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Municipal Debt Finance Law: Theory and Practice, Second Edition

Municipal Debt Finance Law: Theory and Practice, Second Edition by Robert S. Amdursky, Clayton P. Gillette, G. Allen Bass

Municipal Debt Finance Law: Theory and Practice, Second Edition

By Robert S. Amdursky, Clayton P. Gillette, G. Allen Bass
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Wolters Kluwer Legal & Regulatory U.S.
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Municipal Debt Finance Law: Theory and Practice, Second Edition describes the law related to municipal debt finance and indicates the requirements that municipalities and states must satisfy in order to issue debt, the limitations on the amounts and kinds of debt that municipalities and states can issue, the rights of the creditors of municipalities and states, and the role of federal securities laws in regulating the issuance of debt by municipalities and states.

Municipal Debt Finance Law: Theory and Practice, Second Edition provides an examination of the legal principles underlying the issuance of debt by states and their political subdivisions. The book provides in-depth analysis of the conditions that must be satisfied prior to issuance of debt; state constitutional restrictions on the issuance of debt, such as the public purpose requirement, the prohibition on lending of credit, and debt limitations; the rights of bondholders; and federal regulation of municipal securities.

The world of municipal finance has undergone major transformations in the law regarding the conditions under which states and localities can issue debt, the form of transactions, and the regulation of bonds evidencing those debts. In addition, the fiscal environment surrounding states and their political subdivisions has been dramatically altered by the financial crisis of 2008. Terms that were unknown twenty years ago have become commonplace. More importantly, terms that were known but rarely uttered, such as “municipal bankruptcy,” have now become part of everyday conversation.

Municipal Debt Finance Law: Theory and Practice, Second Edition examines all of these issues including a new chapter on municipal bankruptcy. It emphasizes the basic principles and themes that dominate municipal finance. The new edition also covers key issues like the proper scope of liability for disclosure and the applicability of federal securities laws to municipal bonds.

SKU: 10045664-7777


  • §1.1 The Financial Role of Local Government—An Introduction to Public Finance
  • §1.2 A Brief History of State and Local Indebtedness
  • §1.3 The Classifications and Characteristics of Municipal Securities
  • §1.4 The Municipal Bond Market and the Mechanics of Bond Issuance


  • §2.1 Introduction
  • §2.2 Source and Scope of the Power to Issue
  • §2.3 Local Accountability and the Judicial Definition of “Local Authority”
  • §2.4 Debt Elections
  • §2.5 Interlocal Agencies and Delegation of Municipal Power
  • §2.6 The Interstate Compact Clause
  • §2.7 Pre-Issuance Bond Validation
  • §2.8 Bond Elections and the Voting Rights Act


  • §3.1 Introduction: The Rationale and Historical Origins of Public Purpose Limitations
  • §3.2 State Constitutional Sources of the Public Purpose Doctrine
  • §3.3 The Federal Constitution as a Source of the Limitation
  • §3.4 Federal Constitutional Constraints on the Use of Bond Proceeds: First Amendment Considerations
  • §3.5 Defining Public Purpose
  • §3.6 An Economic View of Public Purpose
  • §3.7 Prohibitions on Gifts or Loans of Credit


  • §4.1 Introduction and Overview
  • §4.2 The Various Forms of Debt Limitations
  • §4.3 Calculating “Taxable Property” to Determine the Amount of the Limitation
  • §4.4 Obligations Outside the Debt Limitation – The “Special Fund” Doctrine
  • §4.5 The Source of Repayment as a Measure of Debt: Ad Valorem Property Taxes and the Special Fund Doctrine
  • §4.6 Implications of the Special Fund Doctrine
  • §4.7 Financing Improvements, Extensions, and Additions to Existing Facilities as Elements of Debt
  • §4.8 Service Contracts as Debt
  • §4.9 “Take-or-Pay” Obligations as Debt
  • §4.10 Moral Obligations as Debt
  • §4.11 Tax Increment Financing as Debt
  • §4.12 Debt Limitations for Public Authorities and Special Districts
  • §4.13 Overlapping Jurisdictions and Overlapping Debt Limitations
  • §4.14 Conduit Financing: Building Authorities and Lease-Purchase Obligations as Debt Obligations
  • §4.15 A Critique of Debt Limitations


