    Gulf Opportunity Zone: States Are Allocating Federal Tax
    Incentives to Finance Low-Income Housing and a Wide Range of
    Private Facilities (16-JUL-08, GAO-08-913).

    In 2005, Hurricanes Katrina, Rita, and Wilma devastated the Gulf
    Coast, destroying wide swaths of housing, key infrastructure, and
    numerous private businesses. In response, Congress granted the
    states a wide range of disaster relief, including billions of
    dollars of grants and tax incentives to revitalize the Gulf
    Coast. Specifically, the Gulf Opportunity (GO) Zone Act of 2005
    (Pub. L. No. 109-135) provided tax incentives to individuals and
    businesses in certain presidentially declared disaster areas.
    Congress mandated that GAO review how state and local governments
    allocated and used federal tax incentives in the act and
    subsequent legislation. This report (1) identifies tax incentives
    in the GO Zone Act of 2005 and subsequent legislation for which
    state and local governments have allocation and oversight
    responsibilities, (2) describes the procedures state governments
    use in allocating the tax incentives, including how they plan to
    monitor compliance with federal laws, and (3) describes how tax
    incentives have been allocated and for what purposes. To address
    these objectives, GAO analyzed key documentation from GO Zone
    states and interviewed state officials, selected local officials,
    and representatives from private and nonprofit entities.
    -------------------------Indexing Terms-------------------------
    REPORTNUM:   GAO-08-913
        ACCNO:   A82898
      TITLE:     Gulf Opportunity Zone: States Are Allocating Federal Tax
    Incentives to Finance Low-Income Housing and a Wide Range of
    Private Facilities
         DATE:   07/16/2008
      SUBJECT:   Allocation (Government accounting)
    	     Catastrophe bonds
    	     Cost effectiveness analysis
    	     Disaster recovery
    	     Disaster relief aid
    	     Eligibility criteria
    	     Federal aid to localities
    	     Federal aid to states
    	     Federal legislation
    	     Federal taxes
    	     Federal/state relations
    	     Financial management
    	     Funds management
    	     Grants to states
    	     Local governments
    	     Low income housing
    	     Natural disasters
    	     State governments
    	     Strategic planning
    	     Tax administration
    	     Tax credit
    	     Tax exempt status
    	     Taxes
    	     Policies and procedures

    ******************************************************************
    ** This file contains an ASCII representation of the text of a  **
    ** GAO Product.                                                 **
    **                                                              **
    ** No attempt has been made to display graphic images, although **
    ** figure captions are reproduced.  Tables are included, but    **
    ** may not resemble those in the printed version.               **
    **                                                              **
    ** Please see the PDF (Portable Document Format) file, when     **
    ** available, for a complete electronic file of the printed     **
    ** document's contents.                                         **
    **                                                              **
    ******************************************************************
    GAO-08-913

    This text file was formatted by the U.S. Government Accountability
    Office (GAO) to be accessible to users with visual impairments, as part
    of a longer term project to improve GAO products' accessibility. Every
    attempt has been made to maintain the structural and data integrity of
    the original printed product. Accessibility features, such as text
    descriptions of tables, consecutively numbered footnotes placed at the
    end of the file, and the text of agency comment letters, are provided
    but may not exactly duplicate the presentation or format of the printed
    version. The portable document format (PDF) file is an exact electronic
    replica of the printed version. We welcome your feedback. Please E-mail
    your comments regarding the contents or accessibility features of this
    document to Webmaster@gao.gov.

    This is a work of the U.S. government and is not subject to copyright
    protection in the United States. It may be reproduced and distributed
    in its entirety without further permission from GAO. Because this work
    may contain copyrighted images or other material, permission from the
    copyright holder may be necessary if you wish to reproduce this
    material separately.

    Report to the Committee on Finance, U.S. Senate, and the Committee on
    Ways and Means, House of Representatives:

    United States Government Accountability Office:
    GAO:

    July 2008:

    Gulf Opportunity Zone:

    States Are Allocating Federal Tax Incentives to Finance Low-Income
    Housing and a Wide Range of Private Facilities:

    GAO-08-913:

    GAO Highlights:

    Highlights of GAO-08-913, a report to the Committee on Finance, U.S.
    Senate and the Committee on Ways and Means, House of Representatives.

    Why GAO Did This Study:

    In 2005, Hurricanes Katrina, Rita, and Wilma devastated the Gulf Coast,
    destroying wide swaths of housing, key infrastructure, and numerous
    private businesses. In response, Congress granted the states a wide
    range of disaster relief, including billions of dollars of grants and
    tax incentives to revitalize the Gulf Coast. Specifically, the Gulf
    Opportunity (GO) Zone Act of 2005 (Pub. L. No. 109-135) provided tax
    incentives to individuals and businesses in certain presidentially
    declared disaster areas. Congress mandated that GAO review how state
    and local governments allocated and used federal tax incentives in the
    act and subsequent legislation.

    This report (1) identifies tax incentives in the GO Zone Act of 2005
    and subsequent legislation for which state and local governments have
    allocation and oversight responsibilities, (2) describes the procedures
    state governments use in allocating the tax incentives, including how
    they plan to monitor compliance with federal laws, and (3) describes
    how tax incentives have been allocated and for what purposes. To
    address these objectives, GAO analyzed key documentation from GO Zone
    states and interviewed state officials, selected local officials, and
    representatives from private and nonprofit entities.

    What GAO Found:

    States with GO Zones are responsible for allocating and overseeing the
    use of four tax incentives in the GO Zone Act of 2005. The table below
    identifies the provisions and the amounts each state received. Alabama,
    Louisiana, and Mississippi received allocation authority for all four
    provisions. Florida and Texas each received $3.5 million in GO Zone low-
    income housing tax credit (LIHTC) authority, but did not receive
    allocations under the other incentives.

    Table: GO Zone Act of 2005 Cumulative Allocation Authority by State
    (Dollars in millions):

    Incentive: GO Zone tax-exempt private activity bonds[A,C]; Alabama:
    $2,174;
    Louisiana: $7,840;
    Mississippi: $4,921;
    Total: $14,935.

    Incentive: LIHTCs[A,B,C];
    Alabama: $47;
    Louisiana: $170;
    Mississippi: $106;
    Total: $323.

    Incentive: GO Zone tax credit bonds; Alabama: $50;
    Louisiana: $200;
    Mississippi: $100;
    Total: $350.

    Incentive: GO Zone additional advance refunding bonds; Alabama: $1,125;
    Louisiana: $4,500;
    Mississippi: $2,250;
    Total: $7,875.

    Source: GAO analysis of Joint Committee on Taxation and Gulf Coast
    state data.

    [A] These provisions are extensions of existing federal tax incentives.
    States received GO Zone allocation authority for these provisions in
    addition to their annual state allocation.

    [B] Florida and Texas each received $3.5 million in GO Zone LIHTC
    authority for 2006.

    [C] Dollars for private activity bonds and LIHTCs are rounded to the
    nearest million.

    [End of table]

    With some process variations, the three eligible states with GO Zones
    generally allocated bond authority on a first-come, first-served basis
    without consistently targeting the allocations to assist recovery in
    the most damaged areas. Officials in Louisiana and Mississippi
    acknowledged that the first-come, first-served approach led to
    allocating bond authority to less-damaged areas at the start of the
    program. The five eligible state housing finance agencies used existing
    processes to award GO Zone LIHTCs, but differed in how they targeted
    these credits. For all three bond provisions, state officials and bond
    issuers said the borrower�s bond counsel is generally responsible for
    ensuring that the bonds are compliant with applicable laws when issued.
    State housing finance agencies plan to use existing procedures to
    monitor compliance once units are placed in service.

    As of mid-June 2008, eligible states had allocated 87 percent of the GO
    Zone private activity bond authority, but bonds issued amount to about
    50 percent of the total awarded allocation authority. The bonds issued
    will be used to finance a wide range of facilities, including
    manufacturing facilities, utilities, housing, retail facilities, and
    hotels. State housing finance authorities have awarded 95 percent of
    the GO Zone LIHTCs. Although few housing units are currently in
    service, state housing finance agency officials said planned units will
    be in service by the mandated deadline. GO Zone LIHTC-funded units will
    address about 17 and 45 percent of the rental housing units with major
    or severe damage in the states of Louisiana and Mississippi,
    respectively. The three eligible states with GO Zones used the tax
    credit bonds and additional advance refundings to varying degrees to
    provide debt relief. State officials said current economic conditions
    pose challenges for using both GO Zone bond and LIHTC financing.

    What GAO Recommends:

    GAO is not making any recommendations. Technical comments from
    officials in the five states, IRS and Treasury were incorporated as
    appropriate.

    To view the full product, including the scope and methodology, click on
    [hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-08-913]. For more
    information, contact Michael Brostek at (202) 512-9110 or
    brostekm@gao.gov.

    [End of section]

    Contents:

    Letter:

    Results in Brief:

    Background:

    States with GO Zones Are Responsible for Allocating Four Federal Tax
    Incentives under the GO Zone Act of 2005:

    With Some Variation in Their Processes, States with GO Zones Generally
    Allocated Bond Authority on a First-Come, First-Served Basis; States
    Relied on Existing Procedures to Allocate LIHTCs:

    Most GO Zone Private Activity Bonds Have Been Allocated for a Range of
    Private Facilities and LIHTCs for Rental Housing; States Used Debt
    Relief Provisions to Varying Degrees:

    Agency Comments:

    Appendix I: Gulf Opportunity (GO) Zone Tax-Exempt Private Activity
    Bonds Issued:

    Appendix II: Low-Income Housing Tax Credit Uses by State:

    Appendix III: Additional Advance Refunding Bonds Issued, by State:

    Appendix IV: Related GAO Products:

    Appendix V: GAO Contact and Staff Acknowledgments:

    Tables:

    Table 1: GO Zone Act of 2005 Cumulative Allocation Authority by State:

    Table 2: GO Zone Bonds Issued in Alabama, Largest to Smallest:

    Table 3: GO Zone Bonds Issued in Louisiana, Largest to Smallest:

    Table 4: GO Zone Bonds Issued in Mississippi, Largest to Smallest:

    Table 5: Comparison of Gulf Opportunity (GO) Zone Low-Income Housing
    Tax Credit (LIHTC) Units to Available Department of Housing and Urban
    Development Data on Units with Major or Severe Damage by County and
    Parish:

    Table 6: Alabama's Use of GO Zone Low-Income Housing Tax Credits:

    Table 7: Florida's Use of Go Zone Low-Income Housing Tax Credits:

    Table 8: Louisiana's Use of GO Zone Low-Income Housing Tax Credits:

    Table 9: Mississippi's Use of GO Zone Low-Income Housing Tax Credits:

    Table 10: Texas' Use of GO Zone Low-Income Housing Tax Credits:

    Table 11: Alabama's Use of Gulf Opportunity (GO) Zone Advance
    Refundings, Largest to Smallest:

    Table 12: Louisiana's Use of GO Zone Advance Refundings, Largest to
    Smallest:

    Table 13: Mississippi's Use of Go Zone Advance Refundings, Largest to
    Smallest:

    Figures:

    Figure 1: Map of Gulf Opportunity Zones by State:

    Figure 2: Amount and Status of GO Zone Bond Authority, by State:

    Figure 3: GO Zone Bond Authority Allocated Amounts (Including Bonds
    Issued), by County and Parish:

    Figure 4: Comparison of GO Zone LIHTC Planned and In-service Units:

    Figure 5: Planned and In-service GO Zone LIHTC-funded Units by County
    and Parish:

    Figure 6: Selected Louisiana Parishes and Mississippi Counties with
    Major or Severe Damage to Rental Housing:

    Figure 7: Planned and In-service GO Zone LIHTC-funded Units as a
    Percentage of Rental Housing Units with Major or Severe Damage for
    Selected Counties and Parishes:

    Abbreviations:

    BOS: Board of Supervisors:

    DDA: Difficult Development Areas:

    CDBG: Community Development Block Grant:

    FEMA: Federal Emergency Management Agency:

    GO Zone: Gulf Opportunity Zone:

    HFA: Housing Finance Agency:

    HUD: Housing and Urban Development:

    IDA: Industrial Development Authority:

    IDB: Industrial Development Board:

    IRS: Internal Revenue Service:

    JCT: Joint Committee on Taxation:

    LDED: Louisiana Department of Economic Development:

    LIHTC: Low-Income Housing Tax Credit:

    MBFC: Mississippi Business Finance Corporation:

    MDA: Mississippi Development Authority:

    QAP: Qualified Allocation Plan:

    SBC: State Bond Commission:

    SED: Small Enterprise Development:

    [End of section]

    United States Government Accountability Office:
    Washington, DC 20548:

    July 16, 2008:

    The Honorable Max Baucus:
    Chairman:
    The Honorable Charles E. Grassley:
    Ranking Member:
    Committee on Finance:
    United States Senate:

    The Honorable Charles B. Rangel:
    Chairman:
    The Honorable Jim McCrery:
    Ranking Member:
    Committee on Ways and Means:
    House of Representatives:

    In 2005, Hurricanes Katrina, Rita, and Wilma devastated areas along the
    Gulf Coast in Alabama, Florida, Louisiana, Mississippi, and Texas. The
    hurricanes destroyed wide swaths of housing, infrastructure, and
    businesses, leaving more than 1,500 people dead and hundreds of
    thousands displaced without shelter or employment. The size and scope
    of the devastation caused by the Gulf Coast hurricanes presents the
    nation with unprecedented rebuilding challenges. For perspective on the
    magnitude, some estimates put capital losses at a range of $70 billion
    to more than $150 billion.[Footnote 1] Currently, nearly 3 years after
    the 2005 Gulf Coast hurricanes, the Gulf Coast and the nation continue
    to face the challenge of rebuilding.

    Current rebuilding activities, including the bulk of federal rebuilding
    assistance, are directed primarily toward restoring the region's stock
    of livable housing and essential infrastructure. Additional efforts are
    directed at economic recovery. Over the coming years, perhaps decades,
    significant and complex challenges lie ahead. Major decisions will need
    to be made regarding a wide range of issues including coastal
    restoration, levee protection, infrastructure, land use, and economic
    recovery. All levels of government, together with the private and
    nonprofit sectors will need to play a critical role in this process.
    Agreeing on what rebuilding will be done, where, how, and--particularly
    important--who will bear the costs, will be key to moving forward with
    the rebuilding process.

    In response to the Gulf Coast devastation, the federal government
    committed a historically high level of resources through an array of
    grants, loans, subsidies, and federal tax incentives. The bulk of
    federal rebuilding assistance from 2005 through 2008 came from two key
    programs--the Federal Emergency Management Agency's (FEMA) Public
    Assistance program ($10.4 billion as of April 2008) and the Department
    of Housing and Urban Development's (HUD) Community Development Block
    Grant (CDBG) program ($19.7 billion as of May 2008). Federal recovery
    and rebuilding assistance also includes payouts from the National Flood
    Insurance Program as well as funds for levee restoration and repair.
    Also to assist with recovery from the Gulf Coast hurricanes, the Gulf
    Opportunity (GO) Zone Act of 2005[Footnote 2] provided a range of tax
    relief and incentives for individuals and businesses in the GO Zones.

    Whereas some GO Zone tax incentives flow directly to taxpayers making
    certain qualified investments, the act authorized the states to
    allocate certain tax incentives such as additional low-income housing
    tax credits (LIHTC) and tax-exempt bond financing. For these two
    provisions, existing tax incentives were extended, granting additional
    authority to GO Zone areas in addition to regular, annual allocations
    available to the affected states. Each eligible state was responsible
    for setting up an application process and selecting which qualified
    projects are to receive allocations up to each state's GO Zone
    allocation authority under the GO Zone act.

    The Small Business and Work Opportunity Tax Act, part of the U.S. Troop
    Readiness, Veterans' Care, Katrina Recovery, and Iraq Accountability
    Appropriations Act, 2007,[Footnote 3] mandated that we study state and
    local practices in allocating and utilizing tax incentives in the GO
    Zone Act of 2005 and subsequent, amending legislation and report to
    Congress.[Footnote 4] On the basis of discussions with the House
    Committee on Ways and Means and the Senate Committee on Finance, our
    objectives were to (1) identify the tax incentives in the GO Zone Act
    of 2005 and subsequent legislation for which state and local
    governments had allocation and oversight responsibilities; (2) describe
    the processes state governments use to allocate the tax incentives,
    including how they ensure compliance with federal laws and prevent
    fraud, waste, and abuse; and, (3) describe how much of the tax
    incentives state and local governments have used and for what purposes.

    To identify the incentives in the GO Zone Act of 2005 and subsequent
    legislation for which states had allocation and oversight
    responsibilities, we reviewed the acts and Joint Committee on Taxation
    (JCT) explanations of the acts. We also reviewed our past and ongoing
    work related to Gulf Coast rebuilding. In addition, we interviewed
    officials from the Internal Revenue Service (IRS) and HUD.

    To identify the processes used by state governments to allocate federal
    GO Zone tax incentives and efforts to monitor compliance with federal
    laws, we obtained documentation, such as allocation plans for LIHTCs,
    bond commission meeting transcripts, bond commission meeting status
    updates, and state auditors' reports, from state officials in Alabama,
    Florida, Louisiana, Mississippi, and Texas, the five states with GO
    Zones eligible to use the tax incentives, and we interviewed officials
    and bond issuers in these states.

    To determine how much of the GO Zone tax incentives were used and for
    what purposes, we (1) obtained and analyzed documentation from the
    relevant state governments, including GO Zone bond applications,
    official bond documents made available to investors at the time the
    bonds are sold, program status reports, and descriptions of planned low-
    income housing developments; (2) interviewed state and selected local
    officials, including selected bond issuers; and (3) held discussions
    with selected private sector participants and nonprofit organizations.
    We obtained data on the total GO Zone bond allocations as of mid-June
    2008 and LIHTC awards as of April 2008. We reviewed information on all
    bonds issued by each state as of mid-June 2008, including summary
    information provided by the states describing how bonds were used. Due
    to differences in the way the bond type data were reported across the
    three eligible states, we did not attempt to quantify aggregate use by
    categories across the states. For LIHTCs, we reviewed the number of
    projects, units funded, and units in service as of April 2008. During
    our visits to Louisiana and Mississippi, the two states most directly
    affected by the Gulf Coast hurricanes, we toured several low-income
    housing projects funded with GO Zone tax credits. To provide
    perspective on the extent to which units have been developed with GO
    Zone LIHTCs, we compared the number of planned units to the number of
    units in service for each of the 5 states as of April 2008. Where data
    were available for selected parishes and counties in Louisiana and
    Mississippi, we compared planned and in-service GO Zone LIHTC units to
    rental housing units with major or severe damage by parish or county;
    comparable data were not available for every GO Zone parish and county
    in those two states or for Alabama, Florida, or Texas.[Footnote 5]

    We assessed the reliability of the state level bond and housing data
    by, when possible, comparing the data the states provided to official
    documentation and interviewing state officials with knowledge of the
    data. We determined that the data we used in this report were
    sufficiently reliable for our purposes. We conducted this performance
    audit from February through July 2008, in accordance with generally
    accepted government auditing standards. Those standards require that we
    plan and perform the audit to obtain sufficient, appropriate evidence
    to provide a reasonable basis for our findings and conclusions based on
    our audit objectives. We believe that the evidence obtained provides a
    reasonable basis for our findings and conclusions based on our audit
    objectives.

    Results in Brief:

    Under the GO Zone Act of 2005, Gulf Coast state governments were
    responsible for allocating four tax incentives between 2006 and 2010:
    (1) $14.9 billion in tax-exempt private activity bond authority; (2)
    $330 million in low-income housing tax credit (LIHTC) allocation; (3)
    $350 million in GO Zone tax credit bonds, a newly created category of
    tax credit bonds; and (4) $7.9 billion in additional advance refunding
    bonds. Alabama, Louisiana, and Mississippi were eligible to use all
    three bond authorities and the housing finance agencies (HFA) in these
    states, as well as for Florida and Texas, received the GO Zone LIHTC
    allocations. With the exception of the tax credit bonds, the bond
    provisions in the GO Zone Act are broadly similar to incentives offered
    in the New York Liberty Zone following the September 11, 2001,
    terrorist attacks in New York City. To assist with recovery from the
    Gulf Coast hurricanes, the bond authority helps finance the development
    of private facilities and activities, including some facilities, such
    as hotels and retail facilities, that cannot be financed with tax-
    exempt private activity bonds subject to annual state volume caps. The
    LIHTCs help finance the development of rental housing. The tax credit
    bond and advance refunding provisions were to provide debt relief for
    existing debt held by state and local governments. The act gave the
    eligible states broad discretion to allocate the GO Zone private
    activity bonds for a wide range of purposes.

