H. R. 6560
IN THE HOUSE OF REPRESENTATIVES
September 25, 2012
Mr. Coffman of Colorado introduced the following bill; which was referred to the Committee on Ways and Means
To amend the Internal Revenue Code of 1986 to allow an additional advance refunding for certain tax-exempt bonds.
This Act may be cited as the
Local Schools and Infrastructure
Improvement Act of 2012.
Additional advance refunding of certain tax-exempt bonds
Clause (i) of section 149(d)(3)(A) of the Internal Revenue Code of 1986 is amended to read as follows:
the refunding bond is only the 1st or 2nd advance refunding of the original bond,
Advance refunding bond requirements
Subparagraph (A) of section 149(d)(3) of such Code is
amended by striking
and at the end of clause (iv), by striking
the period at the end of clause (v), and by adding at the end the following new
in the case of the 2nd advance refunding of the original bond—
the issuer is projected to realize present value debt service savings (determined without regard to administrative expenses) in connection with the issue of which the refunding bond is a part,
the average maturity date of the issue of which the refunding bond is a part is not later than the average maturity date of the bonds to be refunded by such issue, and
the amount of the refunding bond does not exceed the outstanding amount of the refunded bond.
Paragraph (3) of section 149(d) of such Code is amended by adding after subparagraph (B) the following new subparagraph:
Special rule for 2nd advance refundings
Clause (vi) of subparagraph (A) shall not apply in the case of a 2nd advance refunding if—
the original bond has been redeemed, or
the issuer determines that the 2nd advance refunding is necessary to avoid or terminate a default in the payment of debt service on the refunded bond.
The amendment made by this section shall apply to refunding bonds issued on or after the date of the enactment of this Act.