Tax-exempt bond financing requirement

(a) In general Section 42(h)(4) of the Internal Revenue Code of 1986 is amended— (1) in subparagraph (B)(ii)(I)— (A) by striking obligations described in subparagraph (A) and inserting qualified obligations, and (B) by striking 25 percent and inserting 15 percent, and (2) by adding at the end the following new subparagraph: (C) Qualified obligation For purposes of subparagraph (B)(ii), the term qualified obligation means an obligation which is described in subparagraph (A) and which is part of an issue the issue date of which is before January 1, 2028.. (b) Effective date (1) In general The amendment made by this section shall apply to buildings placed in service in taxable years beginning after December 31, 2025. (2) Rehabilitation expenditures treated as separate new building In the case of any building with respect to which any expenditures are treated as a separate new building under section 42(e) of the Internal Revenue Code of 1986, for purposes of paragraph (1), both the existing building and the separate new building shall be treated as having been placed in service on the date such expenditures are treated as placed in service under section 42(e)(4) of such Code.