100 STAT. 2606
PUBLIC LAW 99-514—OCT. 22, 1986
"SEC. 142. EXEMPT FACILITY BOND.
"(a) GENERAL RULE.—For purposes of this part, the term 'exempt facility bond' means any bond issued as part of an issue 95 percent or more of the net proceeds of which are to be used to provide— "(1) airports, "(2) docks and wharves, "(3) mass commuting facilities, "(4) facilities for the furnishing of water, -.,, "(5) sewage facilities, .„ "(6) solid waste disposal facilities, ,,j, "(7) qualified residential rental projects, "(8) facilities for the local furnishing of electric energy or gas, "(9) local district heating or cooling facilities, or "(10) qualified hazardous waste facilities. "(b) SPECIAL EXEMPT FACILITY BOND RULES.—For purposes of
subsection (a)— "(1) CERTAIN FACILITIES MUST BE GOVERNMENTALLY OWNED.—
"(A) IN GENERAL.—A facility shall be treated as described -'Ko; '-n in paragraph (1), (2), or (3) of subsection (a) only if all of the property to be financed by the net proceeds of the issue is to ilsti be owned by a governmental unit. iO -i......
"(B) SAFE HARBOR FOR LEASES AND MANAGEMENT CON-
TRACTS.—For purposes of subparagraph (A), property leased by a governmental unit shall be treated as owned by such governmental unit if— "(i) the lessee makes an irrevocable election (binding on the lessee and all successors in interest under the „. lease) not to claim depreciation or an investment credit with respect to such property, ,' "(ii) the lease term (as defined in 168(i)(3)) is not more than 80 percent of the reasonably expected economic life of the property (as determined under section 147(b)), and .. "(iii) the lessee has no option to purchase the propr tU-^r-i ^^ty other than at fair market value (as of the time such option is exercised). .,;, Rules similar to the rules of the preceding sentence shall apply to management contracts and similar types of operating agreements. "(2) LIMITATION ON OFFICE SPACE.—An office shall not be treated as described in a paragraph of subsection (a) unless— "(A) the office is located on the premises of a facility described in such a paragraph, and "(B) not more than a de minimis amount of the functions to be performed at such office is not directly related to the day-to-day operations at such facility. "(c) AIRPORTS, DOCKS AND WHARVES, AND MASS COMMUTING
FACILITIES.—For purposes of subsection (a)— "(1) STORAGE AND TRAINING FACILITIES.—Storage or training
facilities directly related to a facility described in paragraph (1), (2), or (3) of subsection (a) shall be treated as described in the paragraph in which such facility is described. "(2) EXCEPTION FOR CERTAIN PRIVATE FACILITIES.—Property
shall not be treated as described in paragraph (1), (2), or (3) of subsection (a) if such property is described in any of the follow-
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