Private Activity Bonds are tax-exempt bonds that can be issued for specific purposes. The federalgovernment grants annual allocations of this bonding authority to states under the Tax Reform Act of 1986. The State of Colorado established its Private Activity Bond (PAB) allocation program by statute (24-32-1701 et seq, C.R.S.) to provide for the allocation of Colorado's PAB authority.
The primary purpose of Colorado's PAB program is to meet federal requirements in the Tax Reform Act of 1986 and also to:
Establish an orderly and equitable process of allocating tax-exempt PAB issuance authority.
Encourage private investment in housing, higher education, jobs, solid and hazardous waste treatment, and water and sewer facilities.
Encourage development in areas of the state where housing, higher education, jobs, and certain infrastructure improvements are most needed.
Encourage the increase or maintenance of the local tax base.
Maximize the use of the state's tax-exempt PAB allocation.
Private Activity Bonds are tax-exempt bonding authority, used either to create a loan for a project at a tax-exempt interest rate, or to create a mortgage credit certificate.
The Statewide Balance is available to (1) local issuers (ie, governments) not receiving a direct allocation or (2) state authorities and designated local governments that need additional allocation.
Colorado's Private Activity Bond program holds workshops around the state each summer. These classes are designed for local officials, potential developers & others who want to learn how to best utilize PAB financing to benefit their communities, especially given all the recent changes in our economy and the bond market. Please see the brochure on the training page for locations and registration information.