Official Action / Intent

The evidence of Official Intent of the Issuer (or the Conduit Borrower if it is a 501(c)(3) Organization) to Reimburse expenditures with proceeds of the Bonds, including a general functional description of the project to which the reimbursement relates and the maximum Principal amount to be Reimbursed.  Sometimes called an intent resolution, a declaration of intent, or an Inducement Resolution, it is required under the Code if the Issuer (or the Conduit Borrower if it is a 501(c)(3) Organization) is to be Reimbursed for certain expenditures paid from non-borrowed funds prior to the issue date of the Bonds.  Note that a Conduit Borrower that is not a 501(c)(3) Organization cannot be the party that adopts the evidence of Official Intent.  In such a case, the Conduit Issuer must adopt the Official Intent.

The action must be adopted not more than sixty days after the Reimbursed expenditure, and the reimbursement with Bond proceeds must occur not later than eighteen months after the later of (i) the date on which the original expenditure was paid, or (ii) the date on which the property was placed in service (or abandoned).

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Use of bond proceeds to pay project costs prior to the issuance of bonds. Reimbursement raises questions related to whether the reimbursement qualifies as an expenditure of tax-exempt bond proceeds for federal income tax purposes.

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Supplemental Indenture

A supplement to an outstanding indenture, entered into pursuant to the terms of an outstanding indenture and delivered in connection with the issuance of additional bonds, to cure an inconsistency or formal defect in the Indenture or to amend the indenture in some manner.