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Ohio Volume Cap Summary

Overview:

Volume Cap is federally authorized and refers to the maximum amount of tax-exempt private activity bonds that can be issued annually in each state. Annually, each state receives an allocation of Volume Cap that is referred to as the “state ceiling.” This ceiling is based upon an IRS Inflation Adjustment and IRS Calendar Year Resident Population Estimates. For 2011, the IRS Inflation Adjustment is $95 per capita. Ohio’s state ceiling for calendar year 2011 is $1,095,967,880.

Tax-exempt private activity bonds facilitate public and private sector collaboration in providing financing for eligible projects at interest rates below that of the conventional market. The interest that bondholders earn is not subject to federal taxes, and may not be subject to state and local income tax depending upon the type of bond issuer. Each state establishes rules for allocating the state ceiling among those governmental units and authorities in the state that have authority to issue tax-exempt private activity bonds (i.e. counties, cities, port authorities, housing authorities, quasi state agencies, as well as some states).

• Ohio’s rules can be found under Chapter 122-4 of the Ohio Administrative Code. These rules explain the types of eligible projects based upon a formula.
  
  
• Ohio Volume Cap Fact Sheet: For a quick overview of how allocation amounts are determined based upon formula and the eligible program areas.

Application Process:

The State of Ohio accepts applications for allocation of Volume Cap from authorized bond issuers or bond counsel based upon selection rounds held three times per year. In addition, the Director of the Ohio Department of Development is authorized with a set-aside of Volume Cap for allocation on a discretionary basis. For more information on the application process, see the links on this page under Features.

Note: Those interested should consult with bond counsel and the federal tax codes governing private activity bonds before applying for Volume Cap.