§ 103. — Interest on State and local bonds.
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From the U.S. Code Online via GPO Access
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[Laws in effect as of January 24, 2002]
[Document not affected by Public Laws enacted between
January 24, 2002 and December 19, 2002]
[CITE: 26USC103]
TITLE 26--INTERNAL REVENUE CODE
Subtitle A--Income Taxes
CHAPTER 1--NORMAL TAXES AND SURTAXES
Subchapter B--Computation of Taxable Income
PART III--ITEMS SPECIFICALLY EXCLUDED FROM GROSS INCOME
Sec. 103. Interest on State and local bonds
(a) Exclusion
Except as provided in subsection (b), gross income does not include
interest on any State or local bond.
(b) Exceptions
Subsection (a) shall not apply to--
(1) Private activity bond which is not a qualified bond
Any private activity bond which is not a qualified bond (within
the meaning of section 141).
(2) Arbitrage bond
Any arbitrage bond (within the meaning of section 148).
(3) Bond not in registered form, etc.
Any bond unless such bond meets the applicable requirements of
section 149.
(c) Definitions
For purposes of this section and part IV--
(1) State or local bond
The term ``State or local bond'' means an obligation of a State
or political subdivision thereof.
(2) State
The term ``State'' includes the District of Columbia and any
possession of the United States.
(Aug. 16, 1954, ch. 736, 68A Stat. 29; Pub. L. 90-364, title I,
Sec. 107(a), June 28, 1968, 82 Stat. 266; Pub. L. 90-634, title IV,
Sec. 401(a), Oct. 24, 1968, 82 Stat. 1349; Pub. L. 91-172, title VI,
Sec. 601(a), Dec. 30, 1969, 83 Stat. 656; Pub. L. 92-178, title III,
Sec. 315(a), (b), Dec. 10, 1971, 85 Stat. 529; Pub. L. 94-164,
Sec. 7(a), Dec. 23, 1975, 89 Stat. 976; Pub. L. 94-182, title III,
Sec. 301(a), Dec. 31, 1975, 89 Stat. 1056; Pub. L. 94-455, title XIX,
Secs. 1901(a)(17), (b)(8)(B), 1906(b)(13)(A), title XXI, Secs. 2105(a)-
(c), 2137(d), Oct. 4, 1976, 90 Stat. 1765, 1766, 1794, 1834, 1902, 1931;
Pub. L. 95-339, title II, Sec. 201(a), Aug. 8, 1978, 92 Stat. 467; Pub.
L. 95-600, title III, Secs. 331(a), (b), 332(a), 333(a), 334(a), (b),
title VII, Sec. 703(j)(1), (q)(1), Nov. 6, 1978, 92 Stat. 2839-2841,
2941, 2944; Pub. L. 96-222, title I, Sec. 107(a)(3)(C), Apr. 1, 1980, 94
Stat. 223; Pub. L. 96-223, title II, Secs. 241(a), 242(a), 244(a), Apr.
2, 1980, 94 Stat. 281, 283, 286; Pub. L. 96-499, title XI, Sec. 1103,
Dec. 5, 1980, 94 Stat. 2669; Pub. L. 97-34, title VIII, Secs. 811(a),
(b), 812(a), Aug. 13, 1981, 95 Stat. 349, 350; Pub. L. 97-248, title II,
Secs. 214(a)-(e), 215(a), (b), 217(a)-(d), 219(a), 221(a), (b), (c)(1),
title III, Sec. 310(b)(1), (c)(1), (2), Sept. 3, 1982, 96 Stat. 466-469,
472-474, 477, 478, 596, 599; Pub. L. 97-424, title V, Sec. 547(a), Jan.
6, 1983, 96 Stat. 2199; Pub. L. 97-473, title II, Sec. 202(b)(2), Jan.
14, 1983, 96 Stat. 2609; Pub. L. 98-369, div. A, title IV,
Sec. 474(r)(4), title VI, Secs. 621-624(a), (b)(2), (3), 626(a), 627,
628(a), (c)-(e), (g), 630, July 18, 1984, 98 Stat. 839, 915-922, 924,
926, 928, 931-933; Pub. L. 99-272, title XIII, Sec. 13209(e), Apr. 7,
1986, 100 Stat. 323; Pub. L. 99-514, title XIII, Sec. 1301(a), title
XVIII, Secs. 1864(a)(1), (b)-(e), 1865(a), 1869(a), (b), 1870,
1871(a)(1), (b), 1899A(2)-(4), Oct. 22, 1986, 100 Stat. 2602, 2885,
2886, 2888, 2890, 2891, 2958; Pub. L. 100-647, title I,
Sec. 1013(a)(34)(A), (c)(12)(A), Nov. 10, 1988, 102 Stat. 3544, 3547.)
Amendments
1988--Subsec. (b)(6)(N). Pub. L. 100-647, Sec. 1013(c)(12)(A),
amended subpar. (N), as in effect on the day before the date of the
enactment of Pub. L. 99-514 [Oct. 22, 1986], by redesignating cls. (ii)
and (iii) as (iii) and (iv), respectively, and by striking out cl. (i)
and inserting in lieu thereof the following new cls.:
``(i) In general.--Except as provided in clause (ii), this paragraph
shall not apply to any obligation issued after December 31, 1986.
``(ii) Certain refundings.--This paragraph shall apply to any
obligation (or series of obligations) issued to refund an obligation
issued on or before December 31, 1986, if--
``(I) the average maturity date of the issue of which the
refunding obligation is a part is not later than the average
maturity date of the obligations to be refunded by such issue,
``(II) the amount of the refunding obligation does not exceed
the outstanding amount of the refunded obligation, and
``(III) the proceeds of the refunding obligation are used to
redeem the refunded obligation not later than 90 days after the date
of the issuance of the refunding obligation.
For purposes of subclause (I), average maturity shall be determined in
accordance with subsection (b)(14)(B)(i).''
Subsec. (c)(7). Pub. L. 100-647, Sec. 1013(a)(34)(A), amended par.
(7), as in effect on the day before the date of the enactment of Pub. L.
99-514 [Oct. 22, 1986], by substituting ``necessary'' for ``necessary''.
1986--Pub. L. 99-514, Sec. 1301(a), in amending section generally,
substituted ``Interest on State and local bonds'' for ``Interest on
certain governmental obligations'' in section catchline.
Subsec. (a). Pub. L. 99-514, Sec. 1301(a), substituted ``Exclusion''
for ``General rule'' in heading and amended text generally. Prior to
amendment, text read as follows: ``Gross income does not include
interest on--
``(1) the obligations of a State, a Territory, or a possession
of the United States, or any political subdivision of any of the
foregoing, or of the District of Columbia; and
``(2) qualified scholarship funding bonds.''
Subsec. (b). Pub. L. 99-514, Sec. 1301(a), in amending section
generally, substituted provision relating to exceptions for provision
relating to industrial development bonds.
Subsec. (b)(11). Pub. L. 99-272 struck out par. (11) relating to
pollution control facilities acquired by regional pollution control
authorities.
Subsec. (b)(13), (14)(A). Pub. L. 99-514, Sec. 1871(b), substituted
``and (6)'' for ``(6), and (7)''.
Subsec. (b)(16)(A). Pub. L. 99-514, Sec. 1870, substituted ``clause
(ii)'' for ``clause (i)''.
Subsec. (b)(17)(A). Pub. L. 99-514, Sec. 1871(b), substituted ``and
(6)'' for ``(6), and (7)''.
Subsec. (c). Pub. L. 99-514, Sec. 1301(a), in amending section
generally, substituted provision relating to definitions for provision
relating to arbitrage.
Subsecs. (d) to (g). Pub. L. 99-514, Sec. 1301(a), in amending
section generally, struck out subsecs. (d) to (g) which related to
certain irrigation dams, qualified scholarship funding bonds, certain
federally guaranteed obligations, and qualified steam-generating or
alcohol-producing facilities, respectively.
Subsec. (h). Pub. L. 99-514, Sec. 1301(a), in amending section
generally, struck out subsec. (h) which provided that obligations must
not be guaranteed.
Subsec. (h)(2)(A). Pub. L. 99-514, Sec. 1899A(2), substituted
``guaranteed'' for ``guaranted''.
Subsec. (h)(5)(A). Pub. L. 99-514, Sec. 1865(a), struck out ``the
United States,'' after ``program of''.
Subsecs. (i) to (k). Pub. L. 99-514, Sec. 1301(a), in amending
section generally, struck out subsecs. (i) to (k) which related to
obligations of certain volunteer fire departments, provided that
obligations must be in registered form to be tax-exempt, and required
public approval for industrial development bonds, respectively.
Subsec. (l). Pub. L. 99-514, Sec. 1301(a), in amending section
generally, struck out subsec. (l) which related to information reporting
requirements for certain bonds.
Subsec. (l)(2)(F). Pub. L. 99-514, Sec. 1864(d), added subpar. (F)
which read: ``if such obligation is a private activity bond (as defined
in subsection (n)(7)), such information as the Secretary may require for
purposes of determining whether the requirements of subsection (n) are
met with respect to such obligation.''
Subsec. (m). Pub. L. 99-514, Sec. 1301(a), in amending section
generally, struck out subsec. (m) which related to obligations exempt
other than under this title.
Subsec. (m)(1). Pub. L. 99-514, Sec. 1871(a)(1), substituted ``(j),
(k), (l), (n), and (o)'' for ``(k), (l), and (n)''.
Subsec. (m)(3)(B). Pub. L. 99-514, Sec. 1899A(3), substituted
``608(a)(6)(A)'' for ``608(6)(A)''.
Subsec. (n). Pub. L. 99-514, Sec. 1301(a), in amending section
generally, struck out subsec. (n) which related to limitation on
aggregate amount of private activity bonds issued during any calendar
year.
Subsec. (n)(6)(A), (B)(i). Pub. L. 99-514, Sec. 1864(b), substituted
``governmental units or other authorities'' for ``governmental units''.
Subsec. (n)(7)(C)(i). Pub. L. 99-514, Sec. 1864(c), substituted
``all of the property to be financed by the obligation'' for ``the
property described in such paragraph''.
Subsec. (n)(10)(B). Pub. L. 99-514, Sec. 1864(e), substituted
``identify project'' for ``specify project'' in heading and ``identify
(with reasonable specificity) the project'' for ``specify the project''
in text of subpar. (B)(i).
Subsec. (n)(10)(D). Pub. L. 99-514, Sec. 1864(e)(2), substituted
``any identification or specification'' for ``any specification''.
Subsec. (n)(13). Pub. L. 99-514, Sec. 1864(a)(1), added par. (13).
Subsec. (o). Pub. L. 99-514, Sec. 1301(a), in amending section
generally, struck out subsec. (o) relating to consumer loan bonds.
Pub. L. 99-514, Sec. 1869(a), (b)(1), substituted ``Private loan
bonds'' for ``Consumer loan bonds'' in subsection and par. (2) headings,
``private loan bond'' for ``consumer loan bond'' in text of pars. (1),
(2)(A) and (B), and ``subsection (c)(6)(H)(i)'' for ``subsection
(c)(6)(G)(i)'' in par. (2)(C)(ii).
