Private Activity Questionnaires
The Office of the President and the campuses together verify that the University is in compliance with IRS regulations for tax-exempt financing. To accomplish this, campuses periodically fill out a questionnaire (or update previously submitted ones to reflect changed conditions). These questionnaires assist in detecting any type of private use issues with campus facilities. Formerly this verification was accomplished through hard copies, but in 2012 transitioned to an online format. Hard copies are still required for specific purposes such as for tax certificates at the time of initial funding from bonds and for amendments to tax certificates.
Through this periodic survey and subsequent analysis, the non-university use of each project that has received tax-exempt financing is determined. Every project is evaluated for private activity and private use as a stand-alone project. Most University projects are eligible for tax-exempt financing, but some projects - or portions of projects - do not qualify because of the nature of the activity in the project. It is important to recognize the factors that can influence the tax-exempt status. Private activity restrictions are applicable for the term of the debt obligation, and failure to adhere to these rules at any point before the debt is fully retired can make the entire bond issue in which the project was financed retroactively taxable. For CRM, this encompasses funding from general obligation bonds only. A number of capital projects also include external financing through general revenue bonds (GRBs) administered by the Capital Markets Finance (CMF) office at the Office of the President. Therefore, these two offices coordinate closely on projects with multiple funds sources.
For questions or concerns regarding reporting private use within projects funded from General Obligation Bonds please contact Michael Linder (510) 987-9104.