Private Activity Bonds
Private Activity Bonds (PABs) facilitate the financing of private development projects that deliver public benefits to the community. TAEO is uniquely positioned within the regional ecosystem to serve as a conduit issuer for PAB financing.
What Are Private Activity Bonds?
A Private Activity Bond (PAB) provides a mechanism for private entities to access low-cost capital for eligible projects. TAEO acts as a conduit issuer, enabling recipient organizations to benefit from tax-exempt interest rates, resulting in substantially lower borrowing costs compared to conventional financing.
Eligibility Criteria and Qualifying Organizations
Eligibility requires the applicant organization to secure a dedicated financial institution (underwriter or bank) to manage the bond issuance. Applicants should be familiar with the Internal Revenue Service Code before applying. TAEO operates as a conduit and does not assume financial risk.
Qualifying organizations typically include, but are not limited to:
Non-Profit Institutions
Organizations such as educational institutions, hospitals and community service groups.
Affordable Housing Developers
Entities focused on the construction or rehabilitation of residential properties for Tulsans with lower incomes.
Industrial and Manufacturing Enterprises
Companies undertaking facility construction or expansion that generate new employment opportunities in Tulsa.
Eligible Project Categories
To qualify for tax-exempt status, projects must align with specific federal guidelines and TAEO's development objectives.
Eligible activities include, but are not limited to:
Affordable Housing Development
The rehabilitation or construction of rental housing intended for low-income residents.
Industrial Expansion
The acquisition or construction of facilities for industrial businesses in Tulsa.
Non-Profit Facility Funding
Capital projects that enhance the capacity of non-profit organizations to better serve the community.
Essential Public Infrastructure
Financing for critical public needs such as transportation, clean energy or waste management facilities.
Please note that the final determination of viability for both the organization and activity rests with TAEO’s designated bond counsel, John Wiedeman of Hilborne & Weidman, P.C.
The Private Activity Bond Application Process Guide
The application and issuance process is structured to ensure regulatory compliance and financial diligence:
Preparation
The applicant engages their requisite professional team. A bond underwriter or bank is mandatory, and legal counsel is highly recommended.
Formal Application Submission
Applicants must confirm eligibility and select the appropriate application track (conduit only or combined with a Tax Increment Financing, or TIF, request). A formal application must be submitted to TAEO detailing the project scope, public benefit and financial structure.
Application Fee Payment
The required application fee is remitted to TAEO.
Bond Counsel Review
TAEO's bond counsel conducts a thorough review and provides a determination of approval or rejection.
TAEO Board Inducement Resolution
The TAEO Board approves and formally adopts the Inducement Resolution, which is the official expression of intent to issue tax-exempt bonds for the project.
City Council Approval
The City of Tulsa City Council approval for PABs is required to ensure the project provides a legitimate local public benefit.
Final Board Approval
The Board of Trustees conducts a final review of all documentation and grants definitive approval.
Closing and Funding
All requisite legal documentation is executed, the bond is funded by investors, and proceeds are disbursed to initiate the project.
Administrative Fees
| Fee Type | Amount | Notes |
|---|---|---|
| Application Fee | $1,000 | Waived for eligible 501(c)(3) non-profit applicants. |
| Closing Fee | $5,000 | Paid upon the final closing of the bond issuance. |
| Annual Fee | 10 basis points (0.10%) | Assessed on the outstanding balance of the bond. |
The fee is paid by check to the Tulsa Authority for Economic Opportunity.
Mike Dickerson
Senior Vice President of Incentives & Municipal Relations