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).