# Municipal Bonds, 2010

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- **Document type:** Agency decision

## Text

Municipal Bonds, 2010
by Aaron Barnes

S

ince 2009, State and local governments have been
able to issue three types of bonds to finance essential
operations, facilities, infrastructure, and services for
their constituents.1 These three types are tax-exempt, tax
credit, and direct payment bonds. Tax-exempt bonds provide bondholders (or investors) interest payments that are
exempt from Federal taxation, and often State and local
taxation. Tax credit bonds differ from tax-exempt bonds
in that they are not explicitly interest-bearing obligations.
In lieu of, or in addition to, receiving periodic interest
payments from the bond issuer, a tax credit bondholder
is generally allowed an income tax credit while the bond
is outstanding.2 Direct payment bonds provide issuers
with a Federal subsidy equal to some percentage of the
total interest payment made to bondholders. The interest received is subject to Federal taxation; however, the
interest rate is generally greater than that of a tax-exempt
bond, all things being equal.
Figure A provides an overview of the municipal
bond market for 2010. State and local governments
raised $556.9 billion from tax-exempt, tax credit, and
direct payment bonds. Tax-exempt bond proceeds totaled
$420.7 billion, or 75.5 percent, of all municipal bond proceeds during the year, while tax credit bond proceeds
totaled almost $1.1 billion and accounted for 0.2 percent.
Some 24.3 percent of all municipal bond proceeds came
from the recently introduced direct payment bonds and
totaled more than $135.1 billion.
This article presents information for the three
types of municipal bond financing options available in
Calendar Year 2010. The first section looks at several defining characteristics of tax-exempt bonds and provides
an overview of the market by State. The next section
covers the development of tax credit bond programs and
presents tax credit bond data for 2010. The third section
of this article discusses direct payment bonds programs
and presents bond data for 2010.
Tax-exempt bond data presented here are based
on the populations of Forms 8038, Information Return

Aaron Barnes is an economist with the Special Studies
Special Projects Section. This data release was prepared
under the direction of Melissa Ludlum, Chief.

All Municipal Bonds: Total Tax-Exempt, Taxable
Direct Payment, and Tax Credit Bonds, by Amount
of Proceeds, 2010
[Money amounts are in millions of dollars]

Type of bond

Number

Amount of
proceeds

Percentage
of total
amount

(1)

(2)

(3)

29,315

556,890

100.0

Tax-exempt bonds

25,660

420,679

75.5

Taxable direct payment bonds [2]

3,456

135,127

24.3

199

1,084

0.2

Total [1]

Tax credit bonds [3]

[1] Includes combined data from all governmental, private activity bond, Build America
Bonds, and specified tax credit and tax credit bond returns (Form 8038-G, Information
Return for Tax-Exempt Governmental Obligations; Form 8038, Information Return for TaxExempt Private Activity Bond Issues; Form 8038-B, Information Return for Build America
Bonds and Recovery Zone Economic Development Bond; and Form 8038-TC, Information
Return for Tax Credit Bonds and Specified Tax Credit Bonds ).
[2] Includes bonds reported on Form 8038-B and Form 8038-G with a specific reference to
"Build America Bond direct payment" or "Recovery Zone Economic Development Bond" in
either their issue name or other description. Includes specified tax credit bonds reported on
Form 8038 and Form 8038-TC that indicate the issuer elected to apply section 6431(f) to
receive a refundable credit in lieu of tax credits under section 54(A). Issuers who elect to
apply section 6431(f) are eligible to receive Federal direct payments and are classified as
"taxable direct payment bonds" for purposes of this figure.
[3] Includes bonds reported on Form 8038, Form 8038-B, and Form 8038-TC with a specific
reference to "qualified school construction" bonds, "qualified zone academy" bonds, "new
clean renewable energy" bonds, "qualified energy conservation" bonds, or "Build America
Bond tax credit" bonds in either their issue name or other description. Excludes bonds
reported on Form 8038 and Form 8038-TC that indicate the issuer elected to apply section
6431(f) to receive a refundable credit in lieu of tax credits under section 54(A).
NOTE: Detail may not add to totals because of rounding.

for Tax-Exempt Private Activity Bond Issues, and
Forms 8038-G, Information Return for Tax-Exempt
Governmental Obligations, filed with the Internal
Revenue Service (IRS) for bonds issued during 2010.
Direct payment bond data are based on populations of
Forms 8038-B, Information Return for Build America
Bonds and Recovery Zone Economic Development Bonds,
and Forms 8038-TC, Information Return for Tax Credit
Bonds and Specified Tax Credit Bonds, filed for specified
tax credit bonds issued during the year.3 Data for issuers of direct payment bonds requesting credit payments
are based on the population of Forms 8038-CP, Return
for Credit Payments to Issuers of Qualified Bonds, for
bonds with interest payments occurring in Calendar Year
2010. Tax credit bond data are based on the population of
Forms 8038-TC filed for tax credit bonds issued during

The term “State” includes the District of Columbia, U.S. Possessions, and Federally recognized Indian Tribal governments.
Issuers of certain qualified tax credit bonds, specifically new clean renewable energy bonds and qualified energy conservation bonds, pay bondholders an interest payment
in addition to the tax credit the bondholder receives. For additional information, see “Frequently Asked Question on Qualified Tax Credit Bonds and Specified Tax Credit
Bonds” at http://www.irs.gov/pub/irs-tege/tc_and_stcb_q-a._09-07-10_1.5.pdf.
3 Issuers of Build America Bonds and recovery zone economic development bonds were instructed to file Form 8038-B, Information Return for Build America Bonds and
Recovery Zone Economic Development Bonds. The 2010 data contain a small number of Forms 8038-G, Information Return for Tax-Exempt Governmental Obligations, with a
specific reference to “Build America Bond direct payment” or “Recovery Zone Economic Development Bond” in either their issue name or other description.
1
2

112

Figure A

Municipal Bonds, 2010
Statistics of Income Bulletin | Spring 2013

Calendar Year 2010.4 The vast majority of these returns
were filed in 2010 and 2011.5

Tax-Exempt Bonds

Tax-exempt bonds issued by State and local governments
are classified as either “governmental” or “private activity,” depending on whether the proceeds are used
and secured by public or private entities and resources.
Between Calendar Years 2009 and 2010, the total amount
of tax-exempt bonds issued by State and local governments decreased 5.7 percent, from $446.2 billion to
$420.7 billion.6 For 2010, governmental bonds accounted
for $293.6 billion (69.8 percent) of total tax-exempt bond
proceeds, a decrease of 13.8 percent from $340.7 billion
issued in 2009. Private activity bonds accounted for the
remaining $127.1 billion (30.2 percent).
When a bond is issued, the issuer is obligated to
repay the borrowed bond proceeds at a specified rate of
interest, by some future date. For Federal income tax
purposes, investors who purchase governmental bonds
and certain types of private activity bonds are able to
exclude the bond interest from their gross incomes.7,8
This tax exemption lowers the borrowing cost incurred
by tax-exempt bond issuers, since bondholders are generally willing to accept an interest rate lower than that
earned on comparable taxable bonds.9,10
Both governmental and private activity bonds are
obligations issued by, or on behalf of, State and local
governmental units; use of the proceeds differentiates

the two. Governmental bond proceeds finance essential
government operations, facilities, and services for general public use, and the debt service on these bonds is
paid from general governmental sources. Private activity
bonds are issued by, or on behalf of, State or local governments to finance the project of a private user. Since
private activity bond proceeds are used by one or more
private entities, the debt service is also paid or secured
by one or more private entities.11 Interest income earned
on most private activity bonds is taxable. However, over
the years, Congress has deemed certain types of private
activities necessary for the public good, and therefore,
interest income earned on “qualified private activity
bonds,” as defined in IRC section 141(e), is generally tax
exempt.12,13

Tax-Exempt Bond Volume, by Term of Issue

Bonds are classified as either short term or long term,
depending on the length of time from issuance to maturity. Bonds having maturities of less than 13 months are
typically classified as short term, while those having maturities of 13 months or more are classified as long term.
Of the $293.6 billion in tax-exempt governmental bonds
issued, long-term bonds accounted for $217.3 billion,
more than 74 percent of all governmental bond proceeds
in 2010. Long-term bonds are generally used to finance
construction or other capital improvement projects.
The remaining $76.4 billion of governmental bonds
were issued for short-term projects. Most short-term

4 Prior to June 2010, issuers of tax credit bonds were instructed to file Form 8038, Information Return for Tax-Exempt Private Activity Bond Issues. The 2010 data include a
small number of tax credit bonds reported on Form 8038 that specifically reference “qualified school construction” bonds, “clean renewable energy” bonds, “Midwestern tax
credit” bonds, or “qualified zone academy” bonds. For tax credit bonds issued after March 2010, issuers were required to file the new Form 8038-TC, Information Return for
Tax Credit Bonds and Specified Tax Credit Bonds.
5 Bond issuers were required to file these information returns by the 15th day of the second calendar month after the close of the calendar quarter in which the bond was issued.
6 For Calendar Year 2009 data, see Barnes, Aaron, “Municipal Bonds, 2009,” Statistics of Income Bulletin, Fall 2011, Volume 31, Number 2.
7 In addition, for State income tax purposes, most States allow for the exclusion of interest on bonds issued by government agencies within their own States, thus increasing
the benefit to the bondholder.
8 The extent of exclusion of interest income can vary with taxpayer characteristics. For example, banks and insurance companies may be limited as to how much tax-exempt
interest they can exclude.
9 The interest exclusion for tax-exempt bonds is not allowed for arbitrage bonds or unregistered bonds. An arbitrage bond is one in which any portion of the proceeds is used
to purchase higher-yielding investments or to replace proceeds that have been used to purchase higher-yielding investments. Certain rules allow for arbitrage earnings with
respect to tax-exempt bonds within a specified period, as long as these earnings are rebated to the Department of the Treasury.
10 A registered bond is defined as “a bond whose owner is designated on records maintained by a registrar, the ownership of which cannot be transferred without the registrar
recording the transfer in its records,” according to the Municipal Securities Rulemaking Board’s Glossary of Municipal Securities Terms, http://www.msrb.org/msrbl/glossary/.
See also IRC section 149(a) for additional information.
11 Section 141(a) of the Internal Revenue Code (IRC) provides that the term private activity bond means any bond issued as part of an issue that meets: 1) the private business
tests set forth in the IRC section 141(b); or 2) the private loan financing test set forth in IRC section 141(c). The private business tests of IRC section 141(b) define a bond as a
private activity bond if both of the following criteria are met: 1) more than 10 percent of the bond proceeds are used for a private business purpose; and 2) more than 10 percent
of the bond debt service is derived from private business use and is secured by privately used property. The private loan-financing test of IRC section 141(c) defines a bond as
a private activity bond if the amount of proceeds used to (directly or indirectly) finance loans to nongovernmental persons exceeds the lesser of $5 million or 5 percent of the
proceeds.
12 Tax-exempt private activity bonds include exempt facility bonds, qualified mortgage bonds, qualified veterans’ mortgage bonds, qualified small issue bonds, qualified student
loan bonds, qualified redevelopment bonds, and qualified section 501(c)(3) bonds, all of which are defined in the “Explanation of Terms” section of this article. Examples of
exempt facilities include airports; docks and wharves; sewage facilities; solid waste disposal facilities; qualified residential rental projects; and facilities for the local furnishing
of electricity or gas. Qualified section 501(c)(3) bonds are issued by State and local governments to finance the activities of charitable and similar organizations that are tax
exempt under IRC section 501(c)(3). The primary beneficiaries of these bonds are hospitals, universities, and organizations that provide low-income housing or assisted living
facilities.
13 The interest income from qualified private activity bonds (other than qualified section 501(c)(3) bonds) is considered a tax preference for the alternative minimum tax
calculations.

113

Municipal Bonds, 2010
Statistics of Income Bulletin | Spring 2013

governmental bonds are issued as tax anticipation notes
(TANs), revenue anticipation notes (RANs), or bond
anticipation notes (BANs). TANs and RANs generally
mature within 1 year of issuance, at which time the proceeds are paid from specific tax receipts or other revenue
sources. The proceeds of a BAN are typically used to
pay for start-up costs associated with a future long-term,
bond-financed project. A renewal BAN can be issued on
maturity of an outstanding BAN until, eventually, the
proceeds of the future bond issue are used to pay off or
retire the outstanding BAN. BANs, TANs, and RANs
accounted for almost $73.1 billion, nearly 24.9 percent
of the total governmental bond proceeds for 2010. Shortterm private activity bond proceeds totaled more than
$3.4 billion, only 2.7 percent of the total private activity
bond proceeds for 2010.

Long-Term, Tax-Exempt Bond Volume, by Type
of Issue

Total bond issuance is composed of both nonrefunding
(“new money”) issues and refunding issues. Proceeds
from new money issues finance new capital projects,
while proceeds from refunding issues retire outstanding
debt of prior bond issues. A bond issue can include both
new and refunding proceeds.
Figures B and C show total long-term issuance, as
well as its distribution between new money and refunding proceeds for both governmental and tax-exempt
private activity bonds issued between 2006 and 2010.
In 2010, some 43.5 percent of all long-term governmental bond proceeds were new money issues (Figure B).
Proceeds from new money government bonds decreased

Figure B
Volume of Long-Term, Tax-Exempt Governmental Bonds Issued, by Type and Issue Year, 2006-2010
Billions of dollars
350
300

$316.3
$272.2

$271.7
$262.4

250

$217.3

200
$200.1

150
100

$153.8

$180.2

$151.1
$122.6

$92.1
$116.1

$117.9

$111.4

50
0
2006

2007

2008

2009

Issue year
All issues

NOTE: Detail may not add to totals because of rounding.

