n-09-33.pdf

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Part III - Administrative, Procedural, and Miscellaneous

New clean renewable energy bonds application solicitation and requirements

Notice 2009-33

SECTION 1. PURPOSE

This notice solicits applications for allocations of the present total national bond
volume limitation authority (“volume cap”) of $2.4 billion to issue new clean renewable
energy bonds (“New CREBs”) under § 54C(a) of the Internal Revenue Code (the
“Code”) to finance certain qualified renewable energy facilities described in § 45(d) of
the Code (also referred to in this notice as a qualified “project” or “projects”). This notice
also provides related guidance on the following: (1) eligibility requirements that a
project must meet to be considered for a volume cap allocation; (2) application
requirements and the application form for requests for volume cap allocations; (3) the
method that the Internal Revenue Service (“IRS”) and the Treasury Department will use
to allocate the volume cap; and (4) certain aspects of the applicable law and interim
guidance in this area.
Applications for New CREB volume cap allocations pursuant to this notice must
be filed in accordance with this notice by the following application deadline: August 4,
2009.

This notice will use the term “CREBs” for clean renewable energy bonds issued
under § 54 and the term “New CREBs” for new clean renewable energy bonds issued
under § 54C. To the extent that this notice refers generally to the clean renewable
energy bond program, the term “CREB program” will be used.
SECTION 2. BACKGROUND
.01 Introduction
Section 1303 of the Energy Tax Incentives Act of 2005, Pub. L. No. 109-58, 119
Stat. 594 (2005), added § 54 to the Code. Section 54 originally provided for a total
national volume cap of $800 million for CREBs to finance eligible clean renewable
energy projects and delegated to the Secretary the authority to allocate that volume
cap, subject to the constraint that the Secretary could allocate no more than $500
million of that volume cap to qualified borrowers that were governmental bodies (with
the balance to be allocated to qualified borrowers which were cooperative electric
companies). Section 54 originally required that CREBs had to be issued by an
expiration date of December 31, 2007.
Section 202 of the Tax Relief and Health Care Act of 2006, Pub. L. No. 109-432,
120 Stat. 2922 (2006) (the “2006 Act”), amended § 54 in three respects. First, the 2006
Act increased the total national bond volume cap for CREBs from $800 million to $1.2
billion. Second, the 2006 Act extended the expiration date for the issuance of CREBs
under the total authorized national volume cap of $1.2 billion from December 31, 2007,
to December 31, 2008. Third, the 2006 Act increased the maximum allocations or
reallocations to qualified borrowers which are governmental bodies from $500 million to
$750 million (with the balance to be allocated to cooperative electric companies). In

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2007, the IRS completed the allocation with respect to the volume cap under § 54 of the
Code, as amended.
Section 15316 of the Food, Conservation, and Energy Act of 2008, Pub. L. No.
110-246, 122 Stat. 1651 (2008) (the “2008 Food Act”), added new § 54A to the Code.
Section 54A provides certain general program requirements and operating rules for
qualified tax credit bonds. Section 54A(a) provides that a taxpayer that holds a qualified
tax credit bond on one or more credit allowance dates of the bond occurring during any
taxable year is allowed as a credit against Federal income tax for the taxable year an
amount equal to the sum of the credits determined under § 54A(b) with respect to such
dates.
Section 107 of the Energy Improvement and Extension Act of 2008, Division B of
Pub. L. No. 110-343, 122 Stat. 3765 (2008) (the “2008 Energy Act”) (the 2008 Food Act
and the 2008 Energy Act are referred to collectively as the “2008 Acts”), added new
§ 54C to the Code to provide for a new national volume cap of $800 million for New
CREBs to finance qualified renewable energy facilities. Section 107(b) of the 2008
Energy Act amended § 54A(d)(1) of the Code to provide that the term qualified tax
credit bond, in part, means a New CREB that is part of an issue that meets the
requirements of § 54A(d)(2), (3), (4), (5), and (6) regarding expenditures of bond
proceeds, information reporting, arbitrage, maturity limitations, and prohibitions on
financial conflicts of interest, respectively. Section 107(d) of the 2008 Energy Act
provides that amendments to the Code made by § 107 of the 2008 Energy Act apply to
obligations issued after October 3, 2008.

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Section 1111 of Title I of Division B of the American Recovery and Reinvestment
Act of 2009, Pub. L. No. 111-5, 123 Stat. 115 (2009) (the “2009 Act”), increased the
national bond volume cap for New CREBs by $1.6 billion.
Section 107(c) of the 2008 Energy Act extends the expiration date for the
issuance of CREBs under authority previously allocated by the IRS pursuant to § 54 of
the Code from December 31, 2008, to December 31, 2009. In addition to providing for
authority to issue New CREBs, the 2008 Acts amended certain provisions and
requirements applicable to CREBs with respect to New CREBs authorized under
§§ 54A and 54C of the Code. These amended requirements include: (1) requiring that
100 percent of the “available project proceeds” (as defined in § 54A(e)(4)) be used for
capital expenditures incurred for one or more qualified renewable energy facilities; (2)
reducing the amount of annual CREB credit under § 54C to 70 percent of the amount
determined under the general rules of § 54A(b); (3) providing that not more than one-
third of the national volume cap of $800 million may be allocated to qualified projects
owned by each of three types of qualified owners, including public power providers,
governmental bodies, and cooperative electric companies, respectively; (4) allowing
unrestricted investments of available project proceeds during a prescribed three-year
spending period and, subject to certain restrictions, allowing investments of certain
sinking funds expected to be used to repay the CREBs within certain limitations; (5)
permitting credit “stripping” or separation of the ownership of a qualified tax credit bond,
including a New CREB, and the entitlement to the credit under § 54A with respect to a
qualified tax credit bond under regulations to be promulgated by the Secretary; and (6)
omitting the requirement that the New CREBs be repaid in equal annual installments.

