Table 28. Rules Governing Tax Exempt Bonds for Private Activities Before and After 1986
Issue Before the 1986 Tax Act After the 1986 Tax Act
Definition of a More than 25 percent of bond More than 10 percent of bond Private Activity proceeds used by a private proceeds used by or revenues entity and used to secure property derived from a private concern Volume Cap No unified volume cap; cap on Phased-in unified volume cap; certain private activities in 1986, $75 per capita or $250 million; in 1988 and later, $50 per capita or $150 million Investment Tax Credit 10 percent of certain investments None Depreciation 5-year depreciation schedule Depreciation schedule lengthened, depending on type of environmental facility
Source: U.S. Government Accounting Office, Environmental Infrastructure: Effects of Limits on Certain Tax-Exempt Bonds, GAO/RCED-94-2 (Washington, DC, October 1993).