123STA T . 3 60PUBLIC LA W 111 –5—FE B.1 7, 200 9inter e s t paym ents o n b e h a lf of the iss u er )35 per c ent of the interest payable un d er such bond on such date .‘ ‘ ( c) AP P LICAT I ON O F A RB ITRA GERU LE S . —F or purposes of section 148, the yield on a q ualified bond shall be reduced by the credit allo w ed under this section. ‘‘(d) I NTEREST P A YM ENT D ATE.—For purposes of this subsection, the term ‘interest payment date ’ means each date on which interest is payable by the issuer under the terms of the bond. ‘‘(e) Q UALIFIE DB OND.—For purposes of this subsection, the term ‘qualified bond’ has the meanin g gi v en such term in section 54AA(g).’’. (c) C ONFORMING AMENDMENTS.— (1) S ection 13 2 4(b)(2) of title 31, U nited States Code, is amended by stri k ing ‘‘or 6 428’’ and inserting ‘‘6428, or 6431,’’. (2) Section 54A(c)(1)(B) is amended by striking ‘‘subpart C’’ and inserting ‘‘subparts C and J ’’. (3) Sections 54(c)(2), 13 97E (c)(2), and 14 0 0 N (l)(3)(B) are each amended by striking ‘‘and I’’ and inserting ‘‘, I, and J’’. (4) Section 6211(b)(4)(A) is amended by striking ‘‘and 6428’’ and inserting ‘‘6428, and 6431’’. (5) Section 6401(b)(1) is amended by striking ‘‘and I’’ and inserting ‘‘I, and J’’. (6) T he table of subparts for part I V of subchapter A of chapter 1 is amended by adding at the end the following new item
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‘ SUBPARTJ. BU ILD A ME RI C AB ON DS. ’ ’. (7) The table of section for subchapter B of chapter 65 is amended by adding at the end the following new item: ‘‘ Sec . 6431 . Cr e ditfo r qual ified b o n d s allo w ed to issuer.’’. (d) TRANSITIONAL COORDINATION W IT H STATE L A W .—E x cept as otherwise provided by a State after the date of the enactment of this Act, the interest on any build America bond (as defined in section 54AA of the Internal Revenue Code of 1986, as added by this section) and the amount of any credit determined under such section with respect to such bond shall be treated for purposes of the income tax laws of such State as being exempt from Federal income tax. (e) EFFECTI V E DATE.—The amendments made by this section shall apply to obligations issued after the date of the enactment of this Act. PARTV— R EGUL ATE DIN VE S T M ENT CO MPA - NIES ALLO W ED TO PASS-T H RU TA X CREDIT B OND CREDITS SEC.154 1. R E GULAT E DINV EST M ENT C O M P ANIES ALLO W ED TO PASS - T H RU TA X CREDIT B OND CREDITS. (a) IN G ENERAL.—Part I of subchapter M of chapter 1 is amended by inserting after section 853 the following new section: ‘ ‘SEC. 8 5 3 A. CREDITS F ROM TAX CREDIT BONDS ALLOWED TO SHARE- HOLDERS. ‘‘(a) GENERAL RULE.—A regulated investment company— ‘‘(1) which holds (directly or indirectly) one or more tax credit bonds on one or more applicable dates during the taxable year, and 26USC54note. 26 USC 54 A A note. 26 USC 54.
