Arizona: Incentives

Private Activity Bonds

Private Activity Bonds are securities issued by or on behalf of a local government to provide debt financing for projects used for the trade or business of a private user, as provided by IRC 141 et seq. For a list of issuers see Directory of Issuers. The PAB program can be used for the construction of industrial and manufacturing facilities and the purchase of equipment, residential rental projects, facilities for the furnishing of water, sewage and solid waste facilities and more. Download the Program Summary. To verify project eligibility please contact either the Program Manager or seek Bond Counsel.

Generally speaking investors purchase the bonds, then the money is lent to private users for completion of the project. The investor’s return comes through the operational proceeds of the project. Bonds do not constitute an obligation of the State or any of its jurisdictions. For a more detailed discussion of this process please see Financing with Private Activity Bonds.



There are two bond lotteries held each year with $662,662,400 available for financing eligible projects in calendar year 2014. In addition, allocations can be requested through Director’s Discretion.

To view allocations made to date and the amount of volume cap remaining, click on the links below.



To learn about the PAB timeline please click here or read the summary below.

For the January lottery (takes place the first business day of the year) applicants seeking funding for Qualified Residential Rental Projects, Qualified Student Loan Projects, Manufacturing Projects or Other Projects should appear at Commerce with the appropriate forms completed. (Word forms are available via e-mail to the Program Manager). To apply electronically for the program, click here.

After the lottery each application will be reviewed for completeness and validity and Commerce shall award the bond allocation on a first come first serve basis. If the applicant accepts the available allocation a fee must be submitted.

The applicant will then have 90 days to secure financing and close the deal or file a request for an extension, in which case additional fees may be incurred.

For the July lottery (held the first business day of July) generally the same process ensues, however additional requirements must be met. For example a confirmation fee and security deposit must be paid. Also it is important to note, MRB/MCC confirmations cannot be issued in the July lottery.

Requests for Carry Forward Allocations along with a Notice of Intent can be submitted no later than December 15 of each year. The forms needed to apply for a Carry Forward allocation include: Notice of Intent and CF application.