Status of Legislation and Regulations

Of Interest to the Municipal Market

(As of July 13, 1992)

Bill or Regulation Background and Current


Urban Aid Legislation (HR 11, In the wake of unrest in

HR 3040) Los Angeles and other

cities, Congress as been

trying to craft

legislation to provide

financial aid tax relief

to urban areas. The House

version, passed on July

2, is HR 11, which would

create urban enterprise

zones. The plan would

allow tax-exempt,

qualified redevelopment

bonds to be issued in the

zones for a number of

uses, including loans to

small businesses. The

bill would also

permanently extend the

mortgage revenue bonds

and small-issue

industrial development

bonds, and the low-income

housing tax credit, all

of which expired June 30.

In addition, the bill

contains several


provisions that would

ease the arbitrage rebate

requirement and other tax

law bond curbs. But the

bill also includes a

provision, widely

criticized by the

securities industry, that

would require

mark-to-market accounting

of municipal bonds and

other securities.

The Senate has not yet

drafted an urban aid

package, though the

Senate Finance Committee

has approved legislation,

HR 3040, that would

extend the mortgage bond

and IDB exemption and the

housing credit for 18.

months. Committee

Chairman Lloyd Bentsen,

D-Tex., has said his

panel will probably draft

an enterprise zone bill

the week of July 20.

Energy Bill (HR 776) A comprehensive energy

bill passed by the House

on May 27 contains two

provisions added by the

House Ways and Means

Committee that would

affect the tax-exempt

bond market. One would

remove investment

restrictions on nuclear

decommissioning trust

funds, which under

current law invest only

in U.S.Treasury

securities and tax-exempt

municipal bonds. That

provision would also

lower the funds' 34% tax

rate to 20%.

Another provision,

sponsored by Rep. Beryl

F. Anthony, D-ark.,

would increase the supply

of bank-qualified bonds.

It was designed to

offset any negative

impact on demand for

municipals that the

nuclear trust fund

measure might cause.

Under current law, banks

may deduct 80% of the

cost of carrying

municipal bonds if they

are bought from issuers

who expect to sell no

more than $10 million

annually. Rep Anthony's

provision would raise

that amount to 20$


On June 17, the Senate

Finance Committee

approved its version of

energy legislation, which

proposed removing

investment restrictions

on nuclear

decommissioning funds but

did not propose lowering

the tax rate. The bill

also does not include the

provision on

bank-qualified bonds.

The bill has yet to be

voted on in the full

Senate, where it faces

objections from senators

on energy matters

unrelated to the tax


Waxman Bill (HR 4848) Introduced on April 10

by Rep. Henry A. Waxman,

D-Calif., this

legislation would hurt

the municipal bond

market by imposing a

2.5% tax on unearned

income, including

interest from tax-exempt

bonds, to fund a new

long-term health-care

program for the

chronically ill and

disabled. Congress is

not expected to pass any

health-care legislation

this year, but hearings

may be held on

health-care reform later

this year. Rep. Waxman's

bill is expected to be

at the center of the


Mortgage Bond Extension (HR Rep Barbara B. Kennelly,

1067 and S 167) D-Conn., and Sen. Donald

W. Riegle, D-Mich.,

introduced legislation

last year to permanently

extend the tax exemption

for mortgage revenue

bonds, which is set to

expire June 30. Congress

is considered likely to

pass a bill later this

year that would grant a

short-term extension for

the mortgage bond


Small-issue Industrial Rep. William J. Coyne,

Development Bond Extension D-Pa., and Sen. John B.

(HR 1186 and S 1357) Breaux, D-La.,

introduced legislation

last year to extend the

tax exemption for

small-issue IDBs, which

is to set expire June

30. Rep. Coyne's bill

would extend use of such

bonds through 1996, and

Sen. Breaux's bill would

make it permanent.

Congress is considered

likely to pass a bill

later this year that

would grant a short-term

extension for the

industrial development

bond exemption.

Bond Simplification (HR 2775, Rep. Dan Rostenkowski,

HR 2777 and S 1394) D-III., and Sen. Lloyd

Bentsen, D-Tex., teamed

up last year to offer

broad tax-simplication

legislation, HR 2777 and

S 1394, that includes a

number of minor

provisions to make bond

rules more workable. In

addition, Rep,

Rostenkowski introduced

HR 2775, which included

a few major bond


provisions, such as

increasing the

small-issuer arbitrage

exemption to $10

million. Some of the

provisions in all three

bills were included in

the urban aid bill

passed by the House.

