AMENDMENTS RELATED TO TITLE XIII OF THE REFORM ACT.

SEC. 1013. AMENDMENTS RELATED TO TITLE XIII OF THE REFORM ACT. (a) Amendments Related to Section 1301 of the Reform Act.— (1) Clause (iii) of section 142(d)(4)(B) of the 1986 Code is amended by striking out “average rent” and inserting in lieu thereof “average gross rent”. (2) Clause (iii) of section 143(a)(2)(A) of the 1986 Code is amended by striking out “no bond which is part of such issue meets” and inserting in lieu thereof “such issue does not meet”. (3) Paragraph (4) of section 143(b) of the 1986 Code is amended by inserting “is part of an issue which” after “which”. (4) (A) Clause (ii) of section 144(a)(12)(A) of the 1986 Code is amended by inserting “(or series of bonds)” before “issued to refund”. 102 STAT. 3538 (B) (i) Subclause (I) of section 144(a)(12)(A)(ii) of the 1986 Code is amended to read as follows: “(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) Subparagraph (A) of section 144(a)(12) of the 1986 Code is amended by adding at the end thereof the following new sentence: “For purposes of clause ((j)(1), average maturity shall be determined in accordance with section 147(b)(2)(A).” (iii) A refunding bond issued before July 1, 1987, shall be treated as meeting the requirement of subclause (D 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. (C) Clause (ii) of section 144(a)(12)(A) of the 1986 Code is amended by adding “and” at the end of subclause (II), by striking out subclause (HI), and by redesignating subclause (IV) as subclause (TH). (5) Subparagraph (B) of section 144(b)(1) of the 1986 Code is amended— (A) by striking out “to which part B of title IV of the Higher Education Act of 1965 (relating to guaranteed student loans) does not apply”, and (B) by striking out “of such Act” and inserting in lieu thereof “of the Higher Education Act of 1965”, and (C) by striking out “eligible” and all that follows in such subparagraph and inserting in lieu thereof the following: “eligible. A program shall not be treated as described in this subparagraph if such pregram 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)).” (6) Subclause (I) of section 145(b)(2)(B)(ii) of the 1986 Code is amended by striking out “103(b)” and inserting in lieu thereof “103(b)(2)”. (7) Clause (i) of section 145(b)(2)(C) of the 1986 Code is amended by striking out “subparagraph (B)(ii)” and inserting in lieu thereof “subparagraph (B)”. (8) Paragraph (4) of section 145(b) of the 1986 Code is amended by striking out “subparagraphs (O and (D)” and inserting in lieu thereof “subparagraphs (O, (D), and (E)”. (9) Subparagraph (A) of section 146(f)(5) of the 1986 Code (as in effect before the amendments made by section 10631 of the Revenue Act of 1987) is amended to read as follows: “(A) the purpose of issuing exempt facility bonds described in 1 of the paragraphs of section 142(a),”. (10) (A) Paragraph (1) of section 146(k) of the 1986 Code is amended by striking out “paragraph (2)” and inserting in lieu thereof “paragraphs (2) and (3)”. 102 STAT. 3539 (B) Subsection (k) of section 146 of the 1986 Code is amended by adding at the end thereof the following new paragraph: “(3) Treatment of governmental bonds to which volume cap allocated.—Paragraph (1) shall not apply to any bond to which volume cap is allocated under section 141(b)(5)— “(A) for an output facility, or “(B) for a facility of a type described in paragraph (4), (5), (6), or (10) of section 142(a), if the issuer establishes that the State’s share of the private business use (as defined by section 141(b)(6)) of the facility will equal or exceed the State’s share of the volume cap allocated with respect to bonds issued to finance the facility.” (11) Subsection (e) of section 147 of the 1986 Code is amended by striking out “treated as”. (12) Subsection (f) of section 147 of the 1986 Code (relating to public approval requirement for private activity bonds) is amended by adding at the end thereof the following new paragraph: (4) Special rules for scholarship funding bond issues and volunteer fire department bond issues.— “(A) Scholarship funding bonds.—In the case of a qualified scholarship funding bond, any governmental unit which made a request described in section 150(d)(2)(B) with respect to the issuer of such bond shall be treated for purposes of paragraph (2) of this subsection as the govern-mental unit on behalf of which such bond was issued. Where more than one governmental unit within a State has made a request described in section 15O(d)(2)(B), the State may also be treated for purposes of paragraph (2) of this subsection as the governmental unit on behalf of which such bond was issued. “(B) Volunteer fire department bonds.—In the case of a bond of a volunteer fire department which meets the requirements of section 150(e), the political subdivision described in section 150(e)(2)(B) with respect to such department shall be treated for purposes of paragraph (2) of this subsection as the governmental unit on behalf of which such bond was issued.” (13) (A) Paragraph (1) of section 147(g) of the 1986 Code (relating to restriction on issuance costs financed by issue) is amended by striking out “aggregate face amount of the issue” and inserting in lieu thereof “proceeds of the issue”. (B) Paragraph (2) of section 147(g) of the 1986 Code is amended by striking out “aggregate authorized face amount of the issue does not” and inserting in lieu thereof “proceeds of the issue do not”. (C) The amendments made by this paragraph shall apply to bonds issued after June 30, 1987. (14) Paragraph (2) of section 148(d) of the 1986 Code (relating to special rules for reasonably required reserve or replacement fund) is amended by striking out “any fund described in paragraph (1)” and inserting in lieu thereof “any reserve or replacement fund”. (15) Paragraph (3) of section 148(f) of the 1986 Code is amended by adding at the end thereof the following new sentence: “A series of issues which are redeemed during a 6-month period (or such longer period as the Secretary may prescribe) shall be 102 STAT. 3540treated (at the election of the issuer) as 1 issue for purposes of the preceding sentence if no bond which is part of any issue in such series has a maturity of more than 270 days or is a private activity bond.” (16) (A) Subclause (I) of section 148(f)(4)(B)(iii) of the 1986 Code (relating to safe harbor for determining when proceeds of tax or revenue anticipation bonds are expended) is amended by striking out “aggregate face amount of such issue” and inserting in lieu thereof “proceeds of such issue”. (B) The amendment made by subparagraph (A) shall apply to bonds issued after June 30, 1987, (17) (A) Subparagraph (C) of section 148(f)(4) of the 1986 Code is amended— (i) by striking out the heading and inserting in lieu thereof: “(C) Exception for governmental units issuing $5,000,000 or less of bonds.— “(i) In general.—”, (ii) by redesignating clauses (i) through (iv) as subclauses (I) through (TV), respectively, and moving the margins of such subclauses 2 ems to the right, and (iii) by striking out the last sentence and inserting in lieu thereof the following new clauses: “(ii) Aggregation of issuers.