The amendment made by section 628(g) (amending this
section) shall apply to refunding obligations issued after the
date of the enactment of this Act (July 18, 1984); except that if
substantially all the proceeds of the refunded issue were used to
provide airports or docks, such amendment shall only apply to
refunding obligations issued after December 31, 1984. In the case
of refunding obligations not to exceed $100,000,000 issued after
October 21, 1986, by Dade County, Florida, for the purpose of
advance refunding its Aviation Revenue Bonds (Series J), the
first sentence of this paragraph shall be applied by substituting
'the date which is 1 year after the date of the enactment of the
Technical and Miscellaneous Revenue Act of 1988 (Nov. 10, 1988)'
for 'December 31, 1984' and the amendments made by section 1301
of the Tax Reform Act of 1986 (section 1301 of Pub. L. 99-514,
enacting sections 141 to 150 and 7703 of this title, amending
this section and sections 2, 22, 25, 32, 86, 105, 152, 153, 163,
194, 269A, 414, 879, 1398, 3402, 4701, 4940, 4942, 4988, 6362,
6652, and 7871 of this title, repealing section 103A of this
title, enacting provisions set out as notes under sections 141
and 148 of this title, and amending provisions set out as a note
under section 103A of this title) shall not apply. In the case
of refunding obligations not exceeding $100,000,000 issued by the
Alabama State Docks Department, the first sentence of this
paragraph shall be applied by substituting 'December 31, 1987'
for 'December 31, 1984' and the Internal Revenue Code of 1986
shall be applied without regard to section 149(d)(2)..(sic)
''(5) Special rule for health club facilities. - In the case of
any health club facility, with respect to the amendment made by
section 627(c) (amending this section) -
''(A) paragraph (1) shall be applied by substituting 'April
12, 1984' for 'December 31, 1983', and
''(B) paragraph (3) shall be applied by substituting 'April
13, 1984' for 'October 19, 1983' each place it appears.
''(d) Provisions of This Subtitle Not To Apply to Certain
Property. - The amendments made by this subtitle (sections 621-632
of Pub. L. 98-369, amending this section and sections 103A and 168
of this title and enacting provisions set out as notes under this
section) shall not apply to any property (and shall not apply to
obligations issued to finance such property) if such property is
described in any of the following paragraphs:
''(1) Any property described in paragraph (5), (6), or (7) of
section 31(g) of this Act (set out as an Effective Date of 1984
Amendment note under section 168 of this title).
''(2) Any property described in paragraph (4), (8), or (17) of
section 31(g) of this Act (set out as an Effective Date of 1984
Amendment note under section 168 of this title) but only if the
obligation is issued before January 1, 1985, and only if before
June 19, 1984, the issuer had evidenced an intent to issue
obligations exempt from taxation under the Internal Revenue Code
of 1986 in connection with such property.
''(3) Any property described in paragraph (3) of section 216(b)
of the Tax Equity and Fiscal Responsibility Act of 1982 (set out
as an Effective Date of 1982 Amendment note under section 168 of
this title).
''(4) Any solid waste disposal facility described in section
103(b)(4)(E) of the Internal Revenue Code of 1986 if -
''(A) a State public authority created pursuant to State
legislation which took effect on June 18, 1973, took formal
action before October 19, 1983, to commit development funds for
such facility.
''(B) such authority issues obligations for any such facility
before January 1, 1987, and
''(C) expenditures have been made for the development of any
such facility before October 19, 1983.
''(5) Any solid waste disposal facility described in section
103(b)(4)(E) of the Internal Revenue Code of 1986 (formerly
I.R.C. 1954) if -
''(A) a city government, by resolutions adopted on April 10,
1980, and December 27, 1982, took formal action to authorize
the submission of a proposal for a feasibility study for such
facility and to authorize the presentation to the Department of
the Army (U.S. Army Missile Command) of a proposed agreement to
jointly pursue construction and operation of such facility,
''(B) such city government (or a public authority on its
behalf) issues obligations for such facility before January 1,
1988, and
''(C) expenditures have been made for the development of such
facility before October 19, 1983. Notwithstanding the foregoing
provisions of this subsection, the amendments made by section
624 (amending sections 103 and 103A of this title and enacting
provisions set out as a note under this section) (relating to
arbitrage) shall apply to obligations issued to finance
property described in paragraph (5).
''(e) Determination of Significant Expenditure. -
''(1) In general. - For purposes of this section, the term
'significant expenditures' means expenditures which equal or
exceed the lesser of -
''(A) $15,000,000, or
''(B) 20 percent of the estimated cost of the facilities.
''(2) Certain grants treated as expenditures. - For purposes of
paragraph (1), the amount of any UDAG grant preliminarily
approved on May 5, 1981, or April 4, 1983, shall be treated as an
expenditure with respect to the facility for which such grant was
so approved.
''(f) Exceptions for Certain Other Amendments. - If -
''(1) there was an inducement resolution (or other comparable
preliminary approval) for an issue before June 19, 1984, by any
issuing authority, and
''(2) such issue is issued before January 1, 1985, the
following amendments shall not apply:
''(A) the amendments made by section 623 (amending this
section),
''(B) the amendments made by subsections (a) and (b) of
section 627 (amending this section) (except to the extent such
amendments relate to farm land),
''(C) in the case of a race track, the amendment made by
section 627(c) (amending this section), and
''(D) the amendments made by section 628(c) (amending this
section).''
(Section 1872(a)(2)(B) of Pub. L. 99-514 provided that the
amendment of section 631(c)(3) of Pub. L. 98-369, set out above,
made by section 1872(a)(2)(B) of Pub. L. 99-514 is effective with
respect to obligations issued after Mar. 28, 1985.)
EFFECTIVE DATE OF 1983 AMENDMENT
For effective date of amendment by Pub. L. 97-473, see section
204(2) of Pub. L. 97-473, set out as an Effective Date note under
section 7871 of this title.
EFFECTIVE DATE OF 1982 AMENDMENT
Section 214(f) of Pub. L. 97-248 provided that:
''(1) Composite issues; small issue exemption. - The amendments
made by subsections (a) and (b) (amending this section) shall apply
to obligations issued after the date of the enactment of this Act
(Sept. 3, 1982).
''(2) Termination. - The amendment made by subsection (c)
(amending this section) shall take effect on the date of the
enactment of this Act (Sept. 3, 1982).