114

New money proceeds

Refunding proceeds

$94.6

2010

Municipal Bonds, 2010
Statistics of Income Bulletin | Spring 2013

Figure C
Volume of Long-Term, Tax-Exempt Private Activity Bonds Issued, by Type and Issue Year, 2006–2010
Billions of dollars
160
$136.6

140
120

$132.8
$123.6

$108.6
$102.8

100
80

$86.6
$63.3

$63.3
$80.3

$52.2

60
40

$
$45.3

$60.3

$52.5

$50 0
$50.0

$50.6

20
0
2006

2007

2008

2009

2010

Issue year
All issues

New money proceeds

37.4 percent, from $151.1 billion in 2009 to $94.6 billion in 2010, a 44.7-percent decline from the preceding
4-year average of $171.3 billion. Refunding governmental bond proceeds increased 10.1 percent, from $111.4
billion in 2009 to $122.6 billion in 2010, an approximate
12.1-percent increase from the preceding 4-year average of $109.4 billion.14 This is the first time since 1993
that States issued more long-term governmental bond
refunding proceeds than new money proceeds. A low
interest rate environment, combined with the availability
of direct payment bonds, are possible reasons for issuing
more long-term governmental bond proceeds for refunding issues than for new money issues.
For 2010, some 51.5 percent of all long-term private
activity bond proceeds were new money issues (Figure
C). New money private activity bond proceeds increased
21.9 percent from $52.2 billion in 2009 to $63.3 billion
in 2010; however, new money proceeds were 0.5 percent
lower than the preceding 4-year average of $63.7 billion.
Refunding private activity bond proceeds increased 19.2
14

Refunding proceeds

percent from $50.6 billion in 2009 to $60.3 billion in
2010, some 6.6 percent higher than the preceding 4-year
average of $56.6 billion.

Long-Term, Tax-Exempt Bond Volume, by
Selected Purpose

Figures D and E present the composition of long-term,
tax-exempt bond proceeds for both governmental and
private activity bond issues, by selected purpose and type
of issue. During 2010, more than half (55.1 percent) of
the total $217.3 billion in long-term, governmental bond
proceeds financed education, utilities, and transportation projects. Nearly one-third (33.2 percent) of these
proceeds were used for “other bond purposes.” Proceeds
used for other bond purposes may contain issues that
were not separately allocated by the issuer, or issues not
applicable to any of the purposes listed on Form 8038-G.
Issuers of governmental bonds for education, utilities,
and other purposes used more proceeds to refund prior
issues than to finance new capital projects. Conversely,

Additional tax-exempt bond data, including data for prior years, can be found on SOI’s Tax Stats Web pages: http://www.irs.gov/taxstats. Click on “Tax-Exempt Bonds.”

115

Municipal Bonds, 2010
Statistics of Income Bulletin | Spring 2013

Figure D
Long-Term, Tax-Exempt Governmental Bonds, by Selected Bond Purpose and Type of Issue, 2010
Billions of dollars
80
70
60
50

$41.2

40

$30.5

30
$25.6

$14.4

20
$30.9
$21.7

10
0

Other purposes
[1]

Education

$
$12.6

$15 0
$15.0

Utilities

Transportation

$6.0
$7.7
Environment

$2 4
$2.4
$2.8
Public safety

$
$1.8

$1.8

Health and
hospital

Bond purpose
New money proceeds

Refunding proceeds

[1] "Other purposes" refer to obligations for which a specific purpose either did not apply or was not clearly indicated on Form 8038-G. It does not include
specific purposes, such as housing and bond and tax/revenue anticipation notes, that are not shown separately in the figure. See Table 2.

issuers of governmental bonds for transportation, environment, and public safety used more proceeds to finance
new capital projects than to refund prior bond issues
(Figure D). Only governmental bonds with proceeds used
for health and hospital projects spent an equal amount to
finance new capital projects and refund prior bond issues.
Qualified section 501(c)(3) bonds include total qualified hospital bonds and qualified nonhospital bonds
issued to benefit entities exempt from income tax under
IRC section 501(c)(3). Combined, these bonds accounted
for 49.3 percent of the $123.6 billion of long-term, private
activity bond proceeds for 2010 (Figure E). For almost all
private activity bond purposes shown in Figure E, more
proceeds were spent financing new capital projects than
refunding prior bond issues, with the exceptions of qualified hospital and water, sewage, and solid waste disposal.

See Internal Revenue Notice 2009-50 for additional information.
IRC section 144(c)(6)(b) requires that proceeds may not be used for any private or commercial golf course, country club, massage parlor, hot tub facility, suntan facility,
racetrack or other facility used for gambling, or any store whose principal business is the sale of alcoholic beverages for consumption on the premises.
15
16

116

The American Recovery and Reinvestment Act of
2009 (ARRA) added IRC section 1400U-3, which authorized the issuance of tax-exempt recovery zone exempt
facility bonds. These are private activity bonds issued
by State and local governments to finance qualified projects located in “recovery zones.” A recovery zone is an
area that has significant poverty, unemployment, home
foreclosure rates, general distress, or distress from the
closure of a military installation. It also includes those
areas designated as an empowerment zone or renewal
community.15 Qualified projects include any trade or
business except those used for residential real estate,
and any trade or business under IRC 144(c)(6)(B).16 For
2010, there were 427 recovery zone exempt facility bonds
issued for a total of $6.3 billion in long-term, new money
proceeds.

Municipal Bonds, 2010
Statistics of Income Bulletin | Spring 2013

Figure E
Long-Term, Tax-Exempt Private Activity Bonds, by Selected Bond Purpose and Type of
Issue, 2010
Billions of dollars
35
30
25

$15.4
$17.7

20
15
10

$6.7
$16.2
$11.7

5
0

Qualified section
501(c)(3)
nonhospital

Qualified
hospital

$3.1

$8.0

$4.1

$4.3

Airport

Qualified
mortgage

$6.3

$2.7
Water, sewage,
and solid waste
disposal

$2.2
$3.5

Recovery zone
Qualified
facility bonds residential rental

Bond purpose
New money proceeds

Overview of Tax-Exempt Bond Issues, by State

Figure F presents States with the largest absolute decreases
and increases in the amount of new money long-term, taxexempt governmental bonds. Total proceeds for this type
of bond decreased $56.4 billion (37.3 percent) from 2009
to 2010, falling to $94.6 billion. Issuances in California and
New York fell 48 percent and 59.6 percent, respectively, and
these States experienced the largest absolute decreases in
these bond proceeds. Texas experienced a decrease (40.5
percent) in this type of governmental bond proceeds during
the year. In all, from 2009 to 2010, new money long-term
governmental bond proceeds decreased in 40 States by
nearly $60.2 billion.
Florida experienced the largest absolute increase
(16.8 percent) in new money long-term governmental
bond proceeds from 2009 to 2010. Other States with
significant increases included U.S. Possessions (up 60
17

Refunding proceeds

percent), Oklahoma (up 18.9 percent), and Louisiana (up
24.3 percent). In all, from 2009 to 2010, new money longterm governmental bond proceeds increased in 12 States
by slightly more than $3.7 billion.
Figure G presents the amount of governmental bond
proceeds for the top 15 States, in terms of total dollar
volume of new money long-term, tax-exempt bonds
issued for 2010. Combined, these States accounted for
71.9 percent of the total $94.6 billion of new money
long-term governmental bond proceeds for the year.
About $42.7 billion (45.1 percent) of the total proceeds
were issued by authorities in the following five States:
California (15.3 percent), Texas (9.1 percent), Florida (8.9
percent), New York (7 percent), and Pennsylvania (4.8
percent). Together, according to 2010 Census estimates,
these five States accounted for almost 34.6 percent of the
total U.S. population.17

The resident population estimates for July 1, 2010, were produced by the U.S. Bureau of the Census.

117

Municipal Bonds, 2010
Statistics of Income Bulletin | Spring 2013

Figure F
States with Largest Decreases and Increases in Amount of New Money Long-Term, Tax-Exempt
Governmental Bonds, 2009–2010

[Money amounts are in millions of dollars]

State of issue

2009
amount

2010
amount

(1)

(2)

All States

Change in amount

Percentage change
in amount

(3)

(4)

151,050

94,644

-56,406

-37.3

California

27,872

14,502

-13,370

-48.0

New York

16,364

6,612

-9,752

-59.6

Texas

14,512

8,630

-5,882

-40.5

States with decreases:

Connecticut

3,453

1,160

-2,293

-66.4

Virginia

3,740

1,599

-2,141

-57.2

Florida

7,224

8,436

1,212

16.8

U.S. Possessions [1]

1,966

3,145

1,179

60.0

Oklahoma

1,605

1,909

304

18.9

Louisiana

1,239

1,540

301

24.3

177

380

203

114.7

States with increases:

New Hampshire
[1] U.S. Possessions include Guam, Puerto Rico, and the U.S. Virgin Islands.
NOTE: Detail may not add to totals because of rounding.

Figure G
New Money Long-Term, Tax-Exempt Governmental Bonds, by Selected Bond Purpose, for Top 15
States, Ranked by Total Tax-Exempt Governmental Bond Issuance, 2010

[Money amounts are in millions of dollars]

Total
State of issue

Other purposes [1]

Education

Transportation

Utilities

Environment

Amount

Amount

Percent of
State total

Amount

Percent of
State total

Amount

Percent of
State total

Amount

Percent of
State total

Amount

Percent of
State total

(1)

(2)

(3)

(4)

(5)

(6)

(7)

(8)

(9)

(10)

(11)

94,644

30,939

32.7

21,682

22.9

14,962

15.8

12,596

13.3

7,679

8.1

California

14,502

1,660

11.4

4,010

27.7

2,726

18.8

2,897

20.0

1,408

9.7

Texas

8,630

2,211

25.6

3,243

37.6

570

6.6

2,194

25.4

194

2.2

Florida

8,436

4,138

49.1

897

10.6

1,711

20.3

1,148

13.6

447

5.3

New York

6,612

3,218

48.7

1,071

16.2

1,645

24.9

119

1.8

97

1.5

Pennsylvania

4,529

847

18.7

1,356

29.9

633

14.0

498

11.0

829

18.3

All States

118

Selected bond purpose

Illinois

3,709

2,241

60.4

789

21.3

511

13.8

35

0.9

d

d

Arizona

3,227

1,703

52.8

342

10.6

693

21.5

d

d

405

12.6

U.S. Possessions [2]

3,145

2,449

77.9

d

d

0

0

d

d

0

0

Washington

2,655

1,171

44.1

393

14.8

66

2.5

333

12.5

461

17.4

New Jersey

2,336

578

24.7

529

22.6

673

28.8

91

3.9

355

15.2

North Carolina

2,295

1,053

45.9

595

25.9

168

7.3

114

5.0

32

1.4

Minnesota

2,166

1,096

50.6

281

13.0

355

16.4

244

11.3

86

4.0

Georgia

2,091

456

21.8

322

15.4

d

d

958

45.8

216

10.3

Oklahoma

1,909

163

8.5

976

51.1

250

13.1

397

20.8

d

d

Iowa

1,809

568

31.4

719

39.7

70

3.9

84

4.6

129

7.1

d—Data deleted to avoid disclosure of information about specific bonds. However, the data are included in the appropriate totals.
[1] For purposes of this figure, "other purposes" refers to obligations for which a specific purpose either did not apply or was not clearly indicated on the Form 8038-G. It does not
include specific purposes, such as public safety and housing, that are not shown separately in the figure. See Table 1.
[2] U.S. Possessions include Guam, Puerto Rico, and the U.S. Virgin Islands.
NOTE: Detail may not add to totals because of rounding.

Municipal Bonds, 2010
Statistics of Income Bulletin | Spring 2013

An examination of issuance by State reveals some
differences in the allocation of proceeds by bond purpose. Overall, for 2010, some 22.9 percent of the $94.6
billion of new money long-term governmental bonds was
issued for educational purposes. However, of the total
amount for these bonds issued in Oklahoma, 51.1 percent was issued for education. In contrast, 10.6 percent
of long-term governmental bonds issued in both Florida
and Arizona was for this purpose.
Transportation projects accounted for 15.8 percent
of States’ total new money long-term proceeds. In New
Jersey, however, 28.8 percent of the total amount of new
money long-term governmental bonds was for transportation, while in Iowa, only 3.9 percent was allocated for
the same purpose. Transportation bonds accounted for
only 2.5 percent of Washington’s total amount of new
money long-term bond issues.
Utility bond proceeds accounted for 13.3 percent of
all new money long-term governmental bonds in 2010.
Georgia and Texas each spent a large portion of their
total allocation on utility projects, 45.8 percent and 25.4
percent, respectively. In contrast, New York allocated
1.8 percent of its total amount of new money long-term
bonds to utility projects.

Figure H presents States with the largest absolute
decreases and increases in the amount of new money
long-term, tax-exempt private activity bonds from 2009
to 2010. Total new money long-term, tax-exempt private
activity bond proceeds increased by approximately $11.1
billion (21.3 percent). New York experienced the largest
absolute decrease (34.2 percent) in these bond proceeds
in 2010. States with significant relative decreases in new
money long-term, tax-exempt private activity bonds included California (down 17.7 percent), Illinois (down 14.6
percent), and New Mexico (down 79.9 percent). For the
17 States that reduced their issuance of these types of
bonds in 2010, the overall reduction in proceeds totaled
$6.1 billion.
Louisiana experienced the largest relative increase
(277.6 percent) in new money long-term, tax-exempt private activity bond proceeds, which was due to increases
in Qualified Gulf Opportunity Zone exempt facility
bonds and Gulf Opportunity Zone mortgage bonds.18
From 2009 to 2010, other States with significant increases
in these types of bond issues included Texas (up 90.7
percent) and Florida (up 97 percent). In all, new money
long-term, tax-exempt private activity bond proceeds increased in 35 States by just less than $17.2 billion.

Figure H
States with Largest Decreases and Increases in Amount of New Money Long-Term, Tax-Exempt Private
Activity Bonds, 2009–2010
[Money amounts are in millions of dollars]

State of issue

All States

2009
amount

2010
amount

Change in
amount

Percentage change in
amount

(1)

(2)

(3)

(4)

52,216

63,330

11,114

21.3

States with decreases:
New York

7,582

4,990

-2,592

-34.2

California

7,389

6,082

-1,307

-17.7

Illinois

3,007

2,567

-440

-14.6

Indiana

1,162

774

-388

-33.4

462

93

-369

-79.9

New Mexico
States with increases:
Louisiana

941

3,553

2,612

277.6

Texas

2,620

4,997

2,377

90.7

Florida

2,102

4,141

2,039

97.0

Mississippi

517

1,605

1,088

210.4

Georgia

1,014

1,852

838

82.6

NOTE: Detail may not add to totals because of rounding.

18 The Gulf Opportunity Zone Act of 2005, signed into law as Public Law 109-135 on December 21, 2005, authorized a new category of tax-exempt bonds. The proceeds
of such bonds are used to finance the construction and rehabilitation of certain residential and nonresidential property located in certain localities of Alabama, Louisiana,
and Mississippi, designated as the “Gulf Opportunity Zone.” This area constitutes the portion of the Hurricane Katrina disaster area, determined by the President to warrant
individual or individual and public assistance from the Federal government, under the Robert T. Stafford Disaster Relief and Emergency Assistance Act.

