IRS Revenue Procedure
2002-25

 Code Sec. 1397E



<<FULL TEXT>>

26 CFR 601.601: Rules and regulations.
(Also Part I, section 1397E.)


REV. PROC. 2002-25

SECTION 1. PURPOSE

Pursuant to section 1397E(e)(2) of the Internal Revenue Code, this
revenue procedure allocates among the States the 2002 national limitation
amount of Qualified Zone Academy Bonds ("Bond" or "Bonds") that may be
issued for the calendar year 2002. 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 section 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 section 1397E(d)(5), with respect to a qualified
zone academy, as defined by section 1397E(d)(4).

.02 Section 1397E(e)(1), as amended by section 608 of the Job Creation
and Worker Assistance Act of 2002, Pub. L. 107-147, 116 Stat. 21 (2002),
provides that the national limitation amount of 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 section 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 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), and Rev. Proc. 2001-14 (2001-1
C.B. 343), respectively, allocated the national limitation for 1998, 1999,
2000, and 2001 among the States.


SECTION 3. NATIONAL QUALIFIED ZONE ACADEMY BOND LIMITATION FOR 2002

The 2002 national limitation amount for Bonds is $400 million. This
amount is allocated among the States as follows:

MAXIMUM FACE
AMOUNT OF BONDS
THAT MAY BE
ISSUED DURING 2002
STATE (thousands of dollars)
----- ----------------------
ALABAMA $7,683
ALASKA 634
ARIZONA 7,061
ARKANSAS 5,589
CALIFORNIA 53,149
COLORADO 4,105
CONNECTICUT 2,621
DELAWARE 862
DISTRICT OF COLUMBIA 898
FLORIDA 19,196
GEORGIA 10,400
HAWAII 1,376
IDAHO 1,927
ILLINOIS 16,827
INDIANA 6,032
IOWA 2,465
KANSAS 3,004
KENTUCKY 5,637
LOUISIANA 8,736
MAINE 1,269
MARYLAND 4,632
MASSACHUSETTS 7,528
MICHIGAN 11,884
MINNESOTA 3,411
MISSISSIPPI 4,284
MISSOURI 5,266
MONTANA 1,628
NEBRASKA 1,771
NEVADA 2,035
NEW HAMPSHIRE 766
NEW JERSEY 7,970
NEW MEXICO 3,578
NEW YORK 29,441
NORTH CAROLINA 10,903
NORTH DAKOTA 730
OHIO 13,847
OKLAHOMA 6,032
OREGON 4,572
PENNSYLVANIA 12,710
RHODE ISLAND 1,017
SOUTH CAROLINA 4,787
SOUTH DAKOTA 802
TENNESSEE 9,814
TEXAS 36,059
UTAH 2,537
VERMONT 850
VIRGINIA 6,391
WASHINGTON 7,097
WEST VIRGINIA 2,968
WISCONSIN 6,199
WYOMING 646
AMERICAN SAMOA 418
GUAM 426
NORTHERN MARIANAS 381
PUERTO RICO 26,727
VIRGIN ISLANDS 422


SECTION 4. EFFECTIVE DATE

This revenue procedure is effective April 29, 2002, and applies to
Bonds issued after March 9, 2002.


DRAFTING INFORMATION

The principal author of this revenue procedure is Zoran Stojanovic of
the Office of Assistant Chief Counsel (Exempt Organizations/Employment
Tax/Government Entities). For further information regarding this revenue
procedure, contact Mr. Stojanovic at (202) 622-3980 (not a toll-free
call).

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