SCOPE OF THIS OVERVIEW This memorandum provides a brief explanation and overview of tax-exempt Private Activity Bond (formerly known as Industrial Development Bond) financing under the Internal Revenue Code of 1986, as amended (the “I.R.C.”), including financing for manufacturing facilities, for Section 501(c)(3) non-profit organizations, for certain “exempt facilities” and in Enterprise Zones.  This memorandum also describes “Taxable Bond” financing and other incentives for the location of industry, which have developed as an alternative to the more restrictive Private Activity Bond program.  Details concerning “manufacturing small issues,” “Section 501(c)(3) organizations,” “exempt facilities” and “Taxable Bonds” appear in this memorandum.  Bond… Read more

Introduction Government bodies take on specific obligations to file information regularly (“continuing disclosure”) when they issue bonds through an underwriter. Failure to affirmatively make such filings has significant consequences. These continuing disclosure obligations are the subject of this Overview. Governmental bonds generally are exempt from the requirements of registration and the filing of periodic disclosure reports under the federal Securities Acts of 1933 and 1934. The exemptions apply both to the governmental bonds of states and local government units, and to “private activity” bonds issued by governmental authorities for the benefit of nonprofit and for-profit companies when the bonds meet… Read more

The unpopularity of property taxes and the simplicity and perceived fairness of sales taxes have made the County 1% Special Purpose Local Option Sales Tax (“SPLOST”) a popular method for funding needed capital projects in Georgia. That the voters must approve the SPLOST through referendum reinforces democratic principles and is popular with officials. The voters will decide whether the described projects are funded through SPLOST, and elected officials need not raise property taxes for funded projects. The SPLOST statute was substantially rewritten in the 2004 General Assembly, effective July 1, 2004, with respect to how the tax is to be… Read more

BENEFITS OF A REGIONAL APPROACH TO SOLID WASTE MANAGEMENT NEEDS The Georgia Comprehensive Solid Waste Management Act (the “Act”), enacted by the General Assembly of the State of Georgia in 1990, has placed a number of compliance, management and other requirements on cities and counties in dealing with their municipal solid waste stream. A regional approach to meeting the obligations imposed by the Act offers economies and efficiencies of scale that would be difficult for cities and counties to attain acting on their own. A regional solid waste management authority could offer a variety of services to its participating cities… Read more

Regulations Require Declaration of Official Intent The Internal Revenue Service has revised its regulations concerning the use of tax-exempt financing (bonds, notes and leases, referred to below generally as “bonds”) to reimburse expenditures made prior to the date of the financing. Under the new regulations, the proceeds of bonds may be allocated to a prior capital expenditure for a period of time after the expenditure is made, but only if a formal declaration of reasonable intention to reimburse the expenditure with the proceeds of a borrowing (a “declaration of official intent”) had been properly made within sixty (60) days after… Read more

Introduction Scope. This memorandum provides a brief explanation and overview of tax-exempt financing for nonprofit hospitals and other healthcare organizations under Georgia law and the Internal Revenue Code of 1986. A variety of governmental debt obligations may qualify for tax exemption (e.g., bonds, notes, revenue anticipation certificates, bank loans, installment sales and leases), and these are sometimes referred to interchangeably as “bonds,” “debt,” or “obligations.” A summary is presented of the state law requirements for issuance of debt by public hospital authorities. Rules governing the exemption from federal income taxation of interest paid on such obligations also are outlined. Debts… Read more

Introduction This memorandum provides a brief explanation and overview of tax-exempt financing for governmental purposes under Georgia law and the Internal Revenue Code of 1986. A summary is presented of the state law procedures and requirements for issuance of bonds and other forms of financing by local governments and public authorities. Rules governing the exemption from federal income taxation of interest paid on such obligations are also outlined. A variety of governmental debt obligations may qualify for tax exemption (e.g., bonds, notes, revenue certificates, bank loans, leases and certificates of participation), and these are sometimes referred to interchangeably as “bonds,”… Read more

Introduction. Nonprofit schools increasingly are taking advantage of tax-exempt bond financing to fund capital improvements and expansion. Bond financing can be used for land acquisition, bricks and mortar, furniture, furnishings and equipment and many other costs associated with a school’s educational, recreational and charitable purposes, including in proper circumstances refinancing of capital debt. The principal advantages of such bond financing are the low interest rates and the attractiveness of the debt to lenders and investors. Bond financing may permit a school to build its projects sooner, expand the scope of its projects, or direct its fundraising to other purposes. With… Read more

Introduction This memorandum provides a brief explanation and overview of tax-exempt Bond financing for 501(c)(3) nonprofit organizations under the Internal Revenue Code of 1986, as amended (the “I.R.C.”). Tax-exempt 501(c)(3) Bonds may be issued for most facilities utilized for the exempt purposes of Section 501(c)(3) organizations, as outlined in this memorandum. The principal advantages of such bond financing are the low interest rates and the attractiveness of the debt to lenders and investors. Bond financing may permit a user to build its projects sooner, expand the scope of its projects, or direct its fundraising to other purposes. With facilities financed… Read more

All Georgia communities can provide partial relief, and some can provide full exemptions, from ad valorem taxes for certain privately-used facilities through bond-lease transactions. This ability can be used as an incentive to induce the location of a new business or the expansion of an existing business in the community. This incentive can be provided whether or not the project qualifies for tax-exempt bond financing. An absolute waiver of ad valorem taxes would be illegal under the Georgia Constitution as well as under basic principles of uniformity of taxation and equal protection of the laws. Ga. Const. of 1983, art…. Read more