119

Municipal Bonds, 2010
Statistics of Income Bulletin | Spring 2013

Figure I
New Money Long-Term, Tax-Exempt Private Activity Bond Proceeds, by Selected Bond Purpose, for Top
15 States, Ranked by Total Tax-Exempt Private Activity Bond Issuance, 2010
[Money amounts are in millions of dollars]

Selected bond purpose
Total
proceeds
State of issue

Qualified section
501(c)(3) nonhospital

Airports, docks, and
wharves [1]

Qualified hospital

Recovery zone exempt
facility bonds

Qualified mortgage

Amount

Amount

Percent of
State total

Amount

Percent of
State total

Amount

Percent of
State total

Amount

Percent of
State total

Amount

Percent of
State total

(1)

(2)

(3)

(4)

(5)

(6)

(7)

(8)

(9)

(10)

(11)

63,330

16,202

25.6

11,710

18.5

8,794

13.9

6,267

9.9

4,295

6.8

California

6,082

1,526

25.1

349

5.7

2,568

42.2

559

9.2

d

d

Texas

4,997

1,112

22.3

790

15.8

783

15.7

d

d

0

0

New York

4,990

1,649

33.0

504

10.1

d

d

470

9.4

209

4.2
10.6

All States

Florida

4,141

955

23.1

460

11.1

983

23.7

194

4.7

439

Louisiana

3,553

325

9.1

d

d

d

d

17

0.5

d

d

Pennsylvania

2,733

913

33.4

864

31.6

d

d

84

3.1

d

d

Illinois

2,567

1,022

39.8

531

20.7

111

4.3

459

17.9

0

0

Massachusetts

2,442

1,085

44.4

520

21.3

d

d

269

11.0

d

d

Ohio

2,276

456

20.0

829

36.4

d

d

488

21.4

d

d

Georgia

1,852

327

17.7

450

24.3

d

d

239

12.9

d

d

New Jersey

1,685

766

45.5

393

23.3

0

0

110

6.5

0

0

Virginia

1,618

386

23.9

378

23.4

0

0

133

8.2

d

d

Mississippi

1,605

20

1.2

d

d

0

0

d

d

d

d

Minnesota

1,240

553

44.6

103

8.3

d

d

134

10.8

d

d

North Carolina

1,226

d

d

531

43.3

0

0.0

384

31.3

0

0

d—Data deleted to avoid disclosure of information about specific bonds. However, the data are included in the appropriate totals.
[1] For purposes of this figure, certain bond purposes were combined. The data here will differ slightly from the the data in Tables 7 and 9.
NOTE: Detail may not add to totals because of rounding.

Figure I shows the amount of bond proceeds for
the top 15 States, in terms of total dollar volume of new
money long-term, tax-exempt private activity bonds
issued for 2010. Combined, these States accounted for
67.9 percent of the total $63.3 billion of new money longterm, tax-exempt private activity bond proceeds for the
year. Almost $23.8 billion (37.5 percent) of the total
proceeds was issued by authorities in the following five
States: California (9.6 percent), Texas (7.9 percent), New
York (7.9 percent), Florida (6.5 percent), and Louisiana
(5.6 percent). Together, according to 2010 Census estimates, these five States accounted for almost 34.1 percent
of the total U.S. population.
Similar to governmental bond issuance, there were
differences among the States in the composition of total
new money long-term, tax-exempt private activity bond
issuance, by purpose. Examining the bond allocations
by purpose for 2010 overall, 25.6 percent of this type of
proceed was for qualified IRC section 501(c)(3) nonhos120

pital organizations; another 18.5 percent was issued for
qualified hospital bonds.
Of the total amount of new money long-term, taxexempt private activity bond proceeds raised in New
Jersey, 45.5 percent was issued for IRC section 501(c)(3)
nonhospital organizations, compared to 9.1 percent in
Louisiana and 1.2 percent in Mississippi. Qualified hospital bonds accounted for 43.3 percent of North Carolina’s
new money long-term, tax-exempt private activity bond
proceeds, compared to 10.1 percent and 8.3 percent for
New York and Minnesota, respectively. Of the top 15
States, California had the smallest total issuance for qualified hospitals, with only 5.7 percent of its total proceeds
allocated for this purpose.
Bonds issued for airports, docks, and wharves accounted for 13.9 percent of all new money long-term,
tax-exempt private activity bond proceeds in 2010, totaling $8.8 billion. California committed 42.2 percent of
its total new money long-term private activity bond pro-

Municipal Bonds, 2010
Statistics of Income Bulletin | Spring 2013

ceeds toward airports, docks, and wharves, while Florida
allocated 23.7 percent for this purpose.
Together, States allocated 9.9 percent of the $63.3
billion of new money long-term, tax-exempt private activity bonds in 2010 for recovery zone exempt facility
bonds, which allow State and local governments to issue
tax-exempt bonds for projects located in areas designated
as “recovery zone property.”19 As previously mentioned,
recovery zones are areas having significant poverty, unemployment, home foreclosure rates, general distress,
or distress from the closure of a military installation,
or those areas designated as an empowerment zone or
renewal community. North Carolina and Ohio directed
a much larger share of their total new money long-term
proceeds to this purpose, 31.3 percent and 21.4 percent,
respectively. In contrast, Louisiana directed only 0.5
percent of its new money long-term bond proceeds to
recovery zone exempt facility bonds.

Tax Credit Bonds

Tax credit bonds differ from tax-exempt bonds in that
they are not explicitly interest-bearing obligations. In
lieu of or in addition to receiving periodic interest payments from the issuer, a bondholder is generally allowed
an income tax credit while the bond is outstanding. The
amount of the credit is determined by multiplying the
bond’s subsidy rate times the credit rate and face amount
on the holder’s bond. The credit rate on the bonds is determined by the Secretary of the Treasury and is an estimate of the rate that permits issuance of such bonds
without discount and interest cost to the qualified issuer.
The credit is includable in the bondholder’s gross income
(as if it were an interest payment on the bond) and can be
claimed against regular income tax liability and alternative minimum tax liability.
The Taxpayer Relief Act of 1997 created the first type
of tax credit bond—the qualified zone academy bond.
In 2005, two additional types—clean renewable energy
bonds and Gulf tax credit bonds—were created. Since
then, various legislation has authorized additional types
of tax credit bonds, such as qualified forestry conservation bonds, new clean renewable energy bonds, qualified
energy conservation bonds, Midwestern tax credit bonds,
and qualified school construction bonds.20,21 Issuers

of tax credit bonds are required to file Form 8038-TC,
Information Return for Tax Credit Bonds and Specified
Tax Credit Bonds. ARRA included several provisions
that affected tax credit bonds. Most notably, the Act authorized the issuance of qualified school construction
bonds, the proceeds of which finance the construction,
rehabilitation, or repair of a public school facility or the
purchase of land on which a public school facility shall
be built.22 ARRA also created tax credit Build America
Bonds, which could be issued for any purpose traditionally funded with tax-exempt governmental bonds and
subject to the same restrictions that apply to tax-exempt
governmental bonds under IRC section 103. Tax credit
Build America Bonds are interest-bearing obligations,
which differentiates them from traditional tax credit
bonds that provide bondholders a tax credit in lieu of any
interest payment. ARRA also amended various IRC sections to modify volume cap provisions for several types
of existing tax credit bonds.
The Hiring Incentives to Restore Employment Act
of 2010 (HIRE) enacted on March 18, 2010, extended
direct payment provisions to certain issuers of qualified
tax credit bonds under IRC section 6431(f).23 Once an
issuer elected to apply section 6431(f), the qualified tax
credit bond became a “specified tax credit bond,” which
is a direct payment bond. In lieu of issuing bonds with a
tax credit to the bondholder, issuers of new clean renewable energy bonds, qualified energy conservation bonds,
qualified zone academy bonds, and qualified school construction bonds could elect to receive a Federal direct
payment subsidy equal to a certain percentage of their
borrowing costs. Specifically, issuers of qualified school
construction bonds and qualified zone academy bonds
could receive the lesser of 100 percent (70 percent for
new clean renewable energy bonds and qualified energy
conservation bonds) of their interest payment or the
amount of interest that would have been paid if the interest rate was determined at the tax credit bond rate.
Once an issuer elects to apply for the direct payment
subsidy under IRC section 6431(f), it is irrevocable, and
the qualified tax credit bond is regarded as a specified
tax credit bond. Data on specified tax credit bonds are
presented in the discussion of direct payment bonds in
the next section of this article.

Recovery zone exempt facility bonds were created under ARRA, IRC section 1400U-3. Recovery zone exempt facility bonds are subject to volume cap restrictions and had
to be issued before January 1, 2011.
20 The Food, Conservation, and Energy Act of 2008 created qualified forestry conservation bonds. The Energy Improvement and Extension Act of 2008 produced new clean
renewable energy bonds and qualified energy conservation bonds. The Tax Extenders and Alternative Minimum Tax Relief Act of 2008 created Midwestern tax credit bonds.
21 Different categories of tax credit bonds vary in terms of the allowable tax credit rate, maturity, and other features. For example, clean renewable energy bonds and qualified
zone academy bonds have a 100-percent tax credit subsidy; however, new clean renewable energy bonds and qualified energy conservation bonds have a 70-percent subsidy.
Borrowers are likely to offer these issues at a discount or pay taxable interest in addition to the tax credit received by the lender.
22 See Internal Revenue Notice 2010-17 for current information on qualified school construction bonds.
23 IRC section 54(A)(d)(1) states that the term “qualified tax credit bond” means—(a) a qualified forestry conservation bond, (b) a new clean renewable energy bond, (c) a
qualified energy conservation bond, (d) a qualified zone academy bond, or (e) a qualified school construction bond.
19

121

Municipal Bonds, 2010
Statistics of Income Bulletin | Spring 2013

Figure J

Direct Payment Bonds

Tax Credit Bonds, by Issue Type, 2010
[Money amounts are in millions of dollars]

Type of bond

Tax credit bonds [2]
Number

Total [1]

Amount

199

1,084

Qualified school construction bonds

134

879

Qualified zone academy bonds

43

163

All other tax credit bonds, combined [3]

22

42

[1] Includes bonds reported on Form 8038, Form 8038-B, and Form 8038-TC with a
specific reference to "qualified school construction" bonds, "qualified zone academy"
bonds, "new clean renewable energy" bonds, "qualified energy conservation" bonds, or
"Build America Bond tax credit" bonds in either their issue name or other description.
Excludes bonds reported on Form 8038 and Form 8038-TC that indicate the issuer
elected to apply section 6431(f) to receive a refundable credit in lieu of tax credits under
section 54(A).
[2] Includes tax credit bonds reported on Form 8038-TC, Information Return for Tax
Credit Bonds and Specified Tax Credit Bonds , Form 8038, Information Return for TaxExempt Private Activity Bond Issues, and Form 8038-B, Information Return for Build
America Bonds and Recovery Zone Economic Development Bonds, with a reference to
"new clean renewable energy" bond, "qualified energy conservation" bond, "qualified
zone academy" bond, "qualified school construction" bond, or "Build America Bond tax
credit" bonds in the issue name or the description field for other issue type.
[3] For purposes of this figure, this category includes tax credit bonds issued for new
clean renewable energy bonds, qualified energy conservation bonds, and Build America
Bond tax credits in order to avoid disclosure of information about specific bonds.

There were nearly $1.1 billion in tax credit bond
proceeds in 2010, representing a 70.9-percent decrease
from the $3.7 billion issued in 2009 (Figure J). Qualified
school construction bond proceeds totaled $879 million,
equaling roughly 81.1 percent of the entire tax credit
bond market. Qualified zone academy bonds accounted
for 15 percent of all tax credit bonds issued in 2010, with
proceeds totaling $163 million. All other tax credit bonds
combined, which include new clean renewable energy
bonds, qualified energy conservation bonds, and tax
credit “Build America Bond,” accounted for another $42
million in total tax credit bond proceeds in 2010.
The top five States with the highest dollar issuance
of tax credit bonds were Texas, Indiana, Minnesota,
California, and New York (Figure K). Combined, these
States issued $551 million (50.8 percent) of all tax credit
bonds. Texas issued the largest amount of tax credit
bonds, accounting for $211 million (19.5 percent) of the
total. Indiana and Minnesota had similar amounts of tax
credit bond issuance, with $98 million (9 percent) and
$95 million (8.8 percent), respectively.

Figure K
Tax Credit Bonds, for All States and Top Five
States, 2010
[Money amounts are in millions of dollars]

Total tax credit bonds [1]
State of issue

Number

Amount

Percentage
of total
amount

Rank

(1)

(2)

(3)

(4)

199

1,084

100.0

N/A

Top five States, total

69

551

50.8

N/A

Texas

28

211

19.5

1

Indiana

10

98

9.0

2

Minnesota

17

95

8.8

3

California

8

76

7.0

4

New York

6

71

6.5

5

All States

N/A—Not applicable. Rank applies only to individual States.
[1] Combines tax credit bonds reported on Form 8038-TC, Information Return for Tax
Credit Bonds and Specified Tax Credit Bonds. Data also combines tax credit bonds
reported on Form 8038, Information Return for Tax-Exempt Private Activity Bond
Issues, and Form 8038-B, Information Return for Build America Bonds and Recovery
Zone Economic Development Bonds, with a reference to "new clean renewable
energy" bond, "qualified energy conservation" bond, "qualified zone academy" bond,
"qualified school construction" bond, or "Build America Bond tax credit" bonds in the
issue name or the description field for other issue type.
NOTE: Detail may not add to totals because of rounding.

