Internal Revenue Code – Section 146

Sec. 146. Volume cap

-STATUTE-

(a) General rule

A 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 agencies

For purposes of this section -

(1) In general

The 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 agency

If 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 issuers

For purposes of this section -

(1) In general

The 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 jurisdictions

For 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 ceiling

For purposes of this section -

(1) In general

The 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 adjustment

In 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 1992" in subparagraph (B) 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 cities

For purposes of this section -

(A) In general

The 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".

(B) Coordination with other allocations

In the case of any State which contains 1 or more

constitutional home rule cities, for purposes of applying

subsections (b) and (c) with respect to issuing authorities in

such State other than constitutional home rule cities, the

State ceiling for any calendar year shall be reduced by the

aggregate volume caps determined for such year for all

constitutional home rule cities in such State.

(C) Constitutional home rule city

For purposes of this section, the term "constitutional home

rule city" means, with respect to any calendar year, any

political subdivision of a State which, under a State

constitution which was adopted in 1970 and effective on July 1,

1971, had home rule powers on the 1st day of the calendar year.

(4) Special rule for possessions with populations of less than

the population of the least populous State

(A) In general

If the population of any possession of the United States for

any calendar year is less than the population of the least

populous State (other than a possession) for such calendar

year, the limitation under paragraph (1)(A) shall not be less

than the amount determined under subparagraph (B) for such

calendar year.

(B) Limitation

The limitation determined under this subparagraph, with

respect to a possession, for any calendar year is an amount

equal to the product of -

(i) the fraction -

(I) the numerator of which is the amount applicable under

paragraph (1)(B) for such calendar year, and

(II) the denominator of which is the State population of

the least populous State (other than a possession) for such

calendar year, and

 

(ii) the population of such possession for such calendar

year.

(5) Increase and set aside for housing bonds for 2008

(A) Increase for 2008

In the case of calendar year 2008, the State ceiling for each

State shall be increased by an amount equal to $11,000,000,000

multiplied by a fraction -

(i) the numerator of which is the State ceiling applicable

to the State for calendar year 2008, determined without

regard to this paragraph, and

(ii) the denominator of which is the sum of the State

ceilings determined under clause (i) for all States.

(B) Set aside

(i) In general

Any amount of the State ceiling for any State which is

attributable to an increase under this paragraph shall be

allocated solely for one or more qualified housing issues.

(ii) Qualified housing issue

For purposes of this paragraph, the term "qualified housing

issue" means -

(I) an issue described in section 142(a)(7) (relating to

qualified residential rental projects), or

(II) a qualified mortgage issue (determined by

substituting "12-month period" for "42-month period" each

place it appears in section 143(a)(2)(D)(i)).

(e) State may provide for different allocation

For purposes of this section -

(1) In general

Except as provided in paragraph (3), a State may, by law

provide a different formula for allocating the State ceiling

among the governmental units (or other authorities) in such State

having authority to issue tax-exempt private activity bonds.

(2) Interim authority for Governor

(A) In general

Except as otherwise provided in paragraph (3), the Governor

of any State may proclaim a different formula for allocating

the State ceiling among the governmental units (or other

authorities) in such State having authority to issue private

activity bonds.

(B) Termination of authority

The authority provided in subparagraph (A) shall not apply to

bonds issued after the earlier of -

(i) the last day of the 1st calendar year after 1986 during

which the legislature of the State met in regular session, or

(ii) the effective date of any State legislation with

respect to the allocation of the State ceiling.

(3) State may not alter allocation to constitutional home rule

cities

Except as otherwise provided in a State constitutional

amendment (or law changing the home rule provision adopted in the

manner provided by the State constitution), the authority

provided in this subsection shall not apply to that portion of

the State ceiling which is allocated to any constitutional home

rule city in the State unless such city agrees to such different

allocation.

(f) Elective carryforward of unused limitation for specified

purpose

(1) In general

If -

(A) an issuing authority's volume cap for any calendar year

after 1985, exceeds

(B) the aggregate amount of tax-exempt private activity bonds

issued during such calendar year by such authority,

 

such authority may elect to treat all (or any portion) of such

excess as a carryforward for 1 or more carryforward purposes.

(2) Election must identify purpose

In any election under paragraph (1), the issuing authority

shall -

(A) identify the purpose for which the carryforward is

elected, and

(B) specify the portion of the excess described in paragraph

(1) which is to be a carryforward for each such purpose.

