‘‘(iii) has lost at least 20 percent of 
its population between calendar year 2000 
and calendar year 2010. 
‘‘(D) LIMITATION ON AMOUNT OF BONDS 
DESIGNATED.— 
‘‘(i) IN GENERAL.—The maximum ag-
gregate face amount of bonds which may 
be designated under subparagraph (A) 
with respect to any specified city shall not 
exceed the bond limitation allocated to 
such city under clause (ii). 
‘‘(ii) 
ALLOCATION.—The 
Secretary 
shall allocate bond limitation to each speci-
fied city such that the bond limitation allo-
cated to such city bears the same propor-
tion to $1,000,000,000 as the population 
of such city (as determined for purposes of 
the 2010 census) bears to the total popu-
lation of all specified cities (as so deter-
mined).’’. 
(2) PAYMENTS TO ISSUERS.—Section 6431 of 
such Code is amended by adding at the end the fol-
lowing: 
‘‘(g) APPLICATION OF SECTION TO CERTAIN ECO-
NOMIC DEVELOPMENT EXTENSION BONDS.— 
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‘‘(1) IN GENERAL.—An economic development 
extension bond shall be treated as a qualified bond 
for purposes of this section. 
‘‘(2) APPLICABLE PERCENTAGE.—The applica-
ble percentage under subsection (b) shall be 35 per-
cent.’’. 
(f) 
CURRENT
REFUNDINGS
PERMITTED.—Sub-
section (g) of section 54AA of such Code is amended by 
adding at the end the following new paragraph: 
‘‘(3) TREATMENT
OF
CURRENT
REFUNDING 
BONDS.— 
‘‘(A) IN GENERAL.—For purposes of this 
subsection, the term ‘qualified bond’ includes 
any bond (or series of bonds) issued to refund 
a qualified bond if— 
‘‘(i) 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, 
‘‘(ii) the amount of the refunding 
bond does not exceed the outstanding 
amount of the refunded bond, and 
‘‘(iii) the refunded bond is redeemed 
not later than 90 days after the date of the 
issuance of the refunding bond. 
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‘‘(B) APPLICABLE
PERCENTAGE.—In the 
case of a refunding bond referred to in subpara-
graph (A), the applicable percentage with re-
spect to such bond under section 6431(b) shall 
be the lowest percentage specified in paragraph 
(2) of such section. 
‘‘(C) DETERMINATION OF AVERAGE MATU-
RITY.—For purposes of subparagraph (A)(i), 
average maturity shall be determined in accord-
ance with section 147(b)(2)(A). 
‘‘(D) ISSUANCE RESTRICTION NOT APPLI-
CABLE.—Subsection (d)(1)(B) shall not apply 
to a refunding bond referred to in subpara-
graph (A).’’. 
(g) GROSS-UP OF PAYMENT TO ISSUERS IN CASE OF 
SEQUESTRATION.—In the case of any payment under sec-
tion 6431(b) of the Internal Revenue Code of 1986 made 
after the date of the enactment of this Act to which se-
questration applies, the amount of such payment shall be 
increased to an amount equal to— 
(1) such payment (determined before such se-
questration), multiplied by 
(2) the quotient obtained by dividing 1 by the 
amount by which 1 exceeds the percentage reduction 
in such payment pursuant to such sequestration. 
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For purposes of this subsection, the term ‘‘sequestration’’ 
means any reduction in direct spending ordered in accord-
ance with a sequestration report prepared by the Director 
of the Office and Management and Budget pursuant to 
the Balanced Budget and Emergency Deficit Control Act 
of 1985 or the Statutory Pay-As-You-Go Act of 2010. 
(h) EFFECTIVE DATE.—The amendments made by 
this section shall apply to obligations issued on or after 
the date of the enactment of this Act. 
Æ 
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