Page:United States Statutes at Large Volume 104 Part 2.djvu/917

 PUBLIC LAW 101-508—NOV. 5, 1990 104 STAT. 1388-509 anticipated as of the date of issuance, shall not be considered gross proceeds for purposes of subclause (I) only." (3) Paragraph (4) of section 148(f) is amended— (A) by redesignating subparagraphs (C) and (D) as subparagraphs (D) and (E), respectively, and (B) by inserting after subparagraph (B) the following new subparagraph: "(C) EXCEPTION FROM REBATE FOR CERTAIN PROCEEDS TO BE USED TO FINANCE CONSTRUCTION EXPENDITURES.— "(i) IN GENERAL. —I h the CEise of a construction issue, paragraph (2) shall not apply to the available construction proceeds of such issue if the spending requirements of clause (ii) are met. " (ii) SPENDING REQUIREMENTS. —The spending requirements of this clause are met if at least— "(I) 10 percent of the available construction proceeds of the construction issue are spent for the governmental purposes of the issue within the 6- month period beginning on the date the bonds are issued, "(II) 45 percent of such proceeds are spent for such purposes within the 1-year period beginning on such date, "(III) 75 percent of such proceeds are spent for such purposes within the 18-month period beginning on such date, and "(IV) 100 percent of such proceeds are spent for such purposes within the 2-year period beginning on such date. "(iii) EXCEPTION FOR REASONABLE RETAINAGE.—The spending requirement of clause (ii)(IV) shall be treated as met if— "(I) such requirement would be met at the close of such 2-year period but for a reasonable retainage (not exceeding 5 percent of the available construction proceeds of the construction issue), and "(II) 100 percent of the available construction proceeds of the construction issue are spent for the governmental purposes of the issue within the 3- year period beginning on the date the bonds are issued. "(iv) CONSTRUCTION ISSUE. —For purposes of this subparagraph, the term 'construction issue' means any issue if— "(I) at least 75 percent of the available construction proceeds of such issue are to be used for construction expenditures with respect to property which is to be owned by a governmental unit or a 501(c)(3) organization, and "(II) all of the bonds which are part of such issue are qualified 501(c)(3) bonds, bonds which are not private activity bonds, or private activity bonds issued to finance property to be owned by a governmental unit or a 501(c)(3) organization. For purposes of this subparagraph, the term 'construction' includes reconstruction and rehabilitation, and

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