Easing of Bond Curbs (HR 710 Along with easing the

and S 913) arbitrage requirement

and limits on bank

deductibility, the

legislation introduced

last year by Rep. Beryl

F. Anthony, D-Ark., and

Sen. Max Baucus, D-Mont.

would modify several

other tax-law bond curbs

such as repealing the 5%

unrelated and

disproportionate use

test. Some of the

provisions in this

legislation found their

way into Rep.


simplification bill, HR

2775, and into the House

urban aid bill.

Expanding Demand for Rep. C. Thomas McMillen,

Municipals (HR 5154) D-Md., introduced

legislation on May 14

designed to increase

purchases of municipal

bonds in two areas:

pension funds and

individual retirement

accounts. Under Rep.

McMillen's plan, pension

funds and IRAs would

receive 43 cents in

federal subsidies for

every dollar earned in

interest income from

investments in

tax-exempt bonds. Rep.

McMillen is not a member

of the House Ways and

Means Committee, and

Congress has taken no

action yet on his

measure. Capitol

Hill watchers have said

chances for passage of

his bill are slim,

because it would be

difficult for Congress

to find the money needed

to pay the subsidies.

Environmental Finance (S 90 Sen. Pete Domenici, R-N.

and HR 2172 M., is the author of S

90, which would reduce

restrictions on

tax-exempt bonds used to

help clean up the

environment. These

bonds, which benefit

private firms, would be

classified as


exempting them from the

private-activity volume

cap and permitting

accelerated depreciation

for all privately owned


facilities financed with

tax-exempt bonds.

Rep. Frank J. Guarini,

D-N.J., is the author of

HR 2172, which also

reduces curbs on

private-activity bonds

used for environmental

facilities but does not

permit expanded

depreciation. Neither

measure is expected to

be considered seriously

this year, especially

in light of the current

stalemate over enacting

a tax bill.

HHS Regulations on Medicaid Regulations are due out

Financing Oct. 1 implementing

changes to the Medicaid

program. Originally, the

Department of Health and

Human Services proposed

rules Sept. 12, 1991,

that were slated to go

into effect Jan. 1, 1992,

but they caused so much

controversy that Congress

passed legislation

delaying the rules until

October. The rules are

designed to prevent a

state from counting

certain tax revenues or

donations from hospitals

toward the contributions

it makes to the Medical

program that are

eligible for federal

matching funds.

Department officials

have been meeting with

state and local lobbyists

to craft the upcoming


HOME Program Legislation and The National Affordable

Regulations Housing Act of 1990,

known as the HOME

program, is up for

reauthorization this

year. Under the program,

the federal government

matches contributions

that state and local

government make to

rental housing and home

ownership programs for

low-income people. One

of the key issue during

the reauthorization

debate will be whether

all forms of tax-exempt

debt should count

toward the match. The

1990 law is vague in

this area, and the

Department of Housing

and Urban Development

has taken the position

that only general

obligation bonds should

be eligible for matching

funds. Housing industry

officials, meanwhile, say

private-activity bonds

also should count.

On June 10, the House

Banking Committee

approved its version of

the reauthorization,

which would allow 100%

of the value of

private-activity bond

issuances to be counted

toward the match, and

would fund HOME at a

level of $2.1 billion

for fiscal 1993. The

Senate Banking Committee

approved a Bill June 22

that would allow only

25% of the value of

the private-activity

bond issuances to be

eligible for federal

matching funds. HUD,

meanwhile, is still

drafting the regulations

for the two-year-old

program, and is expected

to publish them later

this year.

Student Loan Bonds (HR 3553 Congress gave final

Regulations approval in early July to

a comprehensive bill that

would reauthorize the

Higher Education Act of

1965. The bill contains

a provision that would

set up a pilot program

to test the idea of

having colleges be

directly responsible for

making and servicing

student loans. Under

present law the federal

government guarantees

loans made to students by

commercial banks, which

in turn sell the loans to

state higher education

authorities that often

finance their purchases

with tax-exempt bonds.

Education officials

have warned that a

direct-loan program

would obviate the need

for those authorities

and, in turn, for

tax-exempt student loan


Government Securities Act The Senate last year

Reauthorization (S 1699, S 1247 passed two complementary

and HR 3927) and relatively simple

bills introduced by Sen.