— For purposes of subclause (IV) of clause (i)— “(I) an issuer and all entities which issue bonds on behalf of such issuer shall be treated as 1 issuer, “(II) all bonds issued by a subordinate entity shall, for purposes of applying such subclause to each other entity to which such entity is subordinate, be treated as issued by such other entity, and “(III) an entity formed (or, to the extent provided by the Secretary, availed of) to avoid the purposes of such subclause (IV) and all other entities benefiting thereby shall be treated as 1 issuer. “(iii) Certain refunding bonds not taken into ac-count in determining small issuer status.—There shall not be taken into account under subclause (TV) of clause (i) any bond issued to refund (other than to advance refund) any bond to the extent the amount of the refunding bond does not exceed the outstanding amount of the refunded bond. “(iv) Certain issues issued by subordinate govern-mental units, etc., exempt from rebate requirement.— An issue issued by a subordinate entity of a governmental unit with general taxing powers shall be treated as described in clause (i)(1) if the aggregate face amount of such issue does not exceed the lesser of— “(I) $5,000,006, or “(II) the amount which, when added to the aggregate face amount of other issues issued by such entity, does not exceed the portion of the $5,000,000 limitation under clause (i)(IV) which such govern-mental unit allocates to such entity. For purposes of the preceding sentence, an entity which issues bonds on behalf of a governmental unit with general taxing powers shall be treated as a 102 STAT. 3541subordinate entity of such unit. An allocation shall be taken into account under subclause (II) only if it is irrevocable and made before the issuance date of such issue and only to the extent that the limitation so allocated bears a reasonable relationship to the benefits received by such governmental unit from issues issued by such entity. “(v) Determination of whether refunding bonds eligible for exception from rebate requirement.— If any portion of an issue is issued to refund other bonds, such portion shall be treated as a separate issue which does not meet the requirements of paragraphs (2) and (3) by reason of this subparagraph unless— “(I) the aggregate face amount of such issue does not exceed $5,000,000, “(II) each refunded bond was issued as part of an issue which was treated as meeting the requirements of paragraphs (2) and (3) by reason of this subparagraph, “(III) the average maturity date of the refunding bonds issued as part of such issue is not later than the average maturity date of the bonds to be refunded by such issue, and “(IV) no refunding bond has a maturity date which is later than the date which is 30 years after the date the original bond was issued. Subclause (III) shall not apply if the average maturity of the issue of which the original bond was a part (and of the issue of which the bonds to be refunded are a part) is 8 years or less. For purposes of this clause, average maturity shall be determined in accordance with section 147(b)(2)(A). “(vi) Refundings of bonds issued under law prior to tax reform act of 1986.— If section 141(a) did not apply to any refunded bond, the issue of which such refunded bond was a part shall be treated as meeting the requirements of subclause (II) of clause (v) if— “(I) such issue was issued by a governmental unit with general taxing powers, “(II) no bond issued as part of such issue was an industrial development bond (as defined in section 103(b)(2), but without regard to subparagraph (B) of section 103(b)(3)) or a private loan bond (as defined in section 103(o)(2)(A), but without regard to any exception from such definition other than section 103(0)(2)(0), and “(III) the aggregate face amount of all tax-exempt bonds (other than bonds described in subclause (ID) issued by such unit during the calendar year in which such issue was issued did not exceed $5,000,000. References in subclause (II) to section 103 shall be to such section as in effect on the day before the date of the enactment of the Tax Reform Act of 1986. Rules similar to the rules of clauses (ii) and (iii) shall apply for purposes of subclause (HI). For purposes of subclause (II) of clause (i), bonds described in subclause 102 STAT. 3542(I) of this clause to which section 141(a) does not apply shall not be treated as private activity bonds.” (B) Subclause (IV) of section 148(f)(4)(C)(i) of the 1986 Code (as redesignated by subparagraph (A)) is amended by striking out “(and all subordinate entities thereof”. (C) (i) Except as provided in clause (ii), the amendments made by this paragraph shall apply to bonds issued after June 30, 1987. (ii) At the election of an issuer (made at such time and in such manner as the Secretary of the Treasury or his delegate may prescribe), the amendments made by this paragraph shall apply to such issuer as if included in the amendments made by section 1301(a) of the Tax Reform Act of 1986. (18) Clause (i) of section 148(f)(4)(D) of the 1986 Code is amended— (A) by inserting “for a program” before “described in section 144(h)(1)(A)”, (B) by striking out “such a program” and inserting in lieu thereof “such program”, and (C) by adding at the end thereof the following; “Amounts designated as interest on student loans shall not be taken into account in determining whether the issuer is reimbursed for such costs. Except as otherwise hereafter provided in regulations prescribed by the Secretary, costs described in subclause (I) paid from amounts earned as described in the first sentence of this clause may also be taken into account in determining the yield on the student loans under a program described in section 144(b)(1)(A).” (19) Subparagraph (B) of section 148(f)(7) of the 1986 Code is amended by striking out “due to reasonable cause and not” and inserting in lieu thereof “not due”. (20) Clause (iii) of section 149(b)(3)(A) of the 1986 Code is amended by striking out “with respect to any bond issued before July 1, 1989”. (21) Subparagraph (A) of section 149(b)(4) of the 1986 Code is amended by striking out “a qualified student loan bond, and a qualified redevelopment bond” and inserting in lieu thereof “and a qualified student loan bond”. (22) Paragraph (3) of section 149(e) of the 1986 Code (relating to information reporting) is amended by striking out “there is reasonable cause for the failure to file such statement in a timely fashion” and inserting in lieu thereof “the failure to file in a timely fashion is not due to willful neglect”. (23) (A) Subparagraph (B) of section 150(b)(4) of the 1986 Code (relating to change in use of facilities financed with tax-exempt private activity bonds) is amended by inserting before the period “or a qualified small issue bond”. (B) The heading for paragraph (4) of section 150(b) of the 1986 Code is amended by inserting “and small issue bonds” after “exempt facility bonds”. (C) Subparagraph (A) of section 150(b)(1) of the 1986 Code is amended by inserting “tax-exempt” before “qualified mortgage bond”. (24) (A) Subsection (e) of section 150 of the 1986 Code is amended by adding at the end thereof the following new paragraph: “(3) Treatment as private activity bonds only for certain purposes.