RULES RELATING TO REBATE ON EARNINGS ON BONA FIDE DEBT SERVICE FUND.

SEC. 6181. RULES RELATING TO REBATE ON EARNINGS ON BONA FIDE DEBT SERVICE FUND. (a) No Rebate Where Earnings Do Not Exceed $100,000.—Clause (ii) of section 148(f)(4)(A) of the 1986 Code is amended by striking “unless the issuer otherwise elects,”. (b) $100,000 Limit Not To Apply to Certain Issues.—Subparagraph (A) of section 148(f)(4) of the 1986 Code is amended by adding at the end thereof the following new sentence: “In the case of an issue no bond of which is a private activity bond, clause (ii) shall be applied without regard to the dollar limitation therein if the average maturity of the issue (determined in accordance with section 147(b)(2)(A)) is at least 5 years and the rates of interest on bonds which are part of the issue do not vary during the term of the issue.” (c) Effective Date; Special Rules.— (1) In general.—The amendments made by this section shall apply to bonds issued after the date of the enactment of this Act. (2) Election for outstanding bonds.—Any issue of bonds other than private activity bonds outstanding as of the date of the enactment of this Act shall be allowed a 1-time election to apply the amendments made by subsection (b) to amounts deposited after such date in bona fide debt service funds of such bonds. (3) Definition of private activity bond.—For purposes of this section and the last sentence of section 148(f)(4)(A) of the 1986 Code (as added by subsection (b)), the term ‘private activity bond’ shall include any qualified 501(c)(3) bond (as defined under section 145 of the 1986 Code).