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.02 New clean renewable energy bonds under § 54C
Section 54C(a) provides that a “new clean renewable energy bond” or New
CREB means any bond issued as part of an issue if: (1) 100 percent of the available
project proceeds of such issue are to be used for capital expenditures incurred by
qualified owners, including governmental bodies, public power providers, or cooperative
electric companies, for one or more qualified renewable energy facilities; (2) the bond is
issued by a qualified issuer; and (3) the issuer designates such bond for purposes of
this section.
Section 54C(b) provides that the annual credit amount under § 54A(b) with
respect to any New CREB issued under § 54C shall be 70 percent of the amount so
determined without regard to § 54C(b).
Section 54C(d)(6) defines a “qualified issuer” as: (1) a public power provider; (2)
a cooperative electric company; (3) a governmental body; (4) a clean renewable energy
bond lender; or (5) a not-for-profit electric utility that has received a loan or loan
guarantee under the Rural Electrification Act. Section 54C(d)(2) provides that the term
“public power provider” means a State utility with a service obligation, as such terms are
defined in § 217 of the Federal Power Act (as in effect on the date of the enactment of
this paragraph). Section 54C(d)(3) provides that the term “governmental body” means
any State (including the District of Columbia and any possession of the United States)
or Indian tribal government, or any political subdivision thereof. Section 54C(d)(4)
provides that the term “cooperative electric company” means a mutual or cooperative
electric company described in § 501(c)(12) or § 1381(a)(2)(C). Section 54C(d)(5)
provides that the term “clean renewable energy bond lender” means a lender that is a

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cooperative that is owned by, or has outstanding loans to, 100 or more cooperative
electric companies and is in existence on February 1, 2002, and shall include any
affiliated entity controlled by such lender.
Section 54C(d)(1) defines the term “qualified renewable energy facility” to mean
any of the following qualified facilities (as determined under § 45(d) without regard to
paragraphs (8) and (10) thereof and to any placed in service date) owned by a public
power provider, a governmental body, or a cooperative electric company: (1) a wind
facility under § 45(d)(1); (2) a closed-loop biomass facility under § 45(d)(2); (3) an open-
loop biomass facility under § 45(d)(3); (4) a geothermal or solar energy facility under
§ 45(d)(4); (5) a small irrigation power facility under § 45(d)(5); (6) a landfill gas facility
under § 45(d)(6); (7) a trash combustion facility under § 45(d)(7); (8) a qualified
hydropower facility under § 45(d)(9); and (9) a marine and hydrokinetic renewable
energy facility under § 45(d)(11).
Section 54C(c) provides that the national bond volume cap for New CREBs is
$2.4 billion. Section 54C(c)(2) provides that the Secretary shall allocate no more than
one third of the volume cap to qualified projects owned by public power providers,
governmental bodies, and cooperative electric companies, respectively. Section
54C(c)(3)(A) provides that with respect to public power providers, after the Secretary
identifies the qualified projects of public power providers that are appropriate for
receiving an allocation of the CREB volume cap, the Secretary shall, to the maximum
extent practicable, make allocations among such projects in such manner that the
amount allocated to each such project bears the same ratio to the cost of such project
as the portion of the CREB volume cap that may be allocated to public power providers

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bears to the cost of all such projects. Section 54C(c)(3)(B) provides that with respect to
governmental bodies and cooperative electric companies, the Secretary shall make
allocations of the respective CREB volume caps among qualified projects of
governmental bodies and cooperative electric companies in such manner as the
Secretary determines appropriate.
SECTION 3. APPLICATION REQUIREMENTS IN GENERAL
Each application for an allocation of the New CREBs volume cap under § 54C
(“Application”) must be prepared and submitted in accordance with this section. In
order for an Application to comply with this section, among other things, the Application
must be prepared in substantially the form attached to this notice as Appendix A,
subject to such minor changes or variations as the IRS and the Treasury Department
may approve in their discretion. This Notice, including Appendix A, may be found on
the IRS web site at http://www.irs.gov/taxexemptbond/index.html
or
http://www.irs.gov/pub/irs-drop/
. By submitting an Application, the applicant agrees to
comply with the requirements of this notice.
a. Qualified issuer
. An Application must be submitted by a qualified issuer within
the meaning of § 54C(d)(6). A “qualified issuer” is: (1) a public power provider (as
defined in § 54C(d)(2)); (2) a cooperative electric company (as defined in § 54C(d)(4));
(3) a governmental body (as defined in § 54C(d)(3)); (4) a New CREB lender (as
defined in § 54C(d)(5)); or (5) a not-for-profit electric utility that has received a loan or
loan guarantee under the Rural Electrification Act. An Application must identify the
qualified issuer (including the qualified issuer’s Federal tax identification number) and

