Mar 30, 2012

Overview of Private Activity Bond Financing and Incentives

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


Jun 06, 2007

Overview of Continuing Disclosure Requirements for Bond Issuers

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


Mar 30, 2012

Overview of Bond Financing for NonProfit Schools

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


Jun 06, 2007

How to Live With a 501(c)(3) Bond Issue

The bond documents have been bound in a neat, thick transcript. The chief financial officer has worked for months with the board of directors, management, bond counsel and the remainder of the bond working group to structure and close a successful 501(c)(3) bond issue. The 501(c)(3) nonprofit commences its building program with the bond proceeds and looks forward to enjoying the low, tax-exempt interest rate on the bonds for their full term. What more does the nonprofit need to do? Although continuing compliance with a tax-exempt 501(c)(3) bond issue need not be burdensome, it is rife with specialized and non-intuitive… Read more


Jun 06, 2007

Overview of Governmental Financing

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


Mar 08, 2002

Tax-Exempt Financing for Waste Disposal/Recovery and Wastewater Treatment

Introduction Tax-exempt bond financing is available for certain water and sewage, solid waste disposal/recovery project, waste-to-energy projects, and wastewater treatment projects. Bond financing may be available for public, private and public-private partnership projects. Bonds might be issued directly by a city or a county for government-owned project pursuant to Georgia’s Revenue Bond Law. A privately owned and operated project might be financeable through Georgia’s Development Authorities Law. A government-owned project or a public-private partnership project might be financed with Georgia’s Resource Recovery Development Authorities Law or Georgia’s Regional Solid Waste Management Authorities Law. In order for the bonds to be… Read more


Jun 06, 2007

Overview of Tax-Exempt Financing For NonProfit Hospitals

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


Feb 26, 2002

Community Improvement Districts as a Tool for Infrastructure Financing

Private businesses are more frequently being called upon to bear the costs of public infrastructure improvements necessitated by new facility locations and real estate developments. Long-standing practice has required businesses and developers undertaking new projects to construct adjoining or connecting roads, curbing, sidewalks, street lighting, utility lines, and similar improvements, and to dedicate these to public use. In addition, a more recent trend is to require developers to pay to cities or counties impact fees that reflect the costs of additional infrastructure needs arising as a result of a project, such as road widenings, traffic signals, buffers, parks, and highway… Read more


Jun 06, 2007

Reimbursement of Prior Expenditures With Bond Proceeds-Final Reimbursement Bond Regulations

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


Feb 19, 2002

Requirements for a “Trust Lease” for Exclusion From Treatment as a Capital Expenditure

As a general rule, any capital expenditure which is properly chargeable to the capital account of any person and which is made with respect to the financed facility must be included for purposes of the $10,000,000 capital expenditure limitation under I.R.C. § 144(a)(4). Treasury regulations provide, however, that certain capital expenditures may be excluded from the computation. One such excluded expenditure is an expenditure made by a person, other than the bond user, a related person, or a State or local governmental unit, if the expenditure is made with respect to tangible personal property, or intangible personal property, leased to… Read more