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Internal Revenue Code, § 6431. Credit For Qualified Bonds Allowed To Issuer [Repealed]

Editor's Note: Pub. L. 115-97, Sec. 13404(b), struck Sec. 6431, effective for bonds issued after December 31, 2017.
I.R.C. § 6431(a) In General
Editor's Note: Pub. L. 115-97, Sec. 13404(b), struck Sec. 6431, effective for bonds issued after December 31, 2017.
In the case of a qualified bond issued before January 1, 2011, the issuer of such bond shall be allowed a credit with respect to each interest payment under such bond which shall be payable by the Secretary as provided in subsection (b).
I.R.C. § 6431(b) Payment Of Credit
Editor's Note: Pub. L. 115-97, Sec. 13404(b), struck Sec. 6431, effective for bonds issued after December 31, 2017.
The Secretary shall pay (contemporaneously with each interest payment date under such bond) to the issuer of such bond (or to any person who makes such interest payments on behalf of the issuer) 35 percent of the interest payable under such bond on such date.
I.R.C. § 6431(c) Application Of Arbitrage Rules
Editor's Note: Pub. L. 115-97, Sec. 13404(b), struck Sec. 6431, effective for bonds issued after December 31, 2017.
For purposes of section 148, the yield on a qualified bond shall be reduced by the credit allowed under this section.
I.R.C. § 6431(d) Interest Payment Date
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.
I.R.C. § 6431(e) Qualified Bond
Editor's Note: Pub. L. 115-97, Sec. 13404(b), struck Sec. 6431, effective for bonds issued after December 31, 2017.
For purposes of this subsection, the term “qualified bond” has the meaning given such term in section 54AA(g).
I.R.C. § 6431(f) Application Of Section To Certain Qualified Tax Credit Bonds
Editor's Note: Pub. L. 115-97, Sec. 13404(b), struck Sec. 6431, effective for bonds issued after December 31, 2017.
I.R.C. § 6431(f)(1) In General
In the case of any specified tax credit bond—
I.R.C. § 6431(f)(1)(A)
such bond shall be treated as a qualified bond for purposes of this section,
I.R.C. § 6431(f)(1)(B)
subsection (a) shall be applied without regard to the requirement that the qualified bond be issued before January 1, 2011,
I.R.C. § 6431(f)(1)(C)
the amount of the payment determined under subsection (b) with respect to any interest payment due under such bond shall be equal to the lesser of—
I.R.C. § 6431(f)(1)(C)(i)
the amount of interest payable under such bond on such date, or
I.R.C. § 6431(f)(1)(C)(ii)
the amount of interest which would have been payable under such bond on such date if such interest were determined at the applicable credit rate determined under section 54A(b)(3),
I.R.C. § 6431(f)(1)(D)
interest on any such bond shall be includible in gross income for purposes of this title,
I.R.C. § 6431(f)(1)(E)
no credit shall be allowed under section 54A with respect to such bond,
I.R.C. § 6431(f)(1)(F)
any payment made under subsection (b) shall not be includible as income for purposes of this title, and
I.R.C. § 6431(f)(1)(G)
the deduction otherwise allowed under this title to the issuer of such bond with respect to interest paid under such bond shall be reduced by the amount of the payment made under this section with respect to such interest.
I.R.C. § 6431(f)(2) Special Rule For New Clean Renewable Energy Bonds And Qualified Energy Conservation Bonds
In the case of any specified tax credit bond described in clause (i) or (ii) of paragraph (3)(A), the amount determined under paragraph (1)(C)(ii) shall be 70 percent of the amount so determined without regard to this paragraph and sections 54C(b) and 54D(b).
I.R.C. § 6431(f)(3) Specified Tax Credit Bond
For purposes of this subsection, the term “specified tax credit bond” means any qualified tax credit bond (as defined in section 54A(d)) if—
I.R.C. § 6431(f)(3)(A)
such bond is—
I.R.C. § 6431(f)(3)(A)(i)
a new clean renewable energy bond (as defined in section 54C),
I.R.C. § 6431(f)(3)(A)(ii)
a qualified energy conservation bond (as defined in section 54D),
I.R.C. § 6431(f)(3)(A)(iii)
a qualified zone academy bond (as defined in section 54E) determined without regard to any allocation relating to the national zone academy bond limitation for years after 2010 or any carryforward of any such allocation, or
I.R.C. § 6431(f)(3)(A)(iv)
a qualified school construction bond (as defined in section 54F), and
I.R.C. § 6431(f)(3)(B)
the issuer of such bond makes an irrevocable election to have this subsection apply.
(Added by Pub. L. 111-5, div. B, title I, Sec. 1531(b), Feb. 17, 2009, 123 Stat. 115; amended by Pub. L. 111-147, Sec. 301(a), Mar. 18, 2010, 124 Stat. 71; Pub. L. 111-312, title VII, Sec. 758(b), Dec. 17, 2010, 124 Stat. 3296; Pub. L. 113-295, Div. A, title II, Sec. 202(d), Dec. 19, 2014, 128 Stat. 4010; repealed by Pub. L. 115-97, title I, Sec. 13404(b), Dec. 22, 2017, 131 Stat. 2054.)
