SECTION 3. TEMPORARY

REGULATIONS

The Treasury Department and the Internal Revenue Service intend to issue temporary and proposed regulations (the “Temporary Regulations”) under § 54 to provide guidance to holders and issuers of clean renewable energy bonds. It is anticipated that the Temporary Regulations will provide, in part, as follows:

1. For purposes of § 54, the term “qualified project” includes any facility owned by a qualified borrower that is functionally related and subordinate (as determined under § 1.103–8(a)(3) of the Income Tax Regulations) to any qualified facility described in §§ 45(d)(1) through (d)(9) (determined without regard to any placed in service date) and owned by such borrower.

2. For purposes of § 54, the term “political subdivision” will have the same meaning as in § 1.103–1.

3. A clean renewable energy bond may be issued on behalf of a State or political subdivision within the meaning of § 1.103–1(b) under rules similar to those for determining whether a bond issued on behalf of a State or political subdivision,

constitutes an obligation of that State or political subdivision for purposes of § 103.

4. For purposes of § 54, the term “qualified borrower” includes an instrumentality of a State or political subdivision (as determined for purposes of § 103).