Business Definition for: essential purpose (or function) bond
essential purpose (or function) bond
Related Terms:
category of municipal bond as defined in the tax reform act of 1986, which is exempt from federal income taxes as long as it provides no more than 10% benefit to private parties and no more than 5% of the proceeds or $5 million are used for loans to private parties; also called public activity, traditional government purpose, and essential purpose bond. Public purpose bonds include purposes such as roads, libraries, and government buildings.
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