{
  "id": "R40523",
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  "number": "R40523",
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      "date": "2021-04-01",
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      "summary": null,
      "title": "Tax Credit Bonds: Overview and Analysis",
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      "source": "CRSReports.Congress.gov",
      "id": "R40523_26_2021-04-01"
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      "source": "EveryCRSReport.com",
      "id": 609195,
      "date": "2016-10-11",
      "retrieved": "2020-01-02T15:19:03.744201",
      "title": "Tax Credit Bonds: Overview and Analysis",
      "summary": "Nearly all state and local governments sell bonds to finance public projects and certain qualified private activities. The federal government subsidizes state and local bond issuances through a number of policies. One such policy is the Tax Credit Bond (TCB), which provides a tax credit or direct payment to the issuer or investor that is proportional to the bond\u2019s face value. TCBs represent an alternative to tax-exempt bonds, which exclude interest earnings from the investor\u2019s federal taxable income. This report explains the tax credit mechanism and describes the market for TCBs.\nThe majority of TCBs are designated for a specific purpose, location, or project. Issuers use the proceeds for public school construction and renovation; clean renewable energy projects; refinancing of outstanding government debt in regions affected by natural disasters; conservation of forest land; investment in energy conservation; and for economic development purposes. The relative appeal of TCBs and municipal bonds is dependent on issuer and investor characteristics and on economic conditions.\nThe first tax credit bonds, qualified zone academy bonds (QZABs), were introduced as part of the Taxpayer Relief Act of 1997 (P.L. 105-34) and first issued in 1998. Clean renewable energy bonds (CREBs) were created by the Energy Policy Act of 2005 (P.L. 109-58), and were later modified as \u201cnew\u201d CREBs in the Emergency Economic Stabilization Act of 2008 (P.L. 110-343). Gulf tax credit bonds (GTCBs) were created by the Gulf Opportunity Zone Act of 2005 (P.L. 109-135). Qualified forestry conservation bonds (QFCBs) were created by the Food, Conservation, and Energy Act of 2008 (P.L. 110-246). Qualified energy conservation bonds (QECBs) and Midwest Disaster Bonds (MWDBs) were created by the Emergency Economic Stabilization Act of 2008 (P.L. 110-343).\nThe American Recovery and Reinvestment Act of 2009 (P.L. 111-5, ARRA) included several bond provisions that use a tax credit or issuer direct payment. Specifically, ARRA created Qualified School Constructions Bonds (QSCBs), Build America Bonds (BABs) and Recovery Zone Economic Development Bonds (RZEDBs). Unlike other tax credit bonds, the interest rate on the BABs and RZEDBs is a rate agreed to by the issuer and investor and the issuers receive direct payments from the Treasury. In contrast, the Secretary of the Treasury sets the credit rate for the other TCBs. The credit rate differs across TCB programs. The QZAB and QSCB credit rate is set at 100% and the \u201cnew CREB\u201d and QECB credit rate is set at 70% of the interest cost. In contrast, the BAB tax credit rate is 35%. \nMost of the TCBs to date have been established as temporary tax provisions. The authority to issue several TCBs, including GTCBs and CREBs, has expired in recent years. The only permanent TCB, QECBs, are currently fully subscribed. Bonds that are no longer being issued may still be held by the public. In the 114th Congress, multiple bills have been introduced to extend or modify certain TCB programs. The Consolidated Appropriations Act, 2016 (P.L. 114-113) extended the issuance authority of QZABs for the 2015 and 2016 tax years, and provided for $400 million of issuing capacity for each year. Other legislation, including H.R. 2676 and S. 1515 would extend the BAB program indefinitely. Additionally, the President\u2019s FY2017 Budget included a number of proposals related to TCBs, including the creation of a new TCB for certain infrastructure programs.",
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    {
      "source": "EveryCRSReport.com",
      "id": 412315,
      "date": "2012-09-20",
      "retrieved": "2016-04-06T23:55:28.808493",
      "title": "Tax Credit Bonds: Overview and Analysis",
