California Pollution Control Financing Authority (CPCFA) Exempt Facility Bond Financing Program

Who can apply

Business

CPCFA provides financing for any qualified California business, regardless of size, for projects that include the acquisition, construction and/or equipping of qualified pollution control, waste disposal, water furnishing, sewage treatment and resource recovery facilities. The final determination of eligibility is based upon opinion of Bond Counsel and Tax Counsel pursuant to Federal Tax Laws.

Where: The facility and/or equipment being financed must be located in California.

Purpose

The Pollution Control Tax-Exempt Bond Financing Program facilitates low cost capital through private activity, tax-exempt bonds. The securities pay for acquisition, construction or installation of qualified pollution control, water furnishing, waste disposal, waste recovery facilities and equipment. Tax-exempt bond financing assists qualified borrowers to obtain lower interest rates than are available through conventional loans.

Description

CPCFA acts as a conduit issuer in the transaction. The bonds are issued to raise capital for revenue-generating projects where the funds are used by the borrower to make payments to investors. The conduit financing is typically backed by either the borrower's credit or monies pledged to the project by outside investors. If the project fails and goes into default, it is solely the borrower's responsibility to repay the bondholders. Eligible Facilities The following types of projects are eligible for financing: Provides financing to California business, irrespective of company size, for the acquisition, construction or installation or qualified pollution control, waste disposal, and resource recovery facilities  Provides financing to California businesses that meet the size standards set forth in Title 13 of the Code of Federal Regulations or are an eligible small business, which is defined as 500 employees or less, including affiliates, for the acquisition, construction or installation of qualified pollution control, waste disposal, and resource recovery facilities. Final determination of eligibility is based upon opinion of Bond Counsel and Tax Counsel pursuant to Federal Tax Laws. Types of projects, which may qualify for tax-exempt bond financing, include: Curbside collection facilities, Recycling facilities, Composting facilities, Materials recovery facilities, Transfer station Landfills, Waste-to-energy facilities, Qualified solid waste or hazardous waste disposal projects Waste recovery facilities, Water Furnishing Facilities, Wastewater Treatment Facilities. Potential Uses of Bond Proceeds: Buildings and equipment Machinery and furnishings Land Costs of architects, engineers, attorneys and permits Costs of bond issuance Federal Eligibility Requirements Restrictions on use of proceeds: 95% of proceeds must be used for the defined project 2% of bond proceeds can be used for costs of issuance 25% of bond proceeds can be used for land costs in certain cases A public Tax Equity and Fiscal Responsibility Act (TEFRA) hearing must be held before the bonds are issued To acquire an existing building, a minimum of 15% of the bond proceeds must be used to renovate the building The average life of the bond issue cannot exceed 120% of the weighted average of the estimated useful life of the assets being financed. Prospective borrowers should contact bond counsel to help determine if a proposed project qualifies under federal law. Financing is performed in conjunction with allocation from the California Debt Limit Allocation Committee (CDLAC). The allocation is required by federal tax law for private activity tax-exempt bonds to be issued. CPCFA Fees: Application Fee: .0005 (1/20 of 1%) of total application amount, not to exceed $5,000. Payable with initial application.  Administrative Fees: .002 (2/10 of 1%) of total amount of bonds issued utilizing volume cap allocation, minus the application fee. Please see the CPCFA Bond Program website for additional fees which may apply to the financing.

Important dates

Opened

Jul 9, 2020

Application deadline

Ongoing

Expected award announcement

Ongoing

Period of performance

Ongoing

Funding details

Total estimated available

$550,000,000.00

Estimated amount per award

Between $1,500,000.00 and $550,000,000.00

Expected number of awards

Dependant on number of submissions received, application process, etc.

Letter of intent required

No

Matching funds

Not Required

Funding source

Other

Funding source notes

The tax-exempt private activity bond financings are performed in conjunction with allocation from the California Debt Limit Allocation Committee (CDLAC). The allocation is required by federal tax law for private activity tax-exempt bonds to be issued.  The amount of private activity bond allocation allotted to exempt facility projects varies from year to year. CDLAC allocation amounts are typically awarded in January of each calendar year.

Funding method

Advances & Reimbursement(s)

Funding method notes

CPCFA acts as a conduit issuer in the transaction. The bonds are issued to raise capital for revenue-generating projects where the funds are used by the borrower to make payments to investors. The conduit financing is typically backed by either the borrower's credit or funds pledged toward the project by outside investors. If a project fails and goes into default, the responsibility of repayment is solely the borrower's financial obligation.

How to apply

Read the full guidelines on the grantor's site, then apply there. Nothing is submitted through this site.

• Grant guidelines & application ↗
• State Treasurer's Office ↗
• Original listing on grants.ca.gov ↗

Questions about this grant: email: [email protected]; tel: 1-916-654-5610;