PIC 2022 Final Agenda & Session Descriptions
(Updated August 26, 2022)
THURSDAY – NOVEMBER 3
Session 1
POST-ISSUANCE COMPLIANCE OVERVIEW (25 min)
Post-issuance compliance (“PIC”) continues to be a focus of the IRS. Developing a program founded on best practices related to policies and procedures and private business use (“PBU”) and arbitrage rebate monitoring will equip organizations with the tools to withstand IRS scrutiny in this area. This session will review the components of a productive and successful PIC program, discuss the benefits of an effective program, and provide participants with an introduction and baseline for the additional detailed sessions at the Workshop.
Panelists:
Alan Bond, BLX
Aviva Roth, Orrick
Session 2
UNDERSTANDING PBU RULES AND EXCEPTIONS (45 min)
The federal tax rules and regulations relating to PBU are complex and require ongoing monitoring over the life of the bonds to ensuring that the tax-exempt status of such debt is not compromised. This session will provide a detailed review of the federal tax rules and regulations relating to PBU (and Unrelated Trade or Business Use for nonprofit organizations). In addition, this session will review available exceptions to PBU, including short-term and incidental use. Understanding the relevant PBU restrictions and available exceptions will help issuers and borrowers of tax-exempt bonds make sound decisions about future activities occurring in their tax-exempt bond financed facilities. In today’s economic environment, this information is increasingly important as issuers and borrowers look to maximize revenue generating activities in their facilities.
Panelists:
Alan Bond, BLX
Ed Oswald, Orrick
Larry Sobel, Orrick
Session 3
SPONSORED RESEARCH IN TAX-EXEMPT FACILITIES (45 min)
Certain agreements related to sponsored scientific research occurring in tax-exempt financed facilities may give rise to PBU depending on how rights to use intellectual property resulting from the research are managed. This session will discuss the difference between basic and applied research and the IRS safe harbor rules relating to sponsored research as provided in Rev Proc 2007-47. As the trend continues for organizations to take on more sponsored research in their bond financed facilities, participants will be better equipped to make educated decisions regarding the use of such facilities in sponsored research endeavors and to structure agreements to be safe harbor compliant.
Panelists:
Ed Oswald, Orrick
Aviva Roth, Orrick
Larry Sobel, Orrick
Session 4
MANAGEMENT AND SERVICE CONTRACTS IN TAX-EXEMPT FACILITIES (45 min)
Management contracts and other service agreements with third parties occurring in bond financed facilities may give rise to PBU. With Rev Proc 2017-13, the IRS has provided guidance in the form of certain safe harbor requirements for contracts for services rendered in tax-exempt bond-financed facilities. While this revenue procedure can be helpful, issuers and borrowers will need to carefully navigate these principle-based concepts to help minimize the impact that noncompliant contracts can have on their PBU percentage. This session will review Rev Proc 2017-13 and how its application will impact the determination of PBU. Specific guidance for structuring contracts and agreements to be safe harbor compliant will also be discussed.
Panelists:
Richard Chirls, Orrick
Barbara Jane League, Orrick
Session 5
RISING INTEREST RATES: ISSUING BONDS AND INVESTMENT OF BOND PROCEEDS (60 min) – NEW SESSION
With interest rates on the rise there are both opportunities and obstacles for tax-exempt issuers and borrowers. While the current environment is beneficial for the investment of bond proceeds there may be additional hurdles to getting tax-exempt financings to market and some tax-exempt issues may be in positive arbitrage for the first time in over a decade. In addition, rising interest rates may cause a decrease in the market valuations for Reserve Fund investments which may trigger obligations to replenish such Reserves. This session will walk through some of the current challenges around issuing debt as well as some of the benefits and other considerations to investing in today’s market.
Panelists:
Amy Kron, BLX
Jenna Magan, Orrick
Raigen Padayachee, TD Bank
Tom Tight, Public Trust Advisors
Session 6
CALCULATING PBU AND UTILIZING QUALIFIED EQUITY (75 min)
Accurate and timely calculations of PBU are an essential element of an active and effective PIC program. This session will review specific examples of PBU and examine the methods for calculating PBU. The discussion will include examples of calculating PBU for certain typical types of use such as: central utility plants, sponsored research, management contracts and leases, summer use of facilities, and physician group contracts. This session will also discuss how utilizing “qualified equity” on a project will impact the calculation of PBU. This session will help participants gain a better understanding of the impact of various types of activities or uses on the overall PBU within a single tax-exempt bond issue and provide participants with information on properly applying and maximizing the benefit of floating equity.