Christopher J. Dodd,

D-Conn. S 1247 July 31,

1991 reauthorized the

Government Securities

Act of 1986 and

indefinitely extended

the Treasury's

rule-making authority. S

1699, passed Sept. 25,

1991, in the wake of the

Solomon Brothers bidding

scandal, extended the

Treasury's rule-making

authority for one year.

That bill made it

illegal to provide false

information in connection

with biding for

government securities,

and extended the

Securities and Exchange

Commission's antifraud

authority to the

government securities


In the House, the

Energy and Commerce

Committee on June 2

approved HR 3927, a more

complex measure

containing several

provisions that trouble

the securities

industry. Among them is

a provisions that would

give the Treasury

authority identify large

trading positions in the

government securities

market, and the SEC

back-up authority to

monitor prices and audit

sales transactions. The

House version is opposed

by the Treasury, the

Federal Reserve, and

market participants. A

floor vote on the House

bill is not yet


Separately, House

Banking Committee

Chairman Henry

Gonzales, D-Tex., is

backing a bill, HR 4450,

that would require the

Federal Reserve to

experiment for two years

with a single-price

auction system for

Treasury notes and bonds

and a continuous market

for bills. It would also

require the borrowing

advisory committee of

the Public Securities

Association to conduct

its meetings in public.

Fed and Treasury

officials opposed a

mandatory approach when

they are already

experimenting with an

open, single-price

system that would be

fully automated.

Prospects this year are


Legislative prospects

in the House are

complicated by a

possible jurisdictional

disputes. Aides say

Rep. Gonzalez could

ask to have the Energy

and Commerce bill

referred to his

committee, a move that

could delay sending the

measure of the House

floor for final

approval. The Ways and

Means Committee, which

recently approved a

measure clarifying that

a violation of Treasury

securities auction rules

is a violation of

federal securities law,

also could assert

jurisdiction. A ruling

on how to handle the

legislation is expected

from the House


Fiscal 1993 Budget Resolution The House and Senate gave

(H Con.Res.287) final approval to the

fiscal 1993 budget plan

on May 21, but the vote

in each chamber was much

closer than expected. The

House vote was

209-to-207, while the

Senate approved it

52-to-41 after a

conference committee

approved the compromise

measure on May 20. The

new budget sets an

overall cap on domestic

spending of $225.3

billion, the level

called for in the 1990

budget agreement. To

comply with the cap, the

House and Senate

Appropriations Committees

will have to cut domestic

programs by $6.4 billion.

In addition, the budget

calls for cuts of $7

billion in defense

spending cuts.

Balanced Budget Amendment The amendment would

to the U.S. Constitution (HJ. require U.S. receipts to

Res. 290) equal outlays, unless

waived by a three-fifths

majority of both houses

of Congress. The House

defeated the amendment

by a vote of 280 to 153

on June 11, falling 9

votes short of the

two-thirds majority

needed to pass. The

Senate also buried the

amendment on July 1 when

it failed to break off a

filibuster being waged

by opponents. President

Bush and congressional

sponsors have vowed to

force another round of

votes early next year

when the new Congress

arrives, if the

President is re-elected.

Budget Fire Walls Bill (S2399, Both bills would have

HR 3732 eliminated one year

ahead of schedule the

fire walls between

defense, domestic and

international spending

established by the 1990

budget agreement. But the

bills are in limbo after

the Senate version failed

in a March 26 test vote

and the House defeated

its measure March 31.

Senate leaders have no

plans for further action

on their bill, but House

leaders say they may

bring the measure up

again later this year if

the political climate


Superconducting Super Collider The House on June 17

Energy and Water voted to strip the bill

Appropriations Bill (HR 5373) of nearly all the $483

million in federal

funding for the the

Superconducting Super

Collider science project

in Texas. The Senate


Committee's energy and

water development

subcommittee is expected

to take up legislation at

at the end of July.

MSRB Municipal Securities The primary market

Information Library Primary disclosure system of the

Market Disclosure System Municipal Securities

Rulemaking Board's

Municipal Securities

Information Library went

into operation the week

April 20, just over 10

months after it was

approved by the SEC.

Under the system,

official statements filed

with the board by

underwriters are put on

high-capacity digital

audio tapes that are sold

to information vendors

who can repackage the

information and resell it.