For additional information regarding ARRA provisions affecting tax credit bonds, see Barnes, Aaron, “Tax-Exempt Bonds, 2009,” Statistics of Income Bulletin, Fall 2011,
Volume 31, Number 2.
Internal Revenue Notice 2010-35 states, “Section 301 of the Hiring Incentives to Restore Employment Act, Pub. L. No. 111-147, 124 Stat. 71 (2010) (the “HIRE Act”) added
subsection (f) to section 6431 of the Code, which authorizes issuers to irrevocably elect to receive Federal direct payments of allowances of refundable tax credits to subsidize
a prescribed portion of their borrowing costs instead of the Federal tax credits that otherwise would be allowed to holders of certain qualified tax credit bonds under section
54A. For more information regarding the HIRE Act see Internal Revenue Notice 2010-35.
24
25

122

In addition to the tax credit bonds discussed in the previous section, ARRA authorized direct payment bond issuance through the Build America Bonds (BAB) and the
Recovery Zone Economic Development Bond (RZED)
Programs.24 ARRA allows issuers of these bonds to elect
(in lieu of issuing tax-exempt bonds) to receive a direct
refundable credit payment from the Federal government
equal to a percentage of the interest payments made.
Issuers of Build America Bonds receive a credit payment equal to 35 percent of interest payable, and issuers
of recovery zone economic development bonds receive
a credit payment equal to 45 percent of interest payable.
As discussed previously, HIRE extended the direct pay
provision to certain issuers of qualified tax credit bonds.
In lieu of issuing bonds with a tax credit to the bondholder, issuers of specified tax credit bonds may elect to
receive a Federal direct payment on an interest payment
date equal to a certain percentage of the interest paid.25
Specified tax credit bondholders receive taxable interest
payments from the issuer instead of a tax credit.

Municipal Bonds, 2010
Statistics of Income Bulletin | Spring 2013

For Calendar Year 2010, issuers of BABs and RZEDs
were required to file Form 8038-B, Information Return
for Build America Bonds and Recovery Zone Economic
Development Bonds, and issuers of specified tax credit
bonds were required to file Form 8038-TC, Information
Return for Tax Credit Bonds and Specified Tax Credit
Bonds. A direct payment bond issuer was required to
attach a debt service schedule with the following information: type of interest rate (variable or fixed), frequency
of interest payments, total principal outstanding on each
interest payment date, credit payment expected from the
IRS, and earliest call date of the bond.
Figure L shows direct payment bond issuance allowed under ARRA and HIRE for 2010. A total of 3,456
direct payment bonds raised more than $135.1 billion in
proceeds, more than double the amount of direct payment
bond proceeds for 2009 ($65.3 billion). Direct payment
bonds allowed under ARRA raised more than $126.2 billion and accounted for 93.4 percent of all direct payment

bonds issued in 2010. For 2010, the majority (88.9 percent)
of direct payment bonds were BABs; another 4.5 percent
was issued as recovery zone economic development bonds.
Figure L also shows the total specified tax credit
bond issuance allowed under HIRE. In total, 870 specified tax credit bonds raised nearly $8.9 billion in bond
proceeds and made up 6.6 percent of all direct payment
bonds issued in 2010. Qualified school construction
bonds made up 5.8 percent of total direct payment bond
proceeds, with slightly more than $7.8 billion issued in
2010. Qualified zone academy bonds, qualified energy
conservation bonds, and new clean renewable energy
bonds accounted for $332 million, $379 million, and
$371 million in proceeds, respectively. This suggests
that issuers preferred to issue specified tax credit bonds
over qualified tax credit bonds. Of the $10 billion in tax
credit bonds and specified tax credit bonds issued in
2010, slightly less than $8.9 billion (over 89.1 percent)
were specified tax credit bonds.

Figure L
Taxable Direct Payment Bonds Allowed Under the American Recovery and Reinvestment Act (ARRA)
and Specified Tax Credit Bonds Allowed Under the Hiring Incentives To Restore Employment Act
(HIRE), by Bond Type, 2010
[Money amounts are in millions of dollars]

Type of bond

Number
(1)

Total, taxable direct payment bonds [1]
Total, direct payment bonds allowed under the American Recovery and
Reinvestment Act (ARRA) [2]
Build America Bond direct payment
Recovery zone economic development bond direct payment
Total, specified tax credit bonds allowed under the Hiring Incentives To Restore
Employment Act (HIRE) [3]

3,456

Amount

Percentage
of total amount

(2)

(3)
135,127

100.0

2,586

126,230

93.4

2,037

120,098

88.9

549

6,131

4.5

870

8,897

6.6

Qualified school construction bonds

699

7,815

5.8

Qualified zone academy bonds

106

332

0.2

Qualified energy conservation bonds

48

379

0.3

New clean renewable energy bonds

17

371

0.3

[1] Includes bonds reported on Form 8038-B, Information Return for Build America Bonds and Recovery Zone Economic Development Bonds, as well as bonds reported on Form 8038G, Information Return for Tax-Exempt Governmental Obligations, with a specific reference to "Build America Bond direct payment" or "Recovery Zone Economic Development Bond" in
either their issue name or other description. Also includes bonds reported on Form 8038, Information Return for Tax-Exempt Private Activity Bond Issues, and Form 8038-TC,
Information Return for Tax Credit Bonds and Specified Tax Credit Bonds, that indicate the issuer elected to apply section 6431(f) to receive a refundable credit in lieu of tax credits under
section 54(A). Issuers who elect to apply section 6431(f) are eligible to receive Federal direct payments and are classified as "taxable direct payment bonds" for purposes of this figure.
Data exclude returns specifically referencing "Build America Bond tax credit" in either their issue name or other description.
[2] Includes bonds reported on Form 8038-B, as well as bonds reported on Form 8038-G with a specific reference to "Build America Bond direct payment" or "Recovery Zone Economic
Development Bond" in either their issue name or other description.
[3] Includes bonds reported on Form 8038 and Form 8038-TC that indicate the issuer elected to apply section 6431(f) to receive a refundable credit in lieu of tax credits under section
54(A).
NOTE: Detail may not add to totals because of rounding.

123

Municipal Bonds, 2010
Statistics of Income Bulletin | Spring 2013

Figure M shows direct payment bonds allowed under
ARRA, by selected purpose, for 2010. Education bonds
constituted 24.5 percent of total direct payment proceeds
with $30.9 billion, followed by transportation bonds,
which accounted for 23.3 percent of total proceeds, or
$29.4 billion. Other significant purposes included utilities
(19.9 percent) and environment (6.4 percent), with $25.1
billion and $8 billion in proceeds, respectively.
As shown in Figure N, 15 States accounted for nearly
$96.7 billion (76.6 percent) of total Build America Bond
and recovery zone economic development bond issuance.

The 2010 Census estimate for these 15 States, combined,
was 62.9 percent of the U.S. population. California had
$23.7 billion in bond issuance, which made it the single
largest issuer of direct-payment bonds allowable under
ARRA. Nearly 18.8 percent of all direct payment bonds
were issued in California, while its population represents
a little more than 12.1 percent of the U.S. population. New
York issued 58 direct payment bonds totaling slightly less
than $15.1 billion in proceeds, for an average of roughly
$260 million per bond issued. This was the largest average amount for any State and significantly larger than

Figure M
Taxable Direct Payment Bond Amounts Allowed Under the American Recovery and Reinvestment Act
(ARRA) as a Percentage of Total Proceeds, by Selected Purpose, 2010 [1]
[Money amounts are in billions of dollars]

Percentage
25

$30.9
$29.4
$25.1

20

$20.5
15

10
$8.0
5

0

$3.9

Education [2] Transportation

Utilities [3]

Other
purposes [4]

Environment

Health and
hospital

$3.0

$2.5

Public
Capital
infrastructure expenditures
and
related to
property
construction of
public facilities located in the
zone [5]
[5]

$2.3

Public safety

Bond purpose
[1] Includes bonds reported on Form 8038-B, Information Return for Build America Bonds and Recovery Zone Economic Development Bonds, as well as bonds
reported on Form 8038-G, Information Return for Tax-Exempt Governmental Obligations, with a specific reference to "Build
Build America Bond direct payment"
payment or "Recovery
Recovery
Zone Economic Development Bond" in either their issue name or other description. Data exclude returns specifically referencing "Build America Bond tax credit" in
either their issue name or other description.
[2] Includes bonds reported on Form 8038-B, as well as bonds reported on Form 8038-G with a specific reference to "Education" or "School" in either their issue name
or other description.
[3] Includes bonds reported on Form 8038-B, as well as bonds reported on Form 8038-G with a specific reference to "Utility" in either their issue name or other
description.
[4] "Other purposes" refer to build America bonds and recovery zone economic development bonds for which a specific purpose either did not apply or was not clearly
indicated on the Form 8038-G or Form 8038-B. Data combines recovery zone economic development bonds reported for "other purposes" and "job training and
educational programs" to avoid disclosure of specific bonds.
[5] Purposes are for recovery zone economic development bonds filing Form 8038-B.

124

Municipal Bonds, 2010
Statistics of Income Bulletin | Spring 2013

Figure N
Taxable Direct Payment Bonds Allowed Under the American Recovery and Reinvestment Act
(ARRA), for All States and Top 15 States, 2010
[Money amounts are in millions of dollars]

All issues [1]
State of issue

Number
(1)

All States

2,586

Top 15 States, total

Amount
of proceeds

Percentage
of total amount

Rank

(2)

(3)

(4)

126,230

100.0

N/A

1,236

96,683

76.6

N/A

California

127

23,716

18.8

1

New York

58

15,055

11.9

2

Texas

70

9,809

7.8

3

Illinois

225

8,091

6.4

4

Ohio

144

6,803

5.4

5

New Jersey

31

5,269

4.2

6

Washington

78

4,372

3.5

7

Florida

75

3,763

3.0

8

Pennsylvania

78

3,706

2.9

9

Georgia

29

3,416

2.7

10

Massachusetts

16

2,902

2.3

11

Virginia

53

2,701

2.1

12

Colorado

59

2,622

2.1

13

Missouri

161

2,284

1.8

14

Maryland

32

2,174

1.7

15

N/A—Not applicable. Rank applies only to individual states.
[1] Includes bonds reported on Form 8038-B, Information Return for Build America Bonds and Recovery Zone Economic Development Bonds, as well as bonds reported on
Form 8038-G, Information Return for Tax-Exempt Governmental Obligations, with a specific reference to "Build America Bond direct payment" or "Recovery Zone Economic
Development Bond" in either their issue name or other description. Data exclude returns specifically referencing "Build America Bond tax credit" in either their issue name or
other description.

the national average of $48.8 million per direct payment
issued. New York bond proceeds were 11.9 percent of
the national total, a percentage greater than its share of
the U.S. population (6.3 percent). Texas had $9.8 billion
(7.8 percent) in direct bond issuance in 2010, making it
the third largest issuer of direct payment bonds allowable
under ARRA.
Figure O shows 10 States accounted for almost $5.2
billion (58 percent) of the $8.9 billion in total direct payment bond issuance allowable under HIRE (specified
tax credit bonds) for 2010. The 2010 Census estimate
for these 10 States, combined, was 51.9 percent of the
U.S. population. California had just shy of $1.1 billion in
bond issuance, which made it the single largest issuer of
specified tax credit bonds. Florida and Michigan issued

$732 million (8.2 percent) and $581 million (6.5 percent)
of all specified tax credit bonds, but their populations
represent 6.1 percent and 3.2 percent of the U.S. population, respectively. New York had $562 million (6.3 percent) while only issuing 6 specified tax credit bonds in
2010, averaging nearly $93.7 million per bond issued,
again the largest average issue amount for any State and
significantly higher than the national average of $10.2
million per bond issued.
Direct payment bond issuers are required to file
Form 8038-CP, Return for Credit Payments to Issuers
of Qualified Bonds, to request credit payments. Issuers
requested 3,116 credit payments totaling more than $1.8
billion for interest payments made to holders of direct
payment bonds during 2010 (Figure P).26 There were

Form 8038-CP, Return for Credit Payment to Issuers of Qualified Bonds, is used by issuers of Build America Bonds, recovery zone economic development bonds, and
specified tax credit bonds who elect to receive a direct payment from the Federal Government equal to a percentage of the interest payments on these bonds. Specifically,
issuers of Build America Bonds receive a credit payment equal to 35 percent of interest payable, and issuers of recovery zone economic development bonds receive a credit
payment equal to 45 percent of interest payable. For specified tax credit bonds the amount of refundable credit payments for qualified zone academy bonds and qualified school
construction bonds is the lesser of 100 percent of the interest payable or 100 percent of the amount of interest determined at the applicable tax credit rate under 54A(b)(3). The
amount of refundable credit payments for new clean renewable energy bonds and qualified energy conservation bonds is the lesser of 70 percent of the interest payable or 70
percent of the amount of interest determined at the applicable tax credit rate under 54A(b)(3).

26

125

Municipal Bonds, 2010
Statistics of Income Bulletin | Spring 2013

Figure O
Specified Tax Credit Bonds Allowed Under the Hiring Incentives To Restore Employment Act (HIRE),
for All States and Top 10 States, 2010
[Money amounts are in millions of dollars]

Total specified tax credit bonds [1]
State of issue

Number

Amount

Percentage
of total amount

Rank

(1)

(2)

(3)

(4)

All States

870

8,897

100.0

N/A

304

5,163

58.0

N/A

California

50

1,083

12.2

1

Florida

22

732

8.2

2

Michigan

54

581

6.5

3
4

Top 10 States, total

New York

6

562

6.3

Ohio

73

556

6.2

5

Pennsylvania

9

455

5.1

6

Texas

50

352

4.0

7

Illinois

17

330

3.7

8

Washington

17

273

3.1

9

Missouri

6

239

2.7

10

N/A—Not applicable. Rank applies only to individual States.
[1] Includes bonds reported on Form 8038-TC, Information Return for Tax Credit Bonds and Specified Tax Credit Bonds, and Form 8038, Information Return for Tax-Exempt Private
Activity Bond Issues, that indicate the issuer elected to apply section 6431(f) to receive a refundable credit in lieu of tax credits under section 54(A). Issuers who elect to apply section
6431(f) are eligible to receive Federal direct payments and are classified as "specified tax credit bonds" for purposes of this figure.

2,658 Forms 8038-CP filed for direct payment bonds allowable under ARRA, accounting for almost all of the
total credit payments requested. Build America Bond issuers accounted for 95.8 percent of all credit payments
requested for interest paid to bondholders in 2010. An additional $32 million in credit payments were requested by
issuers of recovery zone economic development bonds.
Issuers of direct payment bonds allowable under HIRE
filed 458 Forms 8038-CP and requested $45 million in
credit payments. Issuers of qualified school construction
bonds filed 374 Forms 8038-CP and requested $44 million in credit payments.

