Internal Revenue Code – Section 141

Sec. 141. Private activity bond; qualified bond

-STATUTE-

(a) Private activity bond

For purposes of this title, the term "private activity bond"

means any bond issued as part of an issue -

(1) which meets -

(A) the private business use test of paragraph (1) of

subsection (b), and

(B) the private security or payment test of paragraph (2) of

subsection (b), or

 

(2) which meets the private loan financing test of subsection

(c).

(b) Private business tests

(1) Private business use test

Except as otherwise provided in this subsection, an issue meets

the test of this paragraph if more than 10 percent of the

proceeds of the issue are to be used for any private business

use.

(2) Private security or payment test

Except as otherwise provided in this subsection, an issue meets

the test of this paragraph if the payment of the principal of, or

the interest on, more than 10 percent of the proceeds of such

issue is (under the terms of such issue or any underlying

arrangement) directly or indirectly -

(A) secured by any interest in -

(i) property used or to be used for a private business use,

or

(ii) payments in respect of such property, or

 

(B) to be derived from payments (whether or not to the

issuer) in respect of property, or borrowed money, used or to

be used for a private business use.

(3) 5 percent test for private business use not related or

disproportionate to government use financed by the issue

(A) In general

An issue shall be treated as meeting the tests of paragraphs

(1) and (2) if such tests would be met if such paragraphs were

applied -

(i) by substituting "5 percent" for "10 percent" each place

it appears, and

(ii) by taking into account only -

(I) the proceeds of the issue which are to be used for

any private business use which is not related to any

government use of such proceeds,

(II) the disproportionate related business use proceeds

of the issue, and

(III) payments, property, and borrowed money with respect

to any use of proceeds described in subclause (I) or (II).

(B) Disproportionate related business use proceeds

For purposes of subparagraph (A), the disproportionate

related business use proceeds of an issue is an amount equal to

the aggregate of the excesses (determined under the following

sentence) for each private business use of the proceeds of an

issue which is related to a government use of such proceeds.

The excess determined under this sentence is the excess of -

(i) the proceeds of the issue which are to be used for the

private business use, over

(ii) the proceeds of the issue which are to be used for the

government use to which such private business use relates.

(4) Lower limitation for certain output facilities

An issue 5 percent or more of the proceeds of which are to be

used with respect to any output facility (other than a facility

for the furnishing of water) shall be treated as meeting the

tests of paragraphs (1) and (2) if the nonqualified amount with

respect to such issue exceeds the excess of -

(A) $15,000,000, over

(B) the aggregate nonqualified amounts with respect to all

prior tax-exempt issues 5 percent or more of the proceeds of

which are or will be used with respect to such facility (or any

other facility which is part of the same project).

 

There shall not be taken into account under subparagraph (B) any

bond which is not outstanding at the time of the later issue or

which is to be redeemed (other than in an advance refunding) from

the net proceeds of the later issue.

(5) Coordination with volume cap where nonqualified amount

exceeds $15,000,000

If the nonqualified amount with respect to an issue -

(A) exceeds $15,000,000, but

(B) does not exceed the amount which would cause a bond which

is part of such issue to be treated as a private activity bond

without regard to this paragraph,

 

such bond shall nonetheless be treated as a private activity bond

unless the issuer allocates a portion of its volume cap under

section 146 to such issue in an amount equal to the excess of

such nonqualified amount over $15,000,000.

(6) Private business use defined

(A) In general

For purposes of this subsection, the term "private business

use" means use (directly or indirectly) in a trade or business

carried on by any person other than a governmental unit. For

purposes of the preceding sentence, use as a member of the

general public shall not be taken into account.

(B) Clarification of trade or business

For purposes of the 1st sentence of subparagraph (A), any

activity carried on by a person other than a natural person

shall be treated as a trade or business.

(7) Government use

The term "government use" means any use other than a private

business use.

(8) Nonqualified amount

For purposes of this subsection, the term "nonqualified amount"

means, with respect to an issue, the lesser of -

(A) the proceeds of such issue which are to be used for any

private business use, or

(B) the proceeds of such issue with respect to which there

are payments (or property or borrowed money) described in

paragraph (2).

(9) Exception for qualified 501(c)(3) bonds

There shall not be taken into account under this subsection or

subsection (c) the portion of the proceeds of an issue which (if

issued as a separate issue) would be treated as a qualified

501(c)(3) bond if the issuer elects to treat such portion as a

qualified 501(c)(3) bond.

(c) Private loan financing test

(1) In general

An issue meets the test of this subsection if the amount of the

proceeds of the issue which are to be used (directly or

indirectly) to make or finance loans (other than loans described

in paragraph (2)) to persons other than governmental units

exceeds the lesser of -

(A) 5 percent of such proceeds, or

(B) $5,000,000.

(2) Exception for tax assessment, etc., loans

For purposes of paragraph (1), a loan is described in this

paragraph if such loan -

(A) enables the borrower to finance any governmental tax or

assessment of general application for a specific essential

governmental function,

(B) is a nonpurpose investment (within the meaning of section

148(f)(6)(A)), or

(C) is a qualified natural gas supply contract (as defined in

section 148(b)(4)).

(d) Certain issues used to acquire nongovernmental output property

treated as private activity bonds

(1) In general

For purposes of this title, the term "private activity bond"

includes any bond issued as part of an issue if the amount of the

proceeds of the issue which are to be used (directly or

indirectly) for the acquisition by a governmental unit of

nongovernmental output property exceeds the lesser of -

(A) 5 percent of such proceeds, or

(B) $5,000,000.

(2) Nongovernmental output property

Except as otherwise provided in this subsection, for purposes

of paragraph (1), the term "nongovernmental output property"

means any property (or interest therein) which before such

acquisition was used (or held for use) by a person other than a

governmental unit in connection with an output facility (within

the meaning of subsection (b)(4)) (other than a facility for the

furnishing of water). For purposes of the preceding sentence, use

(or the holding for use) before October 14, 1987, shall not be

taken into account.

(3) Exception for property acquired to provide output to certain

areas

For purposes of paragraph (1) -

(A) In general

The term "nongovernmental output property" shall not include

any property which is to be used in connection with an output

facility 95 percent or more of the output of which will be

consumed in -

(i) a qualified service area of the governmental unit

acquiring the property, or

(ii) a qualified annexed area of such unit.

(B) Definitions

For purposes of subparagraph (A) -

(i) Qualified service area

The term "qualified service area" means, with respect to

the governmental unit acquiring the property, any area

throughout which such unit provided (at all times during the

10-year period ending on the date such property is acquired

by such unit) output of the same type as the output to be

provided by such property. For purposes of the preceding

sentence, the period before October 14, 1987, shall not be

taken into account.

(ii) Qualified annexed area

The term "qualified annexed area" means, with respect to

the governmental unit acquiring the property, any area if -

(I) such area is contiguous to, and annexed for general

governmental purposes into, a qualified service area of

such unit,

(II) output from such property is made available to all

members of the general public in the annexed area, and

(III) the annexed area is not greater than 10 percent of

such qualified service area.

(C) Limitation on size of annexed area not to apply where

output capacity does not increase by more than 10 percent

Subclause (III) of subparagraph (B)(ii) shall not apply to an

annexation of an area by a governmental unit if the output

capacity of the property acquired in connection with the

annexation, when added to the output capacity of all other

property which is not treated as nongovernmental output

property by reason of subparagraph (A)(ii) with respect to such

annexed area, does not exceed 10 percent of the output capacity

of the property providing output of the same type to the

qualified service area into which it is annexed.

(D) Rules for determining relative size, etc.

For purposes of subparagraphs (B)(ii) and (C) -

(i) The size of any qualified service area and the output

capacity of property serving such area shall be determined as

the close of the calendar year preceding the calendar year in

which the acquisition of nongovernmental output property or

the annexation occurs.

(ii) A qualified annexed area shall be treated as part of

the qualified service area into which it is annexed for

purposes of determining whether any other area annexed in a

later year is a qualified annexed area.

(4) Exception for property converted to nonoutput use

For purposes of paragraph (1) -

(A) In general

The term "nongovernmental output property" shall not include

any property which is to be converted to a use not in

connection with an output facility.

(B) Exception

Subparagraph (A) shall not apply to any property which is

part of the output function of a nuclear power facility.

(5) Special rules

In the case of a bond which is a private activity bond solely

by reason of this subsection -

(A) subsections (c) and (d) of section 147 (relating to

limitations on acquisition of land and existing property) shall

not apply, and

(B) paragraph (8) of section 142(a) shall be applied as if it

did not contain "local".

(6) Treatment of joint action agencies

With respect to nongovernmental output property acquired by a

joint action agency the members of which are governmental units,

this subsection shall be applied at the member level by treating

each member as acquiring its proportionate share of such

property.

(7) Exception for qualified electric and natural gas supply

contracts

The term "nongovernmental output property" shall not include

any contract for the prepayment of electricity or natural gas

which is not investment property under section 148(b)(2).

(e) Qualified bond

For purposes of this part, the term "qualified bond" means any

private activity bond if -

(1) In general

Such bond is -

(A) an exempt facility bond,

(B) a qualified mortgage bond,

(C) a qualified veterans' mortgage bond,

(D) a qualified small issue bond,

(E) a qualified student loan bond,

(F) a qualified redevelopment bond, or

(G) a qualified 501(c)(3) bond.

(2) Volume cap

Such bond is issued as part of an issue which meets the

applicable requirements of section 146, and (!1)

 

(3) Other requirements

Such bond meets the applicable requirements of each subsection

of section 147.

 

-SOURCE-

(Added Pub. L. 99-514, title XIII, Sec. 1301(b), Oct. 22, 1986, 100

Stat. 2603; amended Pub. L. 100-203, title X, Sec. 10631(a), Dec.

22, 1987, 101 Stat. 1330-453; Pub. L. 100-647, title I, Sec.

1013(a)(38), Nov. 10, 1988, 102 Stat. 3544; Pub. L. 109-58, title

XIII, Sec. 1327(b), (c), Aug. 8, 2005, 119 Stat. 1019.)

 

 

-MISC1-

PRIOR PROVISIONS

A prior section 141, acts Aug. 16, 1954, ch. 736, 68A Stat. 40;

Feb. 26, 1964, Pub. L. 88-272, title I, Sec. 112(a), 78 Stat. 23;

Dec. 30, 1969, Pub. L. 91-172, title VIII, Sec. 802(a), (c)(4),

(e), 83 Stat. 676, 678; Dec. 10, 1971, Pub. L. 92-178, title II,

Secs. 202, 203(a)-(c), title III, Sec. 301(a), 85 Stat. 511, 520;

Mar. 29, 1975, Pub. L. 94-12, title II, Secs. 201(a), 202(a), 89

Stat. 28, 29; Dec. 23, 1975, Pub. L. 94-164, Sec. 2(a)(1), (b)(1),

89 Stat. 970, 971; Oct. 4, 1976, Pub. L. 94-455, title IV, Sec.

401(b)(1), (2), title XIX, Sec. 1906(b)(13)(A), 90 Stat. 1556,

1834, provided for standard deduction, prior to repeal by Pub. L.

95-30, title I, Sec. 101(d)(1), May 23, 1977, 91 Stat. 133,

applicable to taxable years beginning after Dec. 31, 1976.

 

AMENDMENTS

2005 - Subsec. (c)(2)(C). Pub. L. 109-58, Sec. 1327(b), added

subpar. (C).

Subsec. (d)(7). Pub. L. 109-58, Sec. 1327(c), added par. (7).

1988 - Subsec. (b)(5)(B). Pub. L. 100-647 substituted "cause a

bond" for "cause bond".

1987 - Subsecs. (d), (e). Pub. L. 100-203 added subsec. (d) and

redesignated former subsec. (d) as (e).

 

EFFECTIVE DATE OF 2005 AMENDMENT

Pub. L. 109-58, title XIII, Sec. 1327(d), Aug. 8, 2005, 119 Stat.

1019, provided that: "The amendments made by this section [amending

this section and section 148 of this title] shall apply to

obligations issued after the date of the enactment of this Act

[Aug. 8, 2005]."

 

EFFECTIVE DATE OF 1988 AMENDMENT

Amendment by Pub. L. 100-647 effective, except as otherwise

provided, as if included in the provision of the Tax Reform Act of

1986, Pub. L. 99-514, to which such amendment relates, see section

1019(a) of Pub. L. 100-647, set out as a note under section 1 of

this title.

 

EFFECTIVE DATE OF 1987 AMENDMENT

Section 10631(c) of Pub. L. 100-203 provided that:

"(1) In general. - Except as otherwise provided in this

subsection, the amendments made by this section [amending this

section and sections 142 and 146 of this title] shall apply to

bonds issued after October 13, 1987 (other than bonds issued to

refund bonds issued on or before such date).

"(2) Binding agreements. - The amendments made by this section

shall not apply to bonds (other than advance refunding bonds) with

respect to a facility acquired after October 13, 1987, pursuant to

a binding contract entered into on or before such date.

"(3) Transitional rule. - The amendments made by this section

shall not apply to bonds issued -

"(A) after October 13, 1987, by an authority created by a

statute -

"(i) approved by the State Governor on July 24, 1986, and

"(ii) sections 1 through 10 of which became effective on

January 15, 1987, and

"(B) to provide facilities serving the area specified in such

statute on the date of its enactment."

 

EFFECTIVE DATE; TRANSITIONAL RULES

Subtitle B (Secs. 1311-1318) of title XIII of Pub. L. 99-514, as

amended by Pub. L. 100-647, title I, Sec. 1013(b), (c)(1), (2)(A),

(3)-(11)(D), (13), (14)(A), (d), (e)(1), (2)(A), (f)(1)(A), (2)-

(7)(A), (8), (9), (11), (g), (h), Nov. 10, 1988, 102 Stat. 3545-

3550, 3558; Pub. L. 101-239, title VII, Sec. 7831(e), Dec. 19,

1989, 103 Stat. 2427, provided that:

 

"SEC. 1311. GENERAL EFFECTIVE DATES.

"(a) In General. - Except as otherwise provided in this subtitle,

the amendments made by section 1301 [enacting sections 141 to 150

and 7703 of this title, amending sections 2, 22, 25, 32, 86, 103,

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, omitting former section 143 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 apply to bonds issued after August 15,

1986.

"(b) Section 1301(f). -

"(1) Increase in trade-in rate. - The amendments made by

paragraph (1) of section 1301(f) [amending section 25 of this

title] shall apply to nonissued bond amounts elected after August

15, 1986.

"(2) Certificates. - The amendments made by paragraph (2) of

section 1301(f) [amending section 25 of this title] shall apply

to certificates issued with respect to non-issued bond amounts

elected after August 15, 1986.

"(c) Changes in Use, Etc., of Facilities Financed With Private

Activity Bonds. - Subsection (b) of section 150 of the 1986 Code

shall apply to changes in use (and ownership) after August 15,

1986, but only with respect to financing (including refinancings)

provided after such date.

"(d) Public Approval and Information Reporting. - Sections 147(f)

and 149(e) of the 1986 Code shall apply to bonds issued after

December 31, 1986.

"(e) Rebate Requirement for Qualified Scholarship Funding Bonds. -

Section 150(d) of the 1986 Code shall apply to payments made

after August 15, 1986.

"(f) Section 1303. - The amendments made by section 1303

[amending sections 172, 1016, and 3402 of this title and repealing

sections 1391 to 1397 and 6039B of this title] shall take effect on

the date of the enactment of this Act [Oct. 22, 1986].

 

"SEC. 1312. TRANSITIONAL RULES FOR CONSTRUCTION OR BINDING

AGREEMENTS AND CERTAIN GOVERNMENT BONDS ISSUED AFTER AUGUST 15,

1986.

"(a) Exception for Construction or Binding Agreements. -

"(1) In general. - The amendments made by section 1301 [for

classification see section 1311(a) of this note] shall not apply

to bonds (other than a refunding bond) with respect to a facility

-

"(A)(i) the original use of which commences with the

taxpayer, and the construction, reconstruction, or

rehabilitation of which began before September 26, 1985, and

was completed on or after such date,

"(ii) the original use of which begins with the taxpayer and

with respect to which a binding contract to incur significant

expenditures for construction, reconstruction, or

rehabilitation was entered into before September 26, 1985, and

some of such expenditures are incurred on or after such date,

or

"(iii) acquired on or after September 26, 1985, pursuant to a

binding contract entered into before such date, and

"(B) described in an inducement resolution or other

comparable preliminary approval adopted by an issuing authority

(or by a voter referendum) before September 26, 1985.

"(2) Significant expenditures. - For purposes of paragraph

(1)(A), the term 'significant expenditures' means expenditures

greater than 10 percent of the reasonably anticipated cost of the

construction, reconstruction, or rehabilitation of the facility

involved.

"(b) Certain Amendments To Apply to Bonds Under Subsection (a)

Transitional Rule. -

"(1) In general. - In the case of a bond issued after August

15, 1986, and to which subsection (a) of this section applies,

the requirements of the following provisions shall be treated as

included in section 103 and section 103A (as appropriate) of the

1954 Code:

"(A) The requirement that 95 percent or more of the net

proceeds of an issue are to be used for a purpose described in

section 103(b)(4) or (5) of such Code in order for section

103(b)(4) or (5) of such Code to apply, including the

application of section 142(b)(2) of the 1986 Code (relating to

limitation on office space).

"(B) The requirement that 95 percent or more of the net

proceeds of an issue are to be used for a purpose described in

section 103(b)(6)(A) of the 1954 Code in order for section

103(b)(6)(A) of such Code to apply.

"(C) The requirements of section 143 of the 1986 Code

(relating to qualified mortgage bonds and qualified veterans'

mortgage bonds) in order for section 103A(b)(2) of the 1954

Code to apply.

"(D) The requirements of section 144(a)(11) of the 1986 Code

(relating to limitation on acquisition of depreciable farm

property) in order for section 103(b)(6)(A) of the 1954 Code to

apply.

"(E) The requirements of section 147(b) of the 1986 Code

(relating to maturity may not exceed 120 percent of economic

life).

"(F) The requirements of section 147(f) of the 1986 Code

(relating to public approval required for private activity

bonds).

"(G) The requirements of section 147(g) of the 1986 Code

(relating to restriction on issuance costs financed by issue).

"(H) The requirements of section 148 of the 1986 Code

(relating to arbitrage).

"(I) The requirements of section 149(e) of the 1986 Code

(relating to information reporting).

"(J) The provisions of section 150(b) of the 1986 Code

(relating to changes in use).

"(2) Certain requirements apply only to bonds issued after

december 31, 1986. - In the case of subparagraphs (F) and (I) of

paragraphs (1), paragraph (1) shall be applied by substituting

'December 31, 1986' for 'August 15, 1986'.

"(3) Application of volume cap. - Except as provided in section

1315, any bond to which this subsection applies shall be treated

as a private activity bond for purposes of section 146 of the

1986 Code if such bond would have been taken into account under

section 103(n) or 103A(g) of the 1954 Code (determined without

regard to any carryforward election) were such bond issued before

August 16, 1986.

"(4) Application of provisions. - For purposes of applying the

requirements referred to in any subparagraph of paragraph (1) or

of subsection (a)(3) or (b)(3) of section 1313 to any bond, such

bond shall be treated as described in the subparagraph of section

141(d)(1) of the 1986 Code to which the use of the proceeds of

such bond most closely relates.

"(c) Special Rules for Certain Government Bonds Issued After

August 15, 1986. -

"(1) In general. - In the case of any bond described in

paragraph (2) -

"(A) section 1311(a) and (c) and subsection (b) of this

section shall be applied by substituting 'August 31, 1986' for

'August 15, 1986' each place it appears,

"(B) subsection (b)(1) shall be applied without regard to

subparagraphs (F), (G), and (J), and

"(C) such bond shall not be treated as a private activity

bond for purposes of applying the requirements referred to in

subparagraphs (H) and (I) of subsection (b)(1).

