Page:United States Statutes at Large Volume 100 Part 3.djvu/827

 PUBLIC LAW 99-514—OCT. 22, 1986

100 STAT. 2635

"(n) REDUCTION FOR MORTGAGE CREDIT CERTIFICATES, ETC.—The

volume cap of any issuing authority for any calendar year shall be reduced by the sum of— "(1) the amount of qualified mortgage bonds which such authority elects not to issue under section 25(c)(2)(A)(ii) during such year, plus "(2) the amount of any reduction in such ceiling under section 25(0 applicable to such authority for such year. "SEC. 147. OTHER REQUIREMENTS APPLICABLE TO CERTAIN PRIVATE ACTIVITY BONDS. "(a) SUBSTANTIAL USER REQUIREMENT.—

"(1) IN GENERAL.—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. "(2) RELATED PERSON.—For purposes of paragraph (1), the

following shall be treated as related persons— "(A) 2 or more persons if the relationship between such persons would result in a disallowance of losses under section 267 or 707(b), "(B) 2 or more persons which are members of the same ,^, controlled group of corporations (as defined in section 4,., 1563(a), except that 'more than 50 percent' shall be substituted for 'at least 80 percent' each place it appears therein), , "(C) a partnership and each of its partners (and their spouses and minor children), and "(D) an S corporation and each of its shareholders (and their spouses and minor children). "(b) MATURITY MAY NOT EXCEED 120 PERCENT OF ECONOMIC LIFE.— "(1) GENERAL RULE.—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— "(A) the average maturity of the bonds issued as part of such issue, exceeds "(B) 120 percent of the average reasonably expected economic life of the facilities being financed with the net proceeds of such issue. "(2) DETERMINATION OF AVERAGES.—For purposes of paragraph (D— "(A) the average maturity of any issue shall be determined by taking into account the respective issue prices of the bonds issued as part of such issue, and "(B) the average reasonably expected economic life of the facilities being financed with any issue shall be determined by taking into account the respective cost of such facilities. .,

"(3) SPECIAL RULES.— "(A) DETERMINATION OF ECONOMIC LIFE.—For purposes of

this subsection, the reasonably expected economic life of any facility shall be determined as of the later of^ "(i) the date on which the bonds are issued, or "(ii) the date on which the facility is placed in service (or expected to be placed in service). "(B) TREATMENT OF LAND.—

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