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				 

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GAO-08-913

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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 borrowerï¿½s 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 
[email protected]. 

[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 [email protected]. 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 [email protected]: 

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] 

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