Midwestern Disaster Area Bonds

A.  Checklist for reviewing Midwestern Disaster Area Bond proposals:

  • ___ The project must be in a Midwestern disaster area
  • ___ Have you identified the state agency providing the allocations?
  • ___ The bonds will be issued before January 1, 2013
  • ___ At least 95% of the net proceeds of the bonds be used for “qualified project costs” and “qualifying projects”
  • ___ The project is a  “qualifying project”
    • ___ Used by a person who suffered a loss in a T/B attributable to severe storms, tornadoes or flooding giving rise to any Presidential declaration or  ___ Person using the project has been designated by the Governor as a person carrying on a T/B replacing a T/B with respect to which another person has suffered such loss;
    • ___ If public utility project, project involves repair or reconstruction of public utility property damaged by the severe storms, tornados or flooding;
    • ___ If mortgage financing, [see statute].
  • ___ Bond proceeds will finance “qualified project costs”
    • ___ Yes, the costs will be any costs for a “qualified residential rental project”;
    • ___ Yes, the costs will be to acquire, construct, reconstruct or renovate nonresidential real property (including fixed improvements) located in the disaster area; and/or
    • ___ Yes, the costs will be used to acquire, construct, reconstruct or renovate public utility property in the disaster area.
  • ___ The bond proceeds will finance no movable fixtures and equipment
  • ___ The bonds have been designated as MDABs by the Governor (or as otherwise required by state law)
  • ___ The bonds have been authorized under state law (and all requirements of state law have been followed)
  • ___ Issuance costs do not exceed 2% of the proceeds of the issue
  • ___ Average maturity of the bonds does not exceed 120% of the average reasonably expected economic life of the financed facilities
  • ___ Less than 25% of the bond proceeds will be used to acquire land (or interest therein) (Section 147(c))
  • ___ Are bond proceeds going to be spent on existing (used) property? If so, borrower will need to make rehabilitation expenditures equal to at least 50% (not 15%) of the cost of acquiring the building within two years after the later of the date the building is acquired or the date the bonds are issued)
  • ___ Bond proceeds may not finance airplane, skybox or other private luxury boxes, health club facility, golf course, country club, massage parlor, hot tub facility, suntan facility, racetrack or other gambling facility or liquor store
  • ___ The TEFRA approval process must be completed

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