''(3) Research expenditures. - The amendment made by subsection
(d) (amending this section) shall apply with respect to
expenditures made after the date of the enactment of this Act
(Sept. 3, 1982).
''(4) Certain facilities. - The amendment made by subsection (e)
(amending this section) shall apply to obligations issued after
December 31, 1982.''
Section 215(c) of Pub. L. 97-248 provided that:
''(1) Public approval. - The amendment made by subsection (a)
(amending this section) shall apply to obligations issued after
December 31, 1982, other than obligations issued solely to refund
any obligation which -
''(A) was issued before July 1, 1982, and
''(B) has a maturity which does not exceed 3 years.
''(2) Information reporting. - The amendments made by subsection
(b) (amending this section) shall apply to obligations issued after
December 31, 1982 (including any obligation issued to refund an
obligation issued before such date).''
Section 217(e) of Pub. L. 97-248, as amended by Pub. L. 98-369,
div. A, title VII, Sec. 712(h), July 18, 1984, 98 Stat. 947; Pub.
L. 99-514, Sec. 2, Oct. 22, 1986, 100 Stat. 2095, provided that:
''The amendments made by this section (amending this section) shall
apply to obligations issued after the date of the enactment of this
Act (Sept. 3, 1982). For purposes of applying section
168(f)(8)(D)(v) of the Internal Revenue Code of 1986 (formerly
I.R.C. 1954), the amendments made by subsection (c) (amending this
section) shall apply to agreements entered into after the date of
the enactment of this Act.''
Section 219(b) of Pub. L. 97-248 provided that: ''The amendment
made by subsection (a) (amending this section) shall apply to
obligations issued after December 31, 1982.''
Section 221(d) of Pub. L. 97-248 provided that:
''(1) In general. - Except as provided in paragraph (2), the
amendments made by this section (amending this section and section
1104 of Pub. L. 96-499, formerly set out as a note under section
103A of this title) shall apply to obligations issued after the
date of the enactment of this Act (Sept. 3, 1982).
''(2) Exception. - The amendments made by this section shall not
apply with respect to any obligation to which the amendments made
by section 1103 of the Mortgage Subsidy Bond Tax Act of 1980
(section 1103 of Pub. L. 96-499, amending this section) do not
apply by reason of section 1104 of such Act (section 1104 of Pub.
L. 96-499, formerly set out as a note under section 103A of this
title).''
Section 310(d) of Pub. L. 97-248, as amended by Pub. L. 97-448,
title III, Sec. 306(b)(2), 96 Stat. 2405; Pub. L. 98-216, Sec.
6(b), Feb. 14, 1984, 98 Stat. 8; Pub. L. 99-514, Sec. 2, Oct. 22,
1986, 100 Stat. 2095, provided that:
''(1) In general. - Except as otherwise provided in this
subsection, the amendments made by this section (enacting section
4701 of this title and section 757c-5 of former Title 31, Money and
Finance, and amending this section and sections 103A, 163, 165,
312, and 1232 of this title) shall apply to obligations issued
after December 31, 1982.
''(2) (Repealed. Pub. L. 98-216, Sec. 6(b), Feb. 14, 1984, 98
Stat. 8.)
''(3) Exception for certain warrants, etc. - The amendments made
by subsection (b) (enacting section 4701 of this title and amending
this section and sections 163, 165, 312, and 1232 of this title)
shall not apply to any obligations issued after December 31, 1982,
on the exercise of a warrant or the conversion of a convertible
obligation if such warrant or obligation was offered or sold
outside the United States without registration under the Securities
Act of 1933 (15 U.S.C. 77a et seq.) and was issued before August
10, 1982. A rule similar to the rule of the preceding sentence
shall also apply in the case of any regulations issued under
section 163(f)(2)(C) of the Internal Revenue Code of 1986 (formerly
I.R.C. 1954) (as added by this section) except that the date on
which such regulations take effect shall be substituted for 'August
10, 1982'.
''(4) (Repealed. Pub. L. 98-216, Sec. 6(b), Feb. 14, 1984, 98
Stat. 8.)''
EFFECTIVE DATE OF 1981 AMENDMENT
Section 811(c) of Pub. L. 97-34 provided that: ''The amendments
made by this section (amending this section) shall apply to
obligations issued after the date of the enactment of this Act
(Aug. 13, 1981).''
Section 812(b)(1) of Pub. L. 97-34 provided that: ''The amendment
made by subsection (a) (amending this section) shall apply to
obligations issued after December 31, 1980.''
EFFECTIVE DATE OF 1980 AMENDMENTS
For effective date of amendment by Pub. L. 96-499, see section
1104 of Pub. L. 96-499, set out as an Effective Date note under
section 103A of this title.
Section 241(d) of Pub. L. 96-223 provided that: ''The amendments
made by subsection (a) (amending this section) and the provisions
of subsections (b) and (c) (set out as notes under this section)
shall apply with respect to obligations issued after October 18,
1979.''
Section 242(c) of Pub. L. 96-223 provided that: ''The amendments
made by subsection (a) (amending this section) and the provisions
of subsection (b) (set out as a note under this section) shall
apply with respect to obligations issued after October 18, 1979.''
Section 244(b) of Pub. L. 96-223 provided that: ''The amendments
made by subsection (a) (amending this section) shall apply to
obligations issued on or after October 18, 1979.''
EFFECTIVE DATE OF 1978 AMENDMENTS
Section 201(c) of Pub. L. 95-339 provided that: ''The amendments
made by subsection (a) (amending this section) shall apply to
taxable years ending after the date of the enactment of this Act
(Aug. 8, 1978).''
Section 331(c) of Pub. L. 95-600 provided that:
''(1) The amendments made by subsection (a) (amending this
section) shall apply to -
''(A) obligations issued after December 31, 1978, in taxable
years ending after such date, and
''(B) capital expenditures made after December 31, 1978, with
respect to obligations issued before January 1, 1979.
''(2) The amendment made by subsection (b) (amending this
section) shall apply to -
''(A) obligations issued after September 30, 1979, in taxable
years ending after such date, and
''(B) capital expenditures made after September 30, 1979, with
respect to obligations issued after such date.''
Section 332(b) of Pub. L. 95-600 provided that: ''The amendment
made by subsection (a) (amending this section) shall apply to
taxable years ending after April 30, 1968, but only with respect to
obligations issued after such date.''
