Bond money available to industries $1.3 million OK'd for loans

August 17, 1993|By Amy L. Miller | Amy L. Miller,Staff Writer

Nearly $1.3 million in tax-free bond money will be available for county industries looking to expand in the next year, Carroll County's commissioners were told yesterday.

The federal government has permanently extended the industrial revenue bond program as part of its new budget, said William E. Jenne, administrator of the county office of economic development.

"Industrial revenue bonds are one of the best tools at my disposal as an economic developer in the effort to help manufacturers expand their operations in Carroll County," he said. "I was worried this very important program would not be restored again, especially in this stagnant business environment."

An industrial revenue bond, or IRB, is a private loan between a bank and a manufacturer planning to expand or move to a community.

The Internal Revenue Service does not collect taxes on the income from the bonds, which allows banks to charge lower interest rates. The program was canceled in June 1992 but restored recently.

"Technically, the manufacturer is borrowing money from the county or the state, [which] borrows it from the bank and relends it," said Luther Miller, director of the state Energy Financing Administration. "Actually, the manufacturer borrows the money and the county waves as it goes by."

County officials endorse the loan but are not responsible for defaults, Mr. Miller said.

"It's a mechanism to track the issuance of IRBs," said Mr. Jenne. "Only so much of a dollar value of industrial revenue bond financing is authorized annually. This is primarily to ensure that dollar value isn't surpassed.

"The commissioners are just a conduit in the issuance of that bonding."

Carroll County will be allowed to authorize $1,297,182 in economic development loans and $2,215,955 in housing loans during the next year, Mr. Jenne said.

Housing loans are used for first-time homebuyers and other housing projects, Mr. Miller said.

"We were given a bonus for non-housing because we were one of the few counties that issued IRBs within the last couple of years," Mr. Jenne said. He noted that Evapco, Random House and Marada used industrial revenue bonds to expand or move facilities.

"The commissioners have the flexibility to move the monies around in the two accounts as they see fit," he said.

Carroll County's Economic Development Commission reviews each IRB application and makes recommendations to the county commissioners based on the number and quality of jobs created, the potential for future growth and the environmental impact of expansion, Mr. Jenne said.

Public hearings also are held to explain the project to the community, he said.

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