General Information Regarding CREB Financing

 

The current regulations regarding CREB financing is still in its infancy, even several  years after it began, because of the recent changes with the 2009 federal stimulus package. The bonds have been patterned after the very successful Qualified Zone Academy Bond (QZABs) program school district's currently enjoy, but have added quirks that will add a layer of complexity not found in QZAB. Whether the CREB will enjoy the same market acceptability that the QZAB currently enjoy is an ongoing debate.

The House passed H.R. 1424, the Emergency Economic Stabilization Act of 2008 by a vote of 263-171. The Senate passed the bill with a vote of 74-25. Shortly after the vote, President George Bush signed the bill into law. This bill includes a package of energy and non-energy related tax extensions. Included in the bill is APPA-supported language for the new Clean Renewable Energy Bonds program as well as an $800 million authorization.

The 2009 Recovery Act (Stimulus package), provides for an increase to 2.4 BILLION of CREBs.

  1. Deadline for Submitting a CREB application is set periodically throughout the year. Applications must be submitted to the IRS.

     Applications must be submitted in duplicate to the Internal Revenue Service (IRS), Attention CC:TEGE:EOEG:TEB,  1111 Constitution Avenue, NW, Room 4306, Washington, D.C. 20224. Applications may be hand delivered Monday through Friday between the hours of 8 a.m. and 4 p.m. to the Courier’s Desk, Internal Revenue Service, 1111 Constitution Avenue, NW, Washington, D.C., attention CC:TEGE:EOEG:TEB.
     

  2. SMALL IS BEAUTIFUL. Small projects are given FIRST priority in funding requests.

  3. Any municipality (city, county, state, utility district, etc.) as well as electric COOPs and some specific lenders may issue CREBs for a qualified project.

  4. Projects MUST generate electricity and MUST be created from clean and/or renewable sources, including "clean-coal".

  5. The lender will receive a tax credit from the Federal Government instead of an interest check from the borrower.

  6. The Tax Credit is taken QUARTERLY by the lender.

  7. Repayment of the debt MUST be made in EQUAL, ANNUAL PAYMENTS.

  8. CREB funds must be spent within 5 years.

  9. The tax credit is set by the US Treasury, daily, and for each annual payment year.

  10. The maximum maturity for the CREB will be set by the US Treasury (monthly)

  11. CREB are intended to be issued without interest or be sold at a discount.


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Information Provided by:    McLiney And Company the nation's leading firm in tax-credit bonds.