Except as provided in subsection (h), a private activity bond shall not be a qualified bond for any period during which it is held by a person who is a substantial user of the facilities or by a related person of such a substantial user.
For purposes of paragraph (1), the following shall be treated as related persons-
Except as provided in subsection (h), a private activity bond shall not be a qualified bond if it is issued as part of an issue and-
For purposes of paragraph (1)-
For purposes of this subsection, the reasonably expected economic life of any facility shall be determined as of the later of-
Except as provided in clause (ii), land shall not be taken into account under paragraph (1)(B).
If 25 percent or more of the net proceeds of any issue is to be used to finance land, such land shall be taken into account under paragraph (1)(B) and shall be treated as having an economic life of 30 years.
At the election of the issuer, a qualified 501(c)(3) bond shall be treated as meeting the requirements of paragraph (1) if such bond meets the requirements of subparagraph (B).
A qualified 501(c)(3) bond meets the requirements of this subparagraph if-
A bond shall not meet the requirements of this subparagraph if the maturity date of any bond issued as part of such issue is more than 30 years after the date on which the bond was issued (or, in the case of a refunding or series of refundings, the date on which the original bond was issued).
Paragraph (1) shall not apply to any bond issued as part of an issue 95 percent or more of the net proceeds of which are to be used to finance mortgage loans insured under FHA 242 or under a similar Federal Housing Administration program (as in effect on the date of the enactment of the Tax Reform Act of 1986) where the loan term approved by such Administration plus the maximum maturity of debentures which could be issued by such Administration in satisfaction of its obligations exceeds the term permitted under paragraph (1).
Except as provided in subsection (h), a private activity bond shall not be a qualified bond if-
If the requirements of subparagraph (B) are met with respect to any land, paragraph (1) shall not apply to such land, and subsection (d) shall not apply to property to be used thereon for farming purposes, but only to the extent of expenditures (financed with the proceeds of the issue) not in excess of $450,000.
The requirements of this subparagraph are met with respect to any land if-
For purposes of this paragraph-
The term "first-time farmer" means any individual if such individual-
Any ownership or material participation, or financing received, by an individual's spouse or minor child shall be treated as ownership and material participation, or financing received, by the individual.
For purposes of clause (i), farmland which was previously owned by the individual and was disposed of while such individual was insolvent shall be disregarded if section 108 applied to indebtedness with respect to such farmland.
For purposes of this paragraph, the term "farm" has the meaning given such term by section 6420(c)(2).
For purposes of this paragraph, the term "substantial farmland" means any parcel of land unless such parcel is smaller than 30 percent of the median size of a farm in the county in which such parcel is located.
For purposes of this paragraph, in no event may the amount of financing provided by reason of this paragraph to a first-time farmer for personal property-
exceed $62,500. A rule similar to the rule of subparagraph (C)(ii) shall apply for purposes of the preceding sentence.
For purposes of this paragraph and section 144(a), the acquisition by a first-time farmer of land or personal property from a related person (within the meaning of section 144(a)(3)) shall not be treated as an acquisition from a related person, if-
In the case of any calendar year after 2008, the dollar amount in subparagraph (A) shall be increased by an amount equal to-
If any amount as increased under the preceding sentence is not a multiple of $100, such amount shall be rounded to the nearest multiple of $100.
Any land acquired by a governmental unit (or issuing authority) in connection with an airport, mass commuting facility, high-speed intercity rail facility, dock, or wharf shall not be taken into account under paragraph (1) if-
Except as provided in subsection (h), a private activity bond shall not be a qualified bond if issued as part of an issue and any portion of the net proceeds of such issue is to be used for the acquisition of any property (or an interest therein) unless the 1st use of such property is pursuant to such acquisition.
Paragraph (1) shall not apply with respect to any building (and the equipment therefor) if-
A rule similar to the rule of the preceding sentence shall apply in the case of structures other than a building except that subparagraph (B) shall be applied by substituting "100 percent" for "15 percent".
For purposes of this subsection-
Except as provided in this paragraph, the term "rehabilitation expenditures" means any amount properly chargeable to capital account which is incurred by the person acquiring the building for property (or additions or improvements to property) in connection with the rehabilitation of a building. In the case of an integrated operation contained in a building before its acquisition, such term includes rehabilitating existing equipment in such building or replacing it with equipment having substantially the same function. For purposes of this subparagraph, any amount incurred by a successor to the person acquiring the building or by the seller under a sales contract with such person shall be treated as incurred by such person.
