| Industrial Revenue Bonds have a variety of names | | | | These types of bonds are issued frequently by |
| and purposes, but there are three basic types of | | | | municipalities for a variety of industrial projects, |
| bond issuances as follows:o Tax Exempt - (Small | | | | including the construction, rebuilding, improvements, |
| Issue IDB's) Because the income derived by the bond | | | | remodeling, etc. of the industrial project. The purpose |
| holder is not subject to federal income tax, the | | | | of such bonds, according to 445/3, is to "encourage |
| maximum bond amount is $10 million in any given | | | | the increase of industry and commerce in the State." |
| jurisdiction. According to federal regulations, the $10 | | | | The Illinois Municipal Handbook states that the |
| million total includes the bond amount and capital | | | | issuance of such bonds is subject to many federal |
| expenditures over a six year period going both | | | | statutes and regulations and they recommend |
| backwards and forwards three years. The maximum | | | | seeking advice of bond counsel. |
| any company may have is $40 million nationwide | | | | In order to pursue this, a resolution authorizing such |
| outstanding at any given period.o Taxable - They are | | | | would need to be adopted. The bonds may be issued |
| not exempt from federal tax. The essential | | | | in series and must mature within 40 years from their |
| difference is that the Taxable bond rate is more | | | | dates. Nonetheless, there is no liability on the interest |
| costly to the borrower and not being subject to the | | | | or principal of the authority issuing those bonds. |
| federal volume cap, may exceed $10 million in bond | | | | Municipalities would also be responsible for |
| amount.o Exempt Facility/Solid Waste Disposal Bond - | | | | establishing, collecting, and revising revenues for the |
| These bonds are subject to volume cap although | | | | purpose. Finally, these bonds may be sold at a private |
| there is no restriction on amount and the interest on | | | | sale and issued without a referendum. |
| these bonds is federally tax exempt. | | | | |