26 U.S.C. § 1394
For purposes of part IV of subchapter B of this chapter (relating to tax exemption requirements for State and local bonds), the term "exempt facility bond" includes any bond issued as part of an issue 95 percent or more of the net proceeds (as defined in section 150(a)(3)) of which are to be used to provide any enterprise zone facility.
For purposes of this section-
The term "enterprise zone facility" means any qualified zone property the principal user of which is an enterprise zone business, and any land which is functionally related and subordinate to such property.
The term "qualified zone property" has the meaning given such term by section 1397D; except that-
Except as modified in this paragraph, the term "enterprise zone business" has the meaning given such term by section 1397C.
In applying section 1397C for purposes of this section-
Except as provided in subclause (II), references in section 1397C to empowerment zones shall be treated as including references to enterprise communities.
For purposes of subsections (b)(6) and (c)(5) of section 1397C, an employee shall be treated as a resident of an empowerment zone if such employee is a resident of an empowerment zone, an enterprise community, or a qualified low-income community within an applicable nominating jurisdiction.
A business shall not fail to be treated as an enterprise zone business during the startup period if-
A business shall not fail to be treated as an enterprise zone business for any taxable year beginning after the testing period by reason of failing to meet any requirement of subsection (b) or (c) of section 1397C if at least 35 percent of the employees of such business for such year are residents of an empowerment zone, an enterprise community, or a qualified low-income community within an applicable nominating jurisdiction. The preceding sentence shall not apply to any business which is not a qualified business by reason of paragraph (1), (4), or (5) of section 1397C(d).
For purposes of subparagraph (B)-
The term "qualified low-income community" means any population census tract if-
Subclause (II) shall be applied using possessionwide median family income in the case of census tracts located within a possession of the United States.
The Secretary shall prescribe regulations under which 1 or more targeted populations (within the meaning of section 103(20) of the Riegle Community Development and Regulatory Improvement Act of 1994) may be treated as qualified low-income communities.
In the case of an area which is not tracted for population census tracts, the equivalent county divisions (as defined by the Bureau of the Census for purposes of defining poverty areas) shall be used for purposes of determining poverty rates and median family income.
In the case of a population census tract located within a high migration rural county, clause (i)(II) shall be applied to areas not located within a metropolitan area by substituting "85 percent" for "80 percent".
For purposes of this clause, the term "high migration rural county" means any county which, during the 20-year period ending with the year in which the most recent census was conducted, has a net out-migration of inhabitants from the county of at least 10 percent of the population of the county at the beginning of such period.
For purposes of subparagraph (B)-
The term "startup period" means, with respect to any property being provided for any business, the period before the first taxable year beginning more than 2 years after the later of-
The term "testing period" means the first 3 taxable years beginning after the startup period.
The term "applicable nominating jurisdiction" means, with respect to any empowerment zone or enterprise community, any local government that nominated such community for designation under section 1391.
The term "enterprise zone business" includes any trades or businesses which would qualify as an enterprise zone business (determined after the modifications of subparagraph (B)) if such trades or businesses were separately incorporated.
Subsection (a) shall not apply to any issue if the aggregate amount of outstanding enterprise zone facility bonds allocable to any person (taking into account such issue) exceeds-
For purposes of paragraph (1), the aggregate amount of outstanding enterprise zone facility bonds allocable to any person shall be determined under rules similar to the rules of section 144(a)(10), taking into account only bonds to which subsection (a) applies.
The requirements of sections 147(c)(1)(A) and 147(d) shall not apply to any bond described in subsection (a).
An issue which fails to meet 1 or more of the requirements of subsections (a) and (b) shall be treated as meeting such requirements if-
No deduction shall be allowed under this chapter for interest on any financing provided from any bond to which subsection (a) applies with respect to any facility to the extent such interest accrues during the period beginning on the first day of the calendar year which includes the date on which-
Paragraphs (1) and (2) shall not apply solely by reason of the termination or revocation of a designation as an empowerment zone or an enterprise community.
Paragraphs (1) and (2) shall not apply to any cessation resulting from bankruptcy.
