SECTION 2. BACKGROUND

Section 101 of the Gulf Opportunity Zone Act of 2005, Pub. L. No. 109–135, 119 Stat. 2577, 2578 (2005) (“GO Zone Act”) added §§ 1400M and 1400N to the Code to provide certain tax benefits in a defined portion of the Hurricane Katrina disaster area. Section 1400N(a)(2) authorizes the issuance of tax-exempt GO Zone Bonds. Section 1400N(a)(2) sets forth certain requirements for issuing these bonds, including a requirement that such bonds be “designated” as qualified GO Zone Bonds by a specified State or local governmental official or state bond commission. Section 1400N(a)(3) imposes a bond volume cap on the maximum aggregate face amount

of bonds that may be designated as qualified GO Zone Bonds. Section 764 of the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010, Pub. L. No. 111–312, 124 Stat. 3296, 3324 (2010), extended the deadline for the issuance of GO Zone Bonds through December 31, 2011. For further guidance on GO Zone Bonds, see Notice 2006–41, 2006–1 C.B. 857 (May 1, 2006). Sections 702(d)(1) and 704(a) of the Heartland Disaster Act provide generally that the special provisions for tax-exempt private activity bond financing in the GO Zone under § 1400N of the Code apply with certain modifications to tax-exempt private activity bond financing in the Midwestern Disaster Area and Hurricane Ike Disaster Area, respectively. Midwest Disaster Area bonds and Hurricane Ike Disaster Area bonds must be issued by December 31, 2012. For further guidance on Midwest Disaster Area Bonds and Hurricane Ike Disaster Area Bonds, see Notice 2010–10, 2010–3 I.R.B. 299 (January 19, 2010). The statutory provisions relating to the Qualified Bonds are silent regarding the permissibility of current refundings of these bonds after the applicable bond issuance deadlines. Under a substantially similar predecessor provision for qualified New York Liberty Bonds, the Treasury Department and the IRS previously provided guidance on the allowability of current refundings within certain size limitations for purposes of bond issuance deadlines applicable to those bonds. See Notice 2003–40, 2003–2 C.B. 10, at Question 5 (July 7, 2003). Cf . Staff of Joint Committee on Taxation, Technical Explanation of the Revenue Provisions of H.R. 4440, The “Gulf Opportunity Zone Act of 2005,” as Passed by the House of Representatives and the Senate 5–6, JCX–88–05 (December 16, 2005) (including a description of the Liberty Bond provision in the discussion of present law and also stating that “[c]urrent refundings of outstanding [GO Zone] bonds issued under the provision do not count against the aggregate volume limit to the extent that the principal amount of the refunding bonds does not exceed the outstanding principal amount of the bonds being refunded”).