Law and legal issues

State and local authorities might issuer fewer tax-exempt bonds to fund water infrastructure projects if Congress approves pending legislation to establish a $10 billion water trust fund, market participants said Friday.

BRADENTON, Fla. — Alabama Gov. Bob Riley said yesterday that he could not legally declare an emergency in Jefferson County as requested by officials there who say they need the state’s help to cope with an increasingly dire financial situation created by the loss of a major source of revenue for the county’s general fund.

BRADENTON, Fla. - Jefferson County, Ala., commissioners this week are continuing to sort out severe budget problems that have, for the moment, seemingly overshadowed the county's $3.2 billion sewer debt crisis.

The Securities and Exchange Commission is considering rules that would curb issuers from shopping around for the best ratings for their securities, but it's not clear if the provisions would apply across all types of asset classes, including municipal securities.

WASHINGTON - The Securities and Exchange Commission voted unanimously Wednesday to propose changes to its Rule 15c2-12 on disclosure that would expand the types of events issuers must disclose on a continuing basis as well as eliminate some of the rule's exemptions for variable-rate demand obligations.

DALLAS - Amid a flurry of scandals and investigations involving bond transactions, New Mexico Lieut. Gov. Diane Denish is pushing new ethics legislation as she seeks to escape the tarnished image of Democratic Gov. Bill Richardson.

BRADENTON, Fla. - A Florida judge yesterday began a two-day bond validation hearing in the ongoing case in which the South Florida Water Management District wants to purchase U.S. Sugar Corp. land for $536 million.

SAN FRANCISCO - As California gets closer to the half-billion-dollar mark in outstanding IOUs, the state's leading budget negotiators resumed communications over the weekend, though hours of meetings left more to be resolved.

Supporters of municipal market reforms are worried that the Securities and Exchange Commission appears to be backtracking from earlier calls for widespread legislative and regulatory changes to disclosure and accounting standards, instead favoring a much more modest set of draft regulatory reforms which it will consider at a meeting tomorrow.

WASHINGTON - The Municipal Securities Rulemaking Board issued guidance on Friday warning broker-dealers of the muni rules that they need to comply with when selling or trading California IOUs.

WASHINGTON - Broker-dealer counterparties of municipal interest rate swaps and other customized over-the-counter derivative contracts would have to meet much higher capital and margin requirements than for standardized derivatives contracts under the Obama administration's regulatory reform proposals, Treasury Secretary Timothy Geithner told lawmakers Friday.

DALLAS — A former New Mexico state representative accused of misusing $300,000 from an affordable housing bond issue is awaiting trial along with three other executives after a lengthy investigation by the attorney general’s office.

A bill that would have made it tougher for California municipalities to declare bankruptcy stalled in the state Senate this week.

WASHINGTON - The Securities and Exchange Commission yesterday published rule changes that would make money market funds less susceptible to market turmoil and runs by investors, and asked for public comments on the proposals to be submitted by Sept. 8.

BRADENTON, Fla. - Jefferson County, Ala., disclosed what is believed to be the county's first missed payment to owners of its sewer warrants after defaulting on $46 million of accelerated principal that was due last week.

As California officials begin to issue as much as $3.2 billion of IOUs, there is growing interest in whether the registered warrants should be considered securities or some other type of state obligation.

Kutak Rock LLP last month hired Jeffrey Blumenfeld in its Philadelphia office.

BRADENTON, Fla. - A federal judge in Birmingham late Monday said that Jefferson County, Ala.'s bond insurers and trustee are free to file suit July 20 in state court seeking to have a receiver take over the county's financially troubled sewer system.

BRADENTON, Fla. - Standard & Poor's Monday continued its negative watch on Jefferson County, Ala.'s outstanding debt, though not including the county's troubled sewer bonds.

Employees of a joint-venture broker-dealer, who previously worked for and remain "associated persons" with the two legacy firms that created and control the joint venture, may solicit municipal securities business on behalf of each of their legacy firms without triggering Rule's G-38 prohibition against broker-dealers using independent consultants, the Municipal Securities Rulemaking Board said in recent guidance.