—Bonds which are part of an issue which meets the 102 STAT. 3543requirements of paragraph (1) shall not be treated as private activity bonds except for purposes of sections 147(f) and 149(d).” (B) The amendment made by subparagraph (A) shall apply to bonds issued after October 21, 1988. (25) Clause (ii) of section 1301(f)(2)(C) of the Reform Act is amended to read as follows: “(ii) Clause (ii) of section 25(c)(2)(A) is amended by striking out all that follows ‘an amount of and inserting in lieu thereof ‘private activity bonds which it may otherwise issue during such calendar year under section 146,’.” (26) Subsection (h) of section 25 of the 1986 Code (relating to credit for interest on certain home mortgages) is amended by striking out “1987” and inserting in lieu thereof “1988”. (27) The date contained in section 143(a)(1)(B) of the 1986 Code shall be treated as contained in section 103A(c)(1)(B) of the Internal Revenue Code of 1954, as in effect on the day before the date of the enactment of the Reform Act, for purposes of any bond issued to refund a bond to which such 103A(c)(1) applies. (28) (A) Subparagraph (A) of section 146(i)(2) of the 1986 Code is amended to read as follows: “(A) the average maturity date of the qualified student loan bonds to be refunded by the issue of which the refunding bond is a part, or”. (B) Subparagraph (A) of section 146(i)(3) of the 1986 Code is amended to read as follows: “(A) the average maturity date of the qualified mortgage bonds to be refunded by the issue of which the refunding bond is a part, or”. (C) Subsection (i) of section 146 of the 1986 Code is amended by redesignating paragraph (4) as paragraph (5) and by inserting after paragraph (3) the following new paragraph: (4) Average maturity.—For purposes of paragraphs (2) and (3), average maturity shall be determined in accordance with section 147(b))(2)(A).” (29) Subparagraph (D) of section 147(f)(2) of the 1986 Code is amended by striking out “the maturity date” and all that follows and inserting in lieu thereof “the average maturity date of the issue of which the refunding bond is a part is later than the average maturity date of the bonds to be refunded by such issue. For purposes of the preceding sentence, average maturity shall be determined in accordance with subsection (b)(2)(A). (30) Subparagraph (A) of section 150(b)(1) of the 1986 Code is amended by inserting before the period “and before the date such residence is again the principal residence of at least 1 of the mortgagors who received such financing”. (31) Subparagraph (A) of section 150(b)(2) of the 1986 Code is amended by striking out “described paragraph” and inserting in lieu thereof “described in paragraph”. (32) Paragraph (2) of section 150(b) of the 1986 Code is amended by adding at the end thereof the following: “If the provisions of prior law corresponding to section 142(d) apply to a refunded bond, such provisions shall apply (in lieu of section 142(d)) to the refunding bond.” (33) Subsection (b) of section 150 of the 1986 Code is amended by adding at the end thereof the following new paragraph (6) Small issue bonds which exceed capital expenditure limitation.—In the case of any financing provided from the 102 STAT. 3544proceeds of any bond which, when issued, purported to be a qualified small issue bond, no deduction shall be allowed under this chapter for interest on such financing which accrues during the period such bond is not a qualified small issue bond. (34) (A) Paragraph (7) of section 103(c) 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) is amended by striking out “necessary” and inserting in lieu thereof “necessary”. (B) Subparagraph (A) shall apply to obligations sold after May 2, 1978, and to which Treasury regulation section 1.103–13 (1979) was provided to apply. (35) Validation of sinking fund regulations.— (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. (36) Clause (i) of section 147(f)(2)(E) of the 1986 Code is amended by adding at the end thereof the following new sentence: “If the office of any elected official described in subclause (ID is vacated and an individual is appointed by the chief elected executive officer of the govern-mental unit and confirmed by the elected legislative body of such unit (if any) to serve the remaining term of the elected official, the individual so appointed shall be treated as the elected official for such remaining term.” (37) The table of sections for part III of subchapter B of chapter 1 of the 1986 Code is amended by striking out the items relating to sections 103 and 103 A and inserting in lieu thereof the following new Item: “Sec. 103. Interest on State and local bonds.” (38) Subparagraph (B) of section 141(b)(5) of the 1986 Code is amended by striking out “which would cause bond” and inserting in lieu thereof “which would cause a bond”. (39) Clause (ii) of section 142(b)(1)(B) of the 1986 Code is amended by striking out “(as defined in 168(i)(3))” and inserting in lieu thereof “(as defined in section 168(1)(3))”. (40) Subparagraph (B) of section 146(d)(4) of the 1986 Code is amended by striking out “with respect a possession” and inserting in lieu thereof “with respect to a possession”. (41) Clause (ii) of section 48(1)(11)(A) of the 1986 Code is amended by striking out “an industrial development bond (within the meaning of section 103(b)(2))” and inserting in lieu thereof “a private activity bond (within the meaning of section 141)”. (42) Subsection (a) of section 7478 of the 1986 Code is amended— (A) by striking out “whether prospective obligations are described in section 103(a)” in paragraph (1) and inserting 102 STAT. 3545in lieu thereof “whether interest on prospective obligations will be excludable from gross income under section 103(a)”, and (B) by striking out “whether such prospective obligations are described in section 103(a)” and inserting in lieu thereof “whether interest on such prospective obligations will be excludable from gross income under section 103(a)”. (43) (A) Subsection (b) of section 148 of the 1986 Code (defining higher yielding investments) is amended by adding at the end thereof the following new paragraph: “(3) Alternative minimum tax bonds treated as investment property in certain cases.— “(A) In general.—Except as provided in subparagraph (B), the term ‘investment property’ does not include any tax-exempt bond. “(B) Exception.—With respect to an issue other than an issue a part of which is a specified private activity bond (as defined in section 57(a)(5)(C)), the term ‘investment property’ includes a specified private activity bond (as so defined).” (B) Paragraph (2) of section 148(b) of the 1986 Code (defining investment property) is amended by striking the last sentence. (C) The amendments made by this paragraph shall apply to obligations issued after March 31, 1988. (44) Subparagraph (B) of section 46(c)(5) of the 1986 Code is amended— (A) by striking out “industrial development bonds” in the heading and inserting in lieu thereof “private activity bonds”, and (B) by striking “an industrial development bond (within the meaning of section 103(b)(2))” and inserting in lieu thereof “a private activity bond (within the meaning of section 141)”. (b) Amendments Related to Section 1311 of the Reform Act.— (1) Section 1311 of the Reform Act is amended by redesignating subsection (d) as subsection (f), and by inserting after subsection (c) the following new subsections: “(d) Public Approval and Information Reporting.—Sections 147(f) and 149(e) of the 1986 Code shall apply to bonds issued after December 31, 1986. “(e) Rebate Requirement for Qualified Scholarship Funding Bonds.