Summary

126

The American Recovery and Reinvestment Act of 2009
and The Hiring Incentives To Restore Employment Act
of 2010 temporarily expanded municipal bond financing
options by introducing direct payment bonds through
the Build America Bond, the recovery zone economic
development bond, and specified tax credit bond programs. More than 3,456 direct payment bonds raised
$135.1 billion in proceeds in 2010. The Build America
Bond program raised slightly less than $84.9 billion for
education, transportation, and utilities purposes in 2010
before it expired on December 31, 2010. The provisions
of HIRE allowed issuers of qualified school construction

bonds, qualified zone academy bonds, qualified energy
conservation bonds, and new clean renewable energy
bonds to make an irrevocable election to issue direct
payment bonds in the form of specified tax credit bonds.
For 2010, specified tax credit bonds raised nearly $8.9
billion in proceeds for 870 qualifying facilities. However,
the municipal market was still dominated by the almost
22,000 tax-exempt governmental bonds issued in 2010,
raising $293.6 billion of proceeds for public projects such
as schools, transportation infrastructure, and utilities.
Of the nearly $217.3 billion of long-term governmental
bonds issued, $122.6 billion of proceeds were used to
refunded prior governmental bond issues, while the remaining $94.6 billion of proceeds financed new projects.
This marked the first time since 1993 that refunding proceeds were greater than new money proceeds for governmental bonds. In addition, nearly 3,800 tax-exempt private activity bonds were issued in 2010, totaling $126.1
billion in proceeds. These tax-exempt private activity
bond proceeds financed qualified private facilities (such
as residential rental facilities, single-family housing, and
airports), as well as the facilities of IRC section 501(c)
(3) organizations (such as hospitals and private universities). Of the $123.6 billion of long-term private activity
bonds issued, $63.3 billion of the proceeds were used to
finance new projects, while the remaining $60.3 billion

Municipal Bonds, 2010
Statistics of Income Bulletin | Spring 2013

Figure P
Interest and Credit Payments to Issuers of Direct Payment Bonds, 2010

[Money amounts are in millions of dollars]

Direct payment bond type

Total, direct payment bonds [1]
Total, direct payment bonds allowable under the American Recovery
and Reinvestment Act (ARRA)
Build America Bond
Recovery zone economic development bond
Total, direct payment bonds allowable under the Hiring Incentives To
Restore Employment Act (HIRE)

Number of Forms
8038-CP filed

Interest payable to
bondholders

Credit
payments

(1)

(2)

(3)

3,116

5,122

1,828

2,658

5,072

1,782

2,380

5,002

1,751

278

70

32

458

49

45

Qualified school construction bond

374

48

44

Qualified zone academy bond

55

1

1

New clean renewable energy bond

** 29

** 1

** [2]

Qualified energy conservation bond

**

**

**

** Data combined to prevent disclosure of specific taxpayer data.
[1] Form 8038-CP, Return for Credit Payment to Issuers of Qualified Bonds, is used by issuers of Build America Bonds, recovery zone economic development bonds, and specified tax
credit bonds who elect to receive a direct payment from the Federal Government equal to a percentage of the interest payments on these bonds. Specifically, issuers of Build America
Bonds receive a credit payment equal to 35 percent of interest payable, and recovery zone economic development bonds receive a credit payment equal to 45 percent of interest
payable. For specified tax credit bonds the amount of refundable credit payments for qualified zone academy bonds and qualified school construction bonds is the lesser of 100
percent of the interest payable or 100 percent of the amount of interest determined at the applicable tax credit rate under Internal Revenue Code section 54A(b)(3). The amount of
refundable credit payments for new clean renewable energy bonds and qualified energy conservation bonds is the lesser of 70 percent of the interest payable or 70 percent of the
amount of interest determined at the applicable tax credit rate under section 54A(b)(3).
[2] Indicates an amount less than $500,000.
NOTE: Detail may not add to totals because of rounding.

were used to refund prior tax-exempt private activity
bond issues.

Data Sources and Limitations

The data presented in this article are based on the populations of Forms 8038, 8038-B, 8038-G, and 8038-TC
filed with the Internal Revenue Service for bonds issued
during Calendar Year 2010. Form 8038-CP data are
population data for credit payments requested during
the year.27 Tax-exempt bond data exclude returns filed
for commercial paper transactions, as well as issues
that are loans from the proceeds of another tax-exempt
bond issue, an arrangement known as pooled financing. Data for taxable bonds issued under the American
Recovery and Reinvestment Act of 2009 were compiled
from Forms 8038-B; however, a small percentage were
obtained from Forms 8038-G that included a specific
reference to “Build America Bonds” or “recovery zone
economic development bonds.” Data for tax credit bonds
were compiled from Forms 8038-TC; however, some

data were compiled from Forms 8038 and 8038-G that
included a specific reference to “qualified school construction,” “new clean renewable energy,” “qualified
zone academy,” or “Midwestern tax credit” bonds. Data
for credit payments were compiled from Forms 8038-CP
filed for interest paid to bondholders in 2010.
Bond issuers were required to file Forms 8038, 8038B, 8038-G, and 8038-TC by the 15th day of the second
calendar month after the close of the calendar quarter in
which the bond was issued. The filing deadline for Form
8038-CP varied based on the structure of the interest payments. In an effort to include as many applicable returns
for a particular year as possible, each of the respective
study periods extended well beyond established filing
deadlines. The Forms 8038, 8038-B, 8038-G, and 8038TC data include returns processed from January 1, 2010,
to April 30, 2012, for bonds issued in 2010. The Form
8038-CP data include returns processed from October
24, 2011, to April 23, 2012, for interest paid during 2010.
Where possible, data from amended returns filed and

27 Filing requirements for Form 8038-CP, Return for Credit Payment to Issuers of Qualified Bonds, vary depending on whether the bond has a fixed or variable rate of interest.
Fixed rate bonds must file no later than 45 days after the interest payment date and no earlier than 90 days before the interest payment date. For variable rate bonds, if the issuer
does not know the payment amount 45 days prior to the interest payment date, the issuer must aggregate all credit payments on a quarterly basis and file Form 8038-CP no later
than 45 days after the last interest payment date.

127

Municipal Bonds, 2010
Statistics of Income Bulletin | Spring 2013

processed before the cutoff dates were included. Latefiled returns processed after the respective cutoff dates
were not included in the statistics.
During statistical processing, returns were subject to
thorough testing and correction procedures to ensure data
accuracy and validity. Additional checks were conducted
to identify and exclude duplicate returns. Wherever possible, returns with incomplete information, mathematical errors, or other reporting anomalies were edited to
resolve internal inconsistencies. However, in other cases,
it was not possible to reconcile reporting discrepancies.
Thus, some reporting and processing error may remain.

Explanation of Selected Terms

American Recovery and Reinvestment Act of 2009
(ARRA)—An act of the 111th Congress passed on
February 17, 2009, in response to the economic crisis.
The passage of ARRA added to the Internal Revenue
Code (IRC) sections 54AA and 1400U-1 through 1400U3, authorizing State and local governments to issue two
general types of Build America Bonds, recovery zone
economic development bonds, and recovery zone exempt
facility bonds.
Arbitrage bond—A bond where at the time of issuance, the issuer of the bond intentionally uses all proceeds or a portion of its proceeds to acquire a higher
yield or to replace funds used to acquire higher yielding
investments.
Bond anticipation note (BAN)—A type of shortterm governmental bond issue, the proceeds of which are
generally used to pay the startup costs associated with a
future, long-term bond-financed project. A renewal BAN
can be issued on maturity of an outstanding BAN, until
eventually, the proceeds of the future bond issue are used
to pay off or retire the outstanding BAN.
Build America Bond (BAB)—The American Recovery
and Reinvestment Act (ARRA) added IRC section 54AA
to enable State and local governments to issue bonds for
authorized purposes to promote economic recovery and
job creation. These new types of bonds would be issued
as taxable governmental bonds with federal subsidies to
help offset a portion of issuers’ borrowing costs. The two
distinct types of Build America Bonds—Build America
Bond tax credit and Build America Bond direct payment
subsidy—vary by the structure of federal subsidy. For
calendar year 2010, issuers of Build America Bonds were
required to file IRS Form 8038-B, Information Return
for Build America Bonds and Recovery Zone Economic
Development Bonds.
Build America Bond tax credit bond—This type
of BAB provides a tax credit to investors in an amount
128

equal to 35 percent of the total coupon interest payable
by the issuer of the taxable government bonds.
Build America Bond direct payment bond—This type
of BAB provides a refundable credit payment to State
or local governmental issuers in an amount equal to 35
percent of the total coupon interest payable to investors.
Clean renewable energy bond (CREB)—A type of
tax credit bond used to finance eligible clean renewable
energy projects which are subject to a national volume
cap. Issuers of clean renewable energy bonds under IRC
Section 54 must be eligible to apply for volume cap allocations. Clean renewable energy bonds were first authorized under the Energy Tax Incentive Act of 2005.
For additional information, see Internal Revenue Notice
2007-26.
Commercial paper—Commercial paper consists
of short-term notes that are continually rolled-over.
Maturities average about 30 days but can extend up to
270 days. Many localities use commercial paper to raise
cash needed for current transactions.
Enterprise zone facility bond—Established by the
passage of the Revenue Reconciliation Act of 1993, this
type of exempt facility bond may be issued for certain
businesses in designated “empowerment zones” or “enterprise communities.” These designations are made by
the Secretaries of Agriculture and Housing and Urban
Development and last for a 10-year period. The Taxpayer
Relief Act of 1997 provided certain economically depressed census tracts within the District of Columbia
designation as the “District of Columbia Enterprise
Zone.” Qualified enterprise zone facility bonds are generally subject to the same rules as exempt facility bonds.
Exempt facility bond—Bond issue of which 95 percent or more of the net proceeds is used to finance a
tax-exempt facility (as listed in IRC sections 142(a)(1)
through (15) and 142(k)). These facilities include airports,
docks and wharves, mass commuting facilities, facilities
for the furnishing of water, sewage facilities, solid waste
disposal facilities, qualified residential rental projects,
facilities for the local furnishing of electric energy or
gas. They also include local district heating or cooling
facilities, qualified hazardous waste facilities, high-speed
intercity rail facilities, environmental enhancements of
hydroelectric generating facilities, and qualified public
educational facilities.
Governmental bond—Any obligation that is not a
private activity bond (see below) and is issued by a State
or local government unit. The interest on a governmental
bond is excluded from gross income under IRC section 103.
Gulf Opportunity Zone bond—The Gulf Opportunity
Zone Act of 2005, signed into law as Public Law 109-135

Municipal Bonds, 2010
Statistics of Income Bulletin | Spring 2013

on December 21, 2005, authorized a new category of taxexempt bonds. The proceeds of such bonds are used to
finance the construction and rehabilitation of certain
residential and nonresidential property located in certain localities of Alabama, Louisiana, and Mississippi,
designated as the “Gulf Opportunity Zone.” This area
constitutes the portion of the Hurricane Katrina disaster
area, determined by the President to warrant individual
or individual and public assistance from the Federal government, under the Robert T. Stafford Disaster Relief and
Emergency Assistance Act.
IRC section 1400N(a)(2) defines a qualified Gulf
Opportunity Zone Bond as any bond issued as part of an
issue if it meets the following requirements: (1) 95 percent or more of the net proceeds is to be used for qualified
project costs, or such issue meets the requirements of a
qualified mortgage issue, except as otherwise provided
in IRC section 1400N(a); (2) such bond is issued by the
State of Alabama, Louisiana, or Mississippi or any political subdivision thereof; (3) such bond is designated for
purposes of IRC section 1400N(a) either by the Governor,
or approved bond commission, of such State; (4) the bond
is issued after December 21, 2005, and before January 1,
2012; and (5) no portion of the proceeds of such issue is to
be used to provide any property described in IRC section
144(c)(6)(B). Gulf Opportunity Zone bonds that meet the
general requirements of a qualified mortgage bond issue,
and the proceeds of such bond issues that finance residences located in the Gulf Opportunity Zone, shall be
treated as qualified mortgage bonds (“Gulf Opportunity
Zone Mortgage Bonds”), as described in IRC section
1400N(a)(2)(A)(ii). The Act also authorized the issuance
of “Gulf Opportunity Zone Advance Refunding Bonds,”
which allow for an additional advance refunding for certain bonds, issued by the States of Alabama, Louisiana,
or Mississippi (or any political subdivision thereof), and
outstanding on August 28, 2005. This provision was effective for bonds issued between December 21, 2005, and
January 1, 2012. (See Internal Revenue Service Notice
2006-41, Internal Revenue Bulletin 2006-18, for additional information.)
The Hiring Incentives To Restore Employment Act of
2010 (HIRE)—Enacted on March 18, 2010, HIRE provides an option for issuers of certain qualified tax credit
bonds (“specified tax credit bonds”) to irrevocably elect
to issue the bonds with a direct pay subsidy, in the same
manner as the Build America Bonds direct pay subsidy.
The issuer of these bonds will receive an interest payment subsidy from the Federal government. Bondholders
will receive a taxable interest payment from the issuer
instead of a tax credit. For additional information please
see Internal Revenue Notice 2010-35.

Midwestern tax credit bond—A type of tax credit
bond whose issuers are located in specific counties in
Arkansas, Illinois, Indiana, Iowa, Missouri, Nebraska,
and Wisconsin that were adversely affected by severe
storms, tornadoes, or flooding (collectively referred to as
“the Midwestern disaster area”). Midwestern tax credit
bonds were only authorized for issuance during Calendar
Year 2010. See Internal Revenue Notice 2008-109 for additional information.
New clean renewable energy bond (NEWCREB)—
Any bond issued as part of an issue if: (1) 100 percent
of the available project proceeds of such issue are to be
used for capital expenditures incurred by governmental
bodies, public power providers, or cooperative electric
companies for one or more qualified renewable energy
facilities; (2) the bond is issued by a qualified issuer; and
(3) the issuer designates such bond for purposes of IRC
section 54C.
Issuers of new clean renewable energy bonds receive
70 percent of the interest paid to the borrower if the interest was determined at the tax credit bond rate determined
under section 54A(b)(3) for qualified tax credit bonds. If
a new clean renewable energy bond was issued as a specified tax credit bond, issuers can receive the lesser of 70
percent of their interest payment or the amount of interest
that would have been paid if the interest rate was determined at the tax credit bond rate. For more information
on new clean renewable energy bonds, see IRC section
54C and Internal Revenue Notice 2010-35.
New York Liberty Zone bonds—The Job Creation and
Worker Assistance Act of 2002 created Section 1400L of
the Internal Revenue Code of 1986 to provide various tax
benefits for the area of New York City damaged or affected by the terrorist attack on September 11, 2001. IRC
section 1400L(d) authorizes the issuance of an additional
type of exempt facility bond, namely, “Liberty Bonds.”
Liberty Bonds are subject to the following additional requirements: (1) 95 percent or more of the net proceeds
of such issue must be used for qualified project costs;
(2) the bond must be issued by the State of New York
or any political subdivision thereof; (3) the Governor of
the State of New York or the Mayor of the City of New
York must designate the bond for purposes of section
1400L(d); and (4) the bond must be issued after March
9, 2002, and before January 1, 2012. The maximum aggregate face amount of bonds that may be designated as
Liberty Bonds is $8 billion.
Nongovernmental output property bond—Bonds
used to finance the acquisition of property used by a nongovernmental entity in connection with an output facility
(such as an electric or gas power project). This bond must
meet additional tests under IRC section 141(d).

