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statements in the Staff of Joint Comm. on Taxation, General
Explanation of the Tax Reform Act of 1986, at 1152 (J. Comm.
Print 1987), which discuss the reasons for the enactment of the
private business use test:
Congress believed that * * * [the] diversion of
governmental bond proceeds to nongovernmental users
should be limited, but without setting the threshold
amount so low that de minimis or incidental usage of
government facilities and services by private users
might cause interest on an issue to be taxable.
[Emphasis added.]
In response to petitioner’s contentions respondent argues
that “A legitimate governmental purpose cannot negate
impermissible private business use.” He suggests that uses of a
bond-financed facility that are incidental to its governmental
purpose are taken into account under the private business use
test and that neither the Code nor the regulations provides a
general exception for incidental use. He argues that the
references to the terms “incidental” and “de minimis” in the
General Explanation, which petitioner relies upon, “simply refer
to amounts of private business use that fall below the statutory
threshold established by Congress”; i.e., private business use
which is less than 10 percent of the proceeds of an issue of
bonds.
First, we agree with respondent that neither the Code nor
the regulations provide a general exception for incidental use of
proceeds or financed property, except for the 10-percent
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