Private Security or Payment Test.

The direct or indirect payment of principal or interest

on more than 10 percent of the bond issue is to be secured by or derived from payments in respect
of property used for a private business use.
If a facility is used disproportionately by a private business or is used by a private business in a
manner that is unrelated to the governmental entitys use, the 10 percent limitation of the Private
Business Tests is reduced to a 5 percent limitation.
Private Loan Test. Even if the Private Business Tests are not satisfied, an issue will
nevertheless be an issue of private activity bonds if the lesser of 5 percent of the proceeds or $5
million are used to make or finance loans to persons other than governmental units.
Reasonable Expectations. Generally, the determination of whether an issue
of bonds is an issue of private activity bonds is based upon the issuers
reasonable expectations as of