The Industrial Revenue Bonds (IRB) Program is to incent expansions of manufacturing facilities in the state of Wisconsin.
This program primarily supports the following WEDC Strategic Pillar and Focus Area:
Business Development: Business Retention and Expansion
WEDC is responsible for allocating volume cap on the issuance of private activity bonds.(1) The volume cap limits the amount of bonding authority that can be issued in a year. Once the annual cap is established under federal law, WEDC allocates bonding authority pursuant to Section 238.10 and the Policy on the Allocation of Volume Cap.(2)
Generally, the volume cap allocated by WEDC is for Industrial Revenue Bonds (IRBs). At the federal level, Industrial Revenue Bonds are covered by Sections 103 and 141 through 149 of the Internal Revenue Code and Income Tax Regulations, which establish the nature and size of projects which qualify for federal tax exemption of interest.(3)
IRB bonds are tax-exempt bonds that can be used to stimulate capital investment and job creation by providing private borrowers with access to financing at interest rates that are lower than conventional bank loans. The IRB process involves five separate entities – the borrower, lender, bond attorney, issuer, and WEDC. Each year, federal law establishes a “volume cap” which applies at the state level.
The municipalities and counties sell the IRBs and loan the proceeds to eligible businesses undertaking eligible projects.
(1) Wis. Stat. §238.10
(2) Wis. Stat. §238.10
(3) I.R.C. §103; I.R.C. §141-149