"(2) Bond described. - A bond is described in this paragraph if

such bond is not -

"(A) an industrial development bond, as defined in section

103(b)(2) of the 1954 Code but determined -

"(i) by inserting 'directly or indirectly' after 'is' in

the material preceding clause (i) of subparagraph (B)

thereof, and

"(ii) without regard to subparagraph (B) of section

103(b)(3) of such Code,

"(B) a mortgage subsidy bond (as defined in section

103A(b)(1) of such Code, without regard to any exception from

such definition), or

"(C) a private loan bond (as defined in section 103(o)(2)(A)

of such Code, without regard to any exception from such

definition other than section 103(o)(2)(C) of such Code).

"(d) Election Out. - This section shall not apply to any issue

with respect to which the issuer elects not to have this section

apply.

 

"SEC. 1313. TRANSITIONAL RULES RELATING TO REFUNDINGS.

"(a) Certain Current Refundings. -

"(1) In general. - Except as provided in paragraph (3), the

amendments made by section 1301 [for classification see section

1311(a) of this note] shall not apply to any bond the proceeds of

which are used exclusively to refund (other than to advance

refund) a qualified bond (or a bond which is part of a series of

refundings of a qualified bond) if -

"(A) the amount of the refunding bond does not exceed the

outstanding amount of the refunded bond, and

"(B)(i) the average maturity of the issue of which the

refunding bond is a part does not exceed 120 percent of the

average reasonably expected economic life of the facilities

being financed with the net proceeds of such issue (determined

under section 147(b) of the 1986 Code), or

"(ii) the refunding bond has a maturity date not later than

the date which is 17 years after the date on which the

qualified bond was issued.

In the case of a qualified bond which was (when issued) a

qualified mortgage bond or a qualified veterans' mortgage bond,

subparagraph (B)(i) shall not apply and subparagraph (B)(ii)

shall be applied by substituting '32 years' for '17 years'.

"(2) Qualified bond. - For purposes of paragraph (1), the term

'qualified bond' means any bond (other than a refunding bond) -

"(A) issued before August 16, 1986, or

"(B) issued after August 15, 1986, if section 1312(a) applies

to such bond.

"(3) Certain amendments to apply. - The following provisions of

the 1986 Code shall be treated as included in section 103 and

section 103A (as appropriate) of the 1954 Code and shall apply to

refunding bonds described in paragraph (1):

"(A) The requirements of section 147(f) (relating to public

approval required for private activity bonds) but only if the

maturity date of the refunding bond is later than the maturity

date of the refunded bond.

"(B) The requirements of section 147(g) (relating to

restriction on issuance costs financed by issue).

"(C) The requirements of sections 143(g) and 148 (relating to

arbitrage).

"(D) The requirements of section 149(e) (relating to

information reporting).

"(E) The provisions of section 150(b) (relating to changes in

use).

Subparagraphs (A) and (D) shall apply only if the refunding bond

is issued after December 31, 1986. In the case of a refunding

bond described in paragraph (1) with respect to a qualified bond

described in paragraph (2)(B), the requirements of section

1312(b)(1) which applied to such qualified bond shall be treated

as specified in this paragraph with respect to such refunding

bond.

"(4) Special rules for certain government bonds issued after

august 15, 1986. - In the case of any bond described in section

1312(c)(2) -

"(A) paragraph (2) of this subsection shall be applied by

substituting 'August 31, 1986' for 'August 15, 1986' and by

substituting 'September 1, 1986' for 'August 16, 1986',

"(B) paragraph (3) shall be applied without regard to

subparagraphs (A), (B), and (E), and

"(C) such bond shall not be treated as a private activity

bond for purposes of applying the requirements referred to in

subparagraphs (C) and (D) of paragraph (3).

"(b) Certain Advance Refundings. -

"(1) In general. - Except as provided in paragraph (3), the

amendments made by section 1301 [for classification see section

1311(a) of this note] shall not apply to any bond the proceeds of

which are used exclusively to advance refund a bond if -

"(A) the refunded bond is described in paragraph (2), and

"(B) the requirements of subsection (a)(1)(B) are met.

"(2) Non-idb's, etc. - A bond is described in this paragraph if

such bond is not described in subsection (b)(2) or (o)(2)(A) of

section 103 of the 1954 Code and was issued (or was issued to

refund a bond issued) before August 16, 1986. For purposes of the

preceding sentence, the determination of whether a bond is

described in such subsection (o)(2)(A) shall be made without

regard to any exception other than section 103(o)(2)(C) of such

Code.

"(3) Certain amendments to apply. - The following provisions of

the 1986 Code shall be treated as included in section 103 and

section 103A (as appropriate) of the 1954 Code and shall apply to

refunding bonds described in paragraph (1):

"(A) The requirements of section 147(f) (relating to public

approval required for private activity bonds).

"(B) The requirements of section 147(g) (relating to

restriction on issuance costs financed by issue).

"(C) The requirements of section 148 (relating to arbitrage),

except that section 148(d)(3) shall not apply to proceeds of

such bonds to be used to discharge the refunded bonds.

"(D) The requirements of paragraphs (3) and (4) of section

149(d) (relating to advance refundings).

"(E) The requirements of section 149(e) (relating to

information reporting).

"(F) The provisions of section 150(b) (relating to changes in

use).

"(G) Except as provided in the last sentence of subsection

(c)(2) of this section, the requirements of section 145(b)

(relating to $150,000,000 limitation on bonds other than

hospital bonds).

Subparagraphs (A) and (E) shall apply only if the refunding bond

is issued after December 31, 1986.

"(4) Special rule for certain government bonds issued after

august 15, 1986. - In the case of any bond described in section

1312(c)(2) -

"(A) paragraph (2) of this subsection shall be applied by

substituting 'September 1, 1986' for 'August 16, 1986',

"(B) paragraph (3) shall be applied without regard to

subparagraphs (A), (B), and (F), and

"(C) such bond shall not be treated as a private activity

bond for purposes of applying the requirements referred to in

subparagraphs (C) and (E).

"(5) Certain refunding bonds subject to volume cap. - Any

refunding bond described in paragraph (1) the proceeds of which

are used to refund a bond issued as part of an issue 5 percent or

more of the net proceeds of which are or will be used to provide

an output facility (within the meaning of section 141(b)(4) of

the 1986 Code) shall be treated as a private activity bond for

purposes of section 146 of the 1986 Code (to the extent of the

nongovernmental use of such issue, under rules similar to the

rules of section 146(m)(2) of such Code). For purposes of the

preceding sentence, use by a 501(c)(3) organization with respect

to its activities which do not constitute unrelated trades or

businesses (determined by applying section 513(a) of the 1986

Code) shall not be taken into account.

"(c) Treatment of Certain Refundings of Certain IDB's and

501(c)(3) Bonds. -

"(1) $40,000,000 limit for certain small issue bonds. -

Paragraph (10) of section 144(a) of the 1986 Code shall not apply

to any bond (or series of bonds) the proceeds of which are used

exclusively to refund a tax-exempt bond to which such paragraph

and the corresponding provision of prior law did not apply if -

"(A) the average maturity date of the issue of which the

refunding bond is a part is not later than the average maturity

date of the bonds to be refunded by such issue,

"(B) the amount of the refunding bond does not exceed the

outstanding amount of the refunded bond, and

"(C) the net proceeds of the refunding bond are used to

redeem the refunded bond not later than 90 days after the date

of the issuance of the refunding bond.

For purposes of subparagraph (A), average maturity shall be

determined in accordance with section 147(b)(2)(A) of the 1986

Code.

"(2) $150,000,000 limitation for certain 501(c)(3) bonds. -

Subsection (b) of section 145 of the 1986 Code (relating to

$150,000,000 limitation for nonhospital bonds) shall not apply to

any bond (or series of bonds) the proceeds of which are used

exclusively to refund a tax-exempt bond to which such subsection

did not apply if -

"(A)(i) the average maturity of the issue of which the

refunding bond is a part does not exceed 120 percent of the

average reasonably expected economic life of the facilities

being financed with the net proceeds of such issue (determined

under section 147(b) of the 1986 Code), or

"(ii) the refunding bond has a maturity date not later than

the later of the date which is 17 years after the date on which

the qualified bond (as defined in subsection (a)(2)) was

issued, and

"(B) the requirements of subparagraphs (B) and (C) of

paragraph (1) are met with respect to the refunding bond.

Subsection (b) of section 145 of the 1986 Code shall not apply to

the 1st advance refunding after March 14, 1986, of a bond issued

before January 1, 1986.

"(3) Application to later issues. - Any bond to which section

144(a)(10) or 145(b) of the 1986 Code does not apply by reason of

this section shall be taken into account in determining whether

such section applies to any later issue.

"(d) Mortgage and Student Loan Targeting Rules To Apply to Loans

Made More Than 3 Years After the Date of the Original Issue. -

Subsections (a)(3) and (b)(3) shall be treated as including the

requirements of subsections (e) and (f) of section 143 and

paragraphs (3) and (4) of section 144(b) of the 1986 Code with

respect to bonds the proceeds of which are used to finance loans

made more than 3 years after the date of the issuance of the

original bond.

 

"SEC. 1314. SPECIAL RULES WHICH OVERRIDE OTHER RULES IN THIS

SUBTITLE.

"(a) Arbitrage Restriction on Investments in Annuities. - In the

case of a bond issued after September 25, 1985, section 103(c) of

the 1954 Code shall be applied by treating the reference to

securities in paragraph (2) thereof as including a reference to an

annuity contract. The preceding sentence shall not apply to the

first advance refunding after September 25, 1985, if a bond issued

before September 26, 1985.

"(b) Temporary Period for Advance Refundings. - In the case of a

bond issued after December 31, 1985, to advance refund a bond, the

initial temporary period under section 103(c) of the 1954 Code with

respect to the proceeds of the refunding bond shall end not later

than 30 days after the date of issue of the refunding bond.

"(c) Determination of Yield. - In the case of a bond issued after

December 31, 1985, for purposes of section 103(c) of the 1954 Code,

the yield on an issue shall be determined on the basis of the issue

price (within the meaning of sections 1273 and 1274 of the 1986

Code).

"(d) Arbitrage Rebate Requirement. -

"(1) In general. - Except as otherwise provided in this

subsection, in the case of a bond issued after December 31, 1985,

section 103 of the 1954 Code shall be treated as including the

requirements of section 148(f) of the 1986 Code in order for

section 103(a) of the 1954 Code to apply.

"(2) Government bonds. - In the case of a bond described in

section 1312(c)(2) (and not described in paragraph (3) of this

subsection), paragraph (1) shall be applied by substituting

'August 31, 1986' for 'December 31, 1985'.

"(3) Certain pools. -

"(A) In general. - In the case of a bond described in section

1312(c)(2) and issued as part of an issue described in

subparagraph (B), (C), (D), or (E), paragraph (1) shall be

applied by substituting '3 p.m. E.D.T., July 17, 1986' for

'December 31, 1985'. Such a bond shall not be treated as a

private activity bond for purposes of applying section 148(f)

of the 1986 Code.

"(B) Loans to unrelated governmental units. - An issue is

described in this subparagraph if any portion of the proceeds

of the issue is to be used to make or finance loans to any

governmental unit other than any governmental unit which is

subordinate to the issuer and the jurisdiction of which is

within -

"(i) the jurisdiction of the issuer, or

"(ii) the jurisdiction of the governmental unit on behalf

of which such issuer issued the issue.

"(C) Less than 75 percent of projects identified. - An issue

is described in this subparagraph if less than 75 percent of

the proceeds of the issue is to be used to make or finance

loans to initial borrowers to finance projects identified (with

specificity) by the issuer, on or before the date of issuance

of the issue, as projects to be financed with the proceeds of

the issue.

"(D) Less than 25 percent of funds committed to be borrowed. -

An issue is described in this subparagraph if, on or before

the date of issuance of the issue, commitments have not been

entered into by initial borrowers to borrow at least 25 percent

of the proceeds of the issue.

"(E) Certain long maturity issues. - An issue is described in

this subparagraph if -

"(i) the maturity date of any bond issued as part of such

issue exceeds 30 years, and

"(ii) any principal payment on any loan made or financed by

the proceeds of the issue is to be used to make or finance

additional loans.

"(F) Special rules. -

"(i) Exception from subparagraphs (c) and (d) where similar

pools issued by issuer. - An issue shall not be treated as

described in subparagraph (C) or (D) with respect to any

issue to make or finance loans to governmental units if -

"(I) the issuer, before 1986, issued 1 or more similar issues

to make or finance loans to governmental units, and

"(II) the aggregate face amount of such issues issued during

1986 does not exceed 250 percent of the average of the annual

aggregate face amounts of such similar issues issued during

1983, 1984, or 1985.

"(ii) Determination of issuance. - For purposes of

subparagraph (A), an issue shall not be treated as issued

until -

"(I) the bonds issued as part of such issue are offered to the

public (pursuant to final offering materials), and

"(II) at least 25 percent of such bonds is sold to the public.

For purposes of the preceding sentence, the sale of a bond to

a securities firm, broker, or other person acting in the

capacity of an underwriter or wholesaler shall not be treated

as a sale to the public.

"(e) Information Reporting. - In the case of a bond issued after

December 31, 1986, nothing in section 103(a) of the 1986 Code or

any other provision of law shall be construed to provide an

exemption from Federal income tax for interest on any bond unless

such bond satisfies the requirements of section 149(e) of the 1986

Code. A bond described in section 1312(c)(2) shall not be treated

as a private activity bond for purposes of applying such

requirements.

"(f) Abusive Transaction Limitation on Advance Refundings To

Apply. - In the case of a bond issued after August 31, 1986,

nothing in section 103(a) of the 1986 Code or any other provision

of law shall be construed to provide an exemption from Federal

income tax for interest on any bond if the issue of which such bond

is a part is described in paragraph (4) of section 149(d) of the

1986 Code (relating to abusive transactions).

"(g) Termination of Mortgage Bond Policy Statement Requirement. -

Paragraph (5) of section 103A(j) of the 1954 Code (relating to

policy statement) shall not apply to any bond issued after August

15, 1986, and shall not apply to nonissued bond amounts elected

under section 25 of the 1986 Code after such date.

"(h) Arbitrage Restriction on Investments in Investment-Type

Property. - In the case of a bond issued before August 16, 1986

(September 1, 1986 in the case of a bond described in section

1312(c)(2)), section 103(c) of the 1954 Code shall be applied by

treating the reference to securities in paragraph (2) thereof as

including a reference to investment-type property but only for

purposes of determining whether any bond issued after October 16,

1987, to advance refund such bond (or a bond which is part of a

series of refundings of such bond) is an arbitrage bond (within the

meaning of section 148(a) of the 1986 Code).

"(i) Section To Override Other Rules. - Except as otherwise

expressly provided by reference to a provision to which a

subsection of this section applies, nothing in any other section of

this subtitle shall be construed as exempting any bond from the

application of such provision.

 

"SEC. 1315. TRANSITIONAL RULES RELATING TO VOLUME CAP.

"(a) In General. - Except as otherwise provided in this section,

section 146(f) of the 1986 Code shall not apply with respect to an

issuing authority's volume cap under section 103(n) of the 1954

Code, and no carryforward under such section 103(n) shall be

recognized for bonds issued after August 15, 1986.

"(b) Certain Bonds for Carryforward Projects Outside of Volume

Cap. - Bonds issued pursuant to an election under section

103(n)(10) of the 1954 Code (relating to elective carryforward of

unused limitation for specified project) made before November 1,

1985, shall not be taken into account under section 146 of the 1986

Code if the carryforward project is a facility to which the

amendments made by section 1301 [for classification see section

1311(a) of this note] do not apply by reason of section 1312(a) of

this Act.

"(c) Volume Cap Not To Apply With Respect to Certain Facilities

and Purposes. - Section 146 of the 1986 Code shall not apply to any

bond issued with respect to any facility or purpose described in a

paragraph of subsection (d) if -

"(1) such bond would not have been taken into account under

section 103(n) of the 1954 Code for calendar year 1986

(determined without regard to any carryforward election) were

such bond issued on August 15, 1986, or

"(2) such bond would not have been taken into account under

section 103(n) of the 1954 Code for calendar year 1986

(determined with regard to any carryforward election made before

January 1, 1986) were such bond issued on August 15, 1986.

The preceding sentence shall not apply to the extent section

1313(b)(5) treats any bond as a private activity bond for purposes

of section 146 of the 1986 Code.

"(d) Facilities and Purposes Described. -

"(1) A facility is described in this paragraph if the

amendments made by section 201 of this Act [amending sections 46,

167, 168, 178, 179, 280F, 291, 312, 465, 467, 514, 751, 1245,

4162, 6111, and 7701 of this title] (relating to depreciation) do

not apply to such facility by reason of section 204(a)(8) of this

Act [set out as a note under section 168 of this title] (or, in

the case of a facility which is governmentally owned, would not

apply to such facility were it owned by a nongovernmental

person).

"(2) A facility or purpose is described in this paragraph if

the facility or purpose is described in a paragraph of section

1317.

"(3) A facility is described in this paragraph if the facility -

"(A) serves Los Osos, California, and

"(B) would be described in paragraph (1) were it a solid

waste disposal facility.

The aggregate face amount of bonds to which this paragraph

applies shall not exceed $35,000,000.

"(4) A facility is described in this paragraph if it is a

sewage disposal facility with respect to which -

"(A) on September 13, 1985, the State public facilities

authority took official action authorizing the issuance of

bonds for such facility, and

"(B) on December 30, 1985, there was an executive order of

the State Governor granting allocation of the State ceiling

under section 103(n) of the 1954 Code in the amount of

$250,000,000 to the Industrial Development Board of the Parish

of East Baton Rouge, Louisiana.

The aggregate face amount of bonds to which this paragraph

applies shall not exceed $98,500,000.

"(5) A facility is described in this paragraph if -

"(A) such facility is a solid waste disposal facility in

Charleston, South Carolina, and

"(B) a State political subdivision took formal action on

April 1, 1980, to commit development funds for such facility.

For purposes of determining whether a bond issued as part of an

issue for a facility described in the preceding sentence is an

exempt facility bond for purposes of part IV of subchapter B of

chapter 1 of the 1986 Code, '90 percent' shall be substituted for

'95 percent' in section 142(a) of the 1986 Code.

"The aggregate face amount of bonds to which this paragraph

applies shall not exceed $75,000,000.

"(6) A facility is described in this paragraph if -

"(A) such facility is a wastewater treatment facility for

which site preparation commenced before September 1985, and

"(B) a parish council approved a service agreement with

respect to such facility on December 4, 1985.

The aggregate face amount of bonds to which this paragraph

applies shall not exceed $120,000,000.

"(e) Treatment of Redevelopment Bonds. - Any bond to which

section 1317(6) of this Act applies shall be treated for purposes

of this section as described in subsection (c)(1). The preceding

sentence shall not apply to any bond which (if issued on August 15,

1986) would have been an industrial development bond (as defined in

section 103(b)(2) of the 1954 Code).

 

"SEC. 1316. PROVISIONS RELATING TO CERTAIN ESTABLISHED STATE

PROGRAMS.

"(a) Certain Loans to Veterans for the Purchase of Land. -

"(1) In general. - A bond described in paragraph (2) shall be

treated as described in section 141(d)(1) of the 1986 Code and as

having a carryforward purpose described in section 146(f)(5) of

such Code, but subsections (a), (b), (c), and (d) of section 147

of such Code shall not apply to such bond.

"(2) Bond described. - A bond is described in this paragraph if

-

"(A) such bond is a private activity bond solely by reason of

section 141(c) of such Code, and

"(B) such bond is issued as part of an issue 95 percent or

more of the net proceeds of which are to be used to carry out a

program established under State law to provide loans to

veterans for the purchase of land and which has been in effect

in substantially the same form during the 30-year period ending

on July 18, 1984, but only if such proceeds are used to make

loans or to fund similar obligations -

"(i) in the same manner in which,

"(ii) in the same (or lesser) amount or multiple of acres

per participant, and

"(iii) for the same purposes for which,

such program was operated on March 15, 1984.

