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through 14000-3 to the Code authorizing State and local governments to issue <br />Recovery Zone Bonds. Section 14000-1 imposes a national bond volume limitation <br />("volume cap") of $10 billion for Recovery Zone Economic Development Bonds and $15 <br />billion for Recovery Zone Facifity Bonds_ The volume cap for Recovery Zone Bonds is <br />allocated among the States and counties and large municipalities within the States <br />based on relative declines in employment in 2008. <br />In general, Recovery Zone Economic Development Bonds may be used to <br />finance certain "qualified economic development purposes" and Recovery Zone Facility <br />Bonds may be used to finance certain "recovery zone property," both as described <br />further herein, generally for use within designated "recovery zones," as described <br />below. Section 14000-1(b) provides that, for purposes of 14000-1 through 14000-3, <br />the term "recovery zone" means: (1) any area designated by the issuer as having <br />significant poverty, unemployment, rate of home foreclosures, or general distress; (2) <br />any area designated by the issuer as economically distressed by reason of the closure <br />or realignment of a military installation pursuant to the Defense Base Closure and <br />Realignment Act of 1990; and (3) any area for which a designation as an empowerment <br />zone or renewal community is in effect as of the effective date of ARRA, which effective <br />date is February 17, 2009. <br />.02 BACKGROUND ON BUILD AMERICA BONDS <br />Section 1531 of ARRA added § 54AA to the Code, authorizing State and local <br />governments, at their option, to issue two general types of Build America Bonds ("Build <br />America Bonds") as taxable governmental bonds with Federal subsidies for a portion of <br />their borrowing costs. Section 54AA(d) of the Code defines the term "Build America <br />2 <br />