Private activity bonds are tax-exempt bonds that can be issued to finance certain types of facilities
and projects for private businesses, as enumerated in the Code. They can be issued by local governments,
industrial development authorities, housing finance authorities, and other authorized entities for a
variety of projects, including, but not limited to, low- and moderate-income multifamily housing,
small manufacturing, mass transportation facilities, water and sewage facilities, solid waste disposal facilities,
electric energy and gas facilities, and facilities used by 501(c)(3) charitable organizations.
The federal government imposes an annual limit on the amount of certain types of private activity bonds that
may be issued in each state, which is called the state volume cap. The state volume cap is calculated based
on the state population. From time to time, the IRS revises the per capita multiplier for calculating state
volume cap based on inflation.
The Division determines the the annual amount of state volume cap and administers the allocation of the State volume cap to
Issuers in Florida pursuant to Sections 159.801-159.816 (the "Florida Private Activity Bond Allocation Act"). The Division
distributes the state volume cap among statutorily created pools and allocates available volume cap as set forth in the Florida
Private Activity Bond Allocation Act. Issuers request an allocation of volume cap by submitting an Notice of Intent to Issue,
and, subject to availability, receive an allocation thereof via a Confirmation. Following receipt of the Confirmation, private
activity bonds may then be issued (such bonds must be issued in an amount of at least 90% of the allocation granted for an
allocation of current year volume cap).
Under Section 146 of the Code, the following types of private activity bonds require an allocation of volume cap
by the Division:
-
Exempt facility bonds that finance the following types of facilities:
The ones that need to be nested all the types of projects that can be financed with exempt facility
bonds and that require an allocation of volume cap under section 142 of the code; the remaining
bullets are other types of bonds that are other provisions of the code - e.g., single family housing
is under 143 and manufacturing is under 144.
-
Mass commuting facilities
- Facilities for the furnishing of water
- Sewage facilities
- Solid waste disposal facilities
- Qualified residential rental projects (“multifamily affordable housing bonds”)
- Facilities for the local furnishing of electric energy or gas
- Local district heating or cooling facilities
- Qualified hazardous waste facilities
- High-speed intercity rail facilities (1)
- Qualified broadband projects
- Qualified carbon dioxide capture facilities
- Qualified mortgage bonds (“single-family affordable housing bonds”)
- Mortgage Credit Certificates
- Qualified small issue bonds (i.e., manufacturing bonds)
- Qualified student loan bonds
- Qualified redevelopment bonds
(1) Requires an allocation of volume cap in the amount of 25% of the project cost.
Due to periodic changes to the Code, Issuers should consult their bond counsel for a determination
of the eligibility of a project to be financed with private activity bonds and the need for an allocation
of state volume cap for such bonds.
Applications for allocation of volume cap must be submitted via a "Notice of Intent to Issue” and
contain the information about the Issuer and the proposed private activity bonds required in
Section 159.8051(2), Florida Statutes. All Notices of Intent to Issue must be accompanied by
an opinion or statement of counsel that the project to be financed may be financed with
private activity bonds and that the requested allocation is required to issue such bonds.
An Issuer may not submit a Notice of Intent to Issue unless the TEFRA approval required by section 147(f) of
the Code has been obtained.
An Issuer must file a separate Notice of Intent to Issue for each proposed issuance of private activity bonds.
An issuer may not request an allocation of state volume cap for more than one project or more than one purpose
in a single Notice of Intent to Issue.
An issuer may not request an allocation of state volume limitation from multiple pools in a single Notice of
Intent to Issue.
Notices of Intent to Issue are processed by the Division in accordance with Section 159.8052, Florida Statutes. All Notices of Intent to Issue filed with the Division are evaluated for compliance with the requirements of Section 159.8051, Florida Statutes. All conforming Notices of Intent to Issue are eligible to receive a Confirmation, subject to the availability of a sufficient amount of state volume limitation in the appropriate pool.
Generally, all Notices of Intent to Issue received by the Division on a given business day are considered together; if there is not enough state volume cap available in the appropriate pool(s) to fund all requests, a random drawing is held to determine the order in which Confirmations will be issued by the Division.
Unfilled requests are placed on a pending list in case allocation becomes available at a later date.
