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Essential Purpose Bond
(redirected from Public Purpose Bonds)

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Essential Purpose Bond
A municipal bond that intends to fund the normal functions of a local government. Examples of institutions and activities that an essential purpose bond finances are municipal buildings, police cars, firefighter salaries, and so forth. Essential purpose bonds differ from private activity bonds, which are municipal bonds intended to help private business in the community. It is also called a traditional government purpose bond. See also: General obligation bond.


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The most recent data are for Tax Year 2005 public purpose bonds and private activity bonds.
Under the Tax Reform Act of 1986, Congress permitted tax-exempt municipal financing for stadiums and other sports facilities as public purpose bonds, but only where they met the new definitions in the law crafted by Congress and the Reagan administration.
The most recent data are for Tax Year 2003 public purpose bonds and private activity bonds.
 
 
 
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