rp-21-39.pdf

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Part III

Administrative, Procedural, and Miscellaneous

26 CFR 601.601: Rules and Regulations.
(Also: §§ 147, 1.147(f)-1)

Rev. Proc. 2021-39

SECTION 1. PURPOSE

This revenue procedure provides temporary guidance regarding the public approval
requirement under § 147(f) of the Internal Revenue Code for tax-exempt qualified
private activity bonds. Specifically, in light of the continuing Coronavirus Disease 2019
(COVID-19) pandemic, this revenue procedure extends until March 31, 2022, the time
period described in section 4.02 of Rev. Proc. 2020-21, 2020-22 I.R.B. 872, as modified
by Rev. Proc. 2020-49, 2020-48 I.R.B. 1121, during which certain telephonic hearings
are permitted.

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SECTION 2. BACKGROUND
.01 Pursuant to § 147(f), tax-exempt qualified private activity bonds are subject to a
public approval requirement. Except for refunding bonds described in § 147(f)(2)(D), a
bond issue must be approved by the governmental unit issuing the bonds (or on behalf
of which such bonds are issued) and by the governmental unit having jurisdiction over
the area in which any facility to be financed by the issue is located. Under
§ 147(f)(2)(B), an issue will be treated as having been approved by any governmental
unit if the issue is approved by the applicable elective representative of the
governmental unit after a public hearing following reasonable public notice, or by voter
referendum of the governmental unit.
.02 Section 1.147(f)-1(d)(1) of the Income Tax Regulations provides that public
hearing means a forum providing a reasonable opportunity for interested individuals to
express their views, orally or in writing, on the proposed issue of bonds and the location
and nature of the proposed project to be financed. Section 1.147(f)-1(d)(2) provides
that the public hearing must be held in a location that, based on the facts and
circumstances, is convenient for residents of the approving governmental unit. The
location is presumed convenient for residents of the approving governmental unit if the
public hearing is located in the approving governmental unit’s capital or seat of
government. Further, if more than one governmental unit is required to hold a public
hearing, the hearings may be combined as long as the combined hearing affords the
residents of all of the participating governmental units a reasonable opportunity to be
heard. The location of any combined hearing is presumed convenient for residents of

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each participating governmental unit if it is no farther than 100 miles from the seat of
government of each participating governmental unit beyond whose geographic
jurisdiction the hearing is conducted.
.03 In light of the COVID-19 pandemic, state and local governmental units sought
alternatives to in-person hearings held to meet the public approval requirement. In
response to these concerns, Rev. Proc. 2020-21, effective May 4, 2020, provides
temporary guidance regarding the public approval requirement under § 147(f).
Rev. Proc. 2020-21 provides that for the period beginning May 4, 2020, and ending on
December 31, 2020, hearings held by teleconference that are accessible to the
residents of the approving governmental unit by calling a toll-free telephone number will
be treated as held in a location that, based on the facts and circumstances, is
convenient for residents of the approving governmental unit for purposes of § 1.147(f)-
1(d)(2). Rev. Proc. 2020-49 extends that time period until September 30, 2021. The
Department of the Treasury and the Internal Revenue Service have received several
requests for further extension of the time period. This revenue procedure extends the
time period until March 31, 2022.
SECTION 3. EXTENSION OF TIME PERIOD
The period described in section 4.02 of Rev. Proc. 2020-21 is extended.
Accordingly, section 4.02 of Rev. Proc. 2020-21 is modified as follows:
.02 Time period. The period described in this section 4.02 is the period beginning on
May 4, 2020, and ending on March 31, 2022.

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SECTION 4. EFFECT ON OTHER DOCUMENTS
This revenue procedure modifies section 4.02 of Rev. Proc. 2020-21 and modifies
and supersedes Rev. Proc. 2020-49.
SECTION 5. DRAFTING INFORMATION
The principal authors of this revenue procedure are Johanna Som de Cerff and
David White of the Office of Associate Chief Counsel (Financial Institutions & Products).
For further information regarding this revenue procedure, contact Ms. Som de Cerff or
Mr. White on (202) 317-6980 (not a toll-free number).