Glossary of Municipal Securities Terms

AUTHORITY

A unit or agency of a government, or a separately established not-for-profit entity formed on behalf of a governmental entity, established to perform specialized functions. In some cases, authorities have the power to issue debt that is secured by the lease rental payments made by or other specified revenue of a governmental unit using the facilities constructed with bond proceeds. In other cases, authorities issue private activity bonds for the purpose of making the proceeds available to qualified private entities for use as permitted under the federal tax laws. Examples of such authorities include water and sewer, electric, health facilities, industrial development and housing finance authorities. An authority may function independently of other governmental units, or it may depend upon other units for its creation, funding or administrative oversight.

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