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

Introduction This Memorandum provides a brief explanation and overview of tax-exempt lease-purchase financing and certificates of participation (“COPs”) in Georgia. Counties, cities and school districts (referred to as “Local Governments” in this Overview) are authorized by Georgia law to obtain tax-exempt lease-purchase financing as described below. By this method Local Governments can acquire real property, buildings, vehicles and equipment without incurring a traditional form of debt, such as general obligation bonds or revenue bonds, and no voter referendum or court bond validation is required. The simplified procedures make lease-purchase financing particularly suitable for shorter-term or smaller financings of essential governmental… 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

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

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

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

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 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