The term "rehabilitation expenditures" does not include any expenditure described in section 47(c)(2)(B).
The term "rehabilitation expenditures" shall not include any amount which is incurred after the date 2 years after the later of-
In the case of a project involving 2 or more buildings, this subsection shall be applied on a project basis.
A private activity bond shall not be a qualified bond if issued as part of an issue and any portion of the proceeds of such issue is to be used to provide any airplane, skybox or other private luxury box, health club facility, facility primarily used for gambling, or store the principal business of which is the sale of alcoholic beverages for consumption off premises. The preceding sentence shall not apply to any fixed-wing aircraft equipped for, and exclusively dedicated to providing, acute care emergency medical services (within the meaning of section 4261(g)(2)).
A private activity bond shall not be a qualified bond unless such bond satisfies the requirements of paragraph (2).
A bond shall satisfy the requirements of this paragraph if such bond is issued as a part of an issue which has been approved by-
For purposes of subparagraph (A), an issue shall be treated as having been approved by any governmental unit if such issue is approved-
If there has been public approval under subparagraph (A) of the plan for financing a facility, such approval shall constitute approval under subparagraph (A) for any issue-
No approval under subparagraph (A) shall be necessary with respect to any bond which is issued to refund (other than to advance refund) a bond approved under subparagraph (A) (or treated as approved under subparagraph (C)) unless the average maturity date of the issue of which the refunding bond is a part is later than the average maturity date of the bonds to be refunded by such issue. For purposes of the preceding sentence, average maturity shall be determined in accordance with subsection (b)(2)(A).
For purposes of this paragraph-
The term "applicable elected representative" means with respect to any governmental unit-
If the office of any elected official described in subclause (II) is vacated and an individual is appointed by the chief elected executive officer of the governmental unit and confirmed by the elected legislative body of such unit (if any) to serve the remaining term of the elected official, the individual so appointed shall be treated as the elected official for such remaining term.
If (but for this clause) a governmental unit has no applicable elected representative, the applicable elected representative for purposes of clause (i) shall be the applicable elected representative of the governmental unit-
If-
such governmental unit shall be deemed to be the only governmental unit having jurisdiction over such airport or high-speed intercity rail facilities for purposes of this subsection.
In the case of a qualified scholarship funding bond, any governmental unit which made a request described in section 150(d)(2)(B) with respect to the issuer of such bond shall be treated for purposes of paragraph (2) of this subsection as the governmental unit on behalf of which such bond was issued. Where more than one governmental unit within a State has made a request described in section 150(d)(2)(B), the State may also be treated for purposes of paragraph (2) of this subsection as the governmental unit on behalf of which such bond was issued.
In the case of a bond of a volunteer fire department which meets the requirements of section 150(e), the political subdivision described in section 150(e)(2)(B) with respect to such department shall be treated for purposes of paragraph (2) of this subsection as the governmental unit on behalf of which such bond was issued.
A private activity bond shall not be a qualified bond if the issuance costs financed by the issue (of which such bond is a part) exceed 2 percent of the proceeds of the issue.
In the case of an issue of qualified mortgage bonds or qualified veterans' mortgage bonds, paragraph (1) shall be applied by substituting "3.5 percent" for "2 percent" if the proceeds of the issue do not exceed $20,000,000.
Subsections (a), (b), (c), and (d) shall not apply to any qualified mortgage bond, qualified veterans' mortgage bond, or qualified student loan bond.
Subsections (a), (c), and (d) shall not apply to any qualified 501(c)(3) bond and subsection (e) shall be applied as if it did not contain "health club facility" with respect to such a bond.
Subsection (c) shall not apply to any exempt facility bond issued as part of an issue described in section 142(a)(13) (relating to qualified public educational facilities).
26 U.S.C. § 147
Inflation Adjusted Items for Certain YearsFor inflation adjustment of certain items in this section, see Revenue Procedures listed in a table under section 1 of this title.
EDITORIAL NOTES
REFERENCES IN TEXTThe date of the enactment of the Tax Reform Act of 1986, referred to in subsec. (b)(5), is the date of enactment of Pub. L. 99-514, which was approved Oct. 22, 1986.
