Recognizing the importance of The American Rescue Plan Act of 2021 (ARPA), our  colleague, Attorney Tim Horstmann, wrote the first article in this series titled “The American Rescue Plan Act of 2021. Here’s What to Expect” in April 2021 and in July 2021 Tim penned an article titled “ARPA Windfall: What May Pa. and Its Municipalities Do With This Money?” Adding to this series, we will now discuss what to expect in an ARPA audit.  This article will focus on Pennsylvania’s $13,450,275,500.40 portion of the $350B Coronavirus State and Local Fiscal Recovery Funds Program (CSLFRF), which is the specific program under ARPA that provides new funding to tribal governments, states, territories, and local governments across the United States to aid in their recovery from the COVID-19 pandemic.
Continue Reading ARPA Audits– What to Expect and What You Can Advise Your Clients to Do Now

On Friday, September 10, 2021, the House Ways and Means Committee released the text of a bill – known as the “Build Back Better Act” – that would restore the ability of state and local governments to issue tax-exempt “advance refunding” bonds, i.e., bonds issued more than 90 days before the redemption date of the bonds to be refunded.
Continue Reading Tax-Exempt Advance Refundings Included in Proposed Build Back Better Act

In a previous article, I discussed the enactment of the American Rescue Plan Act of 2021 (“ARPA”), which provides for almost two trillion dollars of new federal spending to combat the ongoing impact of the COVID-19 Pandemic. ARPA provided approximately $350 Billion of new funding to tribal governments, states, territories, and local governments, $14 Billion of which was estimated to be received by Pennsylvania and its municipalities. Initial federal ARPA funding to the states and their political subdivisions was estimated to begin as early as May.

By now, Pennsylvania and its municipalities have received at least a portion of their ARPA funds. But what can they do with it? On May 17, 2021, the United States Department of the Treasury (the “Department”) published an interim final rule providing guidance to recipients on the use of ARPA funds. Consistent with ARPA, the Department in the interim final rule established four broad categories of authorized spending, (i) Public Health and Economic Impacts; (ii) Premium Pay; (iii) Revenue Loss; and (iv) Investments in Infrastructure. Each of these categories is discussed below.
Continue Reading ARPA Windfall: What May Pennsylvania and its Municipalities Do with this Money?

With the onslaught of negative economic news related to the ongoing coronavirus crisis, many municipalities are scrambling to determine the impact of the pandemic on, among other things, their finances. Many may be staring down unbudgeted expenses related to this public health emergency, while at the same time anticipating substantial deficits due to drop-offs in real estate and income tax collections.
Continue Reading Tax Anticipation Notes: A Short-Term Cure for the Coronavirus Budget Deficit?

COVID-19 has rightfully dominated the news over the last several weeks, leaving municipalities, nonprofit organizations and businesses scrambling to determine the impact of this pandemic on, among other things, their finances. Many organizations have contacted their lenders in the past two weeks to seek out short-term deferrals of their payment obligations on loans. But what are the tax implications of such deferrals when an organization has a tax-exempt loan?
Continue Reading Considering a Temporary Deferral on a Tax-Exempt Obligation? Don’t Forget About the Reissuance Rules

The National Association of Bond Lawyers (“NABL”) recently sent a letter to Congress, outlining some measures it recommends Congress adopt to combat the economic downturn related to the Coronavirus COVID-19 Pandemic.  The suggestions are a mix of previously-made requests and new suggestions to inject additional liquidity into the market.

NABL’s recommendations, addressed to the top

The IRS recently announced that it will be issuing guidance in the near future on the elimination of the London Interbank Offered Rate (LIBOR). The guidance, long-awaited by the municipal finance industry, is expected to address under what circumstances a reissuance will occur when a floating rate bond using LIBOR as the reference rate is modified to another reference rate.
Continue Reading IRS Finalizing Guidance on Tax Impact of LIBOR Phaseout

The Internal Revenue Service recently released Notice 2019-39, clarifying the scope of permitted current refundings of bonds issued under special governmental bond programs. Issuers may rely on this Notice to issue tax-exempt bonds to currently refund any bonds that are issued pursuant to such targeted programs, subject to some limitations.
Continue Reading IRS Blesses Current Refundings of Targeted Government Bond Programs (With Limits)

The Internal Revenue Service celebrated New Year’s Eve this year by issuing two rule-making notices of interest to the tax-exempt bond community, on the topics of public approval of private activity bonds and reissuance.

The first notice contains final regulations on the public approval requirement of section 147(f) of the Internal Revenue Code, 26 U.S.C.