Private Activity Bond Volume Cap

Some PABs need to obtain Volume Cap in order for the interest on them to be excludable from federal income tax. Each year the state receives its Volume Cap ceiling – representing $120 per state resident (IRC Sec. 146). Beginning with the 2017 cycle, allocation of Arizona’s Volume Cap is handled by the Arizona Finance Authority (Laws 2016 Ch. 372).

2024 Arizona Volume Cap: $928,918,000.00

Available as of 1/16/2024

Mortgage Revenue Bonds and Mortgage Credit Certificates   $278,675,400.00
Residential Rental   $351,657,200.00
Manufacturing Projects   $46,445,900.00
Director’s Discretion   $232,229,500.00
     
Total Available   $908,918,000.00

List of Allocations (2016 - Present)

Important Dates

Beginning on the first business day of each year, Arizona’s Volume Cap is allocated to issuers within the state on a first-come, first serve basis within the categories shown below (by statute, a percentage of Volume Cap is reserved for each category through March 31):

30%   Mortgage Revenue Bonds and Mortgage Credit Certificates
40%   Residential Rental
5%     Manufacturing Projects
25%   Director’s Discretion

In the event of over-subscription within any category other than Director’s Discretion, Volume Cap will be allocated by lottery. Volume Cap awarded before March 31 expires on March 31 unless extended (see FORMS below).

Until January 31, issuers may apply to reserve Volume Cap for Mortgage Revenue Bond or Mortgage Credit Certificate programs within their jurisdiction and in rural areas. Reservations expire March 31.

After March 31, unallocated Volume Cap, excluding Director’s Discretion, is pooled (no longer limited by category) and available on April 1 on a first come first serve basis. In the event of over-subscription, other than Director’s Discretion, Volume Cap will be allocated by lottery. Volume Cap awarded after March 31 expires after 90 days or December 15, whichever comes first, unless extended (see FORMS below).

By December 15, applicants seeking Carry-forward Volume Cap (Volume Cap for use in subsequent years) must submit an application for Volume Cap, which serves as the project’s Notice of Intent. Carry-forward Volume Cap expires three years from the date it is confirmed (subject to proper filing of IRS form 8328 by the applicant).

On December 17, all remaining Volume Cap, including Director's Discretion, is pooled and distributed to those having filed a Notice of Intent on or before December 15. In the event of over subscription, Carry-forward Volume Cap will be allocated by lottery.

How to Apply

1. Projects/issuers must have an inducement resolution or other official action taken by the issuer in connection with the project prior to applying for Volume Cap.

2. Completed forms (see below) and any accompanying documents should be emailed to [email protected]. Applications will be considered received so long as the application is in order. However, confirmations will not be issued until the application fee has been received.

3. Checks for fees and security deposits should be made payable to the “Arizona Finance Authority” and mailed or delivered to:

Arizona Finance Authority
ATTN: PAB Volume Cap
100 N. 7th Ave, Suite 400
Phoenix, Arizona 85007

Wire Information: 

Bank Name: Bank of America 
201 E. Washington Street 
Phoenix, AZ 85004-2343
Account Name: Office of Economic Opportunity
Account Number: 000001000985
Routing Number: 026009593


Forms

RESERVING VOLUME CAP FOR MORTGAGE PROGRAMS

If applying to reserve Volume Cap for Mortgage Revenue Bonds or Mortgage Credit Certificate programs:

Complete this Reservation form and submit by email.

Applicants will receive electronic confirmation of the reservation (or notice of denial) in a timely manner.


APPLYING FOR VOLUME CAP

If applying for Volume Cap (whether for use in the current year or as Carry-forward Volume Cap):

Complete this Request for Volume Cap form and submit by email with a copy of the project’s inducement resolution or other official action taken by the issuer in connection with the project. A non-refundable application fee of $1,000 must be paid before an award of Volume Cap will be confirmed.

Each request for Volume Cap will receive notice of award (or denial) in a timely manner, generally within three business days after receipt of all application materials. In the event of an award of Volume Cap, an invoice for the confirmation fee and any security deposit, as required by statute, will be sent. Applicants will receive electronic confirmation of an allocation only following receipt by the Arizona Finance Authority of all required fees and security deposits, if any.


EXTENDING ALLOCATED VOLUME CAP

If applying for an extension of Volume Cap already allocated:

Complete this Request for Volume Cap Extension form and submit by email.

Applicants will receive an invoice for a security deposit as required by statute if an extension is to be granted. Applicants will receive electronic confirmation of an extension only following receipt by the Arizona Finance Authority of the security deposit if required.


FILING THE CERTIFICATE OF CLOSING

After bonds are issued or a Mortgage Credit Certificate program is established:

Complete this Certificate of Closing form and submit by email, in a timely manner following the closing date and in no event later than 5:00 p.m. on the 90th day following confirmation of Volume Cap. If the project is subject to A.R.S. § 35-904(d), please attach copies of signed grant commitments.

Applicants will receive a check with reimbursement of any security deposit, less any charge for unused Volume Cap, if applicable.


Questions may be directed to:
[email protected]
(602) 845-1235


RESOURCES AND QUICK LINKS

PAB Volume Cap Fees
ARS 35-901, et seq
IRC