In the case of an empowerment zone facility bond-
Paragraph (1) shall apply to an empowerment zone facility bond only if such bond is designated for purposes of this subsection by the local government which nominated the area to which such bond relates.
The aggregate face amount of bonds which may be designated under subparagraph (A) with respect to any empowerment zone shall not exceed-
Bonds to which paragraph (1) applies shall not be taken into account in applying the limitation of subsection (c) to other bonds.
In the case of a refunding (or series of refundings) of a bond designated under this paragraph, the refunding obligation shall be treated as designated under this paragraph (and shall not be taken into account in applying subparagraph (B)) if-
For purposes of this subsection, the term "empowerment zone facility bond" means any bond which would be described in subsection (a) if-
26 U.S.C. § 1394
EDITORIAL NOTES
REFERENCES IN TEXTSection 103(20) of the Riegle Community Development and Regulatory Improvement Act of 1994, referred to in subsec. (b)(3)(C)(ii), is classified to section 4702(20) of Title 12, Banks and Banking.
PRIOR PROVISIONSA prior section 1394, added Pub. L. 95-600, title VI, §601(a), Nov. 6, 1978, 92 Stat. 2895; amended Pub. L. 96-595, §3(a)(6)-(8), Dec. 24, 1980, 94 Stat. 3465, related to rules applicable to distributions of an electing general stock ownership corporation, prior to repeal by Pub. L. 99-514, title XIII, §1303(a), Oct. 22, 1986, 100 Stat. 2658.A prior section 1395, added Pub. L. 95-600, title VI, §601(a), Nov. 6, 1978, 92 Stat. 2895, related to adjustment to basis of stock of shareholders, prior to repeal by Pub. L. 99-514, title XIII, §1303(a), Oct. 22, 1986, 100 Stat. 2658.
AMENDMENTS2018-Subsec. (b)(3)(B)(i)(II). Pub. L. 115-141 substituted "subsections" for "subsection". 2015-Subsec. (b)(3)(B)(i). Pub. L. 114-113, §171(b), designated existing provisions as subcl. (I), inserted heading, substituted "Except as provided in subclause (II), references" for "References", and added subcl. (II).Subsec. (b)(3)(B)(iii). Pub. L. 114-113, §171(d)(1), substituted ", an enterprise community, or a qualified low-income community within an applicable nominating jurisdiction" for "or an enterprise community".Subsec. (b)(3)(C). Pub. L. 114-113, §171(c)(1), added subpar. (C). Former subpar. (C) redesignated (D).Subsec. (b)(3)(D). Pub. L. 114-113, §171(c)(1), (d)(2), redesignated subpar. (C) as (D) and substituted "Other definitions" for "Definitions" in heading. Former subpar. (D) redesignated (E). Subsec. (b)(3)(D)(iii). Pub. L. 114-113, §171(c)(2), added cl. (iii).Subsec. (b)(3)(E). Pub. L. 114-113, §171(c)(1), redesignated subpar. (D) as (E).2014-Subsec. (f). Pub. L. 113-295, §220(o), struck out "designated under section 1391(g)" after "empowerment zones" in heading.Subsec. (f)(1), (2)(A). Pub. L. 113-295, §220(p), substituted "an empowerment zone facility bond" for "a new empowerment zone facility bond". 2002-Subsec. (c)(2). Pub. L. 107-147 substituted "paragraph (1)" for "subparagraph (A)". 2000-Subsec. (b)(2). Pub. L. 106-554, §1(a)(7)[title I, §116(b)(3)(A)], substituted "section 1397D" for "section 1397C" in introductory provisions.Subsec. (b)(2)(B). Pub. L. 106-554, §1(a)(7)[title I, §116(b)(3)(B)], substituted "section 1397D(a)(2)" for "section 1397C(a)(2)".Subsec. (b)(3). Pub. L. 106-554, §1(a)(7)[title I, §116(b)(4)(A)], substituted "section 1397C" for "section 1397B" wherever appearing.Subsec. (b)(3)(B)(iii). Pub. L. 106-554, §1(a)(7)[title I, §116(b)(4)(B)], substituted "section 1397C(d)" for "section 1397B(d)". Subsec. (f)(3). Pub. L. 106-554, §1(a)(7)[title I, §115(a)], amended heading and text of par. (3) generally. Prior to amendment, text read as follows: "For purposes of this subsection, the term 'new empowerment zone facility bond' means any bond which would be described in subsection (a) if only