Page:United States Statutes at Large Volume 100 Part 3.djvu/840

 100 STAT. 2648

PUBLIC LAW 99-514—OCT. 22, 1986

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"(ii) investments of a bona fide debt service 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.—

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"(i) IN GENERAL.—Except as provided in clause (ii), paragraph (1) shall not apply to— "(I) a private activity bond for a qualified residential rental project or a housing program obliga• tion under section 11(b) of the United States Housing Act of 1937, "(II) a qualified mortgage bond, or "(III) a qualified veterans' mortgage bond. "(ii) EXCEPTION NOT TO APPLY WHERE BOND INVESTED 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 INSTITU-

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TIONS.—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 proceeds of such issue are used in making loans to a financial institution or there is a guarantee by a financial institution unless such guarantee constitutes a federally insured deposit or account. "(4) DEFINITIONS.—For purposes of this subsection—

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"(A) TREATMENT OF CERTAIN ENTITIES WITH AUTHORITY TO

BORROW FROM UNITED STATES.—To the extent provided in regulations prescribed by the Secretary, any entity with be treated as an instrumentality of the United States. Except in the case of an exempt facility bond, a qualified » small issue bond, a qualified student loan bond, and a qualified redevelopment bond, nothing in the preceding sentence shall be construed as treating the District of instrumentality of the United States. "' "(B) FEDERALLY INSURED DEPOSIT OR ACCOUNT.—The term 'federally insured deposit or account' means any deposit or account in a financial institution to the extent such deposit or account is insured under Federal law by the Federal Deposit Insurance Corporation, the Federal Savings and '^" Loan Insurance Corporation, the National Credit Union ' ' ' Administration, or any similar federally chartered corporation. "(c) TAX EXEMPTION MUST B E DERIVED FROM THIS TITLE.— "(1) GENERAL RULE.—Except as provided in paragraph (2), no
 * -•> ^^ statutory authority to borrow from the United States shall
 * '-' > ' Columbia or any possession of the United States as an

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interest on any bond shall be exempt from taxation under this title unless such interest is exempt from tax^ under this title without regard to any provision of law which is not contained in this title and which is not contained in a revenue Act. "(2) CERTAIN PRIOR EXEMPTIONS.— "(A) PRIOR EXEMPTIONS CONTINUED.—For purposes of this

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title, notwithstanding any provision of this part, any bond the interest on which is exempt from taxation under this

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