• Overview of Qualified Energy Construction Bonds
  • November 29, 2010 | Author: Douglass P. Selby
  • Law Firm: Hunton & Williams LLP - Atlanta Office
  • This memorandum addresses Qualified Energy Construction Bonds (“QECBs”), a type of qualified tax credit bond that state and local governments may use to finance various energy projects, including particularly those that promote energy efficiency and renewable source technologies. QECBs were originally authorized under the federal Energy Improvement and Extension Act of 2008, enacted in October 2008, as further amended and expanded by the federal American Recovery and Reinvestment Act of 2009, enacted in February 2009, under Sections 54A and 54D of the Internal Revenue Code of 1986, as amended (the “Code”). Initially, QECBs only provided a credit to a taxpayer bondholder against the bondholder’s tax liability for the year; however, following the enactment of H.R. 2847 in March 2010, issuers now also have the option of electing to receive a direct subsidy from the U.S. Department of Treasury (the “Treasury”) in an amount equivalent to the non-refundable tax credit that would otherwise accrue to the bondholder.