Section 333(b) of Pub. L. 95-600 provided that: ''The amendment
made by subsection (a) (amending this section) shall apply to
obligations issued after the date of the enactment of this Act
(Nov. 6, 1978) in taxable years ending after such date.''
Section 334(c) of Pub. L. 95-600 provided that: ''The amendments
made by this section (amending this section) shall apply to
obligations issued after the date of the enactment of this Act
(Nov. 6, 1978).''
Section 703(q)(2) of Pub. L. 95-600 provided that: ''The
amendments made by paragraph (1) (amending this section) shall
apply with respect to payments made by the Commissioner of
Education after December 31, 1976.''
Amendment by section 703(j)(1) of Pub. L. 95-600 effective on
Oct. 4, 1976, see section 703(r) of Pub. L. 95-600, set out as a
note under section 46 of this title.
EFFECTIVE DATE OF 1976 AMENDMENT
Amendment by section 1901(a)(17), (b)(8)(B) of Pub. L. 94-455
applicable with respect to taxable years ending after Oct. 4, 1976,
see section 1901(d) of Pub. L. 94-455, set out as a note under
section 2 of this title.
Amendment by section 1906(b)(13)(A) of Pub. L. 94-455 effective
Feb. 1, 1977, see section 1906(d)(1) of Pub. L. 94-455, set out as
a note under section 6013 of this title.
Section 2105(d) of Pub. L. 94-455 provided that: ''The amendments
made by this section (amending this section) apply to obligations
issued on or after the date of the enactment of this Act (Oct. 4,
1976).''
Amendment by section 2137(d) of Pub. L. 94-455 applicable to
taxable years beginning after Dec. 31, 1975, see section 2137(e) of
Pub. L. 94-455, set out as a note under section 852 of this title.
EFFECTIVE DATE OF 1975 AMENDMENTS
Section 301(b) of Pub. L. 94-182 provided that: ''The amendment
made by subsection (a) (amending this section) shall apply to
obligations issued after the date of the enactment of this Act
(Dec. 31, 1975).''
Section 7(b) of Pub. L. 94-164 provided that: ''The amendments
made by this section (amending this section) shall apply to
obligations issued after the date of enactment of this Act (Dec.
23, 1975).''
EFFECTIVE DATE OF 1971 AMENDMENT
Section 315(c) of Pub. L. 92-178 provided that: ''The amendments
made by subsection (a) (amending this section) shall apply with
respect to obligations issued after January 1, 1969. The amendment
made by subsection (b) (amending this section) shall apply with
respect to expenditures incurred after the date of the enactment of
this Act (Dec. 10, 1971).''
EFFECTIVE DATE OF 1969 AMENDMENT
Section 601(b) of Pub. L. 91-172 provided that: ''The amendments
made by subsection (a) (amending this section) shall apply with
respect to obligations issued after October 9, 1969.''
EFFECTIVE DATE OF 1968 AMENDMENT
Section 401(b) of Pub. L. 90-634 provided that: ''The amendment
made by subsection (a) (amending this section) shall apply with
respect to obligations issued after the date of the enactment of
this Act (Oct. 24, 1968).''
Section 107(b)(1) of Pub. L. 90-364 provided that: ''Except as
provided by paragraph (2) (set out as a note below), the amendment
made by subsection (a) (amending this section) shall apply to
taxable years ending after April 30, 1968, but only with respect to
obligations issued after such date.''
Transfer of Functions.
TRANSFER OF FUNCTIONS
Functions of Commissioner of Education transferred to Secretary
of Education by section 3441(a)(1) of Title 20, Education.
Miscellaneous
COORDINATION OF CERTAIN AMENDMENTS MADE BY PUB. L. 97-424 AND PUB.
L. 97-473
Section 722(b) of Pub. L. 98-369 provided that: ''For purposes of
applying the amendments made by section 547 of the Highway Revenue
Act of 1982 (Pub. L. 97-424, amending this section) and the
amendment made by section 202(b)(2) of Public Law 97-473 (amending
this section), Public Law 97-473 shall be deemed to have been
enacted immediately before the Highway Revenue Act of 1982.''
VALIDATION OF SINKING FUND REGULATIONS
Section 1013(a)(35) of Pub. L. 100-647 provided that:
''(A) Treasury Regulation section 1.103-13(g) (1979) is hereby
enacted into positive law.
''(B)(i) Except as provided in clause (ii), subparagraph (A)
shall apply to obligations sold after May 2, 1978, and to which
such regulation was provided to apply.
''(ii) Treasury Regulation section 1.103-13(g) (1979) as enacted
into positive law by subparagraph (A) shall cease to apply to the
extent hereafter modified by the Secretary of the Treasury or his
delegate by regulations.''
BONDS ISSUED TO REFUND SUBSECTION (O)(3) OBLIGATIONS
Section 1013(c)(15) of Pub. L. 100-647 provided that: ''A bond
issued to refund an obligation described in section 103(o)(3) of
the Internal Revenue Code of 1954 (as in effect on the day before
the date of the enactment of the Tax Reform Act of 1986 (Oct. 22,
1986)) shall not be treated as described in section 144(b) of the
1986 Code unless it is described in section 144(b)(1)(A) of the
1986 Code.''
PLAN AMENDMENTS NOT REQUIRED UNTIL JANUARY 1, 1989
For provisions directing that if any amendments made by subtitle
A or subtitle C of title XI (Sec. 1101-1147 and 1171-1177) or title
XVIII (Sec. 1800-1899A) of Pub. L. 99-514 require an amendment to
any plan, such plan amendment shall not be required to be made
before the first plan year beginning on or after Jan. 1, 1989, see
section 1140 of Pub. L. 99-514, as amended, set out as a note under
section 401 of this title.
TREATMENT OF CERTAIN GUARANTEES BY FARMERS HOME ADMINISTRATION
Section 1865(b) of Pub. L. 99-514 provided that: ''An obligation
shall not be treated as federally guaranteed for purposes of
section 103(h) of the Internal Revenue Code of 1954 (now 1986) by
reason of a guarantee by the Farmers Home Administration if -
''(1) such guarantee is pursuant to a commitment made by the
Farmers Home Administration before July 1, 1984, and
''(2) such obligation is issued to finance a convention center
project in Carbondale, Illinois.''
