Deadline to apply is Dec. 15, 2009
ARRA includes $25 billion for Recovery Zone Economic Development Bonds and Recovery Zone Facility Bonds

The ARRA included $10 billion for Recovery Zone Economic Development Bonds and $15 billion for Recovery Zone Facility Bonds. All states and counties received an allocation of authority for both bonds, as did any municipalities with a population greater than 100,000.

• Click here for the North Carolina county-by-county breakdown

• Click here to visit the N.C. Commerce Web site for forms and rules

• Click here for guidance from the IRS

• Sample resolution to designate a Recovery Zone

• Memo from LGC regarding designation of Recovery Zone

• Memo from OERI regarding reallocation of unused authorizations

• Click here to view Oct. 22 Webinar on Recovery Zone Economic Development Bonds and Recovery Zone Facility Bonds (Windows Media Player).

• Click here for the PowerPoint slides from the Webinar.

Economic Recovery Zone Bonds are another form of Build America Bonds. These are not tax-exempt bonds. The federal government will reimburse the bond issuer for 45 percent of the interest paid (BAB bond issuers are reimbursed 35 percent of the interest).

Before an Economic Recovery Zone Bond can be issued, a “Recovery Zone” must be designated. These zones are defined as geographical regions with “significant poverty, unemployment, rate of home foreclosures, or general distress.” However, each entity receiving an allocation of bond authority has full discretion to designate one or more Recovery Zones.

Bonds can only be used to promote development or economic activity within a designated Recovery Zone. They can be used for capital expenditures for the acquisition or development of property within a Zone (by public entity), expenditures for public infrastructure and construction of public facilities, which means any building owned by an entity of government and expenditures for job training and education programs. They cannot be use for any activity that benefits a private business or individual.

The Recovery Zone Facility Bonds are specifically formulated to finance private sector activities.

The ARRA requires that the bonds must be issued before Jan. 1, 2011. Counties that wish to use their allocation must make known their intent and provide information about the projects to be funded to the N.C. Department of Commerce by Dec. 15, 2009. A form for this declaration will be made available at www.ncrecovery.gov.

To use their allocations, a county must have issued the RZ bonds by April 15, 2010, or be on the agenda for the Local Government Commission's May 2010 meeting. If a county does not meet this timetable, the bond allocation will be deemed waived to the state, which will reallocate the authority to other projects that can meet the established deadlines.

A Recovery Zone Webinar is scheduled for Oct. 22, 2009, at 11 a.m. Information about registering for the Webinar will be posted when it is available.