4.7.2.1 Volume Cap
In order to limit the amount of tax exempt qualified private activity bonds that can be issued, each state is allocated a “volume cap” for each year, which must be allocated to the issuance of certain types of qualified private activity bonds. In order to issue such tax exempt qualified private activity bonds in California, every issuer must apply to the California Debt Limit Allocation Committee to be assigned the necessary amount of volume cap.
The following types of qualified private activity bonds do not require a volume cap:
- Any qualified veteran’s mortgage bond
- Any qualified 501(c)(3) bond
- Bonds used for airports, docks and wharves, environmental enhancements to hydroelectric generation facilities, and qualified educational facilities
- 100% of any high speed intercity rail facility bonds, but only if owned by a governmental unit (75% of any high speed intercity rail facility bonds, if not owned by a governmental unit)
- Any bond used for governmentally owned solid waste disposal facilities
- 100% of any qualified broadband project bonds, but only if owned by a governmental unit (75% of any qualified broadband project bonds, if not owned by a governmental unit)
- 100% of any qualified carbon capture facility bonds, but only if owned by a governmental unit (75% of any qualified carbon capture facility bonds, if not owned by a governmental unit)