rp-04-72.pdf

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# Part III

Administrative, Procedural, and Miscellaneous

26 CFR 601.601: Rules and Regulations
(Also Part 1, § 1397E)

Rev. Proc. 2004-72

## SECTION 1. PURPOSE

Pursuant to § 1397E(e)(2) of the Internal Revenue Code, this revenue procedure
sets forth the maximum face amount of Qualified Zone Academy Bonds ("Bond" or
"Bonds") that may be issued for each State for the calendar year 2005. For this
purpose, "State" includes the District of Columbia and the possessions of the United
States.

## SECTION 2. BACKGROUND

.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

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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 § 304 of the Working Families Tax
Relief Act of 2004, Pub. L. 108-311, 118 Stat. 1166 (2004), provides that the national
Bond limitation is $400 million for each of the years 1998, 1999, 2000, 2001, 2002,
2003, 2004, and 2005. 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 (1999), provides that any carryforward of a
limitation amount may be carried forward only to the first 2 years (3 years for
carryforwards from 1998 or 1999) following the unused limitation year. For this
purpose, a limitation amount shall be treated as used on a first-in first-out basis.
.04 Rev. Proc. 98-9, 1998-1 C.B. 341; Rev. Proc. 98-57, 1998-2 C.B. 682; Rev.
Proc. 2000-10, 2000-1 C.B. 287; Rev. Proc. 2001-14, 2001-1 C.B. 343; Rev. Proc.
2002-25, 2002-1 C. B. 800; Rev. Proc. 2002-72, 2002-2 C.B. 931, and Rev. Proc. 2004-
61, 2004-43 I.R.B. 707, allocated among the States the national limitation for 1998,
1999, 2000, 2001, 2002, 2003, and 2004, respectively.

SECTION 3. NATIONAL QUALIFIED ZONE ACADEMY BOND LIMITATION FOR 2004

The 2005 national limitation for Bonds is $400 million. This amount is allocated
among the States as follows:

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# MAXIMUM FACE AMOUNT OF BONDS THAT MAY BE ISSUED PURSUANT TO THE CALENDAR YEAR 2005 LIMITATION

STATE

(thousands of dollars)

Alabama

7,004

Alaska

655

Arizona

7,913

Arkansas

5,008

California

48,956

Colorado

4,606

Connecticut

2,937

Delaware

634

District of Columbia

972

Florida

22,693

Georgia

10,713

Hawaii

1,236

Idaho

1,458

Illinois

16,819

Indiana

6,444

Iowa

2,747

Kansas

3,043

Kentucky

6,223

Louisiana

7,923

Maine

1,574

Maryland

4,986

Massachusetts

6,888

Michigan

11,885

Minnesota

3,972

Mississippi

4,817

Missouri

6,360

Montana

1,468

Nebraska

1,775

Nevada

2,578

New Hampshire

771

New Jersey

7,828

New Mexico

3,571

New York

28,598

North Carolina

13,618

North Dakota

644

Ohio

12,952

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# MAXIMUM FACE AMOUNT OF BONDS THAT MAY BE ISSUED PURSUANT TO THE CALENDAR YEAR 2005 LIMITATION

STATE

(thousands of dollars)

Oklahoma

4,648

Oregon

4,712

Pennsylvania

13,512

Rhode Island

1,278

South Carolina

5,451

South Dakota

1,004

Tennessee

8,758

Texas

39,142

Utah

2,250

Vermont

549

Virginia

7,818

Washington

8,092

West Virginia

3,275

Wisconsin

5,578

Wyoming

507

American Samoa

373

Guam

403

Northern Marianas

381

Puerto Rico

19,627

Virgin Islands

373

Total

$400,000

## SECTION 4. EFFECTIVE DATE

This revenue procedure is effective as of December 10, 2004, and applies to
Bonds issued on or after January 1, 2005.

### SECTION 5. DRAFTING INFORMATION

The principal author of this revenue procedure is Zoran Stojanovic of the Office
of Division Counsel/Associate Chief Counsel (Tax Exempt & Government Entities). For
further information regarding this revenue procedure contact Mr. Stojanovic on (202)

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622-3980 (not a toll free call).