Bond Issuers Seek Permanent Relief From In-Person Hearings

Government Finance Officers Association
National Association of Counties
National Association of State Auditors, Comptrollers and Treasurers
National Association of Health and Educational Facilities Finance Authorities
National Association of College and University Business Officers
National Council of State Housing Agencies
National Association of Bond Lawyers

Lily L. Batchelder
Assistant Secretary
Office of Tax Policy
U.S. Department of the Treasury
1500 Pennsylvania Avenue, NW
Washington, DC 20220

William M. Paul
Principal Deputy Chief Counsel and Deputy
Chief Counsel
Internal Revenue Service
1111 Constitution Avenue, NW
Washington, DC 20224

Krishna Vallabhaneni
Tax Legislative Counsel
United States Department of the Treasury
1500 Pennsylvania Avenue, NW, Room 3044
Washington, DC 20220

Dear Ms. Batchelder, Mr. Vallabhaneni, and Mr. Paul:

On behalf of the municipal issuers our undersigned organizations represent, we respectfully request that the temporary relief provided under Revenue Procedure 2020-21 (“Rev. Proc. 2020-21”) and extended by Rev. Proc. 2020 -49 and Rev. Proc. 2021-39 be made permanent in light of the ongoing COVID-19 pandemic and continued need to restrict in-person gatherings.

The COVID-19 Pandemic is the subject of an ongoing emergency declaration made by the President of the United States pursuant to the Robert T. Stafford Disaster Relief and Emergency Assistance Act on March 13, 2020. The COVID-19 Pandemic has also been, and continues to be, the subject of numerous emergency declarations by state and local governments. The COVID-19 Pandemic prompted state and local governments to severely limit or, in some cases, prohibit in-person gatherings by members of the general public.

In response to the COVID-19 Pandemic, the Internal Revenue Service (“IRS”) issued Rev. Proc. 2020-21, which provided temporary guidance regarding the public approval requirement under §147(f) of the Internal Revenue Code for the issuance of tax-exempt private activity bonds. Rev. Proc. 2020-21 temporarily provided that hearings held by teleconference that are accessible to the residents of the approving governmental unit by calling a toll-free telephone number would be treated as held in a location that, based on the facts and circumstances, is convenient for residents of the approving governmental unit for the purpose of §1.147-1(d)(2) of the Treasury Regulations. Rev. Proc. 2020-49 extended that guidance through September 30, 2021, and Rev. Proc. 2021-39 further extended that guidance through March 31, 2022.

The same factors that led to the relief provided in Rev. Proc. 2020-21, Rev. Proc. 2020-49 and Rev. Proc. 2021-39 continue to exist in many jurisdictions. COVID-19 variants have caused portions of the country to return to stricter gathering limits. Even in areas where explicit restrictions have been relaxed, members of the public generally have been encouraged to continue to practice social distancing, and, while personal choices vary, certain members of the public continue to limit engagement with others. Still others are required to quarantine in their homes after potential exposure to those with confirmed cases of COVID -19. Additional COVID-19 variants and other contagious illnesses are expected to continue to require some level of social distancing.

As issuers, we have appreciated the prompt flexibility provided by the IRS through these Revenue Procedures. Telephonic hearings have permitted the continuance of private activity bond issues while maintaining the continued input of our communities. In addition to providing relief from the logistical difficulties presented by the COVID-19 Pandemic, telephonic hearings have allowed our community members to participate remotely when in-person hearings were either unavailable or inconvenient. Given the success of such telephonic access, which helps the public by making it easier for them to express their views regarding a proposed private activity bond issue and thereby furthers the purpose of the public approval requirement in §147(f), we now respectfully request that the temporary relief as extended in Rev. Proc. 2021-39 be made permanent prior to its expiration in March.

If our organizations can provide further assistance, please do not hesitate to reach out to the contacts listed below. Thank you for your time and attention to this important matter.

Sincerely,

Government Finance Officers Association, Emily Swenson Brock, ebrock@gfoa.org
National Association of Counties, Eryn Hurley, ehurley@naco.org
National Association of State Auditors, Comptrollers and Treasurers, Cornelia Chebinou, cchebinou@nasact.org
National Association of Health and Educational Facilities Finance Authorities, Chuck Samuels, casamuels@mintz.com
National Association of College and University Business Officers, Liz Clark, lclark@nacubo.org
National Council of State Housing Agencies, Garth Rieman, grieman@ncsha.org
National Association of Bond Lawyers, Brian Egan, began@nabl.org

cc:
Charles Rettig, Commissioner, Internal Revenue Service
Sunita Lough, Commissioner, Tax Exempt & Government Entities Division, Internal Revenue Service
Helen M. Hubbard, Associate Chief Counsel, Financial Institutions & Products, Internal Revenue Service
Melissa Moye, Director, Office of State and Local Finance, U.S. Department of the Treasury
Jian H. Grant, Branch Chief, Internal Revenue Service
Brett York, Deputy Tax Legislative Counsel, U.S. Department of the Treasury