26 U.S.C. § 149 — Bonds must be registered to be tax exempt;

Page 706 TITLE 26—INTERNAL REVENUE CODE § 149 the term ‘private activity bond’ shall include any qualified 501(c)(3) bond (as defined under section 145 of the 1986 Code).’’ Pub. L. 100–647, title VI, § 6183(b), Nov. 10, 1988, 102 Stat. 3730, provided that: ‘‘The amendment made by subsection (a) [amending this section] shall apply to bonds issued after December 31, 1988.’’ EFFECTIVE DATE Subpart 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; Transi- tional Rules note under section 141 of this title. EXTENSION OF PERIOD TO ELECT TO TERMINATE PER- CENT PENALTY FOR BONDS ISSUED BEFORE NOVEMBER 5, 1990 Pub. L. 101–508, title XI, § 11701(j)(7), Nov. 5, 1990, 104 Stat. 1388–513, provided that: ‘‘In the case of a bond issued before the date of the enactment of this Act [Nov. 5, 1990], the period for making the election under section 148(f)(4)(C)(viii) of the Internal Revenue Code of 1986 (as added by this subsection) shall not expire be- fore the date which is 180 days after such date of enact- ment.’’ AMENDMENT TO ARBITRAGE REGULATIONS Pub. L. 99–514, title XIII, § 1301(c), Oct. 22, 1986, 100 Stat. 2654, provided that: ‘‘The provision in the Federal income tax regulations relating to the arbitrage re- quirements which permits a higher yield on acquired obligations if the issuer elects to waive the benefits of the temporary period provisions shall not apply to bonds issued after August 31, 1986.’’ § 149. Bonds must be registered to be tax exempt; other requirements (a) Bonds must be registered to be tax exempt (1) General rule Nothing in section 103(a) or in any other pro- vision of law shall be construed to provide an exemption from Federal income tax for inter- est on any registration-required bond unless such bond is in registered form. (2) Registration-required bond For purposes of paragraph (1), the term ‘‘reg- istration-required bond’’ means any bond other than a bond which— (A) is not of a type offered to the public, or (B) has a maturity (at issue) of not more than 1 year. (3) Special rules (A) Book entries permitted For purposes of paragraph (1), a book entry bond shall be treated as in registered form if the right to the principal of, and stated in- terest on, such bond may be transferred only through a book entry consistent with regu- lations prescribed by the Secretary. (B) Nominees The Secretary shall prescribe such regula- tions as may be necessary to carry out the purpose of paragraph (1) where there is a nominee or chain of nominees. (b) Federally guaranteed bond is not tax exempt (1) In general Section 103(a) shall not apply to any State or local bond if such bond is federally guaran- teed. (2) Federally guaranteed defined For purposes of paragraph (1), a bond is fed- erally guaranteed if— (A) the payment of principal or interest with respect to such bond is guaranteed (in whole or in part) by the United States (or any agency or instrumentality thereof), (B) such bond is issued as part of an issue and 5 percent or more of the proceeds of such issue is to be— (i) used in making loans the payment of principal or interest with respect to which are to be guaranteed (in whole or in part) by the United States (or any agency or in- strumentality thereof), or (ii) invested (directly or indirectly) in federally insured deposits or accounts, or (C) the payment of principal or interest on such bond is otherwise indirectly guaranteed (in whole or in part) by the United States (or an agency or instrumentality thereof). (3) Exceptions (A) Certain insurance programs A bond shall not be treated as federally guaranteed by reason of— (i) any guarantee by the Federal Housing Administration, the Department of Vet- erans Affairs, the Federal National Mort- gage Association, the Federal Home Loan Mortgage Corporation, or the Government National Mortgage Association, (ii) any guarantee of student loans and any guarantee by the Student Loan Mar- keting Association to finance student loans, (iii) any guarantee by the Bonneville Power Authority pursuant to the North- west