Pub. L. 99-514, Sec. 1869(b)(2), redesignated subsec. (o), relating
to cross references, as (p).
Subsec. (p). Pub. L. 99-514, Sec. 1301(a), in amending section
generally, struck out subsec. (p) which related to cross references.
Pub. L. 99-514, Sec. 1869(b)(2), redesignated former subsec. (o),
relating to cross references, as (p).
Subsec. (p)(4). Pub. L. 99-514, Sec. 1899A(4), substituted ``October
27, 1949 (48 U.S.C. 1403)'' for ``October 27, 1919 (48 U.S.C. 1403)''.
1984--Subsec. (b)(4). Pub. L. 98-369, Sec. 628(e), inserted ``For
purposes of subparagraph (A), any property shall not be treated as
failing to be residential rental property merely because part of the
building in which such property is located is used for purposes other
than residential rental purposes.''
Subsec. (b)(6)(F)(iv). Pub. L. 98-369, Sec. 474(r)(4), substituted
``section 30(b)(2)(A)'' for ``section 44F(b)(2)(A)''.
Subsec. (b)(6)(N). Pub. L. 98-369, Sec. 630, designated existing
provisions as cl. (i) and added cls. (ii) and (iii).
Subsec. (b)(6)(P). Pub. L. 98-369, Sec. 628(c), added subpar. (P).
Subsec. (b)(7). Pub. L. 98-369, Sec. 628(g), repealed par. (7) which
related to advance refunding of qualified public facilities.
Subsec. (b)(13). Pub. L. 98-369, Sec. 628(d), inserted ``For
purposes of this paragraph-- (A) a partnership and each of its partners
(and their spouses and minor children) shall be treated as related
persons, and (B) an S corporation and each of its shareholders (and
their spouses and minor children) shall be treated as related persons.''
Subsec. (b)(15). Pub. L. 98-369, Sec. 623, added par. (15).
Subsec. (b)(16) to (18). Pub. L. 98-369, Sec. 627, added pars. (16)
to (18).
Subsec. (c). Pub. L. 98-369, Sec. 624(b)(2), struck out ``bonds''
after ``Arbitrage'' in heading.
Subsec. (c)(1). Pub. L. 98-369, Sec. 624(b)(3), inserted ``to
arbitrage bonds'' in heading.
Subsec. (c)(6), (7). Pub. L. 98-369, Sec. 624(a), added par. (6) and
redesignated former par. (6) as (7).
Subsec. (h). Pub. L. 98-369, Sec. 622, amended subsec. (h)
generally, in par. (1) substituting provisions that obligations are not
included in the section if they are federally guaranteed for provisions
which excluded obligations guaranteed, in whole or part, by the U.S.
under a program to conserve energy, or under other Federal or State
programs, in par. (2) substituting provisions defining ``federally
guaranteed'' for provisions setting forth obligations to which this
subsection applies, and adding pars. (3) to (5).
Subsec. (m)(1). Pub. L. 98-369, Sec. 628(a)(1), inserted ``In the
case of an obligation issued after December 31, 1983, such obligation
shall not be treated as described in this paragraph unless the
appropriate requirements of subsections (b), (c), (h), (k), (l), and (n)
of this section and section 103A are met with respect to such
obligation. For purposes of applying such requirements, a possession of
the United States shall be treated as a State; except that clause (ii)
of subsection (n)(4)(A) shall not apply.''
Subsec. (m)(2)(B). Pub. L. 98-369, Sec. 628(a)(2), substituted ``is
exempt from tax under this title without regard to any provision of law
which is not contained in this title and which is not contained in a
revenue Act'' for ``is exempt from taxation under any provision of this
title''.
Subsec. (m)(3). Pub. L. 98-369, Sec. 628(a)(3), added par. (3).
Subsec. (n). Pub. L. 98-369, Sec. 621, added subsec. (n). Former
subsec. (n), relating to cross references, redesignated (o).
Subsec. (o). Pub. L. 98-369, Sec. 626(a), added subsec. (o) relating
to consumer loan bonds.
Pub. L. 98-369, Sec. 621, redesignated subsec. (n), relating to
cross references, as (o).
1983--Subsec. (m). Pub. L. 97-424, Sec. 547(a), added subsec. (m).
Former subsec. (m) redesignated (n).
Pub. L. 97-473 amended subsec. (m) generally, adding pars. (1) and
(2), redesignating former pars. (1) to (3) as (3) to (5), respectively,
and striking out par. (24) which had provided reference regarding
exempt-interest dividends to section 852(b)(5)(B.) See section 722(b) of
Pub. L. 98-369, set out as a note below.
Subsec. (n). Pub. L. 97-424, Sec. 547(a), redesignated former
subsec. (m), relating to cross references, as (n).
1982--Subsec. (b)(2). Pub. L. 97-248, Sec. 215(b)(2), substituted
``For purposes of this section'' for ``For purposes of this
subsection''.
Subsec. (b)(4). Pub. L. 97-248, Secs. 217(a)(1), (b), 221(a),
(c)(1), 310(c)(1), in subpar. (A) substituted ``if at all times during
the qualified project period'' for ``if each obligation issued pursuant
to the issue is in registered form and if'' after ``residential rental
property'', and struck out ``(within the meaning of section
167(k)(3)(B))'' after ``low or moderate income'', added subpar. (J),
struck out provision that for purposes of subpar. (A), ``targeted area
project'' meant a project located in a qualified census tract (within
the meaning of section 103A(k)(2)) or an area of chronic economic
distress (within the meaning of section 103A(k)(3)) and, in last
sentence, substituted ``electric energy or gas from'' for ``electric
energy from''.
Subsec. (b)(6)(C). Pub. L. 97-248, Sec. 217(a)(3), substituted
``paragraph (13)'' for ``paragraph (7)''.
Subsec. (b)(6)(F)(iv). Pub. L. 97-248, Sec. 214(d), added cl. (iv).
Subsec. (b)(6)(K) to (O). Pub. L. 97-248, Sec. 214(a)-(c), (e),
added subpars. (K) to (O).
Subsec. (b)(9)(A). Pub. L. 97-248, Sec. 217(c), inserted ``ferry,''
after ``rail car'' in provisions preceding cl. (i), and in cl. (ii),
inserted ``(or, in the case of a ferry, mass transportation services)''
after ``mass commuting services''.
Subsec. (b)(10). Pub. L. 97-248, Sec. 217(a)(2), added par. (10).
Former par. (10) redesignated (13).
Subsec. (b)(11). Pub. L. 97-248, Sec. 217(d), added par. (11).
Subsec. (b)(12). Pub. L. 97-248, Sec. 221(b), added par. (12).
[Provisions of par. (12)(A) were formerly contained, as undesignated
provisions, in par. (4).]
Subsec. (b)(13). Pub. L. 97-248, Sec. 217(a)(2), redesignated former
par. (10) as (13).
Subsec. (b)(14). Pub. L. 97-248, Sec. 219(a), added par. (14).
Subsec. (h). Pub. L. 97-248, Sec. 310(c)(2), substituted ``must not
be guaranteed or subsidized'' for ``must be in registered form and not
guaranteed or subsidized'' in heading, and in par. (1) struck out
subpar. (A) reading ``such obligation is not issued in registered
form'', and redesignated subpars. (B) and (C) as (A) and (B),
respectively.
Subsec. (j). Pub. L. 97-248, Sec. 310(b)(1), added subsec. (j).
Former subsec. (j), relating to cross references, redesignated (m).
Subsec. (k). Pub. L. 97-248, Sec. 215(a), added subsec. (k).
Subsec. (l). Pub. L. 97-248, Sec. 215(b)(1), added subsec. (l).
Subsec. (m). Pub. L. 97-248, Secs. 215(a), (b)(1), 310(b)(1),
redesignated former subsec. (j), relating to cross references, as (m).
1981--Subsec. (b)(4)(I). Pub. L. 97-34, Sec. 811(a), added subpar.
(I).
Subsec. (b)(9), (10). Pub. L. 97-34, Sec. 811(b), added par. (9) and
redesignated former par. (9) as (10).
Subsecs. (i), (j). Pub. L. 97-34, Sec. 812(a), added subsec. (i) and
redesignated former subsec. (i) as (j).
1980--Subsec. (b)(4). Pub. L. 96-499, Sec. 1103(b), inserted before
last sentence provisions defining ``targeted area project'' for purposes
of subpar. (A).
Subsec. (b)(4)(A). Pub. L. 96-499, Sec. 1103(a), substituted
provisions relating to low or moderate income residential rental
property for provisions relating to residential real property for family
units.
Subsec. (b)(4)(H). Pub. L. 96-223, Sec. 242(a)(1), added subpar.
(H).
Subsec. (b)(6)(J). Pub. L. 96-499, Sec. 1103(c), added subpar. (J).
Subsec. (b)(8), (9). Pub. L. 96-223, Sec. 242(a)(2), added par. (8)
and redesignated former par. (8) as (9).
Subsec. (c)(5). Pub. L. 96-222, Sec. 107(a)(3)(C), amended the
directory language of Pub. L. 96-500, Sec. 703(q)(1). See 1978 Amendment
note below for subsec. (c)(5).
Subsec. (g). Pub. L. 96-223, Sec. 241(a), added subsec. (g). Former
subsec. (g) redesignated (i).
Subsec. (h). Pub. L. 96-223, Sec. 244(a), added subsec. (h).
Subsec. (i). Pub. L. 96-223, Secs. 241(a), 244(a), redesignated
former subsec. (g) as (i).
1978--Subsec. (b)(1). Pub. L. 95-600, Sec. 703(j)(1)(A), substituted
``subsection (a)(1) or (2)'' for ``subsection (a)(1)'' in heading.
Subsec. (b)(4). Pub. L. 95-600, Secs. 332(a), 333(a), in subpar.
(G)(i) inserted reference to electric utility, industrial, agricultural,
or commercial users and added subpar. (G)(ii) and provision following
subpar. (G)(ii) relating to the local furnishing of electric energy.
Subsec. (b)(6)(D). Pub. L. 95-600, Sec. 331(a), substituted in
heading and cl. (i) ``$10,000,000'' for ``$5,000,000''.
Subsec. (b)(6)(I). Pub. L. 95-600, Sec. 331(b), added subpar. (I).
Subsec. (b)(7), (8). Pub. L. 95-600, Sec. 334(a), (b), added par.
(7), redesignated former par. (7) as (8) and, as so redesignated,
substituted ``(6), and (7)'' for ``and (6)''.
Subsec. (c)(1). Pub. L. 95-600, Sec. 703(j)(1)(B), substituted in
heading and text ``(a)(1) or (2)'' for ``(a)(1) or (4)''.
Subsec. (c)(2)(A). Pub. L. 95-600, Sec. 703(j)(1)(C), substituted
``subsection (a)(1) or (2)'' for ``subsection (a)(1) or (2) or (4)''.
Subsec. (c)(5). Pub. L. 95-600, Sec. 703(j)(1)(D), (q)(1), as
amended by Pub. L. 96-222, Sec. 107(a)(3)(C), substituted ``section 438
of the Higher Education Act of 1965'' for ``section 2 of the Emergency
Insured Student Loan Act of 1969'' and ``paragraph (2)(A)'' for
``subsection (d)(2)(A)''.
