Recovery Zone Bonds

ARRA authorized two types of recovery zone bonds designed to promote economic development in distressed areas. Both bond programs expired December 31, 2010.

Recovery Zone Economic Development Bonds
Total allocation to Georgia local governments: $355,785,000

A category of Build America Bonds (BABs) for public infrastructure and facilities in “recovery zones”
Recovery zones are designated by the issuer as:
- Any area with significant poverty, unemployment, or home foreclosure rates,
- Any area currently designated as an Empowerment Zones or Renewal Community, and
- Any area designated as economically distressed by reason of closure or realignment of a military installation pursuant to the Defense Base Closure and Realignment Act of 1990
Eligible issuers include the State and local governments and certain “on-behalf-of” issuers
BABs may be issued as tax credit bond or a “Direct Payment” taxable bond
Benefit to issuer of a Recovery Zone Economic Development Bond is a 45% interest subsidy
100% of proceeds (net of debt service reserve and 2% cost of issuance cap) must be used for qualified economic development purpose
Qualified economic development purposes include: promoting development or other economic activity in a recovery zone:
- New money capital expenditures for property in a recovery zone
- Public infrastructure or facilities that promote economic activity in a recovery zone:
- Expenditures for job training and education programs

Proceeds can NOT be used for private activity
US allocation of $10 billion allocated among the States in proportion to their relative 2008 job losses
Suballocations to counties and large municipalities within a State made on the basis of relative job losses
Locality may waive its allocation for further allocation within the State
Must be issued by 12/31/10

Recovery Zone Facility Bonds
Total allocation to Georgia local governments: $533,677,000

A new category of tax-exempt private activity bonds for financing economic development in “recovery zones”
Proceeds can be used to finance depreciable property used in a trade or business in a Recovery Zone that:
- Was acquired, constructed, or renovated after the date of designation of a recovery zone
- The original use of which occurs in the recovery zone, and
- Substantially all of the use of the property is in the active conduct of a qualified business (any trade or business except for residential rental facilities, golf courses, massage parlors, gambling facilities, etc.)
Issuance not subject to State’s current Private Activity Bond cap
Eligible issuers include those entities currently eligible under state law to issue private activity bonds
US allocation of $15 billion allocated among the States in proportion to their relative 2008 job losses
Suballocations to counties and large municipalities within a State made on the basis of relative job losses
Locality may waive its allocation for further allocation within the State
Must be issued by 12/31/10

Contacts
DCA: Bobby Stevens, bstevens@dca.ga.gov
GSFIC: Susan Ridley, susan.ridley@gsfic.ga.gov

GA RZ Allocations

RZ Re-allocations and Issuance Status
December 31, 2010