Indian tribes that received allocations from the first tranche of Tribal Economic Development Bonds (TEDBs) must file for an extension by March 31, 2011, if they plan on issuing their bonds after June 30, 2011. However, even with the extension, the bonds must be issued before December 31, 2011.
Originally, Indian tribes that received allocations from the first tranche of TEDBs were required to issue the bonds by December 31, 2010. IRS Notice 2010-88 provided an automatic extension for issuing the bonds until June 30, 2011. The notice also provided for a second extension until December 31, 2011. But tribes must file a written extension request with the IRS to obtain the second extension.
The extension request must include the following:
- a copy of the allocation letter from the IRS to which the request relates
- each of the following statements, made under the penalty of perjury, from an authorized Indian tribal government official:
- a statement providing the reason for the extension
- a statement that the tribal government reasonably believes to issue the bonds before December 31, 2011
- a statement that the official has knowledge of the relevant facts and circumstances relating to the request and the application, has examined the request and the application, and that the information contained in the request and the application is true, correct and complete.
The extension request package must include a hard copy of the request and electronic copy on compact disc. These materials must be sent to the following address:
Internal Revenue Service SE:T:GE:TEB:CPM Attention: Mark Helfer 1122 Town & Country Commons Chesterfield, Missouri 63017
Background on TEDBs
TEDBs were authorized as part of the American Recovery and Reinvestment Act of 2009 (ARRA), which was signed into law by President Obama on February 17, 2009. TEDBs allow Indian tribal governments to issue bonds without having to satisfy the "essential governmental function" test. However, tribes had to apply for a TEDBs allocation, as ARRA contained a $2 billion limitation that was allocated in two tranches.
The first tranche was announced on September 1, 2009. The first $1 billion in bonding authority was allocated to 58 projects maintained by at least 45 Indian tribes. The projects were both large and small, as the amounts of bonding authority ranged from $22,565,088.46 to $902,603.54.
The second tranche was announced on February 11, 2010. This $1 billion in bonding authority was allocated to 76 projects benefiting at least 66 Indian tribes. Again, the size of the projects varied considerably; the amounts of bonding authority ranged from $1,822,436.05 to $30 million.
Treasury Department Study
ARRA also required the U.S. Department of the Treasury to conduct a study on the effects of these bonds, including whether the prior limitations should be eliminated and report back to Congress. On July 12, 2010, Treasury published a notice requesting comments from Indian tribal governments about TEDBs. The purpose of the comments was to assist Treasury in developing recommendations about TEDBs for the congressionally-directed study. Treasury posted the comments it received online a few weeks ago. The comments can be found the regulations.gov website under docket number TREAS-DO-2011-0001.