Among the new kinds of taxable bonds introduced by the American Recovery and Reinvestment Act of 2009 (the Recovery Act) are Recovery Zone Economic Development Bonds (RZ Economic Development Bonds) and Recovery Zone Facility Bonds (RZ Facility Bonds) (together, RZ Bonds). While the two types of RZ Bonds differ in significant ways, they reflect a common policy goal: stimulating job creation and economic recovery in areas with highest employment declines by enabling state and local governments to finance certain projects and programs at lower borrowing costs.

On June 12, 2009, the Internal Revenue Service (IRS) issued Notice 2009-50 to provide (1) guidance on the volume cap amounts allocated to states and certain political subdivisions for RZ Bonds and (2) interim guidance on other matters relevant to RZ Bonds. The following information is intended to serve as a general overview of Notice 2009-50 and does not constitute an exhaustive discussion or legal advice.

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