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must demonstrate that the entity constitutes a qualified issuer within the meaning of
§ 54C(d)(6).
b. Signatures
. An Application must be signed and dated by, and must include
the printed name and title of, an authorized official of the qualified issuer. For purposes
of this notice, the term “authorized official of the qualified issuer” means an officer,
board member, employee, or other official of the qualified issuer who is duly authorized
to execute legal documents on behalf of the qualified issuer in connection with incurring
debt of the qualified issuer (e.g., a mayor, chairperson of a city council, chairperson of a
board of directors, county or city administrator or manager, chief executive officer or
chief financial officer), similar to the kind of duly authorized official of an issuer who
would be authorized to execute documents in connection with an issuer’s declaration of
official intent to reimburse expenditures from the proceeds of a borrowing under
§ 1.150-2(e), Income Tax Regs.
c. Contact person
. An Application must designate one or more persons with
knowledge regarding the project that the qualified issuer duly authorizes to discuss with
the IRS any information relating to the Application. The designation must include the
designee’s name, title, telephone number, fax number, and mailing address. If a
designee is not an official or officer of the issuer, the Application must include an
executed Form 8821 (Taxpayer Information Authorization), authorizing the disclosure of
taxpayer information specifically relating to the Application to the designee.
d. Addresses
. An Application must be submitted by hard copy in duplicate
accompanied by a copy of the Application in electronic format on compact disc (“CD”)

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by mail to the IRS, TEB CREBs Allocations, 1122 Town & Country Commons, St. Louis,
Missouri 63017.
e. Due date
. An Application must be filed with the IRS on or before the
Application deadline of August 4, 2009.
f. Project description
. Each Application must contain the information required by
this subsection f.
(i) Qualified owner. Each Application must identify the public power provider,
governmental body, or cooperative electric company expected to own the qualified
renewable energy facility. A “public power provider” is a State utility with a service
obligation, as such terms are defined in § 217 of the Federal Power Act (as in effect on
October 3, 2008). A “governmental body” is any State or Indian Tribal government, or
any political subdivision thereof (within the meaning of § 103 of the Code). A
“cooperative electric company” is a mutual or cooperative electric company described in
§§ 501(c)(12) or 1381(a)(2)(C) of the Code. The Application must demonstrate that the
entity is a public power provider, governmental body, or cooperative electric company
within the meaning of § 54C(d)(2), (3), and (4), respectively.
(ii) Qualified project
. Each Application must describe in reasonable detail the
qualified renewable energy facility or facilities constituting the project to be financed with
the proceeds of the New CREBs. The Application must demonstrate that each project
will constitute a “qualified renewable energy facility” under § 54C(d)(1). The Application
must indicate the expected date that the acquisition and construction of each project will
commence and the expected date that each project will be placed in service.

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The Application must contain a certification by an independent, licensed engineer
that each project will meet the requirements for a “qualified facility” under § 45(d) (but
without regard to § 45(d)(8) and (10) and to any placed in service date), and that the
project will be technically viable and will produce electricity.
If the project is a qualified hydropower facility under § 45(d)(9) producing
incremental hydropower production (as defined under § 45(c)(8)(B)), then the
certification also must state that the project consists only of efficiency improvements or
additions to capacity that produce additional production as described in § 45(c)(8)(B)
based on a methodology that would meet Federal Energy Regulatory Commission
(FERC) standards. If the project is a qualified hydropower facility under § 45(d)(9) for
qualified hydropower production at a nonhydroelectric dam under § 45(c)(8)(C), then the
certification also must state that: (i) the facility, when constructed, will meet FERC
licensing requirements and other applicable environmental, licensing and regulatory
requirements; and (ii) the facility will be operated so that the water surface elevation at
any given location and time that would have occurred in the absence of the
hydroelectric project is maintained, subject to any license requirements imposed under
applicable law that change the water surface elevation for the purpose of improving
environmental quality of the affected waterway.
(iii) Prior allocations and related projects
. Each Application must describe the
amount of CREB volume cap previously allocated to each project under § 54 of the
Code described in the Application and to any “related projects.” For purposes of this
notice and the Application, the term “related projects” means projects that are owned by
the same entity, or a “related party” as defined in § 1.150-1(b), that are of the same type

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under § 45(d), located on the same site, and integrated, interconnected, or directly or
indirectly dependent on each other, based on all the facts and circumstances (“Related
Projects”). For purposes of the allocation methodology described in section 6 of this
notice, a facility the construction of which causes an increase in capacity (measured in
units of power) of a project for which an Applicant previously received an allocation
under § 54 will not be treated as a Related Project with respect to such project.
(iv) Location of project
. The Application must indicate the location of the project.
(v) Regulatory approvals
. The Application must describe a plan to obtain all
necessary Federal, state and local regulatory approvals for the project.
g. Plan of financing. The Application must contain a reasonably detailed
description of the plan of financing for the project, including all reasonably expected
sources and uses of financing and other funds, the status of such financing, the
anticipated date of bond issuance, the sources of security and repayment for the bonds,
the aggregate face amount of bonds expected to be issued for the project, and the
issuer’s reasonably expected schedule for spending proceeds of New CREBs. If the
owner intends to use the proceeds of New CREBs to reimburse amounts paid with
respect to a qualified project, the Application must demonstrate that the requirements
under § 54A(d)(2)(D) will be met.
h. Dollar amount of allocation requested
. The Application must specify the dollar
amount of the volume cap requested for the project.
SECTION 4. REQUIRED DECLARATIONS IN APPLICATIONS
Each application submitted under this notice must include the following
declaration signed and dated by an authorized official of the qualified issuer who has

