special tax bond

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Special Tax Bond

A government bond where repayment is guaranteed by a tax that the issuer levies specifically for that purpose. For example, suppose a city issues a special tax bond to build a new campus for the community college. It may levy an excise tax on alcohol sold in the city in order to pay coupons and eventually the principal on this bond. While excise taxes commonly pay for special tax bonds, increases in property taxes, sales taxes, or any other duty may be used.

special tax bond

A municipal bond with debt service limited to the revenues generated by a special tax. A bond issue to finance a convention center with the interest and principal payments limited to taxes received from a levy on motel and restaurant sales is an example of a special tax bond. Certain special tax bonds are also secured by the full faith and credit of the issuer; they have the additional security of being general obligations.

Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.

References in periodicals archive ?

--$38.8 million special tax bonds, tax-exempt series 2015-A.

Fitch Downgrades $39MM Birmingham-Jefferson Civic Center Auth Revs to 'BBB+'; Outlook Stable

Special Tax Bonds. In terms of default risk, special tax (and assessment) bonds can be highly risky.

Special tax bonds (including special assessment bonds) are a diverse group of municipal securities that often bear substantial risk for both issuers and investors, especially when they are payable from property taxes (or assessments) levied on undeveloped real estate to pay for infrastructure that is intended to serve the property.

Telling myth from reality in muniland

The report, among other things, presented four financing options--GO bonds, special tax bonds, special assessment bonds, and a community facilities district--that the City may use to meet its unfunded infrastructure and services needs.

Special Tax bonds can be financed through several means including a parcel tax, or increases to such General Fund taxes as the Transient Occupancy Tax (TOT) (4) and Utility Users Tax (UUT) (5).

Financing community facilities: a case study of the parks and recreational general obligation bond measure of San Jose, California

The payments of interest revenue and principal on municipal bonds may be secured by the full faith and credit of the issuer (general obligation bonds), a specified tax (special tax bonds) or income generated by the project (revenue bonds).

Advising clients on municipal bonds

--$175 million in outstanding special tax bonds, series 2008 and 2009 upgraded to 'AA+' from 'A+'.

Fitch Rates Arlington, TX's IDR 'AAA'; Outlook Stable

Such loans are used in certain types of land-based financings in some jurisdictions, such as tax assessment bonds or special tax bonds (e.g., California Mello Roos bonds) for private development of infrastructure improvements (e.g., streets, lighting, sewers, or undergrounding of utilities).

Overview of final private activity bond tax regulations

SUFFICIENT REVENUE BOND COVERAGE: Coverage of maximum annual debt service (MADS) for all special tax bonds is sufficient for the 'AA' rating level, in spite of varying degrees of volatility over the last several years; legal provisions are sound.

Fitch Affirms Polk County, FL's Rev Bonds at 'AA'; Outlook Stable

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