8.2.2 Maintaining Tax-Exempt Status

8.2.2 Maintaining Tax-Exempt Status

Tax exempt debt obligations issued by public agencies are generally subject to statutory requirements for the use of bond proceeds and bond financed facilities and compliance with arbitrage and arbitrage rebate requirements. See Section 8.3, Post-Issuance Federal Tax Law Requirements and Section 8.3.7, Changes in Use of Bond-Financed Property. These statutory requirements are often a focus of an issuer’s most fundamental post issuance debt management and compliance responsibilities. A failure to adequately follow applicable legal requirements may result in examinations and other enforcement actions, including the loss of the bond’s tax exemption.