Tax-Exempt Bond Incentives For Private Entities In The Heartland: Disaster Tax Relief Act Of 2008
The Heartland Disaster Tax Relief Act of 2008 (the
"Act") was signed into law as part of the Emergency
Economic Stabilization Act of 2008 on October 3, 2008. The Act
provides temporary tax relief for areas in the Midwestern Disaster
Area similar to the relief given to areas impacted by Hurricane
Katrina in 2005.
The Midwestern Disaster Area includes certain counties within
the states of Arkansas, Illinois, Iowa, Indiana, Missouri, Nebraska
and Wisconsin (Kansas, Michigan and Minnesota are included in the
Act but do not qualify for issuance of the bonds described herein)
that were declared major disaster areas by the President on or
after May 20, 2008 and before August 1, 2008 by reason of the
severe storms, tornados or flooding (the "Disaster
Events"). Maps of the portions of the Midwestern Disaster Area
which qualify for such bonds (areas shown in red, light orange or
orange) are below.
Arkansas
Illinois
Indiana
Iowa
Missouri (first Disaster Declaration)
Missouri (second Disaster Declaration)
Nebraska
Wisconsin
Qualified Midwestern Disaster Area Bonds
Among other tax benefits to assist individuals and businesses
affected by the Disaster Events, the Act provides for the issuance
of a new category of tax-exempt Midwestern Disaster Area Bonds
("Bonds") for certain multi-family rental projects,
nonresidential real property, public utility property, and
principal residences as described below:
Proceeds of the Bonds may be used to finance (a) the cost of a
multifamily rental project for low and moderate income individuals,
under relaxed tenant income limitations described below, (b) the
cost of acquisition, construction, reconstruction or renovation of
nonresidential real property (including fixed improvements
associated with such property) or (c) the cost to repair or
reconstruct public utility property, if, in each case, (i) the
person using the property suffered a loss in a trade or business
attributable to the Disaster Events, or (ii) the cost is incurred
by a person designated by the Governor of the State in which the
project is located as a person carrying on a trade or business
replacing a trade or business with respect to which another person
suffered such a loss. Bonds also may be issued to provide financing
for mortgagors who suffered damages to their principal residences
attributable to the Disaster Events.
Bonds may be used to finance certain nonresidential real
property projects, including (subject to the existence of state
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