Subject: Tax-Exempt Debt Compliance

Issue 1

Effective 5/14/2012

I. SCOPE AND PURPOSE

This Administrative Practice Letter – Tax-Exempt Debt Compliance of the University of Maine System (UMS) identifies the compliance areas of tax-exempt bond financing and the University System’s policy of fulfilling all requirements in these areas during both pre and post-issuance processes.

The UMS finances certain capital projects through the issuance of its own tax-exempt revenue bonds and through the use of proceeds from tax-exempt bonds issued and repaid by the State of Maine (“State bonds”). Investors in tax-exempt bonds are willing to accept a lower interest rate because interest earned on tax-exempt bonds is exempt from taxation. This exemption translates into a lower cost of capital for the University and the State.

The exemption also translates into lost tax dollars for the federal government; therefore, the federal government limits the ability to issue tax-exempt bonds to certain types of entities, including governmental entities such as the UMS. The federal government also wants to ensure that tax-exempt debt is benefiting only the qualified entity and not private enterprise.

The tax-exempt status remains throughout the life of the debt provided that the UMS satisfies all applicable federal tax laws. A failure to meet these laws at any time during the life of the bonds could result in the retroactive and prospective loss of the tax-exempt or tax-advantaged status of the bonds or the imposition of additional taxes or assessments on the UMS (or the State of Maine in the case of State bonds).

II. WHO NEEDS TO KNOW THIS POLICY

University staff involved in any stage or aspect of any UMS revenue bond issue or State of Maine bond issue, including but not limited to those who manage, direct or influence any of the following areas needs to know the requirements of this APL:

Area Campus Personnel Impacted System Personnel Impacted
Pre-issuance processes and decision-making including:
  • identification of eligible projects,
  • identification of other funding sources for the projects (e.g., gifts, grants, etc.),
  • funding source for payment of debt service, and
  • due diligence on tax aspects of projects.

CFO

Academic Deans responsible for managing buildings

Auxiliary Directors

Conferences

Development, including Athletics

Facilities – Director, project managers, and accounting

Industrial Cooperation

Space Managers

Sponsored Programs (Research)

Treasurer

Director of Facilities

Controller

Accounting – Director and capital asset accountant

The use of bond proceeds and timing of use CFO

Facilities – Director, project managers, and accounting

Treasurer

Director of Facilities

Controller

Accounting – Director and capital asset accountant

Investing of bond funds and arbitrage processes

CFO

Treasurer

Controller

Director of Accounting

Use of UMS property financed by tax-exempt bonds, including:
  • Leases
  • Management and services agreements
  • Research agreements
  • Naming agreements
  • Short-term rentals
CFO

Academic Deans responsible for managing buildings

Auxiliary Directors

Conferences

Development, including Athletics

Facilities Director

Industrial Cooperation

Purchasing

Space Managers

Sponsored Programs (Research)

Treasurer

Director of Facilities

Controller

Accounting – Director and capital asset accountant

University Counsel

Purchasing

The creation and retention of documentation relating to use of proceeds, arbitrage, return filings, and private usage

CFO

Academic Deans responsible for managing buildings

Auxiliary Directors

Conferences

Development, including Athletics

Facilities – Director, project managers, and accounting

Industrial Cooperation

Purchasing

Space Managers

Sponsored Programs (Research)

Treasurer

Director of Facilities

Controller

Accounting – Director and capital asset accountant

University Counsel

Purchasing

Recording and reporting of financial transactions related to tax-exempt bonds CFO Facilities – Project managers and accounting Treasurer

Director of Facilities

Controller

Accounting – Director and capital asset accountant

III. PRE-ISSUANCE COMPLIANCE REQUIREMENTS

A. Authorization to Issue UMS Tax-Exempt Bonds

The Treasurer, through delegation on an issuance by issuance basis from the UMS Board of Trustees (BOT), is authorized to issue tax-exempt bonds for the UMS.

B. External Advisors for UMS Bonds

To help ensure pre-issuance compliance, the Treasurer engages reputable bond counsel, financial advisors, and underwriters to assist the UMS in the process of issuing tax-exempt bonds. Structure of the debt must comply with the UMS’ debt policy as described in APL Section III-H, “Debt Policy”.

