The National Federation of Municipal Analysts is seeking public comment on a draft of recommended best practices in disclosure for what are often referred to as land secured transactions.
The NFMA announced Wednesday that it had released the draft "Recommended Best Practices in Disclosure for Special Property Tax and Special Assessment Debt Transactions" for public comment through Oct. 15.
Based on differences in state law, special property tax and special assessment debt transactions have a variety of structures, according to the draft RBP. The draft, dated Aug. 15, refers to such deals as land secured transactions or LSTs for short.
The draft RBP "updates and augments" an RBP on LSTs released in 2000, the NFMA said in an Aug. 19 press release.
"This draft marks a significant step forward in modernizing disclosure standards for special property tax and special assessment debt transactions," NFMA Disclosure Committee Chair Jane Ridley said in the release.
"By incorporating current market developments and feedback from a variety of stakeholders, we aim to provide a framework for land secured transactions that enhances clarity and reliability for both investors and issuers," Ridley said.
Generally, LSTs are "developer-driven," the draft RBP explained.
"Developers identify a parcel of land for development and then apply to a local governmental jurisdiction with authority under state law to form a special political subdivision (District) authorized by a state's law to develop and finance the necessary public infrastructure for the proposed development," the draft said.
Typically, districts are authorized under state law to issue bonds to pay for public infrastructure required to support the proposed development, whether it be "residential, commercial or industrial development or a mix thereof," the draft RBP said.
Thomas Longino and Betsy Shelton co-chaired the subcommittee that authored the draft RBP released Wednesday. All such papers, including that newly released draft, are subject to revision based on input received during the public comment period, the release said
The NFMA has written RBPs and white papers on roughly 30 different sectors and topics in the municipal bond market, according to the release. The organization enlists committees made up of analysts and other muni industry stakeholders, including representatives of issuers, to take part in the writing of its RBPs and white papers.
The NFMA, established in 1983, has nearly 1,200 members. Its members are primarily research analysts who evaluate credit and other risks in the muni market. Those individuals represent a variety of entities including mutual funds, insurance companies, broker-dealers, bond insurers, rating agencies and financial advisory firms, according to the release.
