Page:United States Statutes at Large Volume 100 Part 3.djvu/322

 100 STAT. 2130

PUBLIC LAW 99-514—OCT. 22, 1986 •^' " -' f

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clause (i) shall not apply to such organization with respect to any property if such organization elects not to be exempt from tax under section 501(a) during the tax-exempt use period with respect to such property. "(II) TAX-EXEMPT USE PERIOD.—For purposes of

subclause (I), the term 'tax-exempt use period' means the period beginning with the taxable year in which the property described in subclause (I) is first used by the organization and ending with the " ' "' close of the 15th taxable year following the last taxable year of the applicable recovery period of such property. "(III) ELECTION.—Any election under subclause (I), once made, shall be irrevocable, "(iii) TREATMENT OF SUCCESSOR ORGANIZATIONS.—Any organization which is engaged in activities substantially similar to those engaged in by a predecessor organization shall succeed to the treatment under this subparagraph of such predecessor organization. ''."(iv) FIRST USED.—For purposes of this subparagraph, property shall be treated as first used by the organization— "(I) when the property is first placed in service '^ under a lease to such organization, or "(II) in the case of property leased to (or held by) a partnership (or other pass-thru entity) in which the organization is a member, the later of when such property is first used by such partnership or '" • ' pass-thru entity or when such organization is first B' a member of such partnership or pass-thru entity. "(3) SPECIAL RULES FOR CERTAIN HIGH TECHNOLOGY EQUIPMENT.— "(A) EXEMPTION WHERE LEASE TERM IS 5 YEARS OR LESS.—
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For purposes of this section, the term 'tax-exempt use property shall not include any qualified technological equipment if the lease to the tax-exempt entity has a lease term of 5 years or less.

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"(B) EXCEPTION FOR CERTAIN PROPERTY.—

"(i) IN GENERAL.—For purposes of subparagraph (A), the term 'qualified technological equipment' shall not include any property leased to a tax-exempt entity if^ "(I) part or all of the property was financed (directly or indirectly) by an obligation the interest on which is exempt from tax under section 103(a), "(II) such lease occurs after a sale (or other transfer) of the property by, or lease of such property from, such entity (or related entity) and such property has been used by such entity (or a related entity) before such sale (or other transfer) or lease, or "(III) such tax-exempt entity is the United States or any agency or instrumentality of the United States. "(ii) LEASEBACKS DURING IST 3 MONTHS OF USE NOT TAKEN INTO ACCOUNT.—Subclause (II) of clause (i) shall

not apply to any property which is leased within 3

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