4.8.4.1 Initial Temporary Period

4.8.4.1 Initial Temporary Period

For bonds issued to finance capital expenditures, an issuer may invest the proceeds of an issue at an unrestricted yield for up to a 3 year period (an “initial temporary period”) provided the issuer reasonably expects that as of the issue date of the bonds the following requirements will be satisfied:

1. At least 85% of the proceeds of the bonds will be spent on capital projects by the end of the 3 year period.
   
   
2. Within 6 months of the issue date, the issuer expects to spend or expects to incur a binding obligation to a third party to expend at least 5% of the proceeds of the issue on capital projects.
   
   
3. The completion of the capital projects and the allocation of the proceeds of the issue to expenditures will proceed with due diligence.

In the case of bonds issued to finance construction expenditures, the proceeds may be eligible for a 5 year initial temporary period if the issuer reasonably expects to satisfy the above described expenditure, binding contract, and due diligence tests and both the issuer and a licensed architect or engineer certifies that a longer construction period is necessary to complete the project.