The proceeds are loaned to manufacturing businesses to help finance expansion projects. The tax-exemption status results in a lower interest rate for the business. The municipality lends its name, but not its credit, to the bond issue.
Manufacturers can use IRBs to help finance the expansion of their facilities.
Manufacturing generally includes nearly every type of processing that results in the change in the condition of tangible property. Bond counsel should be consulted on eligibility. Eligible projects can include the purchase of land, construction of new facilities, purchase of equipment, and certain costs incurred in the bond issuance. Bond counsel should be consulted on eligibility. Businesses must apply for a volume cap allocation from the Department of Commerce and go through a competitive scoring process.