TREATMENT OF CERTAIN OBLIGATIONS USED TO FINANCE SOLID WASTE
DISPOSAL FACILITY
Section 1865(c) of Pub. L. 99-514 provided that:
''(1) In general. - Any obligation which is part of an issue a
substantial portion of the proceeds of which is to be used to
finance a solid waste disposal facility described in paragraph (2)
shall not, for purposes of section 103(h) of the Internal Revenue
Code of 1954 (now 1986), be treated as an obligation which is
federally guaranteed by reason of the sale of fuel, steam,
electricity, or other forms of usable energy to the Federal
Government or any agency or instrumentality thereof.
''(2) Solid waste disposal facility. - A solid waste disposal
facility is described in this paragraph if such facility is
described in section 103(b)(4)(E) of such Code and -
''(A) if -
''(i) a public State authority created pursuant to State
legislation which took effect on July 1, 1980, took formal
action before October 19, 1983, to commit development funds for
such facility,
''(ii) such authority issues obligations for such facility
before January 1, 1988, and
''(iii) expenditures have been made for the development of
such facility before October 19, 1983,
''(B) if -
''(i) such facility is operated by the South Eastern Public
Service Authority of Virginia, and
''(ii) on December 20, 1984, the Internal Revenue Service
issued a ruling concluding that a portion of the obligations
with respect to such facility would not be treated as federally
guaranteed under section 103(h) of such Code by reason of the
transitional rule contained in section 631(c)(3)(A)(i) of the
Tax Reform Act of 1984 (section 631(c)(3)(A)(i) of Pub. L.
98-369, set out as a note above),
''(C) if -
''(i) a political subdivision of a State took formal action
on April 1, 1980, to commit development funds for such
facility,
''(ii) such facility has a contract to sell steam to a naval
base,
''(iii) such political subdivision issues obligations for
such facility before January 1, 1988, and
''(iv) expenditures have been made for the development of
such facility before October 19, 1983, or
''(D) if -
''(i) such facility is a thermal transfer facility,
''(ii) is to be built and operated by the Elk Regional
Resource Authority, and
''(iii) is to be on land leased from the United States Air
Force at Arnold Engineering Development Center near Tullahoma,
Tennessee.
''(3) Limitations. -
''(A) In the case of a solid waste disposal facility described
in paragraph (2)(A), the aggregate face amount of obligations to
which paragraph (1) applies shall not exceed $65,000,000.
''(B) In the case of a solid waste disposal facility described
in paragraph (2)(B), the aggregate face amount of obligations to
which paragraph (1) applies shall not exceed $20,000,000. Such
amount shall be in addition to the amount permitted under the
Internal Revenue Service ruling referred to in paragraph
(2)(B)(ii).
''(C) In the case of a solid waste disposal facility described
in paragraph (2)(C), the aggregate face amount of obligations to
which paragraph (1) applies shall not exceed $75,000,000.
''(D) In the case of a solid waste disposal facility described
in paragraph (2)(D), the aggregate face amount of obligations to
which paragraph (1) applies shall not exceed $25,000,000.''
TRANSITIONAL RULE FOR LIMIT ON SMALL ISSUE EXCEPTION
Section 1866 of Pub. L. 99-514, as amended by Pub. L. 100-647,
title I, Sec. 1018(m)(1)-(4), Nov. 10, 1988, 102 Stat. 3584,
provided that: ''The amendment made by section 623 of the Tax
Reform Act of 1984 (section 623 of Pub. L. 98-369, amending this
section) shall not apply to any obligation (or series of
obligations) issued to refund another tax-exempt IDB to which the
amendment made by such section 623 did not apply if -
''(1) the average maturity of the issue of which the refunding
obligation is a part does not exceed the average maturity of the
obligations to be refunded by such issue,
''(2) the amount of the refunding obligation does not exceed
the amount of the refunded obligation, and
''(3) the proceeds of the refunding obligation are used to
redeem the refunded obligation not later than 90 days after the
date of the issuance of the refunding obligation.
For purposes of the preceding sentence, the term 'tax-exempt IDB'
means any industrial development bond (as defined in section 103(b)
of the Internal Revenue Code of 1954 (now 1986)) the interest on
which is exempt from tax under section 103(a) of such Code. For
purposes of paragraph (1), average maturity shall be determined in
accordance with subsection (b)(14)(B)(i) of such Code.''
(Section 1018(m)(5) of Pub. L. 100-647 provided that: ''A
refunding obligation issued before July 1, 1987, shall be treated
as meeting the requirement of paragraph (1) of section 1866 of the
Reform Act (Pub. L. 99-514, set out above) if such obligation met
the requirement of such paragraph as enacted by the Reform Act
(Pub. L. 99-514).'')
EXCEPTION FROM 1984 AMENDMENT FOR DOWNTOWN MUSKOGEE REVITALIZATION
PROJECT
Section 1867(b) of Pub. L. 99-514 provided that: ''The amendment
made by section 624 of the Tax Reform Act of 1984 (amending
sections 103 and 103A of this title and enacting provisions set out
as a note under this section) shall not apply to obligations issued
with respect to the Downtown Muskogee Revitalization Project for
which a UDAG grant was preliminarily approved on May 5, 1981, if -
''(1) such obligation is issued before January 1, 1986, or
''(2) such obligation is issued after such date to provide
additional financing for such project except that the aggregate
amount of obligations to which this subsection applies shall not
exceed $10,000,000.''
TRANSITIONAL RULES
Section 1869(c)(1)-(4) of Pub. L. 99-514, as amended by Pub. L.
100-647, title I, Sec. 1018(n), Nov. 10, 1988, 102 Stat. 3584,
provided that:
''(1) Treatment of certain obligations issued by the city of
baltimore. - Obligations issued by the city of Baltimore, Maryland,
after June 30, 1985, shall not be treated as private loan bonds for
purposes of section 103(o) of the Internal Revenue Code of 1954
(now 1986) (or as private activity bonds for purposes of section
103 and part IV of subchapter A of chapter 1 of the Internal
Revenue Code of 1986, as amended by title XIII of this Act
(sections 1301 to 1318 of Pub. L. 99-514)) by reason of the use of
a portion of the proceeds of such obligations to finance or
refinance temporary advances made by the city of Baltimore in
connection with loans to persons who are not exempt persons (within
the meaning of section 103(b)(3) of such Code) if -
''(A) such obligations are not industrial development bonds
(within the meaning of section 103(b)(2) of the Internal Revenue
Code of 1954 (now 1986)),
''(B) the portion of the proceeds of such obligations so used
is attributable to debt approved by voter referendum on or before
November 2, 1982,
''(C) the loans to such nonexempt persons were approved by the
Board of Estimates of the city of Baltimore on or before October
19, 1983, and
''(D) the aggregate amount of such temporary advances financed
or refinanced by such obligations does not exceed $27,000,000.
