WASHINGTON — The Internal Revenue Service is auditing $50 million of transportation infrastructure revenue bonds issued by the Maine Municipal Bond Bank in September 2008.
The IRS notified the bond bank about the audit of these TransCap program bonds in a July 16 letter. The bond bank disclosed the letter in an event notice it filed with the Municipal Securities Rulemaking Board’s EMMA system Tuesday.
The IRS is “currently processing the routine compliance documents to determine compliance with federal tax requirements,” the notice stated.
A portion of the proceeds of the Series 2008A bonds paid for some of the costs of 10 specific projects and others designated by the Maine Department of Transportation. The 10 projects included over 20 miles of highway reconstruction in eight counties in Maine.
The bond bank serves as a financing agency for Maine transportation revenue projects, including capital improvements to bridges, minor spans on or over public ways and highway reconstruction projects. The TransCap program is separate from the bank’s Garvee bonds and state general obligation highway bonds, according to bond documents.
The bonds are paid from revenue in a separate TransCap fund created for the program and held by the bank. The legislature allocated 7.5% of fuel excise tax revenues and revenues from a $10 increase in motor vehicle registration, title and license plates fees to provide for the debt service, the bond documents said.
Citi was co-underwriter along with Wachovia Bank NA, now Wells Fargo.
Hawkins Delafield & Wood LLP was bond counsel.