1. Tax Compliance Reporting for Financed Facilities Rosa H. Renaud, Financing and Treasury Year-End Legal Training May 2010

2. Tax Compliance Reporting for Financed Facilities Since 2008, the State Treasurer’s Office has increased reporting requirements to the CSU due to pressure from the IRS. In 2009, the Treasurer’s Office withheld funds. A Chancellor’s Office task force has been created to develop guidelines for campuses to meet IRS requirements for all State and Non-State tax-exempt funded facilities. The task force worked together to outline the requirements and disseminated the information under a memo issued by Elvyra San Juan, Assistant Vice Chancellor, Capital Planning, Design and Construction, on April 29, 2010. May 20102Year-End Legal Training

3. Tax Compliance Reporting for Financed Facilities The memo outlines a four step process for compliance with IRS private use reporting procedures: 1) Identify all campus State and Non-State Tax- Exempt Bond Funded Facilities that have external research funding and/or areas subleased to Non- CSU entities, considered private use. 2) Complete the Private Use Checklist and all appropriate forms. May 20103Year-End Legal Training

4. Tax Compliance Reporting for Financed Facilities 3) Report the space as part of the annual Space and Facilities Database (SFDB). 4) Maintain records for the life of the Tax-Exempt Bonds issued to finance the facility. The campus Vice President for Administration has been requested to assure compliance and will rely on many departments within the CSU. May 2010Year-End Legal Training4

5. Tax Compliance Reporting for Financed Facilities Please note: Campuses must maintain records for financed projects for the duration of the bond life, plus five years, approximately for 35 years. Typical records that are required are: Accounting records for all invoices paid for the construction of the facility. Contracts and subleases identifying usage of the financed facility. Private usage analyses summarizing the annual use for the facility. May 2010Year-End Legal Training5

6. Tax Compliance Reporting for Financed Facilities Summary: These tax requirements are not new, however, only until the past few years has the IRS been emphasizing them and making them more stringent. The CSU is not alone in its development of guidelines and needs the campuses’ assistance to meet IRS requirements. It is a collaborative effort that will involve Accounting, Contracts & Procurement, CPDC, Financing & Treasury, Auxiliary Organizations, Budget Offices, Sponsored Programs, and Administration. May 20106Year-End Legal Training

7. Tax Compliance Reporting for Financed Facilities Contacts are noted on the April 29 th memo. Should you have general questions, feel free to contact: Rosa Renaud, Finance and Treasury, at (562) 951-4566. rrenaud@calstate.edu May 2010Year-End Legal Training7

8. www.calstate.edu May 20108Year-End Legal Training