Private Activity Bonds

Small & medium sized Arizona manufacturers are encouraged to apply for a tax exempt allocation through the Private Activity Bonds (PAB) program at the Arizona Department of Commerce. Private Activity Bonds are securities issued by or on behalf of a local government to provide debt financing for projects used for the trade or business of a private user. The PAB program can be used for the construction of industrial & manufacturing facilities & the purchase of equipment, residential rental projects, facilities for the furnishing of water, sewage & solid waste facilities & more.

So far in 2006, only one manufacturer has taken advantage of the attractive financing offered by an allocation of Private Activity Bonds. Economic developers around the state should keep an eye out for small manufacturing projects ($2 million - $9 million) that might successfully use bond financing. Until Dec. 31st, 2006, such bonds are limited to $10 million dollars. This limit includes the amount of both bonds & capital expenditures during a 6-year period beginning 3 years before & ending 3 years after bonds are issued.

For info & materials on PAB visit Private Activity Bonds Program. If you have any questions regarding the application process please contact Patty Duff at (602) 771-1213.