—Section 150(d) of the 1986 Code shall apply to payments made after August 15, 1986.” (2) Paragraph (2) of section 1311(b) of the Reform Act (relating to effective date for section 1301(f)) is amended by inserting “with respect to non-issued bond amounts elected” after “issued”. (c) Amendments Related to Section 1313 of the Reform Act.— (1) Clause (i) of section 1313(a)(1)(B) of the Reform Act is amended by striking out “the proceeds” and inserting in lieu thereof “the net proceeds”. (2) (A) Subparagraph (C) of section 1313(a)(3) of the Reform Act is amended by striking out “section 148” and inserting in lieu thereof “sections 143(g) and 148”. (B) The amendment made by subparagraph (A) shall apply to bonds issued after June 30, 1987. 102 STAT. 3546 (3) Subparagraph (E) of section 1313(a)(3) of the Reform Act is amended by striking out “of such Code”. (4) Paragraph (3) of section 1313(a) of the Reform Act is amended by adding at the end thereof the following new sentence: “In the case of a refunding bond described in paragraph (1) with respect to a qualified bond described in paragraph (2)(B), the requirements of section 1312(b)(1) which applied to such qualified bond shall be treated as specified in this paragraph with respect to such refunding bond.” (5) Subparagraph (A) of section 1313(a)(4) of the Reform Act is amended by inserting “and by substituting ‘September 1, 1986’ for ‘August 16, 1986’” before the comma at the end thereof. (6) Paragraph (2) of section 1313(b) of the Reform Act is amended by adding at the end thereof “For purposes of the preceding sentence, the determination of whether a bond is described in such subsection (o)(2)(A) shall be made without regard to any exception other than section 103(o)(2)(C) of such Code.” (7) Subparagraph (F) of section 1313(b)(3) of the Reform Act is amended by striking out “of such Code”. (8) Paragraph (3) of section 1313(b) of the Reform Act is amended by adding after subparagraph (F) the following new subparagraph: “(G) Except as provided in the last sentence of subsection (c)(2) of this section, the requirements of section 145(b) (relating to $150,000,000 limitation on bonds other than hospital bonds).” (9) Paragraph (5) of section 1313(b) of the Reform Act is amended by striking out “are to be” and inserting in lieu thereof “are or will be”. (10) (A) The heading for subsection (c) of section 1313 of the Reform Act is amended by striking out “Current” and inserting in lieu thereof “Certain”. (B) Paragraph (1) of section 1313(c) of the Reform Act is amended— (i) by striking out “apply to any bond” and inserting in lieu thereof “apply to any bond (or series of bonds)”, and (ii) by striking out “law do not” and inserting in lieu thereof “law did not”. (11) (A) Subparagraph (A) of section 1313(c)(1) of the Reform Act is amended to read as follows: “(A) the average maturity date of the issue of which the refunding bond is a part is not later than the average maturity date of the bonds to be refunded by such issue,”. (B) Paragraph (1) of section 1313(c) of the Reform Act is amended by adding at the end thereof the following new sentence: “For purposes of subparagraph (A), average maturity shall be determined in accordance with section 147(b)(2)(A) of the 1986 Code.” (C) Paragraph (1) of section 1313(c) of the Reform Act is amended by adding “and” at the end of subparagraph (B), by striking out subparagraph (C), and by redesignating subparagraph (D) as subparagraph (C). (D) Subparagraph (B) of section 1313(c)(2) of the Reform Act is amended by striking out “and (D)” and inserting in lieu thereof “and (C)”. 102 STAT. 3547 (E) A refunding bond issued before July 1, 1987, shall be treated as meeting the requirement of subparagraph (A) of section 1313(c)(1) of the Reform Act if such bond met the requirement of such subparagraph as in effect before the amendments made by this paragraph. (12) (A) Subparagraph (N) of section 103(b)(6) of the Internal Revenue Code of 1954, as in effect on the day before the date of the enactment of the Reform Act (relating to termination dates), is amended by redesignating clauses (ii) and (iii) as clauses (iii) and (iv), respectively, and by striking out clause (i) and inserting in lieu thereof the following new clauses: “(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)” (B) The date applicable under section 144(a)(12)(B) of the 1986 Code shall be treated as contained in section 103(b)(6)(N)(ii) of the Internal Revenue Code of 1954, as in effect on the day before the date of the enactment of the Reform Act, for purposes of any bond issued to refund a bond to which such section 103(b)(6)(N)(iii) applies. (13) Paragraph (2) of section 1313(c) of the Reform Act is amended— (A) by striking out “apply to any bond” and inserting in lieu thereof “apply to any bond (or series of bonds)”, (B) by striking out “subsection does not” and inserting in lieu thereof “subsection did not”, and (C) by striking out “the proceeds” in subparagraph (a)(1) and inserting in lieu thereof “the net proceeds”. (14) (A) Section 1313 of the Reform Act is amended by adding at the end thereof the following new subsection: “(d) Mortgage and Student Loan Targeting Rules To Apply to Loans Made More Than 3 Years After the Date of the Original Issue.—Subsections (a)(3) and (b)(3) shall be treated as including the requirements of subsections (e) and (f) of section 143 and paragraphs (3) and (4) of section 144(b) of the 1986 Code with respect to bonds the proceeds of which are used to finance loans made more than 3 years after the date of the issuance of the original bond.” (B) The amendment made by subparagraph (A) shall apply with respect to refunding bonds issued after October 16, 1987. 102 STAT. 3548 (15) 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) 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. (d) Amendments Related to Section 1314 of the Reform Act.— (1) Subsection (a) of section 1314 of the Reform Act is amended by adding at the end thereof the following: “The preceding sentence shall not apply to the first advance refunding after September 25, 1985, of a bond issued before September 26, 1985” (2) Subsection (0 of section 1314 of the Reform Act is amended by striking out “December” and inserting in lieu thereof “August”. (3) Section 1314 of the Reform Act is amended by redesignating subsection (g) as subsection (i) and by inserting after subsection (D the following new subsections: “(g) Termination of Mortgage Bond Policy Statement Requirement.—Paragraph (5) of section 103A(j) of the 1954 Code (relating to policy statement) shall not apply to any bond issued after August 15, 1986, and shall not apply to non issued bond amounts elected under section 25 of the 1986 Code after such date. “(h) Arbitrage Restriction on Investments in Investment-Type Property.—In the case of a bond issued before August 16, 1986 (September 1, 1986 in the case of a bond described in section 1312(c)(2)), section 103(c) of the 1954 Code shall be applied by treating the reference to securities in paragraph (2) thereof as including a reference to investment-type property but only for purposes of determining whether any bond issued after October 16, 1987, to advance refund such bond (or a bond which is part of a series of refundings of such bond) is an arbitrage bond (within the meaning of section 148(a) of the 1986 Code).” (e) Amendments Related to Section 1315 of the Reform Act.