The system allows market

participants to obtain

picture-perfect images

of most of the official

statements produced in

the county. Bloomberg

Financial Markets became

the first vendor to

receive digital tapes in

early July. The Bond

Buyer, J.J. Kenney Co.,

Municipal Bond Investors

Assurance Co., and

entrepreneur Donald

Beatty plan to subscribe

to the tapes. Interactive

Data and AMBAC Indemnity

are considering


MSRB Continuing Disclosure The MSRB's 18 month

Pilot Program experimental Continuing

Disclosure Information

Pilot system, which is

the second major element

of the board's Municipal

Securities Information

Library, was approved by

the SEC April 6. The move

ended a two-year

roller-coaster effort by

the board to get the SEC

to endorse the system.

Once the voluntary pilot

program is launched in

November, bond trustees

will be able to file

three-page notices of

important events, such

as calls and draws on

escrow funds, that affect

bonds they oversee in the

secondary market. The

notices can be filed by

fax machine or mail. Six

months after the pilot

system is started,

issuers may voluntarily

start filing similar

notices. When the pilot

program ends about May

1994, the SEC and MSRB

will decide if they want

to make the program

permanent and whether and

how to expand it. The

board's MSIL facility,

including its public

access facility, will be

moved shortly from the

board's Washington,

D.C., headquarters to

nearby Alexandria, Va.,

at 1640 King St.

SEC Rule 2a-7 The unveiling of a new

SEC rule governing

tax-exempt money market

funds has been delayed

by President Bush's 1992

moratorium on rule-making

The SEC in January issued

new standards for both

taxable and tax-exempt

money market funds, but

most of the rigorous new

requirements governing

the kinds and variety of

securities that funds

can hold do not apply to

tax-exempts. Interest in

the new rule was

heightened last winter

when SEC Commissioner

Richard Roberts

recommended that the

agency restrict

tax-exempt money market

funds from investing in

short-term paper of

issuers that do not

pledge to make


disclosure. The

Investment Company

Institute, the industry

association representing

mutual funds, whole Mr.

Roberts Dec. 6 opposing

the proposal. The group

began work this spring

on disclosure guidelines

for tax-exempt money

market and mutual funds

in hopes of heading off

the commissioner's plan.

MSRB Rule on Fee Collection The Municipal Securities

Rulemaking Board on July

1 started streamlining

the way it collects

underwriting fees from

dealers. It will send

monthly bills to firms

rather than collecting

fees after each

underwriting. Dealers

will receive the first

bills at the end of July

for underwritings this

months and will have 30

days to file their

assessment fees.

The board on July 1

also began the process of

collecting fees from

firms doing note deals

with maturities over nine

months. The board

currently exempts notes

two years or under in

maturity. But it will

begin exempting private

placements from filing

fees. As for

variable-rate demand

notes, the board will

now require a fee when

any such notes over nine

months in maturity are

reissued. Notes under

nine months would be

exempt altogether from

fees. Currently, all

variable-rate demand

notes are treated like

long-term bonds and

assessed at a onetime

fee. Inquiries should be

directed to Christopher

Taylor, the MSRB's

executive director, at


MSRB Proposed Official The MSRB proposed in

Statement Collection Rule April expanding its

repository of official

statements by collecting

for the first time

documents for short-term

and variable-rate demand

note deals. The board

also said it may propose

collecting official

statements for private

placements. The whole

issue may be taken up at

the board's next meeting

in late July. The

expansion would mean

that official statements

for virtually all

municipal securities

issued in the United

States would be available

through the primary

market disclosure wing

of the board's Municipal

Securities Information

due June 1.

MSRB Interpretation on The MSRB issued an

Municipal CMOs interpretation in April

that yields do not have

to be stated on

confirmations for

transactions issued by

municipal issuers that

are structured like

collateralized mortgage

obligations. If a yield

is stated, the method

used to calculate it

must be clearly stated

on the confirmation, the

board said. The board

warned that dealers

executing muni CMOs must

meet board rules, such

as record keeping and

qualifications of dealers

selling the securities.

For further information,

contact MSRB Deputy

General Counsel Harold L.


