Internal Revenue Code – Section 144

Sec. 144. Qualified small issue bond; qualified student loan bond; qualified redevelopment bond

-STATUTE-

(a) Qualified small issue bond

(1) In general

For purposes of this part, the term "qualified small issue

bond" means any bond issued as part of an issue the aggregate

authorized face amount of which is $1,000,000 or less and 95

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

(A) for the acquisition, construction, reconstruction, or

improvement of land or property of a character subject to the

allowance for depreciation, or

(B) to redeem part or all of a prior issue which was issued

for purposes described in subparagraph (A) or this

subparagraph.

(2) Certain prior issues taken into account

If -

(A) the proceeds of 2 or more issues of bonds (whether or not

the issuer of each such issue is the same) are or will be used

primarily with respect to facilities located in the same

incorporated municipality or located in the same county (but

not in any incorporated municipality),

(B) the principal user of such facilities is or will be the

same person or 2 or more related persons, and

(C) but for this paragraph, paragraph (1) (or the

corresponding provision of prior law) would apply to each such

issue,

 

then, for purposes of paragraph (1), in determining the aggregate

face amount of any later issue there shall be taken into account

the aggregate face amount of tax-exempt bonds issued under all

prior such issues and outstanding at the time of such later issue

(not including as outstanding any bond which is to be redeemed

(other than in an advance refunding) from the net proceeds of the

later issue).

(3) Related persons

For purposes of this subsection, a person is a related person

to another person if -

(A) the relationship between such persons would result in a

disallowance of losses under section 267 or 707(b), or

(B) such persons are members of the same controlled group of

corporations (as defined in section 1563(a), except that "more

than 50 percent" shall be substituted for "at least 80 percent"

each place it appears therein).

(4) $10,000,000 limit in certain cases

(A) In general

At the election of the issuer with respect to any issue, this

subsection shall be applied -

(i) by substituting "$10,000,000" for "$1,000,000" in

paragraph (1), and

(ii) in determining the aggregate face amount of such

issue, by taking into account not only the amount described

in paragraph (2), but also the aggregate amount of capital

expenditures with respect to facilities described in

subparagraph (B) paid or incurred during the 6-year period

beginning 3 years before the date of such issue and ending 3

years after such date (and financed otherwise than out of the

proceeds of outstanding tax-exempt issues to which paragraph

(1) (or the corresponding provision of prior law) applied),

as if the aggregate amount of such capital expenditures

constituted the face amount of a prior outstanding issue

described in paragraph (2).

(B) Facilities taken into account

For purposes of subparagraph (A)(ii), the facilities

described in this subparagraph are facilities -

(i) located in the same incorporated municipality or

located in the same county (but not in any incorporated

municipality), and

(ii) the principal user of which is or will be the same

person or 2 or more related persons.

 

For purposes of clause (i), the determination of whether or not

facilities are located in the same governmental unit shall be

made as of the date of issue of the issue in question.

(C) Certain capital expenditures not taken into account

For purposes of subparagraph (A)(ii), any capital expenditure

-

(i) to replace property destroyed or damaged by fire,

storm, or other casualty, to the extent of the fair market

value of the property replaced,

(ii) required by a change made after the date of issue of

the issue in question in a Federal or State law or local

ordinance of general application or required by a change made

after such date in rules and regulations of general

application issued under such a law or ordinance,

(iii) required by circumstances which could not be

reasonably foreseen on such date of issue or arising out of a

mistake of law or fact (but the aggregate amount of

expenditures not taken into account under this clause with

respect to any issue shall not exceed $1,000,000), or

(iv) described in clause (i) or (ii) of section 41(b)(2)(A)

for which a deduction was allowed under section 174(a),

 

shall not be taken into account.

(D) Limitation on loss of tax exemption

In applying subparagraph (A)(ii) with respect to capital

expenditures made after the date of any issue, no bond issued

as a part of such issue shall cease to be treated as a

qualified small issue bond by reason of any such expenditure

for any period before the date on which such expenditure is

paid or incurred.

(E) Certain refinancing issues

In the case of any issue described in paragraph (1)(B), an

election may be made under subparagraph (A) of this paragraph

only if all of the prior issues being redeemed are issues to

which paragraph (1) (or the corresponding provision of prior

law) applied. In applying subparagraph (A)(ii) with respect to

such a refinancing issue, capital expenditures shall be taken

into account only for purposes of determining whether the prior

issues being redeemed qualified (and would have continued to

qualify) under paragraph (1) (or the corresponding provision of

prior law).

