On June 7, 2017, new IRS regulations that change the way state and local governments issue tax-exempt bonds went into effect. The new rules change the way municipal issuers determine the issue price of tax-exempt bonds they issue, and amend existing IRS regulations under section 148 of the Internal Revenue Code. The new rules have produced immediate changes to many common documents used by municipal issuers and their advisors in municipal bond transactions.
Continue Reading New IRS Regulations Change the Game for Municipal Bond Issuers
NABL, SIFMA Release Model Issue Price Documents in Advance of Effective Date for New IRS Regulations
The National Association of Bond Lawyers (NABL) and the Securities Industry and Financial Markets Association (SIFMA) recently released model issue price documents in connection with the soon-to-be effective Treasury Regulations on establishing the issue price of a tax-exempt bond issue. NABL’s model documents can be accessed here; SIFMA’s documents can be accessed here.…
Governor Wolf Calls for Major Business Tax Increases in 2017 Budget Proposal
On Tuesday, February 7th, Governor Wolf presented his 2017 budget address to a joint session of the Pennsylvania General Assembly. The Governor’s proposal includes a $1 Billion increase in the tax burden on Pennsylvania businesses and individuals. While the Governor stated that he was proposing no “broad-based tax increases,” his budget does raise revenues significantly while not addressing pension liability. We are currently analyzing the specifics of the Governor’s budget proposal and will provide more information in future posts. For now, however, here are some high level takeaways on the tax front:
Continue Reading Governor Wolf Calls for Major Business Tax Increases in 2017 Budget Proposal
IRS Announces Additional Guidance on Management Contracts for Bond-Financed Facilities
Just a few short months after essentially re-writing the rules on management contracts for bond-financed property, the IRS is at it again. On January 17th the IRS gave advance notice of the publication of Revenue Procedure 2017-13. While Rev. Proc. 2017-13 won’t officially be published until February 6th, the IRS has made a copy of the new guidance available immediately for review.
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Podcast: IRS Changes Course on Management Contracts Involving Facilities Financed by Tax-Exempt Bonds
In this podcast, McNees Public Finance attorney Tim Horstmann discusses the recent announcement by the Internal Revenue Service of a major change in its treatment of management contracts entered into by governmental entities and nonprofit associations exempt from federal income tax under section 501(c)(3) of the Internal Revenue Code.
View the podcast here.
Prefer…
Title Issues in Monetizing Municipal Assets
Municipalities have been looking for new ways to “monetize” publicly owned assets to help fund pension obligations and relieve budgetary pressures. Especially attractive is the transfer of a municipal water or wastewater system to a private operator.
Such a transfer may be accomplished by entering into a long-term lease with a private operator, under what…
IRS Loosens Restrictions on Safe Harbors for Management Contracts for Bond-Financed Property
The Internal Revenue Service, in Revenue Procedure 2016-44, has loosened the restrictions on safe harbors for management contracts entered into by governmental issuers of tax-exempt bonds in connection with facilities financed by such bonds. The revenue procedure, which will be published in the Internal Revenue Bulletin on September 6, 2016, is a welcome development for…
Real Estate Matters in Monetizing Municipal Assets
I recently published an article in The Legal Intelligencer titled, “Real Estate Matters in Monetizing Municipal Assets.” From the article:
Municipalities under financial pressure from rising budgetary costs and long-term obligations are increasingly looking for options to “monetize” publicly owned assets through transfers to private entities. Especially attractive are municipal water and wastewater systems. With
…
Two Down, One to Go: Harrisburg School District Approves 10-Year Tax Abatement Program
Nearly two years after Harrisburg Mayor Eric Papenfuse first proposed it, the Harrisburg School District has approved a new, ten-year tax abatement program for residential and commercial development in the city.
As reported by The Patriot News:
The program would provide a 100-percent tax break for 10 years to improvements on residential properties
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Harrisburg Moves Forward With Plan to Triple Local Services Tax
We previously reported on Mayor Eric Papenfuse’s controversial plan to triple the local services tax in the City of Harrisburg (a tax that overwhelmingly affects commuters, not residents). After securing the needed sign-off from the Commonwealth Court in January, Papenfuse’s plan was stalled by City Council as it worked through numerous other changes proposed to…