• By law, Tucson IDA is a non-profit corporation designated a political subdivision of the State of Arizona.
• Tucson IDA receives no federal, state, county, or City funds.
• Tucson IDA has no taxing power.
• Tucson IDA acts solely as a conduit issuer – it is not the lender.
• By law, the jurisdiction of Tucson IDA includes the entire State of Arizona (except for multifamily projects which must be in the City of Tucson).
• Bonds issued by Tucson IDA are not a charge against the general credit of the Tucson IDA, the City of Tucson or the State of Arizona.
• Tucson IDA has no power of Eminent Domain.

• The Authority’s Board of Directors is comprised of7 private, volunteer citizens appointed by the Mayor and Council of the City of Tucson, Arizona. The Board of Directors meets monthly or as otherwise necessary. Directors serve a 6-year term.

• Private activity bonds are an economic development tool established by Federal tax law and Arizona statutes to induce private sector investment and development of certain facilities which serve various specified public purposes by private for-profit and non-profit organizations.

• Single family homeownership programs
• Multifamily housing facilities
• Exempt facilities including solid waste disposal facilities, utility facilities, hazardous waste facilities and airport facilities
• Student loan programs
• Manufacturing facilities
• Redevelopment projects
• Facilities owned by non-profit organizations.

• In Arizona, private activity bonds are issued by Industrial Development Authorities, such as the Tucson IDA.

• The IDA merely acts as a "conduit" for the insurance of the Bonds. The IDA does not provide funds to an Applicant. Funds are provided by the bond purchaser. It is the responsibility of the Applicant to provide a purchaser for the IDA’s Bonds, which, in many cases, will be a commercial bank or an investment banker. IDA Bonds are not a direct lending or government guarantee program. Applicants must secure a purchaser of the Bonds on the merits of the Project and the financial standing of the Applicant. The IDA is not responsible for making any payments on the Bonds from the IDA’s own funds or assets.
  
  An Applicant receiving a commitment from a lender or underwriter to purchase the Bonds must negotiate the terms of the Bonds, including loan amount, maturity, and interest rate, with that lender or underwriter. Interest rates charged to finance the Project will be lower than conventional commercial rates because of the tax-exempt status of the interest on the Bonds.

• The City bears no liability in the issuance of the bonds.
• The City and IDA are indemnified by the Borrower.
• The City’s role in the issuance of the bonds is “to review the proceedings of” Tucson IDA authorizing the issuance of the Bonds.
• The City has no financial obligation in connection with the bonds.

• Borrower pays the bonds.
• Bonds are repaid from project revenues, guarantees, bond insurance, credit enhancement and other forms of private payment.
• No Tax Dollars or public funds are used to pay the bonds.

• Basically unlimited amount of bonds can be issued on behalf of non-profit corporations and few other purposes.
• All other private activity bonds are subject to the federal private activity bond volume cap.
• Volume cap represents an “authorization” under the federal budget, not an appropriation of federal tax dollars.
• Represents “negative revenue” to the US Treasury, since investors purchasing the bonds do not pay taxes on the interest income they receive.

• By state law, volume cap is allocated within each category.
• First yearly allocations are made through a competitive lottery held on the first business day of January.
• Only borrowers who have received a preliminary approval resolution from an Arizona IDA can participate in the lottery.
• On June 30 any unused volume cap (other than volume cap in the director’s discretion pool) is “re-pooled”.
• A second competitive lottery (without regard to categories) is then held on the first business day of July.

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