— (1) Subsection (c) of section 1315 of the Reform Act is amended— (A) by inserting “for calendar year 1986” after “1954 Code” each place it appears, (B) by striking out “before August 16” each place it appears and inserting in lieu thereof “on August 15”, and (C) by adding at the end thereof the following new sentence: “The preceding sentence shall not apply to the extent section 1313(b)(5) treats any bond as a private activity bond for purposes of section 146 of the 1986 Code.” (2) (A) Subsection (e) of section 1315 of the Reform Act is amended by adding at the end thereof the following new sentence: “The preceding sentence shall not apply to any bond which (if issued on August 15, 1986) would have been an industrial development bond (as defined in section 103(b)(2) of the 1954 Code).” (B) The amendment made by subparagraph (A) shall apply to bonds issued after June 10, 1987. (f) Amendments Related to Section 1316 of the Reform Act.— (1) (A) Subsections (a)(1), (b)(1), (c)(1), and (f)(1) of section 1316 of the Reform Act are each amended by inserting “and as having a 102 STAT. 3549carryforward purpose described in section 146(0(5) of such Code” after “the 1986 Code”. (B) The amendment made by subparagraph (A) shall apply only with respect to carryforwards of volume cap for years after 1986. (2) Subsection (c) of section 1316 of the Reform Act is amended by adding at the end thereof the following new paragraph: “(4) Application of section 147(b).—A bond to which this subsection applies (other than a refunding bond) shall be treated as meeting the requirements of section 147(b) of the 1986 Code if the average maturity (determined in accordance with section 147(b)(2)(A) of such Code) of the issue of which such bond is a part does not exceed 20 years. A bond issued to refund (or which is part of a series of bonds issued to refund) a bond described in the preceding sentence shall be treated as meeting the requirements of such section if the refunding bond has a maturity date not later than the date which is 20 years after the date on which the original bond was issued.” (3) Paragraph (1) of section 1316(e) of the Reform Act is amended— (A) by inserting “(and section 103(h)(2)(B)(ii) of the 1954 Code)” after “1986 Code” the first place it appears, and (B) by inserting “(and section 103(b)(16) of the 1954 Code)” after “1986 Code” in the last sentence. (4) Paragraph (2) of section 1316(g) of the Reform Act is amended— (A) by striking out “described in the paragraph (3)” in subparagraph (A) and inserting in lieu thereof “issued to provide a facility described in paragraph (3)”, and (B) by striking out “which paragraph (3)” in subparagraph (C) and inserting in lieu thereof “which such paragraph (3)”. (5) Paragraph (6) of section 1316(g) of the Reform Act is amended by inserting “(and the provisions of section 1314)” after “section 1301”. (6) Paragraph (7) of section 1316(g) of the Reform Act is amended to read as follows: “(7) In the case of a bond described in section 632(d) of the Tax Reform Act of 1984— “(A) section 141 of the 1986 Code shall be applied without regard to subsection (a)(2) and paragraphs (4) and (5) of subsection (b), “(B) paragraphs (1) and (2) of section 141(b) of the 1986 Code shall be applied by substituting ‘25 percent’ for ‘10 percent’ each place it appears, and “(C) section 149(b) of the 1986 Code shall not apply. This paragraph shall not apply to any bond issued after December 31, 1990” (7) (A) Subparagraph (A) of section 1316(g)(8) of the Reform Act is amended by inserting “and as having a carryforward purpose described in section 146(0(5) of such Code” after “the 1986 Code” (B) The amendment made by subparagraph (A) shall apply only with respect to carryforwards of volume cap for years after 1986. (8) Paragraph (2) of section 1316(j) of the Reform Act is amended to read as follows: 102 STAT. 3550 “(2) by adding at the end thereof the following new sentence: “In the case of refunding obligations not to exceed $100,000,000 issued after October 21, 1986, by Dade County, Florida, for the purpose of advance refunding its Aviation Revenue Bonds (Series J), the first sentence of this paragraph shall be applied by substituting “the date which is 1 year after the date of the enactment of the Technical and Miscellaneous Revenue Act of 1988” for “December 31, 1984” and the amendments made by section 1301 of the Tax Reform Act of 1986 shall not apply.”. (9) Paragraph (2) of section 1316(k) of the Reform Act is amended by striking out “$55,000,000 must be redeemed no later than November 1, 1987” and inserting in lieu thereof “no more than $55,000,000 shall be outstanding later than November 1, 1987”. (10) Section 1104 of the Mortgage Subsidy Bond Tax Act of 1980 is amended by adding at the end of subsection (r) the following new sentence: “Section 148(f) of the Internal Revenue Code of 1986 and the amendments made by section 1301 of the Tax Reform Act of 1986 shall not apply to any bonds described in paragraph (1) which may be issued as a result of the amendments made by the Tax Reform Act of 1986.” (11) Subsection G) of section 1316 of the Reform Act is hereby repealed. (g) Amendments Related to Section 1317 of the Reform Act.— (1) Subparagraph (J) of section 1317(2) of the Reform Act is amended by striking out “began construction in 1980” and inserting in lieu thereof “, a subsidiary of Sierra Pacific Resources, began in 1980 work to design, finance, construct, and operate.” (2) Subparagraph (C) of section 1317(3) of the Reform Act is amended to read as follows: “(C) A facility is described in this subparagraph if— “(i) it is one or more stadiums to be used either by an American League baseball team or a National Football League team currently using a stadium in a city having a population in excess of 2,500,000 and described in section 146(d)(3) of the 1986 Code. “(ii) the bonds to be used to provide financing for one or more such stadiums are issued by a political subdivision or a State agency pursuant to a resolution approving an inducement resolution adopted by a State agency on November 20, 1985, as it may be amended (whether or not the beneficiaries of such issue or issues are the beneficiaries (if any) specified in such inducement resolution and whether or not the number of such stadiums and the locations thereof are as specified in such inducement resolution) or pursuant to P.A. 84–1470 of the State in which such city is located (and by an agency created thereby), and “(iii) such stadium or stadiums are located in the city described in (i). The aggregate face amount of bonds to which this subparagraph applies shall not exceed $250,000,000. In the case of any carryforward of volume cap for one or more stadiums described in the first sentence of this subparagraph, such carryforward shall be valid with respect to bonds issued for 102 STAT. 3551such stadiums notwithstanding any other provision of the 1986 Code or the 1954 Code, and whether or not (i) there is a change in the number of stadiums or the beneficiaries or sites of the stadium or stadiums and (ii) the bonds are issued by either of the state agencies described in the first sentence of this subparagraph.” (3) (A) Subparagraph (P) of section 1317(3) of the Reform Act is amended— (i) by striking out “approved” and inserting in lieu thereof “authorized”, and (ii) by striking out “December 9, 1985” and inserting in lieu thereof “December 2, 1985”. (B) Section 1317(3)(A) of the Reform Act is amended by striking out “domed”. (C) Section 1317(3)(11) of the Reform Act is amended by deleting “coliseum complex.” and