DALLAS — Louisiana’s remaining $1.4 billion capacity for Gulf Opportunity Zone bonds has been opened to economic development projects in all 31 parishes affected by the 2005 hurricanes with the end of the program that established two separate allocation pools.
The $1.1 billion of unrequested authorization in the dedicated pool, which was reserved for 11 parishes with the most damage from hurricanes Katrina and Rita, will be combined with the $300 million of unused capacity in the competitive pool set aside for another 20 parishes with lesser damage.
The separate allocation pools were established by the Louisiana State Bond Commission in 2007 and expired on Jan. 1.
The Bond Commission will hear its first requests for bonds from the new combined pool at its meeting on Jan. 21. The preliminary agenda includes more than $200 million of new requests for GO Zone bonds.
The commission established the pools program to allocate the state’s $7.84 billion of the tax-exempt private activity GO Zone bond capacity authorized by Congress in 2005.
The pool plan set aside $3.54 billion from the state’s authorization of $7.84 billion of the tax-exempt private activity bonds to 11 parishes, including five in the New Orleans area.
The 20 parishes within the competitive pool shared $4.3 billion of capacity.
Whit Kling Jr., director of the Bond Commission, said the single pool consists of capacity for which there were no requests before Dec. 31, 2009.
“Of the $7.8 billion of bonds available, $5.6 billion have been sold,” Kling said. “There are about $700 million of bonds that are in the pipeline, and that leaves $1.4 billion that was not claimed before the deadline.”
He said the approved but unsold bonds include two projects within the dedicated pool parishes and five from the competitive pool parishes.
If those bonds are not sold within 240 days of approval, the approval will expire and the capacity will revert back to the pool.
However, Kling said, that was unlikely to happen. “I think the ones remaining have a fairly good chance of closing,” he said. “They seem to be viable projects.”
Each parish within the dedicated pool received individual allocations.
Some $1.3 billion of capacity within the dedicated pool was allocated to New Orleans, but $750 million of it was returned at the end of 2009.
St. Bernard Parish returned an unused GO Zone bond allocation of $248 million, Kling said, with Jefferson Parish turning back $68 million of its allocation.
The state’s remaining GO Zone bond allocation must be approved and sold by Jan. 1, 2011, when the federal legislation expires.
“The program will end at the end of this year unless it is extended, and I’m not aware that is being considered right now,” he said. “An extension would require action by Congress.”