Subsec. (d). Pub. L. 95-600, Sec. 703(j)(1)(E), substituted
``subsection (b)(4)(G)'' for ``subsection (c)(4)(G)''.
Subsec. (e). Pub. L. 95-339 redesignated second subsec. (e),
relating to cross references, as (g).
Subsec. (f). Pub. L. 95-339 added subsec. (f).
Subsec. (g). Pub. L. 95-339 redesignated second subsec. (e),
relating to cross references, as (g).
1976--Subsec. (a). Pub. L. 94-455, Secs. 1901(a)(17)(A), 2105(a),
added par. (2) relating to qualified scholarship funding bonds. Former
pars. (2) and (3), relating to obligations of the United States and to
the obligations of corporations organized under an Act of Congress, were
struck out.
Subsec. (b). Pub. L. 94-455, Sec. 1901(a)(17)(B), (C), redesignated
subsec. (c) as (b) and in par. (1) of subsec. (b) as so redesignated
substituted ``subsection (a)(1) or (2)'' for ``subsection (a)(1)''.
Former subsec. (b), which created an exception to the rule that gross
income did not include interest on obligations of the United States, by
providing that the exception did not apply to obligations of the United
States (with specified exceptions) unless under the authorizing Acts
such interest is wholly exempt from the taxes imposed by this subtitle,
was struck out.
Subsec. (c). Pub. L. 94-455, Secs. 1901(a)(17)(B), (D), (b)(8)(B),
1906(b)(13)(A), 2105(c), redesignated subsec. (d) as (c) and, in subsec.
(c) as so redesignated, substituted ``(a)(1) or (4)'' for ``(a)(1)'' in
par. (1) and ``(a)(1) or (2) or (4)'' for ``(a)(1)'' in par. (2)(A),
substituted ``educational organization described in section
170(b)(1)(A)(ii)'' for ``educational institution (within the meaning of
section 151(e)(4))'' in par. (3)(A), added par. (5), redesignated former
par. (5) as (6), and in par. (6) as so redesignated substituted
``Secretary'' for ``Secretary or his delegate''. Former subsec. (c)
redesignated (b). See Codification note above.
Subsec. (d). Pub. L. 94-455, Sec. 1901(a)(17)(B), redesignated
subsec. (e) as (d). Former subsec. (d) redesignated (c).
Subsec. (e). Pub. L. 94-455, Secs. 1901(a)(17)(B), (E), 2105(b),
2137(d), added subsec. (e) relating to qualified scholarship funding
bonds, redesignated former subsec. (f) relating to cross references as a
second subsec. (e), reduced the number of cross references in subsec.
(e) as so redesignated from twenty-three (which made reference to
various obligations of the United States and of corporations organized
under Acts of Congress) to three, relating, respectively, to Puerto
Rican bonds, Virgin Islands insular and municipal bonds, and certain
obligations issued under title I of the Housing Act of 1949, and
inserted a fourth cross reference, designated as par. (24) relating to
the treatment of exempt-interest dividends. Former subsec. (e)
redesignated (d).
Subsec. (f). Pub. L. 94-455, Sec. 1901(a)(17)(B), redesignated
subsec. (f), relating to cross references, as (e).
1975--Subsecs. (e), (f). Pub. L. 94-182 and Pub. L. 94-164 made
identical amendments, adding subsec. (e) and redesignating former
subsec. (e) as (f).
1971--Subsec. (c)(4)(E). Pub. L. 92-178, Sec. 315(a)(1), substituted
``energy or gas,'' for ``energy, gas, or water or''.
Subsec. (c)(4)(F). Pub. L. 92-178, Sec. 315(a)(2), substituted ``,
or'' for a period.
Subsec. (c)(4)(G). Pub. L. 92-178, Sec. 315(a)(3), added subpar.
(G).
Subsec. (c)(6)(F)(iii). Pub. L. 92-178, Sec. 315(b), substituted
``$1,000,000'' for ``$250,000''.
1969--Subsecs. (d), (e). Pub. L. 91-172 added subsec. (d) and
redesignated former subsec. (d) as (e).
1968--Subsec. (c). Pub. L. 90-364 added subsec. (c). Former subsec.
(c) redesignated (d).
Subsec. (c)(6)(D) to (H). Pub. L. 90-634 added subpars. (D) to (H).
Subsec. (d). Pub. L. 90-364 redesignated former subsec. (c) as (d).
Effective Date of 1988 Amendment
Section 1013(a)(34)(B) of Pub. L. 100-647 provided that:
``Subparagraph (A) [amending this section] shall apply to obligations
sold after May 2, 1978, and to which Treasury regulation section 1.103-
13 (1979) was provided to apply.''
Effective Date of 1986 Amendment
Amendment by section 1301(a) of Pub. L. 99-514 applicable to bonds
issued after Aug. 15, 1986, except as otherwise provided, see sections
1311 to 1318 of Pub. L. 99-514, set out as an Effective Date;
Transitional Rules note under section 141 of this title.
Amendment by sections 1864(b)-(e), 1865(a), 1869(a), (b), 1870, and
1871(b) of Pub. L. 99-514 effective, except as otherwise provided, as if
included in the provisions of the Tax Reform Act of 1984, Pub. L. 98-
369, div. A, to which such amendment relates, see section 1881 of Pub.
L. 99-514, set out as a note under section 48 of this title.
Section 1864(a)(2) of Pub. L. 99-514 provided that:
``(A) Except as provided in subparagraph (B), the amendment made by
paragraph (1) [amending this section] shall apply to obligations issued
after the date of the enactment of this Act [Oct. 22, 1986] in taxable
years ending after such date.
``(B) At the election of the issuer (made at such time and in such
manner as the Secretary of the Treasury or his delegate shall
prescribe), the amendment made by paragraph (1) shall apply to any
obligation issued on or before the date of the enactment of this Act.''
Section 1871(a)(2) of Pub. L. 99-514 provided that: ``The amendment
made by paragraph (1) [amending this section] shall apply to obligations
issued after March 28, 1985, in taxable years ending after such date.''
Effective Date of 1984 Amendment
Amendment by section 474(r)(4) of Pub. L. 98-369 applicable to
taxable years beginning after Dec. 31, 1983, and to carrybacks from such
years, see section 475(a) of Pub. L. 98-369, set out as a note under
section 21 of this title.
Section 624(c) of Pub. L. 98-369, as amended by Pub. L. 99-514,
title XVIII, Sec. 1867(a), Oct. 22, 1986, 100 Stat. 2888, provided that:
``(1) In general.--Except as otherwise provided in this subsection,
the amendments made by this section [amending this section and section
103A of this title] shall apply with respect to bonds issued after
December 31, 1984.
``(2) Exception.--The amendments made by this section shall not
apply to obligations issued for the Essex County New Jersey Resource
Recovery Project authorized by the Port Authority of New York and New
Jersey on November 10, 1983, as part of an agreement approved by Essex
County, New Jersey, on July 7, 1981, and approved by the State of New
Jersey on December 31, 1981. The aggregate face amount of bonds to which
this paragraph applies shall not exceed $350,000,000.''
Section 626(b) of Pub. L. 98-369, as amended by Pub. L. 99-514,
Sec. 2, title XIII, Sec. 1317(22), title XVIII, Sec. 1869(c)(5), Oct.
22, 1986, 100 Stat. 2095, 2698, 2890; Pub. L. 100-647, title I,
Sec. 1013(g)(24), Nov. 10, 1988, 102 Stat. 3554, provided that:
``(1) In general.--Except as otherwise provided in this subsection
the amendment made by subsection (a) [amending this section] shall apply
to obligations issued after the date of enactment of this Act [July 18,
1984].
``(2) Exceptions for certain student loan programs.--
``(A) In general.--The amendments made by this section [amending
this section] shall not apply to obligations issued by a program
described in the following table to the extent the aggregate face
amount of such obligations does not exceed the amount of allowable
obligations specified in the following table with respect to such
program:
Amount of Allowable
Program Obligations
Colorado Student Obligation Bond $60 million
Authority..............................
Connecticut Higher Education $15.5 million
Supplementary Loan Authority...........
District of Columbia.................... $50 million
Illinois Higher Education Authority..... $70 million
State of Iowa........................... $16 million
Louisiana Public Facilities Authority... $75 million
Maine Health and Higher Education $5 million
Facilities Authority...................
Maryland Higher Education Supplemental $24 million
Loan Program...........................
Massachusetts College Student Loan $90 million
Authority..............................
Minnesota Higher Education Coordinating $60 million
Board..................................
New Hampshire Higher Education and $39 million
Health Facilities Authority............
New York Dormitory Authority............ $120 million
Pennsylvania Higher Education Assistance $300 million
Agency.................................
Georgia Private Colleges and University $31 million
Authority..............................
Wisconsin State Building Commission..... $60 million
South Dakota Health and Educational $6 million
Facilities Authority...................
``(B) Pennsylvania higher education assistance agency.--
Subparagraph (A) shall apply to obligations issued by the
Pennsylvania Higher Education Assistance Agency only if such
obligations are issued solely for the purpose of refunding student
loan bonds outstanding on March 15, 1984.
``(3) Certain tax-exempt mortgage subsidy bonds.--For purposes of
applying section 103(o) of the Internal Revenue Code of 1986 [formerly
I.R.C. 1954], the term `consumer loan bond' shall not include any
mortgage subsidy bond (within the meaning of section 103A(b) of such
Code) to which the amendments made by section 1102 of the Mortgage
Subsidy Bond Tax Act of 1980 [enacting section 103A of this title] do
not apply.
``(4) Refunding exception.--The amendments made by this section
[amending this section] shall not apply to any obligation or series of
obligations the proceeds of which are used exclusively to refund
obligations issued before March 15, 1984, except that--
``(A) the amount of the refunding obligations may not exceed 101
percent of the aggregate face amount of the refunded obligations,
and
``(B) the maturity date of any refunding obligation may not be
later than the date which is 17 years after the date on which the
refunded obligation was issued (or, in the case of a series of
refundings, the date on which the original obligation was issued).
``(5) Exception for certain established programs.--The amendments
made by this section [amending this section] shall not apply to any
obligation substantially all of the proceeds of which are used to carry
out a program established under State law which has been in effect in
substantially the same form during the 30-year period ending on the date
of enactment of this Act [July 18, 1984], but only if such proceeds are
used to make loans or to fund similar obligations--
``(A) in the same manner in which,
``(B) in the same (or lesser) amount per participant, and
``(C) for the same purposes for which,
such program was operated on March 15, 1984. This subparagraph shall not
apply to obligations issued on or after March 15, 1987.
``(6) Certain bonds for renewable energy property.--The amendments
made by this section [amending this section] shall not apply to any
obligations described in section 243 of the Crude Oil Windfall Profit
Tax Act of 1980 [Pub. L. 96-223, set out as a note below].
