AFRICAN DEVELOPMENT BANK ACT

(Pub L. 97-35, Title XIII, Subtitle B, Part 3, August 13, 1981, 95 Stat. 741)

SECURITIES ISSUED BY THE BANK

SEC. 1341. [22 U.S.C. 290i-9] (a) Any securities issued by the Bank (including any guarantee by the Bank, whether or not limited in scope) in connection with the raising of funds for inclusion in the Bank's ordinary capital resources as defined in article 9 of the agreement and any securities guaranteed by the Bank as to both principal and interest to which the commitment in article 7, paragraph 4(a) of the agreement is expressly applicable, shall be deemed to be exempted securities within the meaning of section 3(a)(2) of the Securities Act of 1933 (15 U.S.C. 77c) and section 3(a)(12) of the Securities Exchange Act of 1934. (15 U.S.C. 78c). The Bank shall file with the Securities and Exchange Commission such annual and other reports with regard to such securities as the Commission shall determine to be appropriate in view of the special character of the Bank and its operations as necessary in the public interest or for the protection of investors.

(b) The Securities and Exchange Commission, acting in consultation with such agency or officer as the President shall designate, is authorized to suspend the provisions of subsection (a) at any time as to any or all securities issued or guaranteed by the Bank during the period of such suspension. The Commission shall include in its annual reports to Congress such information as it shall deem advisable with regard to the operations and effect of this section and in connection therewith shall include any views submitted for such purpose by any association of dealers registered with the Commission.

EUROPEAN BANK FOR RECONSTRUCTION AND
DEVELOPMENT ACT

(As contained in P.L. 101-513 (Foreign Operations, Export Financing, and Related Programs Appropriations Act, 1991), November 5, 1990, 104 Stat. 2034)

(c) EUROPEAN BANK FOR RECONSTRUCTION AND DEVELOPMENT.

(1) [22 U.S.C. 2901 note] SHORT TITLE.-This subsection may be cited as the "European Bank for Reconstruction and Development Act".

(2) [22 U.S.C. 2901] ACCEPTANCE OF MEMBERSHIP.-The President is hereby authorized to accept membership for the United States in the European Bank for Reconstruction and Development (in this subsection referred to as the "Bank”) provided for by the agreement establishing the Bank (in this subsection referred to as the "Agreement"), signed on May 29, 1990.

(9) [22 U.S.C. 2901-7] EXEMPTION FROM SECURITIES LAWS FOR CERTAIN SECURITIES ISSUED BY THE BANK; REPORTS REQUIRED.—

(A) EXEMPTION FROM SECURITIES LAWS; REPORTS TO SECURITIES AND EXCHANGE COMMISSION.-Any securities issued by the Bank (including any guaranty by the Bank, whether or not limited in scope) in connection with the raising of funds for inclusion in the Bank's ordinary capital resources as defined in article 7 of the Agreement and any securities guaranteed by the Bank as to both principal and interest to which the commitment in article 6, paragraph 4, of the Agreement is expressly applicable, shall be deemed to be exempted securities within the meaning of section 3(a)(2) of the Securities Act of 1933 and section 3(a)(12) of the Securities Exchange Act of 1934. The Bank shall file with the Securities and Exchange Commission such annual and other reports with regard to such securities as the Commission shall determine to be appropriate in view of the special character of the Bank and its operations and necessary in the public interest or for the protection of investors.

(B) AUTHORITY OF SECURITIES AND EXCHANGE COMMISSION TO SUSPEND EXEMPTION; REPORTS TO THE CONGRESS.-The Securities and Exchange Commission, acting in consultation with such agency or officer as the President shall designate, may suspend the provisions of subparagraph (A) at any time as to any or all securities issued or guaranteed by the Bank during the period of such suspension. The Commission shall include in its annual reports to the Con

EUROPEAN BANK FOR RECONSTRUCTION AND DEVELOPMENT ACT 580

gress such information as it shall deem advisable with regard to the operations and effect of this paragraph.

