Section 1.145-2 - Application of private activity bond regulations(a)In general. Except as provided in this section, §§ 1.141-0 through 1.141-15 apply to section 145(a). For example, under this section, § 1.141-1 , and § 1.141-2 , an issue ceases to be an issue of qualified 501(c)(3) bonds if the issuer or a conduit borrower 501(c)(3) organization takes a deliberate action, subsequent to the issue date, that causes the issue to fail to comply with the requirements of sections 141(e) and 145 (such as an action that results in revocation of exempt status of the 501(c)(3) organization).(b)Modification of private business tests. In applying §§ 1.141-0 through 1.141-15 to section 145(a)- (1) References to governmental persons include 501(c)(3) organizations with respect to their activities that do not constitute unrelated trades or businesses under section 513(a);(2) References to "10 percent" and "proceeds" in the context of the private business use test and the private security or payment test mean "5 percent" and "net proceeds"; and(3) References to the private business use test in §§ 1.141-2 and 1.141-12 include the ownership test of section 145(a)(1).(4) References to governmental bonds in § 1.141-6 mean qualified 501(c)(3) bonds.(5) References to ownership by governmental persons in § 1.141-6 mean ownership by governmental persons or 501(c)(3) organizations.(c)Exceptions - (1)Certain provisions relating to governmental programs. The following provisions do not apply to section 145: § 1.141-2(d)(4) (relating to the special rule for dispositions of personal property in the ordinary course of an established governmental program) and § 1.141-2(d)(5) (relating to the special rule for general obligation bond programs that finance a large number of separate purposes).(2)Costs of issuance. Sections 1.141-3(g)(6) and 1.141-6(d) do not apply to the extent costs of issuance are allocated among the other purposes for which the proceeds are used or to portions of a project. For purposes of section 145(a)(2), costs of issuance are treated as private business use.(d)Issuance costs financed by prior issue. Solely for purposes of applying the private business use test to a refunding issue under § 1.141-13 , the use of proceeds of the prior issue (or any earlier issue in a series of refundings) to pay issuance costs of the prior issue (or the earlier issue) is treated as a government use.T.D. 8712, 62 FR 2303, Jan. 16, 1997, as amended by T.D. 9234, 70 FR 75035 , Dec. 19, 2005; T.D. 9741, 80 FR 65646 , Oct. 27, 2015