``(7) Exception for certain downtown redevelopment project.--The
amendments made by this section [amending this section] shall not apply
to any obligation which is issued as part of an issue 95 percent or more
of the proceeds of which are to be used to provide a project to acquire
and redevelop a downtown area if--
``(A) on August 15, 1985, a downtown redevelopment authority
adopted a resolution to issue obligations for such project,
``(B) before September 26, 1985, the city expended, or entered
into binding contracts to expend, more than $10,000,000 in
connection with such project, and
``(C) the State supreme court issued a ruling regarding the
proposed financing structure for such project on December 11, 1985.
The aggregate face amount of obligations to which this paragraph applies
shall not exceed $85,000,000 and such obligations must be issued before
January 1, 1992.''
Section 631 of Pub. L. 98-369, as amended by Pub. L. 99-514, Sec. 2,
title XIII, Secs. 1316(j), 1317(43), title XVIII, Sec. 1872(a)-(c)(1),
Oct. 22, 1986, 100 Stat. 2095, 2670, 2708, 2891, 2892; Pub. L. 100-647,
title I, Sec. 1013(f)(8), (g)(40), Nov. 10, 1988, 102 Stat. 3549, 3557,
provided that:
``(a) Private Activity Bond Cap.--
``(1) In general.--Except as otherwise provided in this
subsection, the amendment made by section 621 [amending this
section] shall apply to obligations issued after December 31, 1983.
``(2) Inducement resolution before june 19, 1984.--The amendment
made by section 621 shall not apply to any issue of obligations if--
``(A) there was an inducement resolution (or other
comparable preliminary approval) for the issue before June 19,
1984, and
``(B) the issue is issued before January 1, 1985.
``(3) Certain projects preliminarily approved before october 19,
1983, given approval.--If--
``(A) there was an inducement resolution (or other
comparable preliminary approval) for a project before October
19, 1983, by any issuing authority,
``(B) a substantial user of such project notifies the
issuing authority within 30 days after the date of the enactment
of this Act [July 18, 1984] that it intends to claim its rights
under this paragraph, and
``(C) construction of such project began before October 19,
1983, or the substantial user was under a binding contract on
such date to incur significant expenditures with respect to such
project,
such issuing authority shall allocate its share of the limitation
under section 103(n) of such Code for the calendar year during which
the obligations were to be issued pursuant to such resolution (or
other approval) first to such project. If the amount of obligations
required by all projects which meet the requirements of the
preceding sentence exceeds the issuing authority's share of the
limitation under section 103(n) of such Code, priority under the
preceding sentence shall be provided first to those projects for
which substantial expenditures were incurred before October 19,
1983. If any issuing authority fails to meet the requirements of
this paragraph, the limitation under section 103(n) of such Code for
the issuing authority for the calendar year following such failure
shall be reduced by the amount of obligations with respect to which
such failure occurred.
``(3) [(4)] Exception for certain bonds for a convention center
and resource recovery project.--In the case of any city, if--
``(A) the city council of such city authorized a feasibility
study for a convention center on June 10, 1982, and
``(B) on November 4, 1983, a municipal authority acting for
such city accepted a proposal for the construction of a facility
that is capable of generating steam and electricity through the
combustion of municipal waste,
the amendment made by section 621 shall not apply to any issue,
issued during 1984, 1985, 1986, or 1987 and substantially all of the
proceeds of which are to be used to finance the convention center
(or access ramps and parking facilities therefor) described in
subparagraph (A) or the facility described in subparagraph (B).
``(b) Property Financed With Tax-Exempt Bonds Required To Be
Depreciated on Straight-Line Basis.--
``(1) In general.--Except as otherwise provided in this section,
the amendments made by section 628(b) [amending section 168 of this
title] shall apply to property placed in service after December 31,
1983, to the extent such property is financed by the proceeds of an
obligation (including a refunding obligation) issued after October
18, 1983.
``(2) Exceptions.--
``(A) Construction or binding agreement.--The amendments
made by section 628(b) shall not apply with respect to
facilities--
``(i) the original use of which commences with the
taxpayer and the construction, reconstruction, or
rehabilitation of which began before October 19, 1983, or
``(ii) with respect to which a binding contract to incur
significant expenditures was entered into before October 19,
1983.
``(B) Refunding.--
``(i) In general.--Except as provided in clause (ii), in
the case of property placed in service after December 31,
1983, which is financed by the proceeds of an obligation
which is issued solely to refund another obligation which
was issued before October 19, 1983, the amendments made by
section 628(b) shall apply only with respect to an amount
equal to the basis in such property which has not been
recovered before the date such refunded obligation is
issued.
``(ii) Significant expenditures.--In the case of
facilities the original use of which commences with the
taxpayer and with respect to which significant expenditures
are made before January 1, 1984, the amendments made by
section 628(b) shall not apply with respect to such
facilities to the extent such facilities are financed by the
proceeds of an obligation issued solely to refund another
obligation which was issued before October 19, 1983.
``(C) Facilities.--In the case of an inducement resolution
or other comparable preliminary approval adopted by an issuing
authority before October 19, 1983, for purposes of applying
subparagraphs (A)(i) and (B)(ii) with respect to obligations
described in such resolution, the term `facilities' means the
facilities described in such resolution.
``(c) Other Provisions Relating to Tax-Exempt Bonds.--
``(1) In general.--Except as otherwise provided in this
subtitle, the amendments made by sections 622, 623, 627, and 628(c),
(d), and (e) (and the provisions of sections 625(c), 628(f), and
629(b)) [amending this section and enacting provisions set out as
notes under this section] shall apply to obligations issued after
December 31, 1983.
``(2) Obligations invested in federally insured deposits.--
Notwithstanding any other provision of this section, clause (ii) of
section 103(h)(2)(B) of the Internal Revenue Code of 1986 [formerly
I.R.C. 1954] (as amended by this subtitle) shall apply to
obligations issued after April 14, 1983; except that such clause
shall not apply to any obligation issued pursuant to a binding
contract in effect on March 4, 1983.
``(3) Exceptions.--
``(A) Construction or binding agreement.--The amendments
(and provisions) referred to in paragraph (1) shall not apply to
obligations with respect to facilities--
``(i) the original use of which commences with the
taxpayer and the construction, reconstruction, or
rehabilitation of which began before October 19, 1983, and
was completed on or after such date,
``(ii) the original use of which commences with the
taxpayer and with respect to which a binding contract to
incur significant expenditures for construction,
reconstruction, or rehabilitation was entered into before
October 19, 1983, and some of such expenditures are incurred
on or after such date, or
``(iii) acquired after October 19, 1983, pursuant to a
binding contract entered into on or before such date.
``(B) Facilities.--Subparagraph (C) of subsection (b)(2)
shall apply for purposes of subparagraph (A) of this paragraph.
``(C) Exception.--Subparagraph (A) shall not apply with
respect to the amendment made by section 628(e) and the
provisions of sections 628(f) and 629(b) [amending this section
and enacting provisions set out as notes under this section].
``(4) Repeal of advance refunding of qualified public
facilities.--The amendment made by section 628(g) [amending this
section] shall apply to refunding obligations issued after the date
of the enactment of this Act [July 18, 1984]; except that if
substantially all the proceeds of the refunded issue were used to
provide airports or docks, such amendment shall only apply to
refunding obligations issued after December 31, 1984. In the case of
refunding obligations not to exceed $100,000,000 issued after
October 21, 1986, by Dade County, Florida, for the purpose of
advance refunding its Aviation Revenue Bonds (Series J), the first
sentence of this paragraph shall be applied by substituting `the
date which is 1 year after the date of the enactment of the
Technical and Miscellaneous Revenue Act of 1988 [Nov. 10, 1988]' for
`December 31, 1984' and the amendments made by section 1301 of the
Tax Reform Act of 1986 [section 1301 of Pub. L. 99-514, enacting
sections 141 to 150 and 7703 of this title, amending this section
and sections 2, 22, 25, 32, 86, 105, 152, 153, 163, 194, 269A, 414,
879, 1398, 3402, 4701, 4940, 4942, 4988, 6362, 6652, and 7871 of
this title, repealing section 103A of this title, enacting
provisions set out as notes under sections 141 and 148 of this
title, and amending provisions set out as a note under section 103A
of this title] shall not apply. In the case of refunding obligations
not exceeding $100,000,000 issued by the Alabama State Docks
Department, the first sentence of this paragraph shall be applied by
substituting `December 31, 1987' for `December 31, 1984' and the
Internal Revenue Code of 1986 shall be applied without regard to
section 149(d)(2)..[sic]
``(5) Special rule for health club facilities.--In the case of
any health club facility, with respect to the amendment made by
section 627(c) [amending this section]--
``(A) paragraph (1) shall be applied by substituting `April
12, 1984' for `December 31, 1983', and
``(B) paragraph (3) shall be applied by substituting `April
13, 1984' for `October 19, 1983' each place it appears.
``(d) Provisions of This Subtitle Not To Apply to Certain
Property.--The amendments made by this subtitle [sections 621-632 of
Pub. L. 98-369, amending this section and sections 103A and 168 of this
title and enacting provisions set out as notes under this section] shall
not apply to any property (and shall not apply to obligations issued to
finance such property) if such property is described in any of the
following paragraphs:
``(1) Any property described in paragraph (5), (6), or (7) of
section 31(g) of this Act [set out as an Effective Date of 1984
Amendment note under section 168 of this title].
``(2) Any property described in paragraph (4), (8), or (17) of
section 31(g) of this Act [set out as an Effective Date of 1984
Amendment note under section 168 of this title] but only if the
obligation is issued before January 1, 1985, and only if before June
19, 1984, the issuer had evidenced an intent to issue obligations
exempt from taxation under the Internal Revenue Code of 1986 in
connection with such property.
``(3) Any property described in paragraph (3) of section 216(b)
of the Tax Equity and Fiscal Responsibility Act of 1982 [set out as
an Effective Date of 1982 Amendment note under section 168 of this
title].
``(4) Any solid waste disposal facility described in section
103(b)(4)(E) of the Internal Revenue Code of 1986 if--
``(A) a State public authority created pursuant to State
legislation which took effect on June 18, 1973, took formal
action before October 19, 1983, to commit development funds for
such facility.
``(B) such authority issues obligations for any such
facility before January 1, 1987, and
``(C) expenditures have been made for the development of any
such facility before October 19, 1983.
``(5) Any solid waste disposal facility described in section
103(b)(4)(E) of the Internal Revenue Code of 1986 [formerly I.R.C.
1954] if--
``(A) a city government, by resolutions adopted on April 10,
1980, and December 27, 1982, took formal action to authorize the
submission of a proposal for a feasibility study for such
facility and to authorize the presentation to the Department of
the Army (U.S. Army Missile Command) of a proposed agreement to
jointly pursue construction and operation of such facility,
``(B) such city government (or a public authority on its
behalf) issues obligations for such facility before January 1,
1988, and
``(C) expenditures have been made for the development of
such facility before October 19, 1983. Notwithstanding the
foregoing provisions of this subsection, the amendments made by
section 624 [amending sections 103 and 103A of this title and
enacting provisions set out as a note under this section]
(relating to arbitrage) shall apply to obligations issued to
finance property described in paragraph (5).
