In recent days, there have been rumors circulating that Treasury would issue "pre-approvals" for ITC grants in cases where construction begins in 2009 or 2010 but the project is not placed in service before 2011. You will recall that projects may still qualify for the ITC grant in those cases if they meet the placed in service deadline (12/31/12 for wind, 12/31/16 for solar and 12/31/13 for all others).
This rumor has some people excited because it is different than what Treasury had been saying and what attorneys had been advising. Previously, it was believed that Treasury would merely "accept" applications and wait until the project was placed in service to determine if it qualified for the ITC grant.
We have been told definitively by Treasury that the rumor is false. Treasury will not "pre-approve" projects for the ITC grant subject only to meeting the placed in service deadline. According to Treasury:
"We will not be issuing ‘advance rulings’ on projects for which construction begins but are not placed in service. What we outlined on page 3 of the 1603 Guidance document, ‘ II. Application Procedures’ has not changed. We will not issue preliminary approvals because too many things can change by the time a specified property is placed in service. We believe the applicants and lenders should have a good idea if the proposed property meets the requirements of the 1603 program upon reading the application, guidance, terms and conditions, etc.
Stoel Rives has developed an extremely good relationship with individuals at Treasury administering the ITC grant program. We appreciate their candor and willingness to clarify how they intend to run the program.
If you have any questions about this issue, please do not hesitate to contact your favorite Stoel Rives attorney.