Glossary of Municipal Securities Terms

TEFRA

Acronym for “Tax Equity and Fiscal Responsibility Act” of 1982. As a pre-condition for the exclusion from gross income for federal income tax purposes of interest on all qualified private activity bonds, TEFRA requires, among other things, that the issue be approved (a “TEFRA approval”) either by an elected official or body of elected officials of the applicable governmental entity after a public hearing (a “TEFRA hearing”) following reasonable public notice (a “TEFRA notice”) or by voter referendum of such governmental entity. See: PRIVATE ACTIVITY BOND; QUALIFIED BOND.

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