CODIFICATIONPub. L. 110-234 and Pub. L. 110-246 made identical amendments to this section. The amendments by Pub. L. 110-234 were repealed by section 4(a) of Pub. L. 110-246.
AMENDMENTS2017-Subsec. (c)(2)(H)(ii). Pub. L. 115-97 substituted "for 'calendar year 2016' in subparagraph (A)(ii)" for "for 'calendar year 1992' in subparagraph (B)".2012-Subsec. (e). Pub. L. 112-95 inserted at end: "The preceding sentence shall not apply to any fixed-wing aircraft equipped for, and exclusively dedicated to providing, acute care emergency medical services (within the meaning of section 4261(g)(2))."2008-Subsec. (c)(2)(A). Pub. L. 110-246, §15341(a), substituted "$450,000" for "$250,000". Subsec. (c)(2)(C)(i)(II). Pub. L. 110-246, §15341(d), substituted "the amount in effect under subparagraph (A)" for "$250,000". Subsec. (c)(2)(E). Pub. L. 110-246, §15341(c), substituted "unless such parcel is smaller than 30 percent of the median size of a farm in the county in which such parcel is located." for "unless- "(i) such parcel is smaller than 30 percent of the median size of a farm in the county in which such parcel is located, and"(ii) the fair market value of the land does not at any time while held by the individual exceed $125,000."Subsec. (c)(2)(H). Pub. L. 110-246, §15341(b), added subpar. (H). 2001-Subsec. (h). Pub. L. 107-16, §422(e), substituted "certain bonds" for "mortgage revenue bonds, qualified student loan bonds, and qualified 501(c)(3) bonds" in heading.Subsec. (h)(3). Pub. L. 107-16, §422(d), added par. (3). 1996-Subsec. (c)(2)(E)(i). Pub. L. 104-188, §1117(b), substituted "30 percent" for "15 percent". Subsec. (c)(2)(G). Pub. L. 104-188, §1117(a), added subpar. (G).1990-Subsec. (d)(3)(B). Pub. L. 101-508 substituted "section 47(c)(2)(B)" for "section 48(g)(2)(B)". 1989-Subsec. (c)(3). Pub. L. 101-239 inserted a comma after "mass commuting facility" in introductory provisions and in subpar. (A).1988-Subsec. (c)(3). Pub. L. 100-647, §6180(b)(4), inserted "high-speed intercity rail facility" after "mass commuting facility" in introductory text and in subpar. (A). Subsec. (e). Pub. L. 100-647, §1013(a)(11), struck out "treated as" after "shall not be".Subsec. (f)(2)(D). Pub. L. 100-647, §1013(a)(29), substituted "the average maturity date of the issue of which the refunding bond is a part is later than the average maturity date of the bonds to be refunded by such issue. For purposes of the preceding sentence, average maturity shall be determined in accordance with subsection (b)(2)(A)" for "the maturity date of such bond is later than the maturity date of the bond to be refunded".Subsec. (f)(2)(E)(i). Pub. L. 100-647, §1013(a)(36), inserted sentence at end relating to treatment of an individual appointed to fill a vacancy in the office of an elected official.Subsec. (f)(3). Pub. L. 100-647, §6180(b)(5), inserted "or high-speed intercity rail facilities" after "airports" in heading and after "airport" in subpars. (A) and (B) and in last sentence. Subsec. (f)(4). Pub. L. 100-647, §1013(a)(12), added par. (4).Subsec. (g)(1). Pub. L. 100-647, §1013(a)(13)(A), substituted "proceeds" for "aggregate face amount".Subsec. (g)(2). Pub. L. 100-647, §1013(a)(13)(B), substituted "proceeds" for "aggregate authorized face amount" and "do" for "does".
STATUTORY NOTES AND RELATED SUBSIDIARIES
EFFECTIVE DATE OF 2017 AMENDMENT Amendment by Pub. L. 115-97 applicable to taxable years beginning after Dec. 31, 2017, see section 11002(e) of Pub. L. 115-97, set out as a note under section 1 of this title.
EFFECTIVE DATE OF 2012 AMENDMENT Pub. L. 112-95, §1105(b), Feb. 14, 2012, 126 Stat. 152, provided that: "The amendment made by this section [amending this section] shall apply to obligations issued after the date of the enactment of this Act [Feb. 14, 2012]."
