I 
108TH CONGRESS 
1ST SESSION H. R. 1512
To amend the Internal Revenue Code of 1986 to provide that certain bonds 
issued by local governments in connection with delinquent real property 
taxes may be treated as tax exempt. 
IN THE HOUSE OF REPRESENTATIVES 
MARCH 31, 2003
Mr. CAMP (for himself and Mr. LEVIN) 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 provide 
that certain bonds issued by local governments in connec-
tion with delinquent real property taxes may be treated 
as tax exempt.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. TAX EXEMPT TREATMENT OF CERTAIN BONDS 
ISSUED IN CONNECTION WITH DELINQUENT 
REAL PROPERTY TAXES. 
(a) IN GENERAL.—Section 148 of the Internal Rev-
enue Code of 1986 is amended by redesignating subsection
(i) as subsection (j) and by inserting after subsection (h) 
the following new subsection: 
‘‘(i) 
SPECIAL
RULE
FOR
DELINQUENT
TAX 
BONDS.—
‘‘(1) IN GENERAL.—For purposes of this sec-
tion, a bond which meets the requirements of para-
graph (2) shall not be treated as an arbitrage bond. 
‘‘(2) 
DELINQUENT
TAX
BOND
REQUIRE-
MENTS.—A bond meets the requirements of this 
paragraph if—
‘‘(A) the bond is issued primarily to facili-
tate the collection or receipt of delinquent real 
property taxes levied by the issuer for itself, or 
for governmental units within the jurisdiction of 
the issuer, within the 24-month period prior to 
the date of issue of the bond, 
‘‘(B)(i) the amount of the net proceeds of 
the issue of which the bond is a part does not 
exceed the sum of the amount of the delinquent 
real property taxes referenced in subparagraph 
(A) and certified by the issuer of the bond on 
its books and records as uncollected, plus 
issuance costs, and
‘‘(ii) such certification is made as of a spe-
cific date which occurs during the 5-month pe-
riod preceding the date of issue of the bond, 
‘‘(C) the maturity date of the bond is not 
later than 24 months after the date of issue of 
the bond, and 
‘‘(D) all delinquent real property taxes 
(and interest, collection fees, and penalties at-
tributable to such taxes) received by the issuer 
for itself, or for governmental units within the 
jurisdiction of the issuer, after the specific date 
referenced in subparagraph (B)(ii) and before 
the last maturity date of the issue of which the 
bond is a part are used for the payment of 
principal, interest, or redemption price of the 
issue of which the bond is a part to the extent 
required for such purpose. 
For purposes of this paragraph, net proceeds of the 
issue of which the bond is a part shall be treated as 
spent on the date of issuance of the issue. 
‘‘(3) REFUNDING BONDS.—A bond (or series of 
bonds) issued to refund a bond meeting the require-
ments of paragraph (2) shall be treated as meeting 
such requirements only if—
‘‘(A) the maturity date of the refunding 
bond is not later than 24 months after the date 
of issue of the original bond, 
‘‘(B) the amount of the refunding bond 
does not exceed the outstanding amount of the 
refunded bond, and 
‘‘(C) the bond is issued not more than 90 
days before the redemption of the refunded 
bond.’’. 
(b) COORDINATION WITH HEDGE BOND RULES.—
Section 149(g)(3) of such Code is amended by adding at 
the end the following new subparagraph: 
‘‘(D) EXCEPTION
FOR
DELINQUENT
TAX 
BOND.—For purposes of this subsection, the 
term ‘hedge bond’ shall not include any bond 
that 
meets 
the 
requirements 
of 
section 
148(i)(2).’’. 
(c) COORDINATION WITH POOLED FINANCIAL BOND 
RULES.—Section 149(f)(4)(B) of such Code is amended 
by striking ‘‘or’’ at the end of clause (i), by striking the 
period at the end of clause (ii) and inserting ‘‘, or’’, and 
by adding at the end the following new clause: 
‘‘(iii) section 148(i) applies to such 
bond.’’.