"(b) Renewable Energy Property. -

"(1) In general. - A bond described in paragraph (2) shall be

treated as described in section 141(d)(1) of the 1986 Code and as

having a carryforward purpose described in section 146(f)(5) of

such Code.

"(2) Bond described. - A bond is described in this paragraph if

paragraph (1) of section 103(b) of the 1954 Code would not

(without regard to the amendments made by this title) have

applied to such bond by reason of section 243 of the Crude Oil

Windfall Profit Tax Act of 1980 [section 243 of Pub. L. 96-223,

set out as a note under section 103 of this title] if -

"(A) such section 243 were applied by substituting '95

percent or more of the net proceeds' for 'substantially all of

the proceeds' in subsection (a)(1) thereof, and

"(B) subparagraph (E) of subsection (a)(1) thereof referred

to section 149(b) of the 1986 Code.

"(c) Certain State Programs. -

"(1) In general. - A bond described in paragraph (2) shall be

treated as described in section 141(d)(1) of the 1986 Code and as

having a carryforward purpose described in section 146(f)(5) of

such Code.

"(2) Bond described. - A bond is described in this paragraph if

such bond is issued as part of an issue 95 percent or more of the

net proceeds of which are to be used to carry out a program

established under sections 280A, 280B, and 280C of the Iowa Code,

but only if -

"(A) such program has been in effect in substantially the

same form since July 1, 1983, and

"(B) such proceeds are to be used to make loans or fund

similar obligations for the same purposes as permitted under

such program on July 1, 1986.

"(3) $100,000,000 limitation. - The aggregate face amount of

outstanding bonds to which this subsection applies shall not

exceed $100,000,000.

"(4) Application of section 147(b). - A bond to which this

subsection applies (other than a refunding bond) shall be treated

as meeting the requirements of section 147(b) of the 1986 Code if

the average maturity (determined in accordance with section

147(b)(2)(A) of such Code) of the issue of which such bond is a

part does not exceed 20 years. A bond issued to refund (or which

is part of a series of bonds issued to refund) a bond described

in the preceding sentence shall be treated as meeting the

requirements of such section if the refunding bond has a maturity

date not later than the date which is 20 years after the date on

which the original bond was issued.

"(d) Use by Certain Federal Instrumentalities Treated as Use by

Governmental Units. - Use by an instrumentality of the United

States shall be treated as use by a State or local governmental

unit for purposes of section 103, and part IV of subchapter B of

chapter 1, of the 1986 Code with respect to a program approved by

Congress before August 3, 1972, but only if -

"(1) a portion of such program has been financed by bonds

issued before such date, to which section 103(a) of the 1954 Code

applied pursuant to a ruling issued by the Commissioner of the

Internal Revenue Service, and

"(2) construction of 1 or more facilities comprising a part of

such program commenced before such date.

"(e) Refunding Permitted of Certain Bonds Invested in Federally

Insured Deposits. -

"(1) In general. - Section 149(b)(2)(B)(ii) of the 1986 Code

(and section 103(h)(2)(B)(ii) of the 1954 Code) shall not apply

to any bond issued to refund a bond -

"(A) which, when issued, would have been treated as federally

guaranteed by reason of being described in clause (ii) of

section 103(h)(2)(B) of the 1954 Code if such section had

applied to such bond, and

"(B)(i) which was issued before April 15, 1983, or

"(ii) to which such clause did not apply by reason of the

except clause in section 631(c)(2) of the Tax Reform Act of

1984 [section 631(c)(2) of Pub. L. 98-369, set out as a note

under section 103 of this title].

Section 147(c) of the 1986 Code (and section 103(b)(16) of the

1954 Code) shall not apply to any refunding bond permitted under

the preceding sentence if section 103(b)(16) of the 1954 Code did

not apply to the refunded bond when issued.

"(2) Requirements. - A refunding bond meets the requirements of

this paragraph if -

"(A) the refunding bond has a maturity date not later than

the maturity date of the refunded bond,

"(B) the amount of the refunding bond does not exceed the

outstanding amount of the refunded bond,

"(C) the weighted average interest rate on the refunding bond

is lower than the weighted average interest rate on the

refunded bond, and

"(D) the net proceeds of the refunding bond are used to

redeem the refunded bond not later than 90 days after the date

of the issuance of the refunding bond.

"(f) Certain Hydroelectric Generating Property. -

"(1) In general. - A bond described in paragraph (2) shall be

treated as described in section 141(d)(1) of the 1986 Code and as

having a carryforward purpose described in section 146(f)(5) of

such Code.

"(2) Description. - A bond is described in this paragraph if

such bond is issued as part of an issue 95 percent or more of the

net proceeds of which are to be used to provide a facility

described in section 103(b)(4)(H) of the 1954 Code determined -

"(A) by substituting 'an application for a license' for 'an

application' in section 103(b)(8)(E)(ii) of the 1954 Code, and

"(B) by applying the requirements of section 142(b)(2) of the

1986 Code.

"(g) Treatment of Bonds Subject to Transitional Rules Under Tax

Reform Act of 1984. -

"(1) Subsections (d)(3) and (f) of section 148 of the 1986 Code

shall not apply to any bond described in section 624(c)(2) of the

Tax Reform Act of 1984 [section 624(c)(2) of Pub. L. 98-369, set

out as a note under section 103 of this title].

"(2)(A) There shall not be taken into account under section 146

of the 1986 Code any bond issued to provide a facility described

in paragraph (3) of section 631(a) of the Tax Reform Act of 1984

[section 631(a)(3) of Pub. L. 98-369, set out as a note under

section 103 of this title] relating to exception for certain

bonds for a convention center and resource recovery project.

"(B) If a bond issued as part of an issue substantially all of

the proceeds of which are used to provide the convention center

to which such paragraph (3) applies, such bond shall be treated

as an exempt facility bond as defined in section 142(a) of the

1986 Code.

"(C) If a bond which is issued as part of an issue

substantially all of the proceeds of which are used to provide

the resource recovery project to which such paragraph (3)

applies, such bond shall be treated as an exempt facility bond as

defined in section 142(a) of the 1986 Code and section 149(b) of

such Code shall not apply.

"(3) The amendments made by section 1301 [for classification

see section 1311(a) of this note] shall not apply to bonds issued

to finance any property described in section 631(d)(4) of the Tax

Reform Act of 1984 [section 631(d)(4) of Pub. L. 98-369, set out

as a note under section 103 of this title].

"(4) The amendments made by section 1301 [for classification

see section 1311(a) of this note] shall not apply to -

"(A) any bond issued to finance property described in section

631(d)(5) of the Tax Reform Act of 1984 [section 631(d)(5) of

Pub. L. 98-369, set out as a note under section 103 of this

title],

"(B) any bond described in paragraph (2), (3), (4), (5), (6),

or (7) of section 632(a), or section 632(b), of such Act [Pub.

L. 98-369, div. A, title VI, Sec. 632, July 18, 1984, 98 Stat.

937], and

"(C) any bond to which section 632(g)(2) of such Act applies.

In the case of bonds to which this paragraph applies, the

requirements of sections 148 and 149(d) shall be treated as

included in section 103 of the 1954 Code and shall apply to such

bonds.

"(5) The preceding provisions of this subsection shall not

apply to any bond issued after December 31, 1988.

"(6) The amendments made by section 1301 [for classification

see section 1311(a) of this note] (and the provisions of section

1314) shall not apply to any bond issued to finance property

described in section 216(b)(3) of the Tax Equity and Fiscal

Responsibility Act of 1982 [section 216(b)(3) of Pub. L. 97-248,

set out as a note under section 168 of this title].

"(7) In the case of a bond described in section 632(d) of the

Tax Reform Act of 1984 [Pub. L. 98-369, div. A, title VI, Sec.

632(d), July 18, 1984, 98 Stat. 938] -

"(A) section 141 of the 1986 Code shall be applied without

regard to subsection (a)(2) and paragraphs (4) and (5) of

subsection (b),

"(B) paragraphs (1) and (2) of section 141(b) of the 1986

Code shall be applied by substituting '25 percent' for '10

percent' each place it appears, and

"(C) section 149(b) of the 1986 Code shall not apply.

This paragraph shall not apply to any bond issued after December

31, 1990.

"(8)(A) The amendments made by section 1301 [for classification

see section 1311(a) of this note] shall not apply to any bond to

which section 629(a)(1) of the Tax Reform Act of 1984 [section

629(a)(1) of Pub. L. 98-369, set out as a note under section 103

of this title] applies, but such bond shall be treated as a

private activity bond for purposes of section 146 of the 1986

Code and as having a carryforward purpose described in section

146(f)(5) of such Code.

"(B) Section 629 of the Tax Reform Act of 1984 [section 629 of

Pub. L. 98-369, set out as a note under section 103 of this

title] is amended -

"(i) in subsection (c)(2), by striking out '$625,000,000' and

inserting in lieu thereof '$911,000,000',

"(ii) in subsection (c)(3), by adding at the end thereof the

following new subparagraphs:

" '(D) Improvements to existing generating facilities.

" '(E) Transmission lines.

" '(F) Electric generating facilities.', and

"(iii) in subsection (a), by adding at the end thereof the

following new sentence: '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.'

"(h) Certain Pollution Bonds. - Any bond which is treated as

described in section 103(b)(4)(F) of the 1954 Code by reason of

section 13209 of the Consolidated Omnibus Budget Reconciliation Act

of 1985 [Pub. L. 99-272, title XIII, Sec. 13209, Apr. 7, 1986, 100

Stat. 322] shall be treated as an exempt facility bond for purposes

of part IV of subchapter B of chapter 1 of the 1986 Code, and

section 147(d) of the 1986 Code shall not apply to such bond.

"(i) Transition Rule for Aggregate Limit per Taxpayer. - For

purposes of section 144(a)(10) of the 1986 Code, tax increment

bonds described in section 1869(c)(3) of this Act [set out as a

note under section 103 of this title] which are issued before

August 16, 1986, shall not be taken into account under subparagraph

(B)(ii) thereof.

"(j) Extension of Advance Refunding Exception for Qualified

Public Facility. - Paragraph (4) of section 631(c) of the Tax

Reform Act of 1984 [section 631(c)(4) of Pub. L. 98-369, set out as

a note under section 103 of this title] is amended -

"(1) by striking out 'or the Dade County, Florida, airport' in

the last sentence, and

"(2) by adding at the end thereof the following new sentence:

'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 shall not apply.'

"(k) Expansion of Exception for River Place Project. - Section

1104 of the Mortgage Subsidy Bond Tax Act of 1980 [section 1104 of

Pub. L. 96-499, formerly set out as a note under section 103A of

this title], as added by the Tax Reform Act of 1984, is amended -

"(1) by striking out 'December 31, 1984,' in subsection (p) and

inserting in lieu thereof 'December 31, 1984 (other than

obligations described in subsection (r)(1)),', and

"(2) by striking out '$55,000,000,' in subsection (r)(1)(B) and

inserting in lieu thereof '$110,000,000 of which no more than

$55,000,000 shall be outstanding later than November 1, 1987'.

 

"SEC. 1317. TRANSITIONAL RULES FOR SPECIFIC FACILITIES.

"(1) Docks and wharves. - A bond issued as part of an issue 95

percent or more of the net proceeds of which are to be used to

provide any dock or wharf (within the meaning of section

103(b)(4)(D) of the 1954 Code) shall be treated as an exempt

facility bond (for a facility described in section 142(a)(2) of the

1986 Code) for purposes of part IV of subchapter B of chapter 1 of

the 1986 Code if such dock or wharf is described in any of the

following subparagraphs:

"(A) A dock or wharf is described in this subparagraph if -

"(i) the issue to finance such dock or wharf was approved by

official city action on September 3, 1985, and by voters on

November 5, 1985, and

"(ii) such dock or wharf is for a slack water harbor with

respect to which a Corps of Engineers grant of approximately

$2,000,000 has been made under section 107 of the Rivers and

Harbors Act [33 U.S.C. 577].

The aggregate face amount of bonds to which this subparagraph

applies shall not exceed $2,500,000.

"(B) A dock or wharf is described in this subparagraph if -

"(i) inducement resolutions were adopted on May 23, 1985,

September 18, 1985, and September 24, 1985, for the issuance of

the bonds to finance such dock or wharf,

"(ii) a harbor dredging contract with respect thereto was

entered into on August 2, 1985, and

"(iii) a construction management and joint venture agreement

with respect thereto was entered into on October 1, 1984.

The aggregate face amount of bonds to which this subparagraph

applies shall not exceed $625,000,000.

"(C) A facility is described in this subparagraph if -

"(i) the legislature first authorized on June 29, 1981, the

State agency issuing the bond to issue at least $30,000,000 of

bonds,

"(ii) the developer of the facility was selected on April 26,

1985, and

"(iii) an inducement resolution for the issuance of such

issue was adopted on October 9, 1985.

The aggregate face amount of bonds to which this subparagraph

applies shall not exceed $200,000,000.

"(D) A facility is described in this subparagraph if -

"(i) an inducement resolution was adopted on October 17,

1985, for such issue, and

"(ii) the city council for the city in which the facility is

to be located approved on July 30, 1985, an application for an

urban development action grant with respect to such facility.

The aggregate face amount of bonds to which this subparagraph

applies shall not exceed $36,500,000. A facility shall be treated

as described in this subparagraph if it would be so described if

'90 percent' were substituted for '95 percent' in the material

preceding subparagraph (A) of this paragraph.

"(2) Pollution control facilities. - A bond issued as part of an

issue 95 percent or more of the net proceeds of which are to be

used to provide air or water pollution control facilities (within

the meaning of section 103(b)(4)(F) of the 1954 Code) shall be

treated as an exempt facility bond for purposes of part IV of

subchapter B of chapter 1 of the 1986 Code if such facility is

described in any of the following subparagraphs:

"(A) A facility is described in this subparagraph if -

"(i) inducement resolutions with respect to such facility

were adopted on September 23, 1974, and on April 5, 1985,

"(ii) a bond resolution for such facility was adopted on

September 6, 1985, and

"(iii) the issuance of the bonds to finance such facility was

delayed by action of the Securities and Exchange Commission

(file number 70-7127).

The aggregate face amount of bonds to which this subparagraph

applies shall not exceed $120,000,000.

"(B) A facility is described in this subparagraph if -

"(i) there was an inducement resolution for such facility on

November 19, 1985, and

"(ii) design and engineering studies for such facility were

completed in March of 1985.

The aggregate face amount of bonds to which this subparagraph

applies shall not exceed $25,000,000.

"(C) A facility is described in this subparagraph if -

"(i) a resolution was adopted by the county board of

supervisors pertaining to an issuance of bonds with respect to

such facility on April 10, 1974, and

"(ii) such facility was placed in service on June 12, 1985.

The aggregate face amount of bonds to which this subparagraph

applies shall not exceed $90,000,000. For purposes of this

subparagraph, a pollution control facility includes a sewage or

solid waste disposal facility (within the meaning of section

103(b)(4)(E) of the 1954 Code).

"(D) A facility is described in this subparagraph if -

"(i) the issuance of the bonds for such facility was approved

by a State agency on August 22, 1979, and

"(ii) the authority to issue such bonds was scheduled to

expire (under terms of the State approval) on August 22, 1989.

The aggregate face amount of bonds to which this subparagraph

applies shall not exceed $198,000,000.

"(E) A facility is described in this subparagraph if -

"(i) such facility is 1 of 4 such facilities in 4 States with

respect to which the Ball Corporation transmitted a letter of

intent to purchase such facilities on February 26, 1986, and

"(ii) inducement resolutions were issued on December 30,

1985, January 15, 1986, January 22, 1986, and March 17, 1986

with respect to bond issuance in the 4 respective States.

The aggregate face amount of bonds to which this subparagraph

applies shall not exceed $6,000,000.

"(F) A facility is described in this subparagraph if -

"(i) inducement resolutions for bonds with respect to such

facility were adopted on September 27, 1977, May 27, 1980, and

October 8, 1981, and

"(ii) such facility is located at a geothermal power complex

owned and operated by a single investor-owned utility.

For purposes of this subparagraph and section 103 of the 1986

Code, all hydrogen sulfide air and water pollution control

equipment, together with functionally related and subordinate

equipment and structures, located or to be located at such power

complex shall be treated as a single pollution control facility.

The aggregate face amount of bonds to which this subparagraph

applies shall not exceed $600,000,000.

"(G) A facility is described in this subparagraph if -

"(i) such facility is an air pollution control facility

approved by a State bureau of pollution control on July 10,

1986, and by a State board of economic development on July 17,

1986, and

"(ii) on August 15, 1986, the State bond attorney gave notice

to the clerk to initiate validation proceedings with respect to

such issue and on August 28, 1986, the validation decree was

entered.

The aggregate face amount of bonds to which this subparagraph

applies shall not exceed $900,000.

"(I) A facility is described in this subparagraph if -

"(i) a private company met with a State air control board on

November 14, 1985, to propose construction of a sulften unit,

and

"(ii) the sulften unit is being constructed under a letter of

intent to construct which was signed on April 8, 1986.

The aggregate face amount of bonds to which this subparagraph

applies shall not exceed $11,000,000.

"(J) A facility is described in this subparagraph if it is part

of a 250 megawatt coal-fired electric plant in northeastern

Nevada on which the Sierra Pacific Power Company, a subsidiary of

Sierra Pacific Resources, began in 1980 work to design, finance,

construct, and operate. The aggregate face amount of bonds to

which this subparagraph applies shall not exceed $200,000,000.

"(K) A facility is described in this subparagraph if -

"(i) there was an inducement resolution adopted by a State

industrial development authority on January 14, 1976, and

"(ii) such facility is named in a resolution of such

authority relating to carryforward of the State's unused 1985

private activity bond limit passed by such industrial

development authority on December 18, 1985.

This subparagraph shall apply only to obligations issued at the

request of the party pursuant to whose request the January 14,

1976, inducement was given. The aggregate face amount of bonds to

which this subparagraph applies shall not exceed $75,000,000.

"(L) A facility is described in this subparagraph if a city

council passed an ordinance (ordinance number 4626) agreeing to

issue bonds for such project, December 16, 1985. The aggregate

face amount of obligations to which this subparagraph applies

shall not exceed $45,000,000.

"(3) Sports facilities. - A bond issued as part of an issue 95

percent or more of the net proceeds of which are to be used to

provide sports facilities (within the meaning of section

103(b)(4)(B) of the 1954 Code) shall be treated as an exempt

facility bond for purposes of part IV of subchapter B of chapter 1

of the 1986 Code if such facilities are described in any of the

following subparagraphs:

"(A) A facility is described in this subparagraph if it is a

stadium -

"(i) which was the subject of a city ordinance passed on

September 23, 1985,

"(ii) for which a loan of approximately $4,000,000 for land

acquisition was approved on October 28, 1985, by the State

Controlling Board, and

"(iii) a stadium operating corporation with respect to which

was incorporated on March 20, 1985.

The aggregate face amount of bonds to which this subparagraph

applies shall not exceed $200,000,000.

"(B) A facility is described in this subparagraph if -

"(i) it is a stadium with respect to which a lease agreement

for the ground on which the stadium is to be built was entered

into between a county and the stadium corporation for such

stadium on July 3, 1984,

"(ii) there was a resolution approved on November 14, 1984,

by an industrial development authority setting forth the terms

under which the bonds to be issued to finance such stadium

would be issued, and

"(iii) there was an agreement for consultant and engineering

services for such stadium entered into on September 28, 1984.

The aggregate face amount of bonds to which this subparagraph

applies shall not exceed $90,000,000.

