4.7.1.1 Exempt Facility Bonds

Exempt facility bonds are bonds for which at least 95% of the net proceeds are to be used to finance capital costs of one of the following types of facilities:

Airport facilities
Docks and wharves
Mass commuting facilities
Facilities for the furnishing of water
Sewage facilities
Solid waste disposal facilities
Qualified residential rental projects (i.e., multifamily housing)
Facilities for the local furnishing of electric energy or gas
Qualified broadband projects

Qualified carbon dioxide capture projects
Local district heating or cooling facilities
Qualified hazardous waste facilities
High speed intercity rail facilities
Environmental enhancements of hydroelectric generating facilities
Qualified public educational facilities (public schools owned by private entities in public private partnership arrangements)
Qualified green building and sustainable design products
Qualified highway or surface freight transfer facilities.

Net proceeds comprise all proceeds of the bonds, less amounts in a DSRF and less investment proceeds earned after completion of the project. The Code and Regulations contain specific rules and definitions covering each of these exempt facility categories. In the case of the exempt facility bonds issued for airports, docks, and wharves, mass commuting facilities, and environmental enhancements for hydroelectric facilities, the facilities must be owned by a governmental unit.