Public Charter Schools Borrowing With Tax-Exempt Bonds, Second ...

chapter twelve
Post-Issuance Compliance
A Long Term Responsibility
Public charter schools are responsible for monitoring post-issuance compliance
with respect to a range of matters relating to property and programs financed with
tax-exempt bonds. As further described herein, these responsibilities apply over the
entire life of the obligations, including any refunding bonds.
What Kinds of Responsibilities Do Issuers and Conduit Borrowers Have After
Bonds Are Issued?
In addition to the obvious, which is paying the debt service on the bonds, there
are a variety of crucial post-issuance responsibilities that public charter schools
must perform. Failure to perform these duties could lead to serious consequences.
The adoption of written organizational procedures governing internal compliance
with post-issuance obligations helps public charter schools ensure long-term success,
including through normal staff turnover and attrition. Typical examples of postissuance
responsibilities include the following.
A. Tax Responsibilities
In general, when bonds have been issued on a tax-exempt basis, the school will
have covenanted in the bond documents (that is, promised to bondholders) that
it will not do anything that will cause interest on the bonds to become taxable and
that it will take any and all actions necessary to preserve and defend tax-exemption.
While the tax requirements are many and complex, and vary from bond issue to
bond issue, they generally include the following:
Public Charter Schools Borrowing With Tax-Exempt Bonds, Second Edition 55