(F) Aggregate amount of capital expenditures where there is

urban development action grant

In the case of any issue 95 percent or more of the net

proceeds of which are to be used to provide facilities with

respect to which an urban development action grant has been

made under section 119 of the Housing and Community Development

Act of 1974, capital expenditures of not to exceed $10,000,000

shall not be taken into account for purposes of applying

subparagraph (A)(ii). This subparagraph shall not apply to

bonds issued after December 31, 2006.

(G) Additional capital expenditures not taken into account

With respect to bonds issued after December 31, 2006, in

addition to any capital expenditure described in subparagraph

(C), capital expenditures of not to exceed $10,000,000 shall

not be taken into account for purposes of applying subparagraph

(A)(ii).

(5) Issues for residential purposes

This subsection shall not apply to any bond issued as part of

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

used directly or indirectly to provide residential real property

for family units.

(6) Limitations on treatment of bonds as part of the same issue

(A) In general

For purposes of this subsection, separate lots of bonds which

(but for this subparagraph) would be treated as part of the

same issue shall be treated as separate issues unless the

proceeds of such lots are to be used with respect to 2 or more

facilities -

(i) which are located in more than 1 State, or

(ii) which have, or will have, as the same principal user

the same person or related persons.

(B) Franchises

For purposes of subparagraph (A), a person (other than a

governmental unit) shall be considered a principal user of a

facility if such person (or a group of related persons which

includes such person) -

(i) guarantees, arranges, participates in, or assists with

the issuance (or pays any portion of the cost of issuance) of

any bond the proceeds of which are to be used to finance or

refinance such facility, and

(ii) provides any property, or any franchise, trademark, or

trade name (within the meaning of section 1253), which is to

be used in connection with such facility.

(7) Subsection not to apply if bonds issued with certain other

tax-exempt bonds

This subsection shall not apply to any bond issued as part of

an issue (other than an issue to which paragraph (4) applies) if

the interest on any other bond which is part of such issue is

excluded from gross income under any provision of law other than

this subsection.

(8) Restrictions on financing certain facilities

This subsection shall not apply to an issue if -

(A) more than 25 percent of the net proceeds of the issue are

to be used to provide a facility the primary purpose of which

is one of the following: retail food and beverage services,

automobile sales or service, or the provision of recreation or

entertainment; or

(B) any portion of the proceeds of the issue is to be used to

provide the following: any private or commercial golf course,

country club, massage parlor, tennis club, skating facility

(including roller skating, skateboard, and ice skating),

racquet sports facility (including any handball or racquetball

court), hot tub facility, suntan facility, or racetrack.

(9) Aggregation of issues with respect to single project

For purposes of this subsection, 2 or more issues part or all

of the net proceeds of which are to be used with respect to a

single building, an enclosed shopping mall, or a strip of

offices, stores, or warehouses using substantial common

facilities shall be treated as 1 issue (and any person who is a

principal user with respect to any of such issues shall be

treated as a principal user with respect to the aggregated

issue).

(10) Aggregate limit per taxpayer

(A) In general

This subsection shall not apply to any issue if the aggregate

authorized face amount of such issue allocated to any test-

period beneficiary (when increased by the outstanding tax-

exempt facility-related bonds of such beneficiary) exceeds

$40,000,000.

(B) Outstanding tax-exempt facility-related bonds

(i) In general

For purposes of applying subparagraph (A) with respect to

any issue, the outstanding tax-exempt facility-related bonds

of any person who is a test-period beneficiary with respect

to such issue is the aggregate amount of tax-exempt bonds

referred to in clause (ii) -

(I) which are allocated to such beneficiary, and

(II) which are outstanding at the time of such later

issue (not including as outstanding any bond which is to be

redeemed (other than in an advance refunding) from the net

proceeds of the later issue).

(ii) Bonds taken into account

For purposes of clause (i), the bonds referred to in this

clause are -

(I) exempt facility bonds, qualified small issue bonds,

and qualified redevelopment bonds, and

(II) industrial development bonds (as defined in section

103(b)(2), as in effect on the day before the date of the

enactment of the Tax Reform Act of 1986) to which section

141(a) does not apply.