Power Act (16 U.S.C. 839d) as in effect on the date of the enactment of the Tax Reform Act of 1984, or (iv) subject to subparagraph (E), any guarantee by a Federal home loan bank made in connection with the original issuance of a bond during the period begin- ning on the date of the enactment of this clause and ending on December 31, 2010 (or a renewal or extension of a guarantee so made). (B) Debt service, etc. Paragraph (1) shall not apply to— (i) proceeds of the issue invested for an initial temporary period until such pro- ceeds are needed for the purpose for which such issue was issued, (ii) investments of a bona fide debt serv- ice fund, (iii) investments of a reserve which meet the requirements of section 148(d), (iv) investments in bonds issued by the United States Treasury, or (v) other investments permitted under regulations. (C) Exception for housing programs (i) In general Except as provided in clause (ii), para- graph (1) shall not apply to— (I) a private activity bond for a quali- fied residential rental project or a hous- ing program obligation under section 11(b) of the United States Housing Act of 1937, Page 707 TITLE 26—INTERNAL REVENUE CODE § 149 (II) a qualified mortgage bond, or (III) a qualified veterans’ mortgage bond. (ii) Exception not to apply where bond in- vested in federally insured deposits or accounts Clause (i) shall not apply to any bond which is federally guaranteed within the meaning of paragraph (2)(B)(ii). (D) Loans to, or guarantees by, financial in- stitutions Except as provided in paragraph (2)(B)(ii), a bond which is issued as part of an issue shall not be treated as federally guaranteed merely by reason of the fact that the pro- ceeds of such issue are used in making loans to a financial institution or there is a guar- antee by a financial institution unless such guarantee constitutes a federally insured de- posit or account. (E) Safety and soundness requirements for Federal home loan banks Clause (iv) of subparagraph (A) shall not apply to any guarantee by a Federal home loan bank unless such bank meets safety and soundness collateral requirements for such guarantees which are at least as stringent as such requirements which apply under regu- lations applicable to such guarantees by Federal home loan banks as in effect on April 9, 2008. (4) Definitions For purposes of this subsection— (A) Treatment of certain entities with au- thority to borrow from United States To the extent provided in regulations pre- scribed by the Secretary, any entity with statutory authority to borrow from the United States shall be treated as an instru- mentality of the United States. Except in the case of an exempt facility bond, a quali- fied small issue bond, and a qualified student loan bond, nothing in the preceding sentence shall be construed as treating the District of Columbia or any possession of the United States as an instrumentality of the United States. (B) Federally insured deposit or account The term ‘‘federally insured deposit or ac- count’’ means any deposit or account in a fi- nancial institution to the extent such de- posit or account is insured under Federal law by the Federal Deposit Insurance Cor- poration, the Federal Savings and Loan In- surance Corporation, the National Credit Union Administration, or any similar feder- ally chartered corporation. (c) Tax exemption must be derived from this title (1) General rule Except as provided in paragraph (2), no in- terest on any bond shall be exempt from tax- ation under this title unless such interest is exempt from tax under this title without re- gard to any provision of law which is not con- tained in this title and which is not contained in a revenue Act. (2) Certain prior exemptions (A) Prior exemptions continued For purposes of this title, notwithstanding any provision of this part, any bond the in- terest on which is exempt from taxation under this title by reason of any provision of law (other than a provision of this title) which is in effect on January 6, 1983, shall be treated as a bond described in section 103(a). (B) Additional