Current through Register Vol. 54, No. 44, November 2, 2024
Under the allocations in §
61.5 (relating to allocations of
tax-exempt bond authority), to apply for approval of allocations for specific
projects the following procedures shall be followed:
(1)
Approval requirements.
The approval of an allocation for small issue and exempt facilities private
activity bonds requires submission of a preliminary allocation request,
submitted prior to the issuance of the bonds, and submission of a final
allocation request and a copy of IRS Form 8038, Information Return for Private
Activity Bond Issues, within 15 calendar days after closing.
(2)
Preliminary allocation request
(PAR).
(i) A PAR will not be
accepted until the project is approved by the Department if approval is
required under the IDA Law.
(ii) A
PAR shall be submitted by the industrial development authority or other
authorized issuer. A PAR will not be accepted from the applicant's attorney. If
submitted by an authorized issuer other than an industrial development
authority, the PAR shall have attached sufficient information to determine use
and eligibility for allocation.
(iii) A PAR, if properly completed and
submitted, will be approved on a timely basis by the Department.
(iv) A PAR shall be properly completed. An
improperly completed or submitted PAR will be returned for revision or
correction.
(v) A PAR is valid for
90 calendar days after approval or until December 31 of the year in which it is
approved, whichever is earlier. Failure to close within the prescribed period
will result in the automatic loss of the preliminary allocation.
(vi) For projects which are also requesting
funding through an Urban Development Action Grant (UDAG) or through the
Pennsylvania Economic Development Financing Authority (PEDFA), the PAR is valid
for 180 calendar days after approval or until December 31 of the year in which
it is approved, whichever is earlier.
(vii) If the PAR expires prior to closing for
a project, there will be a penalty period of 60 calendar days, after the date
of expiration, before the Department will accept a new PAR for that project. To
avoid this, the issuer, the applicant and the parties involved should be in
agreement regarding the closing date and should be certain that details can be
finalized by that date, before the PAR is submitted.
(viii) If an increase is requested, a PAR
shall be submitted for the increased amount only.
(ix) If a project has a PAR for the original
tax-exempt amount and a PAR for an increase, the closing shall be effected by
the expiration date of the earliest PAR if there is to be one
issuance.
(x) Allocations will not
be granted for projects using private activity bonds for interim financing
purposes.
(xi) Allocations for
small issue projects will be granted based on the chronological order of
receipt and up to an amount which in the aggregate equals a county's
allocation.
(xii) A PAR is valid
only during the calendar year in which it is approved.
(xiii) A PAR submitted in prior years is not
valid for projects in subsequent years. A new PAR shall be submitted each
year.
(xiv) A project closing prior
to the issuance of a PAR, in excess of the approved amount of the PAR, closing
after the PAR has expired or not filing a final allocation request (FAR) and
IRS Form 8038 within the prescribed time periods will automatically have its
allocation rescinded and risk loss of its tax-exempt status. Subsequent
allocations granted with respect to financings which lost allocations for those
reasons will require second closings to insure the tax-exempt status of the
financings.
(xv) Neither project
applications nor a PAR will be approved without the land cost, if the land is
being financed.
(xvi) As required
by §
61.3(a)(1)
(relating to restrictions on county allocations), an applicant shall submit a
letter, on the applicant's letterhead,along with its PAR, certifying that as an
inducement for the Department to approve its allocation request, the applicant
expects to create or preserve the requisite number of jobs.
(3)
Final Allocation Request
(FAR). A project receiving approval of a PAR shall submit a completed
IRS Form 8038 and a FAR within 15 calendar days of the closing or the
allocation will be rescinded, as indicated in this section, and the
60-calendar-day penalty period will be imposed.
(i) A FAR will not be accepted without IRS
Form 8038. The date of closing and the tax-exempt amount shall be the same on
both forms.
(ii) If the issuance
amount on the FAR is less than the preliminary allocation amount approved by
the Department, a decrease letter will be sent automatically, unless otherwise
instructed by the authority.
This section cited in 12 Pa. Code §
63.1 (relating to
allocations).
