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proposed bonds as if the funds raised therefrom were utilized
directly in 1994. As to petitioner's characterization of the
City Obligation, petitioner fails to accord adequate recognition
to the broad authority given to the Secretary to issue
regulations implementing section 148. Thus, section 148(i)
provides:
(i) Regulations.--The Secretary shall prescribe
such regulations as may be necessary or appropriate to
carry out the purposes of this section.
The breadth of this authority to issue "legislative"
regulations, see Coca-Cola Co. & Subs. v. Commissioner, 106 T.C.
1, 18-19 (1996), is clearly revealed by the following statement
in the report of the House Ways and Means Committee at the time
of the enactment of the Technical and Miscellaneous Revenue Act
of 1988, Pub. L. 100-647, sec. 1013(a)(34)(A), 102 Stat. 3342,
3544:
The bill further deletes and re-inserts the term
"necessary" in the specific regulatory authority
granted the Treasury Department under the arbitrage
restrictions. This amendment is intended to clarify
that Treasury's regulatory authority is to be
interpreted broadly, rather than in a literal,
dictionary manner * * *. That regulatory authority is
intended to permit Treasury to eliminate any devices
designed to promote issuance of bonds either partially
or wholly as investment conduits in violation of the
provisions adopted by Congress to control such
activities and to limit the issuance of tax-exempt
bonds to amounts actually required to fund the
activities for which their use specifically has been
approved by Congress. Further, that regulatory
authority is intended to permit Treasury to adopt rules
(including allocation, accounting, and replacement
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