(3) Use of carryforward

(A) In general

If any issuing authority elects a carryforward under

paragraph (1) with respect to any carryforward purpose, any

private activity bonds issued by such authority with respect to

such purpose during the 3 calendar years following the calendar

year in which the carryforward arose shall not be taken into

account under subsection (a) to the extent the amount of such

bonds does not exceed the amount of the carryforward elected

for such purpose.

(B) Order in which carryforward used

Carryforwards elected with respect to any purpose shall be

used in the order of the calendar years in which they arose.

(4) Election

Any election under this paragraph (and any identification or

specification contained therein), once made, shall be

irrevocable.

(5) Carryforward purpose

The term "carryforward purpose" means -

(A) the purpose of issuing exempt facility bonds described in

1 of the paragraphs of section 142(a),

(B) the purpose of issuing qualified mortgage bonds or

mortgage credit certificates,

(C) the purpose of issuing qualified student loan bonds, and

(D) the purpose of issuing qualified redevelopment bonds.

(6) Special rules for increased volume cap under subsection

(d)(5)

No amount which is attributable to the increase under

subsection (d)(5) may be used -

(A) for any issue other than a qualified housing issue (as

defined in subsection (d)(5)), or

(B) to issue any bond after calendar year 2010.

(g) Exception for certain bonds

Only for purposes of this section, the term "private activity

bond" shall not include -

(1) any qualified veterans' mortgage bond,

(2) any qualified 501(c)(3) bond,

(3) any exempt facility bond issued as part of an issue

described in paragraph (1), (2), (12), (13), (14), or (15) of

section 142(a), and

(4) 75 percent of any exempt facility bond issued as part of an

issue described in paragraph (11) of section 142(a) (relating to

high-speed intercity rail facilities).

 

Paragraph (4) shall be applied without regard to "75 percent of" if

all of the property to be financed by the net proceeds of the issue

is to be owned by a governmental unit (within the meaning of

section 142(b)(1)).

(h) Exception for government-owned solid waste disposal facilities

(1) In general

Only for purposes of this section, the term "private activity

bond" shall not include any exempt facility bond described in

section 142(a)(6) which is issued as part of an issue if all of

the property to be financed by the net proceeds of such issue is

to be owned by a governmental unit.

(2) Safe harbor for determination of government ownership

In determining ownership for purposes of paragraph (1), section

142(b)(1)(B) shall apply, except that a lease term shall be

treated as satisfying clause (ii) thereof if it is not more than

20 years.

(i) Treatment of refunding issues

For purposes of the volume cap imposed by this section -

(1) In general

The term "private activity bond" shall not include any bond

which is issued to refund another bond to the extent that the

amount of such bond does not exceed the outstanding amount of the

refunded bond.

(2) Special rules for student loan bonds

In the case of any qualified student loan bond, paragraph (1)

shall apply only if the maturity date of the refunding bond is

not later than the later of -

(A) the average maturity date of the qualified student loan

bonds to be refunded by the issue of which the refunding bond

is a part, or

(B) the date 17 years after the date on which the refunded

bond was issued (or in the case of a series of refundings, the

date on which the original bond was issued).

(3) Special rules for qualified mortgage bonds

In the case of any qualified mortgage bond, paragraph (1) shall

apply only if the maturity date of the refunding bond is not

later than the later of -

(A) the average maturity date of the qualified mortgage bonds

to be refunded by the issue of which the refunding bond is a

part, or

(B) the date 32 years after the date on which the refunded

bond was issued (or in the case of a series of refundings, the

date on which the original bond was issued).

(4) Average maturity

For purposes of paragraphs (2) and (3), average maturity shall

be determined in accordance with section 147(b)(2)(A).

(5) Exception for advance refunding

This subsection shall not apply to any bond issued to advance

refund another bond.

(6) Treatment of certain residential rental project bonds as

refunding bonds irrespective of obligor

(A) In general

If, during the 6-month period beginning on the date of a

repayment of a loan financed by an issue 95 percent or more of

the net proceeds of which are used to provide projects

described in section 142(d), such repayment is used to provide

a new loan for any project so described, any bond which is

issued to refinance such issue shall be treated as a refunding

issue to the extent the principal amount of such refunding

issue does not exceed the principal amount of the bonds

refunded.

(B) Limitations

Subparagraph (A) shall apply to only one refunding of the

original issue and only if -

(i) the refunding issue is issued not later than 4 years

after the date on which the original issue was issued,

(ii) the latest maturity date of any bond of the refunding

issue is not later than 34 years after the date on which the

refunded bond was issued, and

(iii) the refunding issue is approved in accordance with

section 147(f) before the issuance of the refunding issue.

