SECTION 2. BACKGROUND — Internal Revenue Bulletin 2002-49

.01 Section 226 of the Taxpayer Relief Act of 1997, Pub. L. 105–34, 111 Stat. 821 (1997), added § 1397E to the Internal Revenue Code to provide a credit to holders of Bonds under certain circumstances so that

the Bonds generally can be issued without discount or interest. Ninety-five percent of Bond proceeds are to be used for qualified purposes, as defined by § 1397E (d)(5), with respect to a qualified zone academy, as defined by § 1397E(d)(4).

.02 Section 1397E(e)(1), as amended by § 608 of the Job Creation and Worker Assistance Act of 2002, Pub. L. 107–147, 116 Stat. 21 (2002), provides that the national limitation for Bonds that may be issued is $400 million for each of the years 1998, 1999, 2000, 2001, 2002, and 2003. This amount is to be allocated among the States by the Secretary on the basis of their respective populations below the poverty level (as defined by the Office of Management and Budget) and is to be further allocated by each State to qualified zone academies within the State.

.03 Section 1397E(e)(4), as amended, by § 509 of the Tax Relief Extension Act of 1999, Pub. L. 106–170, 113 Stat. 1860

STATE MAXIMUM FACE AMOUNT OF BONDS THAT MAY BE ISSUED PURSUANT TO THE CALENDAR YEAR 2003 LIMITATION (thousands of dollars)

Alabama 7,975 Alaska 619 Arizona 8,914 Arkansas 5,408 California 49,511 Colorado 4,388 Connecticut 2,853 Delaware 607 District of Columbia 1,157 Florida 23,799 Georgia 12,249 Hawaii 1,581 Idaho 1,730 Illinois 14,311 Indiana 5,855 Iowa 2,429 Kansas 3,059 Kentucky 5,763 Louisiana 8,124 Maine 1,512 Maryland 4,411 Massachusetts 6,428 Michigan 10,622 Minnesota 4,136 Mississippi 6,176

2002–49 I.R.B. 931 December 9, 2002

STATE MAXIMUM FACE AMOUNT OF BONDS THAT MAY BE ISSUED PURSUANT TO THE CALENDAR YEAR 2003 LIMITATION (thousands of dollars)

Missouri 6,153 Montana 1,364 Nebraska 1,810 Nevada 1,742 New Hampshire 928 New Jersey 7,826 New Mexico 3,701 New York 30,524 North Carolina 11,607 North Dakota 985 Ohio 13,452 Oklahoma 5,821 Oregon 4,675 Pennsylvania 13,269 Rhode Island 1,146 South Carolina 6,909 South Dakota 710 Tennessee 9,189 Texas 35,853 Utah 2,727 Vermont 676 Virginia 6,462 Washington 7,264 West Virginia 3,334 Wisconsin 4,847 Wyoming 481

American Samoa 470 Guam 412 Northern Marianas 390 Puerto Rico 21,209 Virgin Islands 447