10 CALIFORNIA INDUSTRIAL DEVELOPMENT FINANCING ADVISORY COMMISSION

The core program area is the Industrial Development Bond (IDB) Program where the California Industrial Development Financing Advisory Commission (CIDFAC) serves as the mandatory approval agency for local IDB issuers as required by California statute. Once potential borrowers (manufacturers and processing companies) apply through their local government agency for low cost tax-exempt financing, CIDFAC carefully reviews the public benefits generated by the proposed project, particularly job creation, and determines whether these benefits will significantly outweigh any detrimental public effects from the project. Eligible capital expenditures include the acquisition of land, building construction, building renovation, and the purchase of machinery and equipment. Bond proceeds can also be used to cover the costs of architects, engineers, attorneys, permits, and the costs of bond issuance. The local government issuer can be a city, county, economic development authority, redevelopment agency, or a joint power authority such as the California Statewide Community Development Authority.

The Federal Tax Law that authorizes the issuance of IDBs also includes Empowerment Zone Bonds (EZ Bonds), which fall within CIDFAC's issuance jurisdiction. CIDFAC's EZ Bond Program has the objective of augmenting the benefits of the IDB program to provide further support for economic development in the most distressed communities in California. The EZ Bond Program expands the eligibility of borrowers to manufacturers, retailers, and any service that operates in an Empowerment Zone. The EZ Bond program removes the maximum dollar restriction (applicable to IDBs) on the size of the issuance. There are four federally designated Empowerment Zones in California: Los Angeles, Santa Ana, San Diego, and an unincorporated section of Riverside County. These communities received this federal designation based on their high unemployment and high poverty rates.