(C) Allocation of face amount of issue

(i) In general

Except as otherwise provided in regulations, the portion of

the face amount of an issue allocated to any test-period

beneficiary of a facility financed by the proceeds of such

issue (other than an owner of such facility) is an amount

which bears the same relationship to the entire face amount

of such issue as the portion of such facility used by such

beneficiary bears to the entire facility.

(ii) Owners

Except as otherwise provided in regulations, the portion of

the face amount of an issue allocated to any test-period

beneficiary who is an owner of a facility financed by the

proceeds of such issue is an amount which bears the same

relationship to the entire face amount of such issue as the

portion of such facility owned by such beneficiary bears to

the entire facility.

(D) Test-period beneficiary

For purposes of this paragraph, except as provided in

regulations, the term "test-period beneficiary" means any

person who is an owner or a principal user of facilities being

financed by the issue at any time during the 3-year period

beginning on the later of -

(i) the date such facilities were placed in service, or

(ii) the date of issue.

(E) Treatment of related persons

For purposes of this paragraph, all persons who are related

(within the meaning of paragraph (3)) to each other shall be

treated as 1 person.

(11) Limitation on acquisition of depreciable farm property

(A) In general

This subsection shall not apply to any issue if more than

$250,000 of the net proceeds of such issue are to be used to

provide depreciable farm property with respect to which the

principal user is or will be the same person or 2 or more

related persons.

(B) Depreciable farm property

For purposes of this paragraph, the term "depreciable farm

property" means property of a character subject to the

allowance for depreciation which is to be used in a trade or

business of farming.

(C) Prior issues taken into account

In determining the amount of proceeds of an issue to be used

as described in subparagraph (A), there shall be taken into

account the aggregate amount of each prior issue to which

paragraph (1) (or the corresponding provisions of prior law)

applied which were or will be so used.

(12) Termination dates

(A) In general

This subsection shall not apply to -

(i) any bond (other than a bond described in clause (ii))

issued after December 31, 1986, or

(ii) any bond (or series of bonds) issued to refund a bond

issued on or before such date unless -

(I) 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,

(II) the amount of the refunding bond does not exceed the

outstanding amount of the refunded bond, and

(III) 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 clause (ii)(I), average maturity shall be

determined in accordance with section 147(b)(2)(A).

(B) Bonds issued to finance manufacturing facilities and farm

property

Subparagraph (A) 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 -

(i) any manufacturing facility, or

(ii) any land or property in accordance with section

147(c)(2).

(C) Manufacturing facility

For purposes of this paragraph -

(i) In general

The term "manufacturing facility" means any facility which

is used in the manufacturing or production of tangible

personal property (including the processing resulting in a

change in the condition of such property). A rule similar to

the rule of section 142(b)(2) shall apply for purposes of the

preceding sentence.

(ii) Certain facilities included

Such term includes facilities which are directly related

and ancillary to a manufacturing facility (determined without

regard to this clause) if -

(I) such facilities are located on the same site as the

manufacturing facility, and

(II) not more than 25 percent of the net proceeds of the

issue are used to provide such facilities.

(iii) Special rules for bonds issued in 2009 and 2010

In the case of any issue made after the date of enactment

of this clause and before January 1, 2011, clause (ii) shall

not apply and the net proceeds from a bond shall be

considered to be used to provide a manufacturing facility if

such proceeds are used to provide -

(I) a facility which is used in the creation or

production of intangible property which is described in

section 197(d)(1)(C)(iii), or

(II) a facility which is functionally related and

subordinate to a manufacturing facility (determined without

regard to this subclause) if such facility is located on

the same site as the manufacturing facility.

(b) Qualified student loan bond

For purposes of this part -

(1) In general

The term "qualified student loan bond" means any bond issued as

part of an issue the applicable percentage or more of the net

proceeds of which are to be used directly or indirectly to make

or finance student loans under -

(A) a program of general application to which the Higher

Education Act of 1965 applies if -

(i) limitations are imposed under the program on -

(I) the maximum amount of loans outstanding to any

student, and

(II) the maximum rate of interest payable on any loan,

 

(ii) the loans are directly or indirectly guaranteed by the

Federal Government,

(iii) the financing of loans under the program is not

limited by Federal law to the proceeds of tax-exempt bonds,

and

(iv) special allowance payments under section 438 of the

Higher Education Act of 1965 -

(I) are authorized to be paid with respect to loans made

under the program, or

(II) would be authorized to be made with respect to loans

under the program if such loans were not financed with the

proceeds of tax-exempt bonds, or

 

(B) a program of general application approved by the State if

no loan under such program exceeds the difference between the

total cost of attendance and other forms of student assistance

(not including loans pursuant to section 428B(a)(1) of the

Higher Education Act of 1965 (relating to parent loans) or

subpart I (!1) of part C of title VII of the Public Health

Service Act (relating to student assistance)) for which the

student borrower may be eligible. A program shall not be

treated as described in this subparagraph if such program is

described in subparagraph (A).

