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The Stimulus Bill aka The “American Recovery and Reinvestment Act of 2009” (ARRA)

The Stimulus Bill aka The “American Recovery and Reinvestment Act of 2009” (ARRA). Michael Dvoren J.D. Candidate, Class of 2009 Arizona State University Technology Ventures Services Group. ARRA. Signed into law on February 17, 2009. 407 pages (Pub. L. No. 111-5)

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The Stimulus Bill aka The “American Recovery and Reinvestment Act of 2009” (ARRA)

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  1. The Stimulus BillakaThe “American Recovery and Reinvestment Act of 2009” (ARRA) Michael Dvoren J.D. Candidate, Class of 2009 Arizona State University Technology Ventures Services Group

  2. ARRA • Signed into law on February 17, 2009. • 407 pages (Pub. L. No. 111-5) • Stimulus funds applicable to biofuel projects disbursed through federal and state agencies, especially US Dept of Energy.

  3. ARRA • DOE Secretary Steven Chu has promised to Disperse 70% of the investment from the ARRA plan by the end of 2010 (DOE Feb 19, 2009 Press Release.) • Three types of aid applicable to biofuel projects: • Tax Credits/Incentives • Loan Guarantees • Grants

  4. Tax Credits/Incentives • ARRA extends Production Tax Credit (PTC) • To qualifying facilities placed in service through 2013. Includes “closed-loop” and “open-loop” biomass (as defined by Internal Revenue Code § 45(c)(1)(C),(c)(2)). • Can claim approx 2¢ per kilowatt hour of energy produced in first 10yrs (Aaron Ball, Looper Reed & McGraw, PC). • Credit must be claimed over first 10 year operating period. • ARRA creates option to claim Investment Tax Credit (ITC) instead of PTC. • Can claim ITC instead of PTC if placed in service between Jan 1, 2009 and Dec 31, 2013. • ITC allows credit to be claimed for the year placed in service. • ITC allows effectively 85% of facility cost to be depreciated (Aaron Ball, Looper Reed & McGraw, PC).

  5. Tax Credits/Incentives (cont.) • Allows US Treasury Dept to issue grants in lieu of PTC and ITC. • Up to 30% of facility cost if placed in service or construction begins before end of 2010. • Amount of grant generally equal to amount of ITC claimed. • Fed, state, local govt’s and tax-exempt entities not eligible.

  6. Tax Credits/Incentives (cont.) • Temp Business Credit Increase for Alternative Fuel Vehicle Refueling Property. • Increases tax credit for qualifying property cost from 30% to 50% (includes biodiesel) if placed in service by 2010. • Cap on depreciable property increased from $30,000 to $50,000. • Cap on non-depreciable property increased from $1,000 to $2,000 if placed in service by 2010. • Applies to taxable years beginning Jan. 1, 2009.

  7. Tax Credits/Incentives (cont.) • New 30% credit for a “qualifying advanced energy project.” • Must be certified by Treasury Dept. and DOE. • Included are properties designed to produce energy from renewables, capture carbon, refine blend fuel, or reduce greenhouse gases. • Up to $2.3 billion of credits can be certified.

  8. Tax Credits/Incentives (cont.) • Bonds – may be issued by state, local, or tribal govt’s for qualifying renewable energy projects (trickle down funds through AZ state agencies?) • Clean Renewable Energy Bonds (CREBs) • Created under the Energy Policy Act of 2005. • ARRA authorizes additional $1.6 billion in new CREBs. • Qualified Energy Conservation Bonds (QECBs) • Created under Energy Improvement Act of 2008. • ARRA authorizes additional $2.4 billion in new QECBs to finance govt greenhouse gas reduction programs (including allowing issuance of loans and grants for “green community programs”).

  9. Loan Guarantees • ARRA adds $500 million to DOE’s Loan Guarantee Program established by § 1705, Energy Policy Act of 2005. • For “(a)(3) Leading edge biofuel projects that will use technologies performing at the pilot or demonstration scale that the Secretary determines are likely to become commercial technologies and will produce transportation fuels that substantially reduce life-cycle greenhouse gas emissions compared to other transportation fuels.”

  10. Loan Guarantees (cont.) • Projects must “commence construction not later than September 30, 2011.” • Wages paid on qualifying projects cannot be less than “those prevailing on similar work in the locality as determined by the” Davis-Bacon Act. • DOE may guarantee up to 100% of project’s debt, capped at 80% of project cost.

  11. Loan Guarantees (cont.) • Given time constraints of ARRA funding, DOE may not be able to create new rules in time. Will probably rely on 2005 Energy Policy Act regulations. • As of March 1, 2009, DOE still hadn’t issued a single loan guarantee from 2005 EPA but Secretary Chu has promised to streamline the process and begin offering guarantees by early May. (DOE Feb 19, 2009 Press Release.)

