102 STAT. 3726 PUBLIC LAW 100-647—NOV. 10, 1988

(2) NOT TO APPLY TO EXTENT INCONSISTENT WITH PRIOR

RETURN.—In the case of any estate or gift tax return filed before
the date of the enactment of this Act, the amendments made by
this section shall not apply to the extent such amendments
would be inconsistent with the treatment of the annuity on such
return unless the executor or donor (as the case may be) other-
wise elects under this paragraph before the day 2 years after
the date of the enactment of this Act.

(3) EXTENSION OF TIME FOR ELECTION our.—The time for
making an election under section 2056(bX7XCXii) or 2523(fX6XB)
of the 1986 Code (as added by this subsection) shall not expire
before the day 2 years after the date of the enactment of this
Act (and, if such election is made within the time permitted
under this paragraph, the requirement of such section
2056(bX7XCXii) that it be made on the return shall not apply).

Subtitle H—Tax-Exempt Bond Provisions

SEC. 6176. CLARIFICATION OF SMALL ISSUE BOND DEFINITION OF MANU-
FACTURING FACILITY.

(a) IN GENERAL.—Subparagraph (C) of section 144(aX12) of the
1986 Code (defining manufacturing facility) is amended by adding at
the end thereof the following new sentence: "For purposes of the 1st
sentence of this subparagraph, the term 'manufacturing facility*
includes facilities which are directly related and ancillary to a
manufacturing facility (determined without regard to this sentence)
if—

"(i) such facilities are located on the same site as the
manufacturing facility, and

"(ii) not more than 25 percent of the net proceeds of
the issue are used to provide such facilities."

26 USC 144 note. (b) EFFECTIVE DATE.—

(1) IN GENERAL.—The amendment made by subsection (a)
shall apply to bonds issued after the date of the enactment of
this Act.

(2) REFUNDING^—The amendment made by subsection (a)
shall not apply to any bond issued to refund (or which is part of
a series of bonds issued to refund) a bond issued on or before the
date of the enactment of this Act if—

(A) the average maturity date of the issue of which the
refunding bond is a part is not later than the average
maturity date of the bonds to be refunded by such issue,
and

(B) the amount of the refunding bond does not exceed the
outstanding amount of the refunded bond.

For purposes of subparagraph (A), average maturity shall be
determined in accordance with section 147(b) of the 1986 Code.

SEC. 6177. RULES APPLICABLE TO TAX AND REVENUE ANTICIPATION
BONDS.

(a) CHANGE IN PERIOD USED To DETERMINE CUMULATIVE CASH FLOW
DEFICIT.—Subclause (HI) of section 148(fX4XBXiii) of the 1986 Code
(relating to safe harbor for determining when proceeds of tax and
revenue anticipation bonds are expended) is amended by striking