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12 Pa. Code § 61.6. Allocation procedures.

§ 61.6. Allocation procedures.

 Under the allocations in §  61.5 (relating to allocations of tax-exempt bond authority), to apply for approval of allocations for specific projects the following procedures shall be followed:

   (1)  Approval requirements. The approval of an allocation for small issue and exempt facilities private activity bonds requires submission of a preliminary allocation request, submitted prior to the issuance of the bonds, and submission of a final allocation request and a copy of IRS Form 8038, Information Return for Private Activity Bond Issues, within 15 calendar days after closing.

   (2)  Preliminary allocation request (PAR).

     (i)   A PAR will not be accepted until the project is approved by the Department if approval is required under the IDA Law.

     (ii)   A PAR shall be submitted by the industrial development authority or other authorized issuer. A PAR will not be accepted from the applicant’s attorney. If submitted by an authorized issuer other than an industrial development authority, the PAR shall have attached sufficient information to determine use and eligibility for allocation.

     (iii)   A PAR, if properly completed and submitted, will be approved on a timely basis by the Department.

     (iv)   A PAR shall be properly completed. An improperly completed or submitted PAR will be returned for revision or correction.

     (v)   A PAR is valid for 90 calendar days after approval or until December 31 of the year in which it is approved, whichever is earlier. Failure to close within the prescribed period will result in the automatic loss of the preliminary allocation.

     (vi)   For projects which are also requesting funding through an Urban Development Action Grant (UDAG) or through the Pennsylvania Economic Development Financing Authority (PEDFA), the PAR is valid for 180 calendar days after approval or until December 31 of the year in which it is approved, whichever is earlier.

     (vii)   If the PAR expires prior to closing for a project, there will be a penalty period of 60 calendar days, after the date of expiration, before the Department will accept a new PAR for that project. To avoid this, the issuer, the applicant and the parties involved should be in agreement regarding the closing date and should be certain that details can be finalized by that date, before the PAR is submitted.

     (viii)   If an increase is requested, a PAR shall be submitted for the increased amount only.

     (ix)   If a project has a PAR for the original tax-exempt amount and a PAR for an increase, the closing shall be effected by the expiration date of the earliest PAR if there is to be one issuance.

     (x)   Allocations will not be granted for projects using private activity bonds for interim financing purposes.

     (xi)   Allocations for small issue projects will be granted based on the chronological order of receipt and up to an amount which in the aggregate equals a county’s allocation.

     (xii)   A PAR is valid only during the calendar year in which it is approved.

     (xiii)   A PAR submitted in prior years is not valid for projects in subsequent years. A new PAR shall be submitted each year.

     (xiv)   A project closing prior to the issuance of a PAR, in excess of the approved amount of the PAR, closing after the PAR has expired or not filing a final allocation request (FAR) and IRS Form 8038 within the prescribed time periods will automatically have its allocation rescinded and risk loss of its tax-exempt status. Subsequent allocations granted with respect to financings which lost allocations for those reasons will require second closings to insure the tax-exempt status of the financings.

     (xv)   Neither project applications nor a PAR will be approved without the land cost, if the land is being financed.

     (xvi)   As required by §  61.3(a)(1) (relating to restrictions on county allocations), an applicant shall submit a letter, on the applicant’s letterhead,along with its PAR, certifying that as an inducement for the Department to approve its allocation request, the applicant expects to create or preserve the requisite number of jobs.

   (3)  Final Allocation Request (FAR). A project receiving approval of a PAR shall submit a completed IRS Form 8038 and a FAR within 15 calendar days of the closing or the allocation will be rescinded, as indicated in this section, and the 60-calendar-day penalty period will be imposed.

     (i)   A FAR will not be accepted without IRS Form 8038. The date of closing and the tax-exempt amount shall be the same on both forms.

     (ii)   If the issuance amount on the FAR is less than the preliminary allocation amount approved by the Department, a decrease letter will be sent automatically, unless otherwise instructed by the authority.


   The provisions of this §  61.6 adopted January 10, 1986, effective January 1, 1986, 16 Pa.B. 129; amended January 30, 1987, effective retroactively to January 1, 1987, 17 Pa.B. 571; amended January 22, 1988, effective retroactively to January 1, 1988, 18 Pa.B. 386; amended August 23, 1991, effective August 24, 1991, 21 Pa.B. 3825; amended April 17, 1992, effective April 18, 1992, 22 Pa.B. 1928. Immediately preceding text appears at serial pages (161467) to (161469).

Cross References

   This section cited in 12 Pa. Code §  63.1 (relating to allocations).

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