inserting in lieu thereof “coliseum complex, or is a renovation of an existing stadium located in Oakland, California, and used by an American League baseball team.” (D) Section 1317(3)(W) of the Reform Act is amended by striking out “$225,000,000” and inserting “$25,000,000”. (4) Paragraph (3) of section 1317 of the Reform Act is amended by adding at the end thereof the following new subparagraph: “(Z) A facility is described in this subparagraph if— “(i) such facility was a redevelopment project that was approved in concept by the city council sitting as the redevelopment agency in October 1984, and “(ii) $20,000,000 in funds for such facility was identified in a 5-year budget approved by the city redevelopment agency on October 25, 1984. The aggregate face amount of bonds to which this subparagraph applies shall not exceed $80,000,000.” (5) Paragraph (4) of section 1317 of the Reform Act is amended— (A) by striking out “1986. The bonds” and inserting in lieu thereof “1986, and the bonds”, (B) by striking out “and” at the end the subparagraph (A), and (C) by adding “and” at the end of subparagraph (B). (6) Subparagraph (W) of section 1317(6) of the Reform Act is amended to read as follows: “(W) A project is described in this subparagraph if such project is— “(i) a part of the Kenosha Downtown Redevelopment project, and “(ii) located in an area bounded— “(I) on the east by the east wall of the Army Corps of Engineers Confined Disposal Facility (extended), “(II) on the north by 48th Street (extended), “(III) on the west by the present Chicago & Northwestern Railroad tracks, and “(IV) on the south by the north line of Eichelman Park (60th Street) (extended). The aggregate face amount of bonds to which this subparagraph applies shall not exceed $105,000,000.” 102 STAT. 3552 (7) Paragraph (6) of section 1317 of the Reform Act is amended by redesignating subparagraph (X) as subparagraph (Z) and by inserting after subparagraph (W) the following new subparagraphs: “(X) A project is described in this subparagraph if a redevelopment plan for such project was approved by the city council of Bell Gardens, California, on June 12, 1979. The aggregate face amount of bonds to which this subparagraph applies shall not exceed $10,000,000. “(Y) Nothing in this paragraph shall be construed as having the effect of exempting from tax interest on any bond issued after June 10, 1987, if such interest would not have been exempt from tax were such bond issued on August 15, 1986.” (8) The last sentence of subparagraph (A) of section 1317(7) of the Reform Act is amended by inserting before the period “and section 149(d)(2) of the 1986 Code shall not apply to bonds so treated”. (9) Subparagraph (D) of section 1317(7) of the Reform Act is amended to read as follows: “(D) A facility is described in this subparagraph if— “(i) it is a convention, trade, or spectator facility, “(ii) a regional convention, trade, and spectator facilities study committee was created before March 19, 1985, with respect to such facility, and “(iii) feasibility and preliminary design consultants were hired on May 1, 1985, and October 31, 1985, with respect to such facility. The aggregate face amount of bonds to which this subparagraph applies shall not exceed the excess of $175,000,000 over the amount of bonds to which paragraph (48)(B) applies ” (10) Clause (ii) of section 1317(7)(G) of the Reform Act is amended to read as follows: “(ii) such facility’s location was approved in December 1985 by a task force created jointly by the Governor of the State within which such facility will be located and the mayor of the capital city of such State, and”. (11) Subparagraph (J) of section 1317(7) of the Reform Act is amended— (A) by striking out “civic festival” in clause (i) and inserting in lieu thereof “aquafestival”, (B) by striking out clause (ii) and inserting in lieu thereof the following: “(ii) a referendum was held on April 6, 1985, in which voters permitted the city council to lease 130 acres of dedicated parkland for the purpose of constructing such facility, and”, and (C) by striking out “$5,000,000” and inserting in lieu thereof “$10,000,000”. (12) Subparagraph (E) of section 1317(9) of the Reform Act is amended by striking out “March 5, 1985” and inserting in lieu thereof “March 6, 1985”. (13) Clause (iii) of section 1317(9)(J) of the Reform Act is amended by striking out all that precedes “by the governor” and inserting in lieu thereof the following: 102 STAT. 3553 “(iii) such facility’s location was approved in December 1985 by a task force created jointly”. (14) Subparagraph (A) of section 1317(11) of the Reform Act is amended by striking out “and section 142(a)” and inserting in lieu thereof “in section 142(a)”. (15) Subparagraph (C) of section 1317(11) of the Reform Act is amended to read as follows: “(C) A facility is described in this subparagraph if it is described in section 1865(c)(2)(C) of this Act.” (16) Subparagraph (X) of section 1317(13) of the Reform Act is amended by striking out the last sentence. (17) Paragraph (13) of section 1317 of the Reform Act is amended by adding at the end thereof the following new subparagraphs: “(AA) A residential rental property project is described in this subparagraph if it is the Carriage Trace residential rental project in Clinton, Tennessee. The aggregate face amount of bonds to which this subparagraph applies shall not exceed $10,000,000. “(BB) A residential rental property project is described in this subparagraph if— “(i) a contract to purchase such property was dated as of August 9, 1985, “(ii) there was an inducement resolution adopted on September 27, 1985, for the issuance of obligations to finance such property, “(iii) there was a State court final validation of such financing on November 15, 1985, and “(iv) the certificate of nonappeal from such validation was available on December 15, 1985. The aggregate face amount of bonds to which this subparagraph applies shall not exceed $27,750,000.” (18) Paragraph (14) of section 1317 of the Reform Act is amended by striking out “$90,000,000” and inserting in lieu thereof “$130,000,000” and by inserting “incorporated on February 20, 1985” before the period at the end of the 1st sentence. (19) Subparagraph (B) of section 1317(15) of the Reform Act is amended— (A) by striking out all that follows “agreement with” in clause (i) and inserting in lieu thereof “an underwriter to provide planning and financial guidance for a possible bond issue, and”, and (B) by striking out “certificates” in clause (ii) and inserting in lieu thereof “bond issue” (20) Paragraph (16) of section 1317 of the Reform Act is amended by striking out the last sentence. (21) Clause (i) of section 1317(19)(D) of the Reform Act is amended by striking out “light rail transit way” and inserting in lieu thereof “fixed guide way”. (22) Paragraph (20) of section 1317 of the Reform Act is amended by striking out “Section 148(f)” and inserting in lieu thereof “Subsections (c)(2) and (f) of section 148”. (23) Subparagraph (B) of section 1317(21) of the Reform Act is amended— (A) by striking out “Subsection (c)” and inserting in lieu thereof “Subsections (c)(2)”, and 102 STAT. 3554 (B) by striking out “103A(g)(5)(C)l” and inserting in lieu thereof” 103 A(g)(5)(C)”. (24) Paragraph (22) of section 1317 of the Reform Act is amended to read as follows: “(22) Downtown redevelopment project.