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New Tax Guidence Simplifies Access to Qualified Energy Conservation Bonds

On June 27, 2012, a new public tax guidance issued by the Department of the Treasury will make it easier for state and local governments to access more than $2 billion in existing low-cost financing to fund energy efficiency and renewable energy projects through Qualified Energy Conservation Bonds (QECBs). QECBs provide state and local governments with access to low-cost financing to fund energy efficiency and renewable energy programs.

The  guidance addresses (1) how to measure reductions in energy consumption in public buildings and (2) what constitutes a “Green community program,” including the use of loans, grants, or other repayment mechanisms to implement such programs. In defining a green community program, the IRS included “a loan (or other repayment mechanism) or grant program that is broadly available to members of the general public, including individuals or businesses.