When a tax-exempt issue elects a spending exception under Treas. Reg. section 1.148-7, the rebate question turns into a schedule: spend stated percentages of gross proceeds by dates counted from issuance, and the arbitrage rebate falls away. Most issuers track that schedule in a consultant's workpaper they see once a year. This pack composes two nodes so the issuer's own finance office can check the schedule itself, on any date it chooses, and keep a receipt of each check, so the file that reaches counsel or the rebate analyst carries evidence rather than a recollection.
Stage 1 does the arithmetic the regulation describes: milestone dates counted calendar-wise from the issue date, required percentages of gross proceeds, and a verdict per milestone. Stage 2 turns the resulting receipt into something you can hand over: a bundle labeled with exactly the verification tier its declared gate results support.
The milestone check. You declare the issue date, gross proceeds, the elected exception, whether reasonable retainage was elected, any de minimis amount, and the expenditure schedule to date. The node builds the elected exception's milestone schedule, the 6-month, 18-month, or 24-month construction variant under Treas. Reg. section 1.148-7(c), (d), or (e), computes each milestone date calendar-wise from the issue date, and tests cumulative declared spending against each required amount. The de minimis allowance is capped at the lesser of 3 percent of gross proceeds or $150,000, and a declaration over the cap is rejected rather than quietly clamped. Retainage is never assumed: electing it is a declared boolean that swaps in the regulation's own retainage variant of the schedule.
The evidence bundle. The Stage 1 receipt's execution hash goes in, together with your declaration of which verification gates the receipt has passed, and out comes a shareable bundle stamped OCG-Verify, OCG-Execute, or OCG-Prove, whichever tier those declared results support. The label re-expresses gate outcomes you declare; it re-runs nothing and mints no new trust claim. Its value is honesty in transit: the person who receives the bundle sees exactly what has been verified about the receipt, and exactly what has not.
Unlike packs whose verdict is a reading rule over several receipts, this one's vocabulary comes from Stage 1 itself: every milestone gets exactly one of these three words, and the overall status follows mechanically. The discipline is in the third word. A milestone whose date has not arrived is PENDING, not passed, and most issues spend most of their spending period in that state.
MET only when every milestone in the elected schedule has been met, which by construction cannot happen before the final milestone date.as_of_date. Not a failure and not a pass: the milestone has not yet had its chance to be met. Re-running the pack as each milestone date arrives, and filing each receipt, is the intended use, which is why the evaluation date is a declared input rather than the clock on your machine.| The receipt proves | The receipt does NOT prove |
|---|---|
| That the declared expenditure schedule, measured against the elected exception's milestone dates, produces the recorded per-milestone verdicts under the regulation's percentages. | That the declared expenditures happened, on those dates, in those amounts. A schedule copied from a faulty draw report checks out exactly as well as a true one. |
| That milestone dates were computed calendar-wise from the declared issue date, and the de minimis allowance stayed inside the lesser of 3 percent of gross proceeds or $150,000. | That the elected exception is available to this issue in the first place, or that gross proceeds were measured correctly. Both are counsel questions the node takes as declared. |
| That the evidence bundle's tier label matches the gate results declared for the receipt, per the cumulative SIDECAR.1 tiers. | That any gate actually passed. The label re-expresses your declaration; a wrong declaration produces a confidently wrong label. |
That a third party can replay the same arithmetic from the same declared inputs and reach the same execution_hash. | That any rebate amount is owed or not owed, that a filing obligation is satisfied, or that any regulatory duty has been discharged. |
Carried from the node itself rather than restated here as facts of our own. Confirm current regulatory text with bond counsel before planning against any of them.
As read on 2026-08-07 and carried in art-569: the 6-month exception under Treas. Reg. section 1.148-7(c) requires 100 percent spent by 6 months, or 95 percent by 6 months and 100 percent by 12 with reasonable retainage. The 18-month exception under -7(d) steps through 15, 60, and 100 percent at 6, 12, and 18 months. The 24-month construction exception under -7(e) steps through 10, 45, 75, and 100 percent at 6, 12, 18, and 24 months. Each retainage variant extends the final milestone as the regulation provides.
The future-value arbitrage rebate computation, the thing an issuer ultimately owes or does not owe, is deliberately not in this pack and not in any node it composes. IRS Pub 5271 describes the wider rebate-compliance picture the milestone tests sit inside, as of its 2016 edition; it is cited as orientation, not authority. The milestone receipt is the piece of that picture a finance office can produce for itself.