Reg. § 1.142-4 Use of proceeds to provide a facility.
(a) In general [Reserved]
(b) Reimbursement allocations If an expenditure for a facility is paid before the issue date of the bonds to provide that facility, the facility is described in section only if the expenditure meets the requirements of (relating to reimbursement allocations). For purposes of this , if the proceeds of an issue are used to pay principal of or interest on an obligation other than a State or local bond (for example, temporary construction financing of the conduit borrower), that issue is not a refunding issue, and, thus, does not apply.
(c) Limitation on use of facilities by substantial users
(1) In general If the original use of a facility begins before the issue date of the bonds to provide the facility, the facility is not described in section if any person that was a substantial user of the facility at any time during the 5-year period before the issue date or any related person to that user receives (directly or indirectly) 5 percent or more of the proceeds of the issue for the user's interest in the facility and is a substantial user of the facility at any time during the 5-year period after the issue date, unless—
(i) An official intent for the facility is adopted under within 60 days after the date on which acquisition, construction, or reconstruction of that facility commenced; and
(ii) For an acquisition, no person that is a substantial user or related person after the acquisition date was also a substantial user more than 60 days before the date on which the official intent was adopted.
(2) Definitions For purposes of of this section, substantial user has the meaning used in section , related person has the meaning used in section , and a user that is a governmental unit within the meaning of is disregarded.
(d) Effective date
(1) In general This section applies to bonds sold on or after July 8, 1997. See for rules applicable to bonds sold before that date.
(2) Elective retroactive application An issuer may apply this section to any bond sold before July 8, 1997.
[T.D. 8718, 62 FR 25506, May 9, 1997]