''(2) White pine power project. - The amendment made by section
626(a) of the Tax Reform Act of 1984 (section 626(a) of Pub. L.
98-369, amending this section) shall not apply to any obligation
issued during 1984 to provide financing for the White Pine Power
Project in Nevada.
''(3) Tax increment bonds. - The amendment made by section 626(a)
of the Tax Reform Act of 1984 shall not apply to any tax increment
financing obligation issued before August 16, 1986, if -
''(A) substantially all of the proceeds of the issue are to be
used to finance -
''(i) sewer, street, lighting, or other governmental
improvements to real property,
''(ii) the acquisition of any interest in real property (by a
governmental unit having the power to exercise eminent domain),
the preparation of such property for new use, or the transfer
of such interest to a private developer, or
''(iii) payments of reasonable relocation costs of prior
users of such real property,
''(B) all of the activities described in subparagraph (A) are
pursuant to a redevelopment plan adopted by the issuing authority
before the issuance of such issue,
''(C) repayment of such issue is secured exclusively by pledges
of that portion of any increase in real property tax revenues (or
their equivalent) attributable to the redevelopment resulting
from the issue (or similar issues), and
''(D) none of the property described in subparagraph (A) is
subject to a real property or other tax based on a rate or
valuation method which differs from the rate and valuation method
applicable to any other similar property located within the
jurisdiction of the issuing authority.
''(4) Eastern maine electric cooperative. - The amendment made by
section 626(a) of the Tax Reform Act of 1984 shall not apply to
obligations issued by Massachusetts Municipal Wholesale Electric
Company Project No. 6 if -
''(A) such obligation is issued before January 1, 1986,
''(B) such obligation is issued after such date to refund a
prior obligation for such project, except that the aggregate
amount of obligations to which this subparagraph applies shall
not exceed $100,000,000, or
''(C) such obligation is issued after such date to provide
additional financing for such project except that the aggregate
amount of obligations to which this subparagraph applies shall
not exceed $45,000,000.
Subparagraph (B) shall not apply to any obligation issued for the
advance refunding of any obligation.''
TREATMENT OF OBLIGATIONS TO FINANCE ST. JOHNS RIVER POWER PARK
Section 1869(c)(6) of Pub. L. 99-514 provided that:
''(A) In general. - The amendment made by section 626(a) of the
Tax Reform Act of 1984 (section 626(a) of Pub. L. 98-369, amending
this section) shall not apply to any obligation issued to finance
the project described in subparagraph (B) if -
''(i) such obligation is issued before September 27, 1985,
''(ii) such obligation is issued after such date to refund a
prior tax exemption obligation for such project, the amount of
such obligation does not exceed the outstanding amount of the
refunded obligation, and such prior tax exempt obligation is
retired not later than the date 30 days after the issuance of the
refunding obligation, or
''(iii) such obligation is issued after such date to provide
additional financing for such project except that the aggregate
amount of obligations to which this clause applies shall not
exceed $150,000,000.
Clause (ii) shall not apply to any obligation issued for the
advance refunding of any obligation.
''(B) Description of project. - The project described in this
subparagraph in the St. Johns River Power Park system in Florida
which was authorized by legislation enacted by the Florida
Legislature in February of 1982.''
CERTAIN PUBLIC UTILITIES TREATED AS EXEMPTED PERSONS UNDER SECTION
103(B); SPECIAL RULES FOR CERTAIN RAILROADS
Section 629 of Pub. L. 98-369, as amended by Pub. L. 99-514, Sec.
2, title XIII, Sec. 1316(g)(8)(B), Oct. 22, 1986, 100 Stat. 2095,
2670, provided that:
''(a) Certain Public Utilities. - For purposes of applying
section 103(b)(3) of the Internal Revenue Code (of 1986) with
respect to -
''(1) any obligations issued after the date of enactment of
this Act (July 18, 1984), and
''(2) any obligations issued after December 31, 1969, which
were treated as obligations described in section 103(a) of such
Code on the day on which such obligations were issued,
the term 'exempt person' shall include a regulated public utility
having any customer service area within a State served by a public
power authority which was required as a condition of a Federal
Power Commission license specified by an Act of Congress enacted
prior to the enactment of section 107 of the Revenue and
Expenditure Control Act of 1968 (Public Law 90-364) (June 28, 1968)
to contract to sell power to one such utility and which is
authorized by State law to sell power to other such utilities, but
only with respect to the purchase by any such utility and resale to
its customers of any output of any electrical generation facility
or any portion thereof or any use of any electrical transmission
facility or any portion thereof financed by such power authority
and owned by it or by such State, and provided that by agreement
between such power authority and any such utility there shall be no
markup in the resale price charged by such utility of that
component of the resale price which represents the price paid by
such utility for such output or use. The preceding sentence shall
be applied by inserting 'and a rural electric cooperative utility'
after 'regulated public utility' but only if not more than 1
percent of the load of the public power authority is sold to such
rural electric cooperative utility.
''(b) Certain Railroads. - Section 103(b)(1) of the Internal
Revenue Code of 1986 (formerly I.R.C. 1954) shall not apply to any
obligation which is described in section 103(b)(6)(A) of such Code
if -
''(1) substantially all of the proceeds of such obligation are
used to acquire railroad track and right-of-way from a railroad
involved in a title 11 or similar proceeding (within the meaning
of section 368(a)(3)(A) of such Code), and
''(2) the Federal Railroad Administration provides joint
financing for such acquisitions.
''(c) Special Rules for Subsection (a). -
''(1) Obligations subject to cap. - Any obligation described in
subsection (a) shall be treated as a private activity bond for
purposes of section 103(n) of the Internal Revenue Code of 1986.
''(2) Limitation on amount of obligations to which subsection
(a)(1) applies - The aggregate amount of obligations to which
subsection (a)(1) applies shall not exceed $911,000,000.
''(3) Limitation on purposes. - Subsection (a)(1) shall only
apply to obligations issued as part of an issue substantially all
the proceeds of which are used to provide 1 or more of the
following:
''(A) Cable facilities.
