Page:United States Statutes at Large Volume 100 Part 3.djvu/839

 PUBLIC LAW 99-514—OCT. 22, 1986

100 STAT. 2647

"(2) REGISTRATION-REQUIRED BOND.—For purposes of paragraph (1), the term 'registration-required bond' means any bond other than a bond which— "(A) is not of a type offered to the public, "(B) has a maturity (at issue) of not more than 1 year, or r "(C) is described in section 163(fK2XB). "(3) SPECIAL RULES.— "(A) BOOK ENTRIES PERMITTED.—For purposes of para-


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graph (1), a book entry bond shall be treated as in registered form if the right to the principal of, and stated interest on, such bond may be transferred only through a book entry consistent with regulations prescribed by the Secretary. "(B) NOMINEES.—The Secretary shall prescribe such regulations 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 guaranteed. "(2) FEDERALLY GUARANTEED DEFINED.—For purposes of paragraph (1), a bond is federally 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 instrumentality 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

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treated as federally guaranteed by reason of— "(i) any guarantee by the Federal Housing Administration, the Veterans' Administration, the Federal National Mortgage 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 Marketing Association to finance student loans, or "(iii) any guarantee by the Bonneville Power Authority pursuant to the Northwest Power Act (16 U.S.C. 839d) as in effect on the date of the enactment of the Tax Reform Act of 1984 with respect to any bond issued before July 1, 1989. "(B) DEBT SERVICE, ETC.—Paragraph (1) shall not apply to— "(i) proceeds of the issue invested for an initial temporary period until such proceeds are needed for the purpose for which such issue was issued,

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