Code Section 54D


Code Section Effective Date Name of Act Name of Provision 10yr Revenue Estimate ($millions)
54D 2/17/2009 The American Recovery and Reinvestment Act of 2009 (Public Law 111-5) Expand qualified energy conservation bonds -803

Expand qualified energy conservation bonds

Explanation of Provision236

In General

The provision expands the present-law qualified energy conservation bond program. The provision authorizes issuance of an additional $2.4 billion of qualified energy conservation bonds. Also, the provision clarifies that capital expenditures to implement green community programs include grants, loans and other repayment mechanisms to implement such programs. For example, this expansion will enable States to issue these tax credit bonds to finance retrofits of existing private buildings through loans and/or grants to individual homeowners or businesses, or through other repayment mechanisms. Other repayment mechanisms can include periodic fees assessed on a government bill or utility bill that approximates the energy savings of energy efficiency or conservation retrofits. Retrofits can include heating, cooling, lighting, water-saving, storm water-reducing, or other efficiency measures.

Finally, the provision clarifies that any bond used for the purpose of providing grants, loans or other repayment mechanisms for capital expenditures to implement green community programs is not treated as a private activity bond for purposes of determining whether the requirement that not less than 70 percent of allocations within a State or large local government be used to designate bonds that are not private activity bonds (sec. 54D(e)(3)) has been satisfied.

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236- Section 301 of the Hiring Incentives to Restore Employment Act, Pub. L. No. 111–147, added a provision to section 6431, allowing the issuer of the bonds to elect to receive a direct payment from the Treasury in lieu of providing a tax credit to the holders of the bonds. For further discussion, see Part Seven of this document.
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