Tax-Exempt Private Activity Bond and Industrial Development Bond Financing Program (Tax-Exempt Bond)

Since 1973, CPCFA, a financing authority within the State Treasurer’s Office (STO), has been assisting businesses of all sizes, non-profits, and public-private partnerships in accessing the tax-exempt bond and note market. For qualifying projects, the tax-exempt market can provide lower interest rates or engagement with investors for projects which are not a fit for commercial lending.

Under federal law, certain types of privately-owned projects are eligible to benefit from tax-exemption, but they must have a public entity issue the bonds on their behalf. The public entity issuing the bonds is known as a conduit issuer. A conduit issuer applies to the California Debt Limit Allocation Committee (CDLAC) for tax-exempt allocation.

Under California law, CPCFA is California’s state-level conduit issuer designated to issue tax-exempt private activity bonds (PABs) and industrial development bonds (IDBs) in certain federally defined categories. In certain circumstances CPCFA may issue taxable bonds in the same categories.

The categories assigned to CPCFA include: solid waste handling, disposal, recycling, or converting; water furnishing; wastewater treatment and processing; and carbon dioxide capture.