This summary information is available as a Microsoft Word doc format of    Municipal-Finance-Bond-Tax-Opportunities-ARRTA-ARR  or PDF document pdf format of    Municipal-Finance-Bond-Tax-Opportunities.pdf  .

Common Questions and Answers

Who can issue these bonds?

State, local governments and/or conduits can issue on behalf of RZEDBs; RZ defined as areas having (i) significant poverty, unemployment, foreclosures, (ii) distressed due to base closure, (iii0 designated federal empowerment zone or renewal community

What can they be used for?

Qualified private activity; 95% of net proceeds must be used for RZ property: (i) must be depreciable (no land), (ii) must be constructed or acquired after date of designation of RZ; property must be used in active conduct of a business (not 'sin' business)

How are they subsidized by the feds?

Bonds are tax-exempt

What are the benefits?

Expands the definition of permissible private activity bonds

Are there special reporting requirements?

Same information requirements as tax-exempt state or local government bonds

How long will these bonds be available?

RZFBs must be issued before 1/1/2011

Is there a cap?

Yes. National cap is $15 billion which has been allocated to states in proportion that each state's 2008 employment decline bears to all states. See Massachusetts allocation on page 7. Since counties in Massachusetts cannot issue bonds, presumption is that the county allocations will be allocated to the Commonwealth for further re-allocation for recovery zones in those counties

Where can I find more information?

Section 1401 of ARRTA; Guidance was expected in May; US Treasury website http://www.irs.gov/newsroom/article/0,,id=206044,00.html

What else should I know?

Go to http://mass.gov/recovery/finance for more information related to Municipal Finance Opportunities under ARRA.

Information provided by the Executive Office for Administration and Finance