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personal knowledge of the relevant facts and circumstances: “Under penalties of
perjury, I declare that I have examined this document and, to the best of my knowledge
and belief, all of the facts contained herein are true, correct, and complete.”
SECTION 5. CONSENT TO DISCLOSURE OF ALLOCATION
In order to provide the public with information on how the volume cap authorized
by Congress has been allocated and to facilitate oversight of the CREB program, the
IRS intends to publish the results of the allocation process. The information will be the
most useful to the public if it identifies the specific allocations awarded. Pursuant to
§ 6103, consent is required in order for the IRS to disclose identifying information with
respect to applicants awarded an allocation. Therefore, the IRS requests that each
applicant submit with the Application a declaration consenting to the disclosure by the
IRS of the name of the applicant (issuer), the name of the qualified renewable energy
facility owner (if other than the issuer), the type and location of the qualified renewable
energy facility that is the subject of the Application, and the amount of the New CREBs
volume cap allocation for such facility in the event the facility receives an allocation. To
provide valid consent, the declaration must be in the form set forth in Appendix B. An
applicant is not required to provide a declaration consenting to disclosure in order to
receive an allocation. The IRS will not publish identifying information with respect to
applications that are not awarded an allocation of volume cap or while applications are
pending.
SECTION 6. VOLUME CAP ALLOCATIONS AND METHODOLOGY
a. In general
. New CREB volume cap under § 54C will be allocated in
accordance with this section for qualified projects for which Applications meeting the

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requirements of this notice have been filed with the IRS on or before the Application
deadline set forth in this notice. For purposes of this section 6, all Related Projects, as
defined in section 3(f)(iii), will be treated as a single project.
b. Allocation methodology for governmental bodies and cooperative electric
companies. Up to one-third of the total national volume cap will be allocated to qualified
projects owned by governmental bodies and up to an additional one-third of the total
national volume cap will be allocated to qualified projects owned by cooperative electric
companies. With respect to each such category of qualified owners, the full amount of
volume cap requested will be allocated beginning with the project for which the smallest
dollar amount of volume cap has been requested and continuing with the project for
which the next-smallest dollar amount of volume cap has been requested until the total
amount of volume cap set aside for that category of qualified owners has been
exhausted or until all applications from that category of qualified owners have been
granted, whichever occurs first. For this purpose, except for projects consisting of
increases in capacity as described in section 3(f)(iii) of this notice, any amount of the
CREB volume cap previously allocated to a project under § 54 (for CREBs) of the Code
will be taken into account by increasing the amount requested for that project in the
Application submitted pursuant to this notice by the amount previously allocated to the
project. A project that causes an increase in capacity of an existing project or of a
project that was previously allocated CREB volume cap under § 54 will be treated as a
separate, new project for purposes of the allocation of New CREBs volume cap under
this section.

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c. Allocation methodology for public power providers. Up to one-third of the
total national volume cap will be allocated to qualified projects owned by public power
providers using the pro rata allocation method described below. The amount of volume
cap allocated to a project for a public power provider will bear the same proportion to
the national volume cap allocated to public power providers as the amount of volume
cap requested for that project bears to the total amount of volume cap requested for all
projects by public power providers.
SECTION 7. INSUBSTANTIAL DEVIATIONS FROM APPLICATION PROVISIONS
Generally, any allocation of CREBs or New CREBs volume cap is valid for
purposes of § 54 or § 54C, respectively, with respect to bonds issued pursuant to such
allocation that are used to finance qualified renewable energy facilities described in the
application. An allocation of CREBs or New CREBs under §§ 54 and 54C, respectively,
is also valid notwithstanding insubstantial deviations with respect to the information
submitted in the Application. Whether a deviation with respect to the information
submitted in the Application is insubstantial is determined based on all the facts and
circumstances using criteria similar to those used under § 5f.103-2(f)(2) and Prop. Reg.
§ 1.147(f)-1(b)(6), as amended from time to time, relating to the insubstantial deviation
in the information required for public approval of an issue of governmental bonds under
§ 147(f) of the Code. Applications for approval of specific insubstantial deviations must
be submitted by hard copy and in electronic format on compact disk (“CD”) by mail to
IRS, TEB CREBs Determinations, 1122 Town & Country Commons, St. Louis, Missouri
63017. An application for approval of a specific insubstantial deviation must include (a)
a detailed description of the proposed deviation, (b) facts establishing the continued

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technical viability of the project and that no other taxpayer or the Government will be
prejudiced, (c) a copy of the allocation letter issued by the IRS, and (d) a declaration
pursuant to section 4 of this notice signed by an authorized person in accordance with
section 3.b. of this notice.
SECTION 8. INFORMATION REPORTING
Section 54A(d)(3) requires issuers of New CREBs to submit information reporting
returns to the IRS similar to those required to be submitted under § 149(e) for tax-
exempt State or local governmental bonds. These information reporting returns are
required to be submitted at the same time and in the same manner as those under
§ 149(e) on such forms as shall be prescribed by the IRS for such purpose. Pending
further guidance from the IRS regarding the applicable forms to be used for such
information reporting for New CREBs, in the case of an issue of New CREBs, the issuer
must submit to the IRS an information return on Form 8038, Information Return for Tax-
Exempt Private Activity Bond Issues, at the same time and in the same manner as
required under § 149(e), with modifications as described below. Issuers of New CREBs
should complete Part II of Form 8038 by checking the box on Line 20c (Other), writing
“New Clean Renewable Energy Bonds” or “New CREBs” in the space provided for the
bond description, and entering the issue price of the New CREBs in the Issue Price
column. For purposes of this notice, the term “issue” has the meaning used for tax-
exempt bond purposes in § 1.150-1(c).
SECTION 9. RELIANCE ON NOTICE AND INTERIM GUIDANCE
(a) Generally

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Pending the promulgation and effective date of applicable future regulations or
other published administrative guidance, taxpayers may rely on the interim guidance
provided in this notice and, to the extent not inconsistent with §§ 54A and 54C and this
notice, taxpayers may also rely on Notice 2006-7, 2006-1 C.B. 559 (March 6, 2006),
and Notice 2007-26, 2007-14 I.R.B. 870 (April 2, 2007).
(b) Credit Rate