''(B) Small hydroelectric facilities.
''(C) The acquisition of an interest in an electrical
generating facility.
''(D) Improvements to existing generating facilities.
''(E) Transmission lines.
''(F) Electric generating facilities.''
TREATMENT OF CERTAIN RESIDENTIAL REAL PROPERTY AS RESIDENTIAL
RENTAL PROPERTY
Treatment of Pub. L. 98-369, Sec. 631(d)(3), residential real
property as residential rental property, see section 1809(a)(4)(C)
of Pub. L. 99-514, set out as a note under section 168 of this
title.
PUBLIC APPROVAL REQUIREMENT IN THE CASE OF PUBLIC AIRPORT
Section 628(f) of Pub. L. 98-369, as amended by Pub. L. 99-514,
Sec. 2, Oct. 22, 1986, 100 Stat. 2095, provided that: ''If -
''(1) the proceeds of any issue are to be used to finance a
facility or facilities located on a public airport, and
''(2) the governmental unit issuing such obligations is the
owner or operator of such airport,
such governmental unit shall be deemed to be the only governmental
unit having jurisdiction over such airport for purposes of
subsection (k) of section 103 of the Internal Revenue Code of 1986
(formerly I.R.C. 1954) (relating to public approval for industrial
development bonds).''
SMALL ISSUE LIMIT IN CASE OF CERTAIN URBAN DEVELOPMENT ACTION
GRANTS
Section 628(h) of Pub. L. 98-369, as amended by Pub. L. 99-514,
Sec. 2, Oct. 22, 1986, 100 Stat. 2095, provided that: ''In the case
of any obligation issued on December 11, 1981, section 103(b)(6)(I)
of the Internal Revenue Code of 1986 (formerly I.R.C. 1954) shall
be applied by substituting '$15,000,000' for '$10,000,000' if -
''(1) such obligation is part of an issue,
''(2) substantially all of the proceeds of such issue are used
to provide facilities with respect to which an urban development
action grant under section 119 of the Housing and Community
Development Act of 1974 (42 U.S.C. 5318) was preliminarily
approved by the Secretary of Housing and Urban Development on
January 10, 1980, and
''(3) the Secretary of Housing and Urban Development
determines, at the time such grant is approved, that the amount
of such grant will equal or exceed 5 percent of the total capital
expenditures incurred with respect to such facilities.''
STUDENT LOAN BONDS
Section 625 of Pub. L. 98-369, as amended by Pub. L. 99-514, Sec.
2, title XVIII, Sec. 1868, Oct. 22, 1986, 100 Stat. 2095, 2888,
provided that:
''(a) Arbitrage Regulations. -
''(1) In general. - The Secretary shall prescribe regulations
which specify the circumstances under which a qualified student
loan bond shall be treated as an arbitrage bond for purposes of
section 103 of the Internal Revenue Code of 1986 (formerly I.R.C.
1954). Such regulations may provide that -
''(A) paragraphs (4) and (5) of section 103(c) of such Code
shall not apply, and
''(B) rules similar to section 103(c)(6) shall apply,
to qualified student loan bonds.
''(2) Definitions. - For purposes of this subsection -
''(A) Qualified student loan bond. - The term 'qualified
student loan bond' has the meaning given to such term by
section 103(o)(3) of the Internal Revenue Code of 1986 (as
amended by this Act).
''(B) Arbitrage bond. - The term 'arbitrage bond' has the
meaning given to such term by section 103(c)(2).
''(3) Effective date. -
''(A) In general. - Except as otherwise provided in this
paragraph, any regulations prescribed by the Secretary under
paragraph (1) shall apply to obligations issued after the
qualified date.
''(B) Qualified date. -
''(i) In general. - For purposes of this paragraph, the
term 'qualified date' means the earlier of -
''(I) the date on which the Higher Education Act of 1965 (20
U.S.C. 1001 et seq.) expires, or
''(II) the date, after the date of enactment of this Act (July 18,
1984), on which the Higher Education Act of 1965 is
reauthorized.
''(ii) Publication of regulations. - Notwithstanding clause
(i), the qualified date shall not be a date which is prior to
the date that is 6 months after the date on which the
regulations prescribed under paragraph (1) are published in
the Federal Register.
''(C) Refunding obligations. - Regulations prescribed by the
Secretary under paragraph (1) shall not apply to any obligation
(or series of refunding obligations) issued exclusively to
refund any qualified student loan bond which was issued before
the qualified date, except that the requirements of
subparagraphs (A) and (B) of section 626(b)(4) of this Act (set
out in Effective Date of 1984 Amendment note above) must be met
with respect to such refunding.
''(D) Fulfillment of commitments. - Regulations prescribed by
the Secretary under paragraph (1) shall not apply to any
obligations which are needed to fulfill written commitments to
acquire or finance student loans which are originated after
June 30, 1984, and before the qualified date, but only if -
''(i) such commitments are binding on the qualified date,
and
''(ii) the amount of such commitments is consistent with
practices of the issuer which were in effect on March 15,
1984, with respect to establishing secondary markets for
student loans.
''(b) Arbitrage Limitation on Student Loan Bonds Which Are Not
Qualified Student Loan Bonds. - Under regulations prescribed by the
Secretary of the Treasury or his delegate, any student loan bond
(other than a qualified student loan bond) issued after December
31, 1985, shall be treated as an obligation not described in
subsection (a)(1) or (2) of section 103 of the Internal Revenue
Code of 1986 unless the issue of which such obligation is a part
meets requirements similar to those of sections 103(c)(6) and
103A(i) of such Code.
''(c) Issuance of Student Loan Bonds Which Are Not Tax-Exempt. -
Any issuer who may issue obligations described in section 103(a) of
the Internal Revenue Code of 1986 may elect to issue student loan
bonds which are not described in such section 103(a) of such Code
without prejudice to -
''(1) the status of any other obligations issued, or to be
issued, by such issuer as obligations described in section 103(a)
of such Code, or
''(2) the status of the issuer as an organization exempt from
taxation under such Code.
''(d) Federal Executive Branch Jurisdiction Over Tax-Exempt
Status. - For purposes of Federal law, any determination by the
executive branch of the Federal Government of whether interest on
any obligation is exempt from taxation under the Internal Revenue
Code of 1986 shall be exclusively within the jurisdiction of the
Department of the Treasury.