``(e) Determination of Significant Expenditure.--
``(1) In general.--For purposes of this section, the term
`significant expenditures' means expenditures which equal or exceed
the lesser of--
``(A) $15,000,000, or
``(B) 20 percent of the estimated cost of the facilities.
``(2) Certain grants treated as expenditures.--For purposes of
paragraph (1), the amount of any UDAG grant preliminarily approved
on May 5, 1981, or April 4, 1983, shall be treated as an expenditure
with respect to the facility for which such grant was so approved.
``(f) Exceptions for Certain Other Amendments.--If--
``(1) there was an inducement resolution (or other comparable
preliminary approval) for an issue before June 19, 1984, by any
issuing authority, and
``(2) such issue is issued before January 1, 1985, the following
amendments shall not apply:
``(A) the amendments made by section 623 [amending this
section],
``(B) the amendments made by subsections (a) and (b) of
section 627 [amending this section] (except to the extent such
amendments relate to farm land),
``(C) in the case of a race track, the amendment made by
section 627(c) [amending this section], and
``(D) the amendments made by section 628(c) [amending this
section].''
[Section 1872(a)(2)(B) of Pub. L. 99-514 provided that the amendment
of section 631(c)(3) of Pub. L. 98-369, set out above, made by section
1872(a)(2)(B) of Pub. L. 99-514 is effective with respect to obligations
issued after Mar. 28, 1985.]
Effective Date of 1983 Amendment
For effective date of amendment by Pub. L. 97-473, see section
204(2) of Pub. L. 97-473, set out as an Effective Date note under
section 7871 of this title.
Effective Date of 1982 Amendment
Section 214(f) of Pub. L. 97-248 provided that:
``(1) Composite issues; small issue exemption.--The amendments made
by subsections (a) and (b) [amending this section] shall apply to
obligations issued after the date of the enactment of this Act [Sept. 3,
1982].
``(2) Termination.--The amendment made by subsection (c) [amending
this section] shall take effect on the date of the enactment of this Act
[Sept. 3, 1982].
``(3) Research expenditures.--The amendment made by subsection (d)
[amending this section] shall apply with respect to expenditures made
after the date of the enactment of this Act [Sept. 3, 1982].
``(4) Certain facilities.--The amendment made by subsection (e)
[amending this section] shall apply to obligations issued after December
31, 1982.''
Section 215(c) of Pub. L. 97-248 provided that:
``(1) Public approval.--The amendment made by subsection (a)
[amending this section] shall apply to obligations issued after December
31, 1982, other than obligations issued solely to refund any obligation
which--
``(A) was issued before July 1, 1982, and
``(B) has a maturity which does not exceed 3 years.
``(2) Information reporting.--The amendments made by subsection (b)
[amending this section] shall apply to obligations issued after December
31, 1982 (including any obligation issued to refund an obligation issued
before such date).''
Section 217(e) of Pub. L. 97-248, as amended by Pub. L. 98-369, div.
A, title VII, Sec. 712(h), July 18, 1984, 98 Stat. 947; Pub. L. 99-514,
Sec. 2, Oct. 22, 1986, 100 Stat. 2095, provided that: ``The amendments
made by this section [amending this section] shall apply to obligations
issued after the date of the enactment of this Act [Sept. 3, 1982]. For
purposes of applying section 168(f)(8)(D)(v) of the Internal Revenue
Code of 1986 [formerly I.R.C. 1954], the amendments made by subsection
(c) [amending this section] shall apply to agreements entered into after
the date of the enactment of this Act.''
Section 219(b) of Pub. L. 97-248 provided that: ``The amendment made
by subsection (a) [amending this section] shall apply to obligations
issued after December 31, 1982.''
Section 221(d) of Pub. L. 97-248 provided that:
``(1) In general.--Except as provided in paragraph (2), the
amendments made by this section [amending this section and section 1104
of Pub. L. 96-499, formerly set out as a note under section 103A of this
title] shall apply to obligations issued after the date of the enactment
of this Act [Sept. 3, 1982].
``(2) Exception.--The amendments made by this section shall not
apply with respect to any obligation to which the amendments made by
section 1103 of the Mortgage Subsidy Bond Tax Act of 1980 [section 1103
of Pub. L. 96-499, amending this section] do not apply by reason of
section 1104 of such Act [section 1104 of Pub. L. 96-499, formerly set
out as a note under section 103A of this title].''
Section 310(d) of Pub. L. 97-248, as amended by Pub. L. 97-448,
title III, Sec. 306(b)(2), 96 Stat. 2405; Pub. L. 98-216, Sec. 6(b),
Feb. 14, 1984, 98 Stat. 8; Pub. L. 99-514, Sec. 2, Oct. 22, 1986, 100
Stat. 2095, provided that:
``(1) In general.--Except as otherwise provided in this subsection,
the amendments made by this section [enacting section 4701 of this title
and section 757c-5 of former Title 31, Money and Finance, and amending
this section and sections 103A, 163, 165, 312, and 1232 of this title]
shall apply to obligations issued after December 31, 1982.
``(2) [Repealed. Pub. L. 98-216, Sec. 6(b), Feb. 14, 1984, 98 Stat.
8.]
``(3) Exception for certain warrants, etc.--The amendments made by
subsection (b) [enacting section 4701 of this title and amending this
section and sections 163, 165, 312, and 1232 of this title] shall not
apply to any obligations issued after December 31, 1982, on the exercise
of a warrant or the conversion of a convertible obligation if such
warrant or obligation was offered or sold outside the United States
without registration under the Securities Act of 1933 [15 U.S.C. 77a et
seq.] and was issued before August 10, 1982. A rule similar to the rule
of the preceding sentence shall also apply in the case of any
regulations issued under section 163(f)(2)(C) of the Internal Revenue
Code of 1986 [formerly I.R.C. 1954] (as added by this section) except
that the date on which such regulations take effect shall be substituted
for `August 10, 1982'.
``(4) [Repealed. Pub. L. 98-216, Sec. 6(b), Feb. 14, 1984, 98 Stat.
8.]''
Effective Date of 1981 Amendment
Section 811(c) of Pub. L. 97-34 provided that: ``The amendments made
by this section [amending this section] shall apply to obligations
issued after the date of the enactment of this Act [Aug. 13, 1981].''
Section 812(b)(1) of Pub. L. 97-34 provided that: ``The amendment
made by subsection (a) [amending this section] shall apply to
obligations issued after December 31, 1980.''
Effective Date of 1980 Amendments
For effective date of amendment by Pub. L. 96-499, see section 1104
of Pub. L. 96-499, set out as an Effective Date note under section 103A
of this title.
Section 241(d) of Pub. L. 96-223 provided that: ``The amendments
made by subsection (a) [amending this section] and the provisions of
subsections (b) and (c) [set out as notes under this section] shall
apply with respect to obligations issued after October 18, 1979.''
Section 242(c) of Pub. L. 96-223 provided that: ``The amendments
made by subsection (a) [amending this section] and the provisions of
subsection (b) [set out as a note under this section] shall apply with
respect to obligations issued after October 18, 1979.''
Section 244(b) of Pub. L. 96-223 provided that: ``The amendments
made by subsection (a) [amending this section] shall apply to
obligations issued on or after October 18, 1979.''
Effective Date of 1978 Amendments
Section 201(c) of Pub. L. 95-339 provided that: ``The amendments
made by subsection (a) [amending this section] shall apply to taxable
years ending after the date of the enactment of this Act [Aug. 8,
1978].''
Section 331(c) of Pub. L. 95-600 provided that:
``(1) The amendments made by subsection (a) [amending this section]
shall apply to--
``(A) obligations issued after December 31, 1978, in taxable
years ending after such date, and
``(B) capital expenditures made after December 31, 1978, with
respect to obligations issued before January 1, 1979.
``(2) The amendment made by subsection (b) [amending this section]
shall apply to--
``(A) obligations issued after September 30, 1979, in taxable
years ending after such date, and
``(B) capital expenditures made after September 30, 1979, with
respect to obligations issued after such date.''
Section 332(b) of Pub. L. 95-600 provided that: ``The amendment made
by subsection (a) [amending this section] shall apply to taxable years
ending after April 30, 1968, but only with respect to obligations issued
after such date.''
Section 333(b) of Pub. L. 95-600 provided that: ``The amendment made
by subsection (a) [amending this section] shall apply to obligations
issued after the date of the enactment of this Act [Nov. 6, 1978] in
taxable years ending after such date.''
Section 334(c) of Pub. L. 95-600 provided that: ``The amendments
made by this section [amending this section] shall apply to obligations
issued after the date of the enactment of this Act [Nov. 6, 1978].''
Section 703(q)(2) of Pub. L. 95-600 provided that: ``The amendments
made by paragraph (1) [amending this section] shall apply with respect
to payments made by the Commissioner of Education after December 31,
1976.''
Amendment by section 703(j)(1) of Pub. L. 95-600 effective on Oct.
4, 1976, see section 703(r) of Pub. L. 95-600, set out as a note under
section 46 of this title.
Effective Date of 1976 Amendment
Amendment by section 1901(a)(17), (b)(8)(B) of Pub. L. 94-455
applicable with respect to taxable years ending after Oct. 4, 1976, see
section 1901(d) of Pub. L. 94-455, set out as a note under section 2 of
this title.
Amendment by section 1906(b)(13)(A) of Pub. L. 94-455 effective Feb.
1, 1977, see section 1906(d)(1) of Pub. L. 94-455, set out as a note
under section 6013 of this title.
Section 2105(d) of Pub. L. 94-455 provided that: ``The amendments
made by this section [amending this section] apply to obligations issued
on or after the date of the enactment of this Act [Oct. 4, 1976].''
Amendment by section 2137(d) of Pub. L. 94-455 applicable to taxable
years beginning after Dec. 31, 1975, see section 2137(e) of Pub. L. 94-
455, set out as a note under section 852 of this title.
Effective Date of 1975 Amendments
Section 301(b) of Pub. L. 94-182 provided that: ``The amendment made
by subsection (a) [amending this section] shall apply to obligations
issued after the date of the enactment of this Act [Dec. 31, 1975].''
Section 7(b) of Pub. L. 94-164 provided that: ``The amendments made
by this section [amending this section] shall apply to obligations
issued after the date of enactment of this Act [Dec. 23, 1975].''
Effective Date of 1971 Amendment
Section 315(c) of Pub. L. 92-178 provided that: ``The amendments
made by subsection (a) [amending this section] shall apply with respect
to obligations issued after January 1, 1969. The amendment made by
subsection (b) [amending this section] shall apply with respect to
expenditures incurred after the date of the enactment of this Act [Dec.
10, 1971].''
Effective Date of 1969 Amendment
Section 601(b) of Pub. L. 91-172 provided that: ``The amendments
made by subsection (a) [amending this section] shall apply with respect
to obligations issued after October 9, 1969.''
Effective Date of 1968 Amendment
Section 401(b) of Pub. L. 90-634 provided that: ``The amendment made
by subsection (a) [amending this section] shall apply with respect to
obligations issued after the date of the enactment of this Act [Oct. 24,
1968].''
Section 107(b)(1) of Pub. L. 90-364 provided that: ``Except as
provided by paragraph (2) [set out as a note below], the amendment made
by subsection (a) [amending this section] shall apply to taxable years
ending after April 30, 1968, but only with respect to obligations issued
after such date.''
