​It is a mixed bag of improvements beyond the status quo and some disappointments. The trick is to take advantage of new technology which exists since the original rules were published as well as to minimize the burden on and the resources spent by state and local governments and issuers while complying with the requirements the law.

It could be that there will be additional nuggets that will be dug up but our take is that some of the positives are :

--The public notice period has been reduced from 14 days to 7;

-- Issuer websites are satisfactory for public notice instead of more general governmental, state websites in the case of state conduit issuers;

--Websites can be used as sole means of public notice rather than older media;

-- Broad project description allowed (e.g., 501(c)(3) bonds as defined in section 145 of the code for a hospital facility and working capital);

--Provided liberal definition of insubstantial deviation to be a use of proceeds for a project in an amount not more than 10% more than the amount specified or any amount less; and

--Allowed supplemental approval for changes in projects if the original approval met the approval requirements and the change was not foreseen at the time the bonds were issued.


On the other hand, the oft times wastefulness and delay of the public hearings are continued :

--They cannot be canceled even if nobody has signed up for them;

--Disallowed relying solely on nonphysical hearings such as webcasts or even a conference call; and

--There seems to be limitations on using existing state hearing processes as a surrogate for the federal hearing.

All this means that for a process where quite often no one from the public appears, time and resources will be spent for little benefit.

Additionally:

• Project is defined to include projects and facilities at the same or proximate sites so the requirement to specify a bond amount for each location is maintained.  As we said in our comments, this may be problematic for large hospital systems with multiple projects and multiple sites.  Interestingly, they put back a sentence in the definition of Project that says projects on different sites may be treated as part of the same Project if used in an integrated operation.  The proposed regs said that was dropped because it was too difficult to determine what was an integrated operation.  This may be helpful for hospital systems but unclear what it really means given the clear description in the preamble that lumping multiple projects together is not giving notice of scope of project and potential impact on a particular community;

 

• The benefit to using the new regs for existing bonds is the ability to have a supplemental approval if the project changes.  However, in order to use the supplemental approval provision, it seems to require that the original approval have met the requirements of the new regs.  This may not be the case for large hospital systems with multiple locations and projects that did not specify amounts by project in the original notice.

 

• There is no refunding bond relief.  With bonds issued to refund bonds of many series that had themselves been issued to refinance many prior series, it gets very complicated to try to figure out amounts by project and location for each prior series.  The NAHEFFA comments had asked for the ability to just give a maximum amount of refunding bonds to be issued.

 
It's always disappointing when you have rulemakings occur about every 20 years and you don't get as many benefits of reform to the procedures as possible. But, this does appear to be a significant improvement from the status quo.