"(C) A facility is described in this subparagraph if -

"(i) it is one or more stadiums to be used either by an

American League baseball team or a National Football League

team currently using a stadium in a city having a population in

excess of 2,500,000 and described in section 146(d)(3) of the

1986 Code,

"(ii) the bonds to be used to provide financing for one or

more such stadiums are issued by a political subdivision or a

State agency pursuant to a resolution approving an inducement

resolution adopted by a State agency on November 20, 1985, as

it may be amended (whether or not the beneficiaries of such

issue or issues are the beneficiaries (if any) specified in

such inducement resolution and whether or not the number of

such stadiums and the locations thereof are as specified in

such inducement resolution) or pursuant to P.A. 84-1470 of the

State in which such city is located (and by an agency created

thereby), and

"(iii) such stadium or stadiums are located in the city

described in (i).

The aggregate face amount of bonds to which this subparagraph

applies shall not exceed $250,000,000. In the case of any

carryforward of volume cap for one or more stadiums described in

the first sentence of this subparagraph, such carryforward shall

be valid with respect to bonds issued for such stadiums

notwithstanding any other provision of the 1986 Code or the 1954

Code, and whether or not (i) there is a change in the number of

stadiums or the beneficiaries or sites of the stadium or stadiums

and (ii) the bonds are issued by either of the state agencies

described in the first sentence of this subparagraph.

"(D) A facility is described in this subparagraph if -

"(i) such facility is a stadium or sports arena for Memphis,

Tennessee,

"(ii) there was an inducement resolution adopted on November

12, 1985, for the issuance of bonds to expand or renovate an

existing stadium and sports arena and/or to construct a new

arena, and

"(iii) the city council for such city adopted a resolution on

April 19, 1983, to include funds in the capital budget of the

city for such facility or facilities.

The aggregate face amount of bonds to which this subparagraph

applies shall not exceed $35,000,000.

"(E) A facility is described in this subparagraph if such

facility is a baseball stadium located in Bergen, Essex, Union,

Middlesex, or Hudson County, New Jersey with respect to which

governmental action occurred on November 7, 1985. The aggregate

face amount of bonds to which this subparagraph applies shall not

exceed $150,000,000.

"(F) A facility is described in this subparagraph if -

"(i) it is a facility with respect to which -

"(I) an inducement resolution dated December 24, 1985, was

adopted by the county industrial development authority,

"(II) a public hearing of the county industrial development

authority was held on February 6, 1986, regarding such

facility, and

"(III) a contract was entered into by the county, dated

February 19, 1986, for engineering services for a highway

improvement in connection with such project, or

"(ii) it is a domed football stadium adjacent to Cervantes

Convention Center in St. Louis, Missouri, with respect to which

a proposal to evaluate market demand, financial operations, and

economic impact was dated May 9, 1986.

The aggregate face amount of bonds to which this subparagraph

applies shall not exceed $175,000,000.

"(G) A project to provide a roof or dome for an existing sports

facility is described in this subparagraph if -

"(i) in December 1984 the county sports complex authority

filed a carryforward election under section 103(n) of the 1954

Code with respect to such project,

"(ii) in January 1985, the State authorized issuance of

$30,000,000 in bonds in the next 3 years for such project, and

"(iii) an 11-member task force was appointed by the county

executive in June 1985, to further study the feasibility of the

project.

The aggregate face amount of bonds to which this subparagraph

applies shall not exceed $30,000,000.

"(H) A sports facility renovation or expansion project is

described in this subparagraph if -

"(i) an amendment to the sports team's lease agreement for

such facility was entered into on May 23, 1985, and

"(ii) the lease agreement had previously been amended in

January 1976, on July 6, 1984, on April 1, 1985, and on May 7,

1985.

The aggregate face amount of bonds to which this subparagraph

applies shall not exceed $20,000,000.

"(I) A facility is described in this subparagraph if -

"(i) an appraisal for such facility was completed on March 6,

1985,

"(ii) an inducement resolution was adopted with respect to

such facility on June 7, 1985, and

"(iii) a State bond commission granted preliminary approval

for such project on September 3, 1985.

The aggregate face amount of bonds to which this subparagraph

applies shall not exceed $3,200,000.

"(J) A sports facility renovation or expansion project is

described in this subparagraph if -

"(i) such facility is a domed stadium which commenced

operations in 1965,

"(ii) such facility has been the subject of an ongoing

construction, expansion, or renovation program of planned

improvements,

"(iii) part 1 of such improvements began in 1982 with a

preliminary renovation program financed by tax-exempt bonds,

"(iv) part 2 of such program was previously scheduled for a

bond election on February 25, 1986, pursuant to a Commissioners

Court Order of November 5, 1985, and

"(v) the bond election for improvements to such facility was

subsequently postponed on December 10, 1985, in order to

provide for more comprehensive construction planning.

The aggregate face amount of bonds to which this subparagraph

applies shall not exceed $60,000,000.

"(K) A facility is described in this subparagraph if -

"(i) the 1985 State legislature appropriated a maximum sum of

$22,500,000 to the State urban development corporation to be

made available for such project, and

"(ii) a development and operation agreement was entered into

among such corporation, the city, the State budget director,

and the county industrial development agency, as of March 1,

1986.

The aggregate face amount of bonds to which this subparagraph

applies shall not exceed $28,000,000.

"(L) A facility is described in this subparagraph if -

"(i) it is to consist of 1 or 2 stadiums appropriate for

football games and baseball games with related structures and

facilities,

"(ii) governmental action was taken on August 7, 1985, by the

county commission, and on December 19, 1985, by the city

council, concerning such facility, and

"(iii) such facility is located in a city having a National

League baseball team.

The aggregate face amount of bonds to which this subparagraph

applies shall not exceed $200,000,000.

"(M) A facility is described in this subparagraph if -

"(i) such facility consists of 1 or 2 stadium projects (1 of

which may be a stadium renovation or expansion project) with

related structures and facilities,

"(ii) a special advisory commission commissioned a study by a

national accounting firm with respect to a project for such

facility, which study was released in September 1985, and

recommended construction of either a new multipurpose or a new

baseball-only stadium,

"(iii) a nationally recognized design and architectural firm

released a feasibility study with respect to such project in

April 1985, and

"(iv) the metropolitan area in which the facility is located

is presently the home of an American League baseball team.

The aggregate face amount of bonds to which this subparagraph

applies shall not exceed $200,000,000.

"(N) A facility is described in this subparagraph if -

"(i) it is to consist of 1 or 2 stadiums appropriate for

football games and baseball games with related structures and

facilities,

"(ii) the site for such facility was approved by the council

of the city in which such facility is to be located on July 9,

1985, and

"(iii) the request for proposals process was authorized by

the council of the city in which such facility is to be located

on November 5, 1985, and such requests were distributed to

potential developers on November 15, 1985, with responses due

by February 14, 1986.

The aggregate face amount of bonds to which this subparagraph

applies shall not exceed $200,000,000.

"(O) A facility is described in this subparagraph if -

"(i) such facility is described in a feasibility study dated

September 1985, and

"(ii) resolutions were adopted or other actions taken on

February 21, 1985, July 18, 1985, August 8, 1985, October 17,

1985, and November 7, 1985, by the Board of Supervisors of the

county in which such facility will be located with respect to

such feasibility study, appropriations to obtain land for such

facility, and approving the location of such facility in the

county.

The aggregate face amount of bonds to which this subparagraph

applies shall not exceed $20,000,000.

"(P) A facility is described in this subparagraph if such

facility constructed on a site acquired with the sale of revenue

bonds authorized by a city council on December 2, 1985,

(Ordinances No. 669 and 670, series 1985). The aggregate face

amount of bonds to which this subparagraph applies shall not

exceed $90,000,000.

"(Q) A facility is described in this subparagraph if -

"(i) resolutions were adopted approving a ground lease dated

June 27, 1983, by a sports authority (created by a State

legislature) with respect to the land on which the facility

will be erected,

"(ii) such facility is described in a market study dated June

13, 1983, and

"(iii) such facility was the subject of an Act of the State

legislature which was signed on July 1, 1983.

The aggregate face amount of bonds to which this subparagraph

applies shall not exceed $81,000,000.

"(R) A facility is described in this subparagraph if such

facility is a baseball stadium and adjacent parking facilities

with respect to which a city made a carryforward election of

$52,514,000 on February 25, 1985. The aggregate face amount of

bonds to which this subparagraph applies shall not exceed

$50,000,000.

"(S) A facility is described in this subparagraph if -

"(i) such facility is to be used by both a National Hockey

League team and a National Basketball Association team,

"(ii) such facility is to be constructed on a platform using

air rights over land acquired by a State authority and

identified as site B in a report dated May 30, 1984, prepared

for a State urban development corporation, and

"(iii) such facility is eligible for real property tax (and

power and energy) benefits pursuant to State legislation

approved and effective as of July 7, 1982.

The aggregate face amount of bonds to which this subparagraph

applies shall not exceed $225,000,000.

"(T) A facility is described in this subparagraph if -

"(i) a resolution authorizing the financing of the facility

through an issuance of revenue bonds was adopted by the City

Commission on August 5, 1986, and

"(ii) the metropolitan area in which the facility is to be

located is currently the spring training home of an American

league baseball team located during the regular season in a

city described in subparagraph (C).

The aggregate face amount of bonds to which this subparagraph

applies shall not exceed $10,000,000.

"(U) A facility is described in this subparagraph if it is a

football stadium located in Oakland, California, with respect to

which a design was completed by a nationally recognized

architectural firm for a stadium seating approximately 72,000, to

be located on property adjacent to an existing coliseum complex,

or is a renovation of an existing stadium located in Oakland,

California, and used by an American League baseball team. The

aggregate face amount of bonds to which this subparagraph applies

shall not exceed $100,000,000.

"(V) A facility is described in this subparagraph if it is a

sports arena (and related parking facility) for Grand Rapids,

Michigan. The aggregate face amount of bonds to which this

subparagraph applies shall not exceed $80,000,000.

"(W) A facility is described in this subparagraph if such

facility is located adjacent to the Anacostia River in the

District of Columbia. The aggregate face amount of bonds to which

this subparagraph applies shall not exceed $25,000,000.

"(X) A facility is described in this subparagraph if it is a

spectator sports facility for the City of San Antonio, Texas. The

aggregate face amount of bonds to which this subparagraph applies

shall not exceed $125,000,000.

"(Y) A facility is described in this subparagraph if it will be

part of, or adjacent to, an existing stadium which has been owned

and operated by a State university and if -

"(i) the stadium was the subject of a feasibility report by a

certified public accounting firm which is dated December 28,

1984, and

"(ii) a report by an independent research organization was

prepared in December 1985 demonstrating support among donors

and season ticket holders for the addition of a dome to the

stadium.

The aggregate face amount of bonds to which this subparagraph

applies shall not exceed $50,000,000.

"(Z) A facility is described in this subparagraph if -

"(i) such facility was a redevelopment project that was

approved in concept by the city council sitting as the

redevelopment agency in October 1984, and

"(ii) $20,000,000 in funds for such facility was identified

in a 5-year budget approved by the city redevelopment agency on

October 25, 1984.

The aggregate face amount of bonds to which this subparagraph

applies shall not exceed $80,000,000.

"(4) Residential rental property. - A bond issued as part of an

issue 95 percent or more of the net proceeds of which are to be

used to finance a residential rental project within the meaning of

section 103(b)(4) of the 1954 Code shall be treated as an exempt

facility bond within the meaning of section 142(a)(7) of the 1986

Code if the facility with respect to the bond is issued satisfies

all low-income occupancy requirements applicable to such bonds

before August 15, 1986, and the bonds are issued pursuant to -

"(A) a contract to purchase such property dated August 12,

1985;

"(B) the county housing authority approved the property and the

financing thereof on September 24, 1985, and

"(C) there was an inducement resolution adopted on October 10,

1985, by the county industrial development authority.

The aggregate face amount of bonds to which this paragraph applies

shall not exceed $25,400,000.

"(5) Airports. - A bond issued as a part of an issue 95 percent

or more of the net proceeds of which are to be used to provide an

airport (within the meaning of section 103(b)(4)(D) of the 1954

Code) shall be treated as an exempt facility bond (for facilities

described in section 142(a)(1) of the 1986 Code) for purposes of

part IV of subchapter B of chapter 1 of the 1986 Code if the

facility is described in any of the following subparagraphs:

"(A) A facility is described in this subparagraph if such

facility is a hotel at an airport facility serving a city

described in section 631(a)(3) of the Tax Reform Act of 1984

[section 631(a)(3) of Pub. L. 98-369, set out as a note under

section 103 of this title] (relating to certain bonds for a

convention center and resource recovery project). The aggregate

face amount of bonds to which this subparagraph applies shall not

exceed $40,000,000.

"(B) A facility is described in this subparagraph if such

facility is the primary airport for a city described in paragraph

(3)(C). The aggregate face amount of bonds to which this

subparagraph applies shall not exceed $500,000,000. Section

148(d)(2) of the 1986 Code shall not apply to any issue to which

this subparagraph applies. A facility shall be described in this

subparagraph if it would be so described if '90 percent' were

substituted for '95 percent' in the material preceding

subparagraph (A).

"(C) A facility is described in this subparagraph if such

facility is a hotel at Logan airport and such hotel is located on

land leased from a State authority under a lease contemplating

development of such hotel dated May 1, 1983, or under an

amendment, renewal, or extension of such a lease. The aggregate

face amount of bonds to which this subparagraph applies shall not

exceed $40,000,000.

"(D) A facility is described in this subparagraph if such

facility is the airport for the County of Sacramento, California.

The aggregate face amount of bonds to which this subparagraph

applies shall not exceed $150,000,000.

"(6) Redevelopment projects. - A bond issued as part of an issue

95 percent or more of the net proceeds of which are to be used to

finance redevelopment activities as part of a project within a

specific designated area shall be treated as a qualified

redevelopment bond for purposes of part IV of subchapter B of

chapter 1 of the 1986 Code if such project is described in any of

the following subparagraphs:

"(A) A project is described in this subparagraph if it was the

subject of a city ordinance numbered 82-115 and adopted on

December 2, 1982, or numbered 9590 and adopted on April 6, 1983.

The aggregate face amount of bonds to which this subparagraph

applies shall not exceed $9,000,000.

"(B) A project is described in this subparagraph if it is a

redevelopment project for an area in a city described in

paragraph (3)(C) which was designated as commercially blighted on

November 14, 1975, by the city council and the redevelopment plan

for which will be approved by the city council before January 31,

1987. The aggregate face amount of bonds to which this

subparagraph applies shall not exceed $20,000,000.

"(C) A project is described in this subparagraph if it is a

redevelopment project for an area in a city described in

paragraph (3)(C) which was designated as commercially blighted on

March 28, 1979, by the city council and the redevelopment plan

for which was approved by the city council on June 20, 1984. The

aggregate face amount of bonds to which this subparagraph applies

shall not exceed $100,000,000.

"(D) A project is described in this subparagraph if it is any

one of three redevelopment projects in areas in a city described

in paragraph (3)(C) designated as blighted by a city council

before January 31, 1987 and with respect to which the

redevelopment plan is approved by the city council before January

31, 1987. The aggregate face amount of bonds to which this

subparagraph applies shall not exceed $20,000,000.

"(E) A project is described in this subparagraph if such

project is for public improvements (including street

reconstruction and improvement of underground utilities) for

Great Falls, Montana, with respect to which engineering estimates

are due on October 1, 1986. The aggregate face amount of bonds to

which this subparagraph applies shall not exceed $3,000,000.

"(F) A project is described in this subparagraph if -

"(i) such project is located in an area designated as

blighted by the governing body of the city on February 15, 1983

(Resolution No. 4573), and

"(ii) such project is developed pursuant to a redevelopment

plan adopted by the governing body of the city on March 1, 1983

(Ordinance No. 15073).

The aggregate face amount of bonds to which this subparagraph

applies shall not exceed $5,000,000.

"(G) A project is described in this subparagraph if -

"(i) such project is located in an area designated by the

governing body of the city in 1983,

"(ii) such project is described in a letter dated August 8,

1985, from the developer's legal counsel to the development

agency of the city, and

"(iii) such project consists primarily of retail facilities

to be built by the developer named in a resolution of the

governing body of the city on August 30, 1985.

The aggregate face amount of bonds to which this subparagraph

applies shall not exceed $75,000,000.

"(H) A project is described in this subparagraph if -

"(i) such project is a project for research and development

facilities to be used primarily to benefit a State university

and related hospital, with respect to which an urban renewal

district was created by the city council effective October 11,

1985, and

"(ii) such project was announced by the university and the

city in March 1985.

The aggregate face amount of bonds to which this subparagraph

applies shall not exceed $40,000,000.

"(I) A project is described in this subparagraph if such

project is a downtown redevelopment project with respect to which

-

"(i) an urban development action grant was made, but only if

such grant was preliminarily approved on November 3, 1983, and

received final approval before June 1, 1984, and

"(ii) the issuer of bonds with respect to such facility

adopted a resolution indicating the issuer's intent to adopt

such redevelopment project on October 6, 1981, and the issuer

adopted an ordinance adopting such redevelopment project on

December 13, 1983.

The aggregate face amount of bonds to which this subparagraph

applies shall not exceed $10,000,000.

"(J) A project is described in this subparagraph if -

"(i) with respect to such project the city council adopted on

December 16, 1985, an ordinance directing the urban renewal

authority to study blight and produce an urban renewal plan,

"(ii) the blight survey was accepted and approved by the

urban renewal authority on March 20, 1986, and

"(iii) the city planning board approved the urban renewal

plan on May 7, 1986.

The aggregate face amount of bonds to which this subparagraph

applies shall not exceed $60,000,000.

"(K) A project is described in this subparagraph if -

"(i) the city redevelopment agency approved resolutions

authorizing issuance of land acquisition and public

improvements bonds with respect to such project on August 8,

1978,

"(ii) such resolutions were later amended in June 1979, and

"(iii) the State Supreme Court upheld a lower court decree

validating the bonds on December 11, 1980.

The aggregate face amount of bonds to which this subparagraph

applies shall not exceed $380,000,000.

"(L) A project is described in this subparagraph if it is a

mixed use redevelopment project either -

"(i) in an area (known as the Near South Development Area)

with respect to which the planning department of a city

described in paragraph 3(C) promulgated a draft development

plan dated March 1986, and which was the subject of public

hearings held by a subcommittee of the plan commission of such

city on May 28, 1986, and June 10, 1986, or

"(ii) in an area located within the boundaries of any 1 or

more census tracts which are directly adjacent to a river whose

course runs through such city.

The aggregate face amount of bonds to which this subparagraph

applies shall not exceed $75,000,000.

"(M) A project is described in this subparagraph if it is a

redevelopment project for an area in a city described in

paragraph 3(C) and such area -

"(i) was the subject of a report released in May 1986,

prepared by the National Park Service, and

"(ii) was the subject of a report released January 1986,

prepared by a task force appointed by the Mayor of such city.

The aggregate face amount of bonds to which this subparagraph

applies shall not exceed $75,000,000.

"(N) A project is described in this subparagraph if it is a

city-university redevelopment project approved by a city

ordinance No. 152-0-84 and the development plan for which was

adopted on January 28, 1985. The aggregate face amount of bonds

to which this subparagraph applies shall not exceed $23,760,000.

"(O) A project is described in this subparagraph if -

"(i) an inducement resolution was passed on March 9, 1984,

for issuance of bonds with respect to such project,

"(ii) such resolution was extended by resolutions passed on

August 14, 1984, April 2, 1985, August 13, 1985, and July 8,

1986,

"(iii) an urban development action grant was preliminarily

approved for part or all of such project on July 3, 1986, and

"(iv) the project is located in a district designated as the

Peabody-Gayoso District.

