Page:United States Statutes at Large Volume 100 Part 3.djvu/847

 PUBLIC LAW 99-514—OCT. 22, 1986

100 STAT. 2655

(e) MANAGEMENT CONTRACTS.—The Secretary of the Treasury or

his delegate shall modify the Secretary's advance ruling guidelines relating to when use of property pursuant to a management contract is not considered a trade or business use by a private person for purposes of section 141(a) of the Internal Revenue Code of 1986 to provide that use pursuant to a management contract generally shall not be treated as trade or business use as long as— (1) the term of such contract (including renewal options) does not exceed 5 years, (2) the exempt owner has the option to cancel such contract at the end of any 3-year period, (3) the manager under the contract is not compensated (in whole or in part) on the basis of a share of net profits, and (4) at least 50 percent of the annual compensation of the manager under such contract is based on a periodic fixed fee. (f) AMENDMENTS RELATING TO MORTGAGE CREDIT CERTIFICATE PROGRAM.— (1) TRADE-IN RATE INCREASED TO 25 PERCENT.—

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(A) Subparagraph (A) of section 25(d)(2) (relating to aggregate limit of certificate credit rates) is amended by striking out "20 percent" and inserting in lieu thereof "25 percent". (B) Subparagraph (A) of section 25(0(2) (defining correction amount) is amended by striking out "0.20" and inserting in lieu thereof "0.25". (2) CONFORMING AMENDMENTS.—


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(A) Clause (ii) of section 25(b)(2)(A) (defining certificate indebtedness amount) is amended by striking out "section 103A(1)(6)" and inserting in lieu thereof "section 143(k)(4)". (B) Clause (iii) of section 25(b)(2)(A) is amended by striking out "section 103A(1)(7)" and inserting in lieu thereof "section 143(k)(5)". (C)(i) Subparagraphs (A)(iii) and (B) of section 25(c)(2) are each amended by striking out "section 103A" each place it appears and inserting in lieu thereof "section 143". (ii) Clause (ii) of section 25(c)(2)(A) is amended by striking out "section 103A" and inserting in lieu thereof "section 103". (D) Clause (iii) of section 25(c)(2)(A) (defining qualified mortgage credit certificate program) is amended by striking out all the subclauses thereof and inserting in lieu thereof the following: "(I) subsection (c) (relating to residence requirements), "(II) subsection (d) (relating to 3-year requirement), "(III) subsection (e) (relating to purchsise price requirement), "(IV) subsection (0 (relating to income requirements), "(V) subsection (h) (relating to portion of loans required to be placed in targeted areas), and "(VI) paragraph (1) of subsection (i) (relating to other requirements),". (E) The last sentence of subparagraph (A) of section 25(c)(2) is amended by striking out "section 103A(c)(2)" and inserting in lieu thereof "section 143(a)(2)". (F) Subparagraph (B) of section 25(c)(2) is amended—

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