4.9.1.3 18-Month Expenditure Exception

As with the 6 month exception, proceeds of an issue that are not in a reserve fund are not subject to the rebate requirement if all of the proceeds (including investment proceeds) are spent within 18 months from the issue date, provided all of the following occur:

At least 15% of the proceeds are spent within 6 months.
At least 60% of the proceeds are spent within 12 months.
At least 100% of the proceeds are spent within 18 months.

Compliance with the 18 month exception, like compliance with the 6 month exception, is based on actual expenditures, although the 15% and 60% expenditure requirements are measured based on the sale proceeds plus the aggregate investment proceeds expected to be earned during the 18 month period, in accordance with the issuer’s reasonable estimate of investment earnings at closing. Additionally, as with the 6 month exception, amounts held in a reserve fund are not treated as proceeds for purposes of satisfying the expenditure requirements. The 18 month expenditure exception does not apply to refundings.