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Section 141 - Private Business Use Tests, Government Use, Management Contracts

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Private Business Use Tests:

PLR 201114003 (4/8/11)
This responds to a request for a ruling that the forbearance to exercise certain termination rights with respect to a wholesale electricity requirements contract, will not cause that contract to be treated as entered into after September 19, 2002, for purposes of § 1.141-15(f)(2) of the Income Tax Regulations.

PLR 200524015 (03/16/2005)
A request for rulings on behalf of Agency (whose members are natural gas and electrc joint action agencies and natural gas and electric distribution systems) that Agency and subsidiary are instrumentalities and use of bond proceeds will not constitute use meeting the private business tests.

PLR 200502012 (9/28/04)
This responds to the Authority's request for a ruling that the acquisition of various interests in land and will not give rise to private business use under IRC Section 141 and that the related arrangements are uses related and not disproportionate to the government use of the proceeds.

PLR 200441025 (6/14/2004)
This is in response to your request for the following rulings: 1)That the proposed allocation of proceeds of the Bonds to the Parking Unit is reasonable; and 2) That certain contractual arrangements for the use of the Project will not cause the Bonds to meet the private business tests.

PLR200403055 (01/16/2004)
This is in response to your request for a supplemental ruling that the Authority may continue to rely on the following conclusions reached in the private letter ruling issued to the Authority on Date 1 despite the factual changes that have occurred since Date 1: (1) The Authority's allocation of 50% of the Trench Costs to the Street improvements will not cause the Bonds or the New Bonds to be private activity bonds; (2) The facts and circumstances weigh against application of the anti-abuse rule of section 1.141-14 of the income tax regulations to reallocate the proceeds of the Bonds or the New Bonds to other purposes.

PLR200347009 (11/21/2003)
This responds to your request for the following three rulings: (1) the License Agreement described below will not cause the Series A and Series B Bonds (collectively, "the bonds") to satisfy the private business use thest under section 145(a)(2)(B) and 141(b)(1) of the Internal Revenue Code; (2) the Scientist Agreement described below will not cause the Bonds to satisfy the private business use test under sections 145(a)(2)(B) and 141(b)(1); and (3) the right of the Large Contributors described below to require the Organization to transfer shares of the Corporations Class A Stock to one or more section 501(c)(3) organizations chosen by the Large Contributors will not cause the Bonds to satisfy the private business use test under section 145(a)(2)(B) and 141(b)(1).

PLR200336001 (09/05/2003)
This is in response to your request for a ruling that the distribution of the District cable television programming by the Provider, under the facts and terms described below, does not constitute private business use under IRC section 141(b)(1) of facilities used to produce that programming.

PLR200323006 (06/06/2003)
This is in response to the City's request for a ruling that the proposed naming rights contract described herein will not cause the Issue (hereafter described) to meet the private business use test under IRC section 141(b).

PLR200250031 (12/13/2002)
This is in response to your request on behalf of the Authority for a ruling that the Lease of the System between the City and the Operator will not adversely affect the tax-exempt status of the bonds.

PLR200250004 (12/13/2002)
This letter is in response to your request for a ruling that the bond to be issued to finance certain costs incurred by Port in connection with a project to improve the channels and returning basins of Port's harbor will not meet the private business use test of IRC section 141(b)(1).

FSA200245048 (11/08/2002)
Whether bonds used to purchase a working interest in the Gas Field are private activity bonds because those bonds purchased nongovernmental output property, within the meaning of IRC section 141(d); whether Utility's allocations of gas from its working interest to its own use should be respected; whether proceeds of the Series Bonds were used indirectly to fund Utility's purchase of its working interest in the Gas Field; whether any of the Series B Bonds are part of the same issue as the Series C Bonds or the Series D Bonds; and whether Utility acquired investment-type property under section 148 when it acquired contracts to sell gas.

PLR200230028 (06/27/2002)
This letter is in response to your request on behalf of the Agency for a ruling that the actions taken by some of its members to become participating transmission owners in the independent system operation will not be treated as a deliberate action that causes the Bonds to be private activity bonds under section 141 of the Internal Revenue Code of 1986.