    With some variations in their processes, Alabama, Louisiana, and
    Mississippi generally allocated the GO Zone bond provisions on a first-
    come, first-served basis, and all five eligible states used existing
    processes to award GO Zone LIHTCs. Alabama and Mississippi have similar
    processes for allocating GO Zone private activity bonds, whereas
    Louisiana's bond allocation process has changed over time. For the most
    part, all three eligible states allocated GO Zone tax-exempt private
    activity bond authority without consistently targeting the allocations
    to assist recovery in the most damaged areas, although Louisiana
    recently set aside some of its remaining allocation authority for the
    most damaged parishes. Officials in all three states as well as local
    bond issuers we interviewed said that they rely on the borrower's bond
    counsel opinions to ensure that the activities to be financed with
    bonds are eligible for the GO Zone allocations, and bond counsel
    submits required information returns to IRS. For all five eligible Gulf
    Coast states, HFAs used existing procedures to award GO Zone LIHTCs and
    will use existing procedures to monitor compliance as units are placed
    in service. In awarding GO Zone LIHTCs, some state HFAs gave priority
    to LIHTC projects that were to be developed in the most damaged
    counties. For the GO Zone tax credit bond provision, Louisiana and
    Mississippi used different approaches in selecting which existing state
    and local debt to temporarily subsidize with the new tax credit bonds
    and how to obtain required matching funds. Similar to GO Zone private
    activity bonds, the three eligible Gulf Coast states generally awarded
    additional advance refunding authority on a first-come, first-served
    basis. State officials said that they rely on the bond issuer's counsel
    to ensure that the bonds are eligible for the GO Zone provisions and
    file required information returns with IRS.

    As of mid-June 2008, the three eligible states had allocated about 87
    percent of the $14.9 billion in GO Zone tax-exempt private activity
    bond authority to finance a wide range of private purposes, and the
    five eligible states awarded 95 percent of the $330 million in LIHTCs
    to finance the development of rental housing. To date, bonds have been
    issued for about half of the awarded allocation authority, reflecting
    44 percent of the total allocation authority provided to Alabama,
    Louisiana, and Mississippi. The three states are using GO Zone tax-
    exempt private activity bonds for a wide range of purposes, including
    housing, utilities, manufacturing, retail facilities, and hotels.
    Across Alabama, Florida, Louisiana, Mississippi, and Texas, few planned
    LIHTC units were in service as of April 2008, but state officials
    anticipate that the units will be in service by the end of calendar
    year 2010, as required by statute. Although other federal programs can
    also fund the development of affordable rental housing, our analysis of
    planned and in-service GO Zone LIHTC-funded units alone indicates that
    these units will address 17 and 45 percent of the rental housing units
    that had major or severe hurricane damage in the states of Louisiana
    and Mississippi, respectively. The extent to which damaged units will
    be addressed varies by county and parish. As for the debt relief
    measures, two of three eligible states used tax credit bonds, and the
    three eligible states used 16 percent of the advance refunding
    authority. Louisiana and Mississippi exhausted their tax credit bond
    authority issuing bonds totaling $300 million, and Alabama elected not
    to issue tax credit bonds primarily due to time constraints in issuing
    the bonds. While Louisiana and Mississippi used relatively little of
    their advance refunding authority, Alabama has allocated over half of
    its advance refunding authority to provide localities with debt relief.
    State officials identified challenges for using all four provisions.
    Current economic conditions, including the reduced availability of
    credit nationwide, have made it difficult to issue tax-exempt bonds,
    and the value of housing tax credits has declined recently, meaning
    developers attract less equity investment. For the debt relief
    provisions, states faced challenges identifying debt eligible for the
    additional advance refunding provision and educating investors about
    the mechanics of the new tax credit bonds.

    State officials in Alabama, Florida, Louisiana, Mississippi, and Texas
    and officials from IRS and the Department of the Treasury provided
    technical comments, which we incorporated as appropriate.

    Background:

    The Gulf Opportunity Zone Act of 2005 includes tax incentives to assist
    recovery and economic revitalization for individuals and businesses in
    designated areas in Alabama, Florida, Louisiana, Mississippi, and Texas
    following Hurricanes Katrina, Rita, and Wilma in 2005. Some of the tax
    incentives in the act are extensions of existing federal tax incentives
    (e.g., tax-exempt private activity bonds, new markets tax credits, low-
    income housing tax credits, etc.) In some cases, the GO Zone Act
    liberalizes the rules that taxpayers must follow to be eligible to
    claim the incentives. JCT estimates indicate that these tax incentives
    will reduce federal revenue by about $9 billion over the 10-year period
    from 2006 to 2015.[Footnote 6]

    The act defined the GO Zones as those counties and parishes in the
    presidentially-declared disaster areas that warranted additional, long-
    term federal assistance. Rather than making the incentives available
    statewide in the five states affected by the 2005 hurricanes, the act
    defined a separate GO Zone for the three major 2005 hurricanes-
    -Katrina, Rita, and Wilma. Both Hurricane Katrina and Hurricane Rita
    affected certain areas in Louisiana, so those GO Zones overlap in
    Louisiana. Figure 1 illustrates the GO Zone areas in each of the five
    affected states. Tax provisions to assist recovery vary by GO Zone,
    with the most assistance provided to areas damaged by Hurricane
    Katrina, particularly in Louisiana and Mississippi.

    Figure 1: Map of Gulf Opportunity Zones by State:

    [See PDF for image]

    This map of the Gulf Opportunity Zones by State indicates the following
    zones in the states of Texas, Louisiana, Mississippi, Alabama, and
    Florida:
    * Katrina GO Zone only;
    * Wilma GO Zone;
    * Rita GO Zone;
    * Katrina and Wilma GO Zone.

    Sources: GAO presentation of IRS information; Map Resources (map).

    [End of figure]

    The GO Zone Act was broadly similar to legislation that created the New
    York Liberty Zone following the September 11, 2001, terrorist attacks
    in New York City. The Job Creation and Worker Assistance Act of 2002
    [Footnote 7] contained various tax incentives designed for response and
    recovery for the area of lower Manhattan designated as the New York
    Liberty Zone.[Footnote 8]

    Similar to those in the Liberty Zone, individuals and businesses may
    claim the GO Zone tax incentives as long as they meet specified federal
    requirements. In these cases, the tax incentives essentially function
    as open-ended entitlement programs that any eligible taxpayer may
    claim. For GO Zone tax incentives such as claiming accelerated
    depreciation on certain assets or partial expensing for certain clean-
    up costs, the full cost to the federal government depends on how many
    taxpayers claim the provision on their tax returns.

    For certain tax incentives in the GO Zone Act of 2005, state
    governments in states with GO Zones were authorized to establish
    processes and select which qualified projects are to receive tax
    incentive allocations up to each state's allocation authority limit. As
    mandated by law, this report discusses those tax incentives in the GO
    Zone Act of 2005 that state and local governments play a role in
    allocating and overseeing.

    Because the states are responsible for selecting which entities receive
    the tax benefit up to the allocation authority provided by law, these
    GO Zone tax incentives appear similar to traditional grant programs
    where governments provide funds directly to grant recipients. For
    example, Gulf Coast states have processes for allocating funds through
    FEMA's Public Assistance program[Footnote 9] and the CDBG program.
    [Footnote 10] In contrast with grant programs, where funds come
    directly from the government, investors in projects that have received
    GO Zone incentives are allowed to either claim a credit against their
    tax liability, as in the case of the LIHTC program, or exclude certain
    portions of the return on their investment, such as interest earned, in
    GO Zone projects from their taxable income, as is the case for tax-
    exempt bonds. Unlike traditional grant programs, the projects receiving
    these tax incentives are financed with bonds that must be repaid or
    equity provided by private investors, meaning developers, investors,
    insurers and other participants have an additional incentive to ensure
    that projects are financially viable and will remain compliant with
    applicable laws.

    Since the 2005 hurricanes, we are conducting ongoing work and have
    completed a number of studies evaluating disaster relief and recovery
    efforts along the Gulf Coast, including how states with GO Zones have
    made use of federal resources. Appendix IV lists related GAO products.

    States with GO Zones Are Responsible for Allocating Four Federal Tax
    Incentives under the GO Zone Act of 2005:

    Under the GO Zone Act of 2005, state and local governments are
    responsible for allocating and overseeing the use of four GO Zone tax
    incentives.[Footnote 11] According to our analysis of JCT estimates,
    these incentives accounted for about 40 percent, or $3.5 billion, of
    the projected cost to the federal government from the GO Zone Act over
    the 10-year period from 2006 to 2015. States with GO Zones were awarded
    authority to allocate:

    * $14.9 billion in tax-exempt private activity bonds, resulting in an
    estimated $1.6 billion reduction in federal revenue from 2006 to
    2015[Footnote 12];

    * $330 million in low-income housing tax credits (LIHTC), resulting in
    an estimated $1.1 billion reduction in federal revenue from 2006 to
    2015[Footnote 13];

    * $350 million in tax credit bonds, resulting in an estimated $57
    million reduction in federal revenue from 2006 to 2015[Footnote 14];
    and:

    * $7.9 billion in additional advance refunding bonds, resulting in an
    estimated $741 million reduction in federal revenue from 2006 to 2015.
    [Footnote 15]

    Alabama, Louisiana, and Mississippi received authority for all three
    bond provisions to use by the end of 2010 and increased LIHTC
    allocations each year for 2006 through 2008. Florida and Texas did not
    receive allocation authority for the bond provisions, but each received
    a onetime increase in LIHTC authority of $3.5 million for 2006. Table 1
    shows the amount of allocation authority that each state received by
    provision.

    Table 1: GO Zone Act of 2005 Cumulative Allocation Authority by State
    (Dollars in millions):

    GO Zone tax-exempt private activity bonds[A,C];
    Alabama: $2,174;
    Louisiana: $7,840;
    Mississippi: $4,921;
    Total: $14,935.

    GO Zone low-income housing tax credits (LIHTC)[A,B,C];
    Alabama: $47;
    Louisiana: $170;
    Mississippi: $106;
    Total: $323.

    GO Zone tax credit bonds;
    Alabama: $50;
    Louisiana: $200;
    Mississippi: $100;
    Total: $350.

    GO Zone additional advance refunding bonds;
    Alabama: $1,125;
    Louisiana: $4,500;
    Mississippi: $2,250;
    Total: $7,875.

    Source: GAO analysis of Joint Committee on Taxation and Gulf Coast
    state data.

    [A] These provisions are extensions of existing federal tax incentives.
    States received GO Zone allocation authority for these provisions in
    addition to their annual state allocation.

    [B] Florida and Texas each received $3.5 million in GO Zone LIHTC
    authority in 2006, but did not receive allocations for the other
    incentives.

    [C] Dollars for private activity bonds and low-income housing tax
    credits are rounded to the nearest million. Dollars for tax credit
    bonds and additional advance refunding bonds are exact amounts.

    [End of table]

    For GO Zone tax-exempt private activity bonds, the allocation amount
    that can be used over the 5-year period from 2006 to 2010 is
    significantly greater than the amount of qualified private activity
    bonds that may be allocated subject to annual state volume caps. For
    perspective, in 2008, state volume caps for tax-exempt private activity
    amounted to about $393 million, $365 million, and $262 million for
    Alabama, Louisiana, and Mississippi, respectively.[Footnote 16]
    Similarly, GO Zone LIHTC allocation authority in Alabama, Louisiana,
    and Mississippi exceeds regular LIHTC authority for 2006 to 2008.
    Alabama, Louisiana, Mississippi, received a total of about $27 million,
    $26 million, and $17 million, respectively, from their combined regular
    state LIHTC allocations (credit ceilings) for 2006 to 2008.[Footnote
    17]

    Tax-Exempt Private Activity Bond Authority:

    The GO Zone Act of 2005 grants Alabama, Louisiana, and Mississippi the
    authority to award tax-exempt bond allocations for qualified private
    activities. Tax-exempt private activity bonds allow private business
    owners and corporations to borrow capital at interest rates lower than
    would otherwise be available.[Footnote 18] Governmental entities issue
    the tax-exempt private activity bonds, generally serving as conduits to
    provide the bond proceeds to borrowers, including business owners and
    corporations that have been awarded allocation authority from the
    state.[Footnote 19] The borrowers' payments on their loans are then
    used to repay principal and interest on the bonds, and investors who
    purchased the bonds can generally exclude interest earned on the bonds
    from their federal income tax.

    All states receive an annual tax-exempt private activity bond
    allocation that is subject to a volume cap and is limited to certain
    types of facilities.[Footnote 20] GO Zone bonds can be issued in
    addition to annual state volume caps in eligible states and can be used
    for a broader range of facilities than tax-exempt private activity
    bonds subject to annual state volume caps. According to the GO Zone Act
    of 2005, eligible states have the authority to allocate an amount of GO
    Zone private activity bonds equal to $2,500 per person in the GO Zone,
    based on prehurricane population counts. States with GO Zone bond
    allocation authority must issue the bonds by December 31, 2010. For the
    three eligible states, aggregate GO Zone allocation authority over the
    period is between 6 and 22 times greater than annual qualified private
    activity bond authority subject to state volume caps. In contrast with
    qualified private activity bonds subject to annual state volume caps,
    GO Zone tax-exempt private activity bonds are not subject to the
    Alternative Minimum Tax.[Footnote 21]

    While GO Zone bonds can be used for facilities that generally cannot be
    built with tax-exempt private activity bond authority subject to annual
    state volume caps, such as hotels and retail facilities, GO Zone
    private activity bonds are subject to certain tax-exempt private
    activity bond prohibitions against financing golf courses, massage
    parlors, gambling, and liquor stores, among other prohibited uses. In
    addition, 95 percent of the bond proceeds must be used for qualified
    projects in the GO Zone.

    The liberalized use for GO Zone tax-exempt private activity bonds in
    comparison to qualified private activity bonds subject to annual state
    volume caps is broadly similar to private activity bond authority
    awarded in the New York Liberty Zone. Whereas the Liberty Zone
    provision divided the authority between the state and local levels and
    set specific limits on retail and residential rental property, the GO
    Zone provision did not set aside any portion to be allocated for
    specific localities or set dollar caps on certain categories of use.
    The GO Zone Act of 2005 provided states with broad discretion in
    allocating GO Zone tax-exempt private activity bonds.[Footnote 22]

    Low-Income Housing Tax Credits (LIHTC):

    The GO Zone Act of 2005 temporarily increased the amount of allocated
    tax credits for the five states along the Gulf Coast by a total of
    about $330 million. The Tax Reform Act of 1986[Footnote 23] authorized
    the LIHTC program to provide an incentive for the acquisition and
    development or the rehabilitation of rental housing affordable to low-
    income households. As required under the Internal Revenue Code, state
    housing finance agencies (HFA) must award credits to developers of
    qualified projects according to their qualified allocation plans (QAP),
    which establish the agencies' funding priorities and eligibility
    criteria. Developers either use the credits or sell them to investors
    to raise capital (i.e., equity) for real estate projects. In general,
    investors can claim credits on the qualified basis of the property--
    that is, total development cost (excluding land and other certain
    costs) of the low-income units. The investor receives approximately 9
    percent of the qualified basis in tax credits annually for 10 years.
    [Footnote 24] The equity raised by the tax credits reduces the need for
    debt financing and as a result, these properties can offer lower, more
    affordable rents.

    GO Zone LIHTCs were provided to the five eligible states in addition to
    their regular annual allocations. Under the regular LIHTC program in
    2006, each of the five states was allocated tax credits equal to $1.90
    per capita. The allocation claimed by Louisiana, Alabama, and
    Mississippi for 2006, 2007, and 2008 equaled $18.00 times each state's
    prehurricane population in the GO Zone.[Footnote 25] As a result of the
    increased per capita allocation, the 2006 through 2008 GO Zone LIHTC
    authority was about 75 percent, 567 percent, and 523 percent greater
    than the regular LIHTC authority that Alabama, Louisiana, and
    Mississippi received in the same period, respectively. While projects
    that receive LIHTCs must normally be placed in service within 2 years
    of the credit allocation, GO Zone LIHTC-funded units (as well as
    regular LIHTC units funded during 2006 through 2008 in a GO Zone) must
    be placed in service before January 1, 2011.[Footnote 26] Unlike
    regular LIHTC allocations, GO Zone credits generally cannot be carried
    forward.[Footnote 27]

    The GO Zone LIHTC provision also expanded the amount of credits
    available to investors. To promote investment in areas where the need
    is greatest for affordable housing, investors can receive additional
    credits if the tax credit properties are located in distressed areas
    known as "difficult development areas" (DDA). Investors in such
    "enhanced" tax credit properties can claim credits for 91 percent
    (instead of the normal 70 percent) of the project's qualified basis.
    The GO Zones are treated as DDAs under the 2005 act, and LIHTC
    properties located in the GO Zone are thus eligible for those enhanced
    LIHTCs.

    GO Zone Tax Credit Bonds:

    The GO Zone Act of 2005 created a new category of tax credit bonds--GO
    Zone tax credit bonds--which Alabama, Louisiana, and Mississippi were
    authorized to issue to provide debt relief to state and local
    governments.[Footnote 28] The GO Zone tax credit bonds must be general
    obligations of the state[Footnote 29] and the bond proceeds must be
    used to make payments on existing state and local debt. Tax credit
    bonds differ from tax exempt bonds in that rather than receiving tax-
    exempt interest payments, bondholders are entitled to a federal tax
    credit equal to a certain percentage of their investment.[Footnote 30]
    Because the state does not pay interest on the GO Zone tax credit
    bonds, they essentially serve as an interest-free loan while they are
    outstanding. Under the act, states are required to match the GO Zone
    tax credit bonds with funds from other sources, such as issuing
    additional general obligation bonds or money from a state's general
    fund. The three eligible states were required to issue tax credit bonds
    by December 31, 2006, and must retire the bonds within 2 years of
    issuing them, meaning that they provide only temporary debt relief to
    the state and local governments that they benefit.

    Additional Advance Refundings of State and Local Bonds:

    The GO Zone Act of 2005 permits one additional advance refunding for
    certain existing tax-exempt bonds in Alabama, Louisiana, and
    Mississippi.[Footnote 31] State and local governments typically refund,
    or refinance, bonds to reduce interest costs and ease restrictions on
    the original bond contract. However, state and local governments can
    generally only advance refund a bond one time and, in certain cases,
    including most tax-exempt private activity bonds, bonds cannot be
    advance refunded. The GO Zone additional advance refunding provision
    provides Alabama, Louisiana, and Mississippi the ability to reduce
    interest costs on existing debt that has already been advance refunded
    one time or did not originally meet the requirements to allow for
    advance refunding. The provision can be used by any issuer in the state
    and is not limited to counties and parishes located in the GO Zone. All
    additional advance refunding bonds must be issued by December 31, 2010.

    The additional advance refunding provision can only be used for bonds
    where one bond is currently outstanding, whether that bond is the
    original bond or the first advance refunded bond. To clarify, bonds
    being refunded are often subject to a call date, or a date at which the
    bond issuer may recall the original bonds and refund or retire them.
    For advance refundings, a second set of bonds is often established in
    advance of the call date with the proceeds from these bonds being
    dedicated to retire the original bond when the call date is reached.
    Therefore, after the second set of bonds are issued and before the call
    date on the original bonds is reached, two sets of bonds are
    outstanding. GO Zone additional advance refundings cannot be used in
    these instances.

    Like GO Zone tax-exempt private activity bonds, GO Zone additional
    advance refunding authority is similar to additional advance refunding
    authority awarded in the New York Liberty Zone following the September
    11, 2001, terrorist attacks. Liberty Zone advance refunding was limited
    to certain debts of the state or New York City, including qualified
    hospital 501(c)(3) bonds.[Footnote 32]

    With Some Variation in Their Processes, States with GO Zones Generally
    Allocated Bond Authority on a First-Come, First-Served Basis; States
    Relied on Existing Procedures to Allocate LIHTCs:

    With some variations in their processes, Alabama, Louisiana, and
    Mississippi generally allocated the GO Zone bond provisions on a first-
    come, first-served basis, and all five eligible states used existing
    processes to award GO Zone LIHTCs. For the most part, all three
    eligible states allocated GO Zone tax-exempt private activity bond
    authority without consistently targeting the allocations to assist
    recovery in the most damaged areas, although Louisiana recently set
    aside some of its remaining allocation authority for the most damaged
    parishes. Officials in Louisiana and Mississippi acknowledged that the
    first-come, first-served approach made it difficult for applicants in
    some of the most damaged areas to make use of the bond provision at the
    beginning of the program. While all eligible states followed existing,
    prehurricane procedures to award LIHTCs and will use existing
    procedures to monitor for federal compliance, the states exhibited some
    differences in how they targeted the GO Zone LIHTC authority to the
    most damaged areas. Louisiana and Mississippi adopted different
    approaches for issuing tax credit bonds and identifying matching fund
    sources, and Alabama chose not to issue tax credit bonds due to time
    constraints associated with issuing the bonds. Similar to the case of
    GO Zone private activity bonds, when allocating additional advance
    refunding authority the three eligible states generally used a first-
    come, first-served approach.

