SECTION 3. INTERIM GUIDANCE

AND RELIANCE

3.1 In General

Pending the promulgation and effective date of future administrative or regulatory guidance, taxpayers may rely on the interim guidance provided in this notice.

3.2 Certain Determinations of Qualified Project Costs for Projects Involving Private Business Use

In the case of a project involving private business use under § 141(b)(6), for purposes of determining qualified project costs that may be financed with proceeds of Qualified Midwestern Disaster Area Bonds and Qualified Hurricane Ike Disaster Area Bonds under § 1400N(a)(2)(A)(i), as modified by the Act, the determination of whether a loss in a trade or business has been suffered and whether a person is carrying on a trade or business replacing a trade or business with respect to which another person suffered such a loss may be made by the Governor of the State in which the project is located in any reasonable manner as the Governor shall determine in good faith in such Governor’s discretion. In addition, a duly authorized designee of such Governor under applicable State law may make these determinations.

Section 3.3 Qualified Project Costs for Public Utility Property

In the case of a project relating to public utility property, qualified project costs that may be financed with proceeds of Qualified Midwestern Disaster Area Bonds and Qualified Hurricane Ike Disaster Area Bonds include the repair or reconstruction of public utility property (as defined in § 168(i)(10)) damaged by a Midwestern

Disaster or Hurricane Ike, as applicable, as provided in § 1400N(a)(2)(A)(i), as modified by the Act. In addition, public utilities may also use proceeds of Qualified Midwestern Disaster Area Bonds and Qualified Hurricane Ike Disaster Area Bonds to finance qualified project costs of projects involving private business use under the first prong of the definition of qualified project costs under § 1400N(a)(2)(A)(i), as modified by the Act, as more particularly described in § 3.2 of this Notice.

Section 3.4 Designations of Areas of Greatest Need

For purposes of the requirement to designate allocations of Qualified Midwestern Disaster Area Bonds and Qualified Hurricane Ike Disaster Area Bonds to provide assistance to areas in the order in which such assistance is most needed under § 1400N(a)(2)(C), as modified by the Act, the Governor of the State in which the Qualified Midwestern Disaster Area Bonds and Qualified Hurricane Ike Disaster Area Bonds are issued or the Bond Commission of such State required to approve such bonds, as applicable under § 1400N(a)(2)(C), may make such designations in any reasonable manner as such Governor or Bond Commission shall determine in good faith in the discretion of such Governor or Bond Commission, as applicable. In addition, a duly authorized designee of such Governor or Bond Commission under applicable State law may make these determinations.

Section 3.5 Certain Reimbursement Expenditures

The reimbursement expenditure rules under § 1.150–2 of the Income Tax Regulations apply to Qualified Midwestern Disaster Area Bonds, Hurricane Ike Disaster Area Bonds, and Qualified Gulf Opportunity Zone Bonds in the same manner as they apply to exempt facility bonds under § 1.142–4, except that, in the case of these disaster area bonds, issuers are treated as having met the official intent requirement under § 1.150–2(e) for original expenditures paid on or after the date of the occurrence of the applicable disaster (i.e., the Midwestern Disaster, Hurricane Ike, or Hurricane Katrina) and before December 31, 2009. Further, in

2010–3 I.R.B. 300 January 19, 2010

able during calendar year 2008, and Rev. Proc. 2009–12, 2009–3 I.R.B. 321, for guidance on determining the maximum value of passenger automobiles first made available during calendar year 2009.

.02 Maximum Automobile Value for Using the Fleet-Average Valuation Rule. An employer with a fleet of 20 or more automobiles providing an automobile for the first time in calendar year 2010 for the personal use of any employee for an entire year may determine the value of the personal use by using the fleet-average valuation rule in regulations section 1.61–21(d)(5)(v) to calculate the Annual Lease Values of the automobiles in the fleet. The fleet-average valuation rule may not be used to determine the Annual Lease Value of any automobile if its fair market value on the date it is first made available exceeds $20,300 for a passenger automobile other than a truck or van, or $21,000 for a truck or van. If all other applicable requirements are met, an employer with a fleet of 20 or more vehicles consisting of passenger automobiles other than trucks or vans as well as trucks and vans may use the fleet-average valuation rule as long as none of the vehicles exceed their respective maximum allowable values. If the fair market value of any passenger automobile in the fleet exceeds these amounts, the employer may determine the value of the personal use under regulations section 1.61–21(f) (Commuting valuation) or the general valuation rules of section 1.61–21(b) or may determine the Annual Lease Value of such automobile separately under the automobile lease valuation rule of section 1.61–21(d)(2) if the applicable requirements are met.