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private activity bond which is not a qualified bond (within the
meaning of section 141).” Sec. 103(b)(1). We must determine in
the instant case whether the bonds that petitioner proposes to
issue are private activity bonds.11 The parties stipulated that
the bonds will not be qualified bonds. See sec. 141(e).
The term “private activity bond” means any bond that is part
of an issue which meets: (1) The private business use test of
section 141(b)(1) and the private security or payment test of
section 141(b)(2), or (2) which meets the private loan financing
test of section 141(c). Sec. 141(a). The parties agree that the
only issue in the instant case is whether the proposed bonds meet
the private business use test and the private security or payment
test (collectively the private business tests). If the private
business tests are met, the bonds are private activity bonds.
See sec. 141(a)(1); City of New York v. Commissioner, 103 T.C.
11Under sec. 7478, the Tax Court shall have jurisdiction, in
a case of actual controversy involving a determination by the
Secretary, to make a declaration whether interest on proposed
bonds will be excludable from gross income under sec. 103(a).
The burden of proof is on petitioner as to the grounds set forth
in respondent’s notice of determination and is on respondent as
to any ground upon which he relies and which is not stated in the
notice of determination. Rule 217(c)(2)(A) and (B); City of New
York v. Commissioner, 103 T.C. 481, 482 (1994), affd. 70 F.3d 142
(D.C. Cir. 1995). Our decision in this case is based upon the
administrative record and the stipulation of facts. Rule 217(a);
City of New York v. Commissioner, supra at 482. We assume that
the facts represented in the administrative record and in the
stipulations are true. Rule 217(b)(1); City of New York v.
Commissioner, supra at 482.
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