C. Requests for and Approval of Tax-Exempt Bond Financing

UMS Revenue Bonds

Each CFO proposes projects to be funded with the bond proceeds and submits information on the projects to the Treasurer. Such information includes the following:

    1. Nature of the project, e.g., new construction, renovation of a facility, etc.
    2. Operational need and impact of the project, e.g., activity to be carried on in the facility, users of the facility, potential for private use, payment or both, etc.
    3. Anticipated use of the facility in five years, 10 years, 15 years, 20 years, 25 years, 30 years
    4. Ability of the University to repay UMS debt
    5. Types and amounts of other funding sources for the project

Prior to the revenue bonds being issued, each CFO also identifies a backup plan for spending the bond proceeds in the unforeseen event the original project(s) are completed under budget or there are otherwise additional proceeds. In developing the plan, consideration is given to whether or not the facility is already financed with tax-exempt debt, current use of the facility, and anticipated future use of the facility.

Before UMS issues bonds or requests proceeds from State bonds, the following approvals are obtained:

    1. BOT approval of the projects to be funded with UMS revenue bond proceeds,
    2. BOT approval of any UMS bond issuance, including a reimbursement resolution, and
    3. Delegation by the Chancellor to the Treasurer of all powers and responsibilities which the Chancellor may have with respect to the issuance of UMS bonds.

State Bonds

Each CFO submits to the UMS Treasurer a list of projects to be funded with proposed State bond proceeds. The Treasurer makes the final determination of which submitted projects will be included in the funding request made to the State of Maine legislature. In the event the legislature approves sending the bond package to referendum at a reduced amount, the Treasurer works with the campus CFOs to determine the revised list of projects to be funded. Throughout the process of obtaining State bond funding, the Treasurer updates the UMS BOT on the status of the proposed funding.

If the bond package is approved by State of Maine voters, the projects may move forward provided the following actions have been taken:

    1. Obtain BOT approval in accordance with BOT policy Section 701: Operating & Capital Budgets. In obtaining BOT approval the following information about the project is considered and shared with the BOT:a. Nature of the project, e.g., new construction, renovation of a facility, etc.b. Operational need and impact of the project, e.g., activity to be carried on in the facility, users of the facility, potential for private use, payment or both, etc.c. Anticipated use of the facility in five years, 10 years, 15 years, 20 years, 25 years, 30 yearsd. Types and amounts of other funding sources for the projectIf a project does not need BOT approval, the above information is compiled and provided to the Tax-Exempt Debt (TED) Compliance Coordinator.
    2. Contact the TED Compliance Coordinator about the anticipated use of the facility. The TED Compliance Coordinator shares this information with the State’s bond counsel to help them determine whether the State should issue tax-exempt bonds or taxable bonds.

Each CFO also identifies a backup plan for spending the State bond proceeds if the original project(s) are completed under budget or in the case of other unforeseen events. In developing the plan, consideration is given to the uses for which the particular bond funding is authorized, whether or not the facility is already financed with tax-exempt debt, current use of the facility, and anticipated future use of the facility.

D. Lease Purchase Agreements

Tax-exempt lease purchase agreements and other short term loan arrangements are available to finance equipment purchases. The Universities are not authorized to enter into such agreements without consultation with the System TED Compliance Coordinator to determine what the approval and compliance implications of entering into such agreements would be.

IV. POST-ISSUANCE COMPLIANCE REQUIREMENTS

Post-issuance tax compliance begins with the debt issuance process itself and provides for a continuing focus on investments of debt proceeds and use of debt-financed property. In order to maintain the debt status as tax-exempt, the University must comply with post-issuance debt requirements.

A. Responsibilities

In accordance with UMS Board Policy 713, the Vice Chancellor for Finance and Administration and Treasurer (the “Treasurer”) has the primary operating responsibility for establishing and maintaining written guidelines to support compliance and for monitoring compliance on an ongoing basis with post-issuance requirements for the bonds. The Treasurer will meet these responsibilities through delegation of certain responsibilities to the System Tax-Exempt Debt (TED) Compliance Coordinator and the University Chief Financial Officers (CFOs).

Below is a summary of the responsibilities of the CFOs, the System TED Compliance Coordinator, and the System Treasurer. These responsibilities are discussed in further detail in the remainder of section IV of this APL.

