To establish policies and procedures to assist the University of Kentucky (the “University”) in complying with the post issuance requirements of federal income tax law in order to preserve the tax-advantaged status of its bonds. Under federal income tax rules, there are several requirements which must be met in order for the University’s bonds to be considered tax-advantaged. The restrictions apply to the date of issuance and for the life of the bond issue, including any refundings.
This policy will be a living document which will be revised and improved over time to reflect new transactions, changes to law and ideas for improvement.
With the exception of Section IX, the policies described below do not apply to bonds issued as federally taxable obligations.
The University of Kentucky seeks for its record retention to be in line with the State University Model Record Retention Schedule.
All records for each bond issue of the University will be maintained for at least six years after the final principal payment is made on the bond issue or the bond issue which refunds the original bond issue. The electronic storage of information will at a minimum conform to the provisions of Revenue Procedure 97-22, 1997-1 C.B. 652 (as amended, supplemented or superseded).
University Financial Service Administration, with the assistance of the individuals outlined in Section III, will ensure, at a minimum, documentation for each bond issue contains the following:
On or about the final retirement date of a bond issue, Accounting and Financial Reporting Services will make a notation in the appropriate file for that bond issue. The files related to the bond issue will remain on site for at least six years after the final retirement date. At the end of six years the University will transfer the paper records to the University Archives for permanent retention. Anything electronic will be retained permanently.
The University will maintain all investment documentation related to bond proceeds, investments and investment earnings in accordance with Section IV of this policy. The University will also maintain all documentation related to the arbitrage rebate calculations.
University Financial Services Administration, with the assistance of designated employees of the University, will monitor and measure the private use for each bond issue to establish that the amount of private use is not more than the applicable private use limit percentage. Please see the E-14-2 Private Business Use of Tax-Advantaged Financed Facilities Policy for more information on monitoring and measuring private business use.
In some instances, the University may seek to reimburse itself for original expenditures with bond proceeds. An original expenditure is an expenditure for a governmental purpose that is originally paid from a source other than a reimbursement bond.
A resolution, which may include a reimbursement resolution, must be passed by the Board of Trustees. The resolution must be in accordance with Treasury Regulatations Section 1.150-2 and adopted prior to issuing the bonds and no later than 60 days after the payment of the original expenditure.
The date of issuance of reimbursement bonds must be no later than 18 months after later of (1) the date the expenditure is paid by the University or (2) the date the project is placed in service, but not more than 3 years after the expenditure is paid. The 3-year maximum limit may be extended to 5 years if the University and a licensed engineer or architect certifies that at least 5 years is necessary to complete the project.
The University will comply with its Continuing Disclosure Agreement (“CDA”) for each outstanding bond issue. University Financial Services Administration and Accounting and Financial Reporting Services will work together to ensure all continuing disclosure documents are submitted to EMMA within the timeframes specified in the CDA.
University Financial Services Administration will engage a provider to provide Continuing Disclosure services.
Appointment of a successor or additional trustee or the change of name of a trustee, if material.
For CDA entered into on or after February 27, 2019, the following two material events will also be included.
Process for Continuing Disclosure Filings
For CDA entered into on or after February 27, 2019, the University will be required to include material events 15 and 16 described in Section IX(1). The following outlines the process for identifying these material events.
University Financial Services Administration will ensure the disclosure filing is posted to EMMA within the required timeframe.
University Financial Services Administration will maintain a database of all new and existing financial obligations or materials agreements to covenants, events of default, remedies, priority rights, and other similar terms that are subject to event 15 and 16 under Rule 15c2-12.
The University will comply with all aspects of this policy with respect to each bond issue that is issued after the date of adoption of this policy.
With respect to each outstanding bond issue that was issued before the adoption date of this policy, the University will implement this policy to the greatest extent, and during the shortest time frame, that is reasonably practicable.