 

 

A bond shall not be treated as a qualified student loan bond if

the issue of which such bond is a part meets the private business

tests of paragraphs (1) and (2) of section 141(b) (determined by

treating 501(c)(3) organizations as governmental units with

respect to their activities which do not constitute unrelated

trades or businesses, determined by applying section 513(a)).

(2) Applicable percentage

For purposes of paragraph (1), the term "applicable percentage"

means -

(A) 90 percent in the case of the program described in

paragraph (1)(A), and

(B) 95 percent in the case of the program described in

paragraph (1)(B).

(3) Student borrowers must be residents of issuing State, etc.

A student loan shall be treated as being made or financed under

a program described in paragraph (1) with respect to an issue

only if the student is -

(A) a resident of the State from which the volume cap under

section 146 for such loan was derived, or

(B) enrolled at an educational institution located in such

State.

(4) Discrimination on basis of school location not permitted

A program shall not be treated as described in paragraph (1)(A)

if such program discriminates on the basis of the location (in

the United States) of the educational institution in which the

student is enrolled.

(c) Qualified redevelopment bond

For purposes of this part -

(1) In general

The term "qualified redevelopment bond" means any bond issued

as part of an issue 95 percent or more of the net proceeds of

which are to be used for 1 or more redevelopment purposes in any

designated blighted area.

(2) Additional requirements

A bond shall not be treated as a qualified redevelopment bond

unless -

(A) the issue described in paragraph (1) is issued pursuant

to -

(i) a State law which authorizes the issuance of such bonds

for redevelopment purposes in blighted areas, and

(ii) a redevelopment plan which is adopted before such

issuance by the governing body described in paragraph (4)(A)

with respect to the designated blighted area,

 

(B)(i) the payment of the principal and interest on such

issue is primarily secured by taxes of general applicability

imposed by a general purpose governmental unit, or

(ii) any increase in real property tax revenues (attributable

to increases in assessed value) by reason of the carrying out

of such purposes in such area is reserved exclusively for debt

service on such issue (and similar issues) to the extent such

increase does not exceed such debt service,

(C) each interest in real property located in such area -

(i) which is acquired by a governmental unit with the

proceeds of the issue, and

(ii) which is transferred to a person other than a

governmental unit,

 

is transferred for fair market value,

(D) the financed area with respect to such issue meets the no

additional charge requirements of paragraph (5), and

(E) the use of the proceeds of the issue meets the

requirements of paragraph (6).

(3) Redevelopment purposes

For purposes of paragraph (1) -

(A) In general

The term "redevelopment purposes" means, with respect to any

designated blighted area -

(i) the acquisition (by a governmental unit having the

power to exercise eminent domain) of real property located in

such area,

(ii) the clearing and preparation for redevelopment of land

in such area which was acquired by such governmental unit,

(iii) the rehabilitation of real property located in such

area which was acquired by such governmental unit, and

(iv) the relocation of occupants of such real property.

(B) New construction not permitted

The term "redevelopment purposes" does not include the

construction (other than the rehabilitation) of any property or

the enlargement of an existing building.

(4) Designated blighted area

For purposes of this subsection -

(A) In general

The term "designated blighted area" means any blighted area

designated by the governing body of a local general purpose

governmental unit in the jurisdiction of which such area is

located.

(B) Blighted area

The term "blighted area" means any area which the governing

body described in subparagraph (A) determines to be a blighted

area on the basis of the substantial presence of factors such

as excessive vacant land on which structures were previously

located, abandoned or vacant buildings, substandard structures,

vacancies, and delinquencies in payment of real property taxes.

(C) Designated areas may not exceed 20 percent of total

assessed value of real property in government's jurisdiction

(i) In general

An area may be designated by a governmental unit as a

blighted area only if the designation percentage with respect

to such area, when added to the designation percentages of

all other designated blighted areas within the jurisdiction

of such governmental unit, does not exceed 20 percent.

