Financial Incentives
Agency Benefits
The Agency offers a variety of types of financial assistance to project applicants including taxable and tax-exempt financing, exemptions from real estate taxes, mortgage recording taxes, and sales and use taxes.
Agency Financing
Tax-Exempt Financing
Tax-Exempt Financing
Under the Internal Revenue Code, interest on certain revenue bonds issued by the Agency with respect to a project located in Chautauqua County is exempt from federal income taxation (“tax-exempt financing”). Tax-exempt financing provides a project beneficiary with both access to the public markets and significantly lower interest rates than those offered through traditional financing. If a project is not eligible for tax-exempt financing, the Agency can issue taxable financing for said project. Taxable revenue bonds that are sold in the public market may also result in lower interest rates and debt service payments. The three most common types of tax-exempt revenue bonds issued by the Agency are Civic Facility Revenue Bonds, Small Issue Manufacturing Revenue Bonds and Exempt Facility Revenue Bonds.
Civic Facility Revenue Bonds
Tax-exempt Civic Facility Revenue Bonds may be issued to finance any project that is owned by a not-for-profit corporation authorized to do business in New York State which is recognized by the Internal Revenue Service as exempt from tax pursuant to Section 501(c)(3) of the Internal Revenue Code (a “501(c)(3) organization”) and utilized by said Section 501(c)(3) organization for its charitable purpose. Typical beneficiaries of Civic Facility Revenue Bonds include colleges and other educational institutions, hospitals and other healthcare facilities, senior citizen facilities, low income facilities, handicapped facilities, museums and other cultural facilities, and community facilities (such as public parking garages and community recreation facilities). With respect to certain housing and medical facilities (such as student housing facilities, senior housing facilities and certain licensed healthcare facilities), there is a state-imposed limit of $20,000,000 on the amount of Civic Facility Revenue Bonds which may be issued at any one time.
Small Issue Manufacturing Revenue Bonds
Tax-exempt Small Issue Manufacturing Revenue Bonds may be issued to finance facilities for the manufacturing or production of tangible personal property (including the processing resulting in a change in the condition of such property).
Exempt Facility Revenue Bonds
Tax-exempt Exempt Facility Revenue Bonds may be issued to finance certain facilities enumerated in Section 142 of the Internal Revenue Code, including certain airport facilities, docks and wharves, mass commuting facilities, water and sewerage facilities, solid waste facilities, low income residential rental facilities, and certain other facilities.
Tax Exemptions
Real Property Tax Exemption/Payment in Lieu of Tax Agreement
The Agency is able to provide project beneficiaries with exemption from real property taxes. A project applicant receiving a property tax exemption from the Agency will be required to enter into a payment in lieu of tax agreement with the Agency. Under the Agency’s uniform tax exemption policy, qualifying projects customarily receive a 10 year real property tax abatement equal to 50% of the value of the improvements made to the property. Under certain circumstances, if a compelling justification exists, the Agency may determine to grant a real property tax abatement that varies from the Agency’s uniform tax exemption policy.
Sales and Use Tax Exemption
The Agency is able to provide project beneficiaries with exemptions from state and local sales and use taxes. This exemption from state and local sales and use tax applies to items purchased in connection with the acquisition, construction and equipping of approved projects and generally may include construction materials, furnishings, equipment, consumables and tool rentals. Under the Agency’s uniform tax exemption policy, this exemption from state and local sales and use taxes will terminate upon completion of the project.
Mortgage Recording Tax Exemption
The Agency is able to provide project beneficiaries with an exemption from state and local mortgage recording taxes. In Chautauqua County, the current mortgage recording tax rate is equal to $1.25 for every $100 secured by the mortgage. This exemption from state and local mortgage recording taxes enables the Agency to substantially lower the cost of financing a project with debt secured by a mortgage and/or an assignment of leases.
Bonds
Industrial Development Bond - Taxable
Eligibility is for primarily manufacturing and certain commercial projects for land, building acquistion/renovation/construction, new machinery and equipment. Minimum is $400,000, with no upper limit. Can be used for 100% of the project. Must have public economic benefit and result in job creation.
Loans
Chautauqua Revolving Loan Fund (CRLF)
Eligibility is for businesses, although other projects may be eligible, for real estate, machinery, equipment, and working capital. Loan linit is usually $75,000, maturing in 5 years. Must result in job creation/retention.
AL Tech Revolving Loan Fund
Eligibility is for primarily manufacturing concerns in Chautauqua County for real estate, machinery, equipment and working capital. Limit is 40% of eligible project costs with a maximum of $1 million, with 7 - 20 year maturity. Must result in job creation.
Chautauqua County Economic Development Fund (EDF)
Facilitates financing economic development projects that, generally, are not eligible for other public forms of incentive financing. Site preparation and business relocation costs can be funded for eligible companies for projects meeting certain economic benefit criteria. Project eligibility determined in accordance with general guidelines of the county's Economic Development Fund.