  1. University CFO Responsibilities

    a. Establish and maintain a process under which proposed arrangements (agreements) regarding the use of UMS tax-exempt financed property are screened for private business use. Provide a written description of this process and responsible positions to the System TED Compliance Coordinator. See section IV-C of this document for further information about screening requirements.

    b. Immediately contact the System TED Compliance Coordinator when possible or actual private business use has been identified. Any needed remedial action must be made timely; thus, waiting for the annual review (see ‘d’ below) would not be appropriate.

    c. Take immediate action to remediate impermissible private business use. This involves working with the System TED Compliance Coordinator, bond counsel, and the System Treasurer to identify an appropriate course of action.

    d. Timely respond to the annual use of facilities questionnaire (see Attachment E) distributed by the System TED Compliance Coordinator.

    e. Ensure that applicable documents are retained in accordance with record retention requirements and provide a list of responsible persons to the System TED Compliance Coordinator. See section IV-H of this document for further information about record retention.

  2. System TED Compliance Coordinator Responsibilities

    a. Periodically provide each University with a listing of all buildings financed in whole or in part with tax-exempt bond proceeds (both UMS and State bonds).

    b. Address campus questions.

    c. Coordinate all contact with outside bond counsel regarding questions related to private business use and other tax-exempt debt compliance issues.

    d. Ensure that rebate or yield reduction calculations are made in accordance with federal requirements and that needed payments are timely remitted to the federal government.

    e. Stay abreast of developments in applicable federal law related to tax-exempt debt. Available tools include the IRS’ web site for the Tax-exempt Bond Community, consultation with bond counsel, attendance at conferences, and other means. Communicate changes as needed to the CFOs and other persons responsible for compliance.

    f. Ensure that the CFOs and other persons responsible for compliance (as identified by the CFOs) are provided with sufficient training and background resources to perform their tasks.

  3. System Treasurer Responsibilities

a. Ensure that provisions are made in the System’s operating budget for the following items:

    • Periodic centralized training for the TED Compliance Coordinator and other persons responsible for tax-exempt debt compliance.
    • Engagement of Bond Counsel to address possible/actual private business use and other compliance issues.
    • Periodic rebate calculations.

b. Serve as the final authority on whether or not a University will enter a private activity arrangement whether or not it places the UMS over the allowed limit.

c. Serve as the final authority on how non-qualified (private activity) bonds will be remediated if necessary.

B. Annual Private Business Use Compliance Surveys

Annually, the TED Compliance Coordinator conducts a survey of the uses of bond-financed property to determine the amount of private business use of each outstanding bond issue for that fiscal year. The TED Compliance Coordinator prepares a “Use of Facilities Questionnaire” (see Attachment E for a sample of the questionnaire) for each University; listing each building that was financed in whole or in part with tax-exempt bonds (both UMS and State bonds). The Use of Facilities Questionnaire is given to the University CFO, who confirms whether the space usage information (including information concerning leases, management and service contracts, space rentals, sponsored research, and naming agreements) provided in response to the prior year’s questionnaire is still accurate, and if not, provides any necessary updates. For any facilities that were not addressed by a prior-year questionnaire, the CFO provides a description of the use of space in the facilities.

The TED Compliance Coordinator reviews the survey responses to identify private business uses of bond-financed space and, as necessary to make this determination, obtains copies of relevant contracts (e.g., leases, management agreements, short-term rental agreements, grant agreements, naming agreements, etc.). The TED Compliance Coordinator refers to the description of the relevant legal standards outlined in this APL in making this determination, although any management or service contracts that do not qualify as “incidental services” as described in Attachment B of this APL should generally be reviewed by bond counsel.

To the extent private business use arose from any arrangement, the TED Compliance Coordinator gathers any information necessary to identify and/or allocate the bond-financed space to private business use. For example, if a noncompliant sponsored research contract is performed in the same space as other compliant research contracts, the TED Compliance Coordinator obtains from the Director of Sponsored Programs data as to the revenues derived from the noncompliant contract, and data as to the revenues derived from all research contracts performed in that space, from which the TED Compliance Coordinator makes a proportional allocation.

If any arrangements are not clearly categorized as impermissible or compliant private business use, or if it is unclear how mixed-use property should be allocated to private business use, the TED Compliance Coordinator discusses the issue with bond counsel.

The TED Compliance Coordinator then calculates the average amount of private business use of each of the UMS’ outstanding bond issues for the fiscal year, or depending on the complexity, engages bond counsel to calculate the amounts. These average amounts for each year are then taken into account in determining the average private use in the measurement period for the bond issues. The purpose of these calculations is to confirm the UMS’ continued compliance with the limitations on private business use. As part of the annual update process, the TED Compliance Coordinator also contacts each person responsible for a bond compliance task, to confirm that the person understands and is continuing to perform his or her responsibilities.