For New CREBs issued under § 54C, the credit rate is determined as of the date
that the issue of New CREBs is sold. The New CREB credit rate is published for that
date by the Bureau of Public Debt on its Internet site for State and Local Government
Series securities at: https://www.treasurydirect.gov
. The credit rates will be determined
by the Treasury Department in accordance with Notice 2009-15, 2009-6 I.R.B. 449
(February 9, 2009).
(c) Maximum term

The maximum term for a New CREB is determined under § 54A(d)(5) by using a
discount rate equal to 110 percent of the long-term adjusted AFR, compounded semi-
annually, for the month in which the bond is sold. For purposes of this notice, a bond is
“sold” on the first day on which there is a binding written contract for the sale or
exchange of the bond. The maximum term for a New CREB is published daily by the
Bureau of Public Debt on its Internet site for State and Local Government Series
securities at: https://www.treasurydirect.gov
.
(d) Permitted sinking fund yield

Section 54A(d)(4)(C) provides that an issue shall not be treated as failing to meet
the arbitrage requirements of § 148 by reason of any fund which is expected to be used

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to repay the issue if: (i) the fund is funded at a rate not more rapid than equal annual
installments; (ii) the fund is funded in a manner reasonably expected to result in an
amount not greater than an amount necessary to repay the issue; and (iii) the yield on
such fund is not greater than the discount rate determined under § 54A(d)(5)(B) (the
“permitted sinking fund yield”).
The permitted sinking fund yield is determined under § 54A(d)(5)(B) by using a
rate equal to 110 percent of the long-term adjusted AFR, compounded semi-annually,
for the month in which the bond is sold. The IRS publishes the long-term adjusted AFR,
compounded semi-annually, each month in a revenue ruling published in the Internal
Revenue Bulletin. The Bureau of Public Debt publishes the permitted sinking fund yield
for each month on its Internet site for State and Local Government Series securities at:
https://www.treasurydirect.gov
.
(e) Joint ownership of qualified renewable energy facilities
Joint ownership of qualified renewable energy facilities financed with New
CREBs will be recognized in a manner similar to the recognition of joint ownership of
output projects under the private activity bond restrictions on tax-exempt bonds under
§ 141.
(f) Allocation and accounting

In determining whether all or a part of a facility will be eligible to be a qualified
renewable energy facility for New CREBs purposes, allocation and accounting rules
similar to those employed for mixed-use projects will be applied.
(g) Qualified expenditures

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For purposes of the requirement under § 54C(a)(1) to use 100 percent of the
available project proceeds of an issue of New CREBs for qualified costs to finance
capital expenditures for qualified renewable energy facilities, available project proceeds
used to finance a reserve, sinking, or replacement fund (e.g., a debt service reserve
fund to secure the New CREBs), including a Qualified Tax Credit Bond sinking fund, will
be treated as nonqualified costs. Except in limited circumstances involving
reimbursements to which § 54A(d)(2)(D) applies, costs of acquiring existing facilities,
including refinancing costs (as contrasted with costs of enhancements, repair, or
rehabilitation of existing facilities), generally will be treated as nonqualified costs for
purposes of the 100 percent use of proceeds test under § 54C(a)(1).
(h) Coordination with tax credit under § 45K

A qualified renewable energy facility under § 54C(d)(1) shall include a qualified
facility under § 45(d)(6) without regard to the limitation under § 45(e)(9)(A) (which
limitation disallows the renewable electricity production credit under § 45 for certain
facilities which receive the nonconventional source production credit under § 45K),
provided that the owner of the qualified renewable energy facility has not been allowed
a credit under § 45K during any taxable year with respect to landfill gas to be used by
the qualified renewable energy facility.
(i) Cooperative electric companies treated like state or local governmental
entities
Cooperative electric companies under § 54C(d)(4) will be treated as
“governmental persons” under § 1.141-1(b) for purposes of (1) applying the arbitrage
investment restrictions under § 148, including the program investment definition under

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§ 1.148-1(b), and (2) determining whether New CREBs are private activity bonds under
§ 141 in applying any particular arbitrage investment restriction that depends on
whether bonds are private activity bonds.
(j) Expiration of allocation

An allocation of New CREBs volume cap is valid for 3 years after the date of the
letter issuing the allocation (the “allocation date”). An allocation of unused volume cap
will expire and revert back to the IRS on the first day following 3 years after the
allocation date. Any bonds issued pursuant to such expired allocation will not be New
CREBs for purposes of §§ 54A and 54C. Under a program to be announced, the IRS
plans to reallocate any unallocated volume cap, and any allocated volume cap that has
been relinquished or that has reverted to the IRS. For purposes of reallocation,
relinquished volume cap means volume cap previously allocated to a qualified issuer to
finance a qualified project for which the IRS has received written notice from a duly
authorized official of the qualified issuer stating that the issuer will not issue CREBs
pursuant to the allocation.
To facilitate reallocation of the unused New CREBs volume cap, a qualified
issuer that determines it will not issue bonds within 3 years from the allocation date
must notify the IRS of such determination in writing within 90 days after the
determination is made. If no determination is made, a qualified issuer that fails to issue
bonds pursuant to its allocation within the 3-year period must notify the IRS of such
failure within 90 days after the end of the 3-year period. The notification must include a
copy of the original allocation letter and must be submitted by hard copy and in
electronic format on compact disk (“CD”) by mail to the IRS, TEB CREBs Forfeiture,