PLR200026020
This letter is in reply to a request for a ruling that interest on the Bonds will be excluded from the gross income of holders of the Bonds under 103(a) of the Internal Revenue Code. Your request is submitted as a reviewable ruling under Rev. Proc. 96-16, 1996-1 C.B. 630.


Government Use:

PLR200336019 (09/05/2003)
This responds to your request for a ruling that the acquisition of certain electric power generators by Agency will not constitute the acquisition of nongovernmental output property under IRC section 141(d)(2).

PLR200306001 (10/24/2002)
This is in response to your request for rulings that (1) the Issuer is an instrumentality for purposes of IRC section 141 and (2) the Proposed Bonds (hereinafter defined) will be treated as financing property used for governmental purposes under sections 103 and 131.

PLR200304015 (date of issuance - 10/18/2002)
This is in response to the request on behalf of the issuer for a ruling regarding the qualified 501(c)(3) bonds that it proposes to issue to finance a portion of the construction of the facility. You have requested a ruling that the proceeds of the Bonds may be allocated to University and government use of the facility.

PLR200301008 (09/13/2002)
This is in reply to a letter dated January 24, 2002, requesting a ruling that the income of Authority is an instrumentality for purposes of IRC section 141.

PLR200225010 (03/08/2002)
This letter is in response to your amended ruling request submitted on behalf of the Authority, which requested a ruling that the Authority is an "instrumentality of its governmental members".

PLR200211003
This is in response to a request for a ruling that the proposed use of the Center by specified groups of users ("proposed user groups") and for the specified uses ("proposed uses") described in the request does not constitute private business use under § 141 of the Internal Revenue Code (the "Code").

PLR200211022
This is in response to a representative's request on behalf of the Agency for a ruling that the Agency's becoming a member of the ISO will not be a deliberate action that causes the Bonds to be private activity bonds under 141 of the Internal Revenue Code (the "Code").

PLR200209005
This is in response to your request on behalf of the Issuer for a ruling that the Issuer's change in the Program will not cause the Bonds to fail to be described in the Provision.

PLR200205009 (11/02/2001)
This is in response to a request for a ruling that the Agreement as described below is a management contract that meets the requirements of Revenue Procedure 97-13, 1997-1 C.B. 632.

TAM200143031
Is the private business use test under 141(b)(1) met if the amount of a lease payment to an airport authority for a terminal space takes into account the net profits generated by parking facility fees on a bond financed parking lot?

PLR200132017
This letter is in reply to a request for a ruling that the proceeds of the Bonds may be allocated to the portions of the Research Facilities (hereinafter defined) used for research arrangements that do not constitute private business use based on a revenue allocation test.

PLR200026013
This is in response to a ruling request submitted on behalf of Authority, concerning the status of Authority for purposes of § 141 of the Internal Revenue Code of 1986. On Date 1 we issued a ruling that the Authority is a wholly owned instrumentality of the Members (as defined below) for purposes of § 141, 3121(b)(7) and 3306(c)(7). You have requested a ruling that, for purposes of § 141, Authority remains an "instrumentality" of its governmental members.


Management Contracts:

PLR200330010 (04/17/2003)
This letter responds to the Issuer's request for a ruling that the management contract will not cause bonds to be issued by the Issuer to finance the facilities to meet the private business use test of IRC section 141(b)(1).

PLR200222006 (02/19/2002)
This letter responds to the Issuer's request for a ruling that the management contract more fully described below does not constitute private business use under Rev. Proc. 97-13, section 5.03(1), 1997-1 C.B. 632, or, in the alternative, under section 1.141-3(b)(4).

PLR200205009 (11/02/2001)
This letter is in response to your request for a ruling that the Agreement as described below is a management contract that meets the requirements of Revenue Procedure 97-13, 1997-1 C.B. 632.

PLR200123057
This in response to a letter requesting a ruling that, based on all the facts and circumstances, C does not have any role or relationship with B, the qualified user, that substantially limits B's ability to exercise its rights, including cancellation rights, under the professional service agreement.

FSA199932017
Whether a private corporation's operation of a correctional facility constructed with the proceeds of bonds that are purportedly tax-exempt results in private use.

Page Last Reviewed or Updated: 07-Apr-2014