    States Generally Awarded Tax-Exempt Private Activity Bond Authority on
    a First-Come, First-Served Basis and Rely on Bond Counsel to Ensure
    Compliance with Federal Laws:

    To expedite bond processing, the three eligible states generally
    allocated the GO Zone private activity bond authority and approved
    projects on a first-come, first-served basis without consistently
    targeting the allocations to assist recovery in the most damaged areas.
    Alabama and Mississippi have similar processes for allocating GO Zone
    private activity bonds, whereas Louisiana's bond allocation process has
    changed over time. Some state officials we interviewed said they were
    uncertain whether the GO Zone bonds should be used quickly anywhere
    within the qualified areas to provide an economic stimulus to the GO
    Zone, or if the bonds should be more focused on recovery efforts in the
    damaged areas. State officials we interviewed acknowledged that the
    first-come, first-served approach led to awarding bond allocation to
    projects in less damaged areas in the GO Zone because businesses in
    these areas were ready to apply for and issue bonds before businesses
    in more damaged areas could make use of the incentive. Counties and
    parishes in the most damaged coastal areas of Louisiana and Mississippi
    faced challenges dealing with the immediate aftermath of hurricane
    debris removal and helping those displaced. While potential GO Zone
    private activity bond applicants in some of the most damaged areas were
    not positioned to apply for allocations when they first became
    available, applicants in those areas have been able to use the GO Zone
    bonds more recently.

    As with tax-exempt private activity bonds that are subject to state
    volume caps, state officials said they rely on bond counsel to ensure
    that bond applications meet program requirements before issuance.
    Issuers must also file information return Form 8038 with the IRS.
    [Footnote 33] According to IRS officials, post-issuance compliance
    costs often do not surface until as long as 5 years after bonds have
    been issued. State officials and others we interviewed did not identify
    any alleged cases of fraud, waste, or abuse with GO Zone private
    activity bonds. However, the processes states used to allocate GO Zone
    bonds introduced risks that could lead to inefficient allocation of the
    federal assistance. For example, officials interviewed indicated that
    some projects that may have been viable without tax-exempt financing
    received some tax-exempt bond authority.

    Alabama and Mississippi Processes for Allocating GO Zone Tax-Exempt
    Private Activity Bonds:

    Alabama and Mississippi applied similar first-come, first-served
    approaches to allocate GO Zone tax-exempt private activity bonds. In
    accordance with the GO Zone Act of 2005, the governors of both states
    had the authority to award GO Zone private activity bond allocations.
    Both states outlined general criteria for making awards, but also
    acknowledged that they did not specifically target certain areas within
    the zone to receive set-aside amounts of GO Zone private activity bond
    allocations.

    The Governor of Alabama initially identified four criteria for
    prioritizing GO Zone bond authority: (1) replacing property damaged or
    destroyed by Hurricane Katrina, (2) rebuilding infrastructure of cities
    or counties damaged by Hurricane Katrina, (3) projects that
    substantially improve the quality of life for the area, and (4) new
    economic development projects. Beginning in April 2006, Alabama began
    awarding allocations based on the Governor's priorities. According to
    Alabama officials, the apparent demand was for new economic development
    projects, and the state decided to adopt a first-come, first-served
    approach for allocating GO Zone private activity bond authority.
    According to the officials we interviewed, one possible explanation why
    many potential GO Zone bond borrowers in the first two categories
    generally did not apply for tax-exempt private activity bonds could be
    that they received insurance settlements and federal grants and loans
    for rebuilding efforts. Unlike regular private activity bonds subject
    to volume caps, Alabama did not charge an application fee for GO Zone
    bonds. GO Zone private activity bond applicants in Alabama submit
    applications to the Alabama Department of Finance, Debt Management
    Division, which reviews the applications for completeness and the
    applications are then submitted to the Finance Director for his
    approval. The Governor did not set a maximum amount of authority that
    may be allocated per project. In Alabama, the bonds must be issued
    within 1 year of the time the borrower receives final approval to issue
    bonds, but borrowers may request an extension.

    In Mississippi, the Governor's Office grants the final approval of GO
    Zone bond allocations on a case-by-case basis after reviewing
    recommendations from the Mississippi Development Authority (MDA). The
    MDA reviews GO Zone bond applications for information on the number of
    jobs the project will create, its projected general economic effect,
    and the degree to which the developer is willing to invest its own
    funds in the project. Mississippi's application for private activity
    bond authority includes a $1,000 application fee and applications are
    reviewed in the order in which they are received. Recommendations for
    allocation are generally made by MDA on a first-come, first-served
    basis.[Footnote 34] Mississippi officials indicated that they have
    tried to ensure that the six most-damaged counties along the Gulf Coast
    have benefited from projects with GO Zone private activity bond
    allocations, but no portion of the GO Zone bond allocation authority
    was set aside specifically for these counties.[Footnote 35] The
    Governor did not set a maximum amount of authority that may be
    allocated per project. Once a project receives final approval in
    Mississippi, bonds must be issued within 120 days.

    Louisiana Process for Allocating GO Zone Tax-Exempt Private Activity
    Bonds:

    Louisiana's process for allocating GO Zone private activity bonds has
    changed over time, and as of June 2008, most of the bond allocation
    authority has been awarded on a first-come, first-served basis with a
    portion set-aside for the 13 most-damaged parishes.

    The Louisiana State Bond Commission (SBC) in February 2006 planned to
    set aside 50 percent of its allocation authority for the 13 most-
    damaged parishes and 50 percent for the rest of the GO Zone.[Footnote
    36] No single project was to receive more than $250 million in GO Zone
    bond allocation authority. In March 2006, the Louisiana Department of
    Economic Development (LDED) began recommending that projects receive
    allocations based on applications to the Louisiana SBC on a first-come,
    first-served basis. Under the GO Zone Act of 2005, the Louisiana SBC
    had authority to make GO Zone bond allocations. However, following SBC
    approval of GO Zone bond allocations, the final step in the Louisiana
    process included the Governor issuing an allocation letter to each GO
    Zone bond recipient.[Footnote 37]

    Louisiana state officials we interviewed stressed that they did not
    initially believe they would have sufficient demand to use all of their
    $7.9 billion allocation by the end of 2010, when the GO Zone bond
    authority expires. Beginning in May 2006, Louisiana SBC staff provided
    status updates to Louisiana SBC members on the amount of remaining and
    used GO Zone bond authority for the 13 most-damaged parishes and the
    remaining parishes at monthly Louisiana SBC meetings. By the end of
    June 2007, the Louisiana SBC had granted final approval for almost $4.6
    billion, or nearly 60 percent, of the state's GO Zone bond allocation
    authority, and preliminary approval to projects worth an additional
    $3.0 billion,[Footnote 38] leaving roughly $300 million in allocation
    authority. The allocations approved included projects exceeding the
    $250 million cap with two large projects for $1 billion each.

    According to bond commission meeting transcripts, some bond commission
    members expressed concerns that the allocations had not been
    effectively targeted to areas and businesses with the greatest need.
    While the 13 most-damaged parishes in aggregate had received more than
    50 percent of the final allocations, some of the most severely damaged
    areas around New Orleans had received relatively little as of June
    2007. For example, as of June 2007, Orleans parish had only received
    about 2 percent of the GO Zone bond allocation authority that had been
    granted final approval. According to Louisiana SBC officials, this was
    in large part due to a lack of applications for potential GO Zone bond
    projects in the most severely damaged areas. Around that time, the
    Governor's office declined to issue final allocation letters pending
    review of the state's GO Zone bond process, and the Louisiana SBC
    temporarily stopped awarding final approval for GO Zone bonds. In
    September 2007, the Louisiana Attorney General ruled that the Governor
    did not have the authority to issue final approval letters for GO Zone
    private activity bonds because the federal act specified that the state
    bond commission has final approval.[Footnote 39]

    In September 2007, the Louisiana SBC, in conjunction with the
    Governor's Office and the LDED, revised the GO Zone allocation process
    and established two pools of allocation authority--a "designated pool"
    for the 13 most-damaged parishes and a "competitive pool" for the rest
    of the GO Zone parishes. While the designated pool resembled the SBC's
    original concept, the list of the 13 parishes targeted for GO Zone bond
    allocations was updated based in part on FEMA data on businesses and
    infrastructure damage and HUD data on major and severe housing damage.
    [Footnote 40] Each pool was to receive half of the remaining GO Zone
    bond authority, or about $1.7 billion per pool. Further, each of the 13
    parishes in the designated pool was to receive GO Zone bond allocation
    authority in proportion to the degree of damage sustained. In addition,
    projects that had received preliminary approval earlier were put on
    hold and had to qualify for final approval by satisfying certain
    criteria relating to the number of jobs created and overall economic
    effect.

    The Louisiana SBC announced allocation awards in October 2007, awarding
    allocations for all remaining authority in the competitive pool with
    about $900 million of allocation authority remaining in the designated
    pool. From October 2007 to April 2008, GO Zone bond projects faced
    difficulty obtaining credit due in part to changing market conditions
    nationwide, and some GO Zone projects requested additional time to
    complete their issuance.[Footnote 41] However, some bond commissioners
    expressed concern that repeatedly extending the period to issue GO Zone
    bonds allowed less viable projects to retain their allocations while
    other applications were waiting for consideration.

    On the basis of its March 2008 review of Louisiana's GO Zone bond
    process requested by the newly elected Governor, the LDED acknowledged
    that the Louisiana GO Zone bond process lacked effective prioritization
    mechanisms and lacked mechanisms to ensure selected projects would be
    viable, and that the changing rules had led to disappointment and
    confusion among some stakeholders. Therefore, the LDED recommended that
    the Louisiana SBC revise its rules for allocating the remaining private
    activity bond authority. In April 2008, the Louisiana SBC adopted the
    LDED's recommendations and, among other recommendations, took the
    following actions:

    * Award authority in the competitive pool to applicants that applied
    before November 2007 on a first-come, first-served basis. After making
    awards to those existing applicants, future awards from the competitive
    pool will be prioritized based on whether the LDED determines that the
    proposed project is consistent with Louisiana's longer-term economic
    development strategy. However, even if the LDED does not designate a
    project as consistent with Louisiana's longer-term economic development
    strategy, the projects are considered by the SBC on a first-come, first-
    served basis, and, at the SBC's discretion, may or may not be awarded
    an allocation.[Footnote 42]

    * Limit the amount of authority that any single developer can receive
    to $100 million going forward.

    * Allow local jurisdictions in the designated pool to recommend
    projects to the Louisiana SBC for approval, and local jurisdictions may
    recommend projects exceeding the $100 million limit, as long as the
    local jurisdiction is located in a designated pool parish that has
    allocation authority remaining and the parish approves the allocation.

    * Impose a 240-day period to issue bonds after receiving allocations.

    * Require, in addition to the regular application fee, that applicants
    must submit a refundable deposit totaling 0.5 percent of the proposed
    allocation with their application.[Footnote 43] This change also
    applied to the applicants that had received allocations but had not yet
    issued bonds as a condition for them to receive the full 240-day
    extension of their allocation time limit.[Footnote 44]

    In May 2008, the Louisiana SBC awarded GO Zone bond authority to
    applicants in the competitive pool pending before November 2007 as well
    as to all other pending applications on the basis of the prioritization
    policy described above, effectively exhausting the competitive pool
    allocation authority on a first-come, first-served basis. As of June
    2008, parishes in the designated pool have bond authority remaining to
    allocate. According to Louisiana officials, if the designated pool
    parishes have not issued bonds for all of their authority by the
    beginning of 2010, the remaining authority will be available to both
    the competitive and designated pools during 2010.

    States Used Existing Procedures to Award GO Zone LIHTCs and Will Use
    Existing Procedures to Monitor Compliance with Applicable Federal Laws:

    The HFAs from the five eligible states used their existing procedures
    to announce the availability of credits, process applications, and
    award GO Zone LIHTCs. Three of the five states announced the
    availability of GO Zone LIHTCs in their qualified allocation plans
    (QAP), which HFAs use to announce the availability of credits,
    eligibility criteria, and information on ranking applications. The
    Florida HFA had already finalized its QAP in 2006 (before the state
    received the extra GO Zone allocation), so the availability of these
    funds was not announced in the QAP, but was advertised at the beginning
    of the 2006 funding cycle. Similarly, the Texas HFA announced the
    availability of GO Zone LIHTCs through a separate policy because its
    QAP had already been published. Officials from each state HFA stated
    that they used their existing procedures to process GO Zone LIHTC
    applications and to award the credits. These processes generally
    include scoring and ranking applications, reviewing market studies and
    environmental assessments, underwriting, and making funding
    recommendations to the boards.

    States generally announced funding priorities for each funding cycle
    through their QAPs. According to the 2006 through 2008 QAPs and HFA
    officials, in some funding cycles the HFAs for Louisiana, Mississippi,
    and Texas gave priority to projects that were to be developed in the GO
    Zone counties with the most hurricane-related damage. For example,
    according to the 2007/2008 QAP for Louisiana, at least 75 percent of
    the 2007 and 2008 GO Zone credits were reserved for parishes with
    significant numbers of rental housing with damage from Hurricanes
    Katrina and Rita. While 13 specific parishes were targeted in Louisiana
    for GO Zone bonds, the QAP targeted 8 parishes for GO Zone
    LIHTCs.[Footnote 45] The QAPs for Alabama and Florida did not give any
    priority to projects in the most-damaged GO Zone counties. According to
    the addendum to Alabama's 2006 QAP, the HFA's priority was to balance
    the distribution of credits throughout the state in terms of
    geographical regions, counties, and urban and rural areas. Officials
    from the Florida HFA stated that the need to prioritize the GO Zone
    counties with the most damage was mitigated by an agency policy to
    prioritize the counties that were hardest hit by 2004 and 2005
    hurricanes, which already included some of the GO Zone counties.

    HFAs are required to annually monitor LIHTC-funded projects for
    compliance with the Internal Revenue Code once projects are complete
    and in service, and report any instances of noncompliance to the IRS
    after giving the owner time to correct the problem.[Footnote 46] As a
    part of this annual monitoring process, officials review documentation
    to ensure that the properties meet one of two tests that restrict both
    the amount of rent that is assessed to tenants and the income of
    eligible tenants.[Footnote 47] In addition, at least once every 3
    years, HFAs must conduct on-site inspections of all buildings in a
    project and, for at least 20 percent of the project's low-income units,
    inspect the units and review income and rent records. For example, the
    Alabama HFA's compliance manual states that its staff will perform
    annual file reviews, including site visits as needed, to ensure that
    the owner is operating the project in compliance. Similarly, according
    to the Louisiana HFA compliance manual, staff will annually review
    compliance monitoring reports, which all project owners are required to
    submit, and periodically conduct on-site visits. We did not assess the
    extent to which monitoring policies have been followed since few GO
    Zone LIHTC-funded units had been placed in service as of April 2008.

    Louisiana and Mississippi Adopted Different Approaches for Issuing Tax
    Credit Bonds; Alabama Did Not Issue Tax Credit Bonds:

    The Louisiana SBC issued tax credit bonds matched by the state with
    general obligation bonds and will retire the bonds by July 17, 2008, by
    refunding them with tax-exempt general obligation bonds. The state
    accepted applications from local entities to receive funds from the tax
    credit bond proceeds. In Mississippi, the State Treasurer's Office
    issued tax credit bonds matched by state general fund money to provide
    temporary debt relief at the state level. They will retire these bonds
    on October 30, 2008. Both states rely on the state's bond counsel
    opinions to ensure that the tax credit bonds are issued in accordance
    with applicable federal laws.

    Alabama did not issue the tax credit bonds because officials in
    Alabama's Debt Management Division believed the deadline for issuing
    tax credit bonds would expire before the state would be able to issue
    general obligation bonds. Alabama officials said the state is required
    to amend its constitution to issue general obligation bonds; as we
    noted earlier, states are required to issue the GO Zone tax credit
    bonds as general obligation bonds. As such, Alabama officials did not
    believe they would be able to meet the deadline for issuing the tax
    credit bonds.

    States Generally Allocated Additional Advance Refundings on a First-
    Come, First-Served Basis and Rely on Bond Counsel to Ensure Compliance
    with Applicable Laws:

    The Governor of Alabama delegated the responsibility to allocate
    advance refundings to the Finance Director. Alabama allocated advance
    refundings on a first-come, first-served basis as counties and bond
    authorities submitted advance refunding applications to the Alabama
    Department of Finance, Debt Management Division. According to Alabama
    officials, as long as the bond issuer and bond counsel certified that
    the bonds qualified for advance refunding, the state approved the
    application.

    In Louisiana, additional advance refunding applicants were to apply to
    the Louisiana SBC, with a copy being sent to the Governor's Office.
    Applications for additional advance refunding authority were approved
    on a first-come, first-served basis. Louisiana indicated the state will
    approve eligible advance refundings on a first-come, first-served basis
    until $1.5 billion of allocation authority remains and then will
    develop criteria to allocate the remaining authority. The issuer's bond
    counsel must indicate in writing that the bonds meet applicable
    requirements.

    The Mississippi State Treasurer's Office, along with other state
    agencies, made cities, counties, and other governmental debt issuers
    aware of the additional advance refunding provision. It then allocated
    additional advance refunding authority to entities that applied to the
    Treasurer's Office generally on a first-come, first-served basis after
    the issuer's bond counsel indicated the bonds met the eligibility
    requirements for GO Zone additional advance refundings and the State
    Treasurer certified that the issuer filed a completed application.

    Most GO Zone Private Activity Bonds Have Been Allocated for a Range of
    Private Facilities and LIHTCs for Rental Housing; States Used Debt
    Relief Provisions to Varying Degrees:

    As of mid-June 2008, states with GO Zones had allocated 87 percent of
    their authority for GO Zone tax-exempt private activity bonds and as of
    April 2008 about 95 percent of their LIHTC authority. However, bonds
    have been issued for only about half of the final allocations,
    representing 44 percent of the total GO Zone tax-exempt private
    activity bond authority, and few LIHTC units were in service. As of
    those dates, Alabama, Louisiana, and Mississippi used GO Zone private
    activity bonds to finance a broad range of private facilities,
    including manufacturing facilities, utilities, housing, retail
    facilities, hotels, and other facilities. Depending on circumstances
    such as time frames for issuing the bonds and the number of eligible
    bonds available, states' use of GO Zone tax credit bonds and additional
    advance refundings varied. States used these latter two provisions to
    provide debt relief at the state and local level. State officials
    identified some challenges in making use of all four provisions.

    Gulf Coast States Have Allocated about 87 Percent of Private Activity
    Bond Authority for a Wide Range of Private Facilities, but Bonds Have
    Only Been Issued for about Half of the Awarded Authority:

    As of mid-June 2008, the three eligible states have allocated 87
    percent of the $14.9 billion in GO Zone private activity bond
    authority, and bonds issued amounted to about 44 percent of the total
    allocation authority (see fig. 2). Alabama, Louisiana, and Mississippi
    have allocated 88 percent, 89 percent, and 84 percent of their GO Zone
    private activity bond authority, respectively.[Footnote 48] Bonds had
    been issued for about half of the allocation authority that the states
    awarded. If applicants receiving private activity bond allocations
    cannot issue bonds within required time frames, the allocation
    authority is returned to the state to be reallocated. States have used
    these bonds for a wide range of facilities as allowed under the act.
    For example, states used GO Zone bonds for manufacturing facilities,
    utilities, housing, hotels, conference centers, retail facilities, and
    a variety of other private business activities. Under normal rules for
    tax-exempt private activity bond financing, some of these uses,
    including hotels and retail facilities, would not be allowed. For a
    listing of GO Zone private activity bonds issued in Alabama, Louisiana,
    and Mississippi as of mid-June 2008, see appendix I.[Footnote 49]

    Figure 2: Amount and Status of GO Zone Bond Authority, by State:

    [See PDF for image]

    This figure is a stacked vertical bar graph depicting the following
    data:

    Amount and Status of GO Zone Bond Authority, by State:

    State: Alabama ($2.2 billion);
    Percent allocated and issued: 39.5;
    Percent allocated only:	48.8;
    Percent unallocated: 11.7.

    State: Louisiana ($7.8 billion);
    Percent allocated and issued: 47.1;
    Percent allocated only:	41.8;
    Percent unallocated: 11.2.

    State: Mississippi ($4.9 billion);
    Percent allocated and issued: 40.3;
    Percent allocated only:	44;
    Percent unallocated: 15.7.

    State: Total, all states ($14.9 billion);
    Percent allocated and issued: 43.7;
    Percent allocated only:	43.6;
    Percent unallocated: 12.7.

    Source: GAO analysis of Alabama, Mississippi, and Louisiana data as of
    mid-June 2008.

    Note: As of mid-June 2008, all remaining allocation authority in
    Louisiana is set aside for the dedicated pool of the 13 most-damaged
    parishes.

