COVINGTON -- Newton County has reserved the right to issue tax-exempt bonds for public and private development.
The American Recovery and Reinvestment Act of 2009 created two new bond programs for use by local governments -- Recovery Zone Economic Development Bonds and Recovery Zone Facility Bonds.
The economic development bonds can be used for public infrastructure and facilities and will receive a 45 percent tax credit on interest payments, intended to attract more investors.
Newton County has been allocated $4,478,000 for Recovery Zone Economic Development Bonds. Board of Commissioners Chairwoman Kathy Morgan said officials have no specific projects to benefit in mind at this time.
"We have not made a decision what we will use them for or if we will use them. If the right facility comes along, we have an avenue we can utilize to minimize the cost to the county," she said.
The county was also allocated $6,717,000 for Recovery Zone Facility Bonds, private activity bonds used to finance new capital improvements owned and used by industrial, commercial, retail and other businesses.
Several existing industries have already expressed interest in taking advantage of tax-exempt interest on those bonds for expansions, Morgan said.
"Tax-exempt bonds are not something we usually have on the negotiating table," Morgan said. "It's just another tool that we have to foster economic development or to fund projects in our community."
The Industrial Development Authority would be the designated issuer for those bonds, with no liability to the county, according to IDA attorney Frank Turner Jr.
Both the economic development and facility bonds must be used on projects that fall within designated recovery zones, or areas that have significant poverty, unemployment or home foreclosure rates; are federally designated empowerment zones; or have been negatively affected by military base closures.
County commissioners unanimously agreed at their Oct. 20 meeting to accept the allocation. The county is required to issue a notice of intent to issue recovery zone bonds to the Georgia Department of Community Affairs by Monday.
Governments intending to use their allocations must complete all project financing by July 1, but may file for an extension.
The state of Georgia received nearly $356 million in economic development allocations and nearly $534 million in facility bond allocations.
A total of 106 counties, three consolidated governments and two cities received allocations.
Any unused funds will be recaptured by the state.