(ii) Designation percentage

For purposes of this subparagraph, the term "designation

percentage" means, with respect to any area, the percentage

(determined at the time such area is designated) which the

assessed value of real property located in such area is of

the total assessed value of all real property located within

the jurisdiction of the governmental unit which designated

such area.

(iii) Exception where bonds not outstanding

The designation percentage of a previously designated

blighted area shall not be taken into account under clause

(i) if no qualified redevelopment bond (or similar bond) is

or will be outstanding with respect to such area.

(D) Minimum designated area

(i) In general

Except as provided in clause (ii), an area shall not be

treated as a designated blighted area for purposes of this

subsection unless such area is contiguous and compact and its

area equals or exceeds 100 acres.

(ii) 10-acre minimum in certain cases

Clause (i) shall be applied by substituting "10 acres" for

"100 acres" if not more than 25 percent of the financed area

is to be provided (pursuant to the issue and all other such

issues) to 1 person. For purposes of the preceding sentence,

all related persons (as defined in subsection (a)(3)) shall

be treated as 1 person. For purposes of this clause, an area

provided to a developer on a short-term interim basis shall

not be treated as provided to such developer.

(5) No additional charge requirements

The financed area with respect to any issue meets the

requirements of this paragraph if, while any bond which is part

of such issue is outstanding -

(A) no owner or user of property located in the financed area

is subject to a charge or fee which similarly situated owners

or users of comparable property located outside such area are

not subject, and

(B) the assessment method or rate of real property taxes with

respect to property located in the financed area does not

differ from the assessment method or rate of real property

taxes with respect to comparable property located outside such

area.

 

For purposes of the preceding sentence, the term "comparable

property" means property which is of the same type as the

property to which it is being compared and which is located

within the jurisdiction of the designating governmental unit.

(6) Use of proceeds requirements

The use of the proceeds of an issue meets the requirements of

this paragraph if -

(A) not more than 25 percent of the net proceeds of such

issue are to be used to provide (including the provision of

land for) facilities described in subsection (a)(8) or section

147(e), and

(B) no portion of the proceeds of such issue is to be used to

provide (including the provision of land for) any private or

commercial golf course, country club, massage parlor, hot tub

facility, suntan facility, racetrack or other facility used for

gambling, or any store the principal business of which is the

sale of alcoholic beverages for consumption off premises.

(7) Financed area

For purposes of this subsection, the term "financed area"

means, with respect to any issue, the portion of the designated

blighted area with respect to which the proceeds of such issue

are to be used.

(8) Restriction on acquisition of land not to apply

Section 147(c) (other than paragraphs (1)(B) and (2) thereof)

shall not apply to any qualified redevelopment bond.

 

-SOURCE-

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

Stat. 2621; amended Pub. L. 100-647, title I, Sec. 1013(a)(4)(A),

(B)(i), (ii), (C), (5), title VI, Sec. 6176(a), Nov. 10, 1988, 102

Stat. 3537, 3538, 3726; Pub. L. 101-239, title VII, Sec. 7105, Dec.

19, 1989, 103 Stat. 2306; Pub. L. 101-508, title XI, Sec. 11409(a),

Nov. 5, 1990, 104 Stat. 1388-478; Pub. L. 102-227, title I, Sec.

109(a), Dec. 11, 1991, 105 Stat. 1688; Pub. L. 103-66, title XIII,

Sec. 13122(a), Aug. 10, 1993, 107 Stat. 432; Pub. L. 108-357, title

III, Sec. 340, Oct. 22, 2004, 118 Stat. 1485; Pub. L. 109-222,

title II, Sec. 208, May 17, 2006, 120 Stat. 351; Pub. L. 111-5,

div. B, title I, Sec. 1301(a), Feb. 17, 2009, 123 Stat. 344.)

 

-REFTEXT-

REFERENCES IN TEXT

Section 119 of the Housing and Community Development Act of 1974,

referred to in subsec. (a)(4)(F), is classified to section 5318 of

Title 42, The Public Health and Welfare.

The date of the enactment of the Tax Reform Act of 1986, referred

to in subsec. (a)(10)(B)(ii)(II), is the date of enactment of Pub.

L. 99-514, which was approved Oct. 22, 1986.

The date of enactment of this clause, referred to in subsec.

(a)(12)(C)(iii), is the date of enactment of Pub. L. 111-5, which

was approved Feb. 17, 2009.

