Certain provisions of the American Recovery and Reinvestment Act, P.L. 111-5 (2009) (ARRA, commonly known as the Economic Stimulus Act), may be of interest to health systems that need to finance new medical office buildings.

The Economic Stimulus Act created a new category of tax exempt bonds known as Recovery Zone Facility Bonds (RZFBs) that can be issued by governmental issuers (e.g., a county or city) for the benefit of any borrower that will finance capital expenditures paid or incurred on property located in a recovery zone. Many health system treasurers are unaware that RZFBs may be available for funding new medical office building construction because the typical constraints on tax exempt financing – the borrower is a tax exempt entity, and stringent limits on "private business use" by independent physicians and other service providers – do not apply to facilities funded by RZFBs.

"Recovery zones" are identified and designated by the relevant governmental issuer, and the Economic Stimulus Act gives issuers broad latitude in making that determination to maximize the likelihood that RZFBs will stimulate new projects. The total volume of RZFBs is capped, and each state has received an allocation of that volume. Some states, Ohio for example, have suballocated that volume between counties and large cities.