Private / Public Use Compliance

Definition

The Ohio State University (“OSU”) has financed the acquisition and construction of, and improvements to, many facilities and other capital projects through the issuance of qualified tax-exempt bonds. As the issuer of tax-exempt bonds, OSU is required to comply with federal tax rules that govern the expenditure of proceeds of tax-exempt, bond-financed property; investment of proceeds in compliance with arbitrage rules; and retention of records. To maintain compliance with federal regulations, the university is required to provide to the campus community written procedures governing the use of tax-exempt bond proceeds. These guidelines, which follow, identify compliance areas of tax-exempt bond financing and OSU’s procedure for fulfilling requirements in these areas. The university treasurer’s office requires units receiving capital project financing to comply with these procedures in their use of tax-exempt, bond-financed property and in the allowance of external research being performed in these facilities. Failure to follow these rules may result in the loss of the tax-exempt status of the bonds, significant penalties, and other consequences. Review of and compliance with most of the rules is required until the bond is paid in full or, if refinanced, until the refinanced bonds are paid in full. The university treasurer’s office is responsible for documenting compliance.

Policy

Questionnaire

To assess and monitor compliance, senior debt analyst will distribute the university’s Private Use Questionnaire to the responsible business managers prior to debt issuance and annually thereafter. The business managers must complete and return the Private Use Questionnaires in a timely manner, and include all necessary information for identifying and quantifying potential sources of “private business use.” Senior debt analyst will analyze questionnaire responses to (1) provide the university treasurer with timely and accurate information for determining whether tax-exempt financing is appropriate for a particular capital project; (2) identify impermissible private business use in existing facilities so that corrective action can be taken; and (3) collect information necessary for complete reporting to the Internal Revenue Service.

Private Use Questionnaire