Series 50: Small Issuer Exception

Small Issuer Exception

Note: This subsection was positioned incorrectly. It should be located under the Rebate Rules section.  

This exception is for municipalities that issue $5 million or less of governmental bonds or $15 million for public school construction in a year. This exception is an exception to the rebate rule. It is not a yield restriction exception. This exception only holds for:

• • Governmental bonds that are not private activity bonds
• • Issuers that have general taxing authority (e.g., state or municipality)
• • Issuers that spend 95% of the proceeds on local governmental activities

Example: A municipality issues $10 million in bonds to build a middle school. Later the same year, the municipality issues $5 million to purchase land on which to build a high school. Both bond issues wil