empowerment zones designated under section 1391(g) were taken into account under sections 1397B and 1397C." 1997-Subsec. (b)(2). Pub. L. 105-34, §955(b), amended heading and text of par. (2) generally. Prior to amendment, text read as follows: "The term 'qualified zone property' has the meaning given such term by section 1397C; except that the references to empowerment zones shall be treated as including references to enterprise communities." Subsec. (b)(3). Pub. L. 105-34, §955(b), amended heading and text of par. (3) generally. Prior to amendment, text read as follows: "The term 'enterprise zone business' has the meaning given to such term by section 1397B, except that-"(A) references to empowerment zones shall be treated as including references to enterprise communities, and "(B) such term includes any trades or businesses which would qualify as an enterprise zone business (determined after the modification of subparagraph (A)) if such trades or businesses were separately incorporated."Subsec. (f). Pub. L. 105-34, §953(a), added subsec. (f).1996-Subsec. (e)(2). Pub. L. 104-188, which directed that par. (2) be amended by striking "(i)" and inserting "(A)" and by striking "(ii)" and inserting "(B)", could not be executed, because par. (2) contained neither "(i)" nor "(ii)".
STATUTORY NOTES AND RELATED SUBSIDIARIES
EFFECTIVE DATE OF 2015 AMENDMENT Pub. L. 114-113, div. Q, title I, §171(e)(2), Dec. 18, 2015, 129 Stat. 3071, provided that: "The amendments made by subsections (b), (c), and (d) [amending this section] shall apply to bonds issued after December 31, 2015."
EFFECTIVE DATE OF 2000 AMENDMENT Pub. L. 106-554, §1(a)(7)[title I, §115(b)], Dec. 21, 2000, 114 Stat. 2763, 2763A-602, provided that: "The amendments made by this section [amending this section] shall apply to obligations issued after December 31, 2001."Amendment by section 1(a)(7) [title I, §116(b)(3), (4)] of Pub. L. 106-554 applicable to qualified empowerment zone assets acquired after Dec. 21, 2000, see section 1(a)(7) [title I, §116(c)] of Pub. L. 106-554, set out as a note under section 1016 of this title.
EFFECTIVE DATE OF 1997 AMENDMENT Pub. L. 105-34, §953(b), Aug. 5, 1997, 111 Stat. 888, provided that: "The amendment made by this section [amending this section] shall apply to obligations issued after the date of the enactment of this Act [Aug. 5, 1997]." Pub. L. 105-34, §955(c), Aug. 5, 1997, 111 Stat. 890, provided that: "The amendments made by this section [amending this section] shall apply to obligations issued after the date of the enactment of this Act [Aug. 5, 1997]."
EFFECTIVE DATE OF 1996 AMENDMENT Amendment by Pub. L. 104-188 effective as if included in the provision of the Revenue Reconciliation Act of 1993, Pub. L. 103-66, §§13001 -13444, to which such amendment relates, see section 1703(o) of Pub. L. 104-188, set out as a note under section 39 of this title.
- Secretary
- The term "Secretary" means the Secretary of the Treasury or his delegate.
- State
- The term "State" shall be construed to include the District of Columbia, where such construction is necessary to carry out provisions of this title.
- corporation
- The term "corporation" includes associations, joint-stock companies, and insurance companies.
- person
- The term "person" shall be construed to mean and include an individual, a trust, estate, partnership, association, company or corporation.
- stock
- The term "stock" includes shares in an association, joint-stock company, or insurance company.
- taxable year
- The term "taxable year" means the calendar year, or the fiscal year ending during such calendar year, upon the basis of which the taxable income is computed under subtitle A. "Taxable year" means, in the case of a return made for a fractional part of a year under the provisions of subtitle A or under regulations prescribed by the Secretary, the period for which such return is made.