Repeal of Qualified Energy Conservation Bonds Effective After December 31, 2017

On December 22, 2017, President Trump signed the Tax Cuts and Jobs Act (HR 1), which makes widespread amendments to the Internal Revenue Code. Section 13404 of HR 1 provides for the repeal of tax credit bonds, including Qualified Energy Conservation Bonds (QECBs), a tool for state and local governments to finance qualified conservation projects as defined in Section 54D of the U.S. Internal Revenue Code. This amendment repeals QECB issuances effective after December 31, 2017, despite the estimated $1 billion remaining in unused state and local QECB allocations across the country.

QECBs are currently defined in U.S. Code Title 26, Subtitle A, Chapter 1, Subchapter A, Part IV, Subpart I, Section 54D. HR 1 eliminates Subparts H, I, and J.

Issuers of QECBs issued on or before December 31, 2017 will continue to receive the federal subsidy on their interest payments through maturity.

Date Posted: 1/17/2018