FINANCING RENEWABLE ENERGY and ENERGY CONSERVATION PROJECTS
Overview In recent years, Congress has developed several programs to help private and public entities finance renewable energy and conservation projects. The first programs granted tax credits to private entities, but these tax credits were unavailable to tax-exempt entities, like local governments. Today, new programs exist which allow local governments and other public entities to finance certain renewable energy and conservation projects with low- or no-interest debt. This is possible by offering investors a federal tax credit in lieu of interest payments. Clean Renewable Energy Bonds In 2005, the Clean Renewable Energy Bonds (CREBs) program was created to give public entities the ability to obtain low-interest or interest-free financing for renewable energy projects. The program was renewed and expanded in 2007. A total of $1.2 billion was made available, and many California entities received an allocation to finance installation of solar panels on government buildings. The deadline for applications for CREBs has passed, but entities that received an allocation have until December 31, 2009 to issue the obligations. Jones Hall provides bond counsel services for multiple public entities in California, including cities, counties, school districts and utility districts, wanting to finance renewable energy projects. Jones Hall has worked on over a dozen CREB financings and can structure financings to include traditional tax-exempt and CREB components. If you have received a CREB allocation and would like to speak to someone at Jones Hall about issuing the CREBs, please contact Alison Benge or Chick Adams. Download Additional Information about CREBs (PDF) New Clean Renewable Energy Bonds In October 2008, Congress created a new Clean Renewable Energy Bonds (New CREBs) program that is similar to the original CREBs program and can be used to finance similar projects, including solar panel installation. Applications for New CREBs were accepted through August 4, 2009, and issuers have 3 years after receiving an allocation issue the New CREB obligations. If you have received a New CREB allocation and would like to speak to someone at Jones Hall about issuing the New CREBs, please contact Alison Benge or Chick Adams. Download Additional Information about New CREBs Qualified Energy Conservation Bonds In October 2008, Congress created the new Qualified Energy Conservation Bonds (QECBs) program which can be used to finance a broad array of conservation projects, including private activity projects and projects that are also covered by the CREBs program. The allocations available for the QECB program was significantly increased as part of the American Recovery and Reinvestment Tax Act of 2009. On April 3, 2009, the IRS allocated each State a portion of the national QECB volume cap. Large local governments having populations of 100,000 or more receive an automatic allocation of QECB volume cap. In California, the distributions to large local governments are to be as follows: the State is to receive $12,746,103; counties are to receive $197,669,919; municipalities are to receive $170,173,417; Indian tribal governments are to receive $739,561. The California Debt Limit Allocation Committee is currently accepting applications for entities wanting to receive a portion of the State QECB allocation. If you have received a QECB allocation or would like to apply for a portion of the State QECB allocation, please contact Alison Benge or Chris Lynch. Download List of 2009 QECB allocations (PDF) Download Additional Information about QECBs
Property Tax Financings Jones Hall has been a leader in the area of property tax financing of renewable energy end energy efficiency improvements on private property in California. The primary purpose of these programs is to make renewable energy and energy efficiency improvements more affordable to property owners by offering financing with a limited down payment and a competitive interest rate but without the due-on-sale feature of commercial loans. Jones Hall authored municipal ordinances authorizing the City of Berkeley and the City and County of San Francisco, both charter cities, to undertake special tax financings of these improvements; the legislation was based on the Mello-Roos Community Facilities Act of 1982 (the "Mello-Roos Act"). Jones Hall also authored Assembly Bill 1709 which would have amended the Mello-Roos Act along the lines of the Berkeley/San Francisco legislation. Assembly Bill 1709 was vetoed by the Governor in 2008, but it appears it will be re-introduced in early-2009. For general law cities, "contractual assessments" using special benefit assessment authority introduced by AB 811 is available to finance renewable energy and energy efficiency improvements to private property. Jones Hall is also active in efforts to amend federal tax law as it applies to property tax financings of renewable energy and energy efficiency improvements. For more information about the these property tax financing programs, please contact Chris Lynch. |