(j) Population

For purposes of this section, determinations of the population of

any State (or issuing authority) shall be made with respect to any

calendar year on the basis of the most recent census estimate of

the resident population of such State (or issuing authority)

released by the Bureau of Census before the beginning of such

calendar year.

(k) Facility must be located within State

(1) In general

Except as provided in paragraphs (2) and (3), no portion of the

State ceiling applicable to any State for any calendar year may

be used with respect to financing for a facility located outside

such State.

(2) Exception for certain facilities where State will get

proportionate share of benefits

Paragraph (1) shall not apply to any exempt facility bond

described in paragraph (4), (5), (6), or (10) of section 142(a)

if the issuer establishes that the State's share of the use of

the facility (or its output) will equal or exceed the State's

share of the private activity bonds issued to finance the

facility.

(3) Treatment of governmental bonds to which volume cap allocated

Paragraph (1) shall not apply to any bond to which volume cap

is allocated under section 141(b)(5) -

(A) for an output facility, or

(B) for a facility of a type described in paragraph (4), (5),

(6), or (10) of section 142(a),

 

if the issuer establishes that the State's share of the private

business use (as defined by section 141(b)(6)) of the facility

will equal or exceed the State's share of the volume cap

allocated with respect to bonds issued to finance the facility.

(l) Issuer of qualified scholarship funding bonds

In the case of a qualified scholarship funding bond, such bond

shall be treated for purposes of this section as issued by a State

or local issuing authority (whichever is appropriate).

(m) Treatment of amounts allocated to private activity portion of

government use bonds

(1) In general

The volume cap of an issuer shall be reduced by the amount

allocated by the issuer to an issue under section 141(b)(5).

(2) Advance refundings

Except as otherwise provided by the Secretary, any advance

refunding of any part of an issue to which an amount was

allocated under section 141(b)(5) (or would have been allocated

if such section applied to such issue) shall be taken into

account under this section to the extent of the amount of the

volume cap which was (or would have been) so allocated.

(n) Reduction for mortgage credit certificates, etc.

The volume cap of any issuing authority for any calendar year

shall be reduced by the sum of -

(1) the amount of qualified mortgage bonds which such authority

elects not to issue under section 25(c)(2)(A)(ii) during such

year, plus

(2) the amount of any reduction in such ceiling under section

25(f) applicable to such authority for such year.

 

-SOURCE-

(Added Pub. L. 99-514, title XIII, Sec. 1301(b), Oct. 22, 1986, 100

Stat. 2630; amended Pub. L. 100-203, title X, Sec. 10631(b), Dec.

22, 1987, 101 Stat. 1330-455; Pub. L. 100-647, title I, Sec.

1013(a)(9), (10), (28), (40), title VI, Sec. 6180(b)(3), Nov. 10,

1988, 102 Stat. 3538, 3543, 3544, 3728; Pub. L. 101-239, title VII,

Sec. 7816(s)(2), Dec. 19, 1989, 103 Stat. 2423; Pub. L. 102-486,

title XIX, Sec. 1921(b)(3), Oct. 24, 1992, 106 Stat. 3028; Pub. L.

103-66, title XIII, Sec. 13121(a), Aug. 10, 1993, 107 Stat. 432;

Pub. L. 105-277, div. J, title II, Sec. 2021(a), Oct. 21, 1998, 112

Stat. 2681-903; Pub. L. 106-554, Sec. 1(a)(7) [title I, Sec.

161(a)], Dec. 21, 2000, 114 Stat. 2763, 2763A-624; Pub. L. 107-16,

title IV, Sec. 422(c), June 7, 2001, 115 Stat. 66; Pub. L. 108-357,

title VII, Sec. 701(c), Oct. 22, 2004, 118 Stat. 1539; Pub. L. 109-

59, title XI, Sec. 11143(c), Aug. 10, 2005, 119 Stat. 1965; Pub.

L. 110-289, div. C, title I, Secs. 3007(a), 3021(a), July 30, 2008,

122 Stat. 2886, 2892.)

 

 

-STATAMEND-

INFLATION ADJUSTED ITEMS FOR CERTAIN YEARS

For inflation adjustment of certain items in this section, see

Revenue Procedures listed in a table under section 1 of this title.

 

AMENDMENT OF SECTION

For termination of amendment by section 901 of Pub. L. 107-16,

see Effective and Termination Dates of 2001 Amendment note below.