129

Municipal Bonds, 2010
Statistics of Income Bulletin | Spring 2013

Pooled financing—An arrangement whereby a portion of the proceeds of a governmental bond issue is used
to make loans to other governmental units.
Private activity bond—Bond issue of which more
than 10 percent of the proceeds is used for any private
business use and more than 10 percent of the payment of
the principal or interest is either secured by an interest
in property to be used for private business use (or payment for such property) or is derived from payments for
property (or borrowed money) used for a private business
use. A bond is also considered a private activity bond if
the amount of the proceeds used to make or finance loans
(other than loans described in IRC section 141(c)(2)) to
persons other than governmental units exceeds the lesser
of 5 percent of the proceeds or $5 million.
Qualified energy conservation bond—Any bond
issued as part of an issue if: (1) 100 percent of the available project proceeds of such issue are to be used for one
or more qualified conservation purposes; (2) the bond is
issued by a State or local government; and (3) the issuer
designates such bond for purposes of IRC section 54D.
Issuers of qualified energy conservation bonds receive 70 percent of the interest paid to the borrower if
the interest was determined at the tax credit bond rate
determined under section 54A(b)(3) for qualified tax
credit bonds. If a qualified energy conservation bond
was issued as a specified tax credit bond, issuers can
receive the lesser of 70 percent of their interest payment
or the amount of interest that would have been paid if the
interest rate was determined at the tax credit bond rate.
For more information on new clean renewable energy
bonds, see IRC section 54D and Internal Revenue Notice
2010-35.
Qualified green building and sustainable design
project—Bond issue of which 95 percent or more of the
net proceeds is used to finance qualified green building and sustainable design projects, as designated by the
Secretary of the Treasury, after consultation with the
Administrator of the Environmental Protection Agency.
The project must be nominated by a State or local government, and the issuer must submit a detailed application to the Treasury Department for consideration, and,
on approval, allocation of a specified issuance amount.
Section 701 of the American Jobs Creation Act of 2004
added IRC sections 142(a)(14) and 142(l), authorizing up
to $2 billion of tax-exempt private activity bonds, not
subject to the unified volume cap, for qualified green
building and sustainable design projects, to be issued
between December 31, 2004, and October 1, 2012. (See
130

Internal Revenue Service Notice 2006-41, Internal
Revenue Bulletin 2006-18, for additional information.)
Qualified highway or surface transfer freight facility
bond—Bond issue of which 95 percent or more of the
net proceeds is used to provide qualified highway or surface freight transfer facilities. Section 11143 of the Safe,
Accountable, Flexible, Efficient, Transportation Equity
Act: A Legacy for Users (SAFETEA-LU) Public Law
109-59, signed into law on August 10, 2005, added IRC
sections 142(a)(15) and 142(m). Section 142(m)(1) defines
the term “qualified highway or surface freight transfer
facilities” as: (a) any surface transportation project that
receives Federal assistance under title 23, United States
Code (as in effect on August 10, 2005); (b) any project
for an international bridge or tunnel for which an international entity authorized under Federal or State law is
responsible and that receives Federal assistance under
title 23, United States Code (as so in effect); or, (c) any
facility for the transfer of freight from truck to rail or
rail to truck (including any temporary storage facilities
directly related to such transfers) that receives Federal
assistance under either title 23 or title 49, United States
Code (as so in effect). This legislation authorized issuance of up to $15 billion of such bonds, not subject to
the unified volume cap, applicable to bonds issued after
August 10, 2005. Allocation of the $15-billion national
limitation is under the jurisdiction of the Department of
Transportation. (See Internal Revenue Service Notice
2006-45, Internal Revenue Bulletin 2006-20, for additional information.)
Qualified hospital bond—Type of qualified section
501(c)(3) bond issue of which 95 percent or more of the
net proceeds are to be used to finance a hospital.
Qualified mortgage bond—Bond issue of which the
proceeds (except issuance costs and reasonably required
reserves) are used to provide financing assistance for
single-family residential property, and which meets the
additional requirements in IRC section 143. Bond proceeds can be applied toward the purchase, improvement,
or rehabilitation of owner-occupied residences, as well as
to finance qualified home-improvement loans.
Qualified public educational facility bond—Bond
issue of which 95 percent or more of the net proceeds
is used to provide qualified public educational facilities,
defined by IRC section 142(k)(1) as any school facility that is: (a) part of a public elementary or secondary
school; and (b) is owned by a private, for-profit corporation under a public-private partnership agreement with a
State or local educational agency. Under a “public-private

Municipal Bonds, 2010
Statistics of Income Bulletin | Spring 2013

partnership agreement,” the corporation agrees to construct, rehabilitate, refurbish, or equip a school facility
and, at the end of the term of the agreement, to transfer the school facility to the State or local educational
agency for no additional consideration. Such bonds are
not subject to the unified volume cap; rather, the annual
State limit is equal to the lesser of $10 per resident or $5
million.
Qualified redevelopment bond—Bond issue of which
95 percent or more of the net proceeds is used to finance
certain specified real property acquisition and redevelopment in blighted areas. (See IRC section 144(c) for additional requirements.)
Qualified school construction bond (QSCB)—A
type of tax credit bond, of which 100 percent of the
bond proceeds are to be used for construction, rehabilitation, repair, or land acquisition in connection with a
public school facility, which is issued by a State or local
government within the jurisdiction of where the school
is located. QSCBs are subject to a national volume cap
to be allocated by the Treasury among the States. The
American Recovery and Reinvestment Act of 2009
(ARRA) created IRC section 54F authorizing QSCBs.
The Hiring Incentives to Restore Employment Act
of 2010 allowed issuers of QSCBs to receive 100 percent of the interest paid to the borrower if the interest
were determined at the tax credit bond rate determined
under section 54A(b)(3) for qualified tax credit bonds. If
a QSCB was issued as a specified tax credit bond issuers
can receive the lesser of 100 percent of their interest payment or the amount of interest that would have been paid
if the interest rate was determined at the tax credit bond
rate. For more information on QSCBs, see IRC section
54E and Internal Revenue Notice 2010-35.
Qualified section 501(c)(3) bond—Bonds issued by
State and local governments to finance the activities of
charitable organizations that are tax-exempt under IRC
section 501(c)(3). A bond must meet the following conditions to be classified as a section 501(c)(3) bond: 1)
all property financed by the net proceeds of the bond
issue is to be owned by a section 501(c)(3) organization
or a governmental unit; and 2) the bond would not be a
private activity bond if section 501(c)(3) organizations
were treated as governmental units with respect to their
activities that are not related trades or businesses, and
the private activity bond definition was applied using a
5-percent threshold rather than a 10-percent threshold.
The primary beneficiaries of these bonds are private,
nonprofit hospitals, colleges, and universities. A qualified
hospital bond issue is one in which 95 percent or more of
the net proceeds is to be used for a hospital.

Qualified small issue bond—Bond issue generally
not exceeding $1 million and of which 95 percent or more
of the net proceeds is used to finance the acquisition of
land and depreciable property or to refund such issues.
In certain instances, an election to take certain capital
expenditures into account can increase the limit on bond
size, from $1 million to $10 million. These bonds may
only be used to finance manufacturing facilities and to
benefit certain first-time farmers.
Qualified student loan bond—Bond issue of which
90 percent or more of the net proceeds is used to make
or finance student loans under a program of general application subject to the Higher Education Act of 1965 (see
IRC section 144(b)(1)(A) for additional requirements) or
of which 95 percent or more of the net proceeds is used
to make or finance student loans under a program of general application approved by the State (see Code section
144(b)(1)(B) for additional requirements).
Qualified veterans’ mortgage bond—In general, a
bond issue of which 95 percent or more of the net proceeds is used to finance the purchase, improvement, or
rehabilitation of owner-occupied residences for veterans
who: 1) served prior to January 1, 1977; and 2) applied for
such a mortgage prior to the date 30 years after leaving
active service or January 31, 1985, whichever is later. The
payment of interest and principal must be secured by a
general obligation of the State, and the bond must meet
certain of the requirements of IRC section 143. The issuance of qualified veterans’ mortgage bonds was limited
to the following five States: Alaska, California, Oregon,
Texas, and Wisconsin, each of which had a veterans’
mortgage bond program in effect prior to June 22, 1984.
Qualified zone academy bond (QZAB)—A type of
tax credit bond issued by a State or local government
to finance certain eligible public school purposes authorized under IRC section 54E. QZABs are subject to
a national volume cap to be allocated by the Treasury
among the States.
Issuers of QZABs receive 100 percent of the interest
paid to the borrower if the interest was determined at the
tax credit bond rate determined under section 54A(b)(3)
for qualified tax credit bonds. If a QZAB was issued as
a specified tax credit bond, issuers can receive the lesser
of 100 percent of their interest payment or the amount
of interest that would have been paid if the interest rate
was determined at the tax credit bond rate. For more information on QZABs, see IRC section 54E and Internal
Revenue Notice 2010-35.
Recovery zone bond—The American Recovery
and Reinvestment Act (ARRA) added IRC sections
1400U-1 through 1400U-3 authorizing State and local
131

Municipal Bonds, 2010
Statistics of Income Bulletin | Spring 2013

governments to issue recovery zone bonds. These bonds
provide tax incentives through lower borrowing costs
and are intended to promote job creation and economic
recovery in targeted areas particularly affected by employment declines. See Internal Revenue Notice 2009-50
for additional information.
Recovery zone economic development bond—
Authorized under IRC section 1400U-2, this type of bond
provides for a deeper Federal subsidy through a refundable credit payment to State or local governmental issuers in an amount equal to 45 percent of the total coupon
interest payable to investors. A recovery zone economic
development bond must be a Build America Bond, the
proceeds of which must be used for one or more qualified economic development purposes. Recovery zone
economic development bonds are allocated under a $10
billion national bond volume cap. For Calendar Year
2010, issuers of recovery zone exempt facility bonds were
required to file IRS Form 8038-B, Information Return
for Build America Bonds and Recovery Zone Economic
Development Bonds.
Recovery zone exempt facility bond—Authorized
under IRC section 1400U-3, which expanded the definition of the term “exempt facility bond” to include any recovery zone facility bond. A recovery zone exempt facility bond must be a qualified private activity bond under
IRC section 142, the proceeds of which may be used to
finance certain “recovery zone property.” Recovery zone
exempt facility bonds are allocated under a $15 billion
national bond volume cap. For Calendar Year 2010, issuers of recovery zone exempt facility bonds were required to file IRS Form 8038, Information Return for
Tax-Exempt Private Activity Bonds.
Specified tax credit bonds—New clean renewable
energy bonds, qualified energy conservation bonds, qualified zone academy bonds and qualified school construction bonds are specified tax credit bonds for purposes

132

of IRC section 6431(f). As a result of legislation in the
HIRE Act, issuers of these bonds can elect to receive
the tax credit in the form of a direct payment subsidy
instead of the bondholder (investor) receiving the tax
credits. Issuers are required to file IRS Form 8038-TC,
Information Return for Tax Credit Bonds and Specified
Tax Credit Bonds, to report such issues. See IRC section
54 and Internal Revenue Notice 2010-35.
Tax credit bond—Tax credit bonds are not interestbearing obligations. The holder of a tax credit bond is
generally allowed an annual Federal income tax credit
while the bond is outstanding. The amount of the credit
is equal to the face amount of the bond multiplied by
the credit rate of the bond. Unique to all other tax credit
bonds, issuers of certain qualified tax credit bonds, specifically new clean renewable energy bonds and qualified energy conservation bonds, pay bondholders taxable interest payments in addition to the tax credit the
bondholder receives. For additional information, see
Internal Revenue Notice 2009-15 and “Frequently asked
Question on Qualified Tax Credit Bonds and Specified
Tax Credit Bonds” at http://www.irs.gov/pub/irs-tege/
tc_and_stcb_q-a._09-07-10_1.5.pdf.
Tax Reform Act transition property bond—A bond
issued under transitional rules contained in the Tax
Reform Act of 1986. Proceeds from bonds issued under
these rules include issues used to fund such items as
pollution control facilities, parking facilities, industrial parks, sports stadiums, and convention facilities.
Proceeds from other bonds issued under the transitional
rules are included in this category only if they could not
be identified as another issue type.
NOTE: Additional tax-exempt bond data, including data
for prior years, can be found on the SOI’s Tax Stats Web
site: http://www.irs.gov/taxstats. Click on “Tax-Exempt
Bonds.”

Municipal Bonds, 2010
Statistics of Income Bulletin | Spring 2013

Table 1. Tax-Exempt Governmental Bonds, by Type and Term
of Issue, 2010
[Money amounts are in millions of dollars]

Type and term of issue

Number

Amount
21,861

All issues, total [1]

293,625

Short-term

5,927

76,367

Long-term

15,934

217,258

15,256

159,906

New money issues, total
Short-term

4,239

65,262

Long-term

11,017

94,644

8,817

133,719

Refunding issues, total
Short-term

2,351

11,105

Long-term

6,466

122,614

[1] A given bond issue can include both new money and refunding proceeds. Thus, the number of new money
issues plus the number of refunding issues will sometimes exceed the total number of issues. However, the
money amounts add to the totals.
NOTE: Detail may not add to totals because of rounding.

