Bond Financing Options - Economic Development

Tax-Exempt Qualified Private Activity Bonds (QPABs)

As a local public trust, the Northwest Louisiana Finance Authority ("NWLFA") can issue tax-exempt bonds for certain qualified privately-owned economic development projects. The NWLFA would act as the conduit issuer of the bonds. The bonds would be paid for through the revenues generated by the private entity. Types of QPABs include:

• Small manufacturing Facilities ($10/$20 million limitation);
• Exempt Facilities - 15 Categories of exempt facilities including, but not limited to, airports, mass commuting facilities, qualified highway or surface freight transfer facilities, and qualified residential rental projects; and
• Qualified 501(c)(3) Bonds that are used for projects that benefit the public and can include hospitals, research labs, and education, cultural and charitable institutions.

Payment in Lieu of Taxes (With or Without Bonds)

A Payment in Lieu of Taxes agreement ("PILOT") allows for an ad valorem property tax abatement for economic development projects. The proceeds can be used to service taxable or tax-exempt bonds issued to fund the project.

• LA exempts all government entities and public trusts from ad valorem property taxes.
• Property must be owned by a political subdivision (government entity).
• An agreement is entered into between a political subdivision and a business.
• The political subdivision has wide discretion over the percentage of abatement and the requirements to obtain the abatement.
• In exchange for a tax abatement, the business will pay an agreed upon payment in lieu of the property tax.
• The payments can be structured in a variety of ways to best ensure the desired economic  benefit for the community.
• These payments can be leveraged to service bonds issued for the project.
• This mechanism can also be utilized without the issuance of bonds.

Tax-Exempt or Taxable Governmental Bonds

As a local public trust, the NWLFA has the authority to issue tax-exempt or taxable Governmental Bonds to fund traditional governmental projects (i.e. public roads, facilities, utilities, etc.). The following bonds can be issued to fund governmental projects:

• General Obligation Bonds - Backed by the full faith and credit of the NWLFA utilizing its ability to levy ad valorem taxes; 
• Revenue Bonds - Backed by revenue generated from the operations of the NWLFA; and
• Sales & Use Tax Bonds - Backed by revenues generated from a sales and use tax levied by the district and specifically designated for the purpose of issuing and servicing bonds.