Glossary of Municipal Securities Terms

VOLUME CAP

The aggregate annual amount of private activity bonds (other than qualified veterans’ mortgage bonds, qualified 501(c)(3) bonds and certain categories of exempt facility bonds) that may be issued within a state in any calendar year on a tax-exempt basis. State volume cap ceilings are established annually based upon annual state population figures. The state ceiling is allocated to the various issuing entities within the state, and to particular issues of such entities, according to rules established by the state and/or the Internal Revenue Code. See: PRIVATE ACTIVITY BOND; QUALIFIED BOND.

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