Geobio Energy (fka GBOE)

[stervc]

Poorme, respectfully, with the $20 Million Bond...

With all due respect, I am going to have to disagree with you on your views of that GBOE PR. That $20 million will be money in the bank for GBOE. If it would have been worded without mentioning the support from the Wisconsin State Department of Commerce and the City of Fon du Lac, then I would agree with you 100%, but... for them to be allowed to mention the Wisconsin State Department of Commerce and City of Fon du Lac approving the issuance of Industrial Revenue Bonds means that they have been endorsed by the state and the city.

Again this is very huge for GBOE to get this endorsement from the Wisconsin State Department of Commerce and City of Fon du Lac to issue GBOE Industrial Revenue Bonds. Believe me, they will get the money. The Wisconsin State Department of Commerce and City of Fon du Lac have a vested interested in making sure this happens because the construction of this plastics recycling and conversion facility will greatly benefit the city by developing businesses and creating jobs within the state of Wisconsin.

To add, the State of Wisconsin already has the $20 Million as you can see since the State of Wisconsin already has $200 million available from their website below:


http://commerce.wi.gov/BD/BD-IRB.html
Wisconsin's Industrial Revenue Bond Program

Wisconsin's Industrial Revenue Bond (IRB) program now has more than $200 million available to assist small manufacturers with expansion projects through low-interest financing. The Department of Commerce grnts the bonding authority (volume cap allocation) to cities, villages and towns to issue the bonds on behalf of a business. This site provides business representatives, municipal officials, bond counsel and others with up-to-date information on the IRB program, the process of applying for volume cap, the availability of volume cap and the latest forms.

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Here is some more info to help everyone to better understand how this will benefit GBOE too:

http://www.cabq.gov/econdev/irbs.html
How do they work?
The city issues the bonds but is not making the loan. The investor buying the bond makes the loan. The company must find its own bond purchaser. It can also buy its own IRBs. The city technically owns title to the facility built with IRBs and leases it to the company for up to 20 years. At the end of the term, title is transferred to the company.

Here’s an example: Company X wants to build a $15 million plant and buy $20 million in equipment. The city issues a $35 million bond for 20 years. During this period the company will repay the bond. The company gets a break on property taxes for land of $4.3 million over 20 years and a break on equipment property taxes of $1.15 million over 7 years. It’s not correct to say the company is getting $35 million in tax breaks. The $35 million represents the amount of money the company will invest in our community

Do IRBs affect the city’s credit ratings?
No. Since the city is not responsible for the loan, the IRB does not have an impact on the city’s credit rating.

Why is an IRB desirable to a company?
IRBs help companies save money in two ways: Because the city owns the title to the project, it’s exempt, for up to 20 years, from 95 percent of property taxes on land, buildings, and equipment. Also, a company may receive gross receipts and compensating tax exemptions on initial purchases of equipment made with bond proceeds.

Can a small business use an IRB?
Because of financing costs, IRBs are typically used for larger capital projects. They are generally not recommended for projects less than $2 million.

Do companies still have to pay taxes?
The company must still pay a portion of property taxes, as well as all corporate taxes. In most cases companies will pay gross receipts taxes on the services or goods they produce and sell. In addition, a company’s employees are paying income taxes and gross receipts taxes on their purchases.

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Again, I think below is worth a repeat so that investors can see that the State of Wisconsin already have the $20 million available as you can see since the State of Wisconsin already has $200 million available from their website:


http://commerce.wi.gov/BD/BD-IRB.html
Wisconsin's Industrial Revenue Bond Program

Wisconsin's Industrial Revenue Bond (IRB) program now has more than $200 million available to assist small manufacturers with expansion projects through low-interest financing. The Department of Commerce grnts the bonding authority (volume cap allocation) to cities, villages and towns to issue the bonds on behalf of a business. This site provides business representatives, municipal officials, bond counsel and others with up-to-date information on the IRB program, the process of applying for volume cap, the availability of volume cap and the latest forms.

v/r
Sterling