The aggregate face amount of bonds to which this subparagraph

applies shall not exceed $140,000,000.

"(P) A project is described in this subparagraph if the project

is a 1-block area of a central business district containing a

YMCA building with respect to which -

"(i) the city council adopted a resolution expressing an

intent to issue bonds for the project on September 27, 1985,

"(ii) the city council approved project guidelines for the

project on December 20, 1985, and

"(iii) the city council by resolution (adopted on July 30,

1986) directed completion of a development agreement.

The aggregate face amount of bonds to which this subparagraph

applies shall not exceed $26,000,000.

"(Q) A project is described in this subparagraph if the project

is a 2-block area of a central business district designated as

blocks E and F with respect to which -

"(i) the city council adopted guidelines and criteria and

authorized a request for development proposals on July 22,

1985,

"(ii) the city council adopted a resolution expressing an

intent to issue bonds for the project on September 27, 1985,

and

"(iii) the city issued requests for development proposals on

March 28, 1986.

The aggregate face amount of bonds to which this subparagraph

applies shall not exceed $47,000,000.

"(R) A project is described in this subparagraph if the project

is an urban renewal project covering approximately 5.9 acres of

land in the Shaw area of the northwest section of the District of

Columbia and the 1st portion of such project was the subject of a

District of Columbia public hearing on June 2, 1986. The

aggregate face amount of bonds to which this subparagraph applies

shall not exceed $10,000,000.

"(S) A project is described in this subparagraph if such

project is a hotel, commercial, and residential project on the

east bank of the Grand River in Grand Rapids, Michigan, with

respect to which a developer was selected by the city in June

1985 and a planning agreement was executed in August 1985. The

aggregate face amount of bonds to which this subparagraph applies

shall not exceed $39,000,000.

"(T) A project is described in this subparagraph if such

project is the Wurzburg Block Redevelopment Project in Grand

Rapids, Michigan. The aggregate face amount of bonds to which

this subparagraph applies shall not exceed $60,000,000.

"(U) A project is described in this subparagraph if such

project is consistent with an urban renewal plan adopted or

ordered prepared before August 28, 1986, by the city council of

the most populous city in a state which entered the Union on

February 14, 1859. The aggregate face amount of bonds to which

this subparagraph applies shall not exceed $83,000,000.

"(V) A project is described in this subparagraph if such

project is consistent with an urban renewal plan which was

adopted (or ordered prepared) before August 13, 1985, by an

appropriate jurisdiction of a state which entered the Union on

February 14, 1859. The aggregate face amount of bonds to which

this subparagraph applies shall not exceed $135,000,000 and the

limitation on the period during which bonds under this section

may be issued shall not apply to such bonds.

"(W) A project is described in this subparagraph if such

project is -

"(i) a part of the Kenosha Downtown Redevelopment project,

and

"(ii) located in an area bounded -

"(I) on the east by the east wall of the Army Corps of

Engineers Confined Disposal Facility (extended),

"(II) on the north by 48th Street (extended),

"(III) on the west by the present Chicago & Northwestern

Railroad tracks, and

"(IV) on the south by the north line of Eichelman Park

(60th Street) (extended).

The aggregate face amount of bonds to which this subparagraph

applies shall not exceed $105,000,000.

"(X) A project is described in this subparagraph if a

redevelopment plan for such project was approved by the city

council of Bell Gardens, California, on June 12, 1979. The

aggregate face amount of bonds to which this subparagraph applies

shall not exceed $10,000,000.

"(Y) Nothing in this paragraph shall be construed as having the

effect of exempting from tax interest on any bond issued after

June 10, 1987, if such interest would not have been exempt from

tax were such bond issued on August 15, 1986.

"(Z) Any designated area with respect to which a project is

described in any subparagraph of this paragraph shall be taken

into account in applying section 144(c)(4)(C) of the 1986 Code in

determining whether other areas (not so described) may be

designated.

"(7) Convention centers. - A bond issued as part of an issue 95

percent or more of the net proceeds of which are to be used to

provide any convention or trade show facility (within the meaning

of section 103(b)(4)(C) of the 1954 Code) shall be treated as an

exempt facility bond for purposes of part IV of subchapter B of

chapter 1 of the 1986 Code if such facility is described in any of

the following subparagraphs:

"(A) A facility is described in this subparagraph if -

"(i) a feasibility consultant and a design consultant were

hired on April 3, 1985, with respect to such facility, and

"(ii) a draft feasibility report with respect to such

facility was presented on November 3, 1985, to the Mayor of the

city in which such facility is to be located.

The aggregate face amount of bonds to which this subparagraph

applies shall not exceed $190,000,000. For purposes of this

subparagraph, not more than $20,000,000 of bonds issued to

advance refund existing convention facility bonds sold on May 12,

1978, shall be treated as bonds described in this subparagraph

and section 149(d)(2) of the 1986 Code shall not apply to bonds

so treated.

"(B) A facility is described in this subparagraph if -

"(i) an application for a State loan for such facility was

approved by the city council on March 4, 1985, and

"(ii) the city council of the city in which such facility is

to be located approved on March 25, 1985, an application for an

urban development action grant.

The aggregate face amount of bonds which this subparagraph

applies shall not exceed $10,000,000.

"(C) A facility is described in this subparagraph if -

"(i) on November 1, 1983, a convention development tax took

effect and was dedicated to financing such facility,

"(ii) the State supreme court of the State in which the

facility is to be located validated such tax on February 8,

1985, and

"(iii) an agreement was entered into on November 14, 1985,

between the city and county in which such facility is to be

located on the terms of the bonds to be issued with respect to

such facility.

The aggregate face amount of bonds to which this subparagraph

applies shall not exceed $66,000,000.

"(D) A facility is described in this subparagraph if -

"(i) it is a convention, trade, or spectator facility,

"(ii) a regional convention, trade, and spectator facilities

study committee was created before March 19, 1985, with respect

to such facility, and

"(iii) feasibility and preliminary design consultants were

hired on May 1, 1985, and October 31, 1985, with respect to

such facility.

The aggregate face amount of bonds to which this subparagraph

applies shall not exceed the excess of $175,000,000 over the

amount of bonds to which paragraph (48)(B) applies.

"(E) A facility is described in this subparagraph if -

"(i) such facility is meeting rooms for a convention center,

and

"(ii) resolutions and ordinances were adopted with respect to

such meeting rooms on January 17, 1983, July 11, 1983, December

17, 1984, and September 23, 1985.

The aggregate face amount of bonds to which this subparagraph

applies shall not exceed $75,000,000.

"(F) A facility is described in this subparagraph if it is an

international trade center which is part of the 125th Street

redevelopment project in New York, New York. The aggregate face

amount of obligations to which this subparagraph applies shall

not exceed $165,000,000.

"(G) A facility is described in this subparagraph if -

"(i) such facility is located in a city which was the subject

of a convention center market analysis or study dated March

1983, and prepared by a nationally recognized accounting firm,

"(ii) such facility's location was approved in December 1985

by a task force created jointly by the Governor of the State

within which such facility will be located and the mayor of the

capital city of such State, and

"(iii) the size of such facility is not more than 200,000

square feet.

The aggregate face amount of bonds to which this subparagraph

applies shall not exceed $70,000,000.

"(H) A facility is described in this subparagraph if an

analysis of operations and recommendations of utilization of such

facility was prepared by a certified public accounting firm

pursuant to an engagement authorized on March 6, 1984, and

presented on June 11, 1984, to officials of the city in which

such facility is located. The aggregate face amount of bonds to

which this subparagraph applies shall not exceed $75,000,000.

"(I) A facility is described in this subparagraph if -

"(i) voters approved a bond issue to finance the acquisition

of the site for such facility on May 4, 1985,

"(ii) title of the property was transferred from the Illinois

Center Gulf Railroad to the city on September 30, 1985, and

"(iii) a United States judge rendered a decision regarding

the fair market value of the site of such facility on December

30, 1985.

The aggregate face amount of bonds to which this subparagraph

applies shall not exceed $131,000,000.

"(J) A facility is described in this subparagraph if -

"(i) such facility is to be used for an annual aquafestival,

"(ii) a referendum was held on April 6, 1985, in which voters

permitted the city council to lease 130 acres of dedicated

parkland for the purpose of constructing such facility, and

"(iii) the city council passed an inducement resolution on

June 19, 1986.

The aggregate face amount of bonds to which this subparagraph

applies shall not exceed $10,000,000.

"(K) A facility is described in this subparagraph if -

"(i) voters approved a bond issued to finance a portion of

the cost of such facility on December 1, 1984, and

"(ii) such facility was the subject of a market study and

financial projections dated March 21, 1986, prepared by a

nationally recognized accounting firm.

The aggregate face amount of bonds to which this subparagraph

applies shall not exceed $5,000,000.

"(L) A facility is described in this subparagraph if -

"(i) on July 12, 1984, the city council passed a resolution

increasing the local hotel and motel tax to 7 percent to assist

in paying for such facility,

"(ii) on October 25, 1984, the city council selected a

consulting firm for such facility, and

"(iii) with respect to such facility, the city council

appropriated funds for additional work on February 7, 1985,

October 3, 1985, and June 26, 1986.

The aggregate face amount of bonds to which this subparagraph

applies shall not exceed $120,000,000.

"(M) A facility is described in this subparagraph if -

"(i) a board of county commissioners, in an action dated

January 21, 1986, supported an application for official

approval of the facility, and

"(ii) the State economic development commission adopted a

resolution dated February 25, 1986, determining the facility to

be an eligible facility pursuant to State law and the rules

adopted by the commission.

The aggregate face amount of bonds to which this subparagraph

applies shall not exceed $7,500,000.

"(8) Sports or convention facilities. - A bond issued as a part

of an issue 95 percent or more of the net proceeds of which are to

be used to provide either a sports facility (within the meaning of

section 103(b)(4)(B) of the 1954 Code) or a convention facility

(within the meaning of section 103(b)(4)(C) of the 1954 Code) shall

be treated as an exempt facility bond for purposes of part IV of

subchapter B of chapter 1 of the 1986 Code if such facility is

described in any of the following subparagraphs:

"(A) A combined convention and arena facility, or any part

thereof (whether on the same or different sites), is described in

this subparagraph if -

"(i) bonds for the expansion, acquisition, or construction of

such combined facility are payable from a tax and are issued

under a plan initially approved by the voters of the taxing

authority on April 25, 1978, and

"(ii) such bonds were authorized for expanding a convention

center, for acquiring an arena site, and for building an arena

or any of the foregoing pursuant to a resolution adopted by the

governing body of the bond issuer on March 17, 1986, and

superseded by a resolution adopted by such governing body on

May 27, 1986.

The aggregate face amount of bonds to which this subparagraph

applies shall not exceed $160,000,000.

"(B) A sports or convention facility is described in this

subparagraph if -

"(i) on March 4, 1986, county commissioners held public

hearings on creation of a county convention facilities

authority, and

"(ii) on March 7, 1986, the county commissioners voted to

create a county convention facilities authority and to submit

to county voters a  1/2  cent sales and use tax to finance such

facility.

The aggregate face amount of bonds to which this subparagraph

applies shall not exceed $150,000,000.

"(C) A sports or convention facility is described in this

subparagraph if -

"(i) a feasibility consultant and a design consultant were

hired prior to October 1980 with respect to such facility,

"(ii) a feasibility report dated October 1980 with respect to

such facility was presented to a city or county in which such

facility is to be located, and

"(iii) on September 7, 1982, a joint city/county resolution

appointed a committee which was charged with the task of

independently reviewing the studies and present need for the

facility.

The aggregate face amount of bonds to which this subparagraph

applies shall not exceed $60,000,000.

"(D) A sports or convention facility is described in this

subparagraph if -

"(i) such facility is a multipurpose coliseum facility for

which, before January 1, 1985, a city, an auditorium district

created by the State legislature within which such facility

will be located, and a limited partnership executed an

enforceable contract,

"(ii) significant governmental action regarding such facility

was taken before May 23, 1983, and

"(iii) inducement resolutions were passed for issuance of

bonds with respect to such facility on May 26, 1986.

The aggregate face amount of bonds to which this subparagraph

applies shall not exceed $25,000,000.

"(9) Parking facilities. - A bond issued as part of an issue 95

percent or more of the net proceeds of which are to be used to

provide a parking facility (within the meaning of section

103(b)(4)(D) of the 1954 Code) shall be treated as an exempt

facility bond for purposes of part IV of subchapter B of chapter 1

of the 1986 Code if such facility is described in any of the

following subparagraphs:

"(A) A facility is described in this subparagraph if -

"(i) there was an inducement resolution on March 9, 1984, for

the issuance of bonds with respect to such facility, and

"(ii) such resolution was extended by resolutions passed on

August 14, 1984, April 2, 1985, August 13, 1985, and July 8,

1986.

The aggregate face amount of bonds to which this subparagraph

applies shall not exceed $30,000,000.

"(B) A facility is described in this subparagraph if -

"(i) such facility is for a university medical school,

"(ii) the last parcel of land necessary for such facility was

purchased on February 4, 1985, and

"(iii) the amount of bonds to be issued with respect to such

facility was increased by the State legislature of the State in

which the facility is to be located as part of its 1983-1984

general appropriations act.

The aggregate face amount of bonds to which this subparagraph

applies shall not exceed $9,000,000.

"(C) A facility is described in this subparagraph if -

"(i) the development agreement with respect to the project of

which such facility is a part was entered into during May 1984,

and

"(ii) an inducement resolution was passed on October 9, 1985,

for the issuance of bonds with respect to the facility.

The aggregate face amount of bonds to which this subparagraph

applies shall not exceed $35,000,000.

"(D) A facility is described in this subparagraph if the city

council approved a resolution of intent to issue tax-exempt bonds

(Resolution 34083) for such facility on April 30, 1986. The

aggregate face amount of bonds to which this subparagraph applies

shall not exceed $8,000,000. Solely for purposes of this

subparagraph, a heliport constructed as part of such facility

shall be deemed to be functionally related and subordinate to

such facility.

"(E) A facility is described in this subparagraph if -

"(i) resolutions were adopted by a public joint powers

authority relating to such facility on March 6, 1985, May 1,

1985, October 2, 1985, December 4, 1985, and February 5, 1986;

and

"(ii) such facility is to be located at an exposition park

which includes a coliseum and sports arena.

The aggregate face amount of bonds to which this subparagraph

applies shall not exceed $150,000,000.

"(F) A facility is described in this subparagraph if -

"(i) it is to be constructed as part of an overall

development that is the subject of a development agreement

dated October 1, 1983, between a developer and an organization

described in section 501(c)(3) of the 1986 Code, and

"(ii) an environmental notification form with respect to the

overall development was filed with a State environmental agency

on February 28, 1985.

The aggregate face amount of bonds to which this subparagraph

applies shall not exceed $60,000,000.

"(G) A facility is described in this subparagraph if -

"(i) an inducement resolution was passed by the city

redevelopment agency on December 3, 1984, and a resolution to

carryforward the private activity bond limit was passed by such

agency on December 21, 1984, with respect to such facility, and

"(ii) the owner participation agreement with respect to such

facility was entered into on July 30, 1986.

The aggregate face amount of bonds to which this subparagraph

applies shall not exceed $18,000,000.

"(H) A facility is described in this subparagraph if -

"(i) an application (dated August 28, 1986) for financial

assistance was submitted to the county industrial development

agency with respect to such facility, and

"(ii) the inducement resolution for such facility was passed

by the industrial development agency on September 10, 1986.

The aggregate face amount of bonds to which this subparagraph

applies shall not exceed $8,000,000.

"(I) A facility is described in this subparagraph if -

"(i) it is located in a city the parking needs of which were

comprehensively described in a 'Downtown Parking Plan' dated

January 1983, and approved by the city's City Plan Commission

on June 1, 1983, and

"(ii) obligations with respect to the construction of which

are issued on behalf of a State or local governmental unit by a

corporation empowered to issue the same which was created by

the legislative body of a State by an Act introduced on May 21,

1985, and thereafter passed, which Act became effective without

the governor's signature on June 26, 1985.

The aggregate face amount of bonds to which this subparagraph

applies shall not exceed $50,000,000.

"(J) A facility is described in this subparagraph if -

"(i) such facility is located in a city which was the subject

of a convention center market analysis or study dated March

1983 and prepared by a nationally recognized accounting firm,

"(ii) such facility is intended for use by, among others,

persons attending a convention center located within the same

town or city, and

"(iii) such facility's location was approved in December 1985

by a task force created jointly by the governor of the State

within which such facility will be located and the mayor of the

capital city of such State.

The aggregate face amount of bonds to which this subparagraph

applies shall not exceed $30,000,000.

"(K) A facility is described in this subparagraph if -

"(i) scale and components for the facility were determined by

a city downtown plan adopted October 31, 1984 (resolution

number 3882), and

"(ii) the site area for the facility is approximately 51,200

square feet.

The aggregate face amount of bonds to which this subparagraph

applies shall not exceed $5,000,000.

"(L) A facility is described in this subparagraph if -

"(i) the property for such facility was offered for

development by a city renewal agency on March 19, 1986

(resolution number 920), and

"(ii) the site area for the facility is approximately 25,600

square feet.

The aggregate face amount of bonds to which this subparagraph

applies shall not exceed $5,000,000.

"(M) A facility is described in this subparagraph if such

facility was approved by official action of the city council on

July 26, 1984 (resolution number 33718), and is for the Moyer

Theatre. The aggregate face amount of bonds to which this

subparagraph applies shall not exceed $8,000,000.

"(N) A facility is described in this subparagraph if it is part

of a renovation project involving the Outlet Company building in

Providence, Rhode Island. The aggregate face amount of

obligations to which this subparagraph applies shall not exceed

$6,000,000.

"(10) Certain advance refundings. -

"(A) Section 149(d)(3) of the 1986 Code shall not apply to a

bond issued by a State admitted to the Union on November 16,

1907, for the advance refunding of not more than $186,000,000

State turnpike obligations.

"(B) A refunding of the Charleston, West Virginia Town Center

Garage Bonds shall not be treated for purposes of part IV of

subchapter A of chapter 1 of the 1986 Code as an advance

refunding if it would not be so treated if '100' were substituted

for '90' in section 149(d)(5) of such Code.

"(11) Principal user provisions. -

"(A) In the case of a bond issued as part of an issue the

proceeds of which are to be used to provide a facility described

in subparagraph (B) or (C), the determination of whether such

bond is an exempt facility bond shall be made by substituting '90

percent' for '95 percent' in section 142(a) of the 1986 Code.

"(B) A facility is described in this subparagraph if -

"(i) it is a waste-to-energy project for which a contract for

the sale of electricity was executed in September 1984, and

"(ii) the design, construction, and operation contract for

such project was signed in March 1985 and the order to begin

construction was issued on March 31, 1986.

The aggregate face amount of bonds to which this subparagraph

applies shall not exceed $29,100,000.

"(C) A facility is described in this subparagraph if it is

described in section 1865(c)(2)(C) of this Act [set out as a note

under section 103 of this title].

"(12) Qualified scholarship funding bonds. - Subsections (d)(3)

and (f) of section 148 of the 1986 Code shall not apply to any bond

or series of bonds the proceeds of which are used exclusively to

refund qualified scholarship funding bonds (as defined in section

150 of the 1986 Code) issued before January 1, 1986, if -

"(A) the amount of the refunding bonds does not exceed the

aggregate face amount of the refunded bonds,

"(B) the maturity date of such refunding bond is not later than

later of -

"(i) the maturity date of the bond to be refunded, or

"(ii) the date which is 15 years after the date on which the

refunded bond was issued (or, in the case of a series of

refundings, the date on which the original bond was issued),

"(C) the bonds to be refunded were issued by the California

Student Loan Finance Corporation, and

"(D) the face amount of the refunding bonds does not exceed

$175,000,000.

