4.9.1.2 6-month Expenditure Exception

Under the 6 month expenditure exception, proceeds are not subject to the rebate requirement if the issuer actually spends all proceeds of the issue within 6 months of the date the bonds are issued. The 6 month exception is based on actual expenditures. Solely for purposes of determining compliance with the 6 month expenditure exception, amounts held in a qualifying reserve fund are not treated as proceeds. Therefore, the amounts held in the reserve fund are subject to the normal rebate requirement. The 6 month expenditure exception is most likely to apply to acquisition financing (where the project is being acquired rather than constructed), TRAN and RAN financing, reimbursement financings, and current refundings.