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Private Activity Bond Refunding Regulations  


Author:  Linda B. Schakel.


Source: Volume 24, Number 02, Summer 2003 , pp.79-85(7)




Municipal Finance Journal

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Abstract: 

The Internal Revenue Service (IRS) and Department of Treasury recently released regulations that begin to close the loop on private activity bond (PAB) regulations (68 FR 25845; May 14, 2003). These regulations are the first comprehensive attempt to deal with the private activity bond tests since the 1986 Tax Reform Act produced the Proposed Regulations that were issued on December 30, 1994 (59 FR 67658; December 30, 1994). Most of the sections of the 1994 Proposed Regulations were finalized in 1997, although the portions dealing with refundings, allocation rules, and output facilities were not included in these final regulations (62 FR 2275; January 16, 1997). (The output regulations were finalized in 2002, and the allocation rules remain on the IRS business plan.) The latest set of regulations, published on May 14, 2003, tackles the private activity bond tests in the context of refundings. These Refunding Regulations have again been issued in proposed form in order to provide an opportunity for public comment, presumably because of the time that has passed since the refunding rules were last proposed. Although issuers cannot rely on the Refunding Regulations in their current proposed form, the regulations nevertheless provide important guidance to state and local governments.

Keywords: 

Affiliations:  1: Ballard Spahr Andrews & Ingersoll, LLP.

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