  12. Grants • $3.2 Billion for the Energy Efficiency and Conservation Block Grant Program • Assists local govt’s implementing energy efficiency and conservation programs authorized by the Energy Independence and Security Act of 2007. • $2.8 billion awarded based on formula in Title V, subtitle E of the act (42 U.S.C. 17151 et seq.). • $400 million remaining awarded on a “competitive basis.” • Arizona’s portion is currently $63,817,400 (DOE website @ http://www.energy.gov/arizona.htm).

  13. Grants (cont.) • $3.1 Billion for the State Energy Program • Provides grants to state energy offices for efficiency and renewable programs authorized under the Energy Policy and Conservation Act (42 U.S.C. 6321). • Conditioned on state Governors’ assurances re regulatory policies, building code requirements, prioritizing existing state programs. • Arizona’s portion is currently $55,447,000 (DOE website @ http://www.energy.gov/arizona.htm).

  14. Grants (cont.) • $3.4 Billion for “Fossil Energy Research and Development.” • Includes: • $1.52 billion for “industrial carbon capture and energy efficiency improvement projects, including a small allocation for innovative concepts for beneficialCO2reuse.” (Joint Explanatory Statement of the Committee of Conference for the ARRA).

  15. Grants (cont.) • $1.6 Billion “for an additional amount for ‘Science.’” • $1.2 Billion already allocated to DOE Office of Science (DOE March 23, 2009 Press Release) • Approved projects include: • “$277 million for Energy Frontier Research Centers to be awarded on a competitive basis to universities” (including biofuels).

  16. Grants (cont.) • $400 Million for Advanced Research Projects Agency-Energy (ARPA-E) • To be used under § 5012 of the American Competes Act.

  17. Grants (cont.) • $500 Million for Green Jobs • Used for research, labor exchange, and job training projects to prepare workers for energy efficiency and renewable industries. • To be used under § 171(e)(1)(B)(ii) of the Workforce Investment Act. • Up to $37.5 million for Job Corps Centers which may include training in energy efficiency careers.

  18. Federal Grants Process Registering Your Organization

  19. 6 Step Process • Step 1: Obtain DUNS Number • Step 2: Register with CCR • Step 3: Username and Password • Step 4: Register with Grants.gov • Step 5: AOR Authorization • Step 6: Track AOR Status

  20. Step 1: Obtain Data Universal Number System (DUNS) Number • Go to Dun and Bradstreet at http://fedgov.dnb.com/webform • Turn around = same day

  21. Step 2: Register w/ Central Contractor Registry (CCR) • Labor intensive requiring a lot of info • Apply by phone (1-888-227-2423) or on line (http://www.ccr.gov) • Designate E-Business Point of Contact (E-Biz POC) and create “M-PIN” • E-Biz POC designates Authorized Organizational Representatives (AOR) - • Turn around = 1-3 days for organization to gather needed info for application + at least 5 business days if organization has Employment identification Number (EIN) or Taxpayer Identification Number (TIN). If no TIN or EIN then add additional 2 weeks to obtain info from IRS • IMPORTANT: CCR Needs to be Renewed Annually

  22. Step 3: Username and Password • Wait one day after registration with CCR (Step 2) before creating username and password • Username and password = electronic signature • To complete this step AOR registers with the Operational Research Consultants (ORC) at http://apply07.grants.gov/apply/OrcRegister • Turnaround = same day (not including one day wait after Step 2)

  23. Step 4: AOR Registers with Grants.gov • AOR* registers at https://apply07.grants.gov/apply/GrantsgovRegister • Enter CCR username and password from Step 3 • AOR registration triggers Step 5 • Turn around = same day *AOR (Authorized Organization Rep) is the person(s) authorized to submit grant applications through Grants.gov on behalf of your organization

  24. Step 5: AOR Authorization • E-Biz POC receives email notification that AOR has registered with Grants.gov (Step 4) • Using DUNS number (Step 1) and MPIN (Step 2) E-Biz POC approves AOR to submit grant applications on behalf of organization • Turnaround = same day

  25. Step 6: Track AOR Status • AOR logs in to check status • Turnaround = depends on E-Biz POC in Step 5 Total time to complete registration process: 3 to 5 business days or 1 to 3 weeks depending on your organization

  26. ARRA Specific DOE Webpage http://www.energy.gov/recovery/ Click on “Funding Opportunities” on left hand side.

  27. Questions? Michael Dvoren, J.D. (2009) Arizona State University Technology Ventures Services Group mdvoren@yahoo.com Pete Arambula, J.D., M.A. Desert Biofuels Initiative Arizona State University Technology Ventures Services Group pete@desertbiofuels.org

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