— Subsection (b) of section 626 of the Tax Reform Act of 1984 is amended by adding at the end thereof the following new paragraph: ‘“(7) Exception for certain downtown redevelopment project.— The amendments made by this section shall not apply to any obligation which is issued as part of an issue 95 percent or more of the proceeds of which are to be used to provide a project to acquire and redevelop a downtown area if— “(A) on August 15, 1985, a downtown redevelopment authority adopted a resolution to issue obligations for such project, “(B) before September 26, 1985, the city expended, or entered into binding contracts to expend, more than $10,000,000 in connection with such project, and “(C) the State supreme court issued a ruling regarding the proposed financing structure for such project on December 11, 1985. The aggregate face amount of obligations to which this paragraph applies shall not exceed $85,000,000 and such obligations must be issued before January 1, 1992.” (25) Subparagraph (A) of section 1317(24) of the Reform Act is amended by adding at the end thereof the following: “The last paragraph of this section shall not apply to the treatment under the preceding sentence.” (26) (A) Clause (i) of section 1317(25)(A) of the Reform Act is amended by striking out “3 counties” and inserting in lieu thereof “1 or more of 3 counties”. (B) Clause (i) of section 1317(25)(B) of the Reform Act is amended by adding at the end thereof the following new sentence: “For purposes of applying section 146(k) of the 1986 Code, the public utility facility described in subparagraph (A) shall be treated as described in paragraph (2) of such section and such paragraph shall be applied without regard to the requirement that the issuer establish that a State’s share of the use of a facility (or its output) will equal or exceed the State’s share of the private activity bonds issued to finance the facility.” (27) Subparagraph (I) of section 1317(27) of the Reform Act is amended by adding at the end thereof the following: “For purposes of determining whether any bond to which this subparagraph applies is a qualified small issue bond, there shall not be taken into account under section 144(a) of the 1986 Code capital expenditures with respect to any facility of the United States Government and there shall not be taken into account any bond allocable to the United States Government.” (28) Clause (i) of section 1317(29)(B) of the Reform Act is amended by striking out all that follows “1993” and inserting in lieu thereof “, by the State of Connecticut, and”. (29) Subparagraph (D) of section 1317(29) of the Reform Act is amended by striking out “the net proceeds” and inserting in lieu thereof “the proceeds”. (30) Section 1317(33)(A)(ii) of the Reform Act is amended— (A) by striking out “on” and inserting in lieu thereof “dated” each place it appears, and 102 STAT. 3555 (B) by inserting “dated on December 1, 1985” after “(Series 1985A and 1985BJ” in subclause (HI). (31) Subparagraph (B) of section 1317(33) of the Reform Act is amended— (A) by striking out “and before August 7, 1988,”, and (B) by adding at the end thereof the following new sentence: “The aggregate face amount of bonds to which this subparagraph applies shall not exceed $90,000,000.” (32) Subparagraph (G) of section 1317(33) of the Reform Act is amended by striking out “subparagraph (H)” and inserting in lieu thereof “subparagraph (F) . (33) Subparagraph (H) of section 1317(33) of the Reform Act is amended— (A) by striking out clause (ii) and inserting in lieu thereof the following: “(ii) tire proceeds of the issue are to be used to finance projects (to be determined by such university and the issuer) which are similar to those projects intended to be financed by bonds that were the subject of a request transmitted to Congress on November 7, 1985”, and (B) by adding at the end thereof the following: “Bonds to which this subparagraph applies shall be treated as qualified 501(c)(3) bonds if such bonds would not (if issued on August 15, 1986) be industrial development bonds (as defined in section 103(b)(2) of the 1954 Code), and section 147(f) of the 1986 Code shall not apply to the issue of which such bonds are a part. Bonds issued to finance facilities described in this subparagraph shall be treated as issued to finance such facilities notwithstanding the fact that a period in excess of 1 year has expired since the facilities were placed in service.” (34) Subparagraph (K) of section 1317(33) of the Reform Act is amended— (A) by striking out “the issue is” in clause (i) and inserting in lieu thereof “the issue or issues are”, (B) by inserting “at least” before “900 units”, (C) by striking out “2,000 square feet” and inserting in lieu thereof “245,000 square feet”, and (D) by striking out “$150,000,000” and inserting in lieu thereof “$112,000,000”. (35) Paragraph (33) of section 1317 of the Reform Act is amended by striking out subparagraphs (M), (N), and (O) and inserting in lieu thereof the following new subparagraphs: “(M) Proceeds of an issue are described in this subparaBaph if such issue is issued on behalf of the Society of the New York Hospital to finance completion of a project commenced by such hospital in 1981 for construction of a diagnostic and treatment center or to refund bonds issued on behalf of such hospital in connection with the construction of such diagnostic and treatment center or to finance construction and renovation projects associated with an inpatient psychiatric care facility. The aggregate face amount of bonds to which this subparagraph applies shall not exceed $150,000,000. “(N) Any bond to which section 145(b) of the 1986 Code does not apply by reason of this paragraph (other than 102 STAT. 3556subparagraph (A) thereof) shall be taken into account in determining whether such section applies to any later issue. “(O) In the case of any refunding bond— “(i) to which any subparagraph of this paragraph applies, and “(ii) to which the last sentence of section 1313(c)(2) applies, such bond shall be treated as having such subparagraph apply (and the refunding bond shall be treated for purposes of such section as issued before January 1, 1986, and as not being an advance refunding) unless the issuer elects the opposite result.” (36) Paragraph (36) of section 1317 of the Reform Act is amended by striking out “$80,000,000” and inserting in lieu thereof “$400,000,000”. (37) Paragraph (38) of section 1317 of the Reform Act is amended by striking out “and sections 148 and 149”. (38) Paragraphs (39) and (40) of section 1317 of the Reform Act are amended to read as follows: “(39) Certain bonds treated as qualified 5O1(C)(3) bonds.— A bond issued as part of an issue shall be treated for purposes of part IV of subchapter B of chapter 1 of the 1986 Code as a qualified 501(c)(3) bond if— “(A) such bond would not (if issued on August 15, 1986) be an industrial development bond (as defined in section 103(b)(2) of the 1954 Code), and “(B) such issue was approved by city voters on January 19, 1985, for construction or renovation of facilities for the cultural and performing arts. The aggregate face amount of bonds to which this paragraph applies shall not exceed $5,000,000. “(40) Certain library bonds.