QUALIFIED ENERGY
CONSERVATION BONDS (DRAFT)
Written as a Public Service for Montana Cities, Counties, & Tribes
© 4/13/2009 by Russell L. Doty, CEO/General Council
New World WindPower, LLC
406-696-2842
The 2009 Federal Recovery Act[1] makes available in 2009, $3.2 billion in Qualified Energy Conservation Bonds (QECBs) for US state, local & tribal governments. Montana’s share based on population is $10,037,000.
The state is to allocate to large local governments based on the ratio the population of an area bears to the total state population.
The specific IRS document relating to QECBs is found at:
http://www.irs.gov/pub/irs-drop/n-09-29.pdf
On April 8, 2009 the IRS released the following guidance document with regard to tax credit bonds found at http://www.irs.gov/newsroom/article/0,,id=206044,00.html
Bond Provisions in ARRA |
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The law:
Red font means the change came from the 2009 stimulus package http://frwebgate.access.gpo.gov/cgi-bin/getdoc.cgi?dbname=111_cong_bills&docid=f:h1enr.pdf
Yellow means the change came from Energy Improvement and
Extension Act of 2008 found at http://frwebgate.access.gpo.gov/cgi-bin/getdoc.cgi?dbname=110_cong_public_laws&docid=f:publ343.110.pdf
SEC.
301. QUALIFIED ENERGY CONSERVATION BONDS.
(a) IN GENERAL.—Subpart I of part IV of subchapter A of chapter 1, as amended by section 107, is amended by adding at the end the following new section:
‘SEC. 54D. QUALIFIED ENERGY CONSERVATION
BONDS.[2] [3]
‘(a) Qualified Energy Conservation Bond- For purposes of this
subchapter, the term ‘qualified energy conservation bond’ means any bond issued
as part of an issue if--
‘(1) 100 percent of the available project proceeds of such issue are to
be used for one or more qualified conservation purposes,
‘(2) the bond is issued by a State or local government, and
‘(3) the issuer designates such
bond for purposes of this section.
‘(b) Reduced Credit Amount- The annual credit determined under section
54A(b) with respect to any qualified energy conservation bond shall be 70
percent of the amount so determined without regard to this subsection.
‘(c) Limitation on Amount of Bonds Designated- The maximum aggregate
face amount of bonds which may be designated under subsection (a) by any issuer
shall not exceed the limitation amount allocated to such issuer under
subsection (e).
‘(d) National Limitation on Amount of Bonds Designated- There is a
national qualified energy conservation bond limitation of $3,200,000,000 $800,000,000. [4]
‘(e) Allocations-
‘(1) IN GENERAL- The limitation applicable under subsection (d) shall
be allocated by the Secretary among the States in proportion to the population
of the States.
‘(2) ALLOCATIONS TO LARGEST LOCAL GOVERNMENTS-
‘(A) IN GENERAL- In the case of any State in which there is a large
local government, each such local government shall be allocated a portion of
such State’s allocation which bears the same ratio to the State’s allocation
(determined without regard to this subparagraph) as the population of such
large local government bears to the population of such State.
‘(B) ALLOCATION OF UNUSED LIMITATION TO STATE- The amount allocated
under this subsection to a large local government may be reallocated by such
local government to the State in which such local government is located.
‘(C) LARGE LOCAL GOVERNMENT- For purposes of this section, the term
‘large local government’ means any municipality or county if such municipality
or county has a population of 100,000 or more.
‘(3) ALLOCATION TO ISSUERS; RESTRICTION ON PRIVATE ACTIVITY BONDS- Any
allocation under this subsection to a State or large local government shall be
allocated by such State or large local government to issuers within the State
in a manner that results in not less than 70 percent of the allocation to such
State or large local government being used to designate bonds which are not
private activity bonds.
(4) SPECIAL RULES FOR BONDS TO
IMPLEMENT GREEN COMMUNITY PROGRAMS.—In the case of any bond issued for the
purpose of providing loans, grants, or other repayment mechanisms for capital
expenditures to implement green community programs, such bond shall not be
treated as a private activity bond for purposes of paragraph (3).[5]
‘(f) Qualified Conservation Purpose- For purposes of this section--
‘(1) IN GENERAL- The term ‘qualified conservation purpose’ means any of
the following:
‘(A) Capital expenditures incurred for purposes of--
‘(i) reducing energy consumption in publicly-owned buildings by at
least 20 percent,
‘(ii) implementing green
community programs (including the use of
loans, grants, or other repayment mechanisms to implement such programs)[6],
‘(iii) rural development involving the production of electricity from
renewable energy resources, or
‘(iv) any qualified facility (as determined under section 45(d) without
regard to paragraphs (8) and (10) thereof and without regard to any placed in
service date).