  • §5.1 Introduction
  • §5.2 Security Arrangements in Revenue Bond Financings
  • §5.3 Events of Default
  • §5.4 The Right to Payment
  • §5.5 The Right Not to Have the Bondholders' Security Impaired: Introduction to the Contracts Clause
  • §5.6 To Whom Does the Contracts Clause Apply?
  • §5.7 What Constitutes a “Law” for Purposes of the Contracts Clause?
  • §5.8 What Constitutes an Impairment of the Obligation of Contract?
  • §5.9 What Does Not Constitutean Impairment?
  • §5.10 What Constitutes an Unconstitutional Impairment of Contract
  • §5.11 What Constitutes an Unconstitutional Impairment of Contract—Critique
  • §5.12 Invalid or Defective Bonds
  • §5.13 Contractual Rights of Bondholders
  • §5.14 Statutory Protections for Bondholders
  • §5.15 Municipal Debt Adjustment or “Bankruptcy”


  • §6.1 Introduction
  • §6.2 The Federal Securities Laws
  • §6.3 Definition of “Security”
  • §6.4 Rule 131
  • §6.5 What is a “Municipal Security?”
  • §6.6 Municipal Securities as “Exempt Securities”
  • §6.7 Guarantees as Securities and Exempt Securities
  • §6.8 Antifraud Provisions
  • §6.9 Disclosure
  • §6.10 Aiding and Abetting and Scheme Liability
  • §6.11 Rule 15c2-12
  • §6.12 The Roles of Participants in the Disclosure Process
  • §6.13 Mark-Ups and Yield-Burning
  • §6.14 Self-Regulation and the Municipal Securities Rulemaking Board
  • §6.15 State Securities Regulation
  • §6.16 Constitutional Issues in Federal Regulation of Municipal Securities

Table of Cases



Robert S. Amdursky was a partner in the Manhattan law firm of Wilkie Farr & Gallagher and an adjunct professor at the New York University Law School. He served as chairman of the New York State Moreland Act Commission to Investigate the Operation and Administration of the Returnable Container Act, as counsel to the New York State Joint Legislative Committee on Housing and Urban Development, and as special counsel to the majority leader in the New York State Senate. He was deputy chairman of the state's Mortgage Finance Agency, and a member of or adviser to many state commissions, including those dealing with the Urban Development Corporation and the revision of state and local financing laws. Mr. Amdursky was a graduate of Cornell University and the Harvard Law School. Following his death in 1990, Mr. Amdursky posthumously received the National Association of Bond Lawyers’ Bernard P. Friel Medal for distinguished service in public finance.

Clayton P. Gillette is the Max E. Greenberg Professor of Contract Law at NYU School of Law. He teaches in the areas of local government law, commercial law, and contracts. Gillette is the author of Local Redistribution and Local Democracy: Interest Groups and the Courts, and co-author of Local Government Law: Cases and Materials (with Lynn Baker), and Municipal Debt Finance Law (with Robert S. Amdursky and Allen G. Bass). He has written numerous articles on various aspects of local government law, with particular focus on municipal finance. Gillette’s work explores subjects ranging from the appropriate degree of municipal fiscal autonomy, to the role of reputation in commercial transactions, to the political economy of international sales law. Gillette received his B.A. from Amherst College and his J.D. from the University of Michigan School of Law. Prior to joining the NYU faculty, Professor Gillette served as the Perre Bowen Professor of Law at the University of Virginia School of Law, and as Professor of Law and Warren Scholar in Municipal Law at Boston University. He was Vice Dean at NYU School of Law from 2004 to 2007. Before entering academia, Gillette clerked for Judge J. Edward Lumbard of the United States Court of Appeals for the Second Circuit, and was associated with Cleary, Gottlieb, Steen and Hamilton in New York City.

G. Allen Bass is a veteran bond lawyer with over 40 years’ experience. He began his career in 1972 when public finance began to expand into financing residential and multifamily mortgages, health and education facilities and student loans, and when economic development finance began to become widespread. In particular, he participated in the creation of mortgage financing agencies and authorities in several states. Mr. Bass expanded beyond housing finance and was the principal lawyer on The Bond Buyers 2005 “Midwest Deal of the Year” and the inaugural award in 2009 of the “Non-Traditional Finance Deal of the Year.” In 2005 he was recognized as a Michigan Lawyer of the Year by the Michigan Lawyers Weekly. A graduate of the University of Missouri – Kansas City Law School, he has served on the adjunct faculties of the Boston University School of Law and the New York Institute of Finance. Most recently, he was a speaker at New York University’s Fifth Annual Global Economic Policy Forum held in November 2012. Mr. Bass has practiced in New York City, Boston and Detroit.