Cook County.docVIP

Cook County Recovery Zone Facility Bonds Program Overview and Application Todd H. Stroger, President Cook County Board of Commissioners Bureau of Community Development William Moore Bureau Chief  Background: Cook County Recovery Zone Facility Bonds In February 2009, as part of the American Recovery and Reinvestment Act of 2009 Congress enacted Sections 1400U-1 and 1400U-3 of the Internal Revenue Code of 1986 permitting State and local governments to issue recovery zone facility bonds, (RZFB’s) a new tax-exempt private activity bond, to finance certain depreciable property, including new or used equipment, located or to be located in a designated recovery zone. There is a $15 billion national limitation on the issuance of RZFB’s, known as the “volume cap” Cook County’s share of the volume cap is $196,814,000 so the total amount of RZFB’s Cook County can issue is limited to $196,814,000. In certain circumstances Cook County may (but is not required to) cede a portion of its volume cap to permit a municipality located in Cook County to issue recovery zone facility bonds, provided that the County has approved the proposed project and that such municipality has also designated the proposed project site as a recovery zone. Recovery zone facility bonds are obligations, the interest on which is tax-exempt if the following requirements are satisfied: (i) 95% or more of the net proceeds of the bond issue are to be used for “recovery zone property;” (ii) the obligation is issued pursuant to a local allocation of volume cap; (iii) the obligation is issued on/or before December 31, 2010; and (iv) the issuer designates the obligation as a recovery zone facility bond. Recovery zone property is depreciable property that meets the following requirements: (i) the property was constructed, reconstructed, renovated or acquired by purchase by the taxpayer after the date on which the designation of the recovery zone took effect; (ii