Panelists:
Caleb Lansky, BLX
Ed Oswald, Orrick
Larry Sobel, Orrick
Session 7
PBU CALCULATIONS – BEYOND COMPLIANCE (45 min) – NEW SESSION
PBU calculations are required for 501(c)(3) organizations to complete IRS Schedule K and necessary for all organizations to document compliance with IRS rules and regulations and be prepared for an IRS audit. But, PBU calculations can be used for so much more. Having accurate calculations of PBU allows organizations to make educated decisions about future use of their tax-exempt bond financed facilities, taking on additional use or activity that generates PBU while still allowing the bond issue to remain in compliance with the PBU limitations. This session will discuss specific examples of how PBU calculations may be used as planning and forecasting tools, and how this can be helpful to organizations looking to maximize revenue for the organization.
Panelists:
Robyn Helmlinger, Orrick
Caleb Lansky, BLX
Ed Oswald, Orrick
Session 8
OPEN FORUM AND HOT TOPICS (45 min)
This roundtable discussion will cover areas of post-issuance compliance not specifically covered in other sessions at the Workshop. This session will allow participants to raise and discuss issues or pain points they are observing day-to-day and share ideas and concerns with fellow finance professionals. Orrick and BLX participants will share their views and insights on the topics discussed. Come prepared and have your questions ready for this open forum discussion session.
Panelists:
Alan Bond, BLX
Jenna Magan, Orrick
Ed Oswald, Orrick
FRIDAY – NOVEMBER 4
Session 9
UPDATE ON IRS ENFORCEMENTS AND AUDITS (45 min)
The Tax Exempt and Government Entities (TE/GE) division at the IRS has an active enforcement process relating to tax-exempt bonds, with the focus changing on a yearly basis. In the past 2 years, the IRS has received a substantial increase in budget and has been hiring. This session will provide an update on the TE/GE activities and what that means for issuers and borrowers. Orrick has extensive experience with respect to tax-exempt bond audits and will provide guidance on what issuers and borrowers should be aware of when responding to an IRS audit.
Panelists:
Richard Chirls, Orrick
Barbara Jane League, Orrick
Sandee Stallings, BLX
Session 10
BORROWER PERSPECTIVE – OUR POST-ISSUANCE COMPLIANCE PROGRAM (30 min)
This session will highlight the post-issuance tax compliance program of a higher ed institution and a healthcare organization. Our panelist will discuss the effort expended to position their organization to be prepared to respond to IRS reporting requirements and how their focus has shifted over time. In addition, we will discuss how their organization manages PBU in their tax-exempt bond financed facilities. This discussion can serve as a valuable resource to other organizations facing similar tax compliance burdens.
Panelists:
Alan Bond, BLX
Herb Bone, Fred Hutchinson Cancer Center
Chris Pings, The University of Arizona
Session 11
CONTINUING DISCLOSURE AND SEC RULE 15c2-12 (60 min)
This session will provide an overview of recent events relating to SEC Rule 15c2-12, including implementation of recently adopted 15c2-12 event notices with emphasis on recent federal stimulus programs, and other related 15c2-12 issues. This session will assist participants in navigating their continuing disclosure requirements under their CDAs and potential voluntary disclosure notices.
Panelists:
Jeff Higgins, BLX
Robyn Helmlinger, Orrick
Session 12
MANAGING ARBITRAGE REBATE (60 min)
Make sure that your organization understands the arbitrage requirements, is adequately documenting compliance, and is aware of potential rebate payments in light of the current interest rate environment. This session will review the arbitrage rebate and yield restriction requirements relating to tax-exempt bonds. Topics to be discussed include Federal reporting and filing requirements, contrasting the rebate and yield restriction requirements, and developing a compliance plan that includes making timely payments, document retention and compliance substantiation. This session will equip participants with the knowledge to better understand the complex arbitrage rebate regulations and provide participants with the tools to effectively manage compliance.
Panelists:
Glenn Casterline, BLX
Barbara Jane League, Orrick
Sandee Stallings, Orrick
PRETAPED SESSION
[501(c)(3) Organizations Track]
2021 IRS Schedule K Review (50 min)
This session will provide a review of the 2021 IRS Schedule K with commentary on the information being requested on the form and on specific calculations required by nonprofit borrowers with respect to their outstanding tax-exempt bonds which must be reported on the form. The panel will also discuss the relationship of certain questions on the form that may not be obvious to some and provide guidance with respect to answering specific questions. This session will allow 501(c)(3) organizations to better understand the information being provided to the IRS on an annual basis and why the information being requested is important to the IRS.
Panelists:
Jessica Doherty, BLX
Aviva Roth, Orrick
