The California Debt Limit Allocation Committee's mission is to allocate tax-exempt private activity bond authority for the State of California. Private activity bonds may only be used by the private sector for projects and programs that provide a public benefit. The major public benefit in California is the creation of affordable housing.

The federal government limits the amount of tax-exempt private activity bond authority that can be issued in a state on an annual basis. The limit of bond authority in 2010 is calculated by multiplying the state population by $90. California has the largest population, and thus has the largest debt (or tax-exempt bond) limit, which totaled over $3.3 billion in 2010.

The Committee's allocation of tax-exempt bond authority results in the issuance of bonds by cities, counties, joint powers authorities, and state agencies. The bonds are purchased and used by the private sector and are not an obligation of the state or of the federal government.

The Committee administers six programs that are funded through the allocation and issuance of tax-exempt private activity bonds. Those programs are: (1) the Qualified Residential Rental Project Program, (2) the Single-Family Housing Program, (3) the Extra Credit Home Purchase Program, (4) the Industrial Development Bond Project Program, (5) the Exempt Facility Program, and (6) the Student Loan Program.

The Committee is also responsible for the reallocation of Recovery Zone Economic Development Bond (RZEDB), Recovery Zone Facility Bond (RZFB), and Qualified Energy Conservation Bond (QECB) authority originally provided to qualified localities, but later waived back to the State. These bond programs, made available through the American Recovery and Reinvestment Act of 2009, provide tax incentives and lower borrowing costs for local governments and provate entities to promote job creation and economic recovery in areas particularly affected by employment decline; and for the QECB authority, to facilitate renewable energy conservation programs and projects throughout the State.

The Committee is comprised of the State Treasurer as Chairperson, the Governor, or upon his designation, the Director of Finance, and the State Controller. The Committee is funded on a fee-supported basis.