19

20
1122 Town & Country Commons, St. Louis, Missouri 63017.
Consistent with allocation requirements under § 54C(c)(2), any relinquished or
reverted New CREB volume cap under § 54C will be reallocated only for a qualified
project owned or to be owned by the same category of qualified owner as the owner
that originally received the relinquished or reverted allocation. The IRS does not plan to
reallocate any unused, relinquished, or unallocated portion of the CREB volume cap
authorized under § 54 of the Code.
SECTION 10. EFFECT ON OTHER DOCUMENTS
To the extent not amended by the 2008 Acts and 2009 Act, references to § 54 of
the Code under Notice 2006-7 and Notice 2007-26 apply as if the references were to
corresponding provisions of §§ 54A and 54C.
SECTION 11. DRAFTING INFORMATION
The principal authors of this notice are Zoran Stojanovic and Timothy L. Jones of
the Office of Associate Chief Counsel (Financial Institutions and Products). However,
other personnel from the IRS and the Treasury Department participated in its
development. For further information regarding this notice and the Application, contact
Janae Lemley on (636) 255-1202 (not a toll-free call).

APPENDIX
A
APPLICATION
FOR ALLOCATION OF
NEW
CLEAN RENEWABLE ENERGY BOND VOLUME CAP
Internal Revenue Service
TEB CREBs Allocations
1122 Town & Country Commons
St. Louis, Missouri 63017
The following constitutes the application (“Application”) of (Name) (the “Applicant”) for
allocation of new clean renewable energy bond (“New CREB”) volume cap under section 54C(c)
of the Internal Revenue Code (the “Code”) (unless otherwise noted, section references herein are
to the Code) to finance the project described below. (If a single Application is used to request
New CREB volume cap for more than one project, then all of the required information in the
Application must be provided separately for each project.)
1. Name of Applicant/Issuer_________________________________________________
Street Address ___________________________________________________________
City__________________________State_______________________Zip____________
Telephone Number _______________________ Fax Number _____________________
Taxpayer Identification Number _____________________________________________
2. Status of Issuer – (Select as appropriate)
The Applicant/Issuer is a “qualified issuer” under section 54C(d)(6) because it is --
(i) a “clean renewable energy lender” that is a cooperative owned by, or has
outstanding loans to, 100 or more cooperative electrical companies and was in
existence on February 1, 2002, or is an affiliate that is owned by such a lender, as
demonstrated by the attached documents included as Exhibit D.
(ii) a “cooperative electric company” that is a mutual or cooperative electric
company described in section 501(c)(12) or section 1381(a)(2)(C), as
demonstrated by the attached documents included as Exhibit D, including a copy
of the determination letter previously obtained from the IRS, if any (or other
relevant documents).

2
(iii) a “governmental body” that is a State, a possession of the United States,
the District of Columbia, an Indian tribal government, or any political subdivision
of the foregoing, as demonstrated by the attached documents included as Exhibit
D. (Supporting documents are not required to be attached for governmental
bodies that are general purpose governmental entities with substantial taxing,
eminent domain, and police powers such as generally a county, city, municipality,
township, or borough.)
(iv) a “public power provider” that is a State utility with a service obligation,
as such terms are defined in section 217 of the Federal Power Act (as in effect on
October 3, 2008), as demonstrated by the attached documents included as Exhibit
D.
(v) a “not-for-profit electric utility which has received a loan or loan
guarantee under the Rural Electrification Act,” as demonstrated by the attached
documents included as Exhibit D. For this purpose, supporting documents should
include copies of the articles of incorporation and bylaws of the not-for-profit
electric utility, and of the loan or loan guarantee documents.
3. Name of Qualified Renewable Energy Facility Owner __________________________
___________________________________________________________________________
Street Address ___________________________________________________________
City State Zip
Telephone Number
Fax Number
4. Status of Owner – (Select as appropriate)
The Owner is a qualified entity under section 54C(d)(1) because it is --
(i) a qualified owner under section 54C(d)(4) that is a mutual or cooperative
electric company under section 501(c)(12) or section 1381(a)(2)(C), as
demonstrated by the attached documents included as Exhibit D,
including a copy of the determination letter previously obtained from the
IRS, if any (or other relevant documents).
(ii) a qualified owner under section 54C(d)(3) that is a “governmental body”
and is a State, a possession of the United States, the District of
Columbia, an Indian tribal government, or any political subdivision of

3
the foregoing, as demonstrated by the attached documents included as
Exhibit D. (Supporting documents are not required to be attached for
governmental bodies that are general purpose governmental entities
with substantial taxing, eminent domain, and police powers such as
generally a county, city, municipality, township, or borough.)
(iii) a qualified owner under section 54C(d)(2) that is a “public power
provider” and is a State utility with a service obligation, as such terms
are defined in section 217 of the Federal Power Act (as in effect on
October, 3 2008), as demonstrated by the attached documents included
as Exhibit D. For this purpose, supporting documents should include
copies of the articles of incorporation and bylaws of the electric utility.
5. Name of Qualified Renewable Energy Facility.
________________________________________________________________________
________________________________________________________________________
6. Detailed Description of the Qualified Renewable Energy Facility. A reasonably
detailed description of the qualified renewable energy facility (the “Project”) is set forth
below or in attached Exhibit A, including reasonably expected costs of components, such
as land, site prep, equipment, installation, other dedicated facilities such as transmission,
Project capacity and projected or expected use of the power produced at the Project:
7. Qualified Renewable Energy Facility. The Project is a “qualified renewable energy
facility” within the meaning of section 54C(d)(1) of the Code because it is a “qualified
facility” (as determined under section 45(d) of the Code without regard to section
45(d)(8) and (10) and to any placed in service date) that is (select as appropriate)--
(1) a wind facility – a facility using wind to produce electricity;
(2) a closed-loop biomass facility – a facility using closed-loop biomass (as
defined in section 45(c)) to produce electricity or, if owned by the taxpayer prior to
January 1, 2008, a facility using closed-loop biomass to produce electricity which is
modified to use closed-loop biomass to co-fire with coal, with other biomass, or with
both, but only if the modification is approved under the Biomass Power for Rural
Development Programs or is part of a pilot project of the Commodity Credit Corporation;
(3) an open-loop biomass facility – a facility using open-loop biomass (as
defined in section 45(c)) to produce electricity and in the case of a facility using

