322 
agreement was described on or before such date 
in a public announcement or in a filing with the 
Securities and Exchange Commission required 
by reason of such ownership change. 
Subtitle F—Fiscal Relief for State 
and Local Governments 
PART 1—IMPROVED MARKETABILITY FOR TAX- 
EXEMPT BONDS 
SEC. 1501. DE MINIMIS SAFE HARBOR EXCEPTION FOR TAX- 
EXEMPT INTEREST EXPENSE OF FINANCIAL 
INSTITUTIONS. 
(a) IN GENERAL.—Subsection (b) of section 265 is 
amended by adding at the end the following new para-
graph: 
‘‘(7) DE
MINIMIS
EXCEPTION
FOR
BONDS 
ISSUED DURING 2009 OR 2010.— 
‘‘(A) IN GENERAL.—In applying paragraph 
(2)(A), there shall not be taken into account 
tax-exempt obligations issued during 2009 or 
2010. 
‘‘(B) LIMITATION.—The amount of tax-ex-
empt obligations not taken into account by rea-
son of subparagraph (A) shall not exceed 2 per-
cent of the amount determined under para-
graph (2)(B).
323 
‘‘(C) REFUNDINGS.—For purposes of this 
paragraph, a refunding bond (whether a current 
or advance refunding) shall be treated as issued 
on the date of the issuance of the refunded 
bond (or in the case of a series of refundings, 
the original bond).’’. 
(b) TREATMENT AS FINANCIAL INSTITUTION PREF-
ERENCE ITEM.—Clause (iv) of section 291(e)(1)(B) is 
amended by adding at the end the following: ‘‘That por-
tion of any obligation not taken into account under para-
graph (2)(A) of section 265(b) by reason of paragraph (7) 
of such section shall be treated for purposes of this section 
as having been acquired on August 7, 1986.’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to obligations issued after Decem-
ber 31, 2008. 
SEC. 1502. MODIFICATION OF SMALL ISSUER EXCEPTION 
TO TAX-EXEMPT INTEREST EXPENSE ALLOCA-
TION RULES FOR FINANCIAL INSTITUTIONS. 
(a) IN GENERAL.—Paragraph (3) of section 265(b) 
(relating to exception for certain tax-exempt obligations) 
is amended by adding at the end the following new sub-
paragraph: 
‘‘(G) SPECIAL
RULES
FOR
OBLIGATIONS 
ISSUED DURING 2009 AND 2010.—
324 
‘‘(i) INCREASE
IN
LIMITATION.—In 
the case of obligations issued during 2009 
or 2010, subparagraphs (C)(i), (D)(i), and 
(D)(iii)(II) shall each be applied by sub-
stituting ‘$30,000,000’ for ‘$10,000,000’. 
‘‘(ii) 
QUALIFIED
501(C)(3)
BONDS 
TREATED AS ISSUED BY EXEMPT ORGANI-
ZATION.—In the case of a qualified 
501(c)(3) bond (as defined in section 145) 
issued during 2009 or 2010, this para-
graph shall be applied by treating the 
501(c)(3) organization for whose benefit 
such bond was issued as the issuer. 
‘‘(iii) SPECIAL RULE FOR QUALIFIED 
FINANCINGS.—In the case of a qualified fi-
nancing issue issued during 2009 or 
2010— 
‘‘(I) subparagraph (F) shall not 
apply, and 
‘‘(II) any obligation issued as a 
part of such issue shall be treated as 
a qualified tax-exempt obligation if 
the requirements of this paragraph 
are met with respect to each qualified 
portion of the issue (determined by
325 
treating each qualified portion as a 
separate issue issued by the qualified 
borrower with respect to which such 
portion relates). 
‘‘(iv) QUALIFIED FINANCING ISSUE.— 
For purposes of this subparagraph, the 
term ‘qualified financing issue’ means any 
composite, pooled, or other conduit financ-
ing issue the proceeds of which are used 
directly or indirectly to make or finance 
loans to one or more ultimate borrowers 
each of whom is a qualified borrower. 
‘‘(v) QUALIFIED PORTION.—For pur-
poses of this subparagraph, the term 
‘qualified portion’ means that portion of 
the proceeds which are used with respect 
to each qualified borrower under the issue. 
‘‘(vi) QUALIFIED
BORROWER.—For 
purposes of this subparagraph, the term 
‘qualified borrower’ means a borrower 
which is a State or political subdivision 
thereof or an organization described in sec-
tion 501(c)(3) and exempt from taxation 
under section 501(a).’’.
326 
(b) EFFECTIVE DATE.—The amendments made by 
this section shall apply to obligations issued after Decem-
ber 31, 2008. 
SEC. 1503. TEMPORARY MODIFICATION OF ALTERNATIVE 
MINIMUM TAX LIMITATIONS ON TAX-EXEMPT 
BONDS. 
(a) INTEREST ON PRIVATE ACTIVITY BONDS ISSUED 
DURING 2009 AND 2010 NOT TREATED AS TAX PREF-
ERENCE ITEM.—Subparagraph (C) of section 57(a)(5) is 
amended by adding at the end a new clause: 
‘‘(vi) EXCEPTION FOR BONDS ISSUED 
IN 2009 AND 2010.—For purposes of clause 
(i), the term ‘private activity bond’ shall 
not include any bond issued after Decem-
ber 31, 2008, and before January 1, 2011. 
For purposes of the preceding sentence, a 
refunding bond (whether a current or ad-
vance refunding) shall be treated as issued 
on the date of the issuance of the refunded 
bond (or in the case of a series of 
refundings, the original bond).’’. 
(b) NO
ADJUSTMENT
TO
ADJUSTED
CURRENT 
EARNINGS
FOR
INTEREST
ON
TAX-EXEMPT
BONDS 
ISSUED AFTER 2008.—Subparagraph (B) of section