report of the Council of Development Finance Agencies (CDFA) released in July, 2014, provides analysis of the use of private activity bond volume cap data. Private activity bonds are revenue (rather than tax)-backed bonds that are issued by state or local authorities for the purpose of financing private project, such as small manufacturing facilities. If the type of project is eligible for low interest rate tax-exempt financing, they are often subject to the federally-mandated volume cap. In 2013, the volume cap for each state was equal to the greater of $95 per capita or $291,875,000. Each state may sub-allocate its volume cap among agencies, municipalities, or private activity bond categories as it chooses. In order to issue qualified private activity bonds in cap-subject categories, an issuer generally must apply to the appropriate agency to receive permission to use the volume cap. Cap that is not used at the end of the year may be carried forward for use in one of the next three years. A state's current volume cap can therefore generally be defined as its new allocation plus the carryforward from its last three years.

On a national level, a total of $32.7 billion in new volume cap allocation was available to the 50 states and the District of Columbia in 2013. When taking into account another $56.4 billion of volume cap that was carried forward from prior years, a total of approximately $90 billion of volume cap allocation was available. Notwithstanding this substantial capacity for the issuance of private activity bonds, only $8.8 billion in such bonds was issued in 2013. This marks the third straight year of decline for total issuance, from a recent high point of more than $14.5 billion in 2010. The issuance of such bonds among the states accounted for less than one third of the year's new cap allocation, and about 10% of the total available volume cap after including carry forward allocations.

The issuance of qualified small issue bonds, often referred to as industrial development bonds or IDB's, rose from $240 million in 2012 to $356 million in 2013. The CDFA report notes, however, that as recently as 2009, IDB's accounted for nearly $1 billion of private activity bond issuance.

In Georgia, the state agency responsible for the allocation of our private activity bond volume cap is the Georgia Department of Community Affairs. For 2013, the total private activity volume cap was $942,395,000, which was divided into three separate pools: an Economic Development share in the amount of $400,518,000; a Housing share, also in the amount of $400,518,000; and a Flexible share in the amount of $141,355,000. Of this nearly one billion dollars of available Volume Cap for qualifying private activity bonds, only $64,432,000 was actually allocated to bond issues that closed in 2013: a single qualified small issue industrial development bond in the amount of $5 million, and two multifamily bond issues aggregating $59,432,000.