I 

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. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Investing in Our Com5 munities Act’’. 

6 SEC. 2. TREATMENT OF ADVANCE REFUNDING BONDS. 

7 (a) IN GENERAL.—Section 149(d) of the Internal 

8 Revenue Code of 1986 is amended— 


pbinns on DSKJLVW7X2PROD with BILLS
2 

•HR 2288 IH

1 (1) in paragraph (1), by striking ‘‘to advance 

2 refund another bond’’ and inserting ‘‘as part of an 

3 issue described in paragraph (2), (3), or (4)’’; 

4 (2) by redesignating paragraphs (2) and (3) as 

5 paragraphs (6) and (7), respectively; and 

6 (3) by inserting after paragraph (1) the fol7 lowing new paragraphs: 

8 ‘‘(2) CERTAIN PRIVATE ACTIVITY BONDS.—An 

9 issue is described in this paragraph if any bond 

10 (issued as part of such issue) is issued to advance 

11 refund a private activity bond (other than a qualified 

12 501(c)(3) bond). 

13 ‘‘(3) OTHER BONDS.— 

14 ‘‘(A) IN GENERAL.—An issue is described 

15 in this paragraph if any bond (issued as part of 

16 such issue), hereinafter in this paragraph re17 ferred to as the ‘refunding bond’, is issued to 

18 advance refund a bond unless— 

19 ‘‘(i) the refunding bond is only— 

20 ‘‘(I) the 1st advance refunding of 

21 the original bond if the original bond 

22 is issued after 1985, or 

23 ‘‘(II) the 1st or 2nd advance re24 funding of the original bond if the 

25 original bond was issued before 1986, 


pbinns on DSKJLVW7X2PROD with BILLS
3 

•HR 2288 IH

1 ‘‘(ii) in the case of refunded bonds 

2 issued before 1986, the refunded bond is 

3 redeemed not later than the earliest date 

4 on which such bond may be redeemed at 

5 par or at a premium of 3 percent or less, 

6 ‘‘(iii) in the case of refunded bonds 

7 issued after 1985, the refunded bond is re8 deemed not later than the earliest date on 

9 which such bond may be redeemed, 

10 ‘‘(iv) the initial temporary period 

11 under section 148(c) ends— 

12 ‘‘(I) with respect to the proceeds 

13 of the refunding bond not later than 

14 30 days after the date of issue of such 

15 bond, and 

16 ‘‘(II) with respect to the proceeds 

17 of the refunded bond on the date of 

18 issue of the refunding bond, and 

19 ‘‘(v) in the case of refunded bonds to 

20 which section 148(e) did not apply, on and 

21 after the date of issue of the refunding 

22 bond, the amount of proceeds of the re23 funded bond invested in higher yielding in24 vestments (as defined in section 148(b)) 

25 which are nonpurpose investments (as deVerDate Sep 11 2014 01:36 May 26, 2021 Jkt 019200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H2288.IH H2288

pbinns on DSKJLVW7X2PROD with BILLS
4 

•HR 2288 IH

1 fined in section 148(f)(6)(A)) does not ex2 ceed— 

3 ‘‘(I) the amount so invested as 

4 part of a reasonably required reserve 

5 or replacement fund or during an al6 lowable temporary period, and 

7 ‘‘(II) the amount which is equal 

8 to the lesser of 5 percent of the pro9 ceeds of the issue of which the re10 funded bond is a part or $100,000 (to 

11 the extent such amount is allocable to 

12 the refunded bond). 

13 ‘‘(B) SPECIAL RULES FOR REDEMP14 TIONS.— 

15 ‘‘(i) ISSUER MUST REDEEM ONLY IF

16 DEBT SERVICE SAVINGS.—Clause (ii) and 

17 (iii) of subparagraph (A) shall apply only 

18 if the issuer may realize present value debt 

19 service savings (determined without regard 

20 to administrative expenses) in connection 

21 with the issue of which the refunding bond 

22 is a part. 

23 ‘‘(ii) REDEMPTIONS NOT REQUIRED

24 BEFORE 90TH DAY.—For purposes of 

25 clauses (ii) and (iii) of subparagraph (A), 


pbinns on DSKJLVW7X2PROD with BILLS
5 

•HR 2288 IH

1 the earliest date referred to in such clauses 

2 shall not be earlier than the 90th day after 

3 the date of issuance of the refunding bond. 

4 ‘‘(4) ABUSIVE TRANSACTIONS PROHIBITED.— 

5 An issue is described in this paragraph if any bond 

6 (issued as part of such issue) is issued to advance 

7 refund another bond and a device is employed in 

8 connection with the issuance of such issue to obtain 

9 a material financial advantage (based on arbitrage) 

10 apart from savings attributable to lower interest 

11 rates. 

12 ‘‘(5) SPECIAL RULES FOR PURPOSES OF PARA13 GRAPH (3).—For purposes of paragraph (3), bonds 

14 issued before the date of the enactment of this sub15 section shall be taken into account under subpara16 graph (A)(i) thereof except— 

17 ‘‘(A) a refunding which occurred before 

18 1986 shall be treated as an advance refunding 

19 only if the refunding bond was issued more 

20 than 180 days before the redemption of the re21 funded bond, and 

22 ‘‘(B) a bond issued before 1986, shall be 

23 treated as advance refunded no more than once 

24 before March 15, 1986.’’. 


pbinns on DSKJLVW7X2PROD with BILLS
6 

•HR 2288 IH

1 (b) CONFORMING AMENDMENT.—Section 

2 148(f)(4)(C) of such Code is amended by redesignating 

3 clauses (xiv) through (xvi) as clauses (xv) through (xvii) 

4 and by inserting after clause (xiii) the following new 

5 clause: 

6 ‘‘(xiv) DETERMINATION OF INITIAL

7 TEMPORARY PERIOD.—For purposes of 

8 this subparagraph, the end of the initial 

9 temporary period shall be determined with10 out regard to section 149(d)(3)(A)(iv).’’. 

11 (c) EFFECTIVE DATE.—The amendments made by 

12 this section shall apply to advance refunding bonds issued 

13 after the date of the enactment of this Act. 

Æ 


pbinns on DSKJLVW7X2PROD with BILLS