    [End of figure]

    In all three eligible states, larger bonds account for at least 69
    percent of the total GO Zone bonds issued. As of mid-June 2008, the 10
    largest bonds issued in Alabama, Louisiana, and Mississippi account for
    approximately 92 percent, 76 percent, and 69 percent of total bonds
    issued, respectively. This is one indication that borrowers financing
    larger projects may have been able to use the GO Zone tax-exempt
    private activity bonds to a greater extent than borrowers financing
    smaller projects. Officials in Louisiana and Mississippi said that
    smaller projects, such as those issuing bonds for less than about $2 or
    $3 million, may have a more difficult time using the GO Zone private
    activity bond provision because the issuance costs, including fees for
    legal and financial advisors, begin to account for a larger percentage
    of bond proceeds for smaller bonds than for larger bonds.[Footnote 50]

    Some GO Zone parishes and counties contained multiple projects that
    received GO Zone bond allocations, with total amounts in the counties
    and parishes ranging from less than $1 million to over $1 billion. The
    states also awarded projects that were to benefit multiple GO Zone
    counties and parishes. Alabama awarded 7 percent of its GO Zone private
    activity bond authority to projects affecting multiple counties.
    Louisiana awarded 6 percent of its authority to projects affecting
    multiple parishes and Mississippi awarded 29 percent of its authority
    in a similar manner. Figure 3 shows the range of GO Zone tax-exempt
    private activity bond allocations by state and by county or parish as
    of mid-June 2008. Even though the figure indicates that some of the
    most-damaged counties and parishes in Mississippi and Louisiana did not
    yet have any specific projects that have received GO Zone bond
    allocations as of June 2008, these counties and parishes may have
    benefited from some of the projects affecting multiple counties or
    parishes within that state.

    Figure 3: GO Zone Bond Authority Allocated Amounts (Including Bonds
    Issued), by County and Parish:

    [See PDF for image]

    This figure is a map indicating GO Zone Bond Authority Allocated
    Amounts (Including Bonds Issued), by County and Parish in the following
    five categories:
    * $1-49.9 million;
    * $50-199.9 million;
    * $200-999.9 million;
    * Over $1 billion;
    * Other GO Zone counties.

    State: Louisiana ($7.9 billion allocation authority to GO Zone);
    * $1-49.9 million:
    - Washington*;
    - Tangipahoa*;
    - Livingston;
    - West Baton Rouge;
    - Iberville;
    - St. Mary;
    - Iberia*;
    - Vermillion*;
    * $50-199.9 million:
    - St. Bernard*;
    - Jefferson*;
    - Lafourche*;
    - Terrebonne*;
    - Jefferson Davis;
    - Cameron;
    - Lafayette;
    * $200-999.9 million:
    - St. Tammany*;
    - Orleans*;
    - Plaquemines*;
    - St. Charles;
    - St. James;
    - Ascention;
    - East Baton Rouge;
    * Over $1 billion:
    - Calcasieu*;
    * Other GO Zone counties:
    - Others not indicated by name on the map.

    State: Mississippi ($4.9 billion allocation authority to GO Zone);
    * $1-49.9 million:
    - Jones;
    - Lamar;
    - Stone*;
    * $50-199.9 million:
    - Hinds;
    - Rankin;
    - Lauderdale;
    - Forrest;
    - Greene;
    - Warren;
    - Adams;
    - Hancock*;
    * $200-999.9 million:
    - Lowndes;
    - Kemper;
    - Madison;
    - Harrison*;
    - Jackson*;
    * Over $1 billion:
    - None indicated;
    * Other GO Zone counties:
    - Pearl River*;
    - George*;
    - Others not indicated by name on the map.

    State: Alabama ($2.2 billion allocation authority to GO Zone);
    * $1-49.9 million:
    - Clarke;
    - Marendo;
    * $50-199.9 million:
    - Tuscaloosa;
    * $200-999.9 million:
    - Mobile;
    - Washington;
    - Baldwin;
    * Over $1 billion:
    - None indicated;
    * Other GO Zone counties:
    - Others not indicated by name on the map.

    Source: GAO analysis of state data; Map Resources (map).

    * Designated most damaged by state officials[A].

    Notes: Some GO Zone private activity bond allocations are to affect
    multiple counties or parishes in the GO Zones. Mississippi data show
    that 29 percent of the allocations benefit multiple counties. Alabama
    and Louisiana data indicate that 7 percent and 6 percent of the
    allocation authority has benefited multiple counties or parishes,
    respectively. Some counties and parishes have not received specific GO
    Zone bonds, but, some of these counties and parishes may have benefited
    from bonds for projects affecting multiple counties or parishes.

    The data in the figure above represent allocations, including issued
    bonds. The allocations are subject to change and can be returned to the
    state for reallocation if bonds are not issued within required time
    frames.

    [A] As of September 2007, Louisiana designated a pool of the 13 most-
    damaged parishes to receive 50 percent of the GO Zone tax-exempt
    private activity bond allocation authority. Mississippi officials
    recognized the six southernmost counties as those with the most damage
    but did not set aside a specific amount.

    [End of figure]

    Projects are experiencing challenges in issuing the GO Zone private
    activity bonds. According to state officials and others we interviewed:

    * private businesses may need to combine tax-exempt bond financing with
    other federal, state, or local subsidies for a project to be viable;

    * risks associated with financing projects in areas most vulnerable to
    future natural disasters can make it difficult to sell the bonds;

    * insurance costs have risen since the 2005 hurricanes;

    * reduced availability of credit nationwide has made it more difficult
    to issue bonds; and:

    * the most heavily damaged areas in and around New Orleans, Louisiana,
    may not be able to use their designated allocation authority before it
    expires in 2010.

    The Five States Combined Have Awarded 95 Percent of Their LIHTC
    Allocation; Few Planned Units Were In Service as of April 2008:

    The five eligible states have awarded 95 percent of the combined $330
    million in additional tax credit allocation from 2006 through 2008 as
    provided under the GO Zone Act of 2005. The state HFAs for Florida,
    Mississippi, and Texas awarded all of the $113 million of the
    additional GO Zone LIHTC allocations from 2006 through 2008. As of
    April 2008, the Alabama HFA had awarded 74 percent of its $47 million
    GO Zone LIHTC allocation for 2006 through 2008.[Footnote 51] The agency
    awarded all of its 2006 and 2007 allocations, and was in the process of
    awarding its nearly $16 million 2008 GO Zone LIHTC allocation. The
    Louisiana HFA had awarded all of its GO Zone LIHTCs, but some have
    since been returned.

    Few of the planned GO Zone LIHTC funded units were in service as of
    April, 2008 (see fig. 4). While LIHTC-funded units are generally
    required to be placed in service within 2 years of credit allocation,
    Congress extended this requirement for units funded with GO Zone
    LIHTCs. GO Zone LIHTC-funded units (as well as regular LIHTC units
    funded during 2006 through 2008 in a GO Zone) must be placed in service
    before January 1, 2011.[Footnote 52]

    Figure 4: Comparison of GO Zone LIHTC Planned and In-service Units:

    [See PDF for image]

    This figure is a vertical bar graph depicting the following data:

    State: Alabama;
    Planned: 3,259;
    In-service: 68.

    State: Florida;
    Planned: 226;
    In-service: 0.

    State: Louisiana;
    Planned: 11,787;
    In-service: 2,156.

    State: Mississippi;
    Planned: 9,301;
    In-service: 328.

    State: Texas;
    Planned: 398;
    In-service: 0.

    Source: State housing finance agencies for Alabama, Florida, Louisiana,
    Mississippi, and Texas.

    Note: All GO Zone LIHTC units must be placed in service before January
    1, 2011. Data are as of April 2008.

    [End of figure]

    Officials from the five HFAs that received GO Zone LIHTCs told us that
    most units are anticipated to be in service within the required time
    frames, but that they are working to address challenges to help ensure
    that all units are placed in service by the deadline. One of the
    challenges that some HFA officials stated that they are facing is the
    declining market value of tax credits.[Footnote 53] As the value of tax
    credits declines, developers get less equity from investors for each
    dollar in tax credits awarded. As a result, developers must seek
    additional funding sources to make up for the equity shortfall. HFA
    officials from Alabama, Louisiana, and Mississippi also explained that
    they have encountered resistance from some communities to the
    development of affordable rental housing. Such resistance generally
    slows development, as developers try to work out such issues with local
    officials. In addition, HFA officials noted that other challenges
    include the need to address environmental issues, and increases in the
    total costs to develop projects, due to increased costs for labor,
    materials, and land.

    The number of planned GO Zone LIHTC-funded units, and units placed in
    service as of April 2008, varies by GO Zone parish and county (see fig.
    5 and app. II, table 5). As an example, the total number of planned and
    in-service units ranged from a low of 24 units in Washington County,
    Alabama, to a high of 8,636 in Orleans Parish, Louisiana. In most
    counties, from 1 to 150 units were either planned or in service as of
    April 2008. In other GO Zone counties, no GO Zone LIHTC-funded units
    are planned. Our analysis focuses on GO Zone LIHTC-funded units, and it
    is important to note that other programs can also be used to fund
    affordable rental housing, such as HUD programs and other state and
    local programs.

    Figure 5: Planned and In-service GO Zone LIHTC-funded Units by County
    and Parish:

    [See PDF for image]

    This figure is a map of the planned and in-service GO Zone LIHTC-funded
    units by County and Parish, indicated as follows:

    State: Texas;
    * 0 units:
    - counties not indicated by name;
    * 1 to 150 units:
    - Orange;
    - Angelina;
    * 151 to 500 units:
    - Jefferson;
    * More than 500 units:
    - None indicated.

    State: Louisiana;
    * 0 units:
    - counties not indicated by name;
    * 1 to 150 units:
    - Cameron;
    - Terrebonne;
    - Lafourche;
    - St. James;
    - Lafayette;
    - West Baton Rouge;
    - Livingston;
    - Washington;
    * 151 to 500 units:
    - Acadia;
    - Vermillion;
    - Iberia;
    - East Baton Rouge;
    - Tangipahoa;
    * More than 500 units:
    - Calcasieu;
    - Jefferson;
    - Orleans;
    - St. Tammany.

    State: Mississippi;
    * 0 units:
    - counties not indicated by name;
    * 1 to 150 units:
    - Warren;
    - Yazoo;
    - Attala;
    - Winston;
    - Lowndes;
    - Neshoba;
    - Lauderdale;
    - Wayne;
    - George;
    - Copiah;
    - Simpson;
    - Covington;
    - Pike;
    * 151 to 500 units:
    - Pearl River;
    - Forrest;
    - Jones;
    - Madison;
    * More than 500 units:
    - Hancock;
    - Harrison;
    - Jackson;
    - Hinds;

    State: Alabama;
    * 0 units:
    - none indicated on map;
    * 1 to 150 units:
    - Washington;
    - Choctaw;
    - Sumter;
    - Hale;
    - Pickens;
    - Greene;
    - Marengo;
    * 151 to 500 units:
    - Clarke;
    * More than 500 units:
    - Tuscaloosa;
    - Baldwin;
    - Mobile.

    State: Florida;
    * 0 units:
    - counties not indicated by name;
    * 1 to 150 units:
    - Miami-Dade;
    * 151 to 500 units:
    - Broward;
    * More than 500 units:
    - none indicated.

    Sources: State housing finance agencies for Alabama, Florida,
    Louisiana, Mississippi, and Texas as of April 2008 (data); Map
    Resources (maps).

    Note: Planned units are those that received tax credit awards but were
    not in service as of May 1, 2008; in-service units are those that were
    in service prior to May 1, 2008, unless otherwise classified by the
    HFA.

    [End of figure]

    According to statewide HUD data, over 82,000 rental housing units in
    Louisiana and over 20,000 rental housing units in Mississippi had major
    or severe damage. Of these units, nearly 80,000 were in eight Louisiana
    parishes and about 19,200 were in three Mississippi counties (see fig.
    6). In Louisiana and Mississippi, the number of rental units with major
    or severe damage ranged from a low of 468 in Vermilion Parish,
    Louisiana, to a high of nearly 52,000 units in Orleans Parish,
    Louisiana.[Footnote 54]

    Figure 6: Selected Louisiana Parishes and Mississippi Counties with
    Major or Severe Damage to Rental Housing:

    [See PDF for image]

    This figure is a map indicating the number of units with major or
    severe damage in five categories, as follows:

    State: Louisiana;
    * 1 to 2,000 units with major or severe damage:
    - Calcasieu;
    - Cameron;
    - Vermillion;
    - Plaquemines;
    * 2,001 to 4,300 units with major or severe damage:
    - St. Tammany;
    * 4,301 to 14,000 units with major or severe damage:
    - Jefferson;
    - St. Bernard;
    * 14,001 to 51,700 units with major or severe damage:
    - Orleans;
    * Other GO Zone counties:
    - counties not indicated by name.

    State: Mississippi;
    * 1 to 2,000 units with major or severe damage:
    - none indicated on map;
    * 2,001 to 4,300 units with major or severe damage:
    - Hancock;
    * 4,301 to 14,000 units with major or severe damage:
    - Harrison;
    - Jackson;
    * 14,001 to 51,700 units with major or severe damage:
    - none indicated on map;
    * Other GO Zone counties:
    - counties not indicated by name (no data available).

    Sources: U.S. Department of Homeland Security, Office of the Federal
    Coordinator for Gulf Coast Rebuilding (data); Map Resources (maps).

    Note: Data are from Department of Homeland Security, Office of the
    Federal Coordinator for Gulf Coast Rebuilding, "Current Housing Unit
    Damage Estimates, Hurricanes Katrina, Rita and Wilma" (Feb. 12, 2006).
    County-level data on major and severe damages to rental housing units
    were not available for Alabama, Florida, or Texas.

    Comparing the number of planned and in-service GO Zone LIHTC-funded
    units to the number of rental housing units with major or severe damage
    shows that about 17 percent of the rental housing units with major or
    severe damage in the state of Louisiana, and 45 percent of the
    similarly damaged units in the state of Mississippi, will be addressed
    by GO Zone LIHTC units. While other programs can also be used to fund
    affordable rental housing, our analysis focuses on GO Zone LIHTC-funded
    units. The extent to which damaged units will be addressed varies by
    county and parish (see fig. 7 and app. II, table 5).

    Figure 7: Planned and In-service GO Zone LIHTC-funded Units as a
    Percentage of Rental Housing Units with Major or Severe Damage for
    Selected Counties and Parishes:

    [See PDF for image]

    This figure is a map indicating the planned and in-service GO Zone
    LIHTC-funded units as a percentage of rental housing units with major
    or severe damage for selected counties and parishes:

    State: Louisiana;
    Calcasieu: 64.0%;
    Cameron: 5.4%;
    Vermillion: 78.8%;
    Jefferson: 7.2%;
    St. Tammany: 20.2%;
    Orleans: 16.7%;
    St. Bernard: 0%;
    Plaquemines: 0%.

    State: Mississippi:
    Hancock: 25.6%;
    Harrison: 30.5%;
    Jackson: 21.5%.

    Sources: U.S. Department of Homeland Security, Office of the Federal
    Coordinator for Gulf Coast Rebuilding, state housing finance agencies
    for Mississippi and Louisiana (data); Map Resources (maps).

    Note: Data are from Department of Homeland Security, Office of the
    Federal Coordinator for Gulf Coast Rebuilding, "Current Housing Unit
    Damage Estimates, Hurricanes Katrina, Rita and Wilma" (Feb. 12, 2006).
    Planned units are those that were not in service as of May 1, 2008; in-
    service units are those that were in service prior to May 1, 2008,
    unless otherwise classified by the HFA. County level data on major and
    severe damages to rental housing units were not available for Alabama,
    Florida, or Texas.

    [End of figure]

    Louisiana and Mississippi Exhausted Their Tax Credit Bond Allocation
    Authority:

    Louisiana and Mississippi issued a total of $300 million of GO Zone tax
    credit bonds, exhausting their allocation authority. Louisiana issued
    its $200 million of the tax credit bonds to distribute funds through a
    "Debt Service Assistance Fund" to selected local government entities
    that applied to the State Bond Commission. In all, 13 local government
    entities in New Orleans and the surrounding area received bond proceeds
    from Louisiana's tax credit bonds and general obligation matching
    bonds. The local governments used the funds to make premium and
    interest payments on bonds issued before August 28, 2005. Mississippi
    issued $100 million of the tax credit bonds to make debt service
    payments on state bonds for fiscal year 2007.

    As discussed above, Alabama did not issue tax credit bonds because
    state officials did not believe they would be able to meet the
    requirements for issuing general obligation bonds (tax credit bonds
    must be general obligations of the state) before the provision expired.

    Mississippi officials indicated that educating investors about the
    mechanics of tax credit bonds--that investors receive a credit against
    tax liability but no interest payments--proved to be one challenge in
    marketing the bonds to investors.

    Alabama Has Issued a Larger Percentage of the State's Advance Refunding
    Authority than Louisiana or Mississippi:

    In total, Alabama, Louisiana, and Mississippi have issued GO Zone
    additional advance refunding bonds accounting for 16 percent of their
    total allocation authority. As of mid-June 2008, Alabama had issued 65
    bonds and approved an additional 19 advance refundings, totaling $599
    million, or about 53 percent of its allocation authority. In contrast,
    Louisiana has issued 9 advance refundings, totaling $483 million, or
    about 11 percent of its allocation authority, and Mississippi has only
    issued 6 advance refundings, totaling $169 million, or about 8 percent
    of its allocation authority. Appendix III lists the additional advance
    refunding bonds issued in Alabama, Louisiana, and Mississippi.

    Similar to the case of other tax incentives such as private activity
    bonds and tax credit bonds, the states faced certain challenges in
    issuing additional advance refundings. According to state officials in
    Louisiana and Mississippi, some bonds for which the state may have been
    able to approve an additional advance refunding still had both the
    original bond awaiting its call date and the first advance refunding
    bond outstanding. Under the GO Zone Act of 2005, such bonds are
    ineligible for an additional advance refunding. Also, according to
    officials in Louisiana, some debt had already been refunded before the
    hurricanes at lower interest rates than those available after the 2005
    hurricanes.

    Agency Comments:

    We provided state officials in Alabama, Florida, Louisiana,
    Mississippi, and Texas with portions of the draft report that addressed
    aspects of GO Zone tax incentive allocation and use in their
    jurisdictions. We incorporated their technical comments as appropriate.
    We also provided relevant sections of the report to the Internal
    Revenue Service and the Office of Tax Policy, Department of the
    Treasury. We also incorporated their technical comments as appropriate.

    We are sending copies of this report to the interested congressional
    committees, the Commissioner of Internal Revenue, the Secretary of
    Housing and Urban Development, and other interested parties. We will
    make copies available to others on request. In addition, the report
    will be available at no charge on the GAO Web site at [hyperlink,
    http://www.gao.gov].

    If you or your staff have any questions on matters discussed in this
    report or would like additional information, please contact me at (202)
    512-9110 or at brostekm@gao.gov. Major contributors to this report are
    acknowledged in appendix V.

    Signed by:

    Michael Brostek:
    Director, Tax Issues:

    [End of section]

    Appendix I: Gulf Opportunity (GO) Zone Tax-Exempt Private Activity
    Bonds Issued:

    Table 2: GO Zone Bonds Issued in Alabama, Largest to Smallest:

    Issuer: Industrial Development Board (IDB) of the City of Mobile;
    Approved project: Alabama Power Company;
    Amount (dollars): $246,500,000;
    Project description: Solid Waste Facilities;
    County: Mobile.

    Issuer: IDB of the Town of Chatom;
    Approved project: Alabama Electric Cooperative, Inc.;
    Amount (dollars): $125,000,000;
    Project description: Power Plant Equipment;
    County: Washington.

    Issuer: Alabama Housing Finance Authority;
    Approved project: Single-Family Mortgages;
    Amount (dollars): $100,000,000;
    Project description: Single-Family Mortgages;
    County: Multiple.

    Issuer: Spanish Fort Redevelopment Authority;
    Approved project: Cypress Spanish Fort I, L.P.;
    Amount (dollars): $89,300,000;
    Project description: Retail;
    County: Baldwin.

    Issuer: City of Tuscaloosa, Tuscaloosa County Port Authority;
    Approved project: Cypress Equities Southeast-Midtown Village;
    Amount (dollars): $62,500,000;
    Project description: Retail;
    County: Tuscaloosa.

    Issuer: Industrial Development Authority of Washington;
    Approved project: Bay Gas Storage Company, Ltd.;
    Amount (dollars): $55,000,000;
    Project description: Natural Gas Facility;
    County: Washington.

    Issuer: IDA (IDA) of Tuscaloosa County;
    Approved project: Hunt Refining Company;
    Amount (dollars): $50,000,000;
    Project description: Natural Gas Facility;
    County: Tuscaloosa.

    Issuer: The City of Tuscaloosa, Tuscaloosa County Port Authority;
    Approved project: Riverfront Development Joint Venture;
    Amount (dollars): $25,000,000;
    Project description: Office Building-multi-use;
    County: Tuscaloosa.

    Issuer: IDB of the City of Mobile;
    Approved project: Standard Concrete Products, Inc.;
    Amount (dollars): $20,000,000;
    Project description: Concrete Facility;
    County: Mobile.

    Issuer: The Medical Clinic Board of the City of Gulf Shores, Alabama;
    Approved project: Colonial Pinnacle MOB, LLC;
    Amount (dollars): $13,400,000;
    Project description: Medical Office;
    County: Baldwin.

