Comment on FR Doc # N/A

STATEMENT BY THE INTERNATIONAL BROTHERHOOD OF TEAMSTERS ON PUBLIC APPROVAL GUIDANCE FOR TAX-EXEMPT BONDS Docket IRS-2008-0095 The International Brotherhood of Teamsters (“IBT”) submits the following comments concerning proposed regulations (“Proposed Regulations”) to the public approval requirement under section 147(f) of the Internal Revenue Code. Under the Tax Equity and Fiscal Responsibility Act (“TEFRA”) of 1982, and subsequently the Tax Reform Act of 1986, all state and local government entities must follow a public approval process before issuing any private activity bond on behalf of a private entity. Under existing regulations, this process requires all localities to hold and announce public hearings where concerned citizens may speak for or against a proposed project. Public notices of hearings must also provide the public with project details. These existing regulations ensure at least some transparency and accountability on the part of public officials in the area of public-private financing. IRS recently announced Proposed Regulations that would amend the existing regulations in ways that conflict with the best-interests of the public, and which would significantly undermine this critical public approval process through the following changes: Reducing the notice period before public hearings—Current regulations require that a public notice appear in a mass media outlet at least 14 days before a hearing is held. The Proposed Regulations would reduce this time period to just 7 days. By cutting in half the amount of time between the public notice of a hearing and the actual meeting, the public is effectively denied the opportunity to meaningfully participate in the public approval process. Given the complexity of many large projects, the public must have sufficient time to analyze and understand proposals. It is the experience of many individuals and organizations that the current 14 day requirement is insufficient. A reduction to 7 days would significantly inhibit public participation. Allowing governmental issuers to cancel hearings—The Proposed Regulations would allow government agencies to cancel public hearings on qualified bonds in the event they do not receive “timely requests” to participate in proposed hearings. Considering the Proposed Regulations would shorten an already brief notice period, this change would increase the likelihood that concerned citizens would be barred from participating in the public approval process because they found out about the meeting too late, and thus failed to submit a “timely request” to attend the meeting. This change would also significantly inhibit the opportunity for public participation. Allowing governmental issuers to provide fewer project details—The Proposed Regulations would modify requirements that public notices contain specific project descriptions, and instead allow government issuers to provide just a general description. In addition, the Proposed Regulations alter the requirements of identification of operators and owners of specific projects. The public notice will be allowed to provide either the name of the legal owner or the principal operator or the name of the beneficial party of interest. These changes would have a detrimental impact on the ability of the public to judge the potential impact of a project on a community. If the public is not provided with sufficient information concerning the details of a project, particularly the names of all concerned parties, interested citizens cannot form educated opinions. The Proposed Regulations threaten significantly to undermine an already insufficient public approval process of private activity bonds. These changes would severely diminish the ability of community groups, concerned tax-payers, development advocates, and labor unions to question the use of tax-exempt bonds. A fully transparent public approval process is critical to ensure long-term accountability on the part of elected officials and the private entities, from non-profit hospitals to multi-billion dollar corporations, which receive tax-exempt bonds. While the Proposed Regulations have the stated purpose of “updating, clarifying and simplifying guidance” of the public approval process, these changes would significantly diminish transparency and erode public-oversight of private development projects. In such times of severe economic turmoil, the public must be given every opportunity to question elected officials, private developers seeking qualified bonds, and the potentially risky development deals they propose. For these reasons the IBT strongly objects to the Proposed Regulations.