Transfer of Functions
Functions of Commissioner of Education transferred to Secretary of
Education by section 3441(a)(1) of Title 20, Education.
Coordination of Certain Amendments Made by Pub. L. 97-424 and Pub. L.
97-473
Section 722(b) of Pub. L. 98-369 provided that: ``For purposes of
applying the amendments made by section 547 of the Highway Revenue Act
of 1982 [Pub. L. 97-424, amending this section] and the amendment made
by section 202(b)(2) of Public Law 97-473 [amending this section],
Public Law 97-473 shall be deemed to have been enacted immediately
before the Highway Revenue Act of 1982.''
Validation of Sinking Fund Regulations
Section 1013(a)(35) of Pub. L. 100-647 provided that:
``(A) Treasury Regulation section 1.103-13(g) (1979) is hereby
enacted into positive law.
``(B)(i) Except as provided in clause (ii), subparagraph (A) shall
apply to obligations sold after May 2, 1978, and to which such
regulation was provided to apply.
``(ii) Treasury Regulation section 1.103-13(g) (1979) as enacted
into positive law by subparagraph (A) shall cease to apply to the extent
hereafter modified by the Secretary of the Treasury or his delegate by
regulations.''
Bonds Issued To Refund Subsection (o)(3) Obligations
Section 1013(c)(15) of Pub. L. 100-647 provided that: ``A bond
issued to refund an obligation described in section 103(o)(3) of the
Internal Revenue Code of 1954 (as in effect on the day before the date
of the enactment of the Tax Reform Act of 1986 [Oct. 22, 1986]) shall
not be treated as described in section 144(b) of the 1986 Code unless it
is described in section 144(b)(1)(A) of the 1986 Code.''
Plan Amendments Not Required Until January 1, 1989
For provisions directing that if any amendments made by subtitle A
or subtitle C of title XI [Secs. 1101-1147 and 1171-1177] or title XVIII
[Secs. 1800-1899A] of Pub. L. 99-514 require an amendment to any plan,
such plan amendment shall not be required to be made before the first
plan year beginning on or after Jan. 1, 1989, see section 1140 of Pub.
L. 99-514, as amended, set out as a note under section 401 of this
title.
Treatment of Certain Guarantees by Farmers Home Administration
Section 1865(b) of Pub. L. 99-514 provided that: ``An obligation
shall not be treated as federally guaranteed for purposes of section
103(h) of the Internal Revenue Code of 1954 [now 1986] by reason of a
guarantee by the Farmers Home Administration if--
``(1) such guarantee is pursuant to a commitment made by the
Farmers Home Administration before July 1, 1984, and
``(2) such obligation is issued to finance a convention center
project in Carbondale, Illinois.''
Treatment of Certain Obligations Used To Finance Solid Waste Disposal
Facility
Section 1865(c) of Pub. L. 99-514 provided that:
``(1) In general.--Any obligation which is part of an issue a
substantial portion of the proceeds of which is to be used to finance a
solid waste disposal facility described in paragraph (2) shall not, for
purposes of section 103(h) of the Internal Revenue Code of 1954 [now
1986], be treated as an obligation which is federally guaranteed by
reason of the sale of fuel, steam, electricity, or other forms of usable
energy to the Federal Government or any agency or instrumentality
thereof.
``(2) Solid waste disposal facility.--A solid waste disposal
facility is described in this paragraph if such facility is described in
section 103(b)(4)(E) of such Code and--
``(A) if--
``(i) a public State authority created pursuant to State
legislation which took effect on July 1, 1980, took formal
action before October 19, 1983, to commit development funds for
such facility,
``(ii) such authority issues obligations for such facility
before January 1, 1988, and
``(iii) expenditures have been made for the development of
such facility before October 19, 1983,
``(B) if--
``(i) such facility is operated by the South Eastern Public
Service Authority of Virginia, and
``(ii) on December 20, 1984, the Internal Revenue Service
issued a ruling concluding that a portion of the obligations
with respect to such facility would not be treated as federally
guaranteed under section 103(h) of such Code by reason of the
transitional rule contained in section 631(c)(3)(A)(i) of the
Tax Reform Act of 1984 [section 631(c)(3)(A)(i) of Pub. L. 98-
369, set out as a note above],
``(C) if--
``(i) a political subdivision of a State took formal action
on April 1, 1980, to commit development funds for such facility,
``(ii) such facility has a contract to sell steam to a naval
base,
``(iii) such political subdivision issues obligations for
such facility before January 1, 1988, and
``(iv) expenditures have been made for the development of
such facility before October 19, 1983, or
``(D) if--
``(i) such facility is a thermal transfer facility,
``(ii) is to be built and operated by the Elk Regional
Resource Authority, and
``(iii) is to be on land leased from the United States Air
Force at Arnold Engineering Development Center near Tullahoma,
Tennessee.
``(3) Limitations.--
``(A) In the case of a solid waste disposal facility described
in paragraph (2)(A), the aggregate face amount of obligations to
which paragraph (1) applies shall not exceed $65,000,000.
``(B) In the case of a solid waste disposal facility described
in paragraph (2)(B), the aggregate face amount of obligations to
which paragraph (1) applies shall not exceed $20,000,000. Such
amount shall be in addition to the amount permitted under the
Internal Revenue Service ruling referred to in paragraph (2)(B)(ii).
``(C) In the case of a solid waste disposal facility described
in paragraph (2)(C), the aggregate face amount of obligations to
which paragraph (1) applies shall not exceed $75,000,000.
``(D) In the case of a solid waste disposal facility described
in paragraph (2)(D), the aggregate face amount of obligations to
which paragraph (1) applies shall not exceed $25,000,000.''
Transitional Rule for Limit on Small Issue Exception
Section 1866 of Pub. L. 99-514, as amended by Pub. L. 100-647, title
I, Sec. 1018(m)(1)-(4), Nov. 10, 1988, 102 Stat. 3584, provided that:
``The amendment made by section 623 of the Tax Reform Act of 1984
[section 623 of Pub. L. 98-369, amending this section] shall not apply
to any obligation (or series of obligations) issued to refund another
tax-exempt IDB to which the amendment made by such section 623 did not
apply if--
``(1) the average maturity of the issue of which the refunding
obligation is a part does not exceed the average maturity of the
obligations to be refunded by such issue,
``(2) the amount of the refunding obligation does not exceed the
amount of the refunded obligation, and
``(3) the proceeds of the refunding obligation are used to
redeem the refunded obligation not later than 90 days after the date
of the issuance of the refunding obligation.
For purposes of the preceding sentence, the term `tax-exempt IDB' means
any industrial development bond (as defined in section 103(b) of the
Internal Revenue Code of 1954 [now 1986]) the interest on which is
exempt from tax under section 103(a) of such Code. For purposes of
paragraph (1), average maturity shall be determined in accordance with
subsection (b)(14)(B)(i) of such Code.''
[Section 1018(m)(5) of Pub. L. 100-647 provided that: ``A refunding
obligation issued before July 1, 1987, shall be treated as meeting the
requirement of paragraph (1) of section 1866 of the Reform Act [Pub. L.
99-514, set out above] if such obligation met the requirement of such
paragraph as enacted by the Reform Act [Pub. L. 99-514].'']
Exception From 1984 Amendment for Downtown Muskogee Revitalization
Project
Section 1867(b) of Pub. L. 99-514 provided that: ``The amendment
made by section 624 of the Tax Reform Act of 1984 [amending sections 103
and 103A of this title and enacting provisions set out as a note under
this section] shall not apply to obligations issued with respect to the
Downtown Muskogee Revitalization Project for which a UDAG grant was
preliminarily approved on May 5, 1981, if--
``(1) such obligation is issued before January 1, 1986, or
``(2) such obligation is issued after such date to provide
additional financing for such project except that the aggregate
amount of obligations to which this subsection applies shall not
exceed $10,000,000.''
Transitional Rules
Section 1869(c)(1)-(4) of Pub. L. 99-514, as amended by Pub. L. 100-
647, title I, Sec. 1018(n), Nov. 10, 1988, 102 Stat. 3584, provided
that:
``(1) Treatment of certain obligations issued by the city of
baltimore.--Obligations issued by the city of Baltimore, Maryland, after
June 30, 1985, shall not be treated as private loan bonds for purposes
of section 103(o) of the Internal Revenue Code of 1954 [now 1986] (or as
private activity bonds for purposes of section 103 and part IV of
subchapter A of chapter 1 of the Internal Revenue Code of 1986, as
amended by title XIII of this Act [sections 1301 to 1318 of Pub. L. 99-
514]) by reason of the use of a portion of the proceeds of such
obligations to finance or refinance temporary advances made by the city
of Baltimore in connection with loans to persons who are not exempt
persons (within the meaning of section 103(b)(3) of such Code) if--
``(A) such obligations are not industrial development bonds
(within the meaning of section 103(b)(2) of the Internal Revenue
Code of 1954 [now 1986]),
``(B) the portion of the proceeds of such obligations so used is
attributable to debt approved by voter referendum on or before
November 2, 1982,
``(C) the loans to such nonexempt persons were approved by the
Board of Estimates of the city of Baltimore on or before October 19,
1983, and
``(D) the aggregate amount of such temporary advances financed
or refinanced by such obligations does not exceed $27,000,000.
``(2) White pine power project.--The amendment made by section
626(a) of the Tax Reform Act of 1984 [section 626(a) of Pub. L. 98-369,
amending this section] shall not apply to any obligation issued during
1984 to provide financing for the White Pine Power Project in Nevada.
``(3) Tax increment bonds.--The amendment made by section 626(a) of
the Tax Reform Act of 1984 shall not apply to any tax increment
financing obligation issued before August 16, 1986, if--
``(A) substantially all of the proceeds of the issue are to be
used to finance--
``(i) sewer, street, lighting, or other governmental
improvements to real property,
``(ii) the acquisition of any interest in real property (by
a governmental unit having the power to exercise eminent
domain), the preparation of such property for new use, or the
transfer of such interest to a private developer, or
``(iii) payments of reasonable relocation costs of prior
users of such real property,
``(B) all of the activities described in subparagraph (A) are
pursuant to a redevelopment plan adopted by the issuing authority
before the issuance of such issue,
``(C) repayment of such issue is secured exclusively by pledges
of that portion of any increase in real property tax revenues (or
their equivalent) attributable to the redevelopment resulting from
the issue (or similar issues), and
``(D) none of the property described in subparagraph (A) is
subject to a real property or other tax based on a rate or valuation
method which differs from the rate and valuation method applicable
to any other similar property located within the jurisdiction of the
issuing authority.
``(4) Eastern maine electric cooperative.--The amendment made by
section 626(a) of the Tax Reform Act of 1984 shall not apply to
obligations issued by Massachusetts Municipal Wholesale Electric Company
Project No. 6 if--
``(A) such obligation is issued before January 1, 1986,
``(B) such obligation is issued after such date to refund a
prior obligation for such project, except that the aggregate amount
of obligations to which this subparagraph applies shall not exceed
$100,000,000, or
``(C) such obligation is issued after such date to provide
additional financing for such project except that the aggregate
amount of obligations to which this subparagraph applies shall not
exceed $45,000,000.
