Landscape Lighting Act of 1972
- This is the act of legislation (Streets & Highways Section
22500) that allows local governmental agencies to form Landscape
& Lighting Maintenance Districts for the purpose of financing
the costs and expenses of operating, maintaining, and servicing
landscaping, lighting and appurtenant facilities located within
the public areas of the district.
Lease-Rental Bond - Bonds whose
principal and interest are payable exclusively from rental
payments from a lessee. Rental payments are often derived
from earnings of an enterprise that may be operated by the
lessee or the lessor. Rental payments may also be derived
from taxes levied by the lessee.
Legal Opinion - A written opinion
from bond counsel that an issue of bonds was duly authorized
and issued. The opinion usually includes the statement, "interest
received thereon is exempt from federal taxes and, in certain
circumstances, from state and local taxes."
Letter of Credit - A form of supplement
or, in some cases, direct security for a municipal bond under
which a commercial bank or private corporation guarantees
payment on the bond under certain specified conditions.
Level Debt Service - Principal
and interest payments that, together, represent more or less
equal annual payments over the life of the loan. Principal
may be serial maturities or sinking fund installments.
Lien - A claim on property as
security for debt or obligation.
Limited Tax Bond - A bond secured
by a pledge of a tax that is limited as to rate or amount.
Marks-Roos Bonds - The State Legislature
enacted the Marks-Roos (named after its legislative sponsors)
Local Bond Pooling Act of 1985 to facilitate the financing
of local government facilities by bond bank pools funded by
bond proceeds. The pool, formed under a Joint Powers Authority,
can buy any type of legally issued debt instrument within
or without its geographic area. The idea was to save money
through economies of scale by selling one large bond issue
to finance several small projects. This in fact has not always
happened. Many issues were high yielding, unrated, junk bonds
that benefited no one but the bond underwriter. Several Marks-Roos
issues have defaulted and are under investigation by the Securities
and Exchange Commission. Prospective investors should find
out what sort of loans the pooled fund will make before buying
Maximum Special Tax - When a new
Mello-Roos Community Facilities District is formed, a maximum
special tax amount is assigned to each type of land use. The
actual amount of special tax levied against any one property
cannot exceed the maximum special tax. See our Mello-Roos
Fact Sheet for more information.
Maximum Annual Debt Service -
The maximum amount of principal and interest due by a revenue
bond issuer on its outstanding bonds in any future fiscal
year. This is sometimes the amount to be maintained in the
Debt Service Reserve Fund.
Mello-Roos (Bonds) - The Mello-Roos
(named for its legislative sponsors) Community Facilities
District Act of 1982 established another method whereby almost
every municipal subdivision of the state may form a special,
separate district to finance a long list of public facilities
by the sale of bonds and/or to finance certain public services
on a "pay-as-you-go" basis. These Community Facilities
Districts are formed and bond issues are authorized by a two-thirds
vote of the property owners in the district.
Mortgage Revenue Bond - A bond
backed by a lien on the monthly payments of a large pool of
mortgages, usually issued by a state or local housing authority.
Municipal Bond - Bonds issued
by any of the 50 states, the territories and their subdivisions,
counties, cities, towns, villages and school districts, agencies,
such as authorities and special districts created by the states,
and certain federally sponsored agencies such as local housing
authorities. Historically, the interest paid on theses bonds
has been exempt from federal income taxes and is generally
exempt from state and local taxes in the state of issuance.
There are approximately $1.3 trillion municipal bonds outstanding
and they generate about $50 billion tax-free interest income
Municipal Notes - Short-term municipal
obligations, generally maturing in one year or less. The most
common types are (1) bond anticipation notes (BANs), (2) revenue
anticipation notes (RANs), (3) tax anticipation notes (TANs),
(4) grant anticipation notes, (5) project notes, and (6) construction
Municipal Securities Rulemaking Board
(MSRB) - An independent self-regulatory organization established
by Congress in 1975 which is charged with primary rulemaking
authority - under the SEC - over dealers, dealer banks, and
brokers in municipal securities.
Net Bonded Debt - Gross general
obligation debt less self-supporting general obligation debt,
housing bonds, water revenue bonds, etc.
Net Interest Cost (NIC) - Generally
speaking, issuers award competitive bond sales to the underwriter
bidding the lowest NIC. It represents the average coupon rate
weighted to reflect the time until repayment of principal
and adjusted for the premium or discount.
Net Revenue Available for Debt Service
- Usually, gross operating revenues of an enterprise less
operating and maintenance expenses but exclusive of depreciation
and bond principal and interest. Net revenue as thus defined
is used to determine coverage on revenue bond issues.
Notice of Special Tax - In 1990,
legislation was passed requiring that all sellers of property
in Mello-Roos districts disclose to buyers the presence and
certain features of the Special Tax. The disclosure, known
as a Notice of Special Tax, is the legal responsibility of
the seller of property. See our Notice of Special Tax fact
sheet for more details.
Official Statement (OS) or Offering
Circular (OC) - A document (prospectus) circulated for
an issuer prior to a bond sale with salient facts regarding
the proposed financing. The final OS must be sent to the purchaser
before delivery of the bonds.
Overlapping Debt - The proportionate
share of the general obligation bonds of local governments
located wholly or in part within the limits of the reporting
unit of government that must be borne by property owners within