### Question
How does the law define exempt facility bond?


### Answer
Under *26 U.S.C. § 142*, **exempt facility bond** is defined as:

> any bond issued as part of an issue 95 percent or more of the net proceeds of which are to be used to provide—



(1) airports,



(2) docks and wharves,



(3) mass commuting facilities,



(4) facilities for the furnishing of water,



(5) sewage facilities,



(6) solid waste disposal facilities,



(7) qualified residential rental projects,



(8) facilities for the local furnishing of electric energy or gas,



(9) local district heating or cooling facilities,



(10) qualified hazardous waste facilities,



(11) high-speed intercity rail facilities,



(12) environmental enhancements of hydroelectric generating facilities,



(13) qualified public educational facilities,



(14) qualified green building and sustainable design projects, or



(15) qualified highway or surface freight transfer facilities

#### Citation:
  - *26 U.S.C. § 142*
  - Heading: **Subtitle A-Income Taxes > CHAPTER 1-NORMAL TAXES AND SURTAXES > Subchapter B-Computation of Taxable Income > PART IV-TAX EXEMPTION REQUIREMENTS FOR STATE AND LOCAL BONDS > Subpart A-Private Activity Bonds**