4
agricultural livestock waste nutrients, the nameplate capacity rating of which is not less
than 150 kilowatts;
(4) a geothermal or solar energy facility – a facility using geothermal energy
(as defined in section 45(c)) or solar energy to produce electricity (not including a facility
described in section 48(a)(3) the basis of which is taken into account by the taxpayer for
purposes of determining the energy credit under section 48 of the Code);
(5) a small irrigation power facility – a facility using small irrigation power
(as defined in section 45(c)) to produce electricity;
(6) a landfill gas facility – a facility producing electricity from gas derived
from the biodegradation of municipal solid waste (as defined in section 45(c));
(7) a trash combustion facility – a facility that burns municipal solid waste (as
defined in section 45(c)) to produce electricity;
(8) a qualified hydropower facility – a facility engaged in qualified
hydropower production (as defined in section 45(c)); or

(9) a marine and hydrokinetic renewable energy facility – a facility producing
electricity from marine and hydrokinetic renewable energy (as defined in section 45(c))
with a nameplate capacity of at least 150 kilowatts.
8. Construction Commencement Date and Placed in Service Date. The Borrower begun
or expects to begin the construction, installation and equipping of the Project on
______________________. The Borrower expects that the Project will be placed into
service on or before _________________.
9. Independent Engineer’s Certificate: (If the Application is for more than one Project, a
separate certificate must be included for each Project.) Attached as Exhibit B hereto is a
certification by an independent, licensed engineer to the effect that the Project will be a
“qualified renewable energy facility” within the meaning of section 54C(d)(1) and a
“qualified facility” within the meaning of section 45(d) of the Code (without regard to
section 45(d)(8) and (10) of the Code and to any placed in service date), and that the
project is technically viable and will produce electricity.
If the project is a qualified hydropower facility under section 45(d)(9)--
a. producing incremental hydropower production, then the engineering certificate
also must state that the project consists only of efficiency improvements or
additions to capacity that produce additional production as described in section

5
45(c)(8)(B) based on a methodology that would meet Federal Energy Regulatory
Commission (FERC) standards; or
b. that is a nonhydroelectric dam under section 45(c)(8)(C), then the engineering
certificate also must state that the facility, when constructed, (a) will meet FERC
licensing requirements and other applicable environmental, licensing and
regulatory requirements, and (b) will be operated so that the water surface
elevation at any given location and time that would have occurred in the absence
of the hydroelectric project is maintained, subject to any license requirements
imposed under applicable law that change the water surface elevation for the
purpose of improving environmental quality of the affected waterway.
10. Location of the Project:
Project address or physical location (do not include postal box numbers or mailing
address) ________________________________________________________________
City
State Zip
County where Project is located _____________________________________________
11. Individual to contact for more information about the Project:
Individual Name and Title

Company Name

Street Address

City State Zip
Telephone Number ____________________________
Fax Number __________________________________
Email Address __________________________________
(Include as appropriate) The contact person is not an authorized official or officer of the
Issuer and a properly executed Form 8821 is included with this Application that
authorizes the disclosure by the IRS of information that relates to this Application and the
Project(s) described above to the contact person.

6
12. Regulatory Approvals. Identify each regulatory body, the action that must be taken,
status of any pending action and the remaining timeframe required to obtain each
required approval such as a FERC approval, or siting permits. The plan of the Applicant
for obtaining such approvals is as follows: (or attach an Exhibit)
13. Plan of Financing. Include a reasonably detailed description of the plan of financing for
the Project, including all reasonably expected sources and uses of financing and other
funds, the status of such financing, the anticipated date of bond issuance, the sources of
security and repayment for the bonds, the aggregate face amount of bonds expected to be
issued for the Project, and the issuer’s reasonably expected schedule for spending
proceeds of New CREBs. Attached as Exhibit C is a plan of financing for the Project.
14. Reimbursements. (For reimbursements, include the following statement.) The Issuer
intends to use the proceeds of New CREBs to reimburse costs of the Project in
accordance with section 54A(d)(2)(D). (In addition, the Issuer must demonstrate that the
requirements of § 54A(d)(2)(D) will be met.)
15. Dollar Amount of Allocation Requested for the Project. To finance the Project, the
Applicant hereby requests a New CREB allocation in the amount of
$___________________.
16. Prior Allocations for the Project or Related Project. (If the Project or any Related
Project (as defined in section 3.f.(iii) of this notice) previously received an allocation of
CREBs volume cap under section 54 of the Code, then this paragraph must include a
statement to that effect.)
[If applicable, include the following statement: On (Insert date), the Project previously
received a CREBs volume cap allocation in the amount of $_______________. A copy
of the IRS allocation letter for that allocation is attached.]
[If applicable, include the following statement: On (Insert date), a Related Project
previously received a CREBs volume cap allocation in the amount of $_____________.
A copy of the IRS allocation letter for that allocation is attached.]
17. Other Allocation Requests for Related Projects to the Project. Included below are
descriptions of other projects that are Related Projects (as defined in paragraph 16 above)
to the Project for which the applicant or other entities are applying for a CREB volume
cap allocation. With respect to an applicant on a Related Project other than the
Applicant, set forth below are the names, addresses, contact persons, and telephone
numbers for any such applicant.

