Private Activity Bonds (PABs) are municipal securities the proceeds of which are used by private entities to finance airports, docks, utility facilities, and certain residential rental projects, among other things. Private Activity Bonds provide important  opportunities for developers and investors.

The general process for issuing Private Activity Bonds is set by the state of Arizona within federal guidelines.  Lotzar Law Firm, P.C. has helped many clients to qualify for the issuance of Private Activity Bonds. Call today to schedule a consultation and learn more about how we can assist you in securing PABs.

 

What is the General Process for Issuing Private Activity Bonds?

The Arizona Department of Commerce has authority over bookkeeping and ministerial tasks associated with allocating Private Activity Bonds in the state. Arizona Revised Statutes section 35-701 also establishes guidelines for industrial development corporations to be formed and receive authorization for issuing Private Activity Bonds.

Requests for allocations can be filed by a qualified state university; a qualified issuer of student loan bonds; an industrial development authority, or other qualified issuers. Interested third parties may request allocations, as can bond counsel acting on behalf of the issuer.

Requests for allocation may be submitted by mail to the Arizona Department of Commerce or may be hand-delivered. Allocations are processed and confirmations are issued on a first-come, first-serve basis so hand delivery is often necessary as a practical matter.  If multiple requests for allocation have been submitted and are received at the same time, a lottery system will be utilized in order to establish the priority of the requests for allocation. Refundable security deposits must be submitted before Confirmations will be issued, and non-refundable Confirmation Fees must be paid after allocation.

Applications for Private Activity Bonds can be submitted within one of three different periods. The first period extends January 2 through June 30; the second extends from July 1 through December 16 and the final third period extends from December 17 through December 31.  A fee must be paid when making a request for allocation. The fee depends upon the requested amount.

The Internal Revenue Code section 146 establishes an aggregate amount of Activity Bonds that may be used annually by Arizona.  Prior to April 1, 70 percent of the PABs allocated to manufacturing projects must be reserved for projects that are located in areas with populations of 100,000 or under (non-urban locations). This 70 percent allocation limit also applies to allocations available under the discretion of the director.

Lotzar Law Firm, P.C. has extensive knowledge of the general process for issuing Private Activity Bonds. Our Scottsdale Arizona lawyers can help you to submit your Application in a timely manner and can assist with completing all requirements. Our goal is to do everything possible to ensure you receive an allocation of Private Activity Bonds. Call today to schedule a consultation and learn more about how our attorneys can assist you.

Private Activity Bonds (PABs) make it possible for organizations in the private sector to use Tax Exempt Bonds to finance projects that make a contribution to the public good.  Private Activity Bonds can be issued for specific projects that benefit the community including for healthcare facilities; transportation projects; low-income housing complexes; facilities that provide water, gas or electrical energy; for plants to store hazardous materials; for heating and cooling facilities; and for plants that treat or dispose of solid waste.

There are myriad benefits of having Private Activity Bonds issued when an organization undertakes a qualified project. It is important to consult with an experienced Scottsdale Arizona real estate and development lawyer for assistance in understanding the advantages of PABs and determining if your project may be eligible.  Lotzar Law Firm, P.C. has helped many clients to successfully obtain bond financing so call today to schedule a consultation and learn more about how we can assist with your project.

Benefits of Having Private Activity Bonds (PABs) Issued

Developers, investors, municipal governments and the public all reap the benefits of having Private Activity Bonds issued.

Organizations, investors and developers who can finance projects with Private Activity Bonds benefit from:

• A lower interest rate paid on borrowed money, providing substantial cost savings for project expenditures.
• Reduced project risk.
• Easier access to capital for certain projects that require alternative financing.
• The opportunity to complete projects with a tangible positive benefit for the community.
• Secure Tax Exempt financing to fund capital expenditures.

Private Activity Bonds can finance the acquisition of property, as well as new construction, reconstruction and property improvements.  Developers and investors should consult with an experienced Scottsdale Private Activity Bonds attorney for help determining if they can qualify for this special tax-advantaged alternative financing method.

Benefits of Private Activity Bonds (PABs) for the Public

Private Activity Bonds also have many benefits for the public as a whole.  Some of the many benefits of having Private Activity Bonds issued include the following:

• Private investments in infrastructure is incentivized. Because PABs can be more competitive than other privately available bonds, the bonds encourage investment in transportation projects and other projects that provide for the public good.
• Reduced need for new taxes or borrowing. When Private Activate Bonds make it possible for investors to finance projects that develop infrastructure, local and state governments do not need to increase taxes to provide the necessary services.

Finally, investors who make the decision to purchase Private Activity Bonds can benefit by earning a return on a relatively safe investment.

To take advantage of the many benefits of having Private Activity Bonds issued, it is essential to get help from an experienced Scottsdale real estate development lawyer in securing bond funding for your qualifying project. Lotzar Law Firm, P.C. can assist in determining if you qualify for PABs and can advise you throughout the process of applying for bond financing for your next development project. Call today or contact us online to speak with an experienced lawyer and learn more about how we can help.