A bill to amend the Internal Revenue Code of 1954 with respect to the tax treatment of bonds that are guaranteed by certain Federal agencies.

Amends the Internal Revenue Code to deny tax-exempt treatment of interest on a bond issue if a significant portion of the principal or interest required to be paid on such bonds is insured by a Federal depository insurance agency. Exempts from this restriction proceeds of an issue which are invested: (1) for a temporary period; (2) in a bona fide debt service fund; or (3) in certain reserves or replacement funds.