[Federal Register Volume 72, Number 178 (Friday, September 14, 2007)]
[Rules and Regulations]
[Pages 52470-52471]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E7-18186]


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DEPARTMENT OF THE TREASURY

Internal Revenue Service

26 CFR Part 1

[TD 9339]
RIN 1545-BG44


Qualified Zone Academy Bonds; Obligations of States and Political 
Subdivisions; Correction

AGENCY: Internal Revenue Service (IRS), Treasury.

ACTION: Correcting amendments.

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SUMMARY: This document contains corrections to final and temporary 
regulations (TD 9339) that were published in the Federal Register on 
Monday, July 16, 2007 (72 FR 38767) providing guidance to state and 
local governments that issue qualified zone academy bonds and to banks, 
insurance companies, and other taxpayers that hold those bonds on the 
program requirements for qualified zone academy bonds.

DATES: The correction is effective September 14, 2007.

FOR FURTHER INFORMATION CONTACT: Timothy L. Jones or Zoran Stojanovic, 
(202) 622-3980 (not a toll-free number).

SUPPLEMENTARY INFORMATION: 

Background

    The final and temporary regulations that are the subject of this 
correction are under section 1397E of the Internal Revenue Code.

Need for Correction

    As published, final and temporary regulations (TD 9339) contain 
errors that may prove to be misleading and are in need of 
clarification.

List of Subjects in 26 CFR Part 1

    Income taxes, Reporting and recordkeeping requirements.

Correction of Publication

0
Accordingly, 26 CFR part 1 is corrected by making the following 
amendments:

PART 1--INCOME TAXES

0
Paragraph 1. The authority citation for part 1 continues to read, in 
part, as follows:

    Authority: 26 U.S.C. 7805 * * *

0
Par. 2. Section 1.1397E-1T is amended by revising paragraphs 
(h)(2)(iii)(B), (h)(7)(ii)(D)(2)(ii), and (h)(9)(i)(6) to read as 
follows:


Sec.  1.1397E-1T  Qualified zone academy bonds (temporary).

* * * * *
    (h) * * *
    (2) * * *
    (iii) * * *
    (B) The expenditure of at least 95 percent of the proceeds from the 
sale of the issue for a qualified purpose with respect to a qualified 
zone academy will continue to proceed with due diligence.
* * * * *
    (7) * * *
    (ii) * * *
    (D) * * *
    (2) * * *
    (ii) The first date on which an action is taken that causes the 
issuer to fail actually to use at least 95 percent of the proceeds of 
the issue for a qualified purpose with respect to a qualified zone 
academy.
* * * * *
    (9) * * *
    (i) * * *
    (6) Certain defeasance escrow earnings. With respect to a 
defeasance

[[Page 52471]]

escrow established in a remedial action for an issue of QZABs that 
meets the special rebate requirement under paragraph (h)(7)(ii)(C)(2) 
of this section, the QZAB issuer is treated as ineligible for the small 
issuer exception to arbitrage rebate under section 148(f)(4)(D) and 
paragraph (i)(5) of this section and compliance with that special 
rebate requirement is treated as satisfying applicable arbitrage 
investment restrictions under section 148 for that defeasance escrow.

LaNita Van Dyke,
Chief, Publications and Regulations Branch, Legal Processing Division, 
Associate Chief Counsel (Procedure and Administration).
[FR Doc. E7-18186 Filed 9-13-07; 8:45 am]
BILLING CODE 4830-01-P