''(e) Study on Tax-Exempt Student Loan Bonds. -
''(1) In general. - The Comptroller General of the United
States and the Director of the Congressional Budget Office, shall
conduct studies of -
''(A) the appropriate role of tax-exempt bonds which are
issued in connection with the guaranteed student loan program
and the PLUS program established under the Higher Education Act
of 1965 (20 U.S.C. 1001 et seq.), and
''(B) the appropriate arbitrage rules for such bonds.
''(2) Report. - The Comptroller General of the United States
and the Director of the Congressional Budget Office, shall submit
to the Committee on Finance and the Committee on Labor and Human
Resources of the Senate and the Committee on Ways and Means and
the Committee on Education and Labor of the House of
Representatives reports on the studies conducted under paragraph
(1) by no later than 9 months after the date of enactment of this
Act (July 18, 1984).''
OBLIGATIONS ISSUED TO PROVIDE SOLID WASTE-ENERGY PRODUCING
FACILITIES
Section 241(b) of Pub. L. 96-223, as amended by Pub. L. 99-514,
Sec. 2, Oct. 22, 1986, 100 Stat. 2095, provided that:
''(1) General rule. - For purposes of section 103 of the Internal
Revenue Code of 1986 (formerly I.R.C. 1954), any obligation issued
by an authority for 2 or more political subdivisions of a State
which is part of an issue substantially all of the proceeds of
which are to be used to provide solid waste-energy producing
facilities shall be treated as an obligation of a political
subdivision of a State which meets the requirements of section
103(b)(4)(E) of such Code (relating to solid waste disposal, etc.,
facilities). Nothing in the preceding sentence shall be construed
to override the limitations of section 103(c) of such Code
(relating to arbitrage bonds).
''(2) Solid waste-energy producing facilities. - For purposes of
paragraph (1), the term 'solid waste-energy producing facilities'
means any solid waste disposal facility and any facility for the
production of steam and electrical energy if -
''(A) substantially all of the fuel for the facility producing
steam and electrical energy is derived from solid waste from such
solid waste disposal facility,
''(B) both such solid waste disposal facility and the facility
producing steam and electrical energy are owned and operated by
the authority referred to in paragraph (1), and
''(C) all of the electrical energy and steam produced by the
facility for producing steam and electricity which is not used by
such facility is sold, for purposes other than resale, to an
agency or instrumentality of the United States.
''(3) Solid waste disposal facility. - For purposes of paragraph
(2), the term 'solid waste disposal facility' means any solid waste
disposal facility within the meaning of section 103(b)(4)(E) of the
Internal Revenue Code of 1986 (determined without regard to section
103(g) of such Code).
''(4) Obligations must be in registered form. - This subsection
shall not apply to any obligation which is not issued in registered
form.''
ALCOHOL-PRODUCING FACILITIES
Section 241(c) of Pub. L. 96-223, as amended by Pub. L. 99-514,
Sec. 2, Oct. 22, 1986, 100 Stat. 2095, provided that:
''(1) In general. - Subparagraph (C) of section 103(g)(3) of the
Internal Revenue Code of 1986 (formerly I.R.C. 1954) (as added by
subsection (a)) shall not apply to any facility for the production
of alcohol from solid waste if -
''(A) substantially all of the solid waste derived feedstock
for such facility is produced at a facility which -
''(i) went into full production in 1977,
''(ii) is located within the limits of a city, and
''(iii) is located in the same metropolitan area as the
alcohol-producing facility, and
''(B) before March 1, 1980, there were negotiations between a
governmental body and an organization described in section
501(c)(3) of the Internal Revenue Code of 1986 with respect to
the utilization of a special process for the production of
alcohol at such alcohol-producing facility.
''(2) Limitation. - The aggregate amount of obligations which may
be issued by reason of paragraph (1) with respect to any project
shall not exceed $30,000,000.
''(3) Termination. - This subsection shall not apply to
obligations issued after December 31, 1985.''
HYDROELECTRIC GENERATING FACILITIES
Section 242(b) of Pub. L. 96-223, as amended by Pub. L. 99-514,
Sec. 2, Oct. 22, 1986, 100 Stat. 2095, provided that:
''(1) In general. - For purposes of section 103(b)(4)(H) of the
Internal Revenue Code of 1986 (formerly I.R.C. 1954) (relating to
qualified hydroelectric generating facilities), in the case of a
hydroelectric generating facility described in paragraph (2) -
''(A) the facility shall be treated as a qualified
hydroelectric generating facility (as defined in section
103(b)(8)(A) of such Code) without regard to clause (ii) of
section 48(l)(13)(B) of such Code (relating to maximum generating
capacity), and
''(B) the fraction referred to in subparagraph (C) of section
103(b)(8) of such Code shall be deemed to be 1.
''(2) Facilities to which paragraph (1) applies. - A facility is
described in this paragraph if -
''(A) it would be a qualified hydroelectric generating facility
(as defined in section 103(b)(8)(A) of such Code) if clause (ii)
of section 48(l)(13)(B) did not apply,
''(B) it constitutes an expansion of generating capacity at an
existing hydroelectric generating facility,
''(C) such facility is located at 1 of 2 dams located in the
same county where -
''(i) the rated capacity of the hydroelectric generating
facilities at each such dam on October 18, 1979, was more than
750 megawatts,
''(ii) the construction of the first such dam began in 1956,
power at such first dam was first generated in 1959, and full
power production at such first dam began in 1961, and
''(iii) the construction of the second such dam began in
1959, power at such second dam was first generated in 1963, and
full power production at such second dam began in 1964,
''(D) acquisition or construction of the existing facility
referred to in subparagraph (B) was financed with the proceeds of
an obligation described in section 103(a)(1) of such Code,
''(E) the existing facility is owned and operated by a State,
political subdivision of a State, or agency or instrumentality of
any of the foregoing,
''(F) no more than 60 percent of the electric power and energy
produced by such existing facility and of the qualified
hydroelectric generating facility is to be sold to anyone other
than an exempt person (within the meaning of section 103(b)(3) of
such Code), and
''(G) the agency of the State in which the facility is located
which has jurisdiction over water rights had granted, before
October 18, 1979, a water right under which expanded power and
energy generating capacity for the facility was contemplated.''
STATE OBLIGATIONS FOR RENEWABLE ENERGY PROPERTY
Section 243 of Pub. L. 96-223, as amended by Pub. L. 99-514, Sec.