EFFECTIVE DATE OF 2008 AMENDMENT Amendment of this section and repeal of Pub. L. 110-234 by Pub. L. 110-246 effective May 22, 2008, the date of enactment of Pub. L. 110-234, except as otherwise provided, see section 4 of Pub. L. 110-246, set out as an Effective Date note under section 8701 of Title 7, Agriculture. Pub. L. 110-234, title XV, §15341(e), May 22, 2008, 122 Stat. 1517, and Pub. L. 110-246, §4(a), title XV, §15341(e), June 18, 2008, 122 Stat. 1664, 2279, provided that: "The amendments made by this section [amending this section] shall apply to bonds issued after the date of the enactment of this Act [June 18, 2008]."[Pub. L. 110-234 and Pub. L. 110-246 enacted identical provisions. Pub. L. 110-234 was repealed by section 4(a) of Pub. L. 110-246, set out as a note under section 8701 of Title 7, Agriculture.]
EFFECTIVE DATE OF 2001 AMENDMENT Amendment by Pub. L. 107-16 applicable to bonds issued after Dec. 31, 2001, see section 422(f) of Pub. L. 107-16, set out as a note under section 142 of this title.
EFFECTIVE DATE OF 1996 AMENDMENT Pub. L. 104-188, §1117(c), Aug. 20, 1996, 110 Stat. 1764, provided that: "The amendments made by this section [amending this section] shall apply to bonds issued after the date of the enactment of this Act [Aug. 20, 1996]."
EFFECTIVE DATE OF 1990 AMENDMENT Amendment by Pub. L. 101-508 applicable to property placed in service after Dec. 31, 1990, but not applicable to any transition property (as defined in section 49(e) of this title), any property with respect to which qualified progress expenditures were previously taken into account under section 46(d) of this title, and any property described in section 46(b)(2)(C) of this title, as such sections were in effect on Nov. 4, 1990, see section 11813(c) of Pub. L. 101-508, set out as a note under section 45K of this title.
EFFECTIVE DATE OF 1989 AMENDMENT Amendment by Pub. L. 101-239 effective, except as otherwise provided, as if included in the provision of the Technical and Miscellaneous Revenue Act of 1988, Pub. L. 100-647, to which such amendment relates, see section 7817 of Pub. L. 101-239, set out as a note under section 1 of this title.
EFFECTIVE DATE OF 1988 AMENDMENT Pub. L. 100-647, title I, §1013(a)(13)(C), Nov. 10, 1988, 102 Stat. 3539, provided that: "The amendments made by this paragraph [amending this section] shall apply to bonds issued after June 30, 1987." Amendment by section 1013(a)(11), (12), (29), (36) of Pub. L. 100-647 effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986, Pub. L. 99-514, to which such amendment relates, see section 1019(a) of Pub. L. 100-647, set out as a note under section 1 of this title.Amendment by section 6180(b)(4), (5) of Pub. L. 100-647 applicable to bonds issued after Nov. 10, 1988, see section 6180(c) of Pub. L. 100-647, set out as a note under section 142 of this title.
EFFECTIVE DATESubsec. (f) applicable to bonds issued after Dec. 31, 1986, see section 1311(d) of Pub. L. 99-514, as amended, set out as an Effective Date; Transitional Rules note under section 141 of this title.
SAVINGS PROVISIONFor provisions that nothing in amendment by Pub. L. 101-508 be construed to affect treatment of certain transactions occurring, property acquired, or items of income, loss, deduction, or credit taken into account prior to Nov. 5, 1990, for purposes of determining liability for tax for periods ending after Nov. 5, 1990, see section 11821(b) of Pub. L. 101-508, set out as a note under section 45K of this title.
- State
- The term "State" shall be construed to include the District of Columbia, where such construction is necessary to carry out provisions of this title.
- corporation
- The term "corporation" includes associations, joint-stock companies, and insurance companies.
- person
- The term "person" shall be construed to mean and include an individual, a trust, estate, partnership, association, company or corporation.
- student
- The term "student" means any individual-(i) who is temporarily present in the United States-(I) under subparagraph (F) or (M) of section 101(15) of the Immigration and Nationality Act, or(II) as a student under subparagraph (J) or (Q) of such section 101(15), and(ii) who substantially complies with the requirements for being so present.