requirements for bonds issued after 1983 Subparagraph (A) shall not apply to a bond (not described in subparagraph (C)) issued after 1983 if the appropriate requirements of this part (or the corresponding provisions of prior law) are not met with respect to such bond. (C) Description of bond A bond is described in this subparagraph (and treated as described in subparagraph (A)) if— (i) such bond is issued pursuant to the Northwest Power Act (16 U.S.C. 839d), as in effect on July 18, 1984; (ii) such bond is issued pursuant to sec- tion 608(a)(6)(A) of Public Law 97–468, as in effect on the date of the enactment of the Tax Reform Act of 1986; or (iii) such bond is issued before June 19, 1984 under section 11(b) of the United States Housing Act of 1937. (d) Advance refundings (1) In general Nothing in section 103(a) or in any other pro- vision of law shall be construed to provide an exemption from Federal income tax for inter- est on any bond issued to advance refund an- other bond. (2) Advance refunding For purposes of this part, a bond shall be treated as issued to advance refund another bond if it is issued more than 90 days before the redemption of the refunded bond. (3) Regulations The Secretary shall prescribe such regula- tions as may be necessary or appropriate to carry out the purposes of this subsection. (e) Information reporting (1) In general Nothing in section 103(a) or any other provi- sion of law shall be construed to provide an ex- emption from Federal income tax for interest on any bond unless such bond satisfies the re- quirements of paragraph (2). (2) Information reporting requirements A bond satisfies the requirements of this paragraph if the issuer submits to the Sec- retary, not later than the 15th day of the 2d calendar month after the close of the calendar quarter in which the bond is issued (or such later time as the Secretary may prescribe with respect to any portion of the statement), a statement concerning the issue of which the bond is a part which contains— (A) the name and address of the issuer, Page 708 TITLE 26—INTERNAL REVENUE CODE § 149 (B) the date of issue, the amount of net proceeds of the issue, the stated interest rate, term, and face amount of each bond which is part of the issue, the amount of issuance costs of the issue, and the amount of reserves of the issue, (C) where required, the name of the appli- cable elected representative who approved the issue, or a description of the voter ref- erendum by which the issue was approved, (D) the name, address, and employer iden- tification number of— (i) each initial principal user of any fa- cility provided with the proceeds of the issue, (ii) the common parent of any affiliated group of corporations (within the meaning of section 1504(a)) of which such initial principal user is a member, and (iii) if the issue is treated as a separate issue under section 144(a)(6)(A), any person treated as a principal user under section 144(a)(6)(B), (E) a description of any property to be fi- nanced from the proceeds of the issue, (F) a certification by a State official des- ignated by State law (or, where there is no such official, the Governor) that the bond meets the requirements of section 146 (relat- ing to cap on private activity bonds), if ap- plicable, and (G) such other information as the Sec- retary may require. Subparagraphs (C) and (D) shall not apply to any bond which is not a private activity bond. The Secretary may provide that certain infor- mation specified in the 1st sentence need not be included in the statement with respect to an issue where the inclusion of such informa- tion is not necessary to carry out the purposes of this subsection. (3) Extension of time The Secretary may grant an extension of time for the filing of any statement required under paragraph (2) if the failure to file in a timely fashion is not due to willful neglect. (f) Treatment of certain pooled financing bonds (1) In general Section 103(a) shall not apply to any pooled financing bond unless, with respect to the issue of which such bond is a part, the