To amend the Internal Revenue Code of 1986 to allow an additional advance refunding of bonds originally issued to finance governmental facilities used for essential governmental functions.

January 30, 2003

Mr. SMITH (for himself, Mr. CORZINE, Mr. SCHUMER, and Ms. SNOWE) introduced the following bill; which was read twice and referred to the Committee on Finance

To amend the Internal Revenue Code of 1986 to allow an additional advance refunding of bonds originally issued to finance governmental facilities used for essential governmental functions.

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 `Municipal Debt Refinancing Act'.

SEC. 2. ADDITIONAL ADVANCE REFUNDINGS OF CERTAIN GOVERNMENTAL BONDS.

(a) IN GENERAL- Section 149(d)(3)(A)(i) of the Internal Revenue Code of 1986 (relating to advance refundings of other bonds) is amended--

(1) by striking `or' at the end of subclause (I),

(2) by adding `or' at the end of subclause (II), and

(3) by inserting after subclause (II) the following:

`(III) the 2nd advance refunding of the original bond if the original bond was issued after 1985 or the 3rd advance refunding of the original bond if the original bond was issued before 1986, if, in either case, the refunding bond is issued before the date which is 2 years after the date of the enactment of this subclause and the original bond was issued as part of an issue 90 percent or more of the net proceeds of which were used to finance governmental facilities used for 1 or more essential governmental functions (within the meaning of section 141(c)(2)),'.

(b) EFFECTIVE DATE- The amendments made by this section shall apply to refunding bonds issued on or after the date of the enactment of this Act.

END