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Oklahoma Department of Commerce - State of Success

Economic Development Pooled Financing

The Oklahoma Community Economic Development Pooled Finance incentive targets business expansion projects which include job creation and significant investment in facilities, machinery, and equipment. With a $200 million capacity, this incentive is comprised of two funding options: Company-Purchased Debt option and a Public Finance Debt option.

For information contact Martin Roberts at 405-990-9147 or martin.roberts@okcommerce.gov.


Company-Purchased Debt Option

A for-profit entity in conjunction with one or more unit of local government may make application to the Oklahoma Department of Commerce. The application must move through a competitive scoring process and requires a letter of determination from the Oklahoma Department of Commerce that the project is net benefit positive for the state. If awarded funds, the for-profit entity works through the approval process of the Oklahoma Development Finance Authority (ODFA) to finalize the incentive agreement.

The incentive is in the form of annual cash payments from the State of Oklahoma which are due on a Promissory Note issued by ODFA. Debt (Promissory Note) issued from the Economic Development Pool may be paid from withholdings taxes, and other revenue, at the for‐profit entity benefitted by the financing.

Public Finance Option

A for-profit entity in conjunction with one or more unit of local government may make application to the Oklahoma Department of Commerce. The application must move through a competitive scoring process and requires a letter of determination from the Oklahoma Department of Commerce that the project is net benefit positive for the state. Complete financial information for three years prior, detailed business plan, detailed budget for expansion project, and other financial information may be required. If awarded funds, the for-profit entity works through the approval process of the Oklahoma Development Finance Authority (ODFA) to finalize the private bond issuance.

The incentive is in the form of cash proceeds from the sale of the private bonds, less the cost of issuance. Debt issued from the Economic Development Pool may be paid from withholdings taxes, and other revenue, at the for‐profit entity benefitted by the bond financing.

For debt obligations issued under the Oklahoma Community Economic Development Pooled Finance Act, there is a maximum maturity of 25 years and a maximum coupon rate of 14%. Sixty‐five percent of the net proceeds from both the Infrastructure Pool and the Economic Development Pool shall be used by ODFA for municipalities that do not exceed 300,000 people. The remaining thirty‐five percent may be used by the ODFA for any eligible local government.

Effective September 1, 2010 an evergreen clause permits the renewal of issuing capacity by ODFA.


Disclaimer

The materials contained on this website have been prepared by the Oklahoma Department of Commerce for informational purposes only and do not constitute legal or tax advice. This information is subject to change based on judicial interpretation and legislative action. The application of the information is subject to your unique facts and circumstances. YOU SHOULD NOT ACT UPON ANY INFORMATION CONTAINED IN THESE MATERIALS WITHOUT SEEKING YOUR OWN PROFESSIONAL LEGAL AND TAX ADVICE.

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