require- ments of paragraphs (2), (3), (4), and (5) are met. (2) Reasonable expectation requirement (A) In general The requirements of this paragraph are met with respect to an issue if the issuer reasonably expects that— (i) as of the close of the 1-year period be- ginning on the date of issuance of the issue, at least 30 percent of the net pro- ceeds of the issue (as of the close of such period) will have been used directly or in- directly to make or finance loans to ulti- mate borrowers, and (ii) as of the close of the 3-year period beginning on such date of issuance, at least 95 percent of the net proceeds of the issue (as of the close of such period) will have been so used. (B) Certain factors may not be taken into ac- count in determining expectations Expectations as to changes in interest rates or in the provisions of this title (or in the regulations or rulings thereunder) may not be taken into account in determining whether expectations are reasonable for pur- poses of this paragraph. (C) Net proceeds For purposes of subparagraph (A), the term ‘‘net proceeds’’ has the meaning given such term by section 150 but shall not include proceeds used to finance issuance costs and shall not include proceeds necessary to pay interest (during such period) on the bonds which are part of the issue. (D) Refunding bonds For purposes of subparagraph (A), in the case of a refunding bond, the date of issuance taken into account is the date of issuance of the original bond. (3) Cost of issuance payment requirements The requirements of this paragraph are met with respect to an issue if— (A) the payment of legal and underwriting costs associated with the issuance of the issue is not contingent, and (B) at least 95 percent of the reasonably expected legal and underwriting costs asso- ciated with the issuance of the issue are paid not later than the 180th day after the date of the issuance of the issue. (4) Written loan commitment requirement (A) In general The requirement of this paragraph is met with respect to an issue if the issuer receives prior to issuance written loan commitments identifying the ultimate potential borrowers of at least 30 percent of the net proceeds of such issue. (B) Exception Subparagraph (A) shall not apply with re- spect to any issuer which— (i) is a State (or an integral part of a State) issuing pooled financing bonds to make or finance loans to subordinate gov- ernmental units of such State, or (ii) is a State-created entity providing fi- nancing for water-infrastructure projects through the federally-sponsored State re- volving fund program. (5) Redemption requirement The requirement of this paragraph is met if to the extent that less than the percentage of the proceeds of an issue required to be used under clause (i) or (ii) of paragraph (2)(A) is used by the close of the period identified in such clause, the issuer uses an amount of pro- ceeds equal to the excess of— (A) the amount required to be used under such clause, over (B) the amount actually used by the close of such period, Page 709 TITLE 26—INTERNAL REVENUE CODE § 149 to redeem outstanding bonds within 90 days after the end of such period. (6) Pooled financing bond For purposes of this subsection— (A) In general The term ‘‘pooled financing bond’’ means any bond issued as part of an issue more than $5,000,000 of the proceeds of which are reasonably expected (at the time of the issuance of the bonds) to be used (or are in- tentionally used) directly or indirectly to make or finance loans to 2 or more ultimate borrowers. (B) Exceptions Such term shall not include any bond if— (i) section 146 applies to the issue of which such bond is a part (other than by reason of section 141(b)(5)) or would apply but for section 146(i), or (ii) section 143(l)(3) applies to such issue. (7) Definition of loan; treatment of mixed use issues (A) Loan For purposes of this subsection, the term ‘‘loan’’ does not include— (i) any loan which is a nonpurpose in- vestment (within the meaning of section 148(f)(6)(A), determined without regard to section 148(b)(3)), and (ii) any