The Internal Revenue Service has ruled that a state conservation and reclamation district can issue tax-exempt bonds to finance the acquisition of a private power plant because its public wholesale customers can be included in its "qualified service area," a geographic designation that dictates when bond proceeds can be used to acquire private entities.

The private-letter ruling, which was dated May 8 but not publicly released until this week, stated that the district could use tax-exempt bond proceeds to pay for the acquisition of an investor-owned power plant that would in turn provide power to the district's wholesale customers, which are also governmental entities.

Subscribe Now

Independent and authoritative analysis and perspective for the bond buying industry.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.