8717-14 Adopting post-issuance compliance procedures

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9. Ensure that amounts held in any reasonably required debt service reserve fund that are invested in Higher Yielding Investments do not exceed the least of. (i) 10% of the stated principal amount of the Obligations (or 10% of the Sale Proceeds of the Obligations if the Obligations have original issue discount or original issue premium that exceeds 2% of the stated principal amount of the Obligations plus, in the case of premium, reasonable underwriter's compensation); (ii) maximum annual Debt Service on the Obligations; or (iii) 125% of average annual Debt Service on the Obligations. 10. Compliance with rebate requirement, if applicable (see the tax certificate for possible exceptions from the rebate requirement). Subject to the possible exceptions, including those mentioned below, earnings on Proceeds, to the extent invested at a yield in excess of the Yield on the Obligations (i.e., positive arbitrage), generally must be rebated to the U.S. Treasury, even if a Temporary Period exception from yield restriction allowed the earning of that positive arbitrage. a. Ensure that rebate calculations will be timely performed and payment of Rebate Amounts, if any, will be timely made; such payments are generally due 60 days after the fifth anniversary of the Issuance Date, and then in succeeding installments every five years; the final rebate payment for the Obligations is due 60 days after retirement of the last maturity of the Obligations. (A rebate consultant generally should be hired to perform these calculations, provide analysis for Commingled Funds, advise on arbitrage rebate and yield restriction liability and provide advice on other special circumstances that might arise.) (i) Perform an annual review with rebate consultant of each series of Obligations to determine if any rebate calculations are needed for that year. b. Review the rebate section of the tax certificate to determine whether the "small issuer" rebate exception applies to the Obligations. C. If the 6- nnonth, 18- month, or 24 -month spending exception from the rebate requirement (as described in the tax certificate) may apply to the Obligations, ensure that the spending of Proceeds is monitored prior to the semi - annual spending dates for the applicable exception. d. Timely make rebate and yield reduction payments and file IRS Form 8038 -T. e. Even after all other Proceeds of the Obligations have been spent, ensure compliance with rebate requirements for any debt service reserve find and any debt service find that is not exempt from the rebate requirement (see the tax certificate). f. See the tax certificate for more detail regarding the rebate requirement. 11. Maintain records of investments and expenditures of Proceeds, rebate exception analyses, rebate calculations, Forms 8038 -T, and rebate and yield reduction payments, and any other records relevant to compliance with the arbitrage restrictions. C