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Citations: (R)682.800 AsOfDate: 12/31/98

Subpart H--Special Allowance Payments on Loans Made or Purchased With Proceeds of Tax-Exempt Obligations Sec. 682.800 Special allowance payments for loans financed by proceeds of tax-exempt obligations. (a) The Secretary pays a special allowance on a loan that was made or acquired with the proceeds of an obligation exempt from taxation under section 103 of the Internal Revenue Code of 1986 and is held by or on behalf of an Authority if-(1) For loans financed by an obligation issued after December 31, 1980 and before November 16, 1986, the Secretary approved(i) The Plan for Doing Business of the Authority that issued the obligation; and (ii) The justification of need for the obligation if the obligation was issued after August 14, 1983; or (2) The Plan for Doing Business of the Authority that issued the obligations has been approved by the Governor of the State from which the Authority received or will seek an allocation under section 103(n) of the Internal Revenue Code of 1986 after consultation with the principal guaranty agency for the State. (b) The Secretary pays a special allowance-(1) For loans described in paragraph (a)(1) of this section from the latest of-(i) The date the Secretary approved the Plan for Doing Business of the Authority; (ii) The date the Secretary approved the justification of need for the obligation, if issued after August 14, 1983; or (iii) The date the loan was made or acquired by or on behalf of the Authority with proceeds of a tax-exempt obligation. (2) For a loan described in paragraph (a)(2) of this section, from the latest of-(i) The date the Governor approved the Plan for Doing Business of the Authority; (ii) The date the loan was made or acquired by or on behalf of the Authority with proceeds of a tax-exempt obligation; or (iii) November 16, 1986, if the loan was made or acquired with the proceeds of a tax-exempt obligation issued before that date by an Authority that did not receive before that date approval from the Secretary for its Plan for Doing Business, and, if applicable, its justification of need. (c) The Authority shall submit a copy of the Plan for Doing Business to the Secretary under paragraph (a)(2) of this section within 60 days after receiving the Governor's approval. (d) As used in this paragraph, the term principal guaranty agency means-(1) The guaranty agency in the State with which the Secretary has signed a Basic Program Agreement under Sec. 682.401; or (2) If the Secretary has signed agreements with more than one agency in the State, the agency that has issued the majority of loan guarantees for students who are attending school in the State during the most recently ended Federal fiscal year. (Authority: 20 U.S.C. 1077, 1078, 1078-1, 1078-2, 1078-3, 1082, 1087-1)