BACKGROUND NOTES
AMENDMENTS
2017 - Sec. 6431. Pub. L. 115-97, Sec. 13404(b), struck Sec. 6431. Before being struck, it read as follows:
“Sec. 6431. Credit For Qualified Bonds Allowed To Issuer
“(a) In General.—In the case of a qualified bond issued before January 1, 2011, the issuer of such bond shall be allowed a credit with respect to each interest payment under such bond which shall be payable by the Secretary as provided in subsection (b).
“(b) Payment Of Credit.—The Secretary shall pay (contemporaneously with each interest payment date under such bond) to the issuer of such bond (or to any person who makes such interest payments on behalf of the issuer) 35 percent of the interest payable under such bond on such date.
“(c) Application Of Arbitrage Rules.—For purposes of section 148, the yield on a qualified bond shall be reduced by the credit allowed under this section.
“(d) Interest Payment Date.—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) Qualified Bond.—For purposes of this subsection, the term “qualified bond” has the meaning given such term in section 54AA(g).
“(f) Application Of Section To Certain Qualified Tax Credit Bonds
“(1) In General.—In the case of any specified tax credit bond—
“(A) such bond shall be treated as a qualified bond for purposes of this section,
“(B) subsection (a) shall be applied without regard to the requirement that the qualified bond be issued before January 1, 2011,
“(C) the amount of the payment determined under subsection (b) with respect to any interest payment due under such bond shall be equal to the lesser of—
“(i) the amount of interest payable under such bond on such date, or
“(ii) the amount of interest which would have been payable under such bond on such date if such interest were determined at the applicable credit rate determined under section 54A(b)(3),
“(D) interest on any such bond shall be includible in gross income for purposes of this title,
“(E) no credit shall be allowed under section 54A with respect to such bond,
“(F) any payment made under subsection (b) shall not be includible as income for purposes of this title, and
“(G) the deduction otherwise allowed under this title to the issuer of such bond with respect to interest paid under such bond shall be reduced by the amount of the payment made under this section with respect to such interest.
“(2) Special Rule For New Clean Renewable Energy Bonds And Qualified Energy Conservation Bonds.—In the case of any specified tax credit bond described in clause (i) or (ii) of paragraph (3)(A), the amount determined under paragraph (1)(C)(ii) shall be 70 percent of the amount so determined without regard to this paragraph and sections 54C(b) and 54D(b).
“(3) Specified Tax Credit Bond.—For purposes of this subsection, the term “specified tax credit bond” means any qualified tax credit bond (as defined in section 54A(d)) if—
“(A) such bond is—
“(i) a new clean renewable energy bond (as defined in section 54C),
“(ii) a qualified energy conservation bond (as defined in section 54D),
“(iii) a qualified zone academy bond (as defined in section 54E) determined without regard to any allocation relating to the national zone academy bond limitation for years after 2010 or any carryforward of any such allocation, or
“(iv) a qualified school construction bond (as defined in section 54F), and
“(B) the issuer of such bond makes an irrevocable election to have this subsection apply.”
2014 - Subsec. (f)(3)(A)(iii). Pub. L. 113-295, Div. A, Sec. 202(d), amended clause (iii) by substituting “years after 2010” for “2011” and by substituting “of any such allocation” for “of such allocation”.
2010 - Subsec. (f)(3)(A)(iii). Pub. L. 111-312, Sec. 758(b), amended clause (iii) by inserting “determined without regard to any allocation relating to the national zone academy bond limitation for 2011 or any carryforward of such allocation” after “54E)”.
Subsec. (f). Pub. L. 111-147, Sec. 301(a), added subsec. (f).
EFFECTIVE DATE OF REPEAL
Repeal by Pub. L. 115-97, Sec. 13404(b), effective for bonds issued after December 31, 2017.
EFFECTIVE DATE OF 2014 AMENDMENTS
Amendments by Pub. L. 113-295, Div. A, Sec. 202(d), effective as if included in the provision of the American Taxpayer Relief Act of 2012 to which it relates.
EFFECTIVE DATE OF 2010 AMENDMENT
Amendment by Sec. 758(b) of Pub. L. 111-312 effective for obligations issued after December 31, 2010.
Amendment by Sec. 301(a) of Pub. L. 111-147 effective for bonds issued after the date of the enactment of this Act [Enacted: Mar. 18, 2010].
EFFECTIVE DATE
Effective for obligations issued after the date of the enactment of this Act [Enacted: Feb. 17, 2009].
TRANSITIONAL COORDINATION WITH STATE LAW
Sec. 1531(d) of Pub. L. 111-5, Div. B, provided that:
“(d) TRANSITIONAL COORDINATION WITH STATE LAW.—Except 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.”