Recovery Zone Facility Bonds
Using Recovery Zone Facility Bonds
Recovery Zone Facility Bonds (RZB) are a new category of tax-exempt, private activity bonds for financing economic development in recovery zones. Athens-Clarke County Unified Government has an allocation of $1,629,000 available through the State of Georgia. The proceeds can be used to finance depreciable property used in a trade or business in a recovery zone that:
- Was acquired, constructed, or renovated after the recovery zone designation date
- Original use of which occurs in the recovery zone
- Substantially all of the use of the property is in the active conduct of a qualified business (any trade or business except for residential rental facilities, golf courses, massage parlors, gambling facilities, etc.)
Issuers include those entities currently eligible under state law to issue private activity bonds. The debt service is funded by the private business that owns and uses the property.
An allocation designee may:
- Waive its allocation for further distribution within the state
- Authorize an eligible public entity such as a Development Authority to issue RZBs
- Allocate all or a portion to an unrelated political subdivision within its jurisdiction (such as a city in a county)
The federal government allocated the Recovery Zone Economic Development and Facility Bonds among the states in proportion to their relative 2008 job losses. Sub-allocations to counties and large municipalities within a state were made on the basis of relative job losses.