Congressman Sander Levin

(Washington D.C.)- The U.S. Treasury Department announced today that nearly $2 billion in bond authority will be immediately available for the state and local governments in Michigan under the Recovery Zone Bonds program.  Recovery Zone Bonds, created under the American Recovery and Reinvestment Act are targeted to areas particularly affected by significant job loss and will help state and local governments raise capital for economic development projects. 

“Cities and counties will be able to decide, for themselves, the best use of this financing mechanism - whether its construction projects or the financing of new business development,” said Rep. Levin.  “Recovery bonds are an important new tool for the state and local governments as we all work toward economic recovery.”

The program includes two new types of Recovery Zone Bonds – Recovery Zone Economic Development Bonds and Recovery Zone Facility Bonds. 

Recovery Zone Economic Development Bonds can be used by state and local governments to finance a wide range of public economic development projects.  These bonds lower borrowing costs through a new direct federal payment subsidy for 45 percent of the interest.

Recovery Zone Facility Bonds can be used by state and local governments to help private businesses finance investment in designated recovery zones.  Issuers are able to obtain lower interest rates than would otherwise be the case because the interest is exempt from federal income tax.

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