The Higher Education Act of 1965, referred to in subsec. (b)(1),

is Pub. L. 89-329, Nov. 8, 1965, 79 Stat. 1219, which is classified

generally to chapter 28 (Sec. 1001 et seq.) of Title 20, Education,

and part C (Sec. 2751 et seq.) of subchapter I of chapter 34 of

Title 42, The Public Health and Welfare. Section 428B(a) of that

Act as enacted in the general amendment of part B of title IV of

that Act by Pub. L. 99-498, title IV, Sec. 402(a), Oct. 17, 1986,

100 Stat. 1386, which is classified to section 1078-2 of Title 20,

does not contain a par. (1). Section 438 of that Act is classified

to section 1087-1 of Title 20. For complete classification of this

Act to the Code, see Short Title note set out under section 1001 of

Title 20 and Tables.

The Public Health Service Act, referred to in subsec. (b)(1)(B),

is act July 1, 1944, ch. 373, 58 Stat. 682. Subpart I of part C of

title VII of the Act was classified generally to subpart I (Sec.

294 et seq.) of part C of subchapter V of chapter 6A of Title 42,

The Public Health and Welfare, prior to the general revision of

subchapter V of chapter 6A by Pub. L. 102-408, title I, Sec. 102,

Oct. 13, 1992, 106 Stat. 1994. See subpart I (Sec. 292 et seq.) of

part A of revised subchapter V of chapter 6A of Title 42. For

complete classification of this Act to the Code, see Short Title

note set out under section 201 of Title 42 and Tables.

 

 

-MISC1-

PRIOR PROVISIONS

A prior section 144, acts Aug. 16, 1954, ch. 736, 68A Stat. 41;

Feb. 26, 1964, Pub. L. 88-272, title I, Sec. 112(c), title II, Sec.

232(c), 78 Stat. 24, 110; Dec. 10, 1971, Pub. L. 92-178, title II,

Sec. 206, title III, Sec. 301(c), 85 Stat. 511, 520; Oct. 4, 1976,

Pub. L. 94-455, title V, Sec. 501(b)(3)-(5), title XIX, Sec.

1906(b)(13)(A), 90 Stat. 1558, 1559, 1834, related to method for

electing to take 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

2009 - Subsec. (a)(12)(C). Pub. L. 111-5 substituted dash for

comma after "For purposes of this paragraph", designated remainder

of first sentence and second sentence of existing provisions as cl.

(i) and inserted heading, substituted "The term" for "the term",

added cls. (ii) and (iii), and struck out former last sentence

which read as follows: "For purposes of the 1st sentence of this

subparagraph, the term 'manufacturing facility' includes facilities

which are directly related and ancillary to a manufacturing

facility (determined without regard to this sentence) if -

"(i) such facilities are located on the same site as the

manufacturing facility, and

"(ii) not more than 25 percent of the net proceeds of the issue

are used to provide such facilities."

2006 - Subsec. (a)(4)(F), (G). Pub. L. 109-222 substituted

"December 31, 2006" for "September 30, 2009".

2004 - Subsec. (a)(4)(F). Pub. L. 108-357, Sec. 340(b), inserted

at end "This subparagraph shall not apply to bonds issued after

September 30, 2009."

Subsec. (a)(4)(G). Pub. L. 108-357, Sec. 340(a), added subpar.

(G).

1993 - Subsec. (a)(12)(B). Pub. L. 103-66 amended heading and

text of subpar. (B) generally. Prior to amendment, text read as

follows: "In the case of any bond issued as part of an issue 95

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

provide -

"(i) any manufacturing facility, or

"(ii) any land or property in accordance with section

147(c)(2),

subparagraph (A) shall be applied by substituting 'June 30, 1992'

for 'December 31, 1986'."

1991 - Subsec. (a)(12)(B). Pub. L. 102-227 substituted "June 30,

1992" for "December 31, 1991".

1990 - Subsec. (a)(12)(B). Pub. L. 101-508 substituted "December

31, 1991" for "September 30, 1990".

1989 - Subsec. (a)(12)(B). Pub. L. 101-239 substituted "by

substituting 'September 30, 1990' for 'December 31, 1986' " for "by

substituting '1989' for '1986' ".

1988 - Subsec. (a)(12)(A). Pub. L. 100-647, Sec.

1013(a)(4)(B)(ii), inserted sentence at end that for purposes of

cl. (ii)(I), average maturity be determined in accordance with

section 147(b)(2)(A).

