Documents and Policies: Information Statement

General Policies Concerning Arbitrage Rebate

The Program follows and recommends that Participants follow certain practices when investing tax-exempt bond proceeds designed to provide a clear audit trail for purposes of complying with the regulations concerning arbitrage rebate. These include the following:

1. A Participant should invest all bond proceeds subject to the arbitrage rebate requirements in the Program on the same day as they are received by the Participant. This will enable the Program to track the investment and expenditure of these funds.
   
   
2. A Participant should, at the time of initial investment, identify all funds subject to the arbitrage rebate requirement that must be computed with reference to the same bond yield. A separate account should beestablished for each fund or funds subject to a different bond yield for arbitrage rebate computation purposes, by completing an Account Registration Form provided by the Investment Provider. The Investment Provider will provide advice on the number and type of accounts that will be needed to provide a clear audit trail.
   
   
3. A Participant should notify the Investment Provider when making its initial investment whether all or some of the bond proceeds it is investing are expected to qualify for certain exceptions to rebate commonly known as the spending exceptions The spending exceptions include the “6-month spending exception,” “the 18-month exception” and “the 2-year spending exception.” In addition, if the bond proceeds are expected to qualify for the “2-year spending exception,” the Participant should indicate to the Investment Provider whether the Participant has elected to pay a penalty in lieu of rebate or to pay rebate if the spend down percentages are not met.
   
   
4. A Participant should not draw down the entire bond proceeds account before providing for any rebate requirement or penalty payment.

When an account is opened, the Investment Provider will request certain information from a Participant, including the issue date for the related bonds, to permit scheduling of an exception compliance report, whether the Participant expects to qualify for an exception to the arbitrage rebate requirement and whether an election to pay a penalty in lieu of rebate was made under the 2-year exception. Copies will be requested of the official statement, non-arbitrage certificate or other tax certificate, bond resolution and similar documents and IRS Form 8038-G. The Investment Provider will send the Participant a Confirmation Letter which asks the Participant to confirm the information supplied by the Participant regarding its bonds, such as the bond yield, issuance date, and bond year election and any applicable rebate exceptions, penalty elections and yield restriction dates. The Investment Provider relies on the accuracy of the information supplied by the Participant in the Confirmation Letter and the Investment Provider will not make an independent determination of the bond yield or other information supplied in the Confirmation Letter. If the Participant supplies inaccurate information in the Confirmation Letter, or if the Participant fails to return a completed Confirmation Letter, then the rebate calculations and other rebate services provided by the Investment Provider may not be accurate. For bonds invested outside of the Program, with the opening of an account the Investment Provider reserves the right to require the Participant to furnish a rebate calculation report, at the sole cost of the Participant, covering the period from the date of bond issuance to the date of investment in the Program.

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