2, Oct. 22, 1986, 100 Stat. 2095, provided that:
''(a) Certain State Obligations for Renewable Energy Property. -
''(1) In general. - Paragraph (1) of subsection (b) of section
103 of the Internal Revenue Code of 1986 (formerly I.R.C. 1954)
shall not apply to any obligation issued as part of an issue
substantially all of the proceeds of which are to be used to
provide renewable energy property, if -
''(A) the obligations are general obligations of a State,
''(B) the authority for the issuance of the obligations
requires that taxes be levied in sufficient amount to provide
for the payment of principal and interest on such obligations,
''(C) the amount of such obligations, when added to the sum
of the amounts of all such obligations previously issued by the
State which are outstanding, does not exceed the smaller of -
''(i) $500,000,000 or
''(ii) one-half of 1 percent of the value of all property
in the State,
''(D) such obligations are issued pursuant to a program to
provide financing for small scale energy projects which was
established by a State the legislature of which, before October
18, 1979, approved a constitutional amendment to provide for
such a program, and
''(E) such obligations meet the requirements of paragraph (1)
of section 103(h) of the Internal Revenue Code of 1986.
''(2) Renewable energy property. - For purposes of this
subsection, the term 'renewable energy property' means property
used to produce energy (including heat, electricity, and
substitute fuels) from renewable energy sources (including wind,
solar, and geothermal energy, waste heat, biomass, and water).
''(b) Effective Date. - Subsection (a) shall apply with respect
to obligations issued after the date of enactment of this Act (Apr.
2, 1980).''
DISPOSITION OF AMOUNTS GENERATED BY ADVANCE REFUNDING OF CERTAIN
GOVERNMENTAL OBLIGATIONS
Section 337 of Pub. L. 95-600, as amended by Pub. L. 96-222,
title I, Sec. 103(a)(8), Apr. 1, 1980, 94 Stat. 212; Pub. L.
99-514, Sec. 2, Oct. 22, 1986, 100 Stat. 2095, provided that:
''(a) General Rule. - The payment to a charitable organization of
a refund profit held in a trust fund or escrow arrangement, or held
by an underwriter or other person under a qualified agreement in
accordance with that agreement -
''(1) shall not cause the refunding obligations out of which
the refund profit arose to be treated as arbitrage bonds (within
the meaning of section 103(c) of the Internal Revenue Code of
1986 (formerly I.R.C. 1954)) and
''(2) may be paid without penalty imposed on the issuer of such
obligations.
''(b) Rule for Governments Which Have Already Paid Arbitrage
Profits to the United States. - In the case of a State or local
government which, before January 1, 1977 -
''(1) requested in writing a rule by the Internal Revenue
Service with respect to the tax consequences of paying refund
profit to charitable organizations,
''(2) failed to receive a favorable ruling and did not pay the
refund profit to a charitable organization, and
which accounted to the United States for refund profit by direct
payment to the United States, or by the purchase of low-interest
United States obligations, the Secretary of the Treasury shall pay,
out of any amounts in the Treasury not otherwise appropriated, an
amount equal to the refund profit for which the State or local
government has accounted to the United States. Amounts paid to a
State or local government under this subsection shall be
distributed to such charitable organizations within 90 days after
the date on which the payment is received by the State or local
government in the same manner as if the refund profit had not been
paid to the United States and met the requirements of subsection
(a).
''(c) Definitions. - For purposes of this section -
''(1) Refund profit. - The term 'Refund profit' means interest,
profit, or other amounts generated by, or arising out of, the
advance refunding, before September 24, 1976, of an obligation of
a State or local government described in section 103 of such
Code.
''(2) Charitable organization. - The term 'charitable
organization' means an organization described in section
501(c)(3) of such Code and exempt from taxation under section
501(a) of such Code other than an organization described in
section 509(a) of such Code.
''(3) Qualified agreement. - The term 'qualified agreement'
means an agreement (whether or not enforceable) which provides
for, or contemplates, the payment of refund profit to one or more
charitable organizations.
''(4) Low-interest united states obligations. - The term
'low-interest United States obligations' means United States
obligations which bear an interest rate lower than the highest
rate of interest borne by public debt securities generally
available for purchase at the time such obligations were
purchased.''
TRANSITIONAL PROVISIONS FOR INDUSTRIAL DEVELOPMENT BONDS ISSUED
BEFORE JANUARY 1, 1969
Section 107(b)(2) of Pub. L. 90-364, as amended by Pub. L.
99-514, Sec. 2, Oct. 22, 1986, 100 Stat. 2095, provided that:
''Section 103(c)(1) of the Internal Revenue Code of 1986 (formerly
I.R.C. 1954), as amended by subsection (a) (subsec. (b)(1),
formerly subsec. (c)(1) of this section), shall not apply with
respect to any obligation issued before January 1, 1969, if before
May 1, 1968 -
''(A) the issuance of the obligation (or the project in
connection with which the proceeds of the obligations are to be
used) was authorized or approved by the governing body of the
governmental unit issuing the obligation or by the voters of such
governmental unit;
''(B) in connection with the issuance of such obligation or
with the use of the proceeds to be derived from the sale of such
obligation or the property to be acquired or improved with such
proceeds, a governmental unit has made a significant financial
commitment;
''(C) any person (other than a governmental unit) who will use
the proceeds to be derived from the sale of such obligation or
the property to be acquired or improved with such proceeds has
expended (or has entered into a binding contract to expend) for
purposes which are related to the use of such proceeds or
property, an amount equal to or in excess of 20 percent of such
proceeds; or
''(D) in the case of an obligation issued in conjunction with a
project where financial assistance will be provided by a
governmental agency concerned with economic development, such
agency has approved the project or an application for financial
assistance is pending.''
References
SECTION REFERRED TO IN OTHER SECTIONS
This section is referred to in sections 29, 42, 45, 45D, 48, 57,
142, 143, 144, 145, 148, 149, 150, 168, 265, 465, 593, 643, 646,
667, 772, 811, 832, 834, 842, 851, 871, 1275, 1276, 1278, 4940,
4942, 6049, 7478, 7518, 7701, 7871 of this title; title 7 section
608c; title 12 sections 1441a, 1831q; title 15 sections 77c, 78c;
title 16 sections 839f, 2708; title 19 section 2345; title 45
section 1207; title 46 App. section 1177; title 48 sections 1574,
1670.
