PUBLIC LAW 105-34—AUG. 5, 1997 111 STAT. 821 "PART IV—INCENTIVES FOR EDUCATION ZONES "Sec. 1397E. Credit to holders of qualified zone academy bonds.". "SEC. 1397E. CREDIT TO HOIJ)ERS OF QUALIFIED ZONE ACADEMY BONDS. "(a) ALLOWANCE OF CREDIT.—In the case of an eligible taxpayer who holds a qualified zone academy bond on the credit allowance date of such bond which occurs during the taxable year, there shall be allowed as a credit against the tax imposed by this chapter for such taxable year the amount determined under subsection (b). " (b) AMOUNT OF CREDIT. — "(1) IN GENERAL.— The amount of the credit determined under this subsection with respect to any qualified zone academy bond is the amount equal to the product of— "(A) the credit rate determined by the Secretary under paragraph (2) for the month in which such bond was issued, multiplied by "(B) the face amount of the bond held by the taxpayer on the credit allowance date. "(2) DETERMINATION. —During each calendar month, the Secretary shall determine a credit rate which shall apply to bonds issued during the following calendar month. The credit rate for any month is the percentage which the Secretary estimates will permit the issuance of qualified zone academy bonds without discount and without interest cost to the issuer. "(c) LIMITATION BASED ON AMOUNT OF TAX.—The credit allowed under subsection (a) for any taxable year shall not exceed the excess of— "(1) the sum of the regular tax liability (as defined in section 26(b)) plus the tax imposed by section 55, over "(2) the sum of the credits allowable under part IV of subchapter A (other than subpart C thereof, relating to refundable credits). "(d) QUALIFIED ZONE ACADEMY BOND.—For purposes of this section— "(1) IN GENERAL.—The term 'qualified zone academy bond' means any bond issued as part of an issue if— "(A) 95 percent or more of the proceeds of such issue are to be used for a qualified purpose with respect to a qualified zone academy established by an eligible local education agency, "(B) the bond is issued by a State or local government within the jurisdiction of which such academy is located, "(C) the issuer— "(i) designates such bond for purposes of this section, "(ii) certifies that it has written assurances that the private business contribution requirement of paragraph (2) will be met with respect to such academy, and "(iii) certifies that it has the written approval of the eligible local education agency for such bond issuance, and
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