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Treasury Starts Accepting Applications for Green Grants

By Steven Schneider
August 2009

On August 1, 2009, the Treasury Department began accepting applications for the new green grant program that allows taxpayers to apply for an immediate grant in lieu of a tax credit for various alternative energy technologies. The grants generally range between 10% and 30% of the taxpayer costs for the green technology. The grants relate to commercial facilities (i) placed in service in 2009 or 2010 or (ii) commercial facilities placed in service by specified post-2010 dates but where construction began in 2009 or 2010. For property placed in service in 2009 or 2010, the applications must be submitted after the property is placed in service and before October 1, 2011. Treasury will make payment 60 days after it receives the completed application. For 2009 and 2010 construction with post 2010 completion, a two-step application is generally required with the first part due before October 1, 2011.

Although the grant generally allows taxpayers to access green funding faster than waiting for the tax credit, the grant requires significant additional documentation to be provided to the Treasury, including engineering design documentation, capacity documentation, and annual performance reports for the first five years. Recent guidance also provides other technical details including who is eligible and how to transfer the grant to a lessee. The grant application and other recent guidance are set forth on the IRS website at http://www.treas.gov/recovery/1603.shtml.

For questions regarding the information contained in this advisory, please contact your usual Goulston & Storrs attorney or:

Steven R. Schneider
(202) 721-1145

This advisory should not be construed as legal advice or legal opinion on any specific facts or circumstances. The contents are intended for general informational purposes only, and you are urged to consult your own lawyer concerning your situation and any specific legal questions you may have.

Pursuant to IRS Circular 230, please be advised that, this communication is not intended to be, was not written to be and cannot be used by any taxpayer for the purpose of (i) avoiding penalties under U.S. federal tax law or (ii) promoting, marketing or recommending to another taxpayer any transaction or matter addressed herein.

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