Table 2. Long-Term, Tax-Exempt Governmental Bonds, by Bond Purpose and Type of Issue, 2010
[Money amounts are in millions of dollars]

Bond purpose

Total [1]
Education
Health and hospital
Transportation

All issues

New money issues

Refunding issues

Number

Amount

Number

Amount

Number

Amount

(1)

(2)

(3)

(4)

(5)

(6)

15,934

217,258

11,017

94,644

6,466

122,614

5,411

52,201

3,522

21,682

2,314

30,519

312

3,619

253

1,842

89

1,777

1,073

29,352

787

14,962

440

14,390

Public safety

1,756

5,156

1,499

2,772

407

2,383

Environment

1,421

13,693

1,008

7,679

636

6,014

Housing

100

790

67

290

42

500

Utilities

2,179

38,151

1,366

12,596

1,137

25,555

Bond and tax/revenue anticipation notes
Other purposes [2]

288

2,198

247

1,882

63

316

4,623

72,099

3,078

30,939

2,198

41,160

[1] A given bond issue can include more than one purpose and can include both new money and refunding proceeds. Thus, the summation of number of issues by purpose or by type
of issue will sometimes exceed the total number of issues. However, the money amounts add to the totals.
[2] "Other purposes" refer to obligations for which a specific purpose either did not apply or was not clearly indicated on Form 8038-G, Information Return for Tax-Exempt Government
Obligations.
NOTE: Detail may not add to totals because of rounding.

133

Municipal Bonds, 2010
Statistics of Income Bulletin | Spring 2013

Table 3. Computation of Lendable Proceeds for Long-Term, Tax-Exempt Governmental Bonds, by
Bond Purpose, 2010
[Money amounts are in millions of dollars]

Bond
issuance
costs

Entire
issue
price

Bond purpose

Credit
enhancement

Allocation to
reserve fund

Number

Amount

Number

Amount

Number

Amount

Number

(1)

(2)

(3)

(4)

(5)

(6)

(7)

15,934

217,258

10,959

2,029

1,349

189

1,221

5,411

52,201

3,902

571

568

47

215

312

3,619

173

35

16

2

31

Transportation

1,073

29,352

808

214

46

10

93

Public safety

1,756

5,156

691

53

55

5

46

Environment

1,421

13,693

1,068

114

107

11

157

Total [1]
Education
Health and hospital

Housing

100

790

d

d

4

1

d

Utilities

2,179

38,151

1,859

395

296

48

373

Bond and tax/revenue anticipation notes
Other purposes [2]

Bond purpose

288

2,198

d

d

0

0

d

4,623

72,099

3,351

616

348

65

322

Allocation to
reserve fund
—continued

Total lendable
proceeds

Proceeds used to refund
prior issues

Nonrefunding
proceeds

Amount

Number

Amount

Number

Amount

Number

Amount

(8)

(9)

(10)

(11)

(12)

(13)

(14)

2,555

15,931

212,485

6,466

120,536

11,014

91,949

Education

226

5,411

51,356

2,314

30,110

3,520

21,246

Health and hospital

54

312

3,528

89

1,741

253

1,787

Transportation

605

1,073

28,523

440

14,044

787

14,479

Public safety

40

1,756

5,057

407

2,335

1,499

2,722

Environment

182

1,421

13,387

636

5,917

1,008

7,470

Housing

d

100

769

42

493

66

276

Utilities

707

2,179

37,000

1,137

24,962

1,366

12,037

Total [1]

Bond and tax/revenue anticipation notes
Other purposes [2]

d

288

2,178

63

313

247

1,865

731

4,623

70,687

2,198

40,621

3,078

30,067

d—Data deleted to avoid disclosure of information about specific bonds. However, the data are included in the appropriate totals.
[1] A given bond issue can include more than one purpose. Thus, the summation of number of issues by purpose will sometimes exceed the total number of issues. However,
the money amounts add to the totals.
[2] "Other purposes" refer to obligations for which a specific purpose either did not apply or was not clearly indicated on the Form 8038-G, Information Return for Tax-Exempt
Government Obligations.
NOTE: Detail may not add to totals because of rounding.

134

Municipal Bonds, 2010
Statistics of Income Bulletin | Spring 2013

Table 4. New Money Long-Term, Tax-Exempt Governmental Bonds, by Bond Purpose and Size of
Entire Issue, 2010
[Money amounts are in millions of dollars, except for size of entire issue, which is in whole dollars]

Size of entire issue
All issues

Bond purpose

Number
(1)
Total [2]
Education

Amount
(2)

Number
(3)

$1,000,000
under
$5,000,000

$500,000
under
$1,000,000

Under
$500,000 [1]
Amount
(4)

Number
(5)

Amount
(6)

Number
(7)

Amount
(8)

11,017

94,644

3,970

940

1,334

900

2,921

6,358

3,522

21,682

1,254

300

431

295

851

1,889
147

Health and hospital

253

1,842

74

17

24

15

71

Transportation

787

14,962

239

51

73

45

205

335

Public safety

1,499

2,772

866

205

209

136

237

391

Environment

595

1,008

7,679

263

63

122

77

319

Housing

67

290

10

2

10

7

23

44

Utilities

1,366

12,596

226

57

154

96

542

1,121

Bond and tax/revenue
anticipation notes
Other purposes [3]

247

1,882

51

16

36

24

96

222

3,078

30,939

1,021

230

324

205

795

1,612

Size of entire issue—continued
Bond purpose

Number
(9)
Total [2]

$25,000,000
under
$75,000,000

$10,000,000
under
$25,000,000

$5,000,000
under
$10,000,000
Amount
(10)

Number
(11)

Amount
(12)

Number
(13)

$75,000,000
or more

Amount
(14)

Number
(15)

Amount
(16)

1,050

6,247

950

11,816

508

16,094

284

52,289

Education

338

2,013

376

4,640

206

6,368

66

6,177

Health and hospital

20

114

30

378

21

560

13

611

Transportation

76

277

74

631

49

1,117

71

12,505

Public safety

80

336

57

344

31

441

19

920

Environment

116

585

107

1,045

42

790

39

4,525

Housing

7

48

7

67

5

94

5

28

Utilities

183

933

133

1,319

71

1,781

57

7,289

Bond and tax/revenue
anticipation notes

30

197

17

237

13

577

4

608

Other purposes [3]

351

1,745

316

3,156

178

4,364

93

19,627

[1] Form 8038-G, Information Return for Tax-Exempt Government Obligations, with an entire issue price less than $100,000 is excluded from the study. Issuers of these
bonds are instructed to file Form 8038-GC, Information Return for Small Tax-Exempt Governmental Bond Issues, Leases, and Installment Sales. Statistics of Income does not
process data from the Forms 8038-GC filed with the Internal Revenue Service.
[2] A given bond issue can include more than one purpose. Thus, the summation of number of issues by purpose will sometimes exceed the total number of issues. However,
the money amounts add to the totals.
[3] "Other purposes" refer to obligations for which a specific purpose either did not apply or was not clearly indicated on the Form 8038-G, Informational Return for TaxExempt Government Obligations.
NOTE: Detail may not add to totals because of rounding.

135

Municipal Bonds, 2010
Statistics of Income Bulletin | Spring 2013

Table 5. New Money Long-Term, Tax-Exempt Governmental Bonds, by State of Issue and
Bond Purpose, 2010
[Money amounts are in millions of dollars]

Bond purpose
Total [1]

State of issue

136

Education

Health and hospital

Transportation

Number

Amount

Number

Amount

Number

Amount

Number

Amount

(1)

(2)

(3)

(4)

(5)

(6)

(7)

(8)

All States

11,017

94,644

3,522

21,682

253

1,842

787

Alabama

189

642

29

88

7

125

d

14,962
d

Alaska

17

198

d

d

0

0

d

d
693

Arizona

135

3,227

76

342

d

d

6

Arkansas

150

419

64

257

4

4

4

24

California

624

14,502

214

4,010

33

411

16

2,726

Colorado

200

1,299

44

232

5

45

13

310

Connecticut

123

1,160

65

299

d

d

31

266

Delaware

22

341

3

15

0

0

d

d

District of Columbia

9

300

d

d

0

0

d

d

Florida

291

8,436

53

897

d

d

24

1,711

Georgia

219

2,091

32

322

9

56

d

d

Hawaii

7

149

d

d

d

d

0

0

Idaho

40

96

6

10

4

6

5

14

Illinois

526

3,709

293

789

d

d

30

511

Indiana

268

1,311

85

235

5

169

22

221

Iowa

361

1,809

124

719

12

37

28

70

Kansas

228

731

46

135

13

32

37

61

Kentucky

199

963

84

77

6

28

15

197

Louisiana

170

1,540

33

334

13

28

8

743

Maine

111

271

34

41

d

d

21

60

Maryland

133

1,744

28

499

8

59

15

317
265

Massachusetts

187

1,625

60

451

d

d

27

Michigan

298

1,156

89

228

7

41

d

d

Minnesota

425

2,166

90

281

0

0

47

355

Mississippi

162

310

22

99

10

25

11

46

Missouri

287

899

105

246

8

14

32

192

Montana

47

75

d

d

0

0

0

0

Nebraska

290

399

40

112

6

7

29

31

Nevada

39

271

9

30

0

0

8

158

New Hampshire

65

380

17

96

d

d

11

15

New Jersey

321

2,336

169

529

d

d

6

673

New Mexico

98

878

41

403

d

d

3

99

New York

605

6,612

302

1,071

7

310

46

1,645

North Carolina

316

2,295

48

595

7

36

8

168

North Dakota

133

135

19

21

d

d

8

3

Ohio

306

1,562

118

301

4

11

23

168
250

Oklahoma

383

1,909

274

976

12

40

19

Oregon

99

1,027

30

107

3

23

5

69

Pennsylvania

598

4,529

200

1,356

0

0

30

633

Rhode Island

32

286

4

75

0

0

6

59

Footnotes at end of table.

Municipal Bonds, 2010
Statistics of Income Bulletin | Spring 2013

Table 5. New Money Long-Term, Tax-Exempt Governmental Bonds, by State of Issue and
Bond Purpose, 2010—Continued
[Money amounts are in millions of dollars]

Bond purpose
Total [1]

State of issue

Education

Health and hospital

Transportation

Number

Amount

Number

Amount

Number

Amount

Number

(1)

(2)

(3)

(4)

(5)

(6)

(7)

Amount
(8)

South Carolina

188

1,606

37

412

0

0

6

South Dakota

40

30

14

6

d

d

3

377
3

Tennessee

156

487

24

44

d

d

11

17

Texas

996

8,630

246

3,243

d

d

40

570

Utah

98

975

25

275

d

d

7

399

Vermont

88

169

16

7

4

2

6

15

Virginia

146

1,599

34

404

d

d

11

112

Washington

174

2,655

35

393

11

76

15

66

West Virginia

72

434

14

194

d

d

d

d
215

Wisconsin

296

1,068

96

237

d

d

59

Wyoming

39

62

21

21

d

d

d

d

U.S. Possessions [2]

11

3,145

d

d

0

0

0

0

Footnotes at end of table.

137

Municipal Bonds, 2010
Statistics of Income Bulletin | Spring 2013

Table 5. New Money Long-Term, Tax-Exempt Governmental Bonds, by State of Issue and Bond
Purpose, 2010—Continued
[Money amounts are in millions of dollars]

Bond purpose
State of issue

138

Public safety

Environment

Housing

Number

Amount

Number

Amount

Number

Amount

(9)

(10)

(11)

(12)

(13)

(14)

All States

1,499

2,772

1,008

7,679

67

290

Alabama

31

8

d

d

0

0

Alaska

0

0

0

0

0

0

Arizona

d

d

4

405

0

0

Arkansas

10

4

8

25

0

0

California

59

548

29

1,408

9

102

Colorado

23

25

d

d

d

d

Connecticut

38

34

24

81

d

d

Delaware

5

4

6

58

d

d

District of Columbia

0

0

0

0

d

d

Florida

d

d

18

447

d

d

Georgia

d

d

57

216

0

0

Hawaii

d

d

d

d

0

0

Idaho

6

22

4

12

0

0

Illinois

36

81

d

d

0

0

Indiana

43

62

36

367

0

0

Iowa

26

158

28

129

0

0

Kansas

18

27

21

10

0

0

Kentucky

25

18

6

2

0

0

Louisiana

44

46

23

98

0

0

Maine

22

15

6

4

d

d

Maryland

38

46

30

330

d

d

Massachusetts

37

33

32

300

d

d

Michigan

26

7

76

334

0

0

Minnesota

27

25

48

86

3

2

Mississippi

29

6

6

2

0

0

Missouri

34

126

27

76

0

0

Montana

0

0

11

29

d

d

Nebraska

25

13

8

4

0

0

Nevada

5

9

7

20

0

0

New Hampshire

14

27

10

12

0

0

New Jersey

42

98

30

355

d

d

New Mexico

25

13

d

d

0

0

New York

80

142

18

97

4

2

North Carolina

100

275

19

32

3

5

North Dakota

d

d

10

4

0

0

Ohio

44

25

24

486

0

0

Oklahoma

22

75

d

d

d

d

Oregon

15

29

10

82

0

0

Pennsylvania

76

87

129

829

9

19

Rhode Island

6

17

4

37

d

d

Footnotes at end of table.

Municipal Bonds, 2010
Statistics of Income Bulletin | Spring 2013

Table 5. New Money Long-Term, Tax-Exempt Governmental Bonds, by State of Issue and Bond
Purpose, 2010—Continued
[Money amounts are in millions of dollars]

Bond purpose
State of issue

Public safety

Environment

Housing

Number

Amount

Number

Amount

Number

(9)

(10)

(11)

(12)

(13)

Amount
(14)

South Carolina

d

d

d

d

d

South Dakota

9

10

d

d

d

d
d

Tennessee

21

14

d

d

0

0

Texas

129

131

30

194

d

d

Utah

10

109

4

11

0

0

Vermont

9

5

34

73

d

d

Virginia

33

139

22

164

d

d

Washington

24

50

8

461

4

14

West Virginia

20

5

17

48

0

0

Wisconsin

41

20

58

197

d

d

Wyoming

5

4

d

d

0

0

U.S. Possessions [2]

d

d

0

0

0

0

Footnotes at end of table.

