In order to qualify for tax-exempt status under Section 7871(c)(3)(B), at least 95 percent of the net bond proceeds of the issue must be used to finance the manufacturing facility. Moreover, a qualified manufacturing facility must satisfy the following requirements:
- The facility must be located on land which, throughout the 5 year period ending on the date of issuance of such issue, is part of the qualified Indian lands of the tribal government issuer;
- The facility must be owned and operated by the tribal government issuer;
- The facility must meet the employment requirements of Section 7871(c)(3)(D); and
- No principal user of the facility can be a person (or group of persons) described in Section 144(a)(6)(B).
Finally, because Section 7871(c)(3)(A)(ii) states that these types of bonds are to be treated as qualified small issue bonds, many of the requirements under Section 144(a) must also be satisfied.