D.C. Mun. Regs. tit. 10, r. 10-B5006

Current through Register Vol. 71, No. 44, November 1, 2024

Rule 10-B5006 - QUALIFIED INDUSTRIAL DEVELOPMENT BONDS

5006.1

An industrial development bond shall be deemed a qualified industrial development bond if the following requirements are met:

(a) The bond is issued to finance an exempt facility, an industrial park, an exempt small-issue facility, or an extraordinary facility; and

(b) As to any eligible facility other than an extraordinary facility, substantially all of the proceeds of the industrial development bond are, except as provided in § 5004.2, to be used for the acquisition of the facility after the date of official action with respect to the facility.

5006.2

Notwithstanding the provisions of § 5006.1, an industrial development bond shall not be deemed a qualified industrial development bond if the average maturity of the bonds which are part of an issue exceeds one hundred twenty percent (120%) of the average reasonably expected economic life of the facilities being financed with the proceeds of the issue.

5006.3

For purposes of § 5006.2, the average maturity of any issue of bonds shall be determined by taking into account the respective issue prices of the bonds which are issued as part of the issue, and the average reasonably expected economic life of the facilities being financed with any issue of bonds shall be determined by taking into account the respective cost of the facilities.

5006.4

The reasonably expected economic life of any facility shall be determined as of the later of the date on which the bonds are issued or the date on which the facility is placed in service (or expected to be placed in service).

5006.5

Land shall not be taken into account in determining the average reasonably expected economic life of a facility unless twenty-five percent (25%) or more of the proceeds of any issue is used to finance the acquisition of land, in which case the land shall be taken into account in computing the average maturity of the bonds and shall be treated as having an economic life of fifty (50) years.

5006.6

Proceeds of an industrial development bond used with respect to the acquisition of an eligible facility shall be treated as paid or incurred after the date of official action notwithstanding the fact that a contract, purchase order, or other agreement or document for the acquisition of the facility is entered into prior to the date of official action; Provided, that the benefits and burdens of ownership (e.g., title, possession, and risk loss) shall not be transferred until after the date of official action.

5006.7

Proceeds of an industrial development bond used to reimburse reasonable deposits paid prior to the date of official action with respect to the acquisition of an eligible facility shall be treated as paid after the date of official action if the benefits and burdens of ownership of the eligible facility are transferred after the date of official action.

5006.8

In determining whether substantially all of the proceeds of an industrial development bond issued to finance the acquisition of an exempt small issue facility are used for the acquisition of the exempt small issue facility, proceeds used as working capital or to finance inventory shall be deemed not to have been used for the acquisition of the exempt small issue facility.

5006.9

An industrial development bond shall be deemed a qualified industrial development bond issued to finance an exempt facility if it is issued as part of an issue substantially all of the proceeds of which are to be used to provide any one (1) or more of the following:

(a) Projects for residential rental property;

(b) Sports facilities;

(c) Convention or trade show facilities;

(d) Airports, docks, wharves, mass commuting facilities, parking facilities, or storage or training facilities directly related to any of the foregoing;

(e) Sewage or solid waste disposal facilities or facilities for the local furnishing of electric energy or gas;

(f) Air or water pollution control facilities;

(g) Facilities for the furnishing of water for any purpose if the following occurs:

(1) The water is or will be made available to members of the general public (including electric utility, industrial, agricultural, or commercial users); and

(2) Either the facilities are operated by a governmental unit or the rates for the furnishing or sale of the water have been established or approved by the District, by a state, by a political subdivision of a state, by an agency or instrumentality of the United States, by a public service or public utility commission, or other similar body;

(h) Qualified hydroelectric generating facilities;

(i) Qualified mass commuting vehicles; or

(j) Local district heating or cooling facilities.

5006.10

A facility described in § 5006.9, other than a facility described in § 5006.9(a), shall constitute an exempt facility if that facility satisfies the criteria contained in the Internal Revenue Code and in the Internal Revenue Regulations, as interpreted in Internal Revenue Rulings, applicable to that type of facility.

5006.11

An industrial development bond shall be deemed a qualified industrial development bond issued to finance an industrial park if it is issued as part of an issue substantially all of the proceeds of which are to be used for the acquisition or development of an industrial park.

5006.12

A facility shall constitute an industrial park if that facility satisfies the criteria contained in the Internal Revenue Code and in the Internal Revenue Regulations, as interpreted in Internal Revenue Rulings, applicable to industrial parks.

5006.13

An industrial development bond shall be deemed a qualified industrial development bond issued to finance an exempt small issue facility if it is issued as part of an issue the aggregate authorized face amount (determined in accordance with the provisions of § 5007) of which is ten million dollars ($10,000,000) or less at the time of issuance, and substantially all of the proceeds of which are to be used for one (1) of the following:

(a) The acquisition of land or property of a character subject to the allowance for depreciation provided in the Internal Revenue Code; or

(b) To redeem part or all of a prior issue which was issued to finance an exempt small issue facility.

5006.14

An industrial development bond shall be deemed a qualified industrial development bond notwithstanding the fact that it is not issued to finance an exempt facility of an industrial park and is issued as part of an issue the aggregate authorized face amount (determined in accordance with the provisions of § 5007) of which exceeds ten million dollars ($10,000,000) if substantially all of the proceeds of the bond are to be used to provide an extraordinary facility.

5006.15

For purposes of § 5006.14, an extraordinary facility shall be defined as a facility designated by the Mayor as a facility the acquisition of which shall provide exceptional public benefits to the District.

D.C. Mun. Regs. tit. 10, r. 10-B5006

Final Rulemaking published at 30 DCR 4905, 4916 (September 23, 1983)