Subparagraph (B) shall not apply to any obligation issued for the
advance refunding of any obligation.''
Treatment of Obligations To Finance St. Johns River Power Park
Section 1869(c)(6) of Pub. L. 99-514 provided that:
``(A) In general.--The amendment made by section 626(a) of the Tax
Reform Act of 1984 [section 626(a) of Pub. L. 98-369, amending this
section] shall not apply to any obligation issued to finance the project
described in subparagraph (B) if--
``(i) such obligation is issued before September 27, 1985,
``(ii) such obligation is issued after such date to refund a
prior tax exemption obligation for such project, the amount of such
obligation does not exceed the outstanding amount of the refunded
obligation, and such prior tax exempt obligation is retired not
later than the date 30 days after the issuance of the refunding
obligation, or
``(iii) such obligation is issued after such date to provide
additional financing for such project except that the aggregate
amount of obligations to which this clause applies shall not exceed
$150,000,000.
Clause (ii) shall not apply to any obligation issued for the advance
refunding of any obligation.
``(B) Description of project.--The project described in this
subparagraph in the St. Johns River Power Park system in Florida which
was authorized by legislation enacted by the Florida Legislature in
February of 1982.''
Certain Public Utilities Treated as Exempted Persons Under Section
103(b); Special Rules for Certain Railroads
Section 629 of Pub. L. 98-369, as amended by Pub. L. 99-514, Sec. 2,
title XIII, Sec. 1316(g)(8)(B), Oct. 22, 1986, 100 Stat. 2095, 2670,
provided that:
``(a) Certain Public Utilities.--For purposes of applying section
103(b)(3) of the Internal Revenue Code [of 1986] with respect to--
``(1) any obligations issued after the date of enactment of this
Act [July 18, 1984], and
``(2) any obligations issued after December 31, 1969, which were
treated as obligations described in section 103(a) of such Code on
the day on which such obligations were issued,
the term `exempt person' shall include a regulated public utility having
any customer service area within a State served by a public power
authority which was required as a condition of a Federal Power
Commission license specified by an Act of Congress enacted prior to the
enactment of section 107 of the Revenue and Expenditure Control Act of
1968 (Public Law 90-364) [June 28, 1968] to contract to sell power to
one such utility and which is authorized by State law to sell power to
other such utilities, but only with respect to the purchase by any such
utility and resale to its customers of any output of any electrical
generation facility or any portion thereof or any use of any electrical
transmission facility or any portion thereof financed by such power
authority and owned by it or by such State, and provided that by
agreement between such power authority and any such utility there shall
be no markup in the resale price charged by such utility of that
component of the resale price which represents the price paid by such
utility for such output or use. The preceding sentence shall be applied
by inserting `and a rural electric cooperative utility' after `regulated
public utility' but only if not more than 1 percent of the load of the
public power authority is sold to such rural electric cooperative
utility.
``(b) Certain Railroads.--Section 103(b)(1) of the Internal Revenue
Code of 1986 [formerly I.R.C. 1954] shall not apply to any obligation
which is described in section 103(b)(6)(A) of such Code if--
``(1) substantially all of the proceeds of such obligation are
used to acquire railroad track and right-of-way from a railroad
involved in a title 11 or similar proceeding (within the meaning of
section 368(a)(3)(A) of such Code), and
``(2) the Federal Railroad Administration provides joint
financing for such acquisitions.
``(c) Special Rules for Subsection (a).--
``(1) Obligations subject to cap.--Any obligation described in
subsection (a) shall be treated as a private activity bond for
purposes of section 103(n) of the Internal Revenue Code of 1986.
``(2) Limitation on amount of obligations to which subsection
(a)(1) applies--The aggregate amount of obligations to which
subsection (a)(1) applies shall not exceed $911,000,000.
``(3) Limitation on purposes.--Subsection (a)(1) shall only
apply to obligations issued as part of an issue substantially all
the proceeds of which are used to provide 1 or more of the
following:
``(A) Cable facilities.
``(B) Small hydroelectric facilities.
``(C) The acquisition of an interest in an electrical
generating facility.
``(D) Improvements to existing generating facilities.
``(E) Transmission lines.
``(F) Electric generating facilities.''
Treatment of Certain Residential Real Property as Residential Rental
Property
Treatment of Pub. L. 98-369, Sec. 631(d)(3), residential real
property as residential rental property, see section 1809(a)(4)(C) of
Pub. L. 99-514, set out as a note under section 168 of this title.
Public Approval Requirement in the Case of Public Airport
Section 628(f) of Pub. L. 98-369, as amended by Pub. L. 99-514,
Sec. 2, Oct. 22, 1986, 100 Stat. 2095, provided that: ``If--
``(1) the proceeds of any issue are to be used to finance a
facility or facilities located on a public airport, and
``(2) the governmental unit issuing such obligations is the
owner or operator of such airport,
such governmental unit shall be deemed to be the only governmental unit
having jurisdiction over such airport for purposes of subsection (k) of
section 103 of the Internal Revenue Code of 1986 [formerly I.R.C. 1954]
(relating to public approval for industrial development bonds).''
Small Issue Limit in Case of Certain Urban Development Action Grants
Section 628(h) of Pub. L. 98-369, as amended by Pub. L. 99-514,
Sec. 2, Oct. 22, 1986, 100 Stat. 2095, provided that: ``In the case of
any obligation issued on December 11, 1981, section 103(b)(6)(I) of the
Internal Revenue Code of 1986 [formerly I.R.C. 1954] shall be applied by
substituting `$15,000,000' for `$10,000,000' if--
``(1) such obligation is part of an issue,
``(2) substantially all of the proceeds of such issue are used
to provide facilities with respect to which an urban development
action grant under section 119 of the Housing and Community
Development Act of 1974 [42 U.S.C. 5318] was preliminarily approved
by the Secretary of Housing and Urban Development on January 10,
1980, and
``(3) the Secretary of Housing and Urban Development determines,
at the time such grant is approved, that the amount of such grant
will equal or exceed 5 percent of the total capital expenditures
incurred with respect to such facilities.''
Student Loan Bonds
Section 625 of Pub. L. 98-369, as amended by Pub. L. 99-514, Sec. 2,
title XVIII, Sec. 1868, Oct. 22, 1986, 100 Stat. 2095, 2888, provided
that:
``(a) Arbitrage Regulations.--
``(1) In general.--The Secretary shall prescribe regulations
which specify the circumstances under which a qualified student loan
bond shall be treated as an arbitrage bond for purposes of section
103 of the Internal Revenue Code of 1986 [formerly I.R.C. 1954].
Such regulations may provide that--
``(A) paragraphs (4) and (5) of section 103(c) of such Code
shall not apply, and
``(B) rules similar to section 103(c)(6) shall apply,
to qualified student loan bonds.
``(2) Definitions.--For purposes of this subsection--
``(A) Qualified student loan bond.--The term `qualified
student loan bond' has the meaning given to such term by section
103(o)(3) of the Internal Revenue Code of 1986 (as amended by
this Act).
``(B) Arbitrage bond.--The term `arbitrage bond' has the
meaning given to such term by section 103(c)(2).
``(3) Effective date.--
``(A) In general.--Except as otherwise provided in this
paragraph, any regulations prescribed by the Secretary under
paragraph (1) shall apply to obligations issued after the
qualified date.
``(B) Qualified date.--
``(i) In general.--For purposes of this paragraph, the
term `qualified date' means the earlier of--
``(I) the date on which the Higher Education Act of 1965 [20
U.S.C. 1001 et seq.] expires, or
``(II) the date, after the date of enactment of this Act [July
18, 1984], on which the Higher Education Act of 1965 is
reauthorized.
``(ii) Publication of regulations.--Notwithstanding
clause (i), the qualified date shall not be a date which is
prior to the date that is 6 months after the date on which
the regulations prescribed under paragraph (1) are published
in the Federal Register.
``(C) Refunding obligations.--Regulations prescribed by the
Secretary under paragraph (1) shall not apply to any obligation
(or series of refunding obligations) issued exclusively to
refund any qualified student loan bond which was issued before
the qualified date, except that the requirements of
subparagraphs (A) and (B) of section 626(b)(4) of this Act [set
out in Effective Date of 1984 Amendment note above] must be met
with respect to such refunding.
``(D) Fulfillment of commitments.--Regulations prescribed by
the Secretary under paragraph (1) shall not apply to any
obligations which are needed to fulfill written commitments to
acquire or finance student loans which are originated after June
30, 1984, and before the qualified date, but only if--
``(i) such commitments are binding on the qualified
date, and
``(ii) the amount of such commitments is consistent with
practices of the issuer which were in effect on March 15,
1984, with respect to establishing secondary markets for
student loans.
``(b) Arbitrage Limitation on Student Loan Bonds Which Are Not
Qualified Student Loan Bonds.--Under regulations prescribed by the
Secretary of the Treasury or his delegate, any student loan bond (other
than a qualified student loan bond) issued after December 31, 1985,
shall be treated as an obligation not described in subsection (a)(1) or
(2) of section 103 of the Internal Revenue Code of 1986 unless the issue
of which such obligation is a part meets requirements similar to those
of sections 103(c)(6) and 103A(i) of such Code.
``(c) Issuance of Student Loan Bonds Which Are Not Tax-Exempt.--Any
issuer who may issue obligations described in section 103(a) of the
Internal Revenue Code of 1986 may elect to issue student loan bonds
which are not described in such section 103(a) of such Code without
prejudice to--
``(1) the status of any other obligations issued, or to be
issued, by such issuer as obligations described in section 103(a) of
such Code, or
``(2) the status of the issuer as an organization exempt from
taxation under such Code.
``(d) Federal Executive Branch Jurisdiction Over Tax-Exempt
Status.--For purposes of Federal law, any determination by the executive
branch of the Federal Government of whether interest on any obligation
is exempt from taxation under the Internal Revenue Code of 1986 shall be
exclusively within the jurisdiction of the Department of the Treasury.
``(e) Study on Tax-Exempt Student Loan Bonds.--
``(1) In general.--The Comptroller General of the United States
and the Director of the Congressional Budget Office, shall conduct
studies of--
``(A) the appropriate role of tax-exempt bonds which are
issued in connection with the guaranteed student loan program
and the PLUS program established under the Higher Education Act
of 1965 [20 U.S.C. 1001 et seq.], and
``(B) the appropriate arbitrage rules for such bonds.
``(2) Report.--The Comptroller General of the United States and
the Director of the Congressional Budget Office, shall submit to the
Committee on Finance and the Committee on Labor and Human Resources
of the Senate and the Committee on Ways and Means and the Committee
on Education and Labor of the House of Representatives reports on
the studies conducted under paragraph (1) by no later than 9 months
after the date of enactment of this Act [July 18, 1984].''