Proposals for Streamlining A securities industry

Clearance and Settlement task force recommended

on May 26 that stock and

bond trades be settled

in three days instead of

the current five - a

recommendation that some

municipal market

participants say may be

hard to accomplish

quickly. However,

Securities and Exchange

Commission Chairman

Richard C. Breeden, who

originally recommended

the creation of the task

force, sought to allay

allay fears that the

so-called T plus 3

concept will disrupt the

securities industry. He

said it will probably

take two to three years

to shift to the faster

settlement system rather

than the original 1993

target. He also signaled

that that schedule could

slip even further for

municipal transactions.

The task force, headed

by John Bachmann,

managing principal of

St. Louis-based Edward

D. Jones & Co., was set

up in November 1991 as

an outgrowth of the

Group of 30, an

international panel

examining how to

streamline clearance and

settlement of securities


Registration of Rating Agencies SEC Commissioner Richard

Roberts urged in early

April in a series of

speeches that the agency

require rating agencies

to meet minimum operating

standards and to register

with the commission. The

commission might need

legislative authority to

do so. No formal action

has been taken by the

agency on the proposal.

Two SEC members, Chairman

Richard Breeden and

Commissioner J. Carter

Beese, stated

recently they oppose

Commissioner Robert's

recommendation. Chairman

Breeden was expected to

spell out his reasons in

a letter to Rep. John

Dingell, D-Mich.,

chairman of the House

Energy and Commerce

Committee, who wants to

introduce legislation to

implement Commissioner

Roberts's proposal.

Registration of Conduit Bonds Securities and Exchange

Commissioner Richard

Roberts proposed in a

speech Feb. 29 that

municipal bond brokers

be required to put in

writing why they think

their recommendations to

retail investors to buy

unrated conduit bonds

are suitable.

Broker-dealers currently

are required by law to

make suitability

determinations, but they

do not have to put such

determinations in

writing. The SEC's

market regulations

chief. William Heyman,

wrote the MSRB early

last month urging it to

take up the proposal or

consider other

solutions. The MSRB

touched on the subject

at its quarterly meeting

in mid-May and is

expected to begin

"thorough discussion" of

the issue at its summer

meeting at the end of

July. Mr. Roberts

outlined other options

for dealing with the

unrated, conduit bond

issue at a meeting of

the Bond Club of Virginia

last month.

Investment Advisers Legislation The Senate Banking

(S. 2266) Committee approved on

July 2 introduced by Sen.

Christopher Dodd,

D-Conn., that would

authorize the SEC to

collect annual fees from

investment advisers. The

added dollars would

allow the agency to beef

up considerably its

limited staff for

inspecting advisers. The

bill comes in the wake

of the indictment of

California Investment

adviser Steven Wymer,

who allegedly bilked

municipalities across the

country out of millions

of dollars of funds. In

the House, a draft bill

to be introduced by Rep.

Edward Markey, D-Mass,

has been circulating

since spring. Two

hearings on the measure

were held by the House

Energy and Commerce


telecommunications and

finance subcommittee, of

which the lawmaker is

chairman. Like the

Senate measure, the draft

bill would permit the

SEC to expand its

inspection staff. But it

also specifies risk

factors to be applied to

firms, calls for

inspections for new

registrants within their

first year of operation,

urges follow-up

inspection of certain

firms, requires advisers

to determine the

suitability of certain

investments for clients,

and requires the SEC to

survey the field for

unregistered advisers.

The subcommittee hopes

to vote on a bill by the

end of August.

IRS Arbitrage Rebate The Internal Revenue

Regulations Service on May 12

(FI-91-86/1.148-0-to-9 and finalized arbitrage

1.149(d)(-1) and 1.150-0-1 and rebate rules that had

1.103-13T been published in

temporary in May 1989.

The IRS set a June 30,

1993 expiration date for

the final rules, however,

and announced it would

rewrite and simplify

them before that date.

The IRS said it would

integrate yield

restriction rebate

requirements in the

rewritten rules.

Meanwhile, the final

rules have the same

effective dates as the

1989 rules, which means

they are generally

effective for

governmental bonds

issued after Aug 31,

1986, and for some

nongovernmental bonds

issued after Aug. 15,


The IRS also extended

effective date of 1989

rules until June 17 so

that market

participants with bond

deals in the works could

elect to comply with

either the old or the

new rules during a

one-month period. The

final rules only

slightly modified the

1989 rules, mostly in

the area of refundings.

