(3) Exception for certain private activity bonds (A) In general In the case of an obligation to which this paragraph applies— (i) paragraph (2) shall not apply, (ii) such obligation shall be treated for purposes of this title as a qualified small issue bond, and (iii) section 146 shall not apply. (B) Obligations to which paragraph applies This paragraph shall apply to any obligation issued as part of an issue if— (i) 95 percent or more of the net proceeds of the issue are to be used for the acquisition, construction, reconstruction, or improvement of property which is of a character subject to the allowance for depreciation and which is part of a manufacturing facility (as defined in section 144(a)(12)(C) ), (ii) such issue is issued by an Indian tribal government or a subdivision thereof, (iii) 95 percent or more of the net proceeds of the issue are to be used to finance property which— (I) is to be located on land which, throughout the 5-year period ending on the date of issuance of such issue, is part of the qualified Indian lands of the issuer, and (II) is to be owned and operated by such issuer, (iv) such obligation would not be a private activity bond without regard to subparagraph (C), (v) it is reasonably expected (at the time of issuance of the issue) that the employment requirement of subparagraph (D)(i) will be met with respect to the facility to be financed by the net proceeds of the issue, and (vi) no principal user of such facility will be a person (or group of persons) described in section 144(a)(6)(B). For purposes of clause (iii), section 150(a)(5) shall apply. (C) Private activity bond rules to apply An obligation to which this paragraph applies (other than an obligation described in paragraph (1)) shall be treated for purposes of this title as a private activity bond. (D) Employment requirements (i) In general The employment requirements of this subparagraph are met with respect to a facility financed by the net proceeds of an issue if, as of the close of each calendar year in the testing period, the aggregate face amount of all outstanding tax-exempt private activity bonds issued to provide financing for the establishment which includes such facility is not more than 20 times greater than the aggregate wages (as defined by section 3121(a)) paid during the preceding calendar year to individuals (who are enrolled members of the Indian tribe of the issuer or the spouse of any such member) for services rendered at such establishment. (ii) Failure to meet requirements (I) In general If, as of the close of any calendar year in the testing period, the requirements of this subparagraph are not met with respect to an establishment, section 103 shall cease to apply to interest received or accrued (on all private activity bonds issued to provide financing for the establishment) after the close of such calendar year. (II) Exception Subclause (I) shall not apply if the requirements of this subparagraph would be met if the aggregate face amount of all tax-exempt private activity bonds issued to provide financing for the establishment and outstanding at the close of the 90th day after the close of the calendar year were substituted in clause (i) for such bonds outstanding at the close of such calendar year. (iii) Testing period For purposes of this subparagraph, the term “testing period” means, with respect to an issue, each calendar year which begins more than 2 years after the date of issuance of the issue (or, in the case of a refunding obligation, the date of issuance of the original issue). (E) Definitions For purposes of this paragraph— (i) Qualified Indian lands The term “qualified Indian lands” means land which is held in trust by the United States for the benefit of an Indian tribe. (ii) Indian tribe The term “Indian tribe” means any Indian tribe, band, nation, or other organized group or community which is recognized as eligible for the special programs and services provided by the United States to Indians because of their status as Indians. (iii) Net proceeds The term “net proceeds” has the meaning given such term by section 150(a)(3).