"(13) Residential rental property projects. - A bond issued as

part of an issue 95 percent or more of the net proceeds of which

are to be used to provide a project for residential rental property

which satisfies the requirements of section 103(b)(4)(A) of the

1954 Code shall be treated as an exempt facility bond (for projects

described in section 142(a)(7) of the 1986 Code) for purposes of

part IV of subchapter B of chapter 1 of the 1986 Code if the

project is described in any of the following subparagraphs:

"(A) A residential rental property project is described in this

subparagraph if -

"(i) a public building development corporation was formed on

June 6, 1984, with respect to such project,

"(ii) a partnership of which the corporation is a general

partner was formed on June 8, 1984, and

"(iii) the partnership entered into a preliminary agreement

with the State public facilities authority effective as of May

4, 1984, with respect to the issuance of the bonds for such

project.

The aggregate face amount of bonds to which this subparagraph

applies shall not exceed $6,200,000.

"(B) A residential rental property project is described in this

subparagraph if -

"(i) the Board of Commissioners of the city housing authority

officially selected such project's developer on December 19,

1985,

"(ii) the Board of the City Redevelopment Commission agreed

on February 13, 1986, to conduct a public hearing with respect

to the project on March 6, 1986,

"(iii) an official action resolution for such project was

adopted on March 6, 1986, and

"(iv) an allocation of a portion of the State ceiling was

made with respect to such project on July 29, 1986.

The aggregate face amount of bonds to which this subparagraph

applies shall not exceed $10,000,000.

"(C) A residential rental property project is described in this

subparagraph if -

"(i) the issuance of $1,289,882 of bonds for such project was

approved by a State agency on September 11, 1985, and

"(ii) the authority to issue such bonds was scheduled to

expire (under the terms of the State approval) on September 9,

1986.

The aggregate face amount of bonds to which this subparagraph

applies shall not exceed $1,300,000.

"(D) A residential rental property project is described in this

subparagraph if -

"(i) the issuance of $7,020,000 of bonds for such project was

approved by a State agency on October 10, 1985, and

"(ii) the authority to issue such bonds was scheduled to

expire (under the terms of the State approval) on October 9,

1986.

The aggregate face amount of bonds to which this subparagraph

applies shall not exceed $7,020,000.

"(E) A residential rental property project is described in this

subparagraph if -

"(i) it is to be located in a city urban renewal project area

which was established pursuant to an urban renewal plan adopted

by the city council on May 17, 1960,

"(ii) the urban renewal plan was revised in 1972 to permit

multifamily dwellings in areas of the urban renewal project

designated as a central business district,

"(iii) an inducement resolution was adopted for such project

on December 14, 1984, and

"(iv) the city council approved on November 6, 1985, an

agreement which provides for conveyance to the city of fee

title to such project site.

The aggregate face amount of bonds to which this subparagraph

applies shall not exceed $60,000,000.

"(F) A residential rental property project is described in this

subparagraph if -

"(i) such project is to be located in a city urban renewal

project area which was established pursuant to an urban renewal

plan adopted by the city council on May 17, 1960,

"(ii) the urban renewal plan was revised in 1972 to permit

multifamily dwellings in areas of the urban renewal project

designated as a central business district,

"(iii) the amended urban renewal plan adopted by the city

council on May 19, 1972, also provides for the conversion of

any public area site in Block J of the urban renewal project

area for the development of residential facilities, and

"(iv) acquisition of all of the parcels comprising the Block

J project site was completed by the city on December 28, 1984.

The aggregate face amount of bonds to which this subparagraph

applies shall not exceed $60,000,000.

"(G) A residential rental property project is described in this

subparagraph if -

"(i) such project is to be located on a city-owned site which

is to become available for residential development upon the

relocation of a bus maintenance facility,

"(ii) preliminary design studies for such project site were

completed in December 1985, and

"(iii) such project is located in the same State as the

projects described in subparagraphs (E) and (F).

The aggregate face amount of bonds to which this subparagraph

applies shall not exceed $100,000,000.

"(H) A residential rental property project is described in this

subparagraph if -

"(i) at least 20 percent of the residential units in such

project are to be utilized to fulfill the requirements of a

unilateral agreement date July 21, 1983, relating to the

provision of low- and moderate-income housing,

"(ii) the unilateral agreement was incorporated into

ordinance numbers 83-49 and 83-50, adopted by the city council

and approved by the mayor on August 24, 1983, and

"(iii) an inducement resolution was adopted for such project

on September 25, 1985.

The aggregate face amount of bonds to which this subparagraph

applies shall not exceed $8,000,000.

"(I) A residential rental property project is described in this

subparagraph if -

"(i) a letter of understanding was entered into on December

11, 1985, between the city and county housing and community

development office and the project developer regarding the

conveyance of land for such project, and

"(ii) such project is located in the same State as the

projects described in subparagraphs (E), (F), (G), and (H).

The aggregate face amount of bonds to which this subparagraph

applies shall not exceed an amount which, together with the

amounts allowed under subparagraphs (E), (F), (G), and (H), does

not exceed $250,000,000.

"(J) A residential rental property project is described in this

subparagraph if it is a multifamily residential development

located in Arrowhead Springs, within the county of San

Bernardino, California, and a portion of the site of which

currently is owned by the Campus Crusade for Christ. The

aggregate face amount of bonds to which this subparagraph applies

shall not exceed $350,000,000.

"(K) A residential rental property project is described in this

subparagraph if -

"(i) it is a new residential development with approximately

309 dwelling units located in census tract No. 3202, and

"(ii) there was an inducement ordinance for such project

adopted by a city council on November 20, 1985.

The aggregate face amount of bonds to which this subparagraph

applies shall not exceed $32,000,000.

"(L) A residential rental property project is described in this

subparagraph if -

"(i) it is a new residential development with approximately

70 dwelling units located in census tract No. 3901, and

"(ii) there was an inducement ordinance for such project

adopted by a city council on August 14, 1984.

The aggregate face amount of bonds to which this subparagraph

applies shall not exceed $4,000,000.

"(M) A residential rental property project is described in this

subparagraph if -

"(i) it is a new residential development with approximately

98 dwelling units located in census tract No. 4701, and

"(ii) there was an inducement ordinance for such project

adopted by a city council on August 14, 1984.

The aggregate face amount of bonds to which this subparagraph

applies shall not exceed $7,000,000.

"(N) A project or projects are described in this subparagraph

if they are part of the Willow Road residential improvement plan

in Menlo Park, California. The aggregate face amount of

obligations to which this subparagraph applies shall not exceed

$9,000,000.

"(O) A residential rental property project is described in this

subparagraph if -

"(i) an inducement resolution for such project was approved

on July 18, 1985, by the city council,

"(ii) such project was approved by such council on August 11,

1986, and

"(iii) such project consists of approximately 22 duplexes to

be used for housing qualified low and moderate income tenants.

The aggregate face amount of bonds to which this subparagraph

applies shall not exceed $1,500,000.

"(P) A residential rental property project is described in this

subparagraph if -

"(i) an inducement resolution for such project was approved

on April 22, 1986, by the city council,

"(ii) such project was approved by such council on August 11,

1986, and

"(iii) such project consists of a unit apartment complex

(having approximately 60 units) to be used for housing

qualified low and moderate income tenants.

The aggregate face amount of bonds to which this subparagraph

applies shall not exceed $1,625,000.

"(Q) A residential rental property project is described in this

subparagraph if -

"(i) a State housing authority granted a notice of official

action for the project on May 24, 1985, and

"(ii) a binding agreement was executed for such project with

the State housing finance authority on May 14, 1986, and such

agreement was accepted by the State housing authority on June

5, 1986.

The aggregate face amount of bonds to which this subparagraph

applies shall not exceed $7,800,000.

"(R) A residential rental property project is described in this

subparagraph if such project is either of 2 projects (located in

St. Louis, Missouri) which received commitments to provide

construction and permanent financing through the issuance of

bonds in principal amounts of up to $242,130 and $654,045, on

July 16, 1986. The aggregate face amount of bonds to which this

subparagraph applies shall not exceed $1,000,000.

"(S) A residential rental property project is described in this

subparagraph if -

"(i) a local housing authority approved an inducement

resolution for such project on January 28, 1985, and

"(ii) a suit relating to such project was dismissed without

right of further appeal on April 4, 1986.

The aggregate face amount of bonds to which this subparagraph

applies shall not exceed $13,200,000.

"(T) A residential rental property project is described in this

subparagraph if -

"(i) such project is the renovation of a hotel for residents

for senior citizens,

"(ii) an inducement resolution for such project was adopted

on November 20, 1985, by the State Development Finance

Authority, and

"(iii) such project is to be located in the metropolitan area

of the city described in paragraph (3)(C).

The aggregate face amount of bonds to which this subparagraph

applies shall not exceed $9,500,000.

"(U) A residential rental property project is described in this

subparagraph if -

"(i) such project is the renovation of apartment housing,

"(ii) an inducement resolution for such project was adopted

on December 20, 1985, by the State Housing Development

Authority, and

"(iii) such project is to be located in the metropolitan area

of the city described in paragraph (3)(C).

The aggregate face amount of bonds to which this subparagraph

applies shall not exceed $12,000,000.

"(V) A residential rental project is described in this

subparagraph if it is a renovation and construction project for

low-income housing in central Louisville, Kentucky, and local

board approval for such project was granted April 22, 1986. The

aggregate face amount of bonds to which this subparagraph applies

shall not exceed $500,000.

"(W) A residential rental project is described in this

subparagraph if -

"(i) such project is 1 of 6 residential rental projects

having in the aggregate approximately 1,010 units,

"(ii) inducement resolutions for such projects were adopted

by the county residential finance authority on November 21,

1985, and

"(iii) a public hearing of the county residential finance

authority was held by such authority on December 19, 1985,

regarding such projects to be constructed by an in-commonwealth

developer.

The aggregate face amount of bonds to which this subparagraph

applies shall not exceed $62,000,000.

"(X) A residential rental project is described in this

subparagraph if -

"(i) an inducement resolution with respect to such project

was adopted by the State housing development authority on

January 25, 1985, and

"(ii) the issuance of bonds for such project was the subject

of a law suit filed on October 25, 1985.

The aggregate face amount of bonds to which this subparagraph

applies shall not exceed $64,000,000.

"(Y) A project or projects are described in this subparagraph

if they are financed with bonds issued by the Tulare, California,

County Housing Authority. The aggregate face amount of

obligations to which this subparagraph applies shall not exceed

$8,000,000.

"(Z) A residential rental project is described in this

subparagraph if such project is a multifamily mixed-use housing

project located in a city described in paragraph (3)(C), the

zoning for which was changed to residential-business planned

development on November 26, 1985, and with respect to which both

the city on December 4, 1985, and the state housing finance

agency on December 20, 1985, adopted inducement resolutions. The

aggregate face amount of obligations to which this subparagraph

applies shall not exceed $90,000,000.

"(AA) A residential rental property project is described in

this subparagraph if it is the Carriage Trace residential rental

project in Clinton, Tennessee. The aggregate face amount of bonds

to which this subparagraph applies shall not exceed $10,000,000.

"(BB) A residential rental property project is described in

this subparagraph if -

"(i) a contract to purchase such property was dated as of

August 9, 1985,

"(ii) there was an inducement resolution adopted on September

27, 1985, for the issuance of obligations to finance such

property,

"(iii) there was a State court final validation of such

financing on November 15, 1985, and

"(iv) the certificate of nonappeal from such validation was

available on December 15, 1985.

The aggregate face amount of bonds to which this subparagraph

applies shall not exceed $27,750,000.

"(14) Qualified student loans. - The amendments made by section

1301 [for classification see section 1311(a) of this note] shall

not apply to any qualified student loan bonds (as defined in

section 144 of the 1986 Code) issued by the Volunteer State Student

Assistance Corporation incorporated on February 20, 1985. The

aggregate face amount of bonds to which this paragraph applies

shall not exceed $130,000,000. In the case of bonds to which this

paragraph applies, the requirements of sections 148 and 149(d) of

the 1986 Code shall be treated as included in section 103 of the

1954 Code and shall apply to such bonds.

"(15) Annuity contracts. - The treatment of annuity contracts as

investment property under section 148(b)(2) of the 1986 Code shall

not apply to any bond described in any of the following

subparagraphs:

"(A) A bond is described in this subparagraph if such bond is

issued by a city located in a noncontiguous State if -

"(i) the authority to acquire such a contract was approved on

September 24, 1985, by city ordinance A085-176, and

"(ii) formal bid requests for such contracts were mailed to

insurance companies on September 6, 1985.

The aggregate face amount of bonds to which this subparagraph

applies shall not exceed $57,000,000.

"(B) A bond is described in this subparagraph if -

"(i) on or before May 12, 1985, the governing board of the

city pension fund authorized an agreement with an underwriter

to provide planning and financial guidance for a possible bond

issue, and

"(ii) the proceeds of the sale of such bond issue are to be

used to purchase an annuity to fund the unfunded liability of

the City of Berkeley, California's Safety Members Pension Fund.

The aggregate face amount of bonds to which this subparagraph

applies shall not exceed $40,000,000.

"(C) A bond is described in this subparagraph if such bond is

issued by the South Dakota Building Authority if on September 18,

1985, representatives of such authority and its underwriters met

with bond counsel and approved financing the purchase of an

annuity contract through the sale and leaseback of State

properties. The aggregate face amount of bonds to which this

subparagraph applies shall not exceed $175,000,000.

"(D) A bond is described in this subparagraph if -

"(i) such bond is issued by Los Angeles County, and

"(ii) such county, before September 25, 1985, paid or

incurred at least $50,000 of costs related to the issuance of

such bonds.

The aggregate face amount of bonds to which this subparagraph

applies shall not exceed $500,000,000.

"(16) Solid waste disposal facility. - The amendments made by

section 1301 [for classification see section 1311(a) of this note]

shall not apply to any solid waste disposal facility if -

"(A) construction of such facility was approved by State law

I.C. 36-9-31,

"(B) there was an inducement resolution on November 19, 1984,

for the bonds with respect to such facility, and

"(C) a carryforward election of unused 1984 volume cap was made

for such project on February 25, 1985.

The aggregate face amount of bonds to which this paragraph applies

shall not exceed $120,000,000.

"(17) Refunding of bond anticipation notes. - There shall not be

taken into account under section 146 of the 1986 Code any refunding

of bond anticipation notes -

"(A) issued in December of 1984 by the Rhode Island Housing and

Mortgage Finance Corporation,

"(B) which mature in December of 1986,

"(C) which is not an advance refunding within the meaning of

section 149(d)(5) of the 1986 Code (determined by substituting

'180 days' for '90 days' therein), and

"(D) the aggregate face amount of the refunding bonds does not

exceed $25,500,000.

"(18) Certain airports. - The amendments made by section 1301

[for classification see section 1311(a) of this note] shall not

apply to a bond issued as part of an issue 95 percent or more of

the net proceeds of which are to be used to provide any airport

(within the meaning of section 103(b)(4)(D) of the 1954 Code) if

such airport is a mid-field airport terminal and accompanying

facilities at a major air carrier airport which during April 1980

opened a new precision instrument approach runway 10R28L. The

aggregate face amount of bonds to which this subparagraph applies

shall not exceed $425,000,000.

"(19) Mass commuting facilities. - A bond issued as a part of an

issue 95 percent or more of the net proceeds of which are to be

used to provide a mass commuting facility (within the meaning of

section 103(b)(4)(D) of the 1954 Code) shall be treated as an

exempt facility bond (for facilities described in section 142(a)(3)

of the 1986 Code) for purposes of part IV of subchapter B of

chapter 1 of the 1986 Code if such facility is described in 1 of

the following subparagraphs:

"(A) A facility is described in this subparagraph if -

"(i) such facility provides access to an international

airport,

"(ii) a corporation was formed in connection with such

project in September 1984,

"(iii) the Board of Directors of such corporation authorized

the hiring of various firms to conduct a feasibility study with

respect to such project in April 1985, and

"(iv) such feasibility study was completed in November 1985.

The aggregate face amount of bonds to which this subparagraph

applies shall not exceed $150,000,000.

"(B) A facility is described in this subparagraph if -

"(i) enabling legislation with respect to such project was

approved by the State legislature in 1979,

"(ii) a 1-percent local sales tax assessment to be dedicated

to the financing of such project was approved by the voters on

August 13, 1983, and

"(iii) a capital fund with respect to such project was

established upon the issuance of $90,000,000 of notes on

October 22, 1985.

The aggregate face amount of bonds to which this subparagraph

applies shall not exceed $200,000,000 and such bonds must be

issued before January 1, 1996.

"(C) A facility is described in this subparagraph if -

"(i) bonds issued therefor are issued by or on behalf of an

authority organized in 1979 pursuant to enabling legislation

originally enacted by the State legislature in 1973, and

"(ii) such facility is part of a system connector described

in a resolution adopted by the board of directors of the

authority on March 27, 1986.

The aggregate face amount of bonds to which this subparagraph

applies shall not exceed $400,000,000. Notwithstanding the last

paragraph of this subsection, this subparagraph shall apply to

bonds issued before January 1, 1996.

"(D) A facility is described in this subparagraph if -

"(i) the facility is a fixed guideway project,

"(ii) enabling legislation with respect to the issuing

authority was approved by the State legislature in May 1973,

"(iii) on October 28, 1985, a board issued a request for

consultants to conduct a feasibility study on mass transit

corridor analysis in connection with the facility, and

"(iv) on May 12, 1986, a board approved a further binding

contract for expenditures of approximately $1,494,963, to be

expended on a facility study.

The aggregate face amount of bonds to which this subparagraph

applies shall not exceed $250,000,000. Notwithstanding the last

paragraph of this subsection, this subparagraph shall apply to

bonds issued before January 1, 1996.

"(20) Private colleges. - Subsections (c)(2) and (f) of section

148 of the 1986 Code shall not apply to any bond which is issued as

part of an issue if such bond -

"(A) is issued by a political subdivision pursuant to home rule

and interlocal cooperation powers conferred by the constitution

and laws of a State to provide funds to finance the costs of the

purchase and construction of educational facilities for private

colleges and universities, and

"(B) was the subject of a resolution of official action by such

political subdivision (Resolution No. 86-1039) adopted by the

governing body of such political subdivision on March 18, 1986.

The aggregate face amount of bonds to which this paragraph applies

shall not exceed $100,000,000.

"(21) Pooled financing programs. -

"(A) Section 147(b) of the 1986 Code shall not apply to any

hospital pooled financing program with respect to which -

"(i) a formal presentation was made to a city hospital

facilities authority on January 14, 1986, and

"(ii) such authority passed a resolution approving the bond

issue in principle on February 5, 1986.

The aggregate face amount of bonds to which this subparagraph

applies shall not exceed $95,000,000.

"(B) Subsections (c)(2) and (f) of section 148 of the 1986 Code

shall not apply to bonds for which closing occurred on July 16,

1986, and for which a State municipal league served as

administrator for use in a State described in section

103A(g)(5)(C) of the Internal Revenue Code of 1954. The aggregate

face amount of obligations to which this subparagraph applies

shall not exceed $585,000,000.

"(22) Downtown redevelopment project. - Subsection (b) of section

626 of the Tax Reform Act of 1984 [section 626(b) of Pub. L. 98-

369, set out as a note under section 103 of this title] is amended

by adding at the end thereof the following new paragraph:

" '(7) Exception for certain downtown redevelopment project. -

The amendments made by 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.'

"(23) Mass commuting and parking facilities. - A bond issued as

part of an issue 95 percent or more of the net proceeds of which

are to be used to provide any mass commuting facility or parking

facility (within the meaning of section 103(b)(4)(D) of the 1954

Code) shall be treated as an exempt facility bond for purposes of

part IV of subchapter B of chapter 1 of the 1986 Code if such

facility is provided in connection with the rehabilitation,

renovation, or other improvement to an existing railroad station

owned on the date of the enactment of this Act [Oct. 22, 1986] by

the National Railroad Passenger Corporation in the Northeast

Corridor and which was placed in partial service in 1934 and was

placed in the National Register of Historic Places in 1978. The

aggregate face amount of bonds to which this paragraph applies

shall not exceed $30,000,000.

