Download Locations

• Open CRS (User submitted)
• WikiLeaks

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. Currently, there are four types of TCBs: qualified zone academy bonds (QZABs), clean renewable energy bonds (CREBs), gulf tax credit bonds (GTCBs), and forestry conservation bonds (FCBs). 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 available in 1998. CREBs were created by the Energy Policy Act of 2005 (P.L. 109-58) and GTCBs by the Gulf Opportunity Zone Act of 2005 (P.L. 109-135). FCBs were created by the Food, Conservation, and Energy Act of 2008 (P.L. 110-234). Each TCB is designated for a specific purpose or type of project. Issuers of QZABs are required to use the proceeds to finance public school partnership programs in economically distressed areas. CREBs are designated for clean renewable energy projects. GTCB proceeds are for the refinancing of outstanding government debt in Gulf Coast regions affected by Hurricane Katrina. GTCBs could only be issued in 2006. FCBs are intended to help non-profits or government entities purchase then conserve forest land. All of the TCBs are temporary tax provisions. In December 2006, Congress extended the QZAB program, with modifications, for 2006 and 2007. Several bills have been introduced in the 110th Congress that would extend, expand, modify, or create new tax credit bonds. S. 2886 would extend QZABs two years, through 2009, and would add $400 million in capacity to the CREB program. H.R. 6049, which was approved by the House on May 21, 2008, would extend QZABs one year, expand CREBs, and create a new type of tax credit bond for energy conservation. Similarly, S. 3335 would extend QZABs one year, authorize $2 billion of new CREBs, and create energy conservation TCBs. This report will be updated as legislative events warrant.

Related Legislation:
• S.2886
• H.R.6049
• S.3335

XML