Laidlaw Energy Group, Inc.(fka LLEG)

[discreet_suffolk]

......the program sunsets at the end of this year and in order for projects to qualify they must have begun construction before the end of 2010. It’s the “beginning construction” requirement that is causing all the confusion.

“Nobody has ever dealt with this beginning construction requirement before,” Jenner said. “You either have to place your facility in service by the end of 2010 or you have to begin construction by then.”

Jenner points out that there are two ways to meet the beginning construction requirement and benefit from the program. “One of them requires that you pay or incur more than 5 percent of the total project costs,” he said. “When you think pay or incur, most laymen or nontax people think, ‘Oh well, if I just pay it that’s enough,’ but it isn’t. Pay or incur has a very specific meaning in the tax world and it’s gotten a lot of people in trouble when they think the rule goes one way and it goes another.”

The Treasury Department has also deemed that physical activity (MOVE IN THE BULLDOZER) that occurs before the end of the year can meet the beginning construction test but the activity must be continuous. That means that a developer can’t go out on New Year’s Eve and start digging around and then cease activity for a year, he said. “On the other hand, it doesn’t have to be the developer itself that begins construction,” he added. “Beginning construction can be met by work off-site, and so there are different ways that you can meet that requirement as well.”

Developers should also take a closer look at any contracts they’ve entered into to build renewable energy facilities. “Quite frankly, if they have contracts in place they may very well not be up to snuff,” Jenner said. “There are certain requirements that have to be met for the contract itself to qualify. And if they don’t meet that requirement they could be in trouble.”

Jenner will be joined on the panel by Hamang Patel, an attorney with Michael Best & Friedrich. His presentation, Biomass New Market Tax Credit Financing, will focus on how biomass project developers can take advantage of the new market tax credit program, which directs money to businesses located in low-income census districts.

http://www.biomassmagazine.com/article.jsp?article_id=4091