Page:United States Statutes at Large Volume 119.djvu/2609

 PUBLIC LAW 109–135—DEC. 21, 2005

119 STAT. 2591

‘‘(A) IN GENERAL.—The term ‘qualified bond’ means any obligation of a State or political subdivision thereof which was outstanding on August 28, 2005. ‘‘(B) EXCEPTION FOR PRIVATE ACTIVITY BONDS.—Such term shall not include any private activity bond. ‘‘(C) EXCEPTION FOR ADVANCE REFUNDINGS.—Such term shall not include any bond with respect to which there is any outstanding refunded or refunding bond during the period in which a Gulf tax credit bond is outstanding with respect to such bond. ‘‘(D) USE OF PROCEEDS REQUIREMENT.—Such term shall not include any bond issued as part of an issue if any portion of the proceeds of such issue was (or is to be) used to provide any property described in section 144(c)(6)(B). ‘‘(6) CREDIT INCLUDED IN GROSS INCOME.—Gross income includes the amount of the credit allowed to the taxpayer under this subsection (determined without regard to paragraph (3)) and the amount so included shall be treated as interest income. ‘‘(7) OTHER DEFINITIONS AND SPECIAL RULES.—For purposes of this subsection— ‘‘(A) BOND.—The term ‘bond’ includes any obligation. ‘‘(B) PARTNERSHIP; S CORPORATION; AND OTHER PASSTHRU ENTITIES.— ‘‘(i) IN GENERAL.—Under regulations prescribed by the Secretary, in the case of a partnership, trust, S corporation, or other pass-thru entity, rules similar to the rules of section 41(g) shall apply with respect to the credit allowable under paragraph (1). ‘‘(ii) NO BASIS ADJUSTMENT.—In the case of a bond held by a partnership or an S corporation, rules similar to the rules under section 1397E(i) shall apply. ‘‘(C) BONDS HELD BY REGULATED INVESTMENT COMPANIES.—If any Gulf tax credit bond is held by a regulated investment company, the credit determined under paragraph (1) shall be allowed to shareholders of such company under procedures prescribed by the Secretary. ‘‘(D) REPORTING.—Issuers of Gulf tax credit bonds shall submit reports similar to the reports required under section 149(e). ‘‘(E) CREDIT TREATED AS NONREFUNDABLE BONDHOLDER CREDIT.—For purposes of this title, the credit allowed by this subsection shall be treated as a credit allowable under subpart H of part IV of subchapter A of this chapter. ‘‘(m) APPLICATION OF NEW MARKETS TAX CREDIT TO INVESTMENTS IN COMMUNITY DEVELOPMENT ENTITIES SERVING GULF OPPORTUNITY ZONE.—For purposes of section 45D— ‘‘(1) a qualified community development entity shall be eligible for an allocation under subsection (f)(2) thereof of the increase in the new markets tax credit limitation described in paragraph (2) only if a significant mission of such entity is the recovery and redevelopment of the Gulf Opportunity Zone, ‘‘(2) the new markets tax credit limitation otherwise determined under subsection (f)(1) thereof shall be increased by an amount equal to—

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