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

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 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 renew- able 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 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 § 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 re

2009–17 I.R.B. 870 April 27, 2009

development. For further information regarding this notice and the Application,

contact Janae Lemley at (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).

(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 —

April 27, 2009 871 2009–17 I.R.B.

(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 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 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 .

2009–17 I.R.B. 872 April 27, 2009

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 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.

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.)

April 27, 2009 873 2009–17 I.R.B.

[ 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.

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:

EXHIBIT A

DESCRIPTION OF THE PROJECT (RESPONSE TO QUESTION 6 OF THE APPLICATION)

(Attached hereto)

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) —

2009–17 I.R.B. 874 April 27, 2009

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 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:

EXHIBIT C

PLAN OF FINANCING (RESPONSE TO QUESTION 13 OF THE APPLICATION)

(Attached hereto)

EXHIBIT 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.

April 27, 2009 875 2009–17 I.R.B.

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.