Keeping financing agreements tax-free

(a) To the extent practicable, financing agreements issued pursuant to this chapter shall be issued to comply with requirements imposed by applicable federal law providing that the interest on financing agreements shall be excluded from gross income for federal income tax purposes, except as certain minimum taxes or environmental taxes may apply. The director and, with the approval of the director, the head of an agency may: (1) Enter into agreements; (2) Establish funds or accounts; (3) Make rebate payments to the federal government; and (4) Take any action required to comply with applicable federal tax law. Nothing in this chapter shall prohibit the issuance of financing agreements, the interest on which may be included in gross income for federal income tax purposes. (b) To ensure that interest on a financing agreement issued pursuant to this chapter that is excluded from gross income for federal income tax purposes, except as provided in subsection (a), on the date of issuance shall continue to be excluded, no state officer or employee shall authorize or allow any change, amendment, or modification to a financing agreement that would affect the exclusion of interest on the financing agreement from gross income for federal income tax purposes unless the change, amendment, or modification shall have received the prior approval of the director. Failure to receive the approval of the director shall render any change, amendment, or modification void.