"(24) Tax-exempt status of bonds of certain educational

organizations. -

"(A) In general. - For purposes of section 103 and part IV of

subchapter B of chapter 1 of the 1986 Code, a qualified

educational organization shall be treated as a governmental unit,

but only with respect to a trade or business carried on by such

organization which is not an unrelated trade or business

(determined by applying section 513(a) of such Code to such

organization). The last paragraph of this section shall not apply

to the treatment under the preceding sentence.

"(B) Qualified educational organization. - For purposes of

subparagraph (A), the term 'qualified educational organization'

means a college or university -

"(i) which was reincorporated and renewed with perpetual

existence as a corporation by specific act of the legislature

of the State within which such college or university is located

on March 19, 1913, or

"(ii) which -

"(I) was initially incorporated or created on February 28,

1787, on April 29, 1854, or on May 14, 1888, and

"(II) as an instrumentality of the State, serves as a

'State-related' university by a specific act of the

legislature of the State within which such college or

university is located.

"(25) Tax-exempt status of bonds of certain public utilities. -

"(A) In general. - Except as provided in subparagraph (B), a

bond shall be treated as a qualified bond for purposes of section

103 of the 1986 Code if such bond is issued after the date of the

enactment of this Act [Oct. 22, 1986] with respect to a public

utility facility if such facility is -

"(i) located at any non-federally owned dam (or on project

waters or adjacent lands) located wholly or partially in 1 or

more of 3 counties, 2 of which are contiguous to the third,

where the rated capacity of the hydroelectric generating

facilities at 5 of such dams on October 18, 1979, was more than

650 megawatts each,

"(ii) located at a dam (or on the project waters or adjacent

lands) at which hydroelectric generating facilities were

financed with the proceeds of tax-exempt obligations before

December 31, 1968,

"(iii) owned and operated by a State, political subdivision

of a State, or any agency or instrumentality of any of the

foregoing, and

"(iv) located at a dam (or on project waters or adjacent

lands) where the general public has access for recreational

purposes to such dam or to such project waters or adjacent

lands.

"(B) Special rules for subparagraph (a). -

"(i) Bonds subject to cap. - Section 146 of the 1986 Code

shall apply to any bond described in subparagraph (A) which

(without regard to subparagraph (A)) is a private activity

bond. For purposes of applying section 146(k) of the 1986 Code,

the public utility facility described in subparagraph (A) shall

be treated as described in paragraph (2) of such section and

such paragraph shall be applied without regard to the

requirement that the issuer establish that a State's share of

the use of a facility (or its output) will equal or exceed the

State's share of the private activity bonds issued to finance

the facility.

"(ii) Limitation on amount of bonds to which subparagraph (a)

applies. - The aggregate face amount of bonds to which

subparagraph (A) applies shall not exceed $750,000,000, not

more than $350,000,000 of which may be issued before January 1,

1992.

"(iii) Limitation on purposes. - Subparagraph (A) shall only

apply to bonds issued as part of an issue 95 percent or more of

the net proceeds of which are used to provide 1 or more of the

following:

"(I) A fish by-pass facility or fisheries enhancement

facility.

"(II) A recreational facility or other improvement which is

required by Federal licensing terms and conditions or other

Federal, State, or local law requirements.

"(III) A project of repair, maintenance, renewal, or

replacement, and safety improvement.

"(IV) Any reconstruction, replacement, or improvement,

including any safety improvement, which increases, or allows

an increase in, the capacity, efficiency, or productivity of

the existing generating equipment.

"(26) Convention and parking facilities. - A bond shall not be

treated as a private activity bond for purposes of section 103 and

part IV of subchapter B of chapter 1 of the 1986 Code if -

"(A) such bond is issued to provide a sports or convention

facility described in section 103(b)(4)(B) or (C) of the 1954

Code,

"(B) such bond is not described in section 103(b)(2) or

(o)(2)(A) of such Code,

"(C) legislation by a State legislature in connection with such

facility was enacted on July 19, 1985, and was designated Chapter

375 of the Laws of 1985, and

"(D) legislation by a State legislature in connection with the

appropriation of funds to a State public benefit corporation for

loans in connection with the construction of such facility was

enacted on April 17, 1985, and was designated Chapter 41 of the

Laws of 1985.

The aggregate face amount of bonds to which this subparagraph

applies shall not exceed $35,000,000.

"(27) Small issue termination. - Section 144(a)(12) of the 1986

Code shall not apply to any bond issued as part of an issue 95

percent or more of the net proceeds of which are to be used to

provide a facility described in any of the following subparagraphs:

"(A) A facility is described in this subparagraph if -

"(i) the facility is a hotel and office facility located in a

State capital,

"(ii) the economic development corporation of the city in

which the facility is located adopted an initial inducement

resolution on October 30, 1985, and

"(iii) a feasibility consultant was retained on February 21,

1986, with respect to such facility.

The aggregate face amount of bonds to which this subparagraph

applies shall not exceed $10,000,000.

"(B) A facility is described in this subparagraph if such

facility is financed by bonds issued by a State finance authority

which was created in April 1985 by Act 1062 of the State General

Assembly, and the Bond Guarantee Act (Act 505 of 1985) allowed

such authority to pledge the interest from investment of the

State's general fund as a guarantee for bonds issued by such

authority. The aggregate face amount of bonds to which this

subparagraph applies shall not exceed $75,000,000.

"(C) A facility is described in this subparagraph if such

facility is a downtown mall and parking project for Holland,

Michigan, with respect to which an initial agreement was

formulated with the city in May 1985 and a formal memorandum of

understanding was executed on July 2, 1986. The aggregate face

amount of bonds to which this subparagraph applies shall not

exceed $18,200,000.

"(D) A facility is described in this subparagraph if such

facility is a downtown mall and parking ramp project for Traverse

City, Michigan, with respect to which a final development

agreement was signed in June 1986. The aggregate face amount of

bonds to which this subparagraph applies shall not exceed

$21,500,000.

"(E) A facility is described in this subparagraph if such

facility is the rehabilitation of the Heritage Hotel in

Marquette, Michigan. The aggregate face amount of bonds to which

this subparagraph applies shall not exceed $5,000,000.

"(F) A facility is described in this subparagraph if it is the

Lakeland Center Hotel in Lakeland, Florida. The aggregate face

amount of obligations to which this subparagraph applies shall

not exceed $10,000,000.

"(G) A facility is described in this subparagraph if it is the

Marble Arcade office building renovation project in Lakeland,

Florida. The aggregate face amount of obligations to which this

subparagraph applies shall not exceed $5,900,000.

"(H) A facility is described in this subparagraph if it is a

medical office building in Bradenton, Florida, with respect to

which -

"(i) a memorandum of agreement was entered into on October

17, 1985, and

"(ii) the city council held a public hearing and approved

issuance of the bonds on November 13, 1985.

The aggregate face amount of obligations to which this

subparagraph applies shall not exceed $8,500,000.

"(I) A facility is described in this subparagraph if it

consists of the rehabilitation of the Andover Town Hall in

Andover, Massachusetts. The provisions of section 149(b) of the

1986 Code (relating to federally guaranteed obligations) shall

not apply to obligations to finance such project solely as a

result of the occupation of a portion of such building by a

United States Post Office. For purposes of determining whether

any bond to which this subparagraph applies is a qualified small

issue bond, there shall not be taken into account under section

144(a) of the 1986 Code capital expenditures with respect to any

facility of the United States Government and there shall not be

taken into account any bond allocable to the United States

Government.

"(J) A facility is described in this subparagraph if it is the

Central Bank Building renovation project in Grand Rapids,

Michigan. The aggregate face amount of obligations to which this

subparagraph applies shall not exceed $1,000,000.

"(28) Certain private loans not taken into account. - For

purposes of determining whether any bond is a private activity

bond, an amount of loans (but not in excess of $75,000,000)

provided from the proceeds of 1 or more issues shall not be taken

into account if such loans are provided in furtherance of -

"(A) a city Emergency Conservation Plan as set forth in an

ordinance adopted by the city council of such city on February

17, 1983, or

"(B) a resolution adopted by the city council of such city on

March 10, 1983, committing such city to a goal of reducing the

peak load of such city's electric generation and distribution

system by 553 megawatts in 15 years.

"(29) Certain private business use not taken into account. -

"(A) The nonqualified amount of the proceeds of an issue shall

not be taken into account under section 141(b)(5) of the 1986

Code or in determining whether a bond described in subparagraph

(B) (which is part of such issue) is a private activity bond for

purposes of section 103 and part IV of subchapter B of chapter 1

of the 1986 Code.

"(B) A bond is described in this subparagraph if -

"(i) such bond is issued before January 1, 1993, by the State

of Connecticut, and

"(ii) such bond is issued pursuant to a resolution of the

State Bond Commission adopted before September 26, 1985.

"(C) The nonqualified amount to which this paragraph applies

shall not exceed $150,000,000.

"(D) For purposes of this paragraph, the term 'nonqualified

amount' has the meaning given such term by section 141(b)(8) of

the 1986 Code, except that such term shall include the amount of

the proceeds of an issue which is to be used (directly or

indirectly) to make or finance loans (other than loans described

in section 141(c)(2) of the 1986 Code) to persons other than

governmental units.

"(30) Volume cap not to apply to certain facilities. - For

purposes of section 146 of the 1986 Code, any exempt facility bond

for the following facility shall not be taken into account: The

facility is a facility for the furnishing of water which was

authorized under Public Law 90-537 [43 U.S.C. 1501 et seq.] of the

United States if -

"(A) construction of such facility began on May 6, 1973, and

"(B) forward funding will be provided for the remainder of the

project pursuant to a negotiated agreement between State and

local water users and the Secretary of the Interior signed April

15, 1986.

The aggregate face amount of bonds to which this subparagraph

applies shall not exceed $391,000,000.

"(31) Certain hydroelectric generating property. - A bond shall

be treated as described in paragraph (2) of section 1316(f) of this

Act if -

"(A) such bond would be so described but for the substitution

specified in such paragraph,

"(B) on January 7, 1983, an application for a preliminary

permit was filed for the project for which such bond is issued

and received docket no. 6986, and

"(C) on September 20, 1983, the Federal Energy Regulatory

Commission issued an order granting the preliminary permit for

the project.

The aggregate face amount of bonds to which this paragraph applies

shall not exceed $12,000,000.

"(32) Volume cap. - The State ceiling applicable under section

146 of the 1986 Code for calendar year 1987 for the State which

ratified the United States Constitution on May 29, 1790, shall be

$150,000,000 higher than the State ceiling otherwise applicable

under such section for such year.

"(33) Application of $150,000,000 limitation for certain

qualified 501(c)(3) bonds. - Proceeds of an issue described in any

of the following subparagraphs shall not be taken into account

under section 145(b) of the 1986 Code.

"(A) Proceeds of an issue are described in this subparagraph if

-

"(i) such proceeds are used to provide medical school

facilities or medical research and clinical facilities for a

university medical center,

"(ii) such proceeds are of -

"(I) a $21,550,000 issue dated August 1, 1980,

"(II) a $84,400,000 issue dated September 1, 1984, and

"(III) a $48,500,000 issue (Series 1985 A and 1985 B) dated

on December 1, 1985, and

"(iii) the issuer of all such issues is the same.

"(B) Proceeds of an issue are described in this subparagraph if

such proceeds are for use by Yale University and -

"(i) the bonds are issued after August 8, 1986, by the State

of Connecticut Health and Educational Facilities Authority, or

"(ii) the bonds are the 1st or 2nd refundings (including

advance refundings) of the bonds described in clause (i) or of

original bonds issued before August 7, 1986, by such Authority.

The aggregate face amount of bonds to which this subparagraph

applies shall not exceed $90,000,000.

"(C) Proceeds of an issue are described in this subparagraph if

-

"(i) such issue is issued on behalf of a university

established by Charter granted by King George II of England on

October 31, 1754, to accomplish a refunding (including an

advance refunding) of bonds issued to finance 1 or more

projects, and

"(ii) the application or other request for the issuance of

the issue to the appropriate State issuer was made by or on

behalf of such university before February 26, 1986.

The aggregate face amount of bonds to which this subparagraph

applies shall not exceed $250,000,000.

"(D) Proceeds of an issue are described in this subparagraph if

-

"(i) such proceeds are to be used for finance construction of

a new student recreation center,

"(ii) a contract for the development phase of the project was

signed by the university on May 21, 1986, with a private

company for 5 percent of the costs of the project, and

"(iii) a committee of the university board of administrators

approved the major program elements for the center on August

11, 1986.

The aggregate face amount of bonds to which this subparagraph

applies shall not exceed $25,000,000.

"(E) Proceeds of an issue are described in this subparagraph if

-

"(i) such proceeds are to be used in the construction of new

life sciences facilities for a university for medical research

and education,

"(ii) the president of the university authorized a

faculty/administration planning committee for such facilities

on September 17, 1982,

"(iii) the trustees of such university authorized site and

architect selection on October 30, 1984, and

"(iv) the university negotiated a $2,600,000 contract with

the architect on August 9, 1985.

The aggregate face amount of bonds to which this subparagraph

applies shall not exceed $47,500,000.

"(F) Proceeds of an issue are described in this subparagraph if

such proceeds are to be used to renovate undergraduate chemistry

and engineering laboratories, and to rehabilitate other basic

science facilities, for an institution of higher education in

Philadelphia, Pennsylvania, chartered by legislative Acts of the

Commonwealth of Pennsylvania, including an Act dated September

30, 1791. The aggregate face amount of bonds to which this

subparagraph applies shall not exceed $6,500,000.

"(G) Proceeds of an issue are described in this subparagraph if

such proceeds are of bonds which are the first advance refunding

of bonds issued during 1985 for the development of a computer

network, and construction and renovation or rehabilitation of

other facilities, for an institution of higher education

described in subparagraph (F). The aggregate face amount of bonds

to which this subparagraph applies shall not exceed $80,000,000.

"(H) Proceeds of an issue are described in this subparagraph if

-

"(i) the issue is issued on behalf of a university founded in

1789, and

"(ii) the proceeds of the issue are to be used to finance

projects (to be determined by such university and the issuer)

which are similar to those projects intended to be financed by

bonds that were the subject of a request transmitted to

Congress on November 7, 1985[.]

The aggregate face amount of bonds to which this subparagraph

applies shall not exceed $200,000,000. Bonds to which this

subparagraph applies shall be treated as qualified 501(c)(3)

bonds if such bonds would not (if issued on August 15, 1986) be

industrial development bonds (as defined in section 103(b)(2) of

the 1954 Code), and section 147(f) of the 1986 Code shall not

apply to the issue of which such bonds are a part. Bonds issued

to finance facilities described in this subparagraph shall be

treated as issued to finance such facilities notwithstanding the

fact that a period in excess of 1 year has expired since the

facilities were placed in service.

"(I) Proceeds of an issue are described in this subparagraph if

the issue is issued on behalf of a university established on

August 6, 1872, for a project approved by the trustees thereof on

November 1, 1985. The aggregate face amount of bonds to which

this subparagraph applies shall not exceed $100,000,000.

"(J) Proceeds of an issue are described in this subparagraph if

-

"(i) the issue is issued on behalf of a university for which

the founding grant was signed on November 11, 1885, and

"(ii) such bond is issued for the purpose of providing a Near

West Campus Redevelopment Project and a Student Housing

Project.

The aggregate face amount of bonds to which this subparagraph

applies shall not exceed $105,000,000.

"(J) Proceeds of an issue are described in this subparagraph if

-

"(i) they are the proceeds of advance refunding obligations

issued on behalf of a university established on April 21, 1831,

and

"(ii) the application or other request for the issuance of

such obligations was made to the appropriate State issuer

before July 12, 1986.

The aggregate face amount of obligations to which this

subparagraph applies shall not exceed $175,000,000.

"(K) Proceeds of an issue are described in this subparagraph if

-

"(i) the issue or issues are for the purpose of financing or

refinancing costs associated with university facilities

including at least 900 units of housing for students, faculty,

and staff in up to two buildings and an office building

containing up to 245,000 square feet of space, and

"(ii) a bond act authorizing the issuance of such bonds for

such project was adopted on July 8, 1986, and such act under

Federal law was required to be transmitted to Congress.

The aggregate face amount of obligations to which this

subparagraph applies shall not exceed $112,000,000.

"(L) Proceeds of an issue are described in this subparagraph if

such issue is for Cornell University in an aggregate face amount

of not more than $150,000,000.

"(M) Proceeds of an issue are described in this subparagraph if

such issue is issued on behalf of the Society of the New York

Hospital to finance completion of a project commenced by such

hospital in 1981 for construction of a diagnostic and treatment

center or to refund bonds issued on behalf of such hospital in

connection with the construction of such diagnostic and treatment

center or to finance construction and renovation projects

associated with an inpatient psychiatric care facility. The

aggregate face amount of bonds to which this subparagraph applies

shall not exceed $150,000,000.

"(N) Any bond to which section 145(b) of the 1986 Code does not

apply by reason of this paragraph (other than subparagraph (A)

thereof) shall be taken into account in determining whether such

section applies to any later issue.

"(O) In the case of any refunding bond -

"(i) to which any subparagraph of this paragraph applies, and

"(ii) to which the last sentence of section 1313(c)(2)

applies,

such bond shall be treated as having such subparagraph apply (and

the refunding bond shall be treated for purposes of such section

as issued before January 1, 1986, and as not being an advance

refunding) unless the issuer elects the opposite result.

"(34) Arbitrage rebate. - Section 148(f) of the 1986 Code shall

not apply to any period before October 1, 1990, with respect to any

bond the proceeds of which are to be used to provide a high-speed

rail system for the State of Ohio. The aggregate face amount of

bonds to which this paragraph applies shall not exceed

$2,000,000,000.

"(35) Extension of carryforward period. -

"(A) In the case of a carryforward under section 103(n)(10) of

the 1954 Code of $170,000,000 of bond limit for calendar year

1984 for a project described in subparagraph (B), clause (i) of

section 103(n)(10)(C) of the 1954 Code shall be applied by

substituting '6 calendar years' for '3 calendar years', and such

carryforward may be used by any authority designated by the State

in which the facility is located.

"(B) A project is described in this subparagraph if -

"(i) such project is a facility for local furnishing of

electricity described in section 645 of the Tax Reform Act of

1984 [Pub. L. 98-369, div. A, title VI, Sec. 645, July 18,

1984, 98 Stat. 940], and

"(ii) construction of such facility commenced within the 3-

year period following the calendar year in which the

carryforward arose.

"(36) Power purchase bonds. - A bond issued to finance purchase

of power from a power facility at a dam being renovated pursuant to

P.L. 98-381 [43 U.S.C. 619 et seq.] shall not be treated as a

private activity bond if it would not be such under section

141(b)(1) and (2) of the 1986 Code if 25 percent were substituted

for 10 percent and the provisions of section 141(b)(3), (4), and

(5) of the 1986 Code did not apply. The aggregate face amount of

bonds to which this paragraph applies shall not exceed

$400,000,000.

"(37) Qualified mortgage bonds. - A bond issued as part of either

of 2 issues no later than September 8, 1986, shall be treated as a

qualified mortgage bond within the meaning of section 141(d)(1)(B)

of the 1986 Code if it satisfies the requirements of section 103A

of the 1954 Code and if the issues are issued by the two most

populous cities in the Tar Heel State. The aggregate face amount of

bonds to which this paragraph applies shall not exceed $4,000,000.