use of proceeds by an agency of the issuer unless such agency is a political subdivision or instrumentality of the issuer. (B) Portion of issue to be used for loans treated as separate issue If only a portion of the proceeds of an issue is reasonably expected (at the time of issuance of the bond) to be used (or is inten- tionally used) as described in paragraph (6)(A), such portion and the other portion of such issue shall be treated as separate issues for purposes of determining whether such portion meets the requirements of this sub- section. (g) Treatment of hedge bonds (1) In general Section 103(a) shall not apply to any hedge bond unless, with respect to the issue of which such bond is a part— (A) the requirement of paragraph (2) is met, and (B) the requirement of subsection (f)(3) is met. (2) Reasonable expectations as to when pro- ceeds will be spent An issue meets the requirement of this para- graph if the issuer reasonably expects that— (A) 10 percent of the spendable proceeds of the issue will be spent for the governmental purposes of the issue within the 1-year pe- riod beginning on the date the bonds are issued, (B) 30 percent of the spendable proceeds of the issue will be spent for such purposes within the 2-year period beginning on such date, (C) 60 percent of the spendable proceeds of the issue will be spent for such purposes within the 3-year period beginning on such date, and (D) 85 percent of the spendable proceeds of the issue will be spent for such purposes within the 5-year period beginning on such date. (3) Hedge bond (A) In general For purposes of this subsection, the term ‘‘hedge bond’’ means any bond issued as part of an issue unless— (i) the issuer reasonably expects that 85 percent of the spendable proceeds of the issue will be used to carry out the govern- mental purposes of the issue within the 3- year period beginning on the date the bonds are issued, and (ii) not more than 50 percent of the pro- ceeds of the issue are invested in nonpur- pose investments (as defined in section 148(f)(6)(A)) having a substantially guaran- teed yield for 4 years or more. (B) Exception for investment in tax-exempt bonds not subject to minimum tax (i) In general Such term shall not include any bond issued as part of an issue 95 percent of the net proceeds of which are invested in bonds— (I) the interest on which is not includ- ible in gross income under section 103, and (II) which are not specified private ac- tivity bonds (as defined in section 57(a)(5)(C)). (ii) Amounts in bona fide debt service fund Amounts in a bona fide debt service fund shall be treated as invested in bonds de- scribed in clause (i). (iii) Amounts held pending reinvestment or redemption Amounts held for not more than 30 days pending reinvestment or bond redemption shall be treated as invested in bonds de- scribed in clause (i). (C) Exception for refunding bonds (i) In general A refunding bond shall be treated as meeting the requirements of this sub- section only if the original bond met such requirements. (ii) General rule for refunding of pre-effec- tive date bonds A refunding bond shall be treated as meeting the requirements of this sub- section if— (I) this subsection does not apply to the original bond, (II) the average maturity date of the issue of which the refunding bond is a part is not later than the average matu- rity date of the bonds to be refunded by such issue, and (III) the amount of the refunding bond does not exceed the outstanding amount of the refunded bond. Page 710 TITLE 26—INTERNAL REVENUE CODE § 149 (iii) Refunding of pre-effective date bonds entitled to 5-year temporary period A refunding bond shall be treated as meeting the requirements of this sub- section if— (I) this subsection does not apply to the original bond, (II) the issuer reasonably expected that 85 percent of the spendable proceeds of the issue of which the original bond is a part would be used to carry out the gov- ernmental purposes of the issue within the 5-year period beginning on the date the original bonds were issued but did not reasonably