Eligibility
Applies to qualified 501(c)(3) bonds and specific exempt facility bonds under 142(a) such as airports, docks, and certain high-speed intercity rail facilities.
Frequently Asked Questions
Who is eligible for the Volume Cap Exception for 501(c)(3) and Specific Facilities?
Applies to qualified 501(c)(3) bonds and specific exempt facility bonds under 142(a) such as airports, docks, and certain high-speed intercity rail facilities.
How does the Volume Cap Exception for 501(c)(3) and Specific Facilities work?
Exempts qualified 501(c)(3) bonds and certain exempt facility bonds (like airports, docks, and high-speed rail) from the restrictive State volume caps.
What law authorizes the Volume Cap Exception for 501(c)(3) and Specific Facilities?
The Volume Cap Exception for 501(c)(3) and Specific Facilities is authorized under IRC §146 of the Internal Revenue Code (Title 26, United States Code).
Statutory Text — IRC §146
Source: Internal Revenue Code, Title 26, United States Code
§ 146. Volume cap(a) General ruleA private activity bond issued as part of an issue meets the requirements of this section if the aggregate face amount of the private activity bonds issued pursuant to such issue, when added to the aggregate face amount of tax-exempt private activity bonds previously issued by the issuing authority during the calendar year, does not exceed such authority’s volume cap for such calendar year.
(b) Volume cap for State agenciesFor purposes of this section—(1) In generalThe volume cap for any agency of the State authorized to issue tax-exempt private activity bonds for any calendar year shall be 50 percent of the State ceiling for such calendar year.
(2) Special rule where State has more than 1 agencyIf more than 1 agency of the State is authorized to issue tax-exempt private activity bonds, all such agencies shall be treated as a single agency.
(c) Volume cap for other issuersFor purposes of this section—(1) In generalThe volume cap for any issuing authority (other than a State agency) for any calendar year shall be an amount which bears the same ratio to 50 percent of the State ceiling for such calendar year as—(A) the population of the jurisdiction of such issuing authority, bears to
(B) the population of the entire State.
(2) Overlapping jurisdictionsFor purposes of paragraph (1)(A), if an area is within the jurisdiction of 2 or more governmental units, such area shall be treated as only within the jurisdiction of the unit having jurisdiction over the smallest geographical area unless such unit agrees to surrender all or part of such jurisdiction for such calendar year to the unit with overlapping jurisdiction which has the next smallest geographical area.
(d) State ceilingFor purposes of this section—(1) In generalThe State ceiling applicable to any State for any calendar year shall be the greater of—(A) an amount equal to $75 ($62.50 in the case of calendar year 2001) multiplied by the State population, or
(B) $225,000,000 ($187,500,000 in the case of calendar year 2001).
(2) Cost-of-living adjustmentIn the case of a calendar year after 2002, each of the dollar amounts contained in paragraph (1) shall be increased by an amount equal to—(A) such dollar amount, multiplied by
(B) the cost-of-living adjustment determined under section 1(f)(3) for such calendar year by substituting “calendar year 2001” for “calendar year 2016” in subparagraph (A)(ii) thereof.
If any increase determined under the preceding sentence is not a multiple of $5 ($5,000 in the case of the dollar amount in paragraph (1)(B)), such increase shall be rounded to the nearest multiple thereof.
(3) Special rule for States with constitutional home rule citiesFor purposes of this section—(A) In generalThe volume cap for any constitutional home rule city for any calendar year shall be determined under paragraph (1) of subsection (c) by substituting “100 percent” for “50 percent”.
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