‘(B) Expenditures with respect to research facilities, and research
grants, to support research in--
‘(i) development of cellulosic
ethanol or other nonfossil fuels,
‘(ii) technologies for the capture and sequestration of carbon dioxide
produced through the use of fossil fuels,
‘(iii) increasing the efficiency of existing technologies for producing
nonfossil fuels,
‘(iv) automobile battery technologies and other technologies to reduce
fossil fuel consumption in transportation, or
‘(v) technologies to reduce energy use in buildings.
‘(C) Mass commuting facilities and related facilities that reduce the
consumption of energy, including expenditures to reduce pollution from vehicles
used for mass commuting.
‘(D) Demonstration projects designed to promote the commercialization
of--
‘(i) green building technology,
‘(ii) conversion of agricultural waste for use in the production of
fuel or otherwise,
‘(iii) advanced battery manufacturing technologies,
‘(iv) technologies to reduce peak use of electricity, or
‘(v) technologies for the capture and sequestration of carbon dioxide
emitted from combusting fossil fuels in order to produce electricity.
‘(E) Public education campaigns to promote energy efficiency.
‘(2) SPECIAL RULES FOR PRIVATE ACTIVITY BONDS- For purposes of this
section, in the case of any private activity bond, the term ‘qualified
conservation purposes’ shall not include any expenditure which is not a capital
expenditure.
‘(g) Population-
‘(1) IN GENERAL- The population of any State or local government shall
be determined for purposes of this section as provided in section 146(j)[7] for the calendar year which includes the date of the enactment of this
section.
‘(2) SPECIAL RULE FOR COUNTIES- In determining the population of any
county for purposes of this section, any population of such county which is
taken into account in determining the population of any municipality which is a
large local government shall not be taken into account in determining the
population of such county.
‘(h) Application to Indian Tribal Governments- An Indian tribal
government shall be treated for purposes of this section in the same manner as
a large local government, except that--
‘(1) an Indian tribal government shall be treated for purposes of
subsection (e) as located within a State to the extent of so much of the
population of such government as resides within such State, and
‘(2) any bond issued by an Indian tribal government shall be treated as
a qualified energy conservation bond only if issued as part of an issue the
available project proceeds of which are used for purposes for which such Indian
tribal government could issue bonds to which section 103(a) applies.’.
110-343 § 301
(b) Conforming Amendments-
(1) Paragraph (1) of section 54A(d), as amended by this Act, is amended
to read as follows:
‘(1) QUALIFIED TAX CREDIT BOND- The term ‘qualified tax credit bond’
means--
‘(A) a qualified forestry conservation bond,
‘(B) a new clean renewable energy bond, or
‘(C) a qualified energy conservation bond,
which is part of an issue that meets requirements of paragraphs (2), (3),
(4), (5), and (6).’.
(2) Subparagraph (C) of section 54A(d)(2), as amended by this Act, is
amended to read as follows:
‘(C) QUALIFIED PURPOSE- For purposes of this paragraph, the term
‘qualified purpose’ means--
‘(i) in the case of a qualified forestry conservation bond, a purpose
specified in section 54B(e),
‘(ii) in the case of a new clean renewable energy bond, a purpose
specified in section 54C(a)(1), and
‘(iii) in the case of a qualified energy conservation bond, a purpose
specified in section 54D(a)(1).’.
(3) The table of sections for subpart I of part IV of subchapter A of
chapter 1, as amended by this Act, is amended by adding at the end the
following new item:
‘Sec. 54D. Qualified energy conservation bonds.’.
(c) Effective Date- The amendments made by this section shall apply to obligations issued after the date of the enactment of this Act
General information on zero interest bonds is being posted at http://www.taxcreditbonds.org/TCBs-4.309/US_Tax_Credit_bonds.html
The web page looks like:
OTHER BONDS/GRANTS: August 4, 2009 deadline due date for applications for Clean Renewable Energy Bond (CREBs) allocations. http://www.irs.gov/pub/irs-drop/n-09-33.pdf
For help funding solar
installations on fire stations to make them energy independent in case of an
emergency that takes out the grid, try http://firegrantsupport.com/afg/