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IDA Frequently Asked Questions

What types of projects can IDA Bonds fund?

Per Arizona law, IDAs may issue bonds to finance various types of facilities, although not all such financings would be tax-exempt. Many must be of nonprofit status or owned by the government. Examples of the types of facilities eligible to be financed by an IDA include:

• Industrial and manufacturing facilities and the purchase of equipment and residential rental projects; Industrial park facilities (tax-exempt financing is not available);
  
• Office building or buildings for use as corporate or company headquarters or regional offices and research and development facilities;
  
• A health care institution as defined in ARS Section 36-401;
  
• Repairing or rehabilitating single-family dwelling units or constructing or repairing residential fences and walls;
  
• Airports, docks, wharves, mass commuting facilities, parking facilities, or storage or training facilities, and convention and trade show facilities;
  
• Air or water pollution control facilities (tax-exempt financing is not available);
  
• Any educational institution operated by a nonprofit educational organization that is exempt from taxation under Section 501(c)(3) of the United States Internal Revenue Code not otherwise funded by state monies or any educational institution or organization established under the provisions of Title 15, Chapter 1, Article 8 and owned by a nonprofit organization;
  
• A child welfare agency, as defined in Section 8-501;
  
• A transportation facility constructed or operated pursuant to Title 28, Chapter 26, Article 1 or 2 (tax-exempt financing only if owned by a 501(c)(3) entity);
  
• A museum operated by a nonprofit corporation; or facilities owned by a nonprofit corporation engaged in delivering the community services listed in the statute.
  

How do I utilize the IDA for bond financing?

Applicants should consult the IDA’s Legal Counsel regarding the eligibility of the proposed Project for Bond financing. If eligible, the following process must then be followed:

• Step No. 1. Application is made to the IDA for preliminary approval.
  
• Step No. 2. A preliminary resolution (or inducement resolution) is considered by the IDA. The remainder of this outline will assume approval by the IDA and passed by the IDA.
  
• Step No. 3. If necessary, a request for private activity bond volume cap is made to the Arizona Department of Commerce (“Commerce”).
  
• Step No. 4. Final Approval of the IDA is considered by the IDA. The remainder of this outline will assume approval by the IDA.
  
• Step No. 5. If required under Section 147, 114, d, a notice of public hearing is published.
  
• Step No. 6. A public hearing is held (at least 14 days after notice is given by publication).
  
• Step No. 7. The Mayor and City Council approve the issuance of the Bonds by the IDA.
  
• Step No. 8. If necessary, an application is made to Commerce for review of the Bonds under Section 35-726 of the Act.
  
• Step No. 9. If necessary, a hearing under Section 35-726 is held, and Commerce approves the issuance of the Bonds.
  
• Step No. 10. The Bonds are sold (either privately or publicly).
  
• Step No. 11. The transaction closes.