Obligations Issued To Provide Solid Waste-Energy Producing Facilities
Section 241(b) of Pub. L. 96-223, as amended by Pub. L. 99-514,
Sec. 2, Oct. 22, 1986, 100 Stat. 2095, provided that:
``(1) General rule.--For purposes of section 103 of the Internal
Revenue Code of 1986 [formerly I.R.C. 1954], any obligation issued by an
authority for 2 or more political subdivisions of a State which is part
of an issue substantially all of the proceeds of which are to be used to
provide solid waste-energy producing facilities shall be treated as an
obligation of a political subdivision of a State which meets the
requirements of section 103(b)(4)(E) of such Code (relating to solid
waste disposal, etc., facilities). Nothing in the preceding sentence
shall be construed to override the limitations of section 103(c) of such
Code (relating to arbitrage bonds).
``(2) Solid waste-energy producing facilities.--For purposes of
paragraph (1), the term `solid waste-energy producing facilities' means
any solid waste disposal facility and any facility for the production of
steam and electrical energy if--
``(A) substantially all of the fuel for the facility producing
steam and electrical energy is derived from solid waste from such
solid waste disposal facility,
``(B) both such solid waste disposal facility and the facility
producing steam and electrical energy are owned and operated by the
authority referred to in paragraph (1), and
``(C) all of the electrical energy and steam produced by the
facility for producing steam and electricity which is not used by
such facility is sold, for purposes other than resale, to an agency
or instrumentality of the United States.
``(3) Solid waste disposal facility.--For purposes of paragraph (2),
the term `solid waste disposal facility' means any solid waste disposal
facility within the meaning of section 103(b)(4)(E) of the Internal
Revenue Code of 1986 (determined without regard to section 103(g) of
such Code).
``(4) Obligations must be in registered form.--This subsection shall
not apply to any obligation which is not issued in registered form.''
Alcohol-Producing Facilities
Section 241(c) of Pub. L. 96-223, as amended by Pub. L. 99-514,
Sec. 2, Oct. 22, 1986, 100 Stat. 2095, provided that:
``(1) In general.--Subparagraph (C) of section 103(g)(3) of the
Internal Revenue Code of 1986 [formerly I.R.C. 1954] (as added by
subsection (a)) shall not apply to any facility for the production of
alcohol from solid waste if--
``(A) substantially all of the solid waste derived feedstock for
such facility is produced at a facility which--
``(i) went into full production in 1977,
``(ii) is located within the limits of a city, and
``(iii) is located in the same metropolitan area as the
alcohol-producing facility, and
``(B) before March 1, 1980, there were negotiations between a
governmental body and an organization described in section 501(c)(3)
of the Internal Revenue Code of 1986 with respect to the utilization
of a special process for the production of alcohol at such alcohol-
producing facility.
``(2) Limitation.--The aggregate amount of obligations which may be
issued by reason of paragraph (1) with respect to any project shall not
exceed $30,000,000.
``(3) Termination.--This subsection shall not apply to obligations
issued after December 31, 1985.''
Hydroelectric Generating Facilities
Section 242(b) of Pub. L. 96-223, as amended by Pub. L. 99-514,
Sec. 2, Oct. 22, 1986, 100 Stat. 2095, provided that:
``(1) In general.--For purposes of section 103(b)(4)(H) of the
Internal Revenue Code of 1986 [formerly I.R.C. 1954] (relating to
qualified hydroelectric generating facilities), in the case of a
hydroelectric generating facility described in paragraph (2)--
``(A) the facility shall be treated as a qualified hydroelectric
generating facility (as defined in section 103(b)(8)(A) of such
Code) without regard to clause (ii) of section 48(l)(13)(B) of such
Code (relating to maximum generating capacity), and
``(B) the fraction referred to in subparagraph (C) of section
103(b)(8) of such Code shall be deemed to be 1.
``(2) Facilities to which paragraph (1) applies.--A facility is
described in this paragraph if--
``(A) it would be a qualified hydroelectric generating facility
(as defined in section 103(b)(8)(A) of such Code) if clause (ii) of
section 48(l)(13)(B) did not apply,
``(B) it constitutes an expansion of generating capacity at an
existing hydroelectric generating facility,
``(C) such facility is located at 1 of 2 dams located in the
same county where--
``(i) the rated capacity of the hydroelectric generating
facilities at each such dam on October 18, 1979, was more than
750 megawatts,
``(ii) the construction of the first such dam began in 1956,
power at such first dam was first generated in 1959, and full
power production at such first dam began in 1961, and
``(iii) the construction of the second such dam began in
1959, power at such second dam was first generated in 1963, and
full power production at such second dam began in 1964,
``(D) acquisition or construction of the existing facility
referred to in subparagraph (B) was financed with the proceeds of an
obligation described in section 103(a)(1) of such Code,
``(E) the existing facility is owned and operated by a State,
political subdivision of a State, or agency or instrumentality of
any of the foregoing,
``(F) no more than 60 percent of the electric power and energy
produced by such existing facility and of the qualified
hydroelectric generating facility is to be sold to anyone other than
an exempt person (within the meaning of section 103(b)(3) of such
Code), and
``(G) the agency of the State in which the facility is located
which has jurisdiction over water rights had granted, before October
18, 1979, a water right under which expanded power and energy
generating capacity for the facility was contemplated.''
State Obligations for Renewable Energy Property
Section 243 of Pub. L. 96-223, as amended by Pub. L. 99-514, Sec. 2,
Oct. 22, 1986, 100 Stat. 2095, provided that:
``(a) Certain State Obligations for Renewable Energy Property.--
``(1) In general.--Paragraph (1) of subsection (b) of section
103 of the Internal Revenue Code of 1986 [formerly I.R.C. 1954]
shall not apply to any obligation issued as part of an issue
substantially all of the proceeds of which are to be used to provide
renewable energy property, if--
``(A) the obligations are general obligations of a State,
``(B) the authority for the issuance of the obligations
requires that taxes be levied in sufficient amount to provide
for the payment of principal and interest on such obligations,
``(C) the amount of such obligations, when added to the sum
of the amounts of all such obligations previously issued by the
State which are outstanding, does not exceed the smaller of--
``(i) $500,000,000 or
``(ii) one-half of 1 percent of the value of all
property in the State,
``(D) such obligations are issued pursuant to a program to
provide financing for small scale energy projects which was
established by a State the legislature of which, before October
18, 1979, approved a constitutional amendment to provide for
such a program, and
``(E) such obligations meet the requirements of paragraph
(1) of section 103(h) of the Internal Revenue Code of 1986.
``(2) Renewable energy property.--For purposes of this
subsection, the term `renewable energy property' means property used
to produce energy (including heat, electricity, and substitute
fuels) from renewable energy sources (including wind, solar, and
geothermal energy, waste heat, biomass, and water).
``(b) Effective Date.--Subsection (a) shall apply with respect to
obligations issued after the date of enactment of this Act [Apr. 2,
1980].''
Disposition of Amounts Generated by Advance Refunding of Certain
Governmental Obligations
Section 337 of Pub. L. 95-600, as amended by Pub. L. 96-222, title
I, Sec. 103(a)(8), Apr. 1, 1980, 94 Stat. 212; Pub. L. 99-514, Sec. 2,
Oct. 22, 1986, 100 Stat. 2095, provided that:
``(a) General Rule.--The payment to a charitable organization of a
refund profit held in a trust fund or escrow arrangement, or held by an
underwriter or other person under a qualified agreement in accordance
with that agreement--
``(1) shall not cause the refunding obligations out of which the
refund profit arose to be treated as arbitrage bonds (within the
meaning of section 103(c) of the Internal Revenue Code of 1986
[formerly I.R.C. 1954]) and
``(2) may be paid without penalty imposed on the issuer of such
obligations.
``(b) Rule for Governments Which Have Already Paid Arbitrage Profits
to the United States.--In the case of a State or local government which,
before January 1, 1977--
``(1) requested in writing a rule by the Internal Revenue
Service with respect to the tax consequences of paying refund profit
to charitable organizations,
``(2) failed to receive a favorable ruling and did not pay the
refund profit to a charitable organization, and
which accounted to the United States for refund profit by direct payment
to the United States, or by the purchase of low-interest United States
obligations, the Secretary of the Treasury shall pay, out of any amounts
in the Treasury not otherwise appropriated, an amount equal to the
refund profit for which the State or local government has accounted to
the United States. Amounts paid to a State or local government under
this subsection shall be distributed to such charitable organizations
within 90 days after the date on which the payment is received by the
State or local government in the same manner as if the refund profit had
not been paid to the United States and met the requirements of
subsection (a).
``(c) Definitions.--For purposes of this section--
``(1) Refund profit.--The term `Refund profit' means interest,
profit, or other amounts generated by, or arising out of, the
advance refunding, before September 24, 1976, of an obligation of a
State or local government described in section 103 of such Code.
``(2) Charitable organization.--The term `charitable
organization' means an organization described in section 501(c)(3)
of such Code and exempt from taxation under section 501(a) of such
Code other than an organization described in section 509(a) of such
Code.
``(3) Qualified agreement.--The term `qualified agreement' means
an agreement (whether or not enforceable) which provides for, or
contemplates, the payment of refund profit to one or more charitable
organizations.
``(4) Low-interest united states obligations.--The term `low-
interest United States obligations' means United States obligations
which bear an interest rate lower than the highest rate of interest
borne by public debt securities generally available for purchase at
the time such obligations were purchased.''
Transitional Provisions for Industrial Development Bonds Issued Before
January 1, 1969
Section 107(b)(2) of Pub. L. 90-364, as amended by Pub. L. 99-514,
Sec. 2, Oct. 22, 1986, 100 Stat. 2095, provided that: ``Section
103(c)(1) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954],
as amended by subsection (a) [subsec. (b)(1), formerly subsec. (c)(1) of
this section], shall not apply with respect to any obligation issued
before January 1, 1969, if before May 1, 1968--
``(A) the issuance of the obligation (or the project in
connection with which the proceeds of the obligations are to be
used) was authorized or approved by the governing body of the
governmental unit issuing the obligation or by the voters of such
governmental unit;
``(B) in connection with the issuance of such obligation or with
the use of the proceeds to be derived from the sale of such
obligation or the property to be acquired or improved with such
proceeds, a governmental unit has made a significant financial
commitment;
``(C) any person (other than a governmental unit) who will use
the proceeds to be derived from the sale of such obligation or the
property to be acquired or improved with such proceeds has expended
(or has entered into a binding contract to expend) for purposes
which are related to the use of such proceeds or property, an amount
equal to or in excess of 20 percent of such proceeds; or
``(D) in the case of an obligation issued in conjunction with a
project where financial assistance will be provided by a
governmental agency concerned with economic development, such agency
has approved the project or an application for financial assistance
is pending.''
Section Referred to in Other Sections
This section is referred to in sections 29, 42, 45, 45D, 48, 57,
142, 143, 144, 145, 148, 149, 150, 168, 265, 465, 593, 643, 646, 667,
772, 811, 832, 834, 842, 851, 871, 1275, 1276, 1278, 1400L, 4940, 4942,
6049, 7478, 7518, 7701, 7871 of this title; title 7 section 608c; title
12 sections 1441a, 1831q; title 15 sections 77c, 78c; title 16 sections
839f, 2708; title 19 section 2345; title 45 section 1207; title 46 App.
section 1177; title 48 sections 1574, 1670.