PUBLIC LAW 98-369—JULY 18, 1984
98 STAT. 923
"(I) the aggregate amount earned on all nonpurpose obligations (other than investments attributable to an excess described in this clause), over "(II) the amount which would have been earned if all nonpurpose obligations were invested at a rate equal to the yield on the issue, plus "(ii) any income attributable to the excess described in clause (i), is paid to the United States by the issuer in accordance with the requirements of subparagraph (E). "(E) DUE DATE OF PAYMENTS UNDER SUBPARAGRAPH (D).—
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The amount which is required to be paid to the United States by the issuer shall be paid in installments which are made at least once every 5 years. Each installment shall be in an amount which insures that 90 percent of the amount described in subparagraph (D) with respect to the issue at the time payment of such installment is required will have been paid to the United States. The last installment shall be made no later than 30 days after the day on which the last obligation of the issue is redeemed and shall be in an amount sufficient to pay the remaining balance of the amount described in subparagraph (D) with respect to such issue. "(F) SPECIAL RULES FOR APPLYING SUBPARAGRAPH (D).—
"(i) IN GENERAL.—In determining the aggregate amount earned on nonpurpose obligations for purposes of subparagraph (D)— "(I) any gain or loss on the disposition of a nonpurpose obligation shall be taken into account, and "(II) unless the issuer otherwise elects, any amount earned on a bona fide debt service fund shall not be taken into account if the gross earnings on such fund for the bond year is less than $100,000. "(ii) TEMPORARY INVESTMENTS.—Under regulations prescribed by the Secretary, an issue shall, for purposes of this paragraph, be treated as meeting the requirements of subparagraph (D) if the gross proceeds of such issue are expended for the governmental purpose for which the bond was issued by no later than the day which is 6 months after the date of issuance of such issue. Gross proceeds which are held in a bona fide debt service fund shall not be considered gross proceeds for purposes of this clause only.
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"(G) EXEMPTION FROM GROSS INCOME OF SUM REBATED.—
Gross income does not include the sum described in subparagraph (D). Notwithstanding any other provision of this title, no deduction shall be allowed for any amount paid to the United States under subparagraph (D). "(H) DEFINITIONS.—For purposes of this paragraph— "(i) NONPURPOSE OBLIGATIONS.—The term 'nonpurpose obligation' means any security (within the meaning of subparagraph (A) or (B) of section 165(g)(2)) or any obligation not described in subsection (a) which— "(I) is acquired with the gross proceeds of an issue, and
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