    Issuer: IDB of the City of Mobile;
    Approved project: Alter Trading Corporation;
    Amount (dollars): $10,000,000;
    Project description: Scrap Metal Recycle Facility;
    County: Mobile.

    Issuer: Alabama Housing Finance Authority;
    Approved project: Single-Family mortgages;
    Amount (dollars): $10,000,000;
    Project description: Home Loans;
    County: Multiple.

    Issuer: Clarke County Commission;
    Approved project: Clarke County;
    Amount (dollars): $6,921,363;
    Project description: Industrial Park;
    County: Clarke.

    Issuer: The Downtown Redevelopment Authority of the City of Mobile;
    Approved project: Lafayette Plaza, LLC;
    Amount (dollars): $6,500,000;
    Project description: Hotel;
    County: Mobile.

    Issuer: IDB of the City of Mobile;
    Approved project: High Prov. LLC;
    Amount (dollars): $6,000,000;
    Project description: Hotel;
    County: Mobile.

    Issuer: City of Tuscaloosa, Tuscaloosa County Port Authority;
    Approved project: Forest Manor, Inc.;
    Amount (dollars): $5,000,000;
    Project description: Nursing Home;
    County: Tuscaloosa.

    Issuer: The Medical Clinic Board of the City of Mobile--Springhill;
    Approved project: Southern Medical Health Systems, Inc.;
    Amount (dollars): $3,800,000;
    Project description: Medical Office;
    County: Mobile.

    Issuer: Tuscaloosa County IDA;
    Approved project: Cypress Point, LLC;
    Amount (dollars): $3,500,000;
    Project description: Offices;
    County: Tuscaloosa.

    Issuer: IDB of the City of Mobile;
    Approved project: Standard Concrete Products, Inc.;
    Amount (dollars): $3,000,000;
    Project description: Concrete Facility;
    County: Mobile.

    Issuer: IDB of the City of Mobile;
    Approved project: EBSCO Industries, Inc., a Delware Corporation;
    Amount (dollars): $2,940,000;
    Project description: Office and Warehouse;
    County: Mobile.

    Issuer: Marengo County Port Authority;
    Approved project: Demopolis Hotel;
    Amount (dollars): $2,600,000;
    Project description: Hotel;
    County: Marengo.

    Issuer: Tuscaloosa County IDA;
    Approved project: PLM, LLC;
    Amount (dollars): $2,600,000;
    Project description: Medical Office;
    County: Tuscaloosa.

    Issuer: Tuscaloosa County IDA;
    Approved project: BRJJ, LLC;
    Amount (dollars): $2,500,000;
    Project description: Self-storage Facility;
    County: Tuscaloosa.

    Issuer: City of Jackson;
    Approved project: New Ear Cap Co.;
    Amount (dollars): $1,500,000;
    Project description: Manufacturing Plant;
    County: Clarke.

    Issuer: IDB of the City of Demopolis;
    Approved project: Jackson Paper Company (formerly known as Newell Paper
    Company);
    Amount (dollars): $1,345,000;
    Project description: Warehouse;
    County: Marengo.

    Issuer: City of Foley;
    Approved project: McKenzie Center, LLC;
    Amount (dollars): $1,200,000;
    Project description: Office building-- multi-use;
    County: Baldwin.

    Issuer: Tuscaloosa County IDA;
    Approved project: Mexico North, LLC;
    Amount (dollars): $1,141,000;
    Project description: Restaurant;
    County: Tuscaloosa.

    Issuer: Tuscaloosa County IDA;
    Approved project: DJD Investments, LLC;
    Amount (dollars): $750,000;
    Project description: Maintenance Building;
    County: Tuscaloosa.

    Source: GAO analysis of Alabama data.

    Note: Bond data are as of mid-June 2008.

    [End of table]

    Table 3: GO Zone Bonds Issued in Louisiana, Largest to Smallest:

    Issuer: St. John the Baptist Parish Council;
    Approved project: Marathon Oil Corp.;
    Amount: $1,000,000,000;
    Project description: Oil Refinery;
    Parish: St. John the Baptist.

    Issuer: Lake Charles Harbor and Terminal District;
    Approved project: Lake Charles Cogeneration Project;
    Amount: $1,000,000,000;
    Project description: Petroleum Coke Gasification;
    Parish: Calcasieu.

    Issuer: Louisiana Community Development Authority;
    Approved project: Westlake Chemical Corporation;
    Amount: $250,000,000;
    Project description: Expansion of Chemical Plants;
    Parish: Multiple.

    Issuer: IDB of Ascension Parish;
    Approved project: International Matex Terminal;
    Amount: $165,000,000;
    Project description: Liquid Logistics Center;
    Parish: Ascension.

    Issuer: Louisiana Offshore Terminal Authority;
    Approved project: Louisiana Offshore Terminal Authority;
    Amount: $120,000,000;
    Project description: Offshore Tank Storage Facility;
    Parish: Multiple.

    Issuer: IDB of the Parish of East Baton Rouge;
    Approved project: Stupp Brothers, Inc.;
    Amount: $60,000,000;
    Project description: Pipe Mill;
    Parish: East Baton Rouge.

    Issuer: Louisiana Public Facilities Authority;
    Approved project: II City Plaza, LLC;
    Amount: $60,000,000;
    Project description: Office Building and Parking Garage;
    Parish: East Baton Rouge.

    Issuer: Louisiana Public Facilities Authority;
    Approved project: International Matex Tank Terminals;
    Amount: $50,000,000;
    Project description: Liquid Logistics Center;
    Parish: St. Charles.

    Issuer: Louisiana Housing Finance Agency;
    Approved project: Single-Family Mortgages;
    Amount: $50,000,000;
    Project description: Single-Family Mortgages;
    Parish: Multiple.

    Issuer: Louisiana Housing Finance Agency;
    Approved project: Single-Family Mortgages;
    Amount: $50,000,000;
    Project description: Single-Family Mortgages;
    Parish: Multiple.

    Issuer: Louisiana Public Facilities Authority;
    Approved project: Bluebonnet Hotel Ventures, LLC;
    Amount: $50,000,000;
    Project description: Hotel;
    Parish: East Baton Rouge.

    Issuer: Louisiana Housing Finance Agency;
    Approved project: Single-Family Housing;
    Amount: $49,995,340;
    Project description: Single-Family Housing;
    Parish: Multiple.

    Issuer: St. Tammany Parish Development District;
    Approved project: Rooms to Go St. Tammany, LLC;
    Amount: $45,000,000;
    Project description: Distribution Facility;
    Parish: St. Tammany.

    Issuer: Jefferson Parish Finance Authority;
    Approved project: Single Family Mortgages;
    Amount: $41,920,250;
    Project description: Single-Family Mortgages;
    Parish: Jefferson.

    Issuer: East Baton Rouge Mortgage Finance Authority;
    Approved project: Mortgage-Backed Securities;
    Amount: $40,850,968;
    Project description: Single-Family Mortgages;
    Parish: East Baton Rouge.

    Issuer: Finance Authority of St. Tammany Parish;
    Approved project: Single-Family Mortgages;
    Amount: $39,754,080;
    Project description: Single-Family Mortgages;
    Parish: St. Tammany.

    Issuer: Louisiana Public Facilities Authority;
    Approved project: Coca-Cola Bottling Company Project;
    Amount: $36,125,000;
    Project description: Manufacturing Facility; Parish:
    East Baton Rouge.

    Issuer: Louisiana Community Development Authority;
    Approved project: VSS-Southern Theatres;
    Amount: $32,635,000;
    Project description: Stadium Theatres;
    Parish: Multiple.

    Issuer: Jefferson Parish Finance Authority;
    Approved project: Single-Family Mortgages;
    Amount: $31,402,598;
    Project description: Single-Family Mortgages;
    Parish: Jefferson.

    Issuer: St. Bernard Parish Home Mortgage Authority;
    Approved project: Single-Family Mortgages;
    Amount: $29,999,719;
    Project description: Single-Family Mortgages;
    Parish: St. Bernard.

    Issuer: Lafayette Public Trust Financing Authority;
    Approved project: Single-Family Mortgages;
    Amount: $29,999,520;
    Project description: Single-Family Mortgages;
    Parish: Lafayette.

    Issuer: Lafayette Economic Development Authority;
    Approved project: Stirling Lafayette;
    Amount: $29,400,000;
    Project description: Shopping Mall;
    Parish: Lafayette.

    Issuer: Jefferson Parish Finance Authority;
    Approved project: Single-Family Mortgages;
    Amount: $28,645,000;
    Project description: Single-Family Mortgages;
    Parish: Jefferson.

    Issuer: Louisiana Community Development Authority;
    Approved project: LA Ship, LLC;
    Amount: $25,000,000;
    Project description: Shipyard, Drydock and Manufacturing Facility;
    Parish: Terrebonne.

    Issuer: Louisiana Public Facilities Authority;
    Approved project: Air Products and Chemicals Project;
    Amount: $25,000,000;
    Project description: Manufacturing Facility;
    Parish: Orleans.

    Issuer: Louisiana Community Development Authority;
    Approved project: Southgate Suites, LLC;
    Amount: $25,000,000;
    Project description: Staybridge Suites Hotel;
    Parish: East Baton Rouge.

    Issuer: Jefferson Parish Finance Authority;
    Approved project: Single-Family Mortgages;
    Amount: $20,899,968;
    Project description: Single-Family Mortgages;
    Parish: Jefferson.

    Issuer: Louisiana Public Facilities Authority;
    Approved project: Summa Associates, LLC;
    Amount: $20,000,000;
    Project description: Commercial Office Building;
    Parish: East Baton Rouge.

    Issuer: Louisiana Public Facilities Authority;
    Approved project: Pipeline Technology VI, LLC;
    Amount: $16,500,000;
    Project description: Benzene Pipeline;
    Parish: Multiple.

    Issuer: Louisiana Housing Finance Agency;
    Approved project: Canterbury House Apartments--Sherwood;
    Amount: $16,000,000;
    Project description: Apartment Complex;
    Parish: East Baton Rouge.

    Issuer: Houma-Terrebonne Public Trust Financing Authority;
    Approved project: Single-Family Mortgages;
    Amount: $15,726,000;
    Project description: Single-Family Mortgages;
    Parish: Terrebonne.

    Issuer: Denham Springs/Livingston Housing and Mortgage Finance
    Authority; Approved project: Single-Family Housing;
    Amount: $14,998,875;
    Project description: Single-Family Housing;
    Parish: Livingston.

    Issuer: Louisiana Public Facilities Authority;
    Approved project: GCGK Investments, LLC;
    Amount: $13,260,000;
    Project description: Storage and Distribution Center (Oilfield
    Supplies);
    Parish: Terrebonne.

    Issuer: Louisiana Community Development Authority;
    Approved project: Carter Plantation Hotel;
    Amount: $12,735,000;
    Project description: Hotel and Meeting Facility;
    Parish: Livingston.

    Issuer: Louisiana Community Development Authority;
    Approved project: Margerko Management, LLC/84 Lumber Co.;
    Amount: $12,600,000;
    Project description: Lumber Facilities;
    Parish: Multiple.

    Issuer: Hospital Service District No. 1 of East Baton Rouge Parish;
    Approved project: Hospital Service District No. 1 of East Baton Rouge
    Parish;
    Amount: $12,500,000;
    Project description: Medical Office Building;
    Parish: East Baton Rouge.

    Issuer: Greater Lafourche Port Commission;
    Approved project: VIH Helicopters USA;
    Amount: $10,000,000;
    Project description: Search and Rescue Gulf of Mexico Deep Water Base
    and Helicopter Transportation Facility;
    Parish: Lafourche.

    Issuer: Louisiana Public Facilities Authority;
    Approved project: Southern Ionics Incorp. Project;
    Amount: $10,000,000;
    Project description: Chemical Manufacturer;
    Parish: East Baton Rouge.

    Issuer: Louisiana Public Facilities Authority;
    Approved project: Ray Brandt Real Estate Company;
    Amount: $9,600,000;
    Project description: Automotive Dealership;
    Parish: Jefferson.

    Issuer: Calcasieu Parish Public Trust Authority;
    Approved project: Lake Hotel Group;
    Amount: $9,140,000;
    Project description: Hotel;
    Parish: Calcasieu.

    Issuer: Louisiana Public Facilities Authority;
    Approved project: Century Wilshire, Inc. Project;
    Amount: $9,000,000;
    Project description: Hotel and Meeting Facility;
    Parish: St. Tammany.

    Issuer: IDB of the City of New Orleans;
    Approved project: 521 Tchoupitoulas Street, LLC;
    Amount: $8,500,000;
    Project description: Historic Renovation--Hotel;
    Parish: Orleans.

    Issuer: Louisiana Community Development Authority;
    Approved project: Expert E&P Consultants, LLC;
    Amount: $8,000,000;
    Project description: Oil Refinery, Pipeline, Tank Battery, Terminal,
    Dock and Wharf;
    Parish: Lafourche.

    Issuer: St. Tammany Parish Development District;
    Approved project: Tammany Middle, LLC;
    Amount: $7,800,000;
    Project description: Retail and Office Facility;
    Parish: St. Tammany.

    Issuer: Louisiana Public Facilities Authority;
    Approved project: Spicy Girls of Avery Island, LLC;
    Amount: $7,500,000;
    Project description: Hotel and Business Center;
    Parish: Iberia.

    Issuer: Louisiana Community Development Authority;
    Approved project: Price LeBlanc Facility, LLC;
    Amount: $7,500,000;
    Project description: Automotive Dealership;
    Parish: East Baton Rouge.

    Issuer: IDB of the City of Donaldsville;
    Approved project: Chef John Folse;
    Amount: $7,500,000;
    Project description: Food Processing Plant;
    Parish: Ascension.

    Issuer: Louisiana Public Facilities Authority;
    Approved project: Republic Finance;
    Amount: $6,750,000;
    Project description: Commercial Office Building;
    Parish: East Baton Rouge.

    Issuer: Louisiana Public Facilities Authority;
    Approved project: Bridge House Corporation;
    Amount: $5,550,000;
    Project description: Substance Abuse Center;
    Parish: Orleans.

    Issuer: St. Tammany Parish Development District;
    Approved project: Main Street Holdings;
    Amount: $5,400,000;
    Project description: Retail Shopping Center;
    Parish: St. Tammany.

    Issuer: IDB of the City of New Orleans;
    Approved project: Carrollton Revitalization, LLC;
    Amount: $4,500,000;
    Project description: Retail Drug Store;
    Parish: Orleans.

    Issuer: Louisiana Public Facilities Authority;
    Approved project: Starmount Life Insurance Company;
    Amount: $4,500,000;
    Project description: Office Building;
    Parish: East Baton Rouge.

    Issuer: Louisiana Community Development Authority;
    Approved project: SRL Holdings, LLC;
    Amount: $4,000,000;
    Project description: Veterinary Specialty Hospital;
    Parish: Jefferson.

    Issuer: Louisiana Community Development Authority;
    Approved project: Southgate Suites Retail, LLC;
    Amount: $3,915,000;
    Project description: Retail Shopping Center;
    Parish: East Baton Rouge.

    Issuer: St. Tammany Parish Development District;
    Approved project: BCS, LLC;
    Amount: $3,680,000;
    Project description: Retail Facility;
    Parish: St. Tammany.

    Issuer: IDB of the City of New Orleans;
    Approved project: Robert Fresh Market and Robert E. Lee;
    Amount: $3,650,000;
    Project description: Retail Food Stores;
    Parish: Orleans.

    Issuer: IDB of the City of New Orleans;
    Approved project: Robert Fresh Market and Robert E. Lee;
    Amount: $3,600,000;
    Project description: Retail Food Stores;
    Parish: Orleans.

    Issuer: IDB of the City of Jennings;
    Approved project: Jennings American Legion Hospital;
    Amount: $3,500,000;
    Project description: Hospital and Medical Office Building;
    Parish: Jefferson Davis.

    Issuer: St. Tammany Parish Development District;
    Approved project: 12/59 Properties, LLC;
    Amount: $3,310,000;
    Project description: Shopping Center;
    Parish: St. Tammany.

    Issuer: Louisiana Public Facilities Authority;
    Approved project: LaConte Partners, LLC;
    Amount: $3,150,000;
    Project description: Office Building and Retail Shopping;
    Parish: Multiple.

    Issuer: Calcasieu Parish Public Trust Authority;
    Approved project: Delta Equine Center;
    Amount: $3,000,000;
    Project description: Veterinary Clinic;
    Parish: Calcasieu.

    Issuer: St. Charles Parish Council;
    Approved project: Ram Tool;
    Amount: $2,550,000;
    Project description: Distribution Center;
    Parish: St. Charles.

    Issuer: Calcasieu Parish Public Trust Authority;
    Approved project: Luxor, LLC;
    Amount: $2,500,000;
    Project description: Commercial Office Building;
    Parish: Calcasieu.

    Issuer: St. Tammany Parish Development District;
    Approved project: 1077 Properties, LLC;
    Amount: $2,240,000;
    Project description: Office Facility;
    Parish: St. Tammany.

    Issuer: IDB of St. Mary Parish;
    Approved project: Five Star Fuels, LLC;
    Amount: $2,100,000;
    Project description: Fuel Storage Terminal;
    Parish: St. Mary.

    Issuer: Hammond Area Economic and Industrial Development District;
    Approved project: Agem Management Service, LLC;
    Amount: $,900,000;
    Project description: Office Facility;
    Parish: Tangipahoa.

    Issuer: Calcasieu Parish Public Trust Authority;
    Approved project: Falgoust Eye Medical;
    Amount: $1,300,000;
    Project description: Medical Office Building;
    Parish: Calcasieu.

    Issuer: Calcasieu Parish Public Trust Authority;
    Approved project: JEMCON Investments;
    Amount: $900,000;
    Project description: RV Manufacturing Facility and Dealership;
    Parish: Calcasieu.

    Issuer: Calcasieu Parish Public Trust Authority;
    Approved project: National Networks, LLC;
    Amount: $750,000;
    Project description: Computer Software Network and Repair Facility;
    Parish: Calcasieu.

    Issuer: Calcasieu Parish Public Trust Authority;
    Approved project: TLR Development;
    Amount: $672,000;
    Project description: Commercial Office Building;
    Parish: Calcasieu.

    Issuer: Calcasieu Parish Public Trust Authority;
    Approved project: 4211 Common Street;
    Amount: $460,000;
    Project description: Commercial Office Building;
    Parish: Calcasieu.

    Source: GAO analysis of Louisiana State Bond Commission data.

    Note: Bond data are as of mid-June 2008.

    [End of table]

    Table 4: GO Zone Bonds Issued in Mississippi, Largest to Smallest:

    Issuer: Mississippi Business Finance Corporation (MBFC);
    Approved project: Chevron USA, Inc.;
    Amount: $650,000,000;
    Project description: Manufacturing;
    County: Jackson.

    Issuer: MBFC;
    Approved project: Northrop Grumman Ship Systems, Inc.;
    Amount: $200,000,000;
    Project description: Manufacturing;
    County: Multiple.

    Issuer: MBFC;
    Approved project: SG Resources;
    Amount: $100,000,000;
    Project description: Utility;
    County: Greene.

    Issuer: MBFC;
    Approved project: Renaissance at Colony Park;
    Amount: $77,240,000;
    Project description: Real Estate;
    County: Madison.

    Issuer: MBFC;
    Approved project: PSL--North America, LLC;
    Amount: $68,000,000;
    Project description: Manufacturing;
    County: Hancock.

    Issuer: MDB;
    Approved project: Mississippi Power;
    Amount: $63,550,079;
    Project description: Utility;
    County: Multiple.

    Issuer: MBFC;
    Approved project: DDR Gulfport Promenade, LLC;
    Amount: $60,000,000;
    Project description: Retail;
    County: Harrison.

    Issuer: Mississippi HOME Corp.;
    Approved project: MS Home Corp., Series 2006A-1 & 2006A-2;
    Amount: $59,997,500;
    Project description: Housing;
    County: Multiple.

    Issuer: MBFC;
    Approved project: Petal Gas Storage, LLC;
    Amount: $57,500,000;
    Project description: Manufacturing;
    County: Forrest.

    Issuer: MBFC;
    Approved project: South Mississippi Electric Power Association;
    Amount: $40,000,000;
    Project description: Utility;
    County: Multiple.

    Issuer: MBFC;
    Approved project: King Edward Revitalization Company, LLC;
    Amount: $37,700,823;
    Project description: Hotel Facility;
    County: Hinds.

    Issuer: Mississippi Home Corp.;
    Approved project: Single Family Mortgage, Series 2006B;
    Amount: $37,080,000;
    Project description: Housing;
    County: Multiple.

    Issuer: MBFC;
    Approved project: Coast Electric Power Association;
    Amount: $35,500,000;
    Project description: Utility;
    County: Multiple.

