Rhode Island Code of Regulations
Title 120 - Treasury Department
Chapter 00 - N/A
Subchapter 00 - N/A
Part 4 - Rules and Regulations Governing the Public Finance Management Board (120-RICR-00-00-4)
Section 120-RICR-00-00-4.8 - Allocation

Universal Citation: 120 RI Code of Rules 00 00 4.8

Current through September 18, 2024

A. Purpose. One of the principal functions of the Board is to allocate private activity tax-exempt, taxable and/or federal tax-credit bond issuance capacity ("Cap") among all bond issuers in the State.

1. Under the provisions of the Act and pursuant to § 4.7 of this Part, the Board announces the Cap of the State in January of each year, pursuant to the provisions of the Internal Revenue Code. The Board has the authority to pass a resolution to establish the allocation of the Cap among bond issuers in the State of Rhode Island (the "Allocation Resolution"). Any Allocation Resolution may contain such conditions as the Board deems appropriate and any general allocation may provide for a reserve allocation to the Board of amounts within the aggregate State Cap limit not otherwise allocated to bond issuers. The Board may subsequently, after hearing and at its discretion, allocate part or all of such reserve amounts upon application of bond issuers. Any allocation made by the Board is irrevocable upon the issuance of bonds, except that any time prior to bond issuance, the Board may, after notice and hearing, alter, modify, amend or repeal any allocation.

B. Priorities. The Board determines the allocation of the Cap under the following priorities:

1. To coordinate, assist with and supplement state and local programs, projects, priorities and activities.

2. To consider issuers' use and completion of past allocation awards, the impact of allocation on existing programs, and the availability of alternative sources of financing.

3. To give preference to issuers who can demonstrate the ability to issue private activity bonds for proposed projects by calendar year end.

4. View favorably other financing for all or part of a project from sources other than tax-exempt or taxable bonds.

5. Retain a 10% PFMB reserve allocation for contingencies.

C. Objectives. The objectives of the Board's Cap allocation process are many. A few of the major objectives are identified below.

1. To establish an orderly and equitable process of allocating tax-exempt, taxable and/or federal tax credit private bond issuance capacity.

2. To encourage private investment in creating and sustaining jobs, economic development, housing, solid and hazardous waste management, water and sewer facilities, and higher education.

3. To encourage development in areas of the State where jobs, economic development, housing, certain infrastructure improvements and higher education are most needed.

4. To encourage the increase or maintenance of the tax base in the State.

5. To maximize the efficient use of the State's Cap over time through issuance of recycled or carryforward Cap, before issuance of new Cap.

D. Allocation Review Factors. The following guidelines are used by staff in evaluating and recommending Cap allocation proposals, factors that should be addressed in any Cap request submitted to the PFMB.

1. Project Impact and Feasibility
a. If an issuer requests allocation for more than one financing, what is the order of priority for each?

b. What is the availability of additional or alternative funding sources?

c. What type of arrangements have been made for credit enhancement for the financing? Will some form of State credit enhancement be included in the financing?

d. What analysis has been performed to determine the feasibility of the project?

e. What is the firm schedule for debt financing sale and closing?

f. Are there statutory or other legal considerations which may impact the viability of the project/program?

2. Housing Projects/Program
a. What other financing programs in the community, in addition to private activity bonds, are available for use by the project?

b. Will the project/program be utilizing Low Income Housing Tax Credits or financing other than bonds?

c. What financial commitments are involved in the project/program (i.e. local, developer, HUD, credit enhancement)?

d. Will this project/program improve or preserve the housing availability?

e. Is the project located in an area which has been unserved by various governmental housing programs or by the private sector in the past?

f. Will existing, vacant housing be acquired or renovated in this project (i.e. RTC-owned properties)?

g. Can prior Cap allocation be recycled or carryforward Cap allocation be used instead of new Cap allocation?

3. Economic Development Projects
a. Is the project part of an overall plan for economic development in the community or the region?

b. What is the background and experience of the individuals and companies involved in the project, including the developer?

c. What other financial commitments/agreements are involved with or necessary for the project?

d. What temporary and permanent jobs will be created or retained by this project?

4. Recovery Zone Facility Bond. In addition to the criteria and the guidelines set forth in § 4.8(D)(3) of this Part above pertaining to Economic Development Projects, for Recovery Zone Facility Bonds, the Board will also consider:
a. Has the Rhode Island Commerce Corporation and/or the Rhode Island Industrial Facilities Corporation recommended the project?

b. What are the types of employment, the amounts of new employment and the wages in connection with the employment created by the project?

c. What is the impact on the State's collection of income and payroll taxes?

d. What is the impact on the property tax base of the municipality in which the proposed project will be located?

e. What is the status of governmental approvals and permitting for the project?

f. What is the status of the infrastructure requirements for the project?

5. Student Loan Programs
a. What other programs in the community, in addition to private activity bonds, are available for use by the Student Loan Program?

b. Can prior Cap allocation be recycled or carryforward Cap allocation be used instead of new Cap allocation?

c. Can the economic benefits of tax-exempt financing be quantified relative to alternative financing methods?

6. Solid Waste Treatment, Waste Disposal, Water and Sewer Projects
a. Are all required permits in place?

b. Can this project be financed privately or with governmental purpose bonds?

c. Can the economic benefits of tax-exempt financing be qualified relative to alternative financing methods?

7. Qualified Energy Conservation Bonds
a. What percentage of the project will be financed with private activity bonds?

b. How will the project reduce energy consumption?

c. Are all required permits in place?

8. Other Projects. In addition to the factors set forth above Applications will be considered in terms of the presentations offered to each of these review guideline factors.
a. For each subsequent calendar year, the Board shall enact, after notice and opportunity for hearing thereon, an Allocation Resolution establishing a general allocation of tax-exempt bond issuance capacity among bond issuers in the State.

b. Any allocation enacted by the Board may contain such conditions, as the Board may deem appropriate.

c. Any general allocation may provide for a reserve allocation to the Board of amounts within the State tax-exempt debt issuance capacity not otherwise allocated to bond issuers.

d. The Board may subsequently, after hearing and at its discretion, allocate part or all of such reserve amounts upon application(s) of bond issuer(s).

e. Any allocation made by the Board shall be irrevocable upon issuance of bonds pursuant thereto at least to the extent of the principal amount of such bonds so issued.

f. Except as provided in § 4.8(D)(8)(e) of this Part above, upon request by any bond issuer, or upon its own initiative, the Board may at any time, after hearing, modify, amend or repeal any allocation.

Disclaimer: These regulations may not be the most recent version. Rhode Island may have more current or accurate information. We make no warranties or guarantees about the accuracy, completeness, or adequacy of the information contained on this site or the information linked to on the state site. Please check official sources.
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