—In the case of a bond issued before January 1, 1986, by the City of Los Angeles Community Redevelopment Agency to provide the library and related structures associated with the City of Los Angeles Central Library Project, the ownership and use of the land and facilities associated with such project by persons which are not governmental units (or payments from such persons) shall not adversely affect the exclusion from gross income under section 103 of the 1954 Code of interest on such bonds.” (39) Paragraph (41) of section 1317 of the Reform Act is amended to read as follows: “(41) Certain refunding obligations for certain power facilities.— With respect to 2 net billed nuclear power facilities located in the State of Washington on which construction has been suspended, the requirements of section 147(b) of the 1986 Code shall be treated as satisfied with respect to refunding bonds issued before 1992 if— “(A) each refunding bond has a maturity date not later than the maturity date of the refunded bond, and “(B) the facilities have not been placed in service as of the date of issuance of the refunding bond. The aggregate face amount of bonds to which this paragraph applies shall not exceed $2,000,000,000. Section 146 of the 1986 Code and the last paragraph of this section shall not apply to bonds to which this paragraph applies.” 102 STAT. 3557 (40) Paragraph (43) of section 1317 of the Reform Act is amended by inserting before the period “and the Internal Revenue Code of 1986 shall be applied without regard to section 149(d)(2).” (41) Paragraph (44) of section 1317 of the Reform Act is amended— (A) by inserting after “1986 Code” the following: “and the temporary period limitation of section 148(c)(2) of the 1986 Code”, (B) by striking out “$100,000,000” and inserting in lieu thereof “$200,000,000”, and (C) by striking out “Hospitals Bond Pool” in the second item in the table and inserting in lieu thereof “Hospital Equipment Loan Council”. (42) Paragraph (48) of section 1317 of the Reform Act is amended by striking out “either” in the material preceding subparagraph (A) and inserting in lieu thereof “any”. (43) Subparagraph (B) of section 1317(48) of the Reform Act is amended by striking out “subparagraph (O)” and inserting in lieu thereof “paragraph (6)(II)”. (44) Paragraph (48) of section 1317 of the Reform Act is amended by adding at the end thereof the following new subparagraph: “(C) A facility which is part of a project described in paragraph (6)(O). The aggregate face amount of bonds to which this subparagraph applies shall not exceed $20,000,000.” (45) Paragraph (49) of section 1317 of the Reform Act is amended— (A) by striking out “149(d)” and inserting in lieu thereof “149(d)(2)”, and (B) by inserting “United States” before “Housing Act of 1937”. (46) Paragraph (50) of section 1317 of the Reform Act is amended to read as follows: “(50) Transitioned bonds subject to certain rules.—In the case of any bond to which any provision of this section applies, except as otherwise expressly provided, sections 103 and 103A of the 1954 Code shall be applied as if the requirements of sections 147(g), 148, and 149(d) of the 1986 Code were included in each such section.” (47) Paragraph (51) of section 1317 of the Reform Act is amended— (A) by striking out “Section 141(a)” and inserting in lieu thereof “Section 141(b)”, and (B) by striking out “141(a)(3)” and inserting in lieu thereof “141(b)(3)” (48) Paragraph (52) of section 1317 of the Reform Act is amended by striking out “This section” and inserting in lieu thereof “Except as otherwise provided in this section, this section”. (49) The material preceding subparagraph (A) of section 1317(2) of the Reform Act is amended by striking out “section 103(b)(4)(D)” and inserting in lieu thereof “section 103(b)(4)(F)”. (50) Clause (ii) of section 1317(27)(II) of the Reform Act is amended by striking out “November 14, 1985” and inserting in lieu thereof “November 13, 1985”. 102 STAT. 3558 (51) Subparagraph (I) of section 1317(33) of the Reform Act is amended by striking out “November 11, 1985” and inserting in lieu thereof “November 1, 1985”. (52) Subparagraph (J) of section 1317(3) of the Reform Act is amended by striking out “October 29” in clause (iv) and inserting in lieu thereof “November 5”. (h) Amendments Related to Section 1318 of the Reform Act.—Section 1318 of the Reform Act (relating to definitions, etc., relating to effective dates and transitional rules) is amended— (1) by inserting “(a) Definitions.—” before “For purposes of this subtitle—”, and (2) by adding at the end thereof the following new subsections: “(b) Minimum Tax Treatment.— “(1) In general.— Any bond described in paragraph (2) shall not be treated as a private activity bond for purposes of section 57 of the 1986 Code unless such bond would (if issued on August 7, 1986) be— “(A) an industrial development bond (as defined in section 103(b)(2) of the 1954 Code), or “(B) a private loan bond (as defined in section 103(o)(2)(A) of the 1954 Code, without regard to any exception from such definition other than section 103(o)(2)(C) of such Code). (2) Bonds described.— For purposes of paragraph (1), a bond is described in this paragraph if— “(A) the amendments made by section 1301 do not apply to such bond by reason of section 1312 or 1316(g), “(B) any provision of section 1317 applies to such bond, or “(C) the proceeds of such bond are used to refund any bond referred to in subparagraph (A) or (B) (or any bond which is part of a series of refundings of such a bond) if the requirements of paragraphs (1), (2), and (3) of subsection (c) are met with respect to the refunding bond. “(c) Current Refundings Not Taken Into Account in Applying Aggregate Limit on Bonds to Which Transitional Rules Apply—The limitation on the aggregate face amount of bonds to which any provision of section 1316(g) or 1317 applies shall not be reduced by the face amount of any bond the proceeds of which are to be used exclusively to refund any bond to which such provision applies (or any bond which is part of a series of refundings of such bond) if— (1) the average maturity date of the issue of which the refunding bond is a part is not later than the average maturity date of the bonds to be refunded by such issue, (2) the amount of the refunding bond does not exceed the outstanding amount of the refunded bond, and (3) ) the net proceeds of the refunding bond are used to redeem the refunded bond not later than 90 days after the date of the issuance of the refunding bond. For purposes of paragraph (1), average maturity shall be determined in accordance with section 147(b)(2)(A) of the 1986 Code. No limitation in section 1316(g) or 1317 on the period during which bonds may be issued under such section shall apply to any refunding bond which meets the requirements of this subsection. “(d) Special Rule Permitting Carryforward of Volume Cap for Certain Transitioned Projects.—A bond to which section 1312 or 1317 applies shall be treated as having a carryforward purpose described in section 146(f)(5) of the 1986 Code, and the requirement 102 STAT. 3559of section 14(f)(2)(A) of the 1986 Code shall be treated as met if such project is identified with reasonable specificity. The preceding sentence shall not apply so as to permit a carryforward with respect to any qualified small issue bond.” (i) Application to 501 (c) (3) Bonds.—In accordance with section 1302 of the Reform Act, each amendment and other provision of this Act which applies to private activity bonds shall, unless otherwise expressly provided, apply to qualified 501(c)(3) bonds.