For there to be a private activity concern, the private payments/security limit must also be exceeded. Generally since UMS does not mortgage or assign its property to secure payment of its bonds, the focus will be on the payments test rather than the security limit. Payments received by UMS with respect to contracts with Non-Exempt Persons as well as payments received with respect to privately used facilities are taken into account. Payments may be offset by operation and maintenance costs directly related to the privately used property but not by overhead and administrative costs. Payments are compared on a present value basis against the present value of the debt service on the bonds.

C. Screening Proposed Arrangements for Private Business Use

Before a University enters into an arrangement that involves property financed with tax-exempt debt, the arrangement is reviewed to make sure that entering into the arrangement would not cause impermissible private business use. The types of proposed arrangements that are reviewed include the following.

  • Leases
  • Periodic space rentals
  • Management and service contracts
  • Sponsored research agreements
  • Partnerships
  • Joint ventures
  • Naming rights agreements
  • Sale or other disposition of property
  • Change of use

See Attachment B for a discussion of private business use related to the above types of arrangements.

Responsibility for screening these proposed arrangements is assigned to particular individuals throughout the UMS, who are designated through consultation between the TED Compliance Coordinator, the University CFOs and the identified individuals.

If the screener believes that a proposed arrangement will, or possibly could, give rise to private business use, the screener refers the proposal to the TED Compliance Coordinator. If the TED Compliance Coordinator (in consultation with bond counsel as necessary) determines that no private business use and no private payment would arise, the arrangement may proceed. If the TED Compliance Coordinator determines that private business use and private payments would arise under the arrangement as then proposed, he or she will recommend appropriate steps to promote the best interests of UMS. Such steps (“corrective steps”) may include:

  • requiring that the arrangement be modified to eliminate the impermissible private business use or payments (for example, by fitting the arrangement within IRS “safe harbor” guidance);
  • taking “remedial action” as permitted under the Treasury Regulations to cure any impermissible private business use or payments resulting from the arrangement;
  • re-allocating the sources of funding of the facility at issue to the extent permitted by the Treasury Regulations; or
  • determining that the amount of private business use generated by the arrangement is immaterial and will not cause the applicable limitation on private business use to be exceeded.

It is important that a review of tax compliance be undertaken before arrangements are entered into because corrective steps such as remedial action must be undertaken within certain time periods of the arrangements being entered into, or may not be possible. In no event may the TED Compliance Coordinator approve, or the University enter into, a proposed arrangement that would cause the limitation on private business use or payment for a given bond issue to be exceeded.

Even if a given arrangement would not cause the applicable limitation on private business use or payments to be exceeded, if the amount of private business use or payment generated by the arrangement would be material, the TED Compliance Coordinator will ordinarily recommend that one of the corrective steps described above be undertaken. Only in rare and unusual cases will the TED Compliance Coordinator authorize such an arrangement to be entered into without a corrective step, and shall consult with bond counsel before providing any such authorization.

D. Rebate

Federal tax law requires the UMS to “rebate” to the federal government any amounts earned from the investment of bond proceeds at a yield in excess of the bond yield, unless an exception applies. The UMS retains an outside rebate computation firm to calculate its liability, if any, for rebate for each of its bond issues. The TED Compliance Coordinator is responsible for maintaining the engagement with the firm, providing the firm with the documentation it requires, making sure the firm prepares calculations at the required intervals (including upon the retirement of a given bond issue), reviewing the firm’s calculations for obvious errors, remitting any required rebate to the federal government, and retaining appropriate records. The TED Compliance Coordinator is also responsible for monitoring the spending of bond proceeds and taking appropriate steps to qualify for a “spending exception” to rebate, to the extent practicable.

E. Source of Debt Service Payments; Gifts

To avoid creating a “sinking fund” that is subject to restriction on the yield at which it may be invested, payments of principal and interest on the UMS’ tax-exempt bonds are derived from current revenues (including current gifts), not directly or indirectly from the UMS’ endowment or other restricted funds. Each CFO is responsible for maintaining accounting and cash flow practices that will satisfy this requirement.

Whenever a gift is received that bears a close relationship to bond-financed capital costs (e.g., because it is designated for a bond-financed project, is received through a fundraising campaign that focuses on the project, or otherwise), the gift generally should be (i) used to pay capital costs of the project not financed with bond proceeds, or (ii) deposited into the debt service fund for the issue within 30 days of being received and entirely used for the next payment of debt service on the bonds. If these approaches are not feasible (for example, because the amount of the gift exceeds the amount of the next debt service payment, or there are insufficient other capital costs to which the gift may be applied), bond counsel should be consulted, who can advise whether in this situation the gift will need to be yield-restricted. Each University’s Director of Development is responsible for alerting the TED Compliance Coordinator whenever a gift (other than gifts received pursuant to a pre-approved fundraising campaign) is received that may bear a close relationship to a facility, and the TED Compliance Coordinator will ensure that the gift is applied in a manner consistent with these procedures.

