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Public Finance Authority
The North Dakota Public Finance Authority offers many financing programs and options to new and growing businesses.
Industrial Development Bond Program
Under its Industrial Development Bond Program (IDB), the Authority makes loans to manufacturers that qualify as small issue manufacturers. Qualified small issue manufacturers are defined within the Internal Revenue Code as "Any facility which is used in the manufacturing or production of tangible personal property including the process resulting in a change in the condition of such property." Within that definition, the qualifying organizations must also meet a capital spending requirement. As part of the legislation that approved the IDB, the Authority is limited to $2,000,000 per project and $20,000,000 cumulative for the Program.
The interest rates paid by a qualifying manufacturer are market rates which are set through a competitive bid process when the Authority issues and sells its program bonds to fund the loan. The interest rates paid by the Authority on its program bonds are the same rates the manufacturer will pay on its loan to the Authority. For manufacturers that qualify, the IDB provides an opportunity to finance fixed assets (buildings and equipment) with tax-exempt long-term fixed rates.
The IDB has been assigned a rating of "A" by Standard & Poors Rating Group.
Clean Renewable Energy Bonds
Clean Renewable Energy Bonds (CREBs) are a form of tax credit bond (part of the Energy Tax Incentives Act of 2005) in which interest on the bonds is paid in the form of tax credits by the federal government. For investors, the tax credits represent the return on their investment for the term of the bond. Since the tax credit from the federal government provides the investor with the income on their investment, CREBs provide the issuers/borrowers with the opportunity to borrow money for qualified projects at a 0% interest rate. Qualified projects include wind, biomass, geothermal, solar, small irrigation power, landfill gas, trash combustion, refined coal production, and qualifying hydropower facilities.
In order to qualify, a project must receive an allocation from the Secretary of the Treasury through an application process. As a governmental issuer, the Authority can issue CREBs for those entities that receive an allocation.
Solid Waste Disposal
The solid waste component of a project may be eligible to be financed through the issuance of tax exempt bonds. The Authority can act as a conduit tax exempt issuer for qualifying borrowers that are involved in a project with a solid waste disposal element. One example of a project where a portion of the project would qualify under the definition of solid waste disposal is an ethanol plant.
For more information on these programs, contact the ND Public Finance Authority via email or call 701-328-7100.
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