7

I hereby certify that I am an authorized officer or official of the Applicant and am duly
authorized to execute legal documents on behalf of the Applicant in connection with
incurring debt and that I am duly authorized to execute legal documents on behalf of the
Application in making this Application. Under penalties of perjury, I declare that (i) I have
knowledge of the relevant facts and circumstances relating to this Application and the
Project(s), (ii) I have examined this Application, and (iii) to the best of my knowledge and
belief, all of the facts contained in this Application are true, correct and complete.

By: ________________________________________

Name and Title: ______________________________

Date: _______________________________________

8

EXHIBIT A
DESCRIPTION OF THE PROJECT
(RESPONSE TO QUESTION 6 OF THE APPLICATION)
(Attached hereto)

9

EXHIBIT B
ENGINEER’S CERTIFICATE
(
RESPONSE TO QUESTION 9 OF THE APPLICATION)
(Attached hereto in substantially the form below)

Dated: ___________, 2009
This certificate is being provided to the Internal Revenue Service (“IRS”) in connection
with an application (the “Application”) by [Name of Applicant Issuer:
___________________________] (the “Issuer”) to the IRS requesting an allocation of volume
cap authority to issue new clean renewable energy bonds (“New CREBs”) under section 54C of
the Internal Revenue Code, as amended (the “Code”). The New CREBs are being issued to
make a loan to [Name of the qualified renewable energy facility owner]: _______________ (the
“Owner”), to finance the costs of certain qualified renewable energy facility or facilities
described more particularly in the Application (the “Project”). The undersigned hereby certifies
as follows:
1. I am an independent, licensed engineer, duly qualified to practice the
profession of engineering under the laws of the State of ______________, and I am not
an officer or employee of the Issuer or the Borrower.
2. I have reviewed the Application for a New CREBs volume cap allocation
(including the exhibits thereto) of the Issuer of even date herewith describing the Project.
To the best of my knowledge, information, and belief, the Project will meet the
requirements to be a “qualified renewable energy facility” under section 54C(d)(1) of the
Code and correspondingly a “qualified facility” under section 45(d) of the Code
(determined without regard to section 45(d)(8) and (10) of the Code and without regard to
any placed in service date).
[(Include as applicable) To the best of my knowledge, information, and belief, the
Project is a qualified hydropower facility under section 45(d)(9)--
a. producing incremental hydropower production consisting only of efficiency
improvements or additions to capacity that produce additional production as
described in section 45(c)(8)(B) based on a methodology that would meet Federal
Energy Regulatory Commission (FERC) standards. or
b. that is a nonhydroelectric dam under section 45(c)(8)(C) and the facility, when
constructed, (a) will meet FERC licensing requirements and other applicable
environmental, licensing and regulatory requirements, and (b) will be operated so

10
that the water surface elevation at any given location and time that would have
occurred in the absence of the hydroelectric project is maintained, subject to any
license requirements imposed under applicable law that change the water surface
elevation for the purpose of improving environmental quality of the affected
waterway.]
3. To the best of my knowledge, information and belief, the Project is
technically viable and, when constructed, will produce electricity.
IN WITNESS WHEREOF, I have hereunto affixed my official signature on the date of this
Engineer’s Certificate.
By: ____________________________________________
Seal and/or License number:
Name and Title: __________________________________
_______________________
Company: _______________________________________

11

EXHIBIT C
P
LAN OF FINANCING
(
RESPONSE TO QUESTION 13 OF THE APPLICATION)
(Attached hereto)

12
E
XHIBIT D
DOCUMENTS REGARDING ISSUER OR BORROWER ORGANIZATIONAL STATUS
(RESPONSE TO QUESTION 2 OR 4 OF THE APPLICATION, AS APPLICABLE)
(Attached hereto)

APPENDIX B

CONSENT TO PUBLIC DISCLOSURE
OF CERTAIN NEW CLEAN RENEWABLE ENERGY BOND
APPLICATION INFORMATION

In the event that the Application of [(Insert name of applicant here):
____________________________] (the “Applicant”) for an allocation of authority to
issue new clean renewable energy bonds (“New CREBs”) under section 54C of the
Internal Revenue Code is approved, the undersigned authorized representative of the
Applicant hereby consents to the disclosure by the Internal Revenue Service through
publication of a Notice in the Internal Revenue Bulletin or a press release of the name of
applicant (issuer), the name of the qualified renewable energy facility owner (if other
than the issuer), the type and location of the facility that is the subject of the Application,
and the amount of the allocation, if any, of volume cap authority to issue New CREBs
for such facility. The undersigned understands that this information might be published,
broadcast, discussed or otherwise disseminated in the public record.

This authorization shall become effective upon the execution thereof. Except to the
extent disclosure is authorized herein, the returns and return information of the
undersigned taxpayer are confidential and are protected by law under the Internal
Revenue Code.

I certify that I have the authority to execute this consent to disclose on behalf of the
taxpayer named below.

Date: __________________ Signature: _________________________

Print name: _________________________

Title: _________________________

Name of Applicant-Taxpayer: ___________________________________

Taxpayer Identification Number: _________________________________

Taxpayer’s Address: ____________________________________________
____________________________________________
____________________________________________

Note: Treasury Regulations require that the Internal Revenue Service must receive this
consent within 60 days after it is signed and dated.