In a surprising development, the Treasury Department announced yesterday that tribal governments in 19 states allocated $1 billion of economic development bonds for 58 projects will be able to issue the debt as taxable Build America Bonds and receive direct-payments equal to 35% of their interest payments.

“That’s good news,” said Townsend Hyatt, a partner with Orrick Herrington & Sutcliffe LLP. “We had thought [that] all along, but there were rumblings within the IRS that some people felt that tribal economic development bonds could not be issued as Build America Bonds.”

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