104 STAT. 1388-512 PUBLIC LAW 101-508 —NOV. 5, 1990 Secretary may treat such failure as not occurring if, in addition to paying such penalty, the issuer pays a penalty equal to the sum of— "(I) 50 percent of the amount which was not paid in accordance with clauses (vii) and (viii), plus "(11) interest (at the underpa3anent rate established under section 6621) on the portion of the amount which was not paid on the date required for the period beginning on such date. The Secretary may waive all or any portion of the penalty under this clause. Bonds which are part of an issue with respect to which there is a failure to pay the amount required under this clause (and any refunding bond with respect thereto) shall be treated as not being, and as never having been, tax-exempt bonds. " (xi) ELECTION FOR POOLED FINANCING BONDS.— At the election of the issuer of an issue the proceeds of which are to be used to make or finance loans (other than nonpurpose investments) to 2 or more persons, the periods described in clauses (ii) and (iii) shall begin on— "(I) the date the loan is made, in the case of loans made within the 1-year period after the date the bonds are issued, and "(II) the date following such 1-year period, in the case of loans made after such 1-year period. If such an election applies to an issue, the requirements of paragraph (2) shall apply to amounts earned before the beginning of the periods determined under the preceding sentence. "(xii) PAYMENTS OF PRINCIPAL NOT TO AFFECT REQUIRE- MENTS.— For purposes of this subparagraph, pa3mients of principal on the bonds which are part of the construction issue shall not be treated as an expenditure of the available construction proceeds of the issue, "(xiii) REFUNDING BONDS.— "(I) IN GENERAL. —Except as provided in this clause, clause (viiXII), and the last sentence of clause (x), this subparagraph shall not apply to any refunding bond and no proceeds of a refunded bond shall be treated for purposes of this subparagraph as proceeds of a refunding bond. (II) DETERMINATION OF CONSTRUCTION PORTION OF ISSUE.—For purposes of clause (v), any portion of an issue which is used to refund any issue (or portion thereof) shall be treated as a separate issue. " (Ill) COORDINATION WITH REBATE REQUIREMENT ON REFUNDING BONDS. —The requirements of paragraph (2) shall be treated as met with respect to earnings for any period if a penalty is paid under clause (vii) or (viii) with respect to such earnings for such period. "(xiv) DETERMINATION OF INITIAL TEMPORARY PERIOD. —For purposes of this subpargraph, the end of the initial temporary period shall be determined without regard to section 149(d)(3)(A)(iv).