Public Finance Advisory: The Shoe Drops- Private Activity Bond Regulations At Last
3/1/1997
On January 10, 1997, the Treasury Department ended the bond community's two-year wait for definitive regulations as to what constitutes a private activity bond. Some had urged that the much-criticized December, 1994 proposed regulations be dropped and that an entirely new set of regulations be issued, again in proposed form. However, the Treasury has issued regulations which, despite some movement toward a more subjective approach, are largely based upon the proposed regulations, and it has them in final form. As discussed in this advisory, the new regulations and related "Revenue Procedures" provide general rules as to private business use and payment, and detailed rules as to private management contracts, sponsored research, and change of use situations.
