Tax-Exempt Bond Reform Act of 1986

[AI summary unavailable — showing source text] Tax-Exempt Bond Reform Act of 1986 - Amends the Internal Revenue Code to replace the term "industrial development bonds" with the new term "quasi-governmental bonds." Defines "quasi-governmental bond" as any obligation: (1) which is issued as part of an issue more than 25 percent of the net proceeds of which are to be used directly or indirectly in any trade or business carried on by any person other than a governmental unit; and (2) the payment of the principal or interest on which is, to the extent of more than 25 percent, secured by an interest in property used or to be used in a trade or business or in payments with respect of property, or to be derived from payments in respect of property, or borrowed money, used or to be used in trade or business. Sets forth rules concerning the use of proceeds in ways which will not be considered to be used in a trade or business carried on by other than a governmental unit. Provides that an issue of obligations will not be treated as quasi-governmental bonds if 95 percent or more of the proceeds are to be used to provide projects for residential rental or limited-equity cooperative property if certain conditions are satisfied. Provides that…