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Finance Overview 63 vary from airport to airport, from state to state, and from situation to situation. In addition, alternative funding structures must stand the test of perception within the community, regard- ing the appropriateness of using tax-exempt funding for private development. 5.4.1.2 Alternative Public Debt Options Issuing bonds is an option for financing airport projects for airports with such bond issuing authority. Most airport bonds are issued by large- and medium-hub airports operated by inde- pendent airport authorities, and are secured by current and future airport revenue (i.e., airport revenue bonds). Smaller commercial service airports and GA airports, however, often do not have the authority or the financial strength to independently issue bonds. This condition, how- ever, does not necessarily mean that these smaller airports cannot issue debt for airport devel- opment. If issuing debt for a specific project is deemed the appropriate course of action, the airport's owner (e.g., the city, the county, an authority, or the state) can issue a general obliga- tion bond that is secured by the taxing authority of that entity. Since these bond payments are guaranteed by tax dollars, issuing these bonds is often a difficult undertaking if the underlying revenue stream associated with the project cannot be guaranteed. In 2009, the Federal Government passed into law the ARRA with the intent of stimulating the economy through infrastructure and business investment. Within this Act are two bonding pro- grams that may be applicable to airport development: Recovery Zone Facility (RZF) bonds and Recovery Zone Economic Development (RZED) bonds. These programs are representative of federal and nonfederal programs that are available from time to time, and may include eligibil- ity for a specific airport development project. In short, the airport sponsor may benefit from both traditional approaches and emerging or one-time opportunities when considering debt vehicles. Recovery zone bonds are targeted to areas particularly affected by job loss and help local gov- ernments obtain financing for economic development projects, such as public infrastructure development. The ARRA included $25 billion for these two new types of recovery zone bonds: $10 billion for RZED bonds and $15 billion for RZF bonds. The following provides brief descrip- tions of each: RZED bonds are one type of taxable Build America Bonds that allow state and local govern- ments to obtain lower borrowing costs through a new direct federal payment subsidy, for 45% of the interest, to finance a broad range of qualified economic development projects, such as job training and educational programs. RZF bonds are a type of traditional tax-exempt private activity bond that may be used by pri- vate businesses in designated recovery zones to finance a broad range of depreciable capital projects. Note that funding for these bond programs runs through the end of 2010, and at the time of the writing of this Guidebook, it is unknown if these programs will be renewed in future years. 5.4.1.3 Debt Payment Options Payment of debt obligations is typically funded through revenue derived from the project for which the debt was issued. If the airport development project is approved for funding through PFC collection, bond-associated debt associated with allowable costs can be repaid with PFC funds, per 14 CFR Part 158 and FAA Order 5500.1. Debt obligations can also be satisfied by another stakeholder within the community with an interest in bringing the airport development project to a successful completion. 5.4.2 Private Financing Private funding is that which originates from traditional banks and commercial lending institu- tions or from private investment. Private funding is often characterized as being more expensive