[Congressional Bills 109th Congress]
[From the U.S. Government Publishing Office]
[S. 1474 Introduced in Senate (IS)]








109th CONGRESS
  1st Session
                                S. 1474

  To amend the Deficit Reduction Act of 1984 to clarify the Permanent 
University Fund arbitrage exception and to increase from 20 percent to 
 30 percent the amount of securities and obligations benefitting from 
                             the exception.


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                   IN THE SENATE OF THE UNITED STATES

                             July 22, 2005

 Mrs. Hutchison (for herself and Mr. Cornyn) introduced the following 
  bill; which was read twice and referred to the Committee on Finance

_______________________________________________________________________

                                 A BILL


 
  To amend the Deficit Reduction Act of 1984 to clarify the Permanent 
University Fund arbitrage exception and to increase from 20 percent to 
 30 percent the amount of securities and obligations benefitting from 
                             the exception.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. MODIFICATION OF SPECIAL ARBITRAGE RULE FOR CERTAIN FUNDS.

    (a) In General.--Paragraph (1) of section 648 of the Deficit 
Reduction Act of 1984 (98 Stat. 941) is amended to read as follows:
            ``(1) such securities or obligations are held in a fund--
                    ``(A) which, except to the extent of the investment 
                earnings on such securities or obligations, cannot be 
                used, under State constitutional or statutory 
                restrictions continuously in effect since October 9, 
                1969, through the date of issue of the bond issue, to 
                pay debt service on the bond issue or to finance the 
                facilities that are to be financed with the proceeds of 
                the bonds, or
                    ``(B) the annual distributions from which cannot 
                exceed 7 percent of the average fair market value of 
                the assets held in such fund except to the extent 
                distributions are necessary to pay debt service on the 
                bond issue,''.
    (b) Conforming Amendment.--Paragraph (3) of such section is amended 
by striking ``the investment earnings of'' both places it occurs and 
inserting ``distributions from''.
    (c) Change of Date Relating to Amount Benefitting From Rule.--
Paragraph (4) of such section is amended by striking ``October 9, 
1969'' and inserting ``March 1, 1985''.
    (d) Effective Date.--The amendments made by this section shall take 
effect on the date of enactment of this Act.
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