    Issuer: Warren County Board of Supervisors (BOS);
    Approved project: Warren County; International Paper Company;
    Amount: $30,000,000;
    Project description: Manufacturing;
    County: Warren.

    Issuer: MBFC;
    Approved project: Tindall Corporation;
    Amount: $23,000,000;
    Project description: Manufacturing;
    County: Jackson.

    Issuer: Mississippi Home Corp.;
    Approved project: Single-Family Mortgage Series 2007A;
    Amount: $20,623,054;
    Project description: Housing;
    County: Multiple.

    Issuer: Mississippi Home Corp.;
    Approved project: Single-Family Mortgage, 2006E;
    Amount: $20,600,000;
    Project description: Housing;
    County: Multiple.

    Issuer: Mississippi Home Corp.;
    Approved project: Mississippi Home Corp.--Revenue Bonds;
    Amount: $20,587,600;
    Project description: Housing;
    County: Multiple.

    Issuer: Mississippi Home Corp.;
    Approved project: Mississippi Home Corp.--Revenue;
    Amount: $20,579,040;
    Project description: Housing;
    County: Multiple.

    Issuer: MBFC;
    Approved project: Howard Industries, Inc.;
    Amount: $20,000,000;
    Project description: Manufacturing;
    County: Jones.

    Issuer: Warren County BOS;
    Approved project: International Paper Company;
    Amount: $20,000,000;
    Project description: Manufacturing;
    County: Warren.

    Issuer: Mississippi Home Corp.;
    Approved project: Single Family Mortgage, 2006 C-1 and 2006 C-2;
    Amount: $19,415,000;
    Project description: Housing;
    County: Multiple.

    Issuer: MBFC;
    Approved project: Edgewater Retail Partners;
    Amount: $17,000,000;
    Project description: Retail;
    County: Harrison.

    Issuer: Mississippi Hospital Equipment & Facilities Authority;
    Approved project: MS Baptist Health Systems, Inc.;
    Amount: $17,000,000;
    Project description: Health;
    County: Madison.

    Issuer: Mississippi Home Corp.;
    Approved project: Mississippi Home Corp.--Revenue Bonds;
    Amount: $15,475,713;
    Project description: Housing;
    County: Multiple.

    Issuer: Mississippi Home Corp.;
    Approved project: Mississippi Home Corp.--Revenue Bonds;
    Amount: $15,463,775;
    Project description: Housing;
    County: Multiple.

    Issuer: MBFC;
    Approved project: Twenty-Eighth Place, LLC;
    Amount: $15,000,000;
    Project description: Retail;
    County: Forrest.

    Issuer: MBFC;
    Approved project: Gulfship, LLC;
    Amount: $15,000,000;
    Project description: Manufacturing;
    County: Harrison.

    Issuer: MBFC;
    Approved project: Gulfship, LLC;
    Amount: $15,000,000;
    Project description: Manufacturing;
    County: Harrison.

    Issuer: MBFC;
    Approved project: Gulfship, LLC;
    Amount: $15,000,000;
    Project description: Manufacturing;
    County: Harrison.

    Issuer: MBFC;
    CPX Gulfport ES Opag, LLC;
    Amount: $14,435,000;
    Project description: Hotel Facility;
    County: Harrison.

    Issuer: MBFC;
    Approved project: Chrome Deposit Corporation;
    Amount: $13,485,000;
    Project description: Manufacturing;
    County: Lowndes.

    Issuer: MBFC;
    Approved project: Drury Inns, Inc.;
    Amount: $13,400,000;
    Project description: Hotel Facility;
    County: Lauderdale.

    Issuer: MBFC;
    Approved project: Grand Alliance, LLC;
    Amount: $12,700,000;
    Project description: Health;
    County: Rankin.

    Issuer: MBFC;
    Approved project: CPX Gulfport ES Opag, LLC;
    Amount: $12,300,000;
    Project description: Hotel Facility;
    County: Harrison.

    Issuer: State of Mississippi;
    Approved project: MS Small Enterprise Development (SED) 2008-I Series A-
    D;
    Amount: $11,100,000;
    Project description: Retail;
    County: Multiple.

    Issuer: MBFC;
    Approved project: 600 Concourse, LLC;
    Amount: $10,800,000;
    Project description: Retail;
    County: Madison.

    Issuer: MBFC;
    Approved project: Trustmark Park Hotel, LLC;
    Amount: $9,900,000;
    Project description: Hotel Facility;
    County: Rankin.

    Issuer: MBFC;
    Approved project: Lake Harbour Village, LLC;
    Amount: $9,000,000;
    Project description: Retail;
    County: Madison.

    Issuer: MBFC;
    Approved project: Horn Island Realty, LLC;
    Amount: $7,410,000;
    Project description: Health;
    County: Jackson.

    Issuer: MBFC;
    Approved project: Koar D'Iberville Center, LLC;
    Amount: $7,310,000;
    Project description: Retail;
    County: Harrison.

    Issuer: MBFC;
    Approved project: Hattiesburg Clinic Professional Association;
    Amount: $6,900,000;
    Project description: Health;
    County: Multiple.

    Issuer: MBFC;
    Approved project: Jackson Heart Realty LLC;
    Amount: $6,805,000;
    Project description: Health;
    County: Hinds.

    Issuer: MBFC;
    Approved project: Best Buy Plaza;
    Amount: $6,560,000;
    Project description: Real Estate;
    County: Harrison.

    Issuer: MBFC;
    Approved project: Tri-State Truck Center;
    Amount: $6,000,000;
    Project description: Retail;
    County: Rankin.

    Issuer: MBFC;
    Approved project: Outback 98 West CC, LLC;
    Amount: $5,600,000;
    Project description: Retail;
    County: Lamar.

    Issuer: MBFC;
    Approved project: Nord du Lieu;
    Amount: $5,500,000;
    Project description: Retail;
    County: Harrison.

    Issuer: State of Mississippi;
    Approved project: MS SED Act Issue 2007-I Series A-D;
    Amount: $5,100,000;
    Project description: Manufacturing;
    County: Multiple.

    Issuer: MBFC;
    Approved project: Intrinergy Wiggins, LLC;
    Amount: $5,000,000;
    Project description: Manufacturing;
    County: Stone.

    Issuer: Hancock County;
    Approved project: Hancock County, Series 2006;
    Amount: $2,500,000;
    Project description: Manufacturing;
    County: Hancock.

    Issuer: MBFC;
    Approved project: Colle Towing Company, Inc.;
    Amount: $2,500,000;
    Project description: Manufacturing;
    County: Jackson.

    Issuer: MBFC;
    Approved project: JKW Real Estate;
    Amount: $2,300,000;
    Project description: Retail;
    County: Adams.

    Source: GAO analysis of Mississippi data.

    Note: Bond data as of mid-June 2008.

    [End of table]

    [End of section]

    Appendix II: Low-Income Housing Tax Credit Uses by State:

    Table 5: Comparison of Gulf Opportunity (GO) Zone Low-Income Housing
    Tax Credit (LIHTC) Units to Available Department of Housing and Urban
    Development Data on Units with Major or Severe Damage by County and
    Parish:

    State: Alabama;
    County: Baldwin;
    Planned GO Zone LIHTC units: 662;
    GO Zone LIHTC units in-service: 0;
    Total GO Zone LIHTC units: 662;
    Units with severe damage: n.a.[A];
    Units with major damage: n.a.;
    Total units with severe or major damage: n.a.;
    GO Zone LIHTC units as a percent of units with severe or major damage:
    n.a.

    State: Alabama;
    County: Choctaw;
    Planned GO Zone LIHTC units:104;
    GO Zone LIHTC units in-service: 0;
    Total GO Zone LIHTC units: 104;
    Units with severe damage: n.a.;
    Units with major damage: n.a.;
    Total units with severe or major damage: n.a.;
    GO Zone LIHTC units as a percent of units with severe or major damage:
    n.a.

    State: Alabama;
    County: Clarke;
    Planned GO Zone LIHTC units: 247;
    GO Zone LIHTC units in-service: 0;
    Total GO Zone LIHTC units: 247;
    Units with severe damage: n.a.;
    Units with major damage: n.a.;
    Total units with severe or major damage:n.a.;
    GO Zone LIHTC units as a percent of units with severe or major damage:
    n.a.

    State: Alabama;
    County: Greene;
    Planned GO Zone LIHTC units: 114;
    GO Zone LIHTC units in-service: 0;
    Total GO Zone LIHTC units: 114;
    Units with severe damage: n.a.;
    Units with major damage: n.a.;
    Total units with severe or major damage:n.a.;
    GO Zone LIHTC units as a percent of units with severe or major damage:
    n.a.

    State: Alabama;
    County: Hale;
    Planned GO Zone LIHTC units: 110;
    GO Zone LIHTC units in-service: 0;
    Total GO Zone LIHTC units: 110;
    Units with severe damage: n.a.;
    Units with major damage: n.a.;
    Total units with severe or major damage: n.a.;
    GO Zone LIHTC units as a percent of units with severe or major damage:
    n.a.

    State: Alabama;
    County: Marengo;
    Planned GO Zone LIHTC units: 40;
    GO Zone LIHTC units in-service: 36;
    Total GO Zone LIHTC units: 76;
    Units with severe damage: n.a.;
    Units with major damage: n.a.;
    Total units with severe or major damage: n.a.;
    GO Zone LIHTC units as a percent of units with severe or major damage:
    n.a.

    State: Alabama;
    County: Mobile;
    Planned GO Zone LIHTC units: 981;
    GO Zone LIHTC units in-service: 0;
    Total GO Zone LIHTC units: 981;
    Units with severe damage: n.a.;
    Units with major damage: n.a.;
    Total units with severe or major damage: n.a.;
    GO Zone LIHTC units as a percent of units with severe or major damage:
    n.a.

    State: Alabama;
    County: Pickens;
    Planned GO Zone LIHTC units: 56;
    GO Zone LIHTC units in-service: 32;
    Total GO Zone LIHTC units: 88;
    Units with severe damage: n.a.;
    Units with major damage: n.a.;
    Total units with severe or major damage: n.a.;
    GO Zone LIHTC units as a percent of units with severe or major damage:
    n.a.

    State: Alabama;
    County: Sumter;
    Planned GO Zone LIHTC units: 60;
    GO Zone LIHTC units in-service: 0;
    Total GO Zone LIHTC units: 60;
    Units with severe damage: n.a.;
    Units with major damage: n.a.;
    Total units with severe or major damage: n.a.;
    GO Zone LIHTC units as a percent of units with severe or major damage:
    n.a.

    State: Alabama;
    County: Tuscaloosa;
    Planned GO Zone LIHTC units: 793;
    GO Zone LIHTC units in-service: 0;
    Total GO Zone LIHTC units: 793;
    Units with severe damage: n.a.;
    Units with major damage: n.a.;
    Total units with severe or major damage: n.a.;
    GO Zone LIHTC units as a percent of units with severe or major damage:
    n.a.

    State: Alabama;
    County: Washington;
    Planned GO Zone LIHTC units: 24;
    GO Zone LIHTC units in-service: 0;
    Total GO Zone LIHTC units: 24;
    Units with severe damage: n.a.;
    Units with major damage: n.a.;
    Total units with severe or major damage: n.a.;
    GO Zone LIHTC units as a percent of units with severe or major damage:
    n.a.

    State: Alabama;
    Subtotal;
    Planned GO Zone LIHTC units: 3,191;
    GO Zone LIHTC units in-service: 68;
    Total GO Zone LIHTC units: 3,259;
    Units with severe damage: n.a.;
    Units with major damage: n.a.;
    Total units with severe or major damage: n.a.;
    GO Zone LIHTC units as a percent of units with severe or major damage:
    n.a.

    State: Florida;
    County: Broward;
    Planned GO Zone LIHTC units: 176;
    GO Zone LIHTC units in-service: 0;
    Total GO Zone LIHTC units: 176;
    Units with severe damage: n.a.;
    Units with major damage: n.a.;
    Total units with severe or major damage: n.a.;
    GO Zone LIHTC units as a percent of units with severe or major damage:
    n.a.

    State: Florida;
    County: Miami-Dade;
    Planned GO Zone LIHTC units: 50;
    GO Zone LIHTC units in-service: 0;
    Total GO Zone LIHTC units: 50;
    Units with severe damage: n.a.;
    Units with major damage: n.a.;
    Total units with severe or major damage: n.a.;
    GO Zone LIHTC units as a percent of units with severe or major damage:
    n.a.

    State: Florida;
    Subtotal;
    Planned GO Zone LIHTC units: 226;
    GO Zone LIHTC units in-service: 0;
    Total GO Zone LIHTC units: 226;
    Units with severe damage: n.a.;
    Units with major damage: n.a.;
    Total units with severe or major damage: n.a.;
    GO Zone LIHTC units as a percent of units with severe or major damage:
    n.a.

    State: Louisiana;
    County: Acadia;
    Planned GO Zone LIHTC units: 0;
    GO Zone LIHTC units in-service: 199;
    Total GO Zone LIHTC units: 199;
    Units with severe damage: n.a.;
    Units with major damage: n.a.;
    Total units with severe or major damage: n.a.;
    GO Zone LIHTC units as a percent of units with severe or major damage:
    n.a.

    State: Louisiana;
    County: Calcasieu;
    Planned GO Zone LIHTC units: 909;
    GO Zone LIHTC units in-service: 341;
    Total GO Zone LIHTC units: 1,250;
    Units with severe damage: 183;
    Units with major damage: 1,770;
    Total units with severe or major damage: 1,953;
    GO Zone LIHTC units as a percent of units with severe or major damage:
    64.0.

    State: Louisiana;
    County: Cameron;
    Planned GO Zone LIHTC units: 0;
    GO Zone LIHTC units in-service: 0;
    Total GO Zone LIHTC units: 30;
    Units with severe damage: 379;
    Units with major damage: 172;
    Total units with severe or major damage: 551;
    GO Zone LIHTC units as a percent of units with severe or major damage:
    5.0.

    State: Louisiana;
    County: East Baton Rouge;
    Planned GO Zone LIHTC units: 369;
    GO Zone LIHTC units in-service: 115;
    Total GO Zone LIHTC units: 484;
    Units with severe damage: n.a.;
    Units with major damage: n.a.;
    Total units with severe or major damage: n.a.;
    GO Zone LIHTC units as a percent of units with severe or major damage:
    n.a.

    State: Louisiana;
    County: Iberia;
    Planned GO Zone LIHTC units: 155;
    GO Zone LIHTC units in-service: 64;
    Total GO Zone LIHTC units: 219;
    Units with severe damage: n.a.;
    Units with major damage: n.a.;
    Total units with severe or major damage: n.a.;
    GO Zone LIHTC units as a percent of units with severe or major damage:
    n.a.

    State: Louisiana;
    County: Jefferson;
    Planned GO Zone LIHTC units: 791;
    GO Zone LIHTC units in-service: 210;
    Total GO Zone LIHTC units: 1,001;
    Units with severe damage: 1,937;
    Units with major damage: 12,035;
    Total units with severe or major damage: 13,972;
    GO Zone LIHTC units as a percent of units with severe or major damage:
    7.2.

    State: Louisiana;
    County: Lafayette;
    Planned GO Zone LIHTC units: 109;
    GO Zone LIHTC units in-service: 30;
    Total GO Zone LIHTC units: 139;
    Units with severe damage: n.a.;
    Units with major damage: n.a.;
    Total units with severe or major damage: n.a.;
    GO Zone LIHTC units as a percent of units with severe or major damage:
    n.a.

    State: Louisiana;
    County: Lafourche;
    Planned GO Zone LIHTC units: 72;
    GO Zone LIHTC units in-service: 40;
    Total GO Zone LIHTC units: 112;
    Units with severe damage: n.a.;
    Units with major damage: n.a.;
    Total units with severe or major damage: n.a.;
    GO Zone LIHTC units as a percent of units with severe or major damage:
    n.a.

    State: Louisiana;
    County: Livingston;
    Planned GO Zone LIHTC units: 64;
    GO Zone LIHTC units in-service: 36;
    Total GO Zone LIHTC units: 100;
    Units with severe damage: n.a.;
    Units with major damage: n.a.;
    Total units with severe or major damage: n.a.;
    GO Zone LIHTC units as a percent of units with severe or major damage:
    n.a.

    State: Louisiana;
    County: Orleans;
    Planned GO Zone LIHTC units: 7,754;
    GO Zone LIHTC units in-service: 882;
    Total GO Zone LIHTC units: 8,636;
    Units with severe damage: 34,770;
    Units with major damage: 16,911;
    Total units with severe or major damage: 51,681;
    GO Zone LIHTC units as a percent of units with severe or major damage:
    16.7.

    State: Louisiana;
    County: Plaquemines;
    Planned GO Zone LIHTC units: 0;
    GO Zone LIHTC units in-service: 0;
    Total GO Zone LIHTC units: 0;
    Units with severe damage: 1,087;
    Units with major damage: 370;
    Total units with severe or major damage: 1,457;
    GO Zone LIHTC units as a percent of units with severe or major damage:
    0.0.

    State: Louisiana;
    County: Saint Bernard;
    Planned GO Zone LIHTC units: 0;
    GO Zone LIHTC units in-service: 0;
    Total GO Zone LIHTC units: 0;
    Units with severe damage: 3,943;
    Units with major damage: 1,993;
    Total units with severe or major damage: 5,936;
    GO Zone LIHTC units as a percent of units with severe or major damage:
    0.0.

    State: Louisiana;
    County: Saint James;
    Planned GO Zone LIHTC units: 0;
    GO Zone LIHTC units in-service: 32;
    Total GO Zone LIHTC units: 32;
    Units with severe damage: n.a.;
    Units with major damage: n.a.;
    Total units with severe or major damage: n.a.;
    GO Zone LIHTC units as a percent of units with severe or major damage:
    n.a.

    State: Louisiana;
    County: Saint Tammany;
    Planned GO Zone LIHTC units: 682;
    GO Zone LIHTC units in-service: 112;
    Total GO Zone LIHTC units: 794;
    Units with severe damage: 461;
    Units with major damage: 3,470;
    Total units with severe or major damage: 3,931;
    GO Zone LIHTC units as a percent of units with severe or major damage:
    20.2.

    State: Louisiana;
    County: Tangipahoa;
    Planned GO Zone LIHTC units: 320;
    GO Zone LIHTC units in-service: 95;
    Total GO Zone LIHTC units: 415;
    Units with severe damage: n.a.;
    Units with major damage: n.a.;
    Total units with severe or major damage: n.a.;
    GO Zone LIHTC units as a percent of units with severe or major damage:
    n.a.

    State: Louisiana;
    County: Terrebonne;
    Planned GO Zone LIHTC units: 84;
    GO Zone LIHTC units in-service: 0;
    Total GO Zone LIHTC units: 84;
    Units with severe damage: n.a.;
    Units with major damage: n.a.;
    Total units with severe or major damage: n.a.;
    GO Zone LIHTC units as a percent of units with severe or major damage:
    n.a.

    State: Louisiana;
    County: Vermillion;
    Planned GO Zone LIHTC units: 369;
    GO Zone LIHTC units in-service: 0;
    Total GO Zone LIHTC units: 369;
    Units with severe damage: 27;
    Units with major damage: 441;
    Total units with severe or major damage: 468;
    GO Zone LIHTC units as a percent of units with severe or major damage:
    78.8.

    State: Louisiana;
    County: Washington;
    Planned GO Zone LIHTC units: 32;
    GO Zone LIHTC units in-service: 0;
    Total GO Zone LIHTC units: 32;
    Units with severe damage: n.a.;
    Units with major damage: n.a.;
    Total units with severe or major damage: n.a.;
    GO Zone LIHTC units as a percent of units with severe or major damage:
    n.a.

    State: Louisiana;
    County: West Baton Rouge;
    Planned GO Zone LIHTC units: 47;
    GO Zone LIHTC units in-service: 0;
    Total GO Zone LIHTC units: 47;
    Units with severe damage: n.a.;
    Units with major damage: n.a.;
    Total units with severe or major damage: n.a.;
    GO Zone LIHTC units as a percent of units with severe or major damage:
    n.a.

    State: Louisiana;
    Subtotal;
    Planned GO Zone LIHTC units: 11,787;
    GO Zone LIHTC units in-service: 2,156;
    Total GO Zone LIHTC units: 13,943;
    Units with severe damage: 42,787;
    Units with major damage: 37,162;
    Total units with severe or major damage: 79,949;
    GO Zone LIHTC units as a percent of units with severe or major damage:
    17.4.

    State: Mississippi;
    County: Attala;
    Planned GO Zone LIHTC units: 120;
    GO Zone LIHTC units in-service: 0;
    Total GO Zone LIHTC units: 120;
    Units with severe damage: n.a.;
    Units with major damage: n.a.;
    Total units with severe or major damage: n.a.;
    GO Zone LIHTC units as a percent of units with severe or major damage:
    n.a.

    State: Mississippi;
    County: Copiah;
    Planned GO Zone LIHTC units: 50;
    GO Zone LIHTC units in-service: 0;
    Total GO Zone LIHTC units: 50;
    Units with severe damage: n.a.;
    Units with major damage: n.a.;
    Total units with severe or major damage: n.a.;
    GO Zone LIHTC units as a percent of units with severe or major damage:
    n.a.

