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.
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