113 STAT. 1942
PUBLIC LAW 106-170—DEC. 17, 1999
lodging facility leased by the trust to a taxable REIT subsidiary of the trust if the property is operated on behalf
of such subsidiary by a person who is an eligible independent contractor.
"(9) ELIGIBLE INDEPENDENT CONTRACTOR. — For purposes of
paragraph (8)(B)—
" (A) IN GENERAL.—The term 'eligible independent contractor' means, with respect to any qualified lodging facility,
any independent contractor if, at the time such contractor
enters into a management agreement or other similar
service contract with the taxable REIT subsidiary to
operate the facility, such contractor (or any related person)
is actively engaged in the trade or business of operating
qualified lodging facilities for any person who is not a
related person with respect to the real estate investment
trust or the taxable REIT subsidiary.
"(B) SPECIAL RULES.— Solely for purposes of this paragraph and paragraph (8)(B), a person shall not fail to
be treated as an independent contractor with respect to
any qualified lodging facility by reason of any of the following:
"(i) The taxable REIT subsidiary bears the
expenses for the operation of the facility pursuant to
the management agreement or other similar service
contract.
"(ii) The taxable REIT subsidiary receives the revenues from the operation of such facility, net of expenses
for such operation and fees payable to the operator
pursuant to such agreement or contract.
"(iii) The real estate investment trust receives
income from such person with respect to another property that is attributable to a lease of such other property to such person that was in effect as of the later
of—
"(I) January 1, 1999, or
"(II) the earliest date that any taxable REIT
subsidiary of such trust entered into a management agreement or other similar service contract
with such person with respect to such qualified
lodging facility.
"(C) RENEWALS, ETC., OF EXISTING LEASES.— For purposes of subparagraph (B)(iii)—
"(i) a lease shall be treated as in effect on January
1, 1999, without regard to its renewal after such date,
so long as such renewal is pursuant to the terms
of such lease as in effect on whichever of the dates
under subparagraph (B)(iii) is the latest, and
"(ii) a lease of a property entered into after whichever of the dates under subparagraph (B)(iii) is the
latest shall be treated as in effect on such date if—
"(I) on such date, a lease of such property
from the trust was in effect, and
"(II) under the terms of the new lease, such
trust receives a substantially similar or lesser benefit in comparison to the lease referred to in subclause (I).
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