1302005 Informal Interpretation

801.21, 802.4
Michael Verne

Nothing reportable here.
The formation of the non-corporate entity would be exempt under 802.4. Tax
credits are assets, but we treat them as cash equivalents. K Walsh concurs.


From: (Redacted)

Sent: Wednesday, February 13, 2013 4:47 PM

To: Verne, B. Michael

Subject:Tax Equity financing transactions


Left you a message,but perhaps email is better.

Ihave some questions about "tax equity" financing transactions.

In these transactions, investors provide an upfrontcash amount to green energy projects(such as wind or solar installations), in return for membership interests which entitle the investor to various paymentsover negotiated periods of time. The payments include tax credits, which the federalgovernment has sanctioned to transfer from energy companies to investors(since the energy companies usuallydo not have a high enough tax burdento take advantage of these tax credits, allowingthem to be transferred to investorswho do have higher tax burdens and thus would benefit from the tax credits is designed to encourage investment in these energy initiatives).

Does the PNO treatthese tax equity transactions any differently than othertransactions involving acquisitions of interests in non-corporate entities?

If not, I assume that (1)the same test applies in determining whethera filing is required (whether the tax equity investoris receiving control of the non-corporate entity), and (2) tax creditsare not included as "profits" under the definition of control of a non-corporate entity.

Also, if these transactions do not involvemembership interests, would the tax credits the investoris receiving in return for its investment be considered"assets" under the HSR rules? I would thinknot, but wanted to check.

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