The Internal Revenue Service (IRS) issued a final rule that updates requirements for public approval of tax-exempt private activity bonds (PABs). All PABs are required to hold a hearing of public approval. The rule changes the reasonable public notice period from 14 to 7 days prior to the hearing and allows for the posting of the hearing on a website without other notice. The website notice must be “posted on the governmental unit’s primary website in an area of that website that is used to inform its residents about events affecting the residents.” Posters must also maintain record of the public notices. The final rule also:
- Clarifies that the public hearing must be held even if no one has made a written request to speak at least 24 hours before the hearing
- Allows the public hearing to be held in conjunction with other state or local government hearings
- Expands the list of qualifying elected representatives from (1) the governmental units elected legislative body; (2) the governmental unit’s chief elected executive officer; (3) in the case of a state, the chief elected legal officer of the state’s executive branch of government; or (4) any official elected by the voters of the governmental unit and designated by the governmental unit’s chief elected executive officer or by state or local law to approve issues for the governmental unit to also include (5) the chairman of the governing board of a conduit issuer, if that person is appointed by an elected official to execute public approvals and empowered to approve a bond resolution to authorize an issuance of PABs.
The new rules apply to bonds issued pursuant to a public approval occurring on or after on or after April 1, 2019.