In 2008, the United States Congress authorized Qualified Energy Conservation Bonds to finance energy conservation facilities under a maximum nationwide volume cap. In February 2009, through the American Recovery and Reinvestment Act, Congress increased the cap and allocated a portion to each state based on population.
The State of Oregon received $39,320,000 in issuance authority for QECBs. Based on federal guidance, the state distributed a portion of the statewide volume cap allocation to each large city or county with populations greater than 100,000 and the tribes based on a ratio of the jurisdiction’s population to the state population as a whole.
Qualified projects include:
· Capital expenditures incurred for purposes of:
o Reducing energy consumption in publicly-owned buildings by at least 20 percent;
o Implementing green communities programs;
o Rural development involving the production of electricity from renewable energy resources; or
o Improving qualified facilities, including for example, solar, wind, geothermal and biomass facilities.
· Expenditures with respect to research facilities and research grants to support research in:
o Development of cellulosic ethanol or other non-fossil fuels;
o Technologies for the capture and sequestration of carbon dioxide produced by fossil fuels;
o Increased efficiency of existing technologies for producing non-fossil fuels;
o Automobile battery technologies and other technologies to reduce fossil fuel consumption related to transportation; or
o Technologies to reduce energy use in buildings.
· Implementing mass commuting and related facilities that reduce energy consumption and pollution.
· Demonstration projects designed to promote the commercialization of:
o Green building technology;
o Conversion of agricultural waste to fuel;
o Advanced battery manufacturing technologies;
o Technologies to reduce peak use of electricity; or
o Technologies for the capture and sequestration of carbon dioxide emitted from combusting fossil fuels in order to produce electricity.
· Launching public education campaigns to promote energy efficiency.
Refer to the summary of QECB Oregon volume cap, which itemizes the allocation of QECB volume cap by jurisdiction. At least 70 percent of the QECB authority must be used for government projects and no more than 30 percent may be used for private activity projects. If a local government is not able to, or chooses not to use its original allocation, or to offer it to another issuer within its jurisdiction, the authority may be reallocated to the state. There are reasons why the large local government would not be able to issue QECBs or designate another issuer within the jurisdiction to issue from the original allocation. Some possible reasons include:
o Original allocation too small for a cost effective bond issuance;
o Difficulty of finding a tax credit investor;
o Insufficient debt capacity to issue bonds; or
o Lack of qualified projects within the jurisdiction.
In such cases, original allocations may be voluntarily reallocated to the state so that other issuers may benefit from the capacity. A local government that knows it will not be using its original allocation may affirmatively waive/reallocate the volume cap to the state by adopting a resolution of the governing body, and filing the Notice of Intent to Waive/Reallocate Qualified Energy Conservation Bonds Capacity with the form properly signed by the appropriate official.