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TITLE 26-INTERNAL REVENUE CODE not substantially modified at any time after such date and before the taxpayer placed the equipped building in service), the tax- payer has constructed, reconstructed, erect- ed, or acquired a building and the machin- ery and equipment necessary to the planned use of the building by the taxpay- er, and (B) more than 50 percent of the aggregate adjusted basis of all the property of a char- acter subject to the allowance for depreci- ation making up such building as so equipped is attributable to either property the construction, reconstruction, or erection of which was begun by the taxpayer before April 19, 1969, or property the acquisition of which by the taxpayer occurred before such date, then all property comprising such building as so equipped (and any incidental property ad- jacent to such building which is necessary to the planned use of the building) shall be pre- termination property. For purposes of sub- paragraph (B) of the preceding sentence, the rules of paragraphs (1) and (4) shall be ap- plied. For purposes of this paragraph, a spe- cial purpose structure shall be treated as a building. (3) Plant facility rule (A) General rule If- (I) pursuant to a plan of the taxpayer in existence on April 18, 1969 (which plan was not substantially modified at any time after such date and before the tax- payer placed the plant facility in service), the taxpayer has constructed, recon- structed, or erected a plant facility, and either (ii) the construction, reconstruction, or erection of such plant facility was com- menced by the taxpayer before April 19, 1969, or (iii) more than 50 percent of the aggre- gate adjusted basis of all the property of a character subject to the allowance for de- preciation making up such plant facility is attributable to either property the con- struction, reconstruction, or erection of which was begun by the taxpayer before April 19, 1969, or property the acquisition of which by the taxpayer occurred before such date, then all property comprising such plant fa- cility shall be prL-Lermination property. For purposes of clause (iii) of the preceding sen- tence, the rules of paragraphs (1) and (4) shall be applied. (B) Plant facility defined For purposes of this paragraph, the term "plant facility" means a facility which does not include any building (or of which build- ings constitute an insignificant portion) and which is- (I) a self-contained, single operating unit or processing operation, (ii) located on a single site, and (iII) identified, on April 18, 1969, in the purchasing and internal financial plans of the taxpayer as a single unitary project. (C) Special rule For purposes of this subsection, if- (i) a certificate of convenience and ne- cessity has been issued before April 19, 1969, by a Federal regulatory agency with respect to two or more plant facilities which are included under a single plan of the taxpayer to construct, reconstruct, or erect such plant facilities, and (ii) more than 50 percent of the aggre- gate adjusted basis of all the property of a character subject to the allowance for de- preciation making up such plant facilities is attributable to either property the con- struction, reconstruction, or erection of which was begun by the taxpayer before April 19, 1969, or property the acquisition of which by the taxpayer occurred before such date, such plant facilities shall be treated as a single plant facility. (D) Commencement of construction For purposes of subparagraph (A)(ii), the construction, reconstruction, or erection of a plant facility shall not be considered to have commenced until construction, recon- struction, or erection has commenced at the site of such plant facility. The preceding sentence shall not apply if the site of such plant facility is not located on land. (4) Machinery or equipment rule Any piece of machinery or equipment- (A) more than 50 percent of the parts and components of which (determined on the basis of cost) were held by the taxpayer on April 18, 1969, or are acquired by the tax- payer pursuant to a binding contract which was in effect on such date, for inclusion or use in such piece of machinery or equip- ment, and (B) the cost of the parts and components of which is not an insignificant portion of the total cost, shall be treated as property which is pre-ter- mination property. (5) Certain lease-back transactions, etc. (A) Where a person who is a party to a binding contract described in paragraph (1) transfers rights in such contract (or in the property to which such contract relates) to another person but a party to such contract retains a right to use the property under a lease with such other person, then to the extent of the transferred rights such other person shall, for purposes of paragraph (1), succeed to the position of the transferor with respect to such binding contract and such property. In any case in which the lessor does not make an election under sec- tion 48(d)- (I) the preceding sentence shall apply only if a party to the contract retains the right to use the property under a lease for a term of at least 1 year; and (ii) if such use is retained (other than under a long-term lease), the lessor shall be deemed for the purposes of section 47 as having made a disposition of the prop- erty at such time as the lessee loses the right to use the property. Page 80