F. Investment of Bond Proceeds

Prior to being spent, bond proceeds must be invested in a manner that will establish fair market value for federal tax purposes, in order to maintain compliance with the rebate and arbitrage yield restriction rules. The rules for establishing fair market value are summarized in the tax certificates executed by the UMS at the time of issuance of each bond issue; certain investments, for example, must be acquired through the detailed “three-bid” procedure set forth in the Treasury Regulations. Typically, bond counsel would review the initial investments of bond proceeds acquired on the issue date for compliance with these rules, but would not necessarily do so for any subsequent investments or reinvestments of such proceeds. The TED Compliance Coordinator will take appropriate steps, in consultation with the Director of Finance and Controller and bond counsel, to assure that subsequent investments or reinvestments of bond proceeds are made in compliance with these rules. For example, investments of proceeds in any guaranteed investment contract, and investments of funds in an escrow to defease a bond issue, will be acquired through the “three-bid” procedure noted above.

G. Expenditure of Bond Proceeds

Federal tax law places many restrictions on the types of expenditures that may be financed with tax-exempt bond proceeds, including, among other things, that the expenditures, meet certain useful life requirements, be made within certain deadlines, and not be used to reimburse expenditures made before the issuance date unless certain requirements are satisfied. The UMS’ expectations as to the expenditure of bond proceeds are set forth in the tax certificate executed on the date of issuance of each bond issue, which bond counsel uses to evaluate compliance with these rules as of such date. The TED Compliance Coordinator will make sure that the UMS’ actual expenditure of proceeds of each bond issue will not deviate materially from the expectations and limitations stated in the tax certificate for the issue without consulting beforehand with bond counsel.

At the time project costs are paid, campus personnel are responsible for identifying the source of funds (e.g., tax-exempt bonds, gifts funds, etc.) from which the costs are being paid and ensuring that the costs qualify to be paid from the indicated source. This allocation is reflected in the UMS’ general ledger system through the use of unique fund, project, and program combinations. See the following UMS business process documents for more information on accounting for bond proceeds:

Accounting for University Revenue Bonds

Accounting for State Capital Bond Proceeds

The TED Compliance Coordinator is responsible for making sure that, for each bond-financed project, bond proceeds are allocated to expenditures for the project within the period ending on the earliest of the following (the “Permitted Allocation Period”):

  1. 18 months after the placed-in-service date of the project (or the payment of the expenditure in question, if later),
  2. five years (plus 60 days) after the issue date of the bonds, or
  3. 60 days after the retirement of the bonds.

The TED Compliance Coordinator is responsible for maintaining a control sheet for each bond issuance that reflects the following data:

  • Name of bond issue and total proceeds received (including project fund proceeds, cost of issuance proceeds, and investment earnings)
  • Description and general ledger reference for each project funded from the bond proceeds
  • Budgeted amount for each project funded from the bond proceeds
  • Date and amount of each drawdown of bond proceeds by project to pay project costs

If UMS bond proceeds continue to be held beyond the end of the relevant temporary period for unrestricted investment, the proceeds will either be invested at a yield not in excess of the yield on the UMS bonds or the TED Compliance Coordinator will assure that a yield reduction payment is made to the Internal Revenue Service in the same manner as rebate payments are made. Generally, the temporary period for proceeds used for project costs is three years from the original date of issuance. The temporary period, however, is terminated if the UMS bonds are advance refunded before the end of that three year period.

H. Record Retention

The UMS is required to maintain sufficient records to demonstrate that its bonds have satisfied the requirements for tax-exempt status. To this end, the TED Compliance Coordinator maintains a list of key records that generally should be retained (see the list on the next page). For each category of records, the list identifies the individuals responsible for maintaining the records for each University. These individuals are designated through consultation between the TED Compliance Coordinator, the University CFOs and the identified individuals. Certain records (such as the bond transcript) are maintained centrally by the TED Compliance Coordinator at the System Office, while other records are maintained by the departments in which the responsible individuals work. Regardless of where held, the records should be maintained for the entire period required by federal tax law. Records may be stored in either hard copy or electronic format. If in electronic format, the federal tax guidelines pertaining to electronic record-keeping (Revenue Procedure 97-22) should be satisfied.

