SECTION 14. TRANSFER OF

REPLACEMENT LAND IN PARTIAL SATISFACTION OF SECTION 54B(e)(2) AND THE REQUIREMENTS OF THIS NOTICE

(1) Transfer of Replacement Land treated as transfer of Unacceptable Land for purposes of satisfying the Disposition Requirement. If land that is required to be transferred to the USFS (or, if applicable, to a State) is not so transferred because it is Unacceptable Land (within the meaning of Section 14(2)(a) of this notice) and if the qualified issuer instead transfers to the USFS or the State land that is Replacement Land with respect to the Unacceptable Land (within the meaning of Section 14(2)(b) of this notice), then the transfer of the Replacement Land is treated like a transfer of the Unacceptable Land for purposes of satisfying the requirements of section 54B(e)(2) and this notice.

(2) Definitions. (a) Unacceptable Land. The term “Unacceptable Land” means land that is required to be transferred to the USFS or to a State under the requirements of section 54B and this notice but that the intended recipient will not accept because of—

unaware at the time it acquired the land; or

aware at the time it acquired the land, which it reasonably believed that it could remedy, but which were not remedied by the qualified issuer’s reasonable efforts; or

suer acquired the land but of which the qualified issuer was then unaware; or

ified issuer acquired the land and were not subsequently caused by

the qualified issuer or by any person that was related to, or acting on behalf of, the qualified issuer. (If an unrelated person engages in activities on the land with the permission of the qualified issuer—regardless whether the qualified issuer is legally required to allow some form of those activities—that person is treated for this purpose as acting on behalf of the qualified issuer.)

(b) Replacement Land. With respect to particular Unacceptable Land, the term “Replacement Land” means land such that—

Replacement Land instead of acquiring the Unacceptable Land, the acquisition would have satisfied the requirements of section 54B(e) (other than section 54B(e)(2));

than the total acreage of the Unacceptable Land;

ceptable Land explicitly determines that the land is no less desirable than the Unacceptable Land would have been if the cause for its unacceptability did not exist; and

consents to accept the land in lieu of the Unacceptable Land.

(3) Application procedure. If a qualified issuer and the USFS (or a State, as applicable) agree to treat certain land as Replacement Land with respect to certain Unacceptable Land, then, pursuant to a written request (not a request for a letter ruling), and upon a showing of good cause, the IRS may agree to treat the land as Replacement Land. The original of any request for this treatment must be sent to the address set forth in Section 17(1)(A) of this notice, and copies must also be sent to the other party to the contract (to which any of the land is required to be transferred). The request must include complete documentation establishing that both the alleged Unacceptable Land and the requested Replacement Land meet the requirements of this Section 14.

September 8, 2008 582 2008–36 I.R.B.

Tax-Exempt Private Activity Bond Issues, in accordance with the instructions for that form and this notice. A copy of the completed and signed Form 8038 must simultaneously be sent to the IRS and USFS at the addresses listed in section 17(1) and (2) of this notice, respectively. An applicant that used the allocation to issue QFCBs must complete Part II by checking the box on Line 11q (Other), writing in “Qualified Forestry Conservation Bonds,” and entering the amount of the bonds in the Issue Price column. An applicant that elects the application of section 54B(h) (and thus receives a refund of a deemed payment in lieu of issuing QFCBs) must file the Form 8038 not later than the date that it would have been required to file the form if it had issued QFCBs on the date that it receives the refund. That applicant must complete Part II of the Form 8038 by checking the box on Line 11q (Other), writing in “Refund Under Section 54B(h),” and entering the amount of the refund in the Issue Price column.