,,ii  #aaeth ,,congress  #ast ,session  
,s4 #aibe  ,,in ,,the ,,senate ,,of     
,,the ,,united ,,states  ,october #e1   
#bjag,mr4 ,menendez 7for himself and    
,mr4 ,cardin7 introduced the following  
bill2 which was read twice and referred 
to the ,committee on ,finance  ,a ,,bill
  ,to amend the ,internal ,revenue ,code
 of #aihf to permanently modify the     
limitations on the deduction of interest
 by financial institutions which hold   
tax-exempt bonds1 and for other         
purposes4  #a4 ,short title ,this ,act  
may be cited as the ,municipal ,bond    
,market ,support ,act of #bjag4  #b4    
,permanent modification of small issuer 
exception to tax-exempt interest expense
 allocation rules for financial         
institutions  7a7 ,permanent increase in
 limitation ,subparagraphs 7,c77i71     
7,d77i71 and 7,d77iii77,,ii7 of section 
#bfe7;b77#c7 of the ,internal ,revenue  
,code of #aihf are each amended by      
striking #aj1jjj1jjj and inserting      
#cj1jjj1jjj4  7b7 ,permanent            

modification of other special rules     
,section #bfe7;b77#c7 of such ,code is  
amended-- 7#a7 by redesignating clauses 
7iv71 7v71 and 7vi7 of subparagraph 7,g7
 as clauses 7ii71 7iii71 and 7iv7 of    
such subparagraph1 respectively2 and    
7#b7 by striking so much of subparagraph
 7,g7 as precedes such clauses and      
inserting the following3  7,g7          
,qualified #eja7;c77#c7 ,bonds ,treated 
,as ,issued ,by ,exempt ,organization   
,in the case of a qualified #eja7;c77#c7
 bond 7as defined in section #ade71 this
 paragraph shall be applied by treating 
the #eja7;c77#c7 organization for whose 
benefit such bond was issued as the     
issuer4  7,h7 ,special rule for         
qualified financings  7i7 ,in general   
,in the case of a qualified financing   
issue-- 7,i7 subparagraph 7,f7 shall not
 apply1 and  7,,ii7 any obligation      
issued as a part of such issue shall be 
treated as a qualified tax-exempt       
obligation if the requirements of this  
paragraph are met with respect to each  

qualified portion of the issue          
7determined by treating each qualified  
portion as a separate issue which is    
issued by the qualified borrower with   
respect to which such portion relates74 
4  7c7 ,inflation adjustment ,section   
#bfe7;b77#c7 of such ,code1 as amended  
by subsection 7b71 is amended by adding 
at the end the following new            
subparagraph3  7,i7 ,inflation          
adjustment ,in the case of any calendar 
year after #bjag1 the #cj1jjj1jjj       
amounts contained in subparagraphs      
7,c77i71 7,d77i71 and 7,d77iii77,,ii7   
shall each be increased by an amount    
equal to--  7i7 such dollar amount1     
multiplied by  7ii7 the cost-of-living  
adjustment determined under section     
#a7;f77#c7 for such calendar year1      
determined by substituting calendar year
 #bjaf for calendar year #aiib in       
subparagraph 7,b7 thereof4  ,any        
increase determined under the preceding 
sentence shall be rounded to the nearest
 multiple of #ajj1jjj4  4  7d7          

,effective date ,the amendments made by 
this section shall apply to obligations 
issued after the date of the enactment  
of this ,act4