CHAPTER 26
TAX EXEMPT LEASES 1

SECTION:

53-26-1: Purpose

53-26-2: Delegation Of Responsibility

53-26-3: Schedule Of Reviews

53-26-4: Tax Requirements Associated With Lease

53-26-5: Expenditure Of Proceeds For Qualified Costs

53-26-6: Use Of Leased Property

53-26-7: Investments And IRS Filings

53-26-8: Corrective Actions

53-26-9: Amendments And Modifications Of Lease

53-26-10: Records

53-26-11: Training

 

Notes

1	1. These Tax Compliance Procedures do not apply to facilities leased from the Local Building Authority of Salt Lake City, Utah, in connection with the issuance of lease revenue bonds, which are covered by the City's Tax Compliance Procedures for tax exempt governmental bonds.

53-26-1: PURPOSE:

Issuers of tax exempt "State or local bonds", which include tax exempt leases, must comply with Federal tax rules pertaining to expenditure of proceeds for qualified costs, rate of expenditure, use of bond financed or leased property, investment of proceeds in compliance with arbitrage rules, and retention of records. The following procedures and policies are intended to establish compliance by Salt Lake City, Utah (the "City"), with these rules in connection with the execution and delivery of tax exempt leases. These Tax Compliance Procedures may also be used by the City to ensure compliance with Federal tax rules for its currently outstanding tax exempt leases. (2019 Compilation)

53-26-2: DELEGATION OF RESPONSIBILITY:

To the extent that any of the responsibilities set forth in these Tax Compliance Procedures are delegated to any other party, the City will keep a record of such delegations with respect to each lease. (2019 Compilation)

53-26-3: SCHEDULE OF REVIEWS:

The City will establish routines for monitoring ongoing compliance that are consistent with discovering any noncompliance in a timely manner so that it may be corrected. While specific review processes are described in detail below, timing for such reviews will be as follows:

   A.   Private (Nonexempt) Use: All contracts, subleases or other arrangements providing special legal entitlement to the use of leased property will be reviewed before execution to ensure that they will not cause private use limits to be exceeded with respect to any lease.

   B.   Arbitrage Compliance: With respect to each lease, the City will ensure that it understands at the time of closing which funds and accounts may become subject to yield restriction investment rules and will keep a record of the dates upon which such rules will begin to apply.

   C.   Rebate Compliance: While rebate calculations may be performed more often, the City will ensure upon the fifth anniversary date of entering into the lease, every five (5) years thereafter, and upon termination of the lease, that either no rebate is owed or provision has been made for the payment of any rebate owed within sixty (60) days.

   D.   Change In Use/Ownership: Before executing any contract, sublease or other document that would materially change the use of the leased property or, to the extent applicable, selling any leased property, the City will: 1) confirm that such change will not require a remedial action to be taken with respect to any lease; 2) take a remedial action, if necessary; or 3) discuss with bond counsel whether a voluntary closing agreement with the Internal Revenue Service is appropriate. (2019 Compilation)