expect that 85 percent of such proceeds would be so spent within the 3-year period beginning on such date, and (III) at least 85 percent of the spend- able proceeds of the original issue (and all other prior original issues issued to finance the governmental purposes of such issue) were spent before the date the refunding bonds are issued. (4) Special rules For purposes of this subsection— (A) Construction period in excess of 5 years The Secretary may, at the request of any issuer, provide that the requirement of para- graph (2) shall be treated as met with re- spect to the portion of the spendable pro- ceeds of an issue which is to be used for any construction project having a construction period in excess of 5 years if it is reasonably expected that such proceeds will be spent over a reasonable construction schedule specified in such request. (B) Rules for determining expectations The rules of subsection (f)(2)(B) shall apply. (5) Regulations The Secretary may prescribe regulations to prevent the avoidance of the rules of this sub- section, including through the aggregation of projects within a single issue. (Added Pub. L. 99–514, title XIII, § 1301(b), Oct. 22, 1986, 100 Stat. 2646; amended Pub. L. 100–647, title I, § 1013(a)(20)–(22), title V, § 5051(a), Nov. 10, 1988, 102 Stat. 3542, 3676; Pub. L. 101–239, title VII, § 7651(a), Dec. 19, 1989, 103 Stat. 2383; Pub. L. 104–188, title I, § 1704(b)(1), Aug. 20, 1996, 110 Stat. 1878; Pub. L. 109–222, title V, § 508(a), (b), (d)(1), (2), May 17, 2006, 120 Stat. 361, 362; Pub. L. 110–289, div. C, title I, § 3023(a), (b), July 30, 2008, 122 Stat. 2894, 2895; Pub. L. 111–147, title V, § 502(a)(2)(A), Mar. 18, 2010, 124 Stat. 107; Pub. L. 115–97, title I, § 13532(a), (b)(1), Dec. 22, 2017, 131 Stat. 2154; Pub. L. 115–141, div. U, title IV, § 401(a)(2)(A), Mar. 23, 2018, 132 Stat. 1184.) Editorial Notes REFERENCES IN TEXT The Northwest Power Act, referred to in subsecs. (b)(3)(A)(iii) and (c)(2)(C)(i), probably means the Pacific Northwest Electric Power Planning and Conservation Act, Pub. L. 96–501, Dec. 5, 1980, 94 Stat 2697, which is classified principally to chapter 12H (§ 839 et seq.) of Title 16, Conservation. For complete classification of this Act to the Code, see Short Title note set out under section 839 of Title 16 and Tables. The date of the enactment of the Tax Reform Act of 1984, referred to in subsec. (b)(3)(A)(iii), is the date of enactment of Pub. L. 98–369, div. A, which was approved July 18, 1984. The date of the enactment of this clause, referred to in subsec. (b)(3)(A)(iv), is the date of enactment of Pub. L. 110–289, which was approved July 30, 2008. Section 11(b) of the United States Housing Act of 1937, referred to in subsecs. (b)(3)(C)(i)(I) and (c)(2)(C)(iii), is classified to section 1473i(b) of Title 42, The Public Health and Welfare. Section 608(a)(6)(A) of Pub. L. 97–468, referred to in subsec. (c)(2)(C)(ii), is classified to section 1207(a)(6)(A) of Title 45, Railroads. The date of the enactment of the Tax Reform Act of 1986, referred to in subsec. (c)(2)(C)(ii), is the date of en- actment of Pub. L. 99–514, which was approved Oct. 22, 1986. AMENDMENTS 2018—Subsec. (b)(3)(A)(i). Pub. L. 115–141 substituted ‘‘Department of Veterans Affairs’’ for ‘‘Veterans’ Ad- ministration’’. 2017—Subsec. (d)(1). Pub. L. 115–97, § 13532(a), sub- stituted ‘‘to advance refund another bond.’’ for ‘‘as part of an issue described in paragraph (2), (3), or (4).’’ Subsec. (d)(2) to (7). Pub. L. 115–97, § 13532(b)(1), redes- ignated pars. (5) and (7) as (2) and (3), respectively, and struck out former pars. (2), (3), (4), and (6) which de- scribed issuing of certain private activity bonds, other refunding bonds, and bonds involved in abusive trans- actions and provided special rules for refunding occur- ring and for bonds issued before 1986. 2010—Subsec. (a)(2). Pub. L. 111–147 inserted ‘‘or’’ at end of subpar. (A), substituted period for ‘‘, or’’ in sub- par. (B), and struck out subpar. (C) which read as fol- lows: ‘‘is described in section 163(f)(2)(B).’’ 