City of Columbus, Ohio - Page 10

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          inapplicable to any arbitrage bond within the meaning of section            
          148.  Sec. 103(b).                                                          
               An arbitrage bond is defined in section 148(a) as follows:             
                    (a) Arbitrage Bond Defined.--For purposes of                      
               section 103, the term "arbitrage bond" means any bond                  
               issued as part of an issue any portion of the proceeds                 
               of which are reasonably expected (at the time of                       
               issuance of the bond) to be used directly or                           
               indirectly--                                                           
                    (1) to acquire higher yielding investments * * *                  
               For purposes of this subsection, a bond shall be                       
               treated as an arbitrage bond if the issuer                             
               intentionally uses any portion of the proceeds of the                  
               issue of which such bond is a part in a manner                         
               described in paragraph (1) * * *.                                      
               A higher yielding investment is "any investment property               
          which produces a yield over the term of the issue which is                  
          materially higher than the yield on the issue."  Sec. 148(b)(1).            
               Section 148(b)(2) provides in pertinent part:                          
                    (2)  Investment property.--The term "investment                   
               property" means--                                                      
                         (A)  any security (within the meaning of                     
                    section 165(g)(2)(A) or (B)),                                     
                         (B)  any obligation,                                         
                         (C)  any annuity contract,                                   
                         (D)  any investment-type property * * *                      
               The legislative purpose in enacting these provisions is                
          reflected in the following statement in the report of the House             







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Last modified: May 25, 2011