 

 

-MISC1-

AMENDMENTS

2008 - Subsec. (d)(5). Pub. L. 110-289, Sec. 3021(a)(1), added

par. (5).

Subsec. (f)(6). Pub. L. 110-289, Sec. 3021(a)(2), added par. (6).

Subsec. (i)(6). Pub. L. 110-289, Sec. 3007(a), added par. (6).

2005 - Subsec. (g)(3). Pub. L. 109-59 substituted "(14), or (15)

of section 142(a), and" for "or (14) of section 142(a) (relating to

airports, docks and wharves, environmental enhancements of

hydroelectric generating facilities, qualified public educational

facilities, and qualified green building and sustainable design

projects), and".

2004 - Subsec. (g)(3). Pub. L. 108-357 substituted "(13), or

(14)" for "or (13)" and "qualified public educational facilities,

and qualified green building and sustainable design projects" for

"and qualified public educational facilities".

2001 - Subsec. (g)(3). Pub. L. 107-16, Secs. 422(c), 901,

temporarily substituted "(12), or (13)" for "or (12)" and

"environmental enhancements of hydroelectric generating facilities,

and qualified public educational facilities" for "and environmental

enhancements of hydroelectric generating facilities". See Effective

and Termination Dates of 2001 Amendment note below.

2000 - Subsec. (d)(1), (2). Pub. L. 106-554 amended pars. (1) and

(2) generally. Prior to amendment, pars. (1) and (2) provided for

State ceilings based on the per capita limits and aggregate limits

set out in an included table.

1998 - Subsec. (d)(1). Pub. L. 105-277 added par. (1) and struck

out heading and text of former par. (1). Text read as follows: "The

State ceiling applicable to any State for any calendar year shall

be the greater of -

"(A) an amount equal to $75 multiplied by the State population,

or

"(B) $250,000,000.

Subparagraph (B) shall not apply to any possession of the United

States."

Subsec. (d)(2). Pub. L. 105-277 added par. (2) and struck out

heading and text of former par. (2). Text read as follows: "In the

case of calendar years after 1987, paragraph (1) shall be applied

by substituting -

"(A) '$50' for '$75', and

"(B) '$150,000,000' for '$250,000,000'."

1993 - Subsec. (g). Pub. L. 103-66, which directed the amendment

of par. (4) by adding at the end thereof the following flush

sentence: "Paragraph (4) shall be applied without regard to '75

percent of' if all of the property to be financed by the net

proceeds of the issue is to be owned by a governmental unit (within

the meaning of section 142(b)(1)).", was executed by inserting the

sentence at the end of subsec. (g), to reflect the probable intent

of Congress.

1992 - Subsec. (g)(3). Pub. L. 102-486 substituted ", (2), or

(12)" for "or (2)" and ", docks and wharves, and environmental

enhancements of hydroelectric generating facilities" for "and docks

and wharves".

1989 - Subsec. (g)(3), (4). Pub. L. 101-239 redesignated par.

(3), relating to exempt facility bonds issued as part of an issue

described in par. (11) of section 142(a), as (4).

1988 - Subsec. (d)(4)(B). Pub. L. 100-647, Sec. 1013(a)(40),

substituted "respect to a" for "respect a".

Subsec. (f)(5)(A). Pub. L. 100-647, Sec. 1013(a)(9), amended

subpar. (A) generally, as in effect before amendment by Pub. L. 100-

203. Before amendment by Pub. L. 100-203, subpar. (A) read as

follows: "the purpose of issuing bonds referred to in one of the

clauses of section 141(d)(1)(A),".

Subsec. (g)(3). Pub. L. 100-647, Sec. 6180(b)(3), added par. (3)

relating to exempt facility bonds issued as part of an issue

described in par. (11) of section 142(a).

Subsec. (i)(2)(A). Pub. L. 100-647, Sec. 1013(a)(28)(A), amended

subpar. (A) generally. Prior to amendment, subpar. (A) read as

follows: "the maturity date of the bond to be refunded, or".

Subsec. (i)(3)(A). Pub. L. 100-647, Sec. 1013(a)(28)(B), amended

subpar. (A) generally. Prior to amendment, subpar. (A) read as

follows: "the maturity date of the bond to be refunded, or".

Subsec. (i)(4), (5). Pub. L. 100-647, Sec. 1013(a)(28)(C), added

par. (4) and redesignated former par. (4) as (5).

