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[Congressional Bills 117th Congress]
[From the U.S. Government Publishing Office]
[H.R. 2288 Introduced in House (IH)]

<DOC>

117th CONGRESS
  1st Session
                                H. R. 2288

    To amend the Internal Revenue Code of 1986 to reinstate advance 
                            refunding bonds.

_______________________________________________________________________

                    IN THE HOUSE OF REPRESENTATIVES

                             March 29, 2021

Mr. Ruppersberger (for himself, Mr. Stivers, Mr. Garamendi, Mr. Zeldin, 
 Mr. Fitzpatrick, Mr. Barr, Mrs. Beatty, Ms. Sewell, Ms. Brownley, Ms. 
   Norton, Mr. Blumenauer, Mrs. Axne, Mr. Garbarino, Mr. Kildee, Mr. 
McGovern, Mr. Cuellar, Ms. Stevens, Mr. Connolly, Ms. Chu, Mr. Panetta, 
 Mr. Kilmer, Mr. Phillips, Mr. Upton, and Mr. Kustoff) introduced the 
 following bill; which was referred to the Committee on Ways and Means

_______________________________________________________________________

                                 A BILL

 
    To amend the Internal Revenue Code of 1986 to reinstate advance 
                            refunding bonds.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Investing in Our Communities Act''.

SEC. 2. TREATMENT OF ADVANCE REFUNDING BONDS.

    (a) In General.--Section 149(d) of the Internal Revenue Code of 
1986 is amended--
            (1) in paragraph (1), by striking ``to advance refund 
        another bond'' and inserting ``as part of an issue described in 
        paragraph (2), (3), or (4)'';
            (2) by redesignating paragraphs (2) and (3) as paragraphs 
        (6) and (7), respectively; and
            (3) by inserting after paragraph (1) the following new 
        paragraphs:
            ``(2) Certain private activity bonds.--An issue is 
        described in this paragraph if any bond (issued as part of such 
        issue) is issued to advance refund a private activity bond 
        (other than a qualified 501(c)(3) bond).
            ``(3) Other bonds.--
                    ``(A) In general.--An issue is described in this 
                paragraph if any bond (issued as part of such issue), 
                hereinafter in this paragraph referred to as the 
                `refunding bond', is issued to advance refund a bond 
                unless--
                            ``(i) the refunding bond is only--
                                    ``(I) the 1st advance refunding of 
                                the original bond if the original bond 
                                is issued after 1985, or
                                    ``(II) the 1st or 2nd advance 
                                refunding of the original bond if the 
                                original bond was issued before 1986,
                            ``(ii) in the case of refunded bonds issued 
                        before 1986, the refunded bond is redeemed not 
                        later than the earliest date on which such bond 
                        may be redeemed at par or at a premium of 3 
                        percent or less,
                            ``(iii) in the case of refunded bonds 
                        issued after 1985, the refunded bond is 
                        redeemed not later than the earliest date on 
                        which such bond may be redeemed,
                            ``(iv) the initial temporary period under 
                        section 148(c) ends--
                                    ``(I) with respect to the proceeds 
                                of the refunding bond not later than 30 
                                days after the date of issue of such 
                                bond, and
                                    ``(II) with respect to the proceeds 
                                of the refunded bond on the date of 
                                issue of the refunding bond, and
                            ``(v) in the case of refunded bonds to 
                        which section 148(e) did not apply, on and 
                        after the date of issue of the refunding bond, 
                        the amount of proceeds of the refunded bond 
                        invested in higher yielding investments (as 
                        defined in section 148(b)) which are nonpurpose 
                        investments (as defined in section 
                        148(f)(6)(A)) does not exceed--
                                    ``(I) the amount so invested as 
                                part of a reasonably required reserve 
                                or replacement fund or during an 
                                allowable temporary period, and
                                    ``(II) the amount which is equal to 
                                the lesser of 5 percent of the proceeds 
                                of the issue of which the refunded bond 
                                is a part or $100,000 (to the extent 
                                such amount is allocable to the 
                                refunded bond).
                    ``(B) Special rules for redemptions.--
                            ``(i) Issuer must redeem only if debt 
                        service savings.--Clause (ii) and (iii) of 
                        subparagraph (A) shall apply only if the issuer 
                        may 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.
                            ``(ii) Redemptions not required before 90th 
                        day.--For purposes of clauses (ii) and (iii) of 
                        subparagraph (A), the earliest date referred to 
                        in such clauses shall not be earlier than the 
                        90th day after the date of issuance of the 
                        refunding bond.
            ``(4) Abusive transactions prohibited.--An issue is 
        described in this paragraph if any bond (issued as part of such 
        issue) is issued to advance refund another bond and a device is 
        employed in connection with the issuance of such issue to 
        obtain a material financial advantage (based on arbitrage) 
        apart from savings attributable to lower interest rates.
            ``(5) Special rules for purposes of paragraph (3).--For 
        purposes of paragraph (3), bonds issued before the date of the 
        enactment of this subsection shall be taken into account under 
        subparagraph (A)(i) thereof except--
                    ``(A) a refunding which occurred before 1986 shall 
                be treated as an advance refunding only if the 
                refunding bond was issued more than 180 days before the 
                redemption of the refunded bond, and
                    ``(B) a bond issued before 1986, shall be treated 
                as advance refunded no more than once before March 15, 
                1986.''.
    (b) Conforming Amendment.--Section 148(f)(4)(C) of such Code is 
amended by redesignating clauses (xiv) through (xvi) as clauses (xv) 
through (xvii) and by inserting after clause (xiii) the following new 
clause:
                            ``(xiv) Determination of initial temporary 
                        period.--For purposes of this subparagraph, the 
                        end of the initial temporary period shall be 
                        determined without regard to section 
                        149(d)(3)(A)(iv).''.
    (c) Effective Date.--The amendments made by this section shall 
apply to advance refunding bonds issued after the date of the enactment 
of this Act.
                                 <all>
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