On March 18, 2010, President Obama signed the Hiring Incentives to Restore Employment Act ("HIRE Act"), more commonly referred to as the "Jobs Bill." Among other things, the HIRE Act permits issuers of Qualified School Construction Bonds (QSCBs), Clean Renewable Energy Bonds (CREBs), Qualified Zone Academy Bonds (QZABs), and Qualified Energy Conservation Bonds (QECBs) to elect to issue these taxable bonds as direct payment bonds. Previously, issuers' only option was to issue these bonds as traditional tax credit bonds for which bondholders receive a tax credit in lieu of all or a portion of bond interest. Now, the HIRE Act allows issuers to elect to issue these bonds as direct payment bonds for which the issuers receive Build America Bond-style direct payments to offset their bond interest cost.
The HIRE Act provides that issuers of QSCBs and QZABs who elect to receive the direct payment will receive payments equal to the lesser of the actual interest rate of the bonds on each interest payment date or the tax credit rate set daily by the Treasury for municipal tax credit bonds. Issuers of CREBs and QECBs who elect to receive the direct payment will receive payments equal to 70% of interest costs.
Note that the direct payments are "refundable credits," meaning they are subject to reduction for tax or other liabilities of the issuer to any federal agency, including employment tax liabilities.
If you have any questions about this new legislation or would like to learn more about these or other municipal financing vehicles, please contact one of the attorneys listed on the right.
Day Pitney Alert
Joy Harmon Sperling and Rachel Packer wrote an article, "No Such Thing As A Free House? NJ Court Says Otherwise," for Law360. The article examines a recent unpublished opinion rendered by the Superior Court of New Jersey, Bergen County in Anim Investment Co. v. Shaloub, No. F-30508-15, 2015 N.J. Super. Unpub. LEXIS 3042 (Ch. Div. June 30, 2016).
Day Pitney Advisory
Judith Blank and Kristin Burgess authored the article, "Anti-discrimination rules for contractors expanded," for the Fairfield County Business Journal. The article discusses best practices for the recent changes in the state's nondiscrimination, affirmative action and supplier diversity program, and how statutes will be extended to municipalities and quasi-public agencies pursuant to recent legislation starting on October first.
Day Pitney LLP has once again been recognized as Connecticut's number one bond counsel firm by volume, serving as bond counsel on issues in Connecticut totaling approximately $1.7 billion in 2016, according to The Bond Buyer, a daily newspaper serving the municipal bond industry.
Day Pitney Press Release
Hartford, Conn., May 26, 2016 - Day Pitney LLP represented the State of Connecticut as lead bond counsel and disclosure counsel in a general obligation refunding bond sale of $501.4 million. The sale resulted in saving of $75.5 million in debt service costs over the life of the refinanced bonds. The Nappier administration has an active debt refunding program which has saved taxpayers $1.1 billion to date.
Hartford, CT, March 23, 2016 - Day Pitney LLP represented the State of Connecticut as disclosure counsel in a general obligation bond sale of $550 million.
Day Pitney was mentioned in an article, “Green Bonds Feature in Coming Connecticut GO Sale,” in The Bond Buyer. The firm was mentioned as lead bond counsel and lead disclosure counsel for the State of Connecticut’s sale of $650 million general obligation bond sale that includes a $65 million green-bond series. Day Pitney partners Namita Tripathi Shah, Judith Blank and Douglas Gillette are advising on the transaction, along with counsel Glenn Rybacki