IRS Allocation and Accounting On May 12 the IRS

Rules For Rebate Purposes issued final allocation

(FI-66-89/1.148-4) and accounting rules for

rebate purposes. The

rules, which tell

issuers how to allocate

the account for the

expenditures and

investments of their

bond proceeds, generally

took effect on June 17.

However, the IRS gave

market participants the

option of electing to

comply with the final

rules for bonds issued

after May 18, the date

the rules were published

in the Federal Register.

The final rules

contain many

modifications to the

rules that had been

proposed in January. The

final rules eliminate or

loosen many of the

restrictions that had

been proposed for

investments contracts.

but require fees paid to

investment contract

brokers to be added to

issuers' investment

income, even if the fees

are paid by contract

providers rather than

the issuers. The final

rules also ease

restrictions on

commingled bond and

nonbond funds.

IRS Transferred Proceeds On May 12 the IRS issued

Rules For Refundings final rules governing

(FI-90-91/1.148-11) transferred proceeds for

refundings. The rules

generally took effect

June 17, However the IRS

gave market participants

the option of electing

to comply with these

rules for bonds issued

after May 18, the date

the rules were published

in the Federal Register,

or retroactively to the

same dates the

transferred proceeds

provisions of the May

1989 arbitrage rebate

rules became effective.

Those 1989 provisions

generally became

effective for bonds sold

after May 15, 1989, or

issued after June 14,


There is one caveat:

the transferred proceeds

rules are applied to

bonds retroactively, the

the savings that are

associated with their

retroactive with their

applications must be

used to redeem the bonds

of the refunding issue.

The final rules make

few modifications to the

rules that had been

proposed in February to

simplify transferred

proceeds computations

and provide relief from

the so-called killer

suck-up requirements

that had discouraged

issuers from partially

refunding bond issues.

In one change in the

final rules, however,

IRS said it would allow

a 90-day temporary

period for current

refundings during which

proceeds are not subject

to yield restriction.

IRS Rules on the The IRS on May 12 issued

Two-Year Rebate Relief Law final rules telling

(FI-1-90/1.148-6) issuers how to comply

with the two-year rebate

relief law Congress

enacted in 1989 and

revised in 1990. The

rules were generally

effective on June 17.

The IRS, however, gave

issuers the option of

complying with these

rules for bonds issued

after May 18, the date

the rules were published

in the Federal Register.

The rules contain some

modifications of rules

that were proposed in

early February. The

rebate relief law

generally exempts

issuers of 501(c)(3)and

governmental bonds

financing construction

from arbitrage rebate

requirements if they

spend most of their bond

proceeds in two years,

according to six-month

spending targets. The

law applies only when

at least 75% of the bond

proceeds are used for


The final rules

clarify what kinds of

expenditures would

qualify as construction

expenditures and ease

definition of

construction to include

some kinds of software.

The rules also clarify

that an issuer must

reasonably expect to

spend, rather than

actually spend, 75% of

proceeds on construction

to qualify for rebate

relief under the law.

IRS Rule on Rebate and On May 12 the IRS issued

Yield Restriction Requirements a new temporary and

(FI-91-86/1.148-12T) proposed rule allowing

issuers subject to rebate

to be exempt from yield

restrictions under

certain circumstances.

The rule, which is

effective for bonds

issued after May 18 but

is also subject to

revision, generally

applies to bond issues

that are subject to both

yield restriction and

rebate requirements, but

do not qualify for an

exemption to rebate. The

rule does not apply to

certain bond proceeds

from refundings or pools

or to bonds that are

subject to a penalty

under the two-year

rebate relief law.

Requests for a public

hearing on the rule must

be submitted by July 17.

IRS Rule on Refunds The IRS on May 12 issued

of Overpayments of Arbitrage a new temporary and

(FI-67-89/1.148-13T) proposed rule allowing

issuers to obtain

refunds for legitimate

overpayments of arbitrage

that were rebated to the

federal government. The

rule is effective but

subject to revision. The

new rules say that

while issuers may request

such refunds now, the

IRS commissioner will

not be required to

consider the requests

until Sept 15. Agency

officials said the delay

will give them time to

issue procedures to

implement this rule.

IRS Arbitrage Rules The IRS on May 12 issued

on Student Loan Bonds final rules on arbitrage

(FI-75-89/1.148-10) restrictions for

student loan bonds. The

rules are effective for

students loan bonds

issued after Jan. 5,


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