"(38) Exempt facility bonds. - A bond shall be treated as an

exempt facility bond within the meaning of section 142(a) of the

1986 Code if it is issued to fund residential, office, retail,

light industrial, recreational and parking development known as

Tobacco Row. Such bond shall be subject to section 146 of the 1986

Code. The aggregate face amount of bonds to which this paragraph

applies shall not exceed $100,000,000.

"(39) Certain bonds treated as qualified 501(c)(3) bonds. - A

bond issued as part of an issue shall be treated for purposes of

part IV of subchapter B of chapter 1 of the 1986 Code as a

qualified 501(c)(3) bond if -

"(A) such bond would not (if issued on August 15, 1986) be an

industrial development bond (as defined in section 103(b)(2) of

the 1954 Code), and

"(B) such issue was approved by city voters on January 19,

1985, for construction or renovation of facilities for the

cultural and performing arts.

The aggregate face amount of bonds to which this paragraph applies

shall not exceed $5,000,000.

"(40) Certain library bonds. - In the case of a bond issued

before January 1, 1986, by the City of Los Angeles Community

Redevelopment Agency to provide the library and related structures

associated with the City of Los Angeles Central Library Project,

the ownership and use of the land and facilities associated with

such project by persons which are not governmental units (or

payments from such persons) shall not adversely affect the

exclusion from gross income under section 103 of the 1954 Code of

interest on such bonds.

"(41) Certain refunding obligations for certain power facilities.

- With respect to 2 net billed nuclear power facilities located in

the State of Washington on which construction has been suspended,

the requirements of section 147(b) of the 1986 Code shall be

treated as satisfied with respect to refunding bonds issued before

1992 if -

"(A) each refunding bond has a maturity date not later than the

maturity date of the refunded bond, and

"(B) the facilities have not been placed in service as of the

date of issuance of the refunding bond.

The aggregate face amount of bonds to which this paragraph applies

shall not exceed $2,000,000,000. Section 146 of the 1986 Code and

the last paragraph of this section shall not apply to bonds to

which this paragraph applies.

"(42) Residential rental property. - A bond issued to finance a

residential rental project within the meaning of 103(b)(4) of the

1954 Code shall be treated as an exempt facility bond within the

meaning of section 142(a)(7) of the 1986 Code if the county housing

finance authority adopted an inducement resolution with respect to

the project on May 8, 1985, and the project is located in Polk

County, Florida. The aggregate face amount of bonds to which this

paragraph applies shall not exceed $4,100,000.

"(43) Extension of advance refunding for certain facilities. -

Paragraph (4) of section 631(c) of the Tax Reform Act of 1984

[section 631(c)(4) of Pub. L. 98-369, set out as a note under

section 103 of this title] is amended -

"(A) by striking out the second sentence thereof,

"(B) by adding at the end thereof the following new sentence:

'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".'

"(44) Pool bonds. - The following amounts of pool bonds are

exempt from the arbitrage rebate requirement of section 148(f) of

the 1986 Code and the temporary period limitation of section

148(c)(2) of the 1986 Code:

 

 

Pool                             2Maximum

Bond Amount

--------------------------------------------------------------------

Tennessee Utility Districts Pool                       $80,000,000

New Mexico Hospital Equipment Loan Council             $35,000,000

Pennsylvania Local Government Investment Trust Po     $375,000,000

Indiana Bond Bank Pool                                $240,000,000

Hernando County, Florida Bond Pool                    $300,000,000

Utah Municipal Finance Cooperative Pool               $262,000,000

North Carolina League of Municipalities Pool          $200,000,000

Kentucky Municipal League Bond Pool                   $170,000,000

Kentucky Association of Counties Bond Pool            $200,000,000

Homewood Municipal Bond Pool                           $50,000,000

Colorado Association of School Boards Pool            $300,000,000

Tennessee Municipal League Pooled Bonds                $75,000,000

Georgia Municipal Association Pool                    $130,000,000

--------------------------------------------------------------------

 

"(45) Certain carryforward elections. - Notwithstanding any other

provision of this title [enacting this section and sections 142 to

150 and 7703 of this title, amending sections 2, 22, 25, 32, 86,

103, 105, 152, 153, 163, 172, 194, 269A, 414, 879, 1016, 1398,

3402, 4701, 4940, 4942, 4988, 6362, 6652, and 7871 of this title,

repealing sections 103A, 1391 to 1397, and 6039B of this title,

omitting former section 143 of this title, enacting provisions set

out as notes under this section and sections 148 and 501 of this

title, and amending provisions set out as a note under section 103A

of this title] -

"(A) In the case of a metropolitan service district created

pursuant to State revised statutes, chapter 268, up to

$100,000,000 unused 1985 bond authority may be carried forward to

any year until 1989 (regardless of the date on which such

carryforward election is made).

"(B) If -

"(i) official action was taken by an industrial development

board on September 16, 1985, with respect to the issuance of

not more than $98,500,000, of waste water treatment revenue

bonds, and

"(ii) an executive order of the governor granted a

carryforward of State bond authority for such project on

December 30, 1985,

such carryforward election shall be valid for any year through

1988. The aggregate face amount of obligations to which this

subparagraph applies shall not exceed $98,500,000.

"(46) Treatment of certain obligations to finance hydroelectric

generating facility. - If -

"(A) obligations are issued in an amount not exceeding

$5,000,000 to finance the construction of a hydroelectric

generating facility located on the North Fork of Cache Creek in

Lake County, California, which was the subject of a preliminary

resolution of the issuer of the obligations on June 29, 1982, or

are issued to refund any of such obligations,

"(B) substantially all of the electrical power generated by

such facility is to be sold to a nongovernmental person pursuant

to a long-term power sales agreement in accordance with the

Public Utility Regulatory Policies Act of 1978 [Pub. L. 95-617,

see Short Title note set out under 16 U.S.C. 2601], and

"(C) the initially issued obligations are issued on or before

December 31, 1986, and any of such refunding obligations are

issued on or before December 31, 1996,

then the person referred to in subparagraph (B) shall not be

treated as a principal user of such facilities by reason of such

sales for purposes of subparagraphs (D) and (E) of section

103(b)(6) of the 1954 Code.

"(47) Treatment of certain obligations to finance steam and

electric cogeneration facility. - If -

"(A) obligations are issued on or before December 31, 1986, in

an amount not exceeding $4,400,000 to finance a facility for the

generation and transmission of steam and electricity having a

maximum electrical capacity of approximately 5.3 megawatts and

located within the City of San Jose, California, or are issued to

refund any of such obligations,

"(B) substantially all of the electrical power generated by

such facility that is not sold to an institution of higher

education created by statute of the State of California is to be

sold to a nongovernmental person pursuant to a long-term power

sales agreement in accordance with the Public Utility Regulatory

Policies Act of 1978 [Pub. L. 95-617, see Short Title note set

out under 16 U.S.C. 2601], and

"(C) the initially issued obligations are issued on or before

December 31, 1986, and any of such refunding obligations are

issued on or before December 31, 1996,

then the nongovernmental person referred to in subparagraph (B)

shall not be treated as a principal user of such facilities by

reason of such sales for purposes of subparagraphs (D) and (E) of

section 103(b)(6) of the Internal Revenue Code of 1954.

"(48) Treatment of certain obligations. - A bond which is not an

industrial development bond under section 103(b)(2) of the Internal

Revenue Code of 1954 shall not be treated as a private activity

bond for purposes of part IV of subchapter B of chapter 1 of the

1986 Code if 95 percent or more of the net proceeds of the issue of

which such bond is a part are used to provide facilities described

in any of the following subparagraphs:

"(A) A facility is described in this subparagraph if it is a

governmentally-owned and operated State fair and exposition

center with respect to which -

"(i) the 1985 session of the State legislature authorized

revenue bonds to be issued in a maximum amount of $10,000,000,

and

"(ii) a market feasibility study dated June 30, 1986,

relating to a major capital improvemental program at the

facility was prepared for the advisory board of the State fair

and exposition center by a certified public accounting firm.

The aggregate face amount of obligations to which this

subparagraph applies shall not exceed $10,000,000.

"(B) A facility is described in this subparagraph if it is a

convention, trade, or spectator facility which is to be located

in the State with respect to which paragraph (6)(U) applies and

with respect to which feasibility and preliminary design

consultants were hired on May 1, 1985 and October 31, 1985. The

aggregate face amount of obligations to which this subparagraph

applies shall not exceed $175,000,000.

"(C) A facility which is part of a project described in

paragraph (6)(O). The aggregate face amount of bonds to which

this subparagraph applies shall not exceed $20,000,000.

"(49) Transition rule for refunding certain housing bonds. -

Sections 146 and 149(d)(2) of the 1986 Code shall not apply to the

refunding of any bond issued under section 11(b) of the United

States Housing Act of 1937 [42 U.S.C. 1437i(b)] before December 31,

1983, if -

"(A) the bond has an original term to maturity of at least 40

years,

"(B) the maturity date of the refunding bonds does not exceed

the maturity date of the refunded bonds,

"(C) the amount of the refunding bonds does not exceed the

outstanding amount of the refunded bonds,

"(D) the interest rate on the refunding bonds is lower than the

interest rate of the refunded bonds, and

"(E) the refunded bond is required to be redeemed not later

than the earliest date on which such bond could be redeemed at

par.

"(50) Transitioned bonds subject to certain rules. - In the case

of any bond to which any provision of this section applies, except

as otherwise expressly provided, sections 103 and 103A of the 1954

Code shall be applied as if the requirements of sections 147(g),

148, and 149(d) of the 1986 Code were included in each such

section.

"(51) Certain additional projects. - Section 141(b) of the 1986

Code shall be applied by substituting '25' for '10' each place it

appears and by not applying sections 141(b)(3) and 141(c)(1)(B) to

bonds substantially all of the proceeds are used for -

"(A) A project is described in this subparagraph if it consists

of a capital improvements program for a metropolitan sewer

district, with respect to which a proposition was submitted to

voters on August 7, 1984. The aggregate face amount of

obligations to which this subparagraph applies shall not exceed

$60,000,000.

"(B) Facilities described in this subparagraph if it consists

of additions, extensions, and improvements to the wastewater

system for Lakeland, Florida. The aggregate face amount of

obligations to which this subparagraph applies shall not exceed

$20,000,000.

"(C) A project is described in this subparagraph if it is the

Central Valley Water Reclamation Project in Utah. The aggregate

face amount of obligations to which this subparagraph applies

shall not exceed $100,000,000.

"(D) A project is described in this subparagraph if it is a

project to construct approximately 26 miles of toll expressways,

with respect to which any appeal to validation was filed July 11,

1986. The aggregate face amount of obligations to which this

subparagraph applies shall not exceed $450,000,000.

"(52) Termination. - Except as otherwise provided in this

section, this section shall not apply to any bond issued after

December 31, 1990.

 

"SEC. 1318. DEFINITIONS, ETC., RELATING TO EFFECTIVE DATES AND

TRANSITIONAL RULES.

"(a) Definitions. - For purposes of this subtitle -

"(1) 1954 code. - The term '1954 Code' means the Internal

Revenue Code of 1954 as in effect on the day before the date of

the enactment of this Act [Oct. 22, 1986].

"(2) 1986 code. - The term '1986 Code' means the Internal

Revenue Code of 1986 as amended by this Act [see Tables for

classification].

"(3) Bond. - The term 'bond' includes any obligation.

"(4) Advance refund. - A bond shall be treated as issued to

advance refund another bond if it is issued more than 90 days

before the redemption of the refunded bond.

"(5) Net proceeds. - The term 'net proceeds' has the meaning

given such term by section 150(a) of the 1986 Code.

"(6) Continued application of the 1954 code. - Nothing in this

subtitle shall be construed to exempt any bond from any provision

of the 1954 Code by reason of a delay in (or exemption from) the

application of any amendment made by subtitle A [sections 1301 to

1303 of Pub. L. 99-514, enacting this section and sections 142 to

150 and 7703 of this title, amending sections 2, 22, 25, 32, 86,

103, 105, 152, 153, 163, 172, 194, 269A, 414, 879, 1016, 1398,

3402, 4701, 4940, 4942, 4988, 6362, 6652, and 7871 of this title,

repealing sections 103A, 1391 to 1397, and 6039B of this title,

omitting former section 143 of this title, enacting provisions

set out as notes under this section and sections 148 and 501 of

this title, and amending provisions set out as a note under

section 103A of this title].

"(7) Treatment as exempt facility. - Any bond which is treated

as an exempt facility bond by section 1316 or 1317 shall not fail

to be so treated by reason of subsection (b) of section 142 of

the 1986 Code.

"(8) Application of future legislation to transitioned bonds. -

In the case of any bond to which the amendments made by section

1301 [for classification see section 1311(a) of this note] do not

apply by reason of a provision of this Act [see Tables for

classification], any amendment of the 1986 Code (and any other

provision applicable to such Code) included in any law enacted

after October 22, 1986, shall be treated as included in section

103 and section 103A (as appropriate) of the 1954 Code with

respect to such bond unless -

"(A) such law expressly provides that such amendment (or

other provision) shall not apply to such bond, or

"(B) such amendment (or other provision) applies to a

provision of the 1986 Code -

"(i) for which there is no corresponding provision in

section 103 and section 103A (as appropriate) of the 1954

Code, and

"(ii) which is not otherwise treated as included in such

sections 103 and 103A with respect to such bond.

"(b) Minimum Tax Treatment. -

"(1) In general. - Any bond described in paragraph (2) shall

not be treated as a private activity bond for purposes of section

57 of the 1986 Code unless such bond would (if issued on August

7, 1986) be -

"(A) an industrial development bond (as defined in section

103(b)(2) of the 1954 Code), or

"(B) a private loan bond (as defined in section 103(o)(2)(A)

of the 1954 Code, without regard to any exception from such

definition other than section 103(o)(2)(C) of such Code).

"(2) Bonds described. - For purposes of paragraph (1), a bond

is described in this paragraph if -

"(A) the amendments made by section 1301 [for classification

see section 1311(a) of this note] do not apply to such bond by

reason of section 1312 or 1316(g),

"(B) any provision of section 1317 applies to such bond, or

"(C) the proceeds of such bond are used to refund any bond

referred to in subparagraph (A) or (B) (or any bond which is

part of a series of refundings of such a bond) if the

requirements of paragraphs (1), (2), and (3) of subsection (c)

are met with respect to the refunding bond.

"(c) Current Refundings Not Taken Into Account in Applying

Aggregate Limit on Bonds to Which Transitional Rules Apply. - The

limitation on the aggregate face amount of bonds to which any

provision of section 1316(g) or 1317 applies shall not be reduced

by the face amount of any bond the proceeds of which are to be used

exclusively to refund any bond to which such provision applies (or

any bond which is part of a series of refundings of such bond) if -

"(1) the average maturity date of the issue of which the

refunding bond is a part is not later than the average maturity

date of the bonds to be refunded by such issue,

"(2) the amount of the refunding bond does not exceed the

outstanding amount of the refunded bond, and

"(3) the net proceeds of the refunding bond are used to redeem

the refunded bond not later than 90 days after the date of the

issuance of the refunding bond.

For purposes of paragraph (1), average maturity shall be determined

in accordance with section 147(b)(2)(A) of the 1986 Code. No

limitation in section 1316(g) or 1317 on the period during which

bonds may be issued under such section shall apply to any refunding

bond which meets the requirements of this subsection.

"(d) Special Rule Permitting Carryforward of Volume Cap for

Certain Transitioned Projects. - A bond to which section 1312 or

1317 applies shall be treated as having a carryforward purpose

described in section 146(f)(5) of the 1986 Code, and the

requirement of section 146(f)(2)(A) of the 1986 Code shall be

treated as met if such project is identified with reasonable

specificity. The preceding sentence shall not apply so as to permit

a carryforward with respect to any qualified small issue bond."

[Section 1013(c)(2)(B) of Pub. L. 100-647 provided that: "The

amendment made by subparagraph (A) [amending section 1313(a)(3)(C)

of Pub. L. 99-514, set out above] shall apply to bonds issued after

June 30, 1987".]

[Section 1013(c)(11)(E) of Pub. L. 100-647 provided that: "A

refunding bond issued before July 1, 1987, shall be treated as

meeting the requirement of subparagraph (A) of section 1313(c)(1)

of the Reform Act [Pub. L. 99-514, set out above] if such bond met

the requirement of such subparagraph as in effect before the

amendments made by this paragraph [amending section 1313(c) of Pub.

L. 99-514, set out above]."]

[Section 1013(c)(14)(B) of Pub. L. 100-647 provided that: "The

amendment made by subparagraph (A) [amending section 1313 of Pub.

L. 99-514, set out above] shall apply with respect to refunding

bonds issued after October 16, 1987."]

[Section 1013(e)(2)(B) of Pub. L. 100-647 provided that: "The

amendment made by subparagraph (A) [amending section 1315(e) of

Pub. L. 99-514, set out above] shall apply to bonds issued after

June 10, 1987."]

[Section 1013(f)(1)(B) of Pub. L. 100-647 provided that: "The

amendment made by subparagraph (A) [amending section 1316 of Pub.

L. 99-514, set out above] shall apply only with respect to

carryforwards of volume cap for years after 1986."]

[Section 1013(f)(7)(B) of Pub. L. 100-647 provided that: "The

amendment made by subparagraph (A) [amending section 1316(g)(8) of

Pub. L. 99-514, set out above] shall apply only with respect to

carryforwards of volume cap for years after 1986."]

 

REGULATIONS

Section 1301(i) of Pub. L. 99-514 provided that: "The Secretary

of the Treasury or his delegate shall amend the provision in the

Federal income tax regulations relating to when use pursuant to

certain output contracts is considered to satisfy the private

business tests of paragraphs (1) and (2) of section 141(b) of the

Internal Revenue Code of 1986 to eliminate the requirement of a 3

percent guaranteed minimum payment."

 

APPLICATION OF SECURITY INTEREST TEST TO BOND FINANCING OF

HAZARDOUS WASTE CLEAN-UP ACTIVITIES

Section 6179 of Pub. L. 100-647 provided that: "Before January 1,

1989, the Secretary of the Treasury or his delegate shall issue

guidance concerning the application of the private security or

payment test under section 141(b)(2) of the Internal Revenue Code

of 1986 to tax-exempt bond financing by State and local governments

of hazardous waste clean-up activities conducted by such

governments where some of the activities occur on privately owned

land."

 

STATE AND LOCAL GOVERNMENT SERIES MODIFICATIONS

Section 1301(d) of Pub. L. 99-514 provided that: "Notwithstanding

any other provision of law or any regulations promulgated

thereunder (including the provisions of 31 CFR part 344) the

Secretary of the Treasury shall extend by January 1, 1987, the

State and Local Government Series program to provide -

"(1) instruments allowing flexible investment of bond proceeds

in a manner eliminating the earning of rebatable arbitrage,

"(2) demand deposits under such program by eliminating advance

notice and minimum maturity requirements related to the purchase

of bonds,

"(3) operation of such program at no net cost to the Federal

Government, and

"(4) deposits for a stated maturity under reasonable advance

notice requirements."

 

MANAGEMENT CONTRACTS

Section 1301(e) of Pub. L. 99-514 provided that: "The Secretary

of the Treasury or his delegate shall modify the Secretary's

advance ruling guidelines relating to when use of property pursuant

to a management contract is not considered a trade or business use

by a private person for purposes of section 141(a) of the Internal

Revenue Code of 1986 to provide that use pursuant to a management

contract generally shall not be treated as trade or business use as

long as -

"(1) the term of such contract (including renewal options) does

not exceed 5 years,

"(2) the exempt owner has the option to cancel such contract at

the end of any 3-year period,

"(3) the manager under the contract is not compensated (in

whole or in part) on the basis of a share of net profits, and

"(4) at least 50 percent of the annual compensation of the

manager under such contract is based on a periodic fixed fee."

 

-FOOTNOTE-

 

(!1) So in original. Probably should end with a period after

"146".

 

 

-End-