104 STAT. 1388-510 PUBLIC LAW 101-508—NOV. 5, 1990 rules similar to the rules of section 142(b)(l)(B) shall apply. " (v) PORTIONS OF ISSUES USED FOR CONSTRUCTION. — If— "(I) all of the construction expenditures to be financed by an issue are to be financed from a portion thereof, and "(II) the issuer elects to treat such portion as a construction issue for purposes of this subparagraph, then, for purposes of this subparagraph and subparagraph (B), such portion shall be treated as a separate issue. "(vi) AVAILABLE CONSTRUCTION PROCEEDS.— For purposes of this subparagraph— "(I) IN GENERAL.— The term 'available construction proceeds' means the amount equal to the issue price (within the meaning of sections 1273 and 1274) of the construction issue, increased by earnings on the issue price, earnings on amounts in any reasonably required reserve or replacement fund not funded from the issue, and earnings on all of the foregoing earnings, and reduced by the amount of the issue price in any reasonably required reserve or replacement fund and the issuance costs financed by the issue. " (II) EARNINGS ON RESERVE INCLUDED ONLY FOR CERTAIN PERIODS.— The term 'available construction proceeds' shall not include amounts earned on any reasonably required reserve or replacement fund after the earlier of the close of the 2-year period described in clause (ii) or the date the construction is substantially completed. "(Ill) PAYMENTS ON ACQUIRED PURPOSE OBLIGA- TiONS EXCLUDED. —The term 'available construction proceeds' shall not include pa3nnents on any obligation acquired to carry out the governmental purposes of the issue and shall not include earnings on such payments. "(IV) ELECTION TO REBATE ON EARNINGS ON RE- SERVE. —At the election of the issuer, the term 'available construction proceeds' shall not include earnings on any reasonably required reserve or replacement fund, "(vii) ELECTION TO PAY PENALTY IN UEU OF REBATE. — "(I) IN GENERAL. —At the election of the issuer, paragraph. (2) shall not apply to available construction proceeds which do not meet the spending requirements of clause (ii) if the issuer pays a penalty, with respect to each 6-month period after the date the bonds were issued, equal to IVa percent of the amount of the available construction proceeds of the issue which, as of the close of such 6-month period, is not spent as required by clause (ii). " (II) TERMINATION.— The penalty imposed by this clause shall cease to apply only as provided in
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