The ownership and private use limitations for qualified
501(c)(3) bonds apply to financed assets for the entire time the
bonds remain outstanding (or for their entire useful lives, if
earlier). However, facts and circumstances that were not
anticipated at the time the bonds were issued may result in a
change in the ownership or use of the financed assets. If the
financed assets will no longer be owned by a governmental unit or
Section 501(c)(3) organization or less than 95% of the financed
assets will be used for qualifying uses, the Section 501(c)(3)
organization must take certain steps to preserve the tax-exempt
status of the bonds.
For purposes of this memorandum, "change in use" means
a change in the use of a building, equipment or other assets
financed with qualified 501(c)(3) bonds or governmental bonds from
a use qualifying for tax-exempt financing to a private business use
which does not qualify for tax-exempt financing.