The following documents shall be retained for the term of each issue of Bonds (including refunding Bonds, if any) plus at least three years:

Document Type Retained by System Office Retained by University
Bond closing transcript(s) and other relevant documentation delivered to the UMS at or in connection with closing of the issue of Bonds

X

All documents relating to expenditures financed or refinanced by Bond proceeds, including (without limitation) construction contracts, purchase orders, invoices, requisitions and payment records, as well as documents relating to costs reimbursed with Bond proceeds X
Records identifying the assets or portion of assets that are financed or refinanced with Bond proceeds, including a final allocation of Bond proceeds;

X

All records of investments, investment agreements, arbitrage reports and underlying documents, in connection with any investment agreements, and copies of all bidding documents, if any X
Copies of all leases, management and service contracts, periodic rental agreements, sponsored research agreements, naming rights agreements, sale and other disposition agreements, etc. supporting use of the bond financed facility by entities other than the University

X
Space records (original and each revision) supporting use of the facility X

The TED Compliance Coordinator monitors IRS guidance and other developments in the law relating to record retention and shall modify these procedures in accordance with any such guidance and developments.

With respect to records relating to tax-exempt bonds, these record retention procedures supersede any of the UMS’ general record retention procedures (as outlined in APL Section IV-D) that may be less stringent.

I. External Advisors / Documentation

The UMS shall consult with bond counsel and other advisors, as needed, throughout the bond issuance process to identify requirements and to establish procedures necessary or appropriate so that the Bonds will continue to qualify for tax-exempt or tax-advantaged status. The UMS also shall consult with bond counsel and other advisors, as needed, following issuance of the bonds to ensure that all applicable post-issuance requirements are met. This shall include, without limitation, consultation in connection with any potential change of use of bond-financed or refinanced assets.

J. Information Reporting

The TED Compliance Coordinator shall confirm that bond counsel has timely filed with the Internal Revenue Service the applicable information report (i.e., Form 8038-G) for each issue of Bonds.

K. Continuing Disclosure

Under the provisions of SEC Rule 15c2-12 (the “Rule”), underwriters of UMS bonds are required to obtain an agreement for ongoing disclosure in connection with the public offering of bonds in a principal amount in excess of $1,000,000. Unless an issuer is exempt from compliance with the Rule as a result of certain permitted exemptions, the transcript for each issue of bonds will include a Continuing Disclosure Certificate or another undertaking by UMS to comply with the Rule. The TED Compliance Coordinator will monitor compliance by UMS with its undertakings, which includes the requirement for an annual filing of audited financial statements and certain other operating and financial information and includes a requirement to file notices of certain listed “material events,” such as principal and interest payment delinquencies, the issuance by the Internal Revenue Service of proposed or final determinations of taxability and rating changes.

L. Education Policy

It is the policy of the UMS, as an issuer of tax-exempt bonds, that the TED Compliance Coordinator, the University CFO’s, and other persons identified by the CFOs as responsible for compliance should be provided with education and training on federal tax requirements applicable to tax-exempt and tax-advantaged bonds. The UMS recognizes that such education and training is vital as a means of helping to ensure that the UMS remains in compliance with those federal tax requirements in respect of its bonds. The UMS will therefore enable and encourage those personnel to participate in educational and training programs offered by professional trade associations and other entities with regard to the federal tax requirements applicable to tax-exempt and tax-advantaged bonds.

V. RESOURCES

To assist each University in monitoring compliance, the following is provided by the UMS System Office:

  • Up-to-date listing of bond financed buildings with the date for which private business use limitations expire
  • Definition of terms commonly used in this APL and attachments – See Attachment A of this document
  • Discussion of arrangements that can give rise to private business use – See Attachment B of this document
  • Screening guidelines for management and service contracts – See Attachment C
  • Screening guidelines for research agreements – See Attachment D of this document
  • Periodic centralized training sessions

VI. RELATED DOCUMENTS

Policy 713: Post-Issuance Compliance for Tax-Exempt Bonds

APL Section III-H: Debt Policy

APL Section IV-D: Record Retention Practices

Attachment A – DEFINITIONS

Attachment B -Private Business Use

Attachment C -Management Contract Guidelines

Attachment D – RESEARCH CONTRACT GUIDELINES

Attachment E – USE OF FACILITIES QUESTIONNAIRE

APPROVED: Signature on file in System Office of Finance and Administration. Vice Chancellor for Finance and Administration

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