Industrial Development Bond (IDB) Financing Program
Designed to help communities grow their economies and provide good-paying jobs through tax-exempt bonds.
If you have any questions about the IDB program, please contact CIDFAC.
Private, tax-exempt industrial bonds are an important tool to help communities grow their economies and provide good-paying jobs. The bonds offer interest-rate savings with the goal of creating new jobs. CIDFAC approves the issuance of IDBs in the State of California as a partner with local governments. The program allows businesses to borrow funds at competitive rates.
Eligible capital expenditures include the acquisition of land, building construction, building renovation and the purchase of machinery and equipment.
The Prospective User (Principals and Financial Officers of Manufacturing Business) Should Contact:
- Bond counsel, preferably a law firm specializing in tax-exempt bonds.
- The local issuing authority to initiate the application process.
- The local issuing authority or CIDFAC to get a recommendation on a financing team such as the underwriter, financial advisor, etc. and to discuss the Industrial Development Bond (IDB) eligibility requirements.
- A financial institution willing to issue a letter of credit for the face amount of the bonds or a qualified institutional investor willing to purchase the bonds through a private placement.
Local IDB Issuing Authority
The California Government Code authorizes local agencies, cities, counties and joint powers authorities to approve IDB projects that create jobs and provide public benefits to the local community. The local government approval process must be completed prior to CIDFAC acceptance of the IDB application. CIDFAC's review, final resolution approval, and allocation approval rely on the public benefit and job creation documentation provided by the local issuing authority.
CIDFAC Application and Approval
The local issuing authority submits the IDB application to CIDFAC. CIDFAC staff reviews the application to determine overall public benefits and the financial security of the project. Federal and state revenues do not guarantee IDB bond financings. The bonds issued are purchased by the private sector and the repayment is not an obligation of the state or federal government. CIDFAC holds its monthly commission meetings in Sacramento.
How to Apply
Please read the application package carefully and provide the information requested. Approval by the local industrial development authority must be received prior to consideration by CIDFAC.
Two copies of the application, all supporting documents including local authority approval, and a $1,250.00 application fee must be sent to the Sacramento office. Applications must be received in the Sacramento office 30 days prior to the next scheduled CIDFAC meeting.
To receive tax-exempt bond allocation, issuers may file the California Debt Limit Allocation Committee (CDLAC) application with CIDFAC.
We appreciate your interest in the industrial development bond financing program, and we hope that the use of tax-exempt IDBs will meet your financing needs. We look forward to working with you throughout this process. If you have any questions, please contact CIDFAC.