The Austin Industrial Development Corporation (AIDC) offers tax-exempt or taxable bonds for eligible manufacturing projects, recycling and other exempt facilities projects, and projects owned and used by Section 501(c)(3) organizations. The Bond Financing Program provides project financing that can be lower-cost and have longer maturity compared with traditional financing.
Potential applicants are encouraged to schedule a pre-submittal consultation regarding your project’s suitability for this program before sending an application. Please contact us at Xavier.firstname.lastname@example.org or 512-978-2502.
An application fee of $1,000 will be due with your completed application. Additional fees will apply at closing; please see the application for an estimated fee schedule.
The following bonds are available through the AIDC:
Small Issue Industrial Revenue Bonds: Designed to provide tax-exempt financing to finance land and depreciable property for eligible manufacturing projects. The maximum bond amount is $10 million with a total capital expenditure limitation of $20 million. Small issue IRBs have terms up to 20 years for real estate and 10 years for equipment.
Exempt Facility Bonds: Can be issued to finance facilities for the furnishing of water, sewage and solid waste disposal facilities, recycling facilities, facilities for the local furnishing of electric energy or gas, local district heating or cooling facilities and qualified hazardous waste facilities.
501(c)(3) Bonds: Can be issued to finance capital facilities and working capital for a variety of non-profit entities and projects including hospitals and other health care provides; educational institutions; assisted living continuing care retirement communities; nursing homes; and human services providers under contract with state government.
The minimum amount of bond issuance under this program is $500,000. All bonds are subject to approval by the AIDC Board, Austin City Council, and the State of Texas. Applicants should note that the review process takes approximately 90 days.
Borrowers must meet the eligibility requirements outlined in the Internal Revenue Code (IRC) in order to qualify for tax-exempt bond financing. Click here to download a compliance guide on tax-exempt bonds from the IRS.
Tax-exempt bonds can be used to finance:
Capital improvements and expansions by for-profit companies, including real estate acquisitions, new equipment, machinery, building construction, and renovations
Land and building acquisitions, new construction and renovations, equipment purchases, debt refinancing and working capital needed by not-for-profit organizations to expand community services
Projects that are owned and operated for the benefit of local, county and state government bodies
Taxable bonds are also available for a wide variety of businesses, such as manufacturing, commercial, warehouse, and distribution, etc. Taxable bonds offer similar flexibility in structuring rates and terms but are not subject to the restrictions placed on tax-exempt financing under the IRC.
The AIDC acts as a conduit through which monies are channeled. Generally, bond debt service is paid by the business under the terms of a lease, sale or loan agreement. As such, it does not constitute a debt or obligation of the City of Austin, the AIDC or the State of Texas.