99-17297. Arbitrage Restrictions on Tax-Exempt Bonds; Correction

[Federal Register Volume 64, Number 131 (Friday, July 9, 1999)]
[Rules and Regulations]
[Pages 37037-37038]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-17297]


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DEPARTMENT OF THE TREASURY

Internal Revenue Service

26 CFR Part 1

[TD 8476]
RIN 1545-AR05; 1545-AP09


Arbitrage Restrictions on Tax-Exempt Bonds; Correction

AGENCY: Internal Revenue Service (IRS), Treasury.

ACTION: Correcting amendment.

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SUMMARY: This document contains corrections to final regulations (TD 
8476) which were published in the Federal Register on Friday, June 18, 
1993 (58 FR 33510), relating to the arbitrage and related restrictions 
applicable to tax-exempt bonds issued by States and local governments.

DATES: This correction is effective December 30, 1998.

FOR FURTHER INFORMATION CONTACT: David White, [phone] (not a 
toll-free number).

SUPPLEMENTARY INFORMATION:

Background

    The final regulations that are the subject of these corrections are 
under section 148 of the Internal Revenue Code.

Need for Correction

    As published, the final regulations (TD 8476) contain errors which 
may prove to be misleading and are in need of clarification.

List of Subjects in 26 CFR Part 1

    Income taxes, Reporting and recordkeeping requirements.

Correction of Publication

    Accordingly, 26 CFR part 1 is corrected by making the following 
correcting amendments:

PART 1--INCOME TAXES

    Paragraph 1. The authority citation for part 1 continues to read in 
part as follows:

    Authority: 26 U.S.C. 7805 * * *

    Par. 2. Section 1.148-11 is amended by adding paragraphs (b)(4), 
(h) and (i) to read as follows:


Sec. 1.148-11  Effective dates.

* * * * *
    (b) * * *
    (4) No elective retroactive application for safe harbor for 
establishing fair market value for guaranteed investment contracts and 
investments purchased for a yield restricted defeasance escrow. The 
provisions of Secs. 1.148-5(d)(6)(iii) (relating to the safe harbor for 
establishing fair market value of guaranteed investment contracts and 
yield restricted defeasance escrow investments) and 1.148-5(e)(2)(iv) 
(relating to a special rule for yield restricted defeasance escrow 
investments) may not be applied to any bond sold before December 30, 
1998.
* * * * *
    (h) Safe harbor for establishing fair market value for guaranteed 
investment contracts and investments purchased for a yield restricted 
defeasance escrow. The provisions of Sec. 1.148-5(d)(6)(iii) are 
applicable to bonds sold on or after March 1, 1999. Issuers may apply 
these provisions to bonds sold on or after December 30, 1998, and 
before March 1, 1999.
    (i) Special rule for investments purchased for a yield restricted 
defeasance escrow. The provisions of Sec. 1.148-5(e)(2)(iv) are 
applicable to bonds sold on or after March 1, 1999. Issuers may apply 
these provisions to

[[Page 37038]]

bonds sold on or after December 30, 1998, and before March 1, 1999.

Cynthia E. Grigsby,
Chief, Regulations Unit, Assistant Chief Counsel (Corporate).
[FR Doc. 99-17297 Filed 7-8-99;8:45am]
BILLLING CODE 4830-01-P