INTERNAL REVENUE CODE

The following provisions represent the Internal Revenue Code of 1986, as amended ("1986 Code"), except with respect to section 103. Section 103 of the Internal Revenue Code of 1954, as amended ("1954 Code"), as shown here does not reflect the extensive amendments made by the Tax Reform Act of 1986 (Pub. L. 99-514, 100 Stat. 2085).

The 1986 Code changed the tax treatment of certain types of municipal bonds by adding 10 additional Code sections, beginning at section 141. The revised Code continues the exclusion from gross income of interest on municipal obligations used for traditional governmental purposes found in section 103(a)(1) of the 1954 Code. The 1986 Code, however, removes the exemption for "industrial development bonds," and instead creates a more limited exemption for "qualified private activity bonds." The activities that may now be financed through the use of private activity bonds are substantially similar to those formerly permitted through the use of industrial development bonds, although some new restrictions are imposed. See section 141(d) of the 1986 Code.

Section 3(a)(2) of the Securities Act of 1933 (15 U.S.C. 77c(a)(2)), and section 3(a)(29) of the Securities Exchange Act of 1934 (15 U.S.C. 78c(a)(29)), continue to refer to "an industrial revenue bond (as defined in section 103(c)(2) of the Internal Revenue Code of 1954)," which was subsequently redesignated as section 103(b) by section 1901(a)(17) of Pub. L. 94-455 (formerly 26 U.S.C. 103(b)). Because these sections do not refer to "qualified private activity bonds," this compilation contains the former provision.

The Securities Act of 1933 and the Securities Exchange Act of 1934 contain other references to provisions of the 1954 Code, including references to sections 401, 403(b), 404(a)(2), and 414(d) in section 3(a)(2) of the Securities Act (15 U.S.C. 77c(a)(2)), and in section 3(a)(12)(C) of the Exchange Act, 15 U.S.C. 78c(a)(12)(C), and to sections 501 and 521 in section 3(a)(5) of the Securities Act (15) U.S.C. 78c(a)(5)). Because these sections of the 1954 Code have been carried forward, with amendments, as the corresponding provisions of the 1986 Code, the 1986 Code versions are reproduced here.

INTERNAL REVENUE CODE OF 1954

[The United States Code citations for the following Internal Revenue Code sections correspond to the section numbers given below.]

Subtitle A-Income Taxes

CHAPTER 1-NORMAL TAXES AND SURTAXES

Subchapter B-Computation of Taxable Income

*

PART III-ITEMS SPECIFICALLY EXCLUDED FROM GROSS

INCOME

SEC. 103. INTEREST ON CERTAIN GOVERNMENTAL OBLIGATIONS.

(a) GENERAL RULE.-Gross income does not include interest on(1) the obligations of a State, a Territory, or a possession of the United States, or any political subdivision of any of the foregoing, or of the District of Columbia; and

(2) qualified scholarship funding bonds.

(b) INDUSTRIAL DEVELOPMENT BONDS.

(1) SUBSECTION (a)(1) OR (2) NOT TO APPLY.-Except as otherwise provided in this subsection, any industrial development bond shall be treated as an obligation not described in subsection (a) (1) or (2).

(2) INDUSTRIAL DEVELOPMENT BOND.-For purposes of this section, the term "industrial development bond" means any obligation

(A) which is issued as part of an issue all or a major portion of the proceeds of which are to be used directly or indirectly in any trade or business carried on by any person who is not an except person (within the meaning of paragraph (3)), and

(B) the payment of the principal or interest on which (under the terms of such obligation or any underlying arrangement) is, in whole or in major part

(i) secured by any interest in property used or to be used in a trade or business or in payments in respect of such property, or

(ii) to be derived from payments in respect of property, or borrowed money, used or to be used in a trade or business.

(3) EXEMPT PERSON.-For purposes of paragraph (2)(A), the term "exempt person" means—

(A) a governmental unit, or

(B) an organization described in section 501(c)(3) and exempt from tax under section 501(a) (but only with respect to a trade or business carried on by such organization which is not an unrelated trade or business, determined by applying section 513(a) to such organization). (4) CERTAIN EXEMPT ACTIVITIES.-Paragraph (1) shall not apply to any obligation which is issued as part of an issue substantially all of the proceeds of which are to be used to provide