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Date") and that (ii) the Project must proceed with due diligence.
B. Monitor progress to ensure that at least 85% of the proceeds of the
Obligations to be used for the construction, renovation or acquisition of the
Project are expended within three years of the Issue Date.
C. Monitor to ensure proceed expenditures from project Obligation issuances
comply with one of the following applicable schedules 1,2,3 :
a) Six-Month Expenditure Schedule. All proceeds must be spent
within six months.
b) Eighteen-Month Expenditure Schedule:
i. By six (6) months following receipt of the proceeds, fifteen
percent (15%) of the proceeds (together with any amounts
received from investments thereof) must have been spent
on the designated projects.
ii. By twelve (12) months following receipt of the proceeds,
sixty percent (60%) of the proceeds (together with any
amounts received from investments thereof) must have
been spent on the designated projects.
iii. By eighteen (18) months following receipt of the proceeds,
one hundred percent (100%) of the proceeds (together with
any amounts received from investments thereof) must
have been spent on the designated projects.
c) Two-Year Expenditure Schedule. The two-year expenditure schedule
is available only for proceeds used to fund construction projects. A
project will qualify as a construction project if at least 75% of the
proceeds will actually be used for actual construction (versus
acquisition) costs. The two-year expenditure exception requires
expenditure of the proceeds within the following schedule:
i. By six (6) months following receipt of the proceeds, ten
percent (10%) of the proceeds (together with any amounts
received from investments thereof) must have been spent
on the designated projects.
1
For more information regarding these expenditure schedules, please refer to McCall Parkhurst & Horton, L.L.P.’s Memorandum
entitled Arbitrage Rebate Regulations, attached to the Federal Tax Certificates for the Obligations at issue.
2
The spending requirements do not generally apply to amounts held in a reasonably required reserve fund, except
in certain cases related to the two-year exception period.
3
“Proceeds” as used in this Section VII(b) generally includes investment earnings, but excludes funds held in a bona fide debt
service fund.
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