    State: Mississippi;
    County: Covington;
    Planned GO Zone LIHTC units: 40;
    GO Zone LIHTC units in-service: 0;
    Total GO Zone LIHTC units: 40;
    Units with severe damage: n.a.;
    Units with major damage: n.a.;
    Total units with severe or major damage: n.a.;
    GO Zone LIHTC units as a percent of units with severe or major damage:
    n.a.

    State: Mississippi;
    County: Forrest;
    Planned GO Zone LIHTC units: 366;
    GO Zone LIHTC units in-service: 0;
    Total GO Zone LIHTC units: 366;
    Units with severe damage: n.a.;
    Units with major damage: n.a.;
    Total units with severe or major damage: n.a.;
    GO Zone LIHTC units as a percent of units with severe or major damage:
    n.a.

    State: Mississippi;
    County: George;
    Planned GO Zone LIHTC units: 72;
    GO Zone LIHTC units in-service: 0;
    Total GO Zone LIHTC units: 72;
    Units with severe damage: n.a.;
    Units with major damage: n.a.;
    Total units with severe or major damage: n.a.;
    GO Zone LIHTC units as a percent of units with severe or major damage:
    n.a.

    State: Mississippi;
    County: Hancock;
    Planned GO Zone LIHTC units: 901;
    GO Zone LIHTC units in-service: 0;
    Total GO Zone LIHTC units: 901;
    Units with severe damage: 1,215;
    Units with major damage: 2,298;
    Total units with severe or major damage: 3,513;
    GO Zone LIHTC units as a percent of units with severe or major damage:
    25.6.

    State: Mississippi;
    County: Harrison;
    Planned GO Zone LIHTC units: 3,480;
    GO Zone LIHTC units in-service: 0;
    Total GO Zone LIHTC units: 3,480;
    Units with severe damage: 3,911;
    Units with major damage: 7,487;
    Total units with severe or major damage: 11,398;
    GO Zone LIHTC units as a percent of units with severe or major damage:
    30.5.

    State: Mississippi;
    County: Hinds;
    Planned GO Zone LIHTC units: 1,626;
    GO Zone LIHTC units in-service: 251;
    Total GO Zone LIHTC units: 1,877;
    Units with severe damage: n.a.;
    Units with major damage: n.a.;
    Total units with severe or major damage: n.a.;
    GO Zone LIHTC units as a percent of units with severe or major damage:
    n.a.

    State: Mississippi;
    County: Jackson;
    Planned GO Zone LIHTC units: 926;
    GO Zone LIHTC units in-service: 0;
    Total GO Zone LIHTC units: 926;
    Units with severe damage: 529;
    Units with major damage: 3,773;
    Total units with severe or major damage: 4,302;
    GO Zone LIHTC units as a percent of units with severe or major damage:
    21.5.

    State: Mississippi;
    County: Jones;
    Planned GO Zone LIHTC units: 152;
    GO Zone LIHTC units in-service: 0;
    Total GO Zone LIHTC units: 152;
    Units with severe damage: n.a.;
    Units with major damage: n.a.;
    Total units with severe or major damage: n.a.;
    GO Zone LIHTC units as a percent of units with severe or major damage:
    n.a.

    State: Mississippi;
    County: Lauderdale;
    Planned GO Zone LIHTC units: 130;
    GO Zone LIHTC units in-service: 0;
    Total GO Zone LIHTC units: 130;
    Units with severe damage: n.a.;
    Units with major damage: n.a.;
    Total units with severe or major damage: n.a.;
    GO Zone LIHTC units as a percent of units with severe or major damage:
    n.a.

    State: Mississippi;
    County: Lowndes;
    Planned GO Zone LIHTC units: 106;
    GO Zone LIHTC units in-service: 0;
    Total GO Zone LIHTC units: 106;
    Units with severe damage: n.a.;
    Units with major damage: n.a.;
    Total units with severe or major damage: n.a.;
    GO Zone LIHTC units as a percent of units with severe or major damage:
    n.a.

    State: Mississippi;
    County: Madison;
    Planned GO Zone LIHTC units: 337;
    GO Zone LIHTC units in-service: 45;
    Total GO Zone LIHTC units: 382;
    Units with severe damage: n.a.;
    Units with major damage: n.a.;
    Total units with severe or major damage: n.a.;
    GO Zone LIHTC units as a percent of units with severe or major damage:
    n.a.

    State: Mississippi;
    County: Neshoba;
    Planned GO Zone LIHTC units: 0;
    GO Zone LIHTC units in-service: 32;
    Total GO Zone LIHTC units: 32;
    Units with severe damage: n.a.;
    Units with major damage: n.a.;
    Total units with severe or major damage: n.a.;
    GO Zone LIHTC units as a percent of units with severe or major damage:
    n.a.

    State: Mississippi;
    County: Pearl River;
    Planned GO Zone LIHTC units: 179;
    GO Zone LIHTC units in-service: 0;
    Total GO Zone LIHTC units: 179;
    Units with severe damage: n.a.;
    Units with major damage: n.a.;
    Total units with severe or major damage: n.a.;
    GO Zone LIHTC units as a percent of units with severe or major damage:
    n.a.

    State: Mississippi;
    County: Pike;
    Planned GO Zone LIHTC units: 108;
    GO Zone LIHTC units in-service: 0;
    Total GO Zone LIHTC units: 108;
    Units with severe damage: n.a.;
    Units with major damage: n.a.;
    Total units with severe or major damage: n.a.;
    GO Zone LIHTC units as a percent of units with severe or major damage:
    n.a.

    State: Mississippi;
    County: Simpson;
    Planned GO Zone LIHTC units: 45;
    GO Zone LIHTC units in-service: 0;
    Total GO Zone LIHTC units: 45;
    Units with severe damage: n.a.;
    Units with major damage: n.a.;
    Total units with severe or major damage: n.a.;
    GO Zone LIHTC units as a percent of units with severe or major damage:
    n.a.

    State: Mississippi;
    County: Warren;
    Planned GO Zone LIHTC units: 108;
    GO Zone LIHTC units in-service: 0;
    Total GO Zone LIHTC units: 108;
    Units with severe damage: n.a.;
    Units with major damage: n.a.;
    Total units with severe or major damage: n.a.;
    GO Zone LIHTC units as a percent of units with severe or major damage:
    n.a.

    State: Mississippi;
    County: Wayne;
    Planned GO Zone LIHTC units: 60;
    GO Zone LIHTC units in-service: 0;
    Total GO Zone LIHTC units: 60;
    Units with severe damage: n.a.;
    Units with major damage: n.a.;
    Total units with severe or major damage: n.a.;
    GO Zone LIHTC units as a percent of units with severe or major damage:
    n.a.

    State: Mississippi;
    County: Winston;
    Planned GO Zone LIHTC units: 80;
    GO Zone LIHTC units in-service: 0;
    Total GO Zone LIHTC units: 80;
    Units with severe damage: n.a.;
    Units with major damage: n.a.;
    Total units with severe or major damage: n.a.;
    GO Zone LIHTC units as a percent of units with severe or major damage:
    n.a.

    State: Mississippi;
    County: Yazoo;
    Planned GO Zone LIHTC units: 96;
    GO Zone LIHTC units in-service: 0;
    Total GO Zone LIHTC units: 96;
    Units with severe damage: n.a.;
    Units with major damage: n.a.;
    Total units with severe or major damage: n.a.;
    GO Zone LIHTC units as a percent of units with severe or major damage:
    n.a.

    State: Mississippi;
    Subtotal;
    Planned GO Zone LIHTC units: 8,982;
    GO Zone LIHTC units in-service: 328;
    Total GO Zone LIHTC units: 9,310;
    Units with severe damage: 5,655;
    Units with major damage: 13,558;
    Total units with severe or major damage: 19,213;

    GO Zone LIHTC units as a percent of units with severe or major damage:
    48.5.

    State: Texas;
    County: Angelina;
    Planned GO Zone LIHTC units: 26;
    GO Zone LIHTC units in-service: 0;
    Total GO Zone LIHTC units: 26;
    Units with severe damage: n.a.;
    Units with major damage: n.a.;
    Total units with severe or major damage: n.a.;
    GO Zone LIHTC units as a percent of units with severe or major damage:
    n.a.

    State: Texas;
    County: Jefferson;
    Planned GO Zone LIHTC units: 252;
    GO Zone LIHTC units in-service: 0;
    Total GO Zone LIHTC units: 252;
    Units with severe damage: n.a.;
    Units with major damage: n.a.;
    Total units with severe or major damage: n.a.;
    GO Zone LIHTC units as a percent of units with severe or major damage:
    n.a.

    State: Texas;
    County: Orange;
    Planned GO Zone LIHTC units: 120;
    GO Zone LIHTC units in-service: 0;
    Total GO Zone LIHTC units: 120;
    Units with severe damage: n.a.;
    Units with major damage: n.a.;
    Total units with severe or major damage: n.a.;
    GO Zone LIHTC units as a percent of units with severe or major damage:
    n.a.

    State: Texas;
    Subtotal;
    Planned GO Zone LIHTC units: 398;
    GO Zone LIHTC units in-service: 0;
    Total GO Zone LIHTC units: 398;
    Units with severe damage: n.a.;
    Units with major damage: n.a.;
    Total units with severe or major damage: n.a.;
    GO Zone LIHTC units as a percent of units with severe or major damage:
    n.a.

    Source: State housing finance agencies for Alabama, Florida, Louisiana,
    Mississippi, and Texas; U.S. Department of Homeland Security, Office of
    the Federal Coordinator for Gulf Coast Rebuilding, Current Housing Unit
    Damage Estimates; Hurricanes Katrina, Rita, and Wilma. February 12,
    2006.

    Note: U.S. Department of Homeland Security, Office of the Federal
    Coordinator for Gulf Coast Rebuilding data are from "Current Housing
    Unit Damage Estimates; Hurricanes Katrina, Rita, and Wilma" (Feb. 12,
    2006). Planned units are those that were not in service as of May 1,
    2008; in-service units are those that were in service prior to May 1, 2
    008, unless otherwise classified by the HFA. County-level data on major
    and severe damages to rental housing units was not available in the
    Current Housing Unit Damage Estimates; Hurricanes Katrina, Rita, and
    Wilma for Alabama, Florida, or Texas.

    [A] N.A. indicates data is not available.

    [End of table]

    Table 6: Alabama's Use of GO Zone Low-Income Housing Tax Credits:

    Calendar year of GO Zone allocation: 2006;
    GO Zone LIHTC allocation to state: $15,651,792;
    Percentage of GO Zone LIHTC allocation reserved: 100%;
    Projects funded: 20;
    Projects in-service: 2;
    Units funded: 1,285;
    Units in-service: 68.

    Calendar year of GO Zone allocation: 2007;
    GO Zone LIHTC allocation to state: $15,651,792;
    Percentage of GO Zone LIHTC allocation reserved: 100;
    Projects funded: 30;
    Projects in-service: 0;
    Units funded: 1,718;
    Units in-service: 0.

    Calendar year of GO Zone allocation: 2008;
    GO Zone LIHTC allocation to state: $15,651,792;
    Percentage of GO Zone LIHTC allocation reserved: 22;
    Projects funded: 4;
    Projects in-service: 0;
    Units funded: 256;
    Units in-service: 0.

    Calendar year of GO Zone allocation: Total;
    GO Zone LIHTC allocation to state: $46,955,376;
    Percentage of GO Zone LIHTC allocation reserved: 74%;
    Projects funded: 54;
    Projects in-service: 2;
    Units funded: 3,259;
    Units in-service: 68.

    Source: Alabama Housing Finance Agency.

    Note: Data are as of April 2008.

    [End of table]

    Table 7: Florida's Use of Go Zone Low-Income Housing Tax Credits:

    Calendar year of GO Zone allocation: 2006;
    GO Zone LIHTC allocation to state: $3,500,000;
    Percentage of GO Zone LIHTC allocation reserved: 100%;
    Projects funded: 2;
    Projects in-service: 0;
    Units funded: 226;
    Units in-service: 0.

    Source: Florida Housing Finance Agency.

    Note: Data are as of April 2008. Florida only had a 1-year GO Zone
    LIHTC allocation.

    [End of table]

    Table 8: Louisiana's Use of GO Zone Low-Income Housing Tax Credits:

    Calendar year of GO Zone allocation: 2006;
    GO Zone LIHTC allocation to state: $56,759,274;
    Percentage of GO Zone LIHTC allocation reserved: 89%;
    Projects funded: 89;
    Projects in-service: 39;
    Units funded: 4,122;
    Units in-service: 1756.

    Calendar year of GO Zone allocation: 2007;
    GO Zone LIHTC allocation to state: $56,759,274;
    Percentage of GO Zone LIHTC allocation reserved: 99;
    Projects funded: 43;
    Projects in-service: 3;
    Units funded: 5,256;
    Units in-service: 400.

    Calendar year of GO Zone allocation: 2008;
    GO Zone LIHTC allocation to state: $56,759,274;
    Percentage of GO Zone LIHTC allocation reserved: 103;
    Projects funded: 33;
    Projects in-service: 0;
    Units funded: 4,565;
    Units in-service: 0.

    Calendar year of GO Zone allocation: Total;
    GO Zone LIHTC allocation to state: $170,277,822;
    Percentage of GO Zone LIHTC allocation reserved: 97%;
    Projects funded: 165;
    Projects in-service: 42;
    Units funded: 13,943;
    Units in-service: 2,156.

    Source: Louisiana Housing Finance Agency.

    Note: Data are as of April 2008.

    [End of table]

    Table 9: Mississippi's Use of GO Zone Low-Income Housing Tax Credits:

    Calendar year of GO Zone allocation: 2006;
    GO Zone LIHTC allocation to state: $35,429,094;
    Percentage of GO Zone LIHTC allocation reserved: 100%;
    Projects funded: 41;
    Projects in-service: 6;
    Units funded: 3,329;
    Units in-service: 328.

    Calendar year of GO Zone allocation: 2007;
    GO Zone LIHTC allocation to state: $35,429,094;
    Percentage of GO Zone LIHTC allocation reserved: 100;
    Projects funded: 32;
    Projects in-service: 0;
    Units funded: 3,545;
    Units in-service: 0.

    Calendar year of GO Zone allocation: 2008;
    GO Zone LIHTC allocation to state: $35,429,094;
    Percentage of GO Zone LIHTC allocation reserved: 100;
    Projects funded: 21;
    Projects in-service: 0;
    Units funded: 2,436;
    Units in-service: 0.

    Calendar year of GO Zone allocation: Total;
    GO Zone LIHTC allocation to state: $106,287,282;
    Percentage of GO Zone LIHTC allocation reserved: 100%;
    Projects funded: 94;
    Projects in-service: 6;
    Units funded: 9,310;
    Units in-service: 328.

    Source: Mississippi HOME Corporation.

    Note: Data are as of April 2008.

    [End of table]

    Table 10: Texas' Use of GO Zone Low-Income Housing Tax Credits:

    Calendar year of GO Zone allocation: 2006;
    GO Zone LIHTC allocation to state: $3,500,000;
    Percentage of GO Zone LIHTC allocation reserved: 100%;
    Projects funded: 7;
    Projects in-service: 0;
    Units funded: 398;
    Units in-service: 0.

    Source: Texas Department of Housing and Community Affairs.

    Note: Data is as of April 2008. Texas only had a 1-year GO Zone LIHTC
    allocation.

    [End of table]

    [End of section]

    Appendix III: Additional Advance Refunding Bonds Issued, by State:

    Table 11: Alabama's Use of Gulf Opportunity (GO) Zone Advance
    Refundings, Largest to Smallest:

    (Continued From Previous Page)

    Approved project: Alabama State Port Authority;
    Amount issued: $141,763,936;
    County: Mobile.

    Approved project: City of Birmingham;
    Amount issued: $84,295,000;
    County: Jefferson.

    Approved project: Alabama A&M University;
    Amount issued: $44,770,235;
    County: Madison.

    Approved project: City of Tuscaloosa;
    Amount issued: $34,954,568;
    County: Tuscaloosa.

    Approved project: The Public Building Authority of the City of
    Huntsville;
    Amount issued: $27,500,000;
    County: Madison.

    Approved project: Birmingham Airport Authority;
    Amount issued: $20,675,000;
    County: Jefferson.

    Approved project: Jasper Water Works & Sewer Board Inc.;
    Amount issued: $18,305,000;
    County: Walker.

    Approved project: City of Pelham;
    Amount issued: $14,925,000;
    County: Shelby.

    Approved project: Macon County Board of Education;
    Amount issued: $14,335,000;
    County: Macon.

    Approved project: Mobile Airport Authority;
    Amount issued: $11,740,000;
    County: Mobile.

    Approved project: Madison Water & Wastewater Board;
    Amount issued: $10,400,000;
    County: Madison.

    Approved project: The Southeast Alabama Gas District;
    Amount issued: $10,150,000;
    County: Covington.

    Approved project: Helena Utilities Board;
    Amount issued: $10,000,000;
    County: Shelby.

    Approved project: The Educational Building Authority of the City of
    Montgomery;
    Amount issued: $10,000,000;
    County: Montgomery.

    Approved project: Huntsville Utilities;
    Amount issued: $10,000,000;
    County: Madison.

    Approved project: City of Madison;
    Amount issued: $9,865,000;
    County: Madison.

    Approved project: City of Birmingham;
    Amount issued: $9,612,566;
    County: Jefferson.

    Approved project: Alexander City;
    Amount issued: $6,456,972;
    County: Tallapoosa.

    Approved project: Montgomery County;
    Amount issued: $6,105,000;
    County: Montgomery.

    Approved project: Blount County Water Authority;
    Amount issued: $6,085,000;
    County: Blount.

    Approved project: The Utilities Board of the City of Ozark;
    Amount issued: $5,652,000;
    County: Dale.

    Approved project: City of Phenix City;
    Amount issued: $5,100,000;
    County: Russell.

    Approved project: Marengo County;
    Amount issued: $4,240,000;
    County: Marengo.

    Approved project: Walnut Hill Water Authority;
    Amount issued: $4,005,000;
    County: Tallapoosa.

    Approved project: Russell County;
    Amount issued: $3,950,000;
    County: Russell.

    Approved project: Northeast Alabama Water, Sewer & Fire Protection
    District;
    Amount issued: $3,950,000;
    County: DeKalb.

    Approved project: St. Clair County Board of Education;
    Amount issued: $3,608,580;
    County: St. Clair.

    Approved project: Hale County Water Authority;
    Amount issued: $3,545,000;
    County: Hale.

    Approved project: Conecuh County;
    Amount issued: $3,460,000;
    County: Conecuh.

    Approved project: Warrior River Water Authority;
    Amount issued: $3,330,000;
    County: Jefferson.

    Approved project: Russell County Water Authority;
    Amount issued: $3,040,000;
    County: Russell.

    Approved project: City of Hamilton;
    Amount issued: $2,800,000;
    County: Marion.

    Approved project: City of Robertsdale;
    Amount issued: $2,780,000;
    County: Baldwin.

    Approved project: City of Lanett;
    Amount issued: $2,750,000;

    County: Chambers.

    Approved project: Utilities Board of the City of Opp;
    Amount issued: $2,750,000;
    County: Covington.

    Approved project: Dale County Board of Education;
    Amount issued: $2,730,000;
    County: Dale.

    Approved project: Crenshaw County Public Building Authority;
    Amount issued: $2,695,000;
    County: Crenshaw.

    Approved project: City of Muscle Shoals;
    Amount issued: $2,339,461;
    County: Colbert.

    Approved project: Russell County Water Authority;
    Amount issued: $2,300,000;
    County: Russell.

    Approved project: City of Talladega;
    Amount issued: $2,100,000;
    County: Talladega.

    Approved project: City of Oxford;
    Amount issued: $2,000,000;
    County: Calhoun.

    Approved project: The Governmental Utility Services Corp. of Bessemer;
    Amount issued: $2,200,000;
    County: Jefferson.

    Approved project: Pike County Water Authority;
    Amount issued: $1,885,000;
    County: Pike.

    Approved project: City of Russellville;
    Amount issued: $1,850,000;
    County: Franklin.

    Approved project: City of Robertsdale;
    Amount issued: $1,810,000;
    County: Baldwin.

    Approved project: The Hale County Health Care Authority;
    Amount issued: $1,700,000;
    County: Hale.

    Approved project: Lamar County Water & Fire Protection Authority Inc.;
    Amount issued: $1,640,000;
    County: Lamar.

    Approved project: Gordo Water Works, Gas & Sewer Board;
    Amount issued: $1,605,000;
    County: Pickens.

    Approved project: The Sewer Board of the City of Arab;
    Amount issued: $1,512,077;
    County: Marshall.

    Approved project: Monroe County Health Care Authority;
    Amount issued: $1,345,000;
    County: Monroe.

