Public Finance Alert
Yesterday, the IRS released proposed regulations (“Proposed Regulations”) relating to the so-called TEFRA public notice and approval requirement for private activity bonds. In general, the Proposed Regulations make it easier to satisfy the TEFRA requirements. For new issues of private activity bonds while the Proposed Regulations are pending, issuers can choose to apply the existing rules or can elect to apply the Proposed Regulations. The Proposed Regulations cannot apply to bonds already issued or approaching issuance with an approval that cannot be updated. Below is a very brief summary of how the new proposed requirements differ from the existing rules.
Although notice of the required public hearing is still presumed to be reasonable if given at least 14 days in advance of the hearing, the notice requirement generally is easier to satisfy.
The Proposed Regulations also provide some very helpful rules that allow for deviations from the information set forth in notice.