Subsec. (k)(1). Pub. L. 100-647, Sec. 1013(a)(10)(A), substituted

"paragraphs (2) and (3)" for "paragraph (2)".

Subsec. (k)(3). Pub. L. 100-647, Sec. 1013(a)(10)(B), added par.

(3).

1987 - Subsec. (f)(5)(A). Pub. L. 100-203 amended subpar. (A)

generally, as amended by Pub. L. 100-647, Sec. 1013(a)(9),

restating it without change. See 1988 Amendment note above.

 

EFFECTIVE DATE OF 2008 AMENDMENT

Amendment by section 3007(a) of Pub. L. 110-289 applicable to

repayments of loans received after July 30, 2008, see section

3007(c) of Pub. L. 110-289, set out as a note under section 42 of

this title.

Amendment by section 3021(a) of Pub. L. 110-289 applicable to

bonds issued after July 30, 2008, see section 3021(c) of Pub. L.

110-289, set out as a note under section 143 of this title.

 

EFFECTIVE DATE OF 2005 AMENDMENT

Amendment by Pub. L. 109-59 applicable to bonds issued after Aug.

10, 2005, see section 11143(d) of Pub. L. 109-59, set out as a note

under section 142 of this title.

 

EFFECTIVE DATE OF 2004 AMENDMENT

Amendment by Pub. L. 108-357 applicable to bonds issued after

Dec. 31, 2004, see section 701(e) of Pub. L. 108-357, set out as a

note under section 142 of this title.

 

EFFECTIVE AND TERMINATION DATES OF 2001 AMENDMENT

Amendment by Pub. L. 107-16 applicable to bonds issued after Dec.

31, 2001, see section 422(f) of Pub. L. 107-16, set out as a note

under section 142 of this title.

Amendment by Pub. L. 107-16 inapplicable to taxable, plan, or

limitation years beginning after Dec. 31, 2012, and the Internal

Revenue Code of 1986 to be applied and administered to such years

as if such amendment had never been enacted, see section 901 of

Pub. L. 107-16, set out as a note under section 1 of this title.

 

EFFECTIVE DATE OF 2000 AMENDMENT

Pub. L. 106-554, Sec. 1(a)(7) [title I, Sec. 161(b)], Dec. 21,

2000, 114 Stat. 2763, 2763A-624, provided that: "The amendment made

by this section [amending this section] shall apply to calendar

years after 2000."

 

EFFECTIVE DATE OF 1998 AMENDMENT

Pub. L. 105-277, div. J, title II, Sec. 2021(b), Oct. 21, 1998,

112 Stat. 2681-903, provided that: "The amendment made by this

section [amending this section] shall apply to calendar years after

1998."

 

EFFECTIVE DATE OF 1993 AMENDMENT

Section 13121(b) of Pub. L. 103-66 provided that: "The amendment

made by subsection (a) [amending this section] shall apply to bonds

issued after December 31, 1993."

 

EFFECTIVE DATE OF 1992 AMENDMENT

Amendment by Pub. L. 102-486 applicable to bonds issued after

Oct. 24, 1992, see section 1921(c) of Pub. L. 102-486, set out as a

note under section 142 of this title.

 

EFFECTIVE DATE OF 1989 AMENDMENT

Amendment by Pub. L. 101-239 effective, except as otherwise

provided, as if included in the provision of the Technical and

Miscellaneous Revenue Act of 1988, Pub. L. 100-647, to which such

amendment relates, see section 7817 of Pub. L. 101-239, set out as

a note under section 1 of this title.

 

EFFECTIVE DATE OF 1988 AMENDMENT

Amendment by section 1013(a)(9), (10), (28), (40) of Pub. L. 100-

647 effective, except as otherwise provided, as if included in the

provision of the Tax Reform Act of 1986, Pub. L. 99-514, to which

such amendment relates, see section 1019(a) of Pub. L. 100-647, set

out as a note under section 1 of this title.

Amendment by section 6180(b)(3) of Pub. L. 100-647 applicable to

bonds issued after Nov. 10, 1988, see section 6180(c) of Pub. L.

100-647, set out as a note under section 142 of this title.

 

EFFECTIVE DATE OF 1987 AMENDMENT

Amendment by Pub. L. 100-203 applicable, with certain exceptions,

to bonds issued after Oct. 13, 1987 (other than bonds issued to

refund bonds issued on or before such date), see section 10631(c)

of Pub. L. 100-203, set out as a note under section 141 of this

title.

 

-End-