Subsec. (a)(12)(A)(ii). Pub. L. 100-647, Sec. 1013(a)(4)(A),

inserted "(or series of bonds)" before "issued to refund" in

introductory text.

Subsec. (a)(12)(A)(ii)(I). Pub. L. 100-647, Sec.

1013(a)(4)(B)(i), amended subcl. (I) generally. Prior to amendment,

subcl. (I) read as follows: "the refunding bond has a maturity date

not later than the maturity date of the refunded bond,".

Subsec. (a)(12)(A)(ii)(III), (IV). Pub. L. 100-647, Sec.

1013(a)(4)(C), redesignated subcl. (IV) as (III) and struck out

former subcl. (III) which provided that this subsection apply when

the interest rate on the refunding bond is lower than the interest

rate on the refunded bond.

Subsec. (a)(12)(C). Pub. L. 100-647, Sec. 6176(a), inserted

sentence at end defining "manufacturing facility".

Subsec. (b)(1). Pub. L. 100-647, Sec. 1013(a)(5), in subpar. (B)

struck out "to which part B of title IV of the Higher Education Act

of 1965 (relating to guaranteed student loans) does not apply"

after "by the State", substituted "of the Higher Education Act of

1965" for "of such Act", amended last sentence generally, and

inserted a new flush sentence at end of par. (1). Prior to

amendment, last sentence of subpar. (B) read as follows: "A bond

issued as part of an issue shall be treated as a qualified student

loan bond only if no bond which is part of such issue meets the

private business tests of paragraphs (1) and (2) of section

141(b)."

 

EFFECTIVE DATE OF 2009 AMENDMENT

Pub. L. 111-5, div. B, title I, Sec. 1301(b), Feb. 17, 2009, 123

Stat. 345, provided that: "The amendments made by this section

[amending this section] shall apply to obligations issued after the

date of the enactment of this Act [Feb. 17, 2009]."

 

EFFECTIVE DATE OF 1993 AMENDMENT

Section 13122(b) of Pub. L. 103-66 provided that: "The amendment

made by subsection (a) [amending this section] shall apply to bonds

issued after June 30, 1992."

 

EFFECTIVE DATE OF 1991 AMENDMENT

Section 109(b) of Pub. L. 102-227 provided that: "The amendment

made by this section [amending this section] shall apply to bonds

issued after December 31, 1991."

 

EFFECTIVE DATE OF 1990 AMENDMENT

Section 11409(b) of Pub. L. 101-508 provided that: "The amendment

made by this section [amending this section] shall apply to bonds

issued after September 30, 1990."

 

EFFECTIVE DATE OF 1988 AMENDMENT

Amendment by section 1013(a)(4)(A), (B)(i), (ii), (C), (5) of

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.

Section 6176(b) of Pub. L. 100-647 provided that:

"(1) In general. - The amendment made by subsection (a) [amending

this section] shall apply to bonds issued after the date of the

enactment of this Act [Nov. 10, 1988].

"(2) Refundings. - The amendment made by subsection (a) shall not

apply to any bond issued to refund (or which is part of a series of

bonds issued to refund) a bond issued on or before the date of the

enactment of this Act 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, and

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

outstanding amount of the refunded bond.

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

determined in accordance with section 147(b) of the 1986 Code."

 

APPLICATION OF SUBSECTION (A)(12)(A)(II)(I) TO REFUNDING BONDS

ISSUED BEFORE JULY 1, 1987

Section 1013(a)(4)(B)(iii) of Pub. L. 100-647 provided that: "A

refunding bond issued before July 1, 1987, shall be treated as

meeting the requirement of subclause (I) of section

144(a)(12)(A)(ii) of the 1986 Code if such bond met the requirement

of such subclause as in effect before the amendments made by this

subparagraph [amending this section]."

 

TERMINATION DATE FOR EXEMPTION FOR CERTAIN SMALL ISSUES UNDER

SECTION 103(B)(6)

Section 1013(c)(12)(B) of Pub. L. 100-647 provided that: "The

date applicable under section 144(a)(12)(B) of the 1986 Code shall

be treated as contained in section 103(b)(6)(N)(iii) of the

Internal Revenue Code of 1954, as in effect on the day before the

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

purposes of any bond issued to refund a bond to which such section

103(b)(6)(N)(iii) applies."

 

-FOOTNOTE-

(!1) See References in Text note below.

 

 

-End-