Public Finance Alert - January 2009

Legislative Provision

House Bill (As passed on 1/28/09)

Senate Bill
(After committee markup on 1/27/09)

Temporary expansion of "qualified tax-exempt obligation" (QTEO) provisions.

Effective for bonds issued after 12/31/08, through 2010.

Increases the QTEO limit from $10 million to $30 million for tax-exempt bonds issued in 2009 and 2010 (new money or refunding).

[SAME.]

In applying the $30 million limit to qualified 501(c)(3) bonds issued during 2009 and 2010, the bonds are treated as though issued by the 501(c)(3) borrower, not by the actual issuer. Thus, each 501(c)(3) is subject to its own $30 million limitation and qualified 501(c)(3) bonds do not count against the issuer's limit.