2008—Subsec. (b)(3)(A)(iv). Pub. L. 110–289, § 3023(a), added cl. (iv). Subsec. (b)(3)(E). Pub. L. 110–289, § 3023(b), added sub- par. (E). 2006—Subsec. (f)(1). Pub. L. 109–222, § 508(d)(1), sub- stituted ‘‘paragraphs (2), (3), (4), and (5)’’ for ‘‘para- graphs (2) and (3)’’. Subsec. (f)(2)(A). Pub. L. 109–222, § 508(a), amended subpar. (A) generally. Prior to amendment, text read as follows: ‘‘The requirements of this paragraph are met with respect to an issue if the issuer reasonably expects that as of the close of the 3-year period beginning on the date of issuance of the issue, at least 95 percent of the net proceeds of the issue (as of the close of such pe- riod) will have been used directly or indirectly to make or finance loans to ultimate borrowers.’’ Subsec. (f)(4) to (6). Pub. L. 109–222, § 508(b), added pars. (4) and (5) and redesignated former par. (4) as (6). Former par. (5) redesignated (7). Subsec. (f)(7). Pub. L. 109–222, § 508(b), redesignated par. (5) as (7). Subsec. (f)(7)(B). Pub. L. 109–222, § 508(d)(2), sub- stituted ‘‘paragraph (6)(A)’’ for ‘‘paragraph (4)(A)’’. 1996—Subsec. (g)(3)(B)(iii). Pub. L. 104–188 amended cl. (iii) generally. Prior to amendment, cl. (iii) read as fol- lows: ‘‘INVESTMENT EARNINGS HELD PENDING REINVEST- MENT.—Investment earnings held for not more than 30 days pending reinvestment shall be treated as invested in bonds described in clause (i).’’ 1989—Subsec. (g). Pub. L. 101–239 added subsec. (g). 1988—Subsec. (b)(3)(A)(iii). Pub. L. 100–647, § 1013(a)(20), struck out ‘‘with respect to any bond issued before July 1, 1989’’ after ‘‘1984’’. Subsec. (b)(4)(A). Pub. L. 100–647, § 1013(a)(21), sub- stituted ‘‘and a qualified student loan bond’’ for ‘‘a qualified student loan bond, and a qualified redevelop- ment bond’’. Subsec. (e)(3). Pub. L. 100–647, § 1013(a)(22), substituted ‘‘the failure to file in a timely fashion is not due to willful neglect’’ for ‘‘there is reasonable cause for the failure to file such statement in a timely fashion’’. Page 711 TITLE 26—INTERNAL REVENUE CODE § 150 Subsec. (f). Pub. L. 100–647, § 5051(a), added subsec. (f). Statutory Notes and Related Subsidiaries EFFECTIVE DATE OF 2017 AMENDMENT Amendment by Pub. L. 115–97 applicable to advance refunding bonds issued after Dec. 31, 2017, see section 13532(c) of Pub. L. 115–97, set out as a note under section 148 of this title. EFFECTIVE DATE OF 2010 AMENDMENT Pub. L. 111–147, title V, § 502(f), Mar. 18, 2010, 124 Stat. 108, provided that: ‘‘The amendments made by this sec- tion [amending this section, sections 163, 165, 871, 881, 1287, and 4701 of this title, and section 3121 of Title 31, Money and Finance] shall apply to obligations issued after the date which is 2 years after the date of the en- actment of this Act [Mar. 18, 2010].’’ EFFECTIVE DATE OF 2008 AMENDMENT Pub. L. 110–289, div. C, title I, § 3023(c), July 30, 2008, 122 Stat. 2895, provided that: ‘‘The amendments made by this section [amending this section] shall apply to guarantees made after the date of the enactment of this Act [July 30, 2008].’’ EFFECTIVE DATE OF 2006 AMENDMENT Amendment by Pub. L. 109–222 applicable to bonds issued after May 17, 2006, see section 508(e) of Pub. L. 109–222, set out as a note under section 148 of this title. EFFECTIVE DATE OF 1996 AMENDMENT Pub. L. 104–188, title I, § 1704(b)(2), Aug. 20, 1996, 110 Stat. 1878, provided that: ‘‘The amendment made by paragraph (1) [amending this section] shall take effect as if included in the amendments made by section 7651 of the Omnibus Budget Reconciliation Act of 1989 [Pub. L. 101–239].’’ EFFECTIVE DATE OF 1989 AMENDMENT Pub. L. 101–239, title VII, § 7651(b), Dec. 19, 1989, 103 Stat. 2385, provided that: ‘‘(1) IN GENERAL.—Except as otherwise provided in this subsection, the amendment made by subsection (a) [amending this section] shall apply to bonds issued after September 14, 1989. ‘‘(2) BONDS SOLD BEFORE SEPTEMBER 15, 1989.—The amendment made by subsection (a) shall not apply to any bond sold before September 15, 1989, and issued be- fore October 15, 1989. ‘‘(3) BONDS WITH RESPECT TO WHICH PRELIMINARY OF- FERING MATERIALS MAILED.