IRS Authorizes Optional TEDB Volume Cap Extensions, Requests Comments On Reallocation Of Volume Cap

On October 31, 2011, the Internal Revenue Service (the "IRS") published an Announcement describing two new features for the existing tribal economic development bond ("TEDB") program.

First, the IRS is providing an optional three-month extension process for existing volume cap allocations. Under current IRS guidelines, existing allocations expire December 31, 2011. The new extension process requires written extension requests to be submitted by November 30, 2011.

In addition, the Announcement proposes certain changes intended to improve the existing IRS allocation methodology for TEDBs. These proposed changes would govern the reallocation of the national $2 billion volume cap for TEDBs, upon the expiration or forfeiture of existing allocations. The IRS estimates that up to 95% or more of the $2 billion in Volume Cap allocations for TEDBs may become available for reallocation as of January 1, 2012. The IRS is seeking public comment on its proposed reallocation