Source: Bond Buyer, March 26, 2009
The American Recovery and Reinvestment Act of 2009 brought about more changes to the tax code pertaining to tax-exempt bonds than any federal law since the massive tax reform of 1986.
The stimulus package includes myriad new bond programs, alters for a time the tax status of certain kinds of bonds, changes rules for issuance and ownership, and — unlike its earlier transformative cousin — includes the unique feature of two-year sunsets for most of its important programs.
These programs give issuers another set of options to evaluate when making their bond sale decisions — sell tax-exempt or taxable bonds, offer investors a tax credit, or take a federal subsidy?
These options — along with the choices of the expanded qualified zone academy bonds and the new qualified school construction bonds, the clean renewable energy bonds, and recovery zone economic development bonds — give issuers and their advisers a lot to think about.
The groups that offer guidance on such things are scrambling to advise their members. We’ve assembled some resources on the last page of this publication that can help you find out what different states, agencies, and organizations have to offer. In the coming pages, The Bond Buyer has tried to assemble a variety of voices from the legal, regulatory, and issuer communities to offer ideas, guidance, and caution about the new tools available in this small window of time.