    Approved project: City of Daleville;
    Amount issued: $1,300,000;
    County: Dale.

    Approved project: The Water Supply & Gas Board of the City of
    Dadeville;
    Amount issued: $1,290,000;
    County: Tallapoosa.

    Approved project: The Utilities Board of the Town of Butler;
    Amount issued: $1,180,000;
    County: Choctaw.

    Approved project: Douglas Water & Fire Protection Authority;
    Amount issued: $1,125,000;
    County: Marshall.

    Approved project: Town of Ashford;
    Amount issued: $1,110,000;
    County: Houston.

    Approved project: Water Works Board of the Town of Oakman;
    Amount issued: $1,000,000;
    County: Walker.

    Approved project: Boaz Gas Board;
    Amount issued: $1,000,000;
    County: Marshall.

    Approved project: Orange Beach Water, Sewer & Fire Protection
    Authority;
    Amount issued: $800,000;
    County: Baldwin.

    Approved project: Greene County;
    Amount issued: $775,000;
    County: Greene.

    Approved project: City of Glencoe;
    Amount issued: $683,136;
    County: Etowah.

    Approved project: City of Heflin;
    Amount issued: $630,000;
    County: Cleburne.

    Approved project: Perry County Commission;
    Amount issued: $460,000;
    County: Perry.

    Approved project: Monroe County Commission;
    Amount issued: $355,000;
    County: Monroe.

    Approved project: Crenshaw County Commission;
    Amount issued: $335,000;
    County: Crenshaw.

    Approved project: Pine Bluff Water Authority;
    Amount issued: $300,000;
    County: Blount.

    Source: GAO analysis of Alabama.

    Note: Bond data are as of mid-June 2008.

    [End of table]

    Table 12: Louisiana's Use of GO Zone Advance Refundings, Largest to
    Smallest:

    Issuer: Louisiana Stadium and Exposition District;
    Amount issued: $154,425,000;
    Parish: Multiple.

    Issuer: Jefferson Parish Counsel, Jefferson Sales Tax District;
    Amount issued: $100,340,000;
    Parish: Jefferson.

    Issuer: East Baton Rouge Sewage Commission;
    Amount issued: $70,000,000;
    Parish: East Baton Rouge.

    Issuer: Louisiana Public Facilities Authority;
    Amount issued: $50,000,000;
    Parish: Orleans.

    Issuer: State of Louisiana;
    Amount issued: $44,258,396;
    Parish: State-level, Not Applicable.

    Issuer: City of Baton Rouge;
    Amount issued: $25,765,000;
    Parish: East Baton Rouge.

    Issuer: Louisiana Public Facilities Authority;
    Amount issued: $20,000,000;
    Parish: Multiple.

    Issuer: Louisiana Public Facilities Authority;
    Amount issued: $11,000,000;
    Parish: Orleans.

    Issuer: Consolidated Waterworks and Wastewater District No.1;
    Amount issued: $6,885,000;
    Parish: St. Charles.

    Source: GAO analysis of Louisiana State Bond Commission data.

    Note: Bond data are as of mid-June 2008.

    [End of table]

    Table 13: Mississippi's Use of Go Zone Advance Refundings, Largest to
    Smallest:

    Issuer: Mississippi Development Bank for Harrison County Utility
    Authority;
    Amount issued: $125,000,000;
    County: Harrison.

    Issuer: Mississippi Hospital Equipment and Facilities Authority;
    Amount issued: $18,000,000;
    County: Jones.

    Issuer: City of Columbus, Mississippi;
    Amount issued: $15,000,000;
    County: Lowndes.

    Issuer: Jackson Municipal Airport Authority;
    Amount issued: $7,000,000;
    County: Rankin.

    Issuer: Claiborne County, Mississippi;
    Amount issued: $2,000,000;
    County: Claiborne.

    Issuer: Culkin Water District;
    Amount issued: $1,500,000;
    County: Warren.

    Source: GAO analysis of Mississippi Development Authority data.

    Note: Bond data are as of mid-June 2008.

    [End of table]

    [End of section]

    Appendix IV: Related GAO Products:

    [End of section]

    Tax Policy: Tax-Exempt Status of Certain Bonds Merits Reconsideration,
    and Apparent Noncompliance with Issuance Cost Limitations Should Be
    Addressed. [hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-08-364].
    Washington, D.C.: February 15, 2008.

    Tax Compliance: Federal Grant and Direct Assistance Recipients Who
    Abuse the Federal Tax System. [hyperlink, http://www.gao.gov/cgi-
    bin/getrpt?GAO-08-31]. Washington, D.C.: November 16, 2007.

    Tax Compliance: Some Hurricanes Katrina and Rita Disaster Assistance
    Recipients Have Unpaid Federal Taxes. [hyperlink,
    http://www.gao.gov/cgi-bin/getrpt?GAO-08-101R]. Washington, D.C.:
    November 16, 2007.

    Gulf Coast Rebuilding: Observations on Federal Financial Implications.
    [hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-07-1079T].
    Washington, D.C.: August 2, 2007.

    Preliminary Information on Gulf Coast Rebuilding. [hyperlink,
    http://www.gao.gov/cgi-bin/getrpt?AO-07-809R]. Washington, D.C.: June
    29, 2007.

    Gulf Coast Rebuilding: Preliminary Observations on Progress to Date and
    Challenges for the Future. [hyperlink, http://www.gao.gov/cgi-
    bin/getrpt?GAO-07-574T]. Washington, D.C.: April 12, 2007.

    Tax Policy: New Markets Tax Credit Appears to Increase Investment by
    Investors in Low-Income Communities, but Opportunities Exist to Better
    Monitor Compliance. [hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-
    07-296]. Washington, D.C.: January 31, 2007.

    Empowerment Zone and Enterprise Community Program: Improvements
    Occurred in Communities, but the Effect of the Program Is Unclear.
    [hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-06-727]. Washington,
    D.C.: September 22, 2006.

    Government Performance and Accountability: Tax Expenditures Represent a
    Substantial Federal Commitment and Need to Be Reexamined. [hyperlink,
    http://www.gao.gov/cgi-bin/getrpt?GAO-05-690]. Washington, D.C.:
    September 23, 2005.

    Elderly Housing: Federal Housing Programs That Offer Assistance for the
    Elderly. [hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-05-174].
    Washington, D.C.: February 14, 2005.

    Tax Administration: Information Is Not Available to Determine Whether
    $5 Billion in Liberty Zone Tax Benefits Will Be Realized. [hyperlink,
    http://www.gao.gov/cgi-bin/getrpt?GAO-03-1102]. Washington, D.C.:
    September 30, 2003.

    Federal Housing Assistance: Comparing the Characteristics and Costs of
    Housing Programs. [hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-02-
    76]. Washington, D.C.: January 31, 2002.

    Tax Credits: Opportunities to Improve Oversight of the Low-Income
    Housing Program. [hyperlink, http://www.gao.gov/cgi-
    bin/getrpt?GAO/GGD/RCED-97-55]. Washington, D.C.: March 28, 1997.

    [End of section]

    Appendix V: GAO Contact and Staff Acknowledgments:

    GAO Contact:

    Michael Brostek, (202) 512-9110, or brostekm@gao.gov:

    Acknowledgments:

    In addition to the individual named above, MaryLynn Sergent, Assistant
    Director; Dan Garcia-Diaz; Thomas Gilbert; Patrick Hatch; Suzanne
    Heimbach; Lisa Moore; John McGrail; Cheryl Peterson; and Jessica
    Thomsen made key contributions to this report.

    [End of section]

    Footnotes:

    [1] GAO, Gulf Coast Rebuilding: Preliminary Observations on Progress to
    Date and Challenges for the Future, [hyperlink, http://www.gao.gov/cgi-
    bin/getrpt?GAO-07-574T] (Washington, D.C.: Apr. 12, 2007).

    [2] Pub. L. No. 109-135 (2005).

    [3] Pub. L. No. 110-28 (2007).

    [4] To satisfy this May 25, 2008 mandate, we reported our preliminary
    findings to the House Committee on Ways and Means and the Senate
    Committee on Finance in briefings on May 22, and 23, 2008,
    respectively.

    [5] While HUD data on housing unit damage are also available for
    selected counties in Alabama, Florida, and Texas, these data do not
    differentiate between rental and owner-occupied units, thus we excluded
    data from these three states from our analysis.

    [6] Joint Committee on Taxation, Estimated Revenue Effects of H.R.
    4440, "The Gulf Opportunity Zone Act of 2005"as passed by the House of
    Representatives and the Senate on December 16, 2005, JCX-89-05R
    (Washington, D.C.: Dec. 20, 2005).

    [7] Pub. L. 107-147 (2002).

    [8] GAO, Tax Administration: Information Is Not Available to Determine
    Whether $5 Billion in Liberty Zone Tax Incentives Will Be Realized,
    [hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-03-1102] (Washington,
    D.C.: Sept. 30, 2003).

    [9] The Public Assistance grant program provides assistance to state
    and local governments and eligible nonprofit organizations on a project-
    by-project basis for emergency work (e.g., removal of debris and
    emergency protective measures) and permanent work (e.g., repairing
    roads, reconstructing buildings, and reestablishing utilities).

    [10] HUD's CDBG program provided funding for disaster recovery,
    including neighborhood revitalization and recovery and housing
    rehabilitation activities, affording states broad discretion and
    flexibility in deciding how to allocate these funds and for what
    purposes.

    [11] What follows in the text are simplified descriptions of the four
    provisions. For more information, see Joint Committee on Taxation,
    Technical Explanation of the Revenue Provisions of H.R. 4440, The "Gulf
    Opportunity Zone Act of 2005" As Passed by the House of Representatives
    and the Senate, JCX-88-05 (Washington, D.C.: Dec. 16, 2005) and Joint
    Committee on Taxation, Technical Explanation of the "Small Business and
    Work Opportunity Tax Act of 2007" and Pension Related Provisions
    Contained in H.R. 2206 As Considered by the House of Representatives on
    May 24, 2007, JCX-29-07 (Washington, D.C.: May 24, 2007).

    [12] In the case of tax-exempt private activity bond authority,
    bondholders are allowed to exclude interest earned on the bonds from
    their taxable income during each year that they receive interest
    payments. GO Zone private activity bonds are not subject to the
    Alternative Minimum Tax.

    [13] In the case of tax credits, investors receive direct reduction in
    tax liability. Investors can claim LIHTCs for eligible projects each
    year for 10 years from the time the housing developments are in
    service.

    [14] For tax credit bonds, investors receive a tax credit or direct
    reduction in tax liability, equal to a percentage of the bond's face
    value for a certain number of years. GO Zone tax credit bonds must be
    retired within 2 years of issuance.

    [15] Similar to GO Zone tax-exempt private activity bond authority,
    bondholders of GO Zone additional advance refundings are allowed to
    exclude interest earned on the bonds from their taxable income.

    [16] Alabama, Louisiana, and Mississippi had annual qualified private
    activity bond volume caps similar to their 2008 levels in both 2006 and
    2007.

    [17] In contrast, Florida and Texas received about $34 million and $43
    million, respectively, as their annual LIHTC credit ceiling in 2006--
    far larger amounts than their onetime GO Zone allocation in 2006.
    Population figures for the regular LIHTC allocation are based upon:
    Internal Revenue Bulletin No. 2006-11 (March 13, 2006); Internal
    Revenue Bulletin No. 2007-11 (March 12, 2007); Internal Revenue
    Bulletin No. 2008-8 (Feb. 25, 2008).

    [18] For additional information on tax-exempt bonds, see GAO, Tax
    Policy: Tax-Exempt Status of Certain Bonds Merits Reconsideration, and
    Apparent Noncompliance with Issuance Cost Limitations Should Be
    Addressed, GAO-08-364 (Washington, D.C.: Feb. 15, 2008).

    [19] Governmental entities include state and local governments and
    political entities thereof, including authorities and industrial
    development boards with the authority to issue tax-exempt bonds.

    [20] The Internal Revenue Code permits each state to devise an
    allocation formula or process for allocating its private activity bond
    volume cap consistent with the state's needs.

    [21] The Alternative Minimum Tax is a separate tax system paralleling
    the federal income tax system that applies to both individual and
    corporate taxpayers. It has different rules for determining taxable
    income, differing rates for determining tax liability, and differing
    rules for allowing the use of tax credits.

    [22] Per the GO Zone Act of 2005, if a state requires a bond commission
    to approve private activity bond authority, then the final authority to
    award GO Zone bonds rests with the bond commission. This is the case in
    Louisiana. If the state does not have a state bond commission, then the
    authority rests with the Governor. In Alabama and Mississippi, the
    Governors have the authority to approve GO Zone private activity bonds.

    [23] Pub. L. No. 99-514.

    [24] Investors generally receive around 4 percent per year for projects
    also financed with tax exempt bonds. These projects are exempt from
    LIHTC credit allocation rules.

    [25] According to the GO Zone Act of 2005, the additional allocation
    amount for Alabama, Louisiana, and Mississippi was equal to the lesser
    of $18.00 times each state's prehurricane population in the GO Zone or
    the amount of tax credits that had been allocated by each state to the
    buildings in the GO Zone as determined prior to August 28, 2005.

    [26] 26 U.S.C. sec. 1400N(c)(5).

    [27] This requirement applies to the GO Zone areas in Alabama,
    Louisiana, and Mississippi.

    [28] Previously, the federal government has allowed limited use of tax
    credit bonds, authorizing only Qualified Zone Academy Bonds for certain
    school renovation and repair and Clean Renewable Energy Bonds for
    renewable energy projects.

    [29] General obligation bonds are backed by the full faith and credit
    of the issuer and are secured by the issuer's general taxing powers,
    including sales taxes, property taxes, and income taxes.

    [30] The credit amount is the credit rate for the bonds as established
    by the Secretary of the Treasury on the day when the bonds are sold
    multiplied by the face value of the bonds.

    [31] A bond is advance refunded when the new bonds are issued more than
    90 days before final payment on the prior issue. If fewer than 90 days
    remain before the final payment on the previous issue, the new bond is
    referred to as a current refunding.

    [32] Section 501(c)(3) of the Internal Revenue Code defines the
    conditions for nonprofit, or charitable, organizations to maintain tax-
    exempt status. Section 501(c)(3) organizations can borrow the proceeds
    of tax-exempt bonds or lease facilities financed with such proceeds.
    Section 501(c)(3) bonds are classified as private activity bonds but
    are not subject to annual state volume caps or, as long as the bonds
    were issued after August 7, 1986, the Alternative Minimum Tax.

    [33] By law, bond issuers are required to file IRS Form 8038,
    Information Return for Tax-Exempt Private Activity Bond Issues.
    Generally, these forms are required to be filed by the 15TH day of the
    second calendar month following the quarter in which the bonds were
    issued.

    [34] Mississippi officials said that as of April 2008, 15 GO Zone bond
    applications did not receive allocations due to factors such as the
    state denying the application or the applicant withdrawing the
    application. Mississippi officials did not provide us with specific
    information on why any of these projects were rejected, noting it is
    the MDA's policy not to release information related to specific
    projects that did not receive approval.

    [35] The six most-damaged counties in Mississippi include: George,
    Hancock, Harrison, Jackson, Pearl River, and Stone.

    [36] The 13 parishes originally designated in April 2006 to receive 50
    percent of the GO Zone bond allocation authority included Calcasieu,
    Cameron, Jefferson, Lafourche, Orleans, Plaquemines, St. Bernard, St.
    Charles, St. John the Baptist, St. Tammany, Tangipahoa, Vermilion, and
    Washington.

    [37] See Louisiana Executive Order No. KBB 2006-9.

    [38] Depending on the bond issuer in Louisiana, bonds have either a two-
    step or a four-step approval process. For public trusts and industrial
    development boards that issue bonds, the bonds must receive both
    preliminary and final approval from the bond issuer and the Louisiana
    SBC. For other bond issuers, only final approval is needed from the
    issuer and the SBC.

    [39] In April 2008, a newly-elected Governor issued an executive order
    officially declaring that the Governor's Office would not issue final
    allocation letters to GO Zone bond recipients.

    [40] Based in part on the review of FEMA and HUD damage data, Iberia
    and Terrebonne parishes were added to the designated pool in 2007,
    replacing St. Charles and St. John the Baptist parishes on the 2006
    list.

    [41] According to an LDED official, GO Zone bond projects have
    continued to face difficulty obtaining credit due to changing market
    conditions through the summer of 2008.

    [42] According to Louisiana SBC officials, through June 2008 as long as
    allocation authority has been available, the SBC has approved GO Zone
    private activity bond project applications.

    [43] Previously, GO Zone bond applicants had to submit a refundable
    flat escrow deposit of $7,500.

    [44] The new requirement for previously approved applicants that had
    not yet issued bonds to submit the refundable deposit has resulted in
    at least one lawsuit.

    [45] The 8 parishes targeted for GO Zone LIHTCs in the 2007/2008
    Louisiana QAP include: Calcasieu, Cameron, Jefferson, Orleans,
    Plaquemines, St. Bernard, St. Tammany, and Vermillion.

    [46] 26 C.F.R. sec. 1.42-5.

    [47] To satisfy the first test, at least 20 percent of the units must
    be occupied by individuals with income of 50 percent or less of the
    area's median gross income, adjusted for family size. To satisfy the
    second test, at least 40 percent of the units must be occupied by
    individuals with income of 60 percent or less of the area's median
    gross income, adjusted for family size.

    [48] Alabama has about 12 percent of its allocation authority remaining
    but most of the remaining authority (about $230 million) is currently
    being reserved for one specific project according to Alabama Department
    of Finance officials. The project is not located in a GO Zone county,
    but Alabama is seeking a legislative change to expand the number of
    counties eligible for GO Zone bond authority.

    [49] As of mid-June 2008, Alabama, Louisiana, and Mississippi had $254
    million, $874 million, and $770 million in allocation authority
    remaining, respectively.

    [50] The State of Mississippi has the Small Enterprise Development
    (SED) program where bond proceeds are pooled and used for a number of
    smaller projects. The program allows smaller projects to benefit from
    GO Zone bond program while keeping interest costs as a percent of bond
    proceeds lower than if each project issued a bond separately.

    [51] The Alabama HFA awarded all of its remaining GO Zone LIHTCs on
    June 23, 2008, after we had requested data on the extent to which the
    credits had been awarded.

    [52] 26 U.S.C. sec. 1400N(c)(5).

    [53] See Alex Frangos, "Credit Losses Stall Affordable-Housing
    Projects," The Wall Street Journal, March 12, 2008, Eastern edition, p.
    B.1; Rebecca Mowbray, "Market Crunch Hinders New Housing," The Times
    Picayune, March 28, 2008.

    [54] While HUD data on housing unit damage are also available for
    selected counties in Alabama, Florida, and Texas, these data do not
    differentiate between rental and owner-occupied units, thus we excluded
    data from these three states from our analysis.

    [End of section]

    GAO's Mission:

    The Government Accountability Office, the audit, evaluation and
    investigative arm of Congress, exists to support Congress in meeting
    its constitutional responsibilities and to help improve the performance
    and accountability of the federal government for the American people.
    GAO examines the use of public funds; evaluates federal programs and
    policies; and provides analyses, recommendations, and other assistance
    to help Congress make informed oversight, policy, and funding
    decisions. GAO's commitment to good government is reflected in its core
    values of accountability, integrity, and reliability.

    Obtaining Copies of GAO Reports and Testimony:

    The fastest and easiest way to obtain copies of GAO documents at no
    cost is through GAO's Web site [hyperlink, http://www.gao.gov]. Each
    weekday, GAO posts newly released reports, testimony, and
    correspondence on its Web site. To have GAO e-mail you a list of newly
    posted products every afternoon, go to [hyperlink, http://www.gao.gov]
    and select "E-mail Updates."

    Order by Mail or Phone:

    The first copy of each printed report is free. Additional copies are $2
    each. A check or money order should be made out to the Superintendent
    of Documents. GAO also accepts VISA and Mastercard. Orders for 100 or
    more copies mailed to a single address are discounted 25 percent.
    Orders should be sent to:

    U.S. Government Accountability Office:
    441 G Street NW, Room LM:
    Washington, D.C. 20548:

    To order by Phone:
    Voice: (202) 512-6000:
    TDD: (202) 512-2537:
    Fax: (202) 512-6061:

    To Report Fraud, Waste, and Abuse in Federal Programs:

    Contact:

    Web site: [hyperlink, http://www.gao.gov/fraudnet/fraudnet.htm]:
    E-mail: fraudnet@gao.gov:
    Automated answering system: (800) 424-5454 or (202) 512-7470:

    Congressional Relations:

    Ralph Dawn, Managing Director, dawnr@gao.gov:
    (202) 512-4400:
    U.S. Government Accountability Office:
    441 G Street NW, Room 7125:
    Washington, D.C. 20548:

    Public Affairs:

    Chuck Young, Managing Director, youngc1@gao.gov:
    (202) 512-4800:
    U.S. Government Accountability Office:
    441 G Street NW, Room 7149:
    Washington, D.C. 20548:
    *** End of document. ***