Pennsylvania Code › Title 12 - COMMERCE, TRADE AND LOCAL GOVERNMENT › Part III - Business Financing › Subpart B - Bonds › Chapter 61 - PRIVATE ACTIVITY BONDS-STATEMENT OF POLICY › Section 61.6 - Allocation procedures

Current through Register Vol. 54, No. 28, July 13, 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.