      "summary": "Almost all state and local governments sell bonds to finance public projects and certain qualified private activities. Most of the bonds issued are identified as tax-exempt bonds because the interest payments are not included in the investor\u2019s federal taxable income. In contrast, Tax Credit Bonds (TCBs) are a type of bond that offers the investor a federal tax credit or the issuer a direct payment. This report explains the tax credit mechanism and describes the market for the bonds. Build America Bonds, which are no longer issued, are a type of TCB.\nThere are a variety of TCBs. Qualified zone academy bonds (QZABs), which were the first tax credit bonds, were introduced as part of the Taxpayer Relief Act of 1997 (P.L. 105-34) and were first issued in 1998. Clean renewable energy bonds (CREBs) were created by the Energy Policy Act of 2005 (P.L. 109-58) and \u201cnew\u201d CREBs by the Emergency Economic Stabilization Act of 2008 (P.L. 110-343). Gulf tax credit bonds (GTCBs) were created by the Gulf Opportunity Zone Act of 2005 (P.L. 109-135), but authority to issue GTCBs has expired. Qualified forestry conservation bonds (QFCBs) were created by the Food, Conservation, and Energy Act of 2008 (P.L. 110-246). Qualified energy conservation bonds (QECBs) and Midwest Disaster Bonds (MWDBs) were created by the Emergency Economic Stabilization Act of 2008 (P.L. 110-343).\nThe American Recovery and Reinvestment Act of 2009 (P.L. 111-5, ARRA) included several bond provisions that use a tax credit or issuer direct payment. Specifically, ARRA created Qualified School Constructions Bonds (QSCBs), Build America Bonds (BABs) and Recovery Zone Economic Development Bonds (RZEDBs). Unlike other tax credit bonds, the interest rate on the BABs and RZEDBs is a rate agreed to by the issuer and investor and the issuers receive direct payments from the Treasury. In contrast, the Secretary of the Treasury sets the credit rate for the other TCBs. The authority to issue BABs and RZEDBs expired after 2010.\nEach TCB, with the exception of BABs, is designated for a specific purpose, location, or project. Issuers use the proceeds for public school construction and renovation; clean renewable energy projects; refinancing of outstanding government debt in regions affected by natural disasters; conservation of forest land; investment in energy conservation; and for economic development purposes. All of the TCBs are temporary tax provisions.\nThe QZAB and QSCB credit rate is set at 100% and the \u201cnew CREB\u201d and QECB credit rate is set at 70% of the interest cost. In contrast, the BAB tax credit rate is 35%. There were several bills introduced in the 111th Congress that would have extended all of the tax credit bond programs including BABs. Only QZABs were extended for the 2011 tax year with $400 million of capacity (P.L. 111-312).\nThe President\u2019s FY2013 budget proposes extending BABs permanently with a 30% credit through 2013, dropping to 28% thereafter. In the 112th Congress, several bills have been introduced to extend and expand a modified version of BABs, including H.R. 11, H.R. 736, H.R. 747, and H.R. 992. In the Senate, S. 796 would extend QZABs and QSCBs and S. 727 would require all municipal bonds to be issued as tax credit bonds. S. 3521 would extend QZABs with $400 million for each of 2012 and 2013. Another bill, S. 1436, would provide $50 billion of bond capacity for state and local government investment in transportation infrastructure. \nThis report will be updated as legislative events warrant.",
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    {
      "source": "University of North Texas Libraries Government Documents Department",
      "sourceLink": "https://digital.library.unt.edu/ark:/67531/metadc491320/",
      "id": "R40523_2010Jul29",
      "date": "2010-07-29",
      "retrieved": "2015-01-27T19:40:46",
      "title": "Tax Credit Bonds: Overview and Analysis",
      "summary": "Almost all state and local governments sell bonds to finance public projects and certain qualified private activities. Most of the bonds issued are tax-exempt bonds because the interest payments are not included in the bondholder's (purchaser's) federal taxable income. In contrast, Tax Credit Bonds (TCBs) are a type of bond that offers the holder a federal tax credit instead of interest. This report explains the tax credit mechanism and describes the market for the bonds.",
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          "id": "Taxation",
          "name": "Taxation"
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      "sourceLink": "https://digital.library.unt.edu/ark:/67531/metadc808025/",
      "id": "R40523_2010Apr23",
      "date": "2010-04-23",
      "retrieved": "2016-03-19T13:57:26",
      "title": "Tax Credit Bonds: Overview and Analysis",
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      "sourceLink": "https://digital.library.unt.edu/ark:/67531/metadc26145/",
      "id": "R40523_2009Apr16",
      "date": "2009-04-16",
      "retrieved": "2010-07-07T17:39:19",
      "title": "Tax Credit Bonds: Overview and Analysis",
      "summary": "Tax Credit Bonds (TCBs) are a type of bond that offers the holder a federal tax credit instead of interest. This report explains the tax credit mechanism and describes the market for the bonds. It also discusses related pieces of legislation and what the most common uses of the proceeds from TCBs are.",
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          "name": "Tax credits"
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