# Act 9 Industrial Revenue Bond An Act 9 Industrial Revenue Bond (Act 9 of 1960, codified at Ark. Code § 14-164-201 et seq. and successor provisions; also referred to as an "Act 9 Bond" or "IRB") is an Arkansas municipal financing instrument that allows a city to issue bonds and use the proceeds to finance industrial facilities owned by a private company, with the bonds repaid solely from the company's lease payments. The structure allows the city to **convey title-on-paper to the company's facility to the city** (or its instrumentality) during the bond term, qualifying the facility for ad valorem property-tax exemption as city-owned property; on bond payoff, title returns to the company. The Act 9 mechanism is the vehicle by which the [[2025-04 Conway City Council Approves Project Stratus MOU|Project Stratus MOU]] commits the [[City of Conway]] to a **net 65% property-tax abatement for 30 years** on the Forgelight Ventures data-center facility. ## How it appears in the corpus - **[[Project Stratus MOU and April 1 Special Council Meeting]]**, April 1, 2025 — Brad Lacy of the [[Conway Area Chamber of Commerce]] explained the tax-abatement structure to City Council: "Mr. Lacy explained that the tax abatement would result from an Act 9 Bond, or Industrial Revenue Bond, so however long that agreement is, it would be the length of term for the property tax abatement" (April 1 minutes p. 1). The MOU § III(a)(i) states: "the bond structures used to provide the Property Tax Abatement will be broad and flexible (e.g., build-out and equipping periods of at least thirty years; maximum investment levels of no more than $10,000,000,000 for real property and $50,000,000,000 for personal property.)" - **[[April 2026 FAQ Project Stratus]]** — FAQ Q7: "the company will participate in Act 9 Bond financing that allows them a 65% property tax abatement. This is a program that is in use by approximately 10 other qualified Faulkner County companies." ## Stakeholders - **City of Conway** — bond issuer. The Council retains future ordinance-adoption authority over the specific IRB issuance, which the MOU contemplates as a downstream action (not yet enacted). - **Forgelight Ventures, LLC** — the company whose facility the IRB finances; pays lease payments that service the bonds; benefits from the property-tax abatement during the bond term. - **Faulkner County** — the property-taxing county; Faulkner County would lose ~65% of property-tax revenue on the facility for 30 years. - **Conway School District** and other property-tax-recipient jurisdictions — also affected by the abatement. - **Bondholders** — purchasers of the Act 9 bonds; receive interest payments from the Company's lease payments. In a typical Act 9 structure, the bonds are unrated and privately placed; institutional buyers vary. ## Timeline - **April 1, 2025**: MOU approved with the Act 9 commitment. - **TBD**: Specific Act 9 bond issuance — an ordinance authorizing the IRB, the lease/leaseback agreement between the City and Forgelight, the offering documents, and the closing — not yet enacted as of the FOIA-2026-126 production date. Jamie Gates's April 1 [[Project Stratus Next Steps and Sequence|sequencing memo]] flagged "[t]he typical suite of council actions related to property tax abatement" as future Council items. ## Notes The MOU's bond-ceiling structure ($10B real property; $50B personal property) is the key sizing parameter. The 5:1 personal-to-real ratio is consistent with hyperscale data-center asset composition: real property (the building, the cooling-tower pad, the substation pad) is modest relative to personal property (the data-center hardware — servers, networking, generators, UPS, cooling pumps). The MOU's $50B personal-property ceiling implies the Council was preparing for a hardware investment **dramatically larger** than the publicly announced "approximately $1,000,000,000" investment — consistent with the 1-gigawatt build-out the [[April 2026 FAQ Project Stratus|FAQ]] later acknowledged. For context: a 1 GW hyperscale data center at industry-standard $/MW hardware capex (~$15-25M/MW including all hardware) implies $15-25B in personal-property hardware investment. The MOU's $50B ceiling is therefore not implausibly large — it accommodates a build-out scaling beyond the initial 1 GW design or a hardware-refresh cycle that maintains the same nominal capacity. The wiki has not separately archived Ark. Code § 14-164-201 et seq. as a Tier-2 record. A follow-on web-archive of the operative Act 9 statute is warranted. The Act 9 IRB structure is widely used in Arkansas for industrial tax-abatement; the FAQ's reference to "approximately 10 other qualified Faulkner County companies" suggests the mechanism is routine within the county. The MOU's adoption of the same structure for a hyperscale data center is therefore not statutorily unusual; what is unusual is the **scale** ($10B/$50B ceilings) and the **30-year term** (versus more typical 15-25 year terms — Brad Lacy told Council "25-30 years has been a standard term length"). The Act 9 structure means that during the 30-year abatement period, **the data-center facility is, in legal form, City of Conway property** (title-on-paper held by the City for the bond term). This is a feature, not a bug — Act 9 was designed to use the form-of-ownership distinction to convert what would otherwise be a private facility's property-tax burden into a tax-exempt city-owned asset for ad valorem purposes. The fact that title-on-paper sits with the City does NOT mean the City controls the facility, can repurpose it, or bears any liability for it; the MOU expressly states "the City is not obligated to any debt associated with the project" (April 1 minutes).