essential function bond

essential function bond definition - business

essential function bond

A bond issued by a municipality when funds from the bond issue are used for traditional government purposes such as government office buildings, libraries, parks, prisons, roads, and schools. The interest on municipal essential function bonds is exempt from federal income tax and is not subject to the alternative minimum tax. Compare private activity bond. See also municipal bond.

The American Heritage® Dictionary of Business Terms Copyright © 2009 by Houghton Mifflin Harcourt Publishing Company. Published by Houghton Mifflin Harcourt Publishing Company. All rights reserved.

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