139

Municipal Bonds, 2010
Statistics of Income Bulletin | Spring 2013

Table 5. New Money Long-Term, Tax-Exempt Governmental Bonds, by State of Issue and
Bond Purpose, 2010—Continued
[Money amounts are in millions of dollars]

Bond purpose
State of issue

140

Bond and tax/revenue
anticipation notes

Utilities

Other purposes [3]

Number

Amount

Number

Amount

Number

Amount

(15)

(16)

(17)

(18)

(19)

(20)

All States

1,366

12,596

247

1,882

3,078

30,939

Alabama

35

130

d

d

68

267

Alaska

d

d

0

0

12

154

Arizona

d

d

0

0

26

1,703

Arkansas

41

84

0

0

21

20

California

77

2,897

22

739

178

1,660

Colorado

29

230

d

d

82

419

Connecticut

5

23

0

0

60

408

Delaware

d

d

0

0

7

88

District of Columbia

0

0

d

d

5

54

Florida

51

1,148

0

0

106

4,138

Georgia

23

958

d

d

52

456

Hawaii

0

0

0

0

d

d

Idaho

4

7

4

8

7

18

Illinois

28

35

d

d

121

2,241
184

Indiana

16

47

11

26

54

Iowa

36

84

9

44

131

568

Kansas

34

78

17

47

83

341

Kentucky

21

318

4

6

38

317

Louisiana

23

170

4

17

23

104

Maine

3

3

8

12

36

95

Maryland

d

d

6

100

62

362

Massachusetts

26

30

5

14

109

530

Michigan

26

94

d

d

54

430

Minnesota

66

244

24

78

138

1,096

Mississippi

9

9

0

0

75

122

Missouri

33

72

0

0

53

172

Montana

12

5

d

d

18

36

Nebraska

24

102

15

10

146

119

Nevada

10

31

0

0

4

23

New Hampshire

d

d

3

15

20

187

New Jersey

15

91

d

d

77

578

New Mexico

9

29

0

0

14

306

New York

23

119

6

9

144

3,218

North Carolina

33

114

7

17

111

1,053

North Dakota

54

78

17

15

20

12

Ohio

16

33

4

59

80

479

Oklahoma

33

397

0

0

44

163

Oregon

10

410

6

126

24

179

Pennsylvania

28

498

8

260

138

847

Rhode Island

d

d

d

d

12

85

Footnotes at end of table.

Municipal Bonds, 2010
Statistics of Income Bulletin | Spring 2013

Table 5. New Money Long-Term, Tax-Exempt Governmental Bonds, by State of Issue and
Bond Purpose, 2010—Continued
[Money amounts are in millions of dollars]

Bond purpose
State of issue

Bond and tax/revenue
anticipation notes

Utilities

Other purposes [3]

Number

Amount

Number

Amount

Number

(15)

(16)

(17)

(18)

(19)

Amount
(20)

South Carolina

23

325

0

0

66

South Dakota

d

d

0

0

d

446
d

Tennessee

44

128

21

28

47

243
2,211

Texas

289

2,194

0

0

256

Utah

20

89

d

d

28

66

Vermont

15

13

d

d

12

50

Virginia

20

102

5

48

62

599

Washington

34

333

9

92

40

1,171

West Virginia

d

d

d

d

17

183

Wisconsin

42

148

15

28

76

218

Wyoming

4

12

0

0

7

8

U.S. Possessions [2]

d

d

0

0

3

2,449

d—Data deleted to avoid disclosure of information about specific bonds. However, the data are included in the appropriate totals.
[1] A given bond issue can include more than one purpose. Thus, the summation of number of issues by purpose will sometimes exceed the total number of issues.
However, the money amounts add to the totals.
[2] U.S. Possessions include Guam, Puerto Rico, and the U.S. Virgin Islands.
[3] "Other purposes" refer to obligations for which a specific purpose either did not apply or was not clearly indicated on Form 8038-G, Information Return for TaxExempt Government Obligations .
NOTE: Detail may not add to totals because of rounding.

141

Municipal Bonds, 2010
Statistics of Income Bulletin | Spring 2013

Table 6. Tax-Exempt Private Activity Bonds, by Type
and Term of Issue, 2010
[Money amounts are in millions of dollars]

Type and term of issue

Number

All issues, total [1]

Amount
3,799

127,054

Short-term

78

3,441

Long-term

3,721

123,613

2,562

63,611

New money issues, total
Short-term

46

281

Long-term

2,516

63,330

1,747

63,443

Refunding issues, total
Short-term

37

3,160

Long-term

1,710

60,283

[1] A given bond issue can include both new money and refunding proceeds. Thus, the number of
new money issues plus the number of refunding issues will sometimes exceed the total number of
issues. However, the money amounts add to the totals.
NOTE: Detail may not add to totals because of rounding.

142

Municipal Bonds, 2010
Statistics of Income Bulletin | Spring 2013

Table 7. Long-Term, Tax-Exempt Private Activity Bonds, by Bond Purpose and Type of Issue, 2010
[Money amounts are in millions of dollars]

Bond purpose

All issues

New money issues

Refunding issues

Number

Amount

Number

Amount

Number

Amount

(1)

(2)

(3)

(4)

(5)

(6)

Total [1]

3,721

123,613

2,516

63,330

1,710

60,283

Airports

97

14,719

52

7,972

67

6,747

Docks and wharves

27

2,101

10

822

22

1,279

Water, sewage, and solid waste disposal facilities

118

6,802

47

2,717

79

4,085

Qualified residential rental facilities

308

5,684

206

3,523

116

2,161

Local electricity or gas furnishing facilities

6

508

d

d

d

d

Tax Reform Act of 1986 transition property bonds

46

3,329

d

d

d

d

Qualified enterprise zone facility bonds

d

d

0

0

d

d

Qualified empowerment zone facility bonds

d

d

0

0

d

d

Qualified highway or surface freight transfer facility bonds

4

1,741

d

d

d

d

Qualified New York Liberty Zone bonds

d

d

0

0

d

d

2008 Housing Act bonds issued under IRC section 142

22

361

19

309

5

52

Qualified Gulf Opportunity Zone exempt facility bonds, Gulf
Opportunity Zone mortgage bonds, and Gulf Opportunity Zone
advance refunding bonds

61

4,962

53

4,539

8

423

Environmental enhancements of hydroelectric generating facilities

d

d

d

d

d

d

Qualified Midwestern disaster area exempt facility bonds, and
qualified Midwestern disaster area mortgage bonds

57

418

57

418

0

0

Qualified Hurricane Ike disaster area exempt facility bonds

5

699

5

699

0

0

Recovery zone facility bonds

427

6,267

427

6,267

0

0

Qualified mortgage bonds

84

7,355

71

4,295

48

3,061

2008 Housing Act bonds issued under IRC section 143

21

1,045

21

865

9

180

Qualified veterans' mortgage bonds

4

307

d

d

d

d

428

823

335

578

103

244

Qualified small issue bonds
Qualified student loan bonds

25

4,683

13

863

16

3,821

Qualified hospital facilities

429

29,374

249

11,710

275

17,664
15,429

Qualified section 501(c)(3) nonhospital bonds

1,614

31,631

983

16,202

955

Nongovernmental output property bonds

d

d

0

0

d

d

Other purposes [2]

12

68

9

13

3

55

d—Data deleted to avoid disclosure of information about specific bonds. However, the data are included in the appropriate totals.
[1] A given bond issue can include more than one purpose and can include both new money and refunding proceeds. Thus, the summation of number of issues by purpose or by
type of issue will sometimes exceed the total number of issues. However, the money amounts add to the totals.
[2] For this table, "other purposes" refer to obligations for which a specific purpose either did not apply or was not clearly indicated on Form 8038, Information Return for Tax-Exempt
Private Activity Bond Issues .
NOTE: Detail may not add to totals because of rounding.

143

Municipal Bonds, 2010
Statistics of Income Bulletin | Spring 2013

Table 8. Computation of Lendable Proceeds for Long-Term Tax-Exempt Private Activity Bonds, by
Selected Bond Purpose, 2010

[Money amounts are in millions of dollars]

Selected bond purpose

Entire issue price

Number
(1)

Credit enhancement

Allocation to reserve
fund

Number
(3)

Number
(5)

Number
(7)

Amount
(4)

Amount
(6)

Amount
(8)

Total [1]

3,721

123,613

2,139

887

192

123

472

1,824

Airports

97

14,719

88

114

19

13

37

542

Docks and wharves

27

2,101

d

d

d

d

11

83

Water, sewage, and solid waste disposal
facilities

118

6,802

49

25

10

1

9

9

Qualified residential rental facilities

308

5,684

61

9

16

8

33

15

2008 Housing Act bonds issued under IRC
section 142

22

361

d

d

d

d

d

d

Qualified Gulf Opportunity Zone exempt
facility bonds, Gulf Opportunity Zone
mortgage bonds, and Gulf Opportunity
Zone advance refunding bonds

61

4,962

44

32

4

2

4

12

Qualified Midwestern disaster area
exempt facility bonds, and qualified
Midwestern disaster area mortgage
bonds

57

418

39

4

d

d

d

d

Recovery zone facility bonds

427

6,267

326

62

29

8

38

59

Qualified mortgage bonds

24

14

0

0

20

45
16

84

7,355

2008 Housing Act bonds issued under IRC
section 143

21

1,045

7

2

0

0

9

Qualified small issue bonds

428

823

87

6

15

1

3

1

Qualified student loan bonds

25

4,683

d

d

d

d

11

40

Qualified hospital facilities
Qualified section 501(c)(3) nonhospital
bonds

429

29,374

292

259

34

60

56

415

1,614

31,631

1,109

297

64

29

247

512

84

7,388

d

d

d

d

10

72

All other bonds, combined [2]
Footnotes at end of table.

144

Amount
(2)

Bond issuance costs

Municipal Bonds, 2010
Statistics of Income Bulletin | Spring 2013

Table 8. Computation of Lendable Proceeds for Long-Term Tax-Exempt Private Activity Bonds, by
Selected Bond Purpose, 2010—Continued

[Money amounts are in millions of dollars]

Selected bond purpose

Total lendable proceeds

Number
(9)

Amount
(10)

Proceeds used to refund prior
issues
Number
(11)

Amount
(12)

Nonrefunding proceeds

Number
(13)

Amount
(14)

Total [1]

3,721

120,778

1,712

59,352

2,609

61,427

Airports

97

14,050

67

6,601

54

7,450

Docks and wharves

27

2,001

22

1,232

10

769

Water, sewage, and solid waste disposal
facilities

118

6,767

79

4,077

48

2,690

Qualified residential rental facilities

308

5,652

116

2,158

206

3,494

2008 Housing Act bonds issued under IRC
section 142

22

359

5

52

19

307

Qualified Gulf Opportunity Zone exempt
facility bonds, Gulf Opportunity Zone
mortgage bonds, and Gulf Opportunity
Zone advance refunding bonds

61

4,916

10

421

53

4,495

Qualified Midwestern disaster area
exempt facility bonds, and qualified
Midwestern disaster area mortgage
bonds

57

411

0

0

57

411

Recovery zone facility bonds

427

6,138

0

0

427

6,138

Qualified mortgage bonds

48

3,044

71

4,253
851

84

7,297

2008 Housing Act bonds issued under IRC
section 143

21

1,027

9

176

21

Qualified small issue bonds

428

815

103

244

336

571

Qualified student loan bonds

25

4,626

16

3,790

13

836

Qualified hospital facilities
Qualified section 501(c)(3) nonhospital
bonds

429

28,640

275

17,274

259

11,366

1,614

30,793

955

15,152

1,065

15,641

84

7,286

63

5,131

25

2,155

All other bonds, combined [2]

d—Data deleted to avoid disclosure of information for specific bonds. However, the data are included in the appropriate totals.
[1] A given bond issue can include more than one purpose. Thus, the summation of number of issues by purpose will sometimes exceed the total number of issues. However, the
money amounts add to the totals.
[2] For purposes of this table, this category includes all issues for which a specific purpose either did not apply or was not clearly indicated on Form 8038, Information Return for
Tax-Exempt Private Activity Bond Issues, as well as bonds issued for: local electricity or gas furnishing facilities, facilities issued under a transitional rule of the Tax Reform Act of
1986, qualified enterprise zone facility bonds, qualified empowerment zone facility bonds, qualified highway or surface freight transfer facility bonds, New York Liberty Zone bonds,
environmental enhancements of hydroelectric generating facilities, Hurricane Ike disaster area exempt facility bonds, qualified veterans' mortgage bonds, and nongovernmental
output property bonds.
NOTE: Detail may not add to totals because of rounding.

145

Municipal Bonds, 2010
Statistics of Income Bulletin | Spring 2013

Table 9. New Money Long-Term Tax-Exempt Private Activity Bonds, by Selected Bond Purpose and
Size of Entire Issue, 2010

[Money amounts are in millions of dollars, except for size of entire issue, which is in whole dollars]

Size of entire issue
All issues

Selected bond purpose

$5,000,000 under
$10,000,000

Number

Amount

Number

Amount

Number

Amount

Number

Amount

(1)

(2)

(3)

(4)

(5)

(6)

(7)

(8)

Total [1]

2,516

63,330

279

82

600

1,582

459

Airports

52

7,972

0

0

d

d

d

d

Docks and wharves
Water, sewage, and solid waste
disposal facilities

10

822

0

0

0

0

0

0

47

2,717

d

d

d

d

7

49

Qualified residential rental facilities
2008 Housing Act bonds issued under
IRC section 142

206

3,523

d

d

d

d

56

388

19

309

0

0

d

d

8

63

53

4,539

0

0

d

d

10

67

Qualified Gulf Opportunity Zone
exempt facility bonds, and Gulf
Opportunity Zone mortgage bonds

2,939

Qualified Midwestern disaster area
exempt facility bonds, and qualified
Midwestern disaster area mortgage
bonds

57

418

d

d

26

62

13

82

Recovery zone facility bonds

427

6,267

11

6

158

441

102

716

Qualified mortgage bonds

71

4,295

0

0

0

0

0

0

2008 Housing Act bonds issued under
IRC section 143

21

865

0

0

0

0

d

d

Qualified small issue bonds

335

578

225

52

60

167

39

258

Qualified student loan bonds

13

863

0

0

0

0

0

0

Qualified hospital facilities
Qualified section 501(c)(3) nonhospital
bonds

249

11,710

4

3

26

75

26

154

983

16,202

26

15

273

667

198

1,144

All other bonds, combined [2]

25

2,252

6

2

d

d

d

d

Footnotes at end of table.

146

$1,000,000 under
$5

[Text truncated at 120,000 characters. The full text is on the page linked above.]

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/agency%3Airs%3Af1a5351a3967c39c. Public record. Not legal advice.