—The amendment made by subsection (a) shall not apply to any issue issued after the date of the enactment of this Act [Dec. 19, 1989] if the preliminary offering materials with respect to such issue were mailed (or otherwise delivered) to members of the underwriting syndicate before September 15, 1989. ‘‘(4) CERTAIN OTHER BONDS.—In the case of a bond issued before January 1, 1991, with respect to which of- ficial action was taken (or a series of official actions were taken), or other comparable preliminary approval was given, before November 18, 1989, demonstrating an intent to issue such bonds in a maximum specified amount for such issue or with a maximum specified amount of net proceeds of such issue, the issuer may elect to apply section 149(g)(2) of the Internal Revenue Code of 1986 (as added by this section) by substituting ‘15 percent’ for ‘10 percent’ in subparagraph (A) and ‘50 percent’ for ‘60 percent’ in subparagraph (C). ‘‘(5) BONDS ISSUED TO FINANCE SELF-INSURANCE FUNDS.—The amendment made by subsection (a) shall not apply to any bonds issued before July 1, 1990, to fi- nance a self-insurance fund if official action was taken (or a series of official actions were taken), or other comparable preliminary approval was given, before September 15, 1989, demonstrating an intent to issue such bonds in a maximum specified amount for such issue or with a maximum specified amount of net pro- ceeds of such issue.’’ EFFECTIVE DATE OF 1988 AMENDMENT Amendment by section 1013(a)(20)–(22) of Pub. L. 100–647 effective, except as otherwise provided, as if in- cluded in the provision of the Tax Reform Act of 1986, Pub. L. 99–514, to which such amendment relates, see section 1019(a) of Pub. L. 100–647, set out as a note under section 1 of this title. Pub. L. 100–647, title V, § 5051(b), Nov. 10, 1988, 102 Stat. 3677, provided that: ‘‘(1) IN GENERAL.—The amendment made by sub- section (a) [amending this section] shall apply to bonds issued after October 21, 1988. ‘‘(2) SPECIAL RULE FOR REFUNDING BONDS.—In the case of a bond issued to refund a bond issued before October 22, 1988— ‘‘(A) if the 3-year period described in section 149(f)(2)(A) of the 1986 Code would (but for this para- graph) expire on or before October 22, 1989, such pe- riod shall expire on October 21, 1990, and ‘‘(B) if such period expires after October 22, 1989, the portion of the proceeds of the issue of which the re- funded bond is a part which is available (on the date of issuance of the refunding issue) to provide loans shall be treated as proceeds of a separate issue (issued after October 21, 1988) for purposes of applying section 149(f) of the 1986 Code.’’ EFFECTIVE DATE Subsec. (e) applicable to bonds issued after Dec. 31, 1986, see section 1311(d) of Pub. L. 99–514, as amended, set out as an Effective Date; Transitional Rules note under section 141 of this title. TRANSFER OF FUNCTIONS Federal Savings and Loan Insurance Corporation abolished and its functions transferred, see sections 401 to 406 of Pub. L. 101–73 set out as a note under section 1437 of Title 12, Banks and Banking. SUBPART C—DEFINITIONS AND SPECIAL RULES Sec. 150. Definitions and special rules. § 150. Definitions and special rules (a) General rule For purposes of this part— (1) Bond The term ‘‘bond’’ includes any obligation. (2) Governmental unit not to include Federal Government The term ‘‘governmental unit’’ does not in- clude the United States or any agency or in- strumentality thereof. (3) Net proceeds The term ‘‘net proceeds’’ means, with re- spect to any issue, the proceeds of such issue reduced by amounts in a reasonably required reserve or replacement fund. (4) 501(c)(3) organization The term ‘‘501(c)(3) organization’’ means any organization described in section 501(c)(3) and exempt from tax under section 501(a). (5) Ownership of property Property shall be treated as owned by a gov- ernmental unit if it is owned on behalf of such unit. (6) Tax-exempt bond The term ‘‘tax-exempt’’ means, with respect to any bond (or issue), that the interest on