It's Official! Final Public Approval Regulations
Now Reflect the 21st Century by Bracewell Law
Treasury has released final regulations relating to the public approval requirements for private activity bonds (aka the “TEFRA approval” process). The Final Regulations effectively track the Proposed Regulations issued in 2017 but make a few additional
tweaks that provide some additional flexibility for issuers and conduit borrowers navigating the process. The Final Regulations are effective for all private activity bonds issued pursuant to a public approval occurring on or after April 1, 2019. Further, certain provisions regarding insubstantial deviations may also be applied in whole, but not in part, to a prior public approval.
As we previously reported, the IRS recognized that technological advances have made the existing public approval regulations outdated and that updates were required to address statutory changes, streamline the public approval process, and reduce ad- ministrative burdens. While there are several adjustments to current law to address these objectives, the changes that issuers and conduits borrowers may view as the most impactful are as follows:
• Electronic Posting of Notice of Public Hearing Permitted; Newspapers Still Allowed
Recognizing that the Internet is probably more than just a fad and that the public has increasingly relied on the Internet as its “go to” source for information, the Final Regulations permit the public notice requirement to be fulfilled by making an electronic posting on either (i) the approving governmental unit’s website or, for issuer approvals (as opposed to host approvals) only, (ii) in the case of an issuer that acts on behalf of a governmental unit, on the issuer’s public website. To make the posting easy for residents to locate, such a posting must be on the entity’s primary public website in an area used to inform residents about events affecting residents. The Final Regulations go on to clarify that issuers remain responsible for maintaining records showing that a public notice containing the requisite information was timely posted to an appropriate website.
For those that do not have a website or simply would prefer to continue past practices, notice may still be given by publication in a newspaper, radio or television broadcast, or by an alternative method permitted for public notices under state law.
Page 16
TALHFA
Winter 2018 / 2019
Talk
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