Oklahoma Bonds
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Table of Contents
Oklahoma Bonds: History
Oklahoma bonds are issued by a state or local agency for financing the State’s projects. However, not all Oklahoma municipal bonds are backed by the ‘full faith and credit’ of the State. Nonetheless, these bonds are a safe investment alternative.[br]
Oklahoma Bonds: History
Some important bond issues in Oklahoma are attributed to the specific years when they were first issued:
- 1904: Bonds worth $100,000 were issued for the construction of the Oklahoma County Courthouse.
- 1950: Bonds worth $31.47 million were sold to Shields and company (underwriters) by the State. This was for the construction of ‘Turner Turnpike,’ an expressway between Oklahoma City and Tulsa.
- 1965: A $6 million bond was issued for the construction of a new Courthouse, ‘County Office Building.’ The infrastructure of the old building became inadequate for serving the increasing number of taxpayers.
Oklahoma Bonds: Administration
Every bond issue in Oklahoma is administered by the Council of Bond Oversight. The five-member council meets once every month for reviewing and approving the financing requests made by State agencies, trusts and departments. They also setup specific terms and conditions for different issuance.
The Council of Bond Oversight Oklahoma consists of:
- The Director of Office of State Finance.
- Two members chosen by the Governor.
- One member selected by the Speaker of Oklahoma House of Representatives.
- One member chosen by the President of Oklahoma Senate.[br]
Private Activity Oklahoma Bonds
Private activity Oklahoma bonds are described by the ‘Internal Revenue Code’ as a bond:
- Of which over 10% of the proceeds are used in a business or trade that is not a governmental unit.
- Of which an amount greater than 5% of the bond value or $5 million, whichever is lower, is used for loans to an individual(s), not being a governmental unit.
Most private activity Oklahoma bonds are taxable, although some bonds are established by the Code as tax-free. They are known as Qualified Private Activity Bonds. An investor does not have to pay Oregon State income tax on the interest on such bonds. However, these exempted bonds are subject to federal tax.
The Internal Revenue Code also imposes a ceiling on the issue of Qualified Private Activity Bonds in a year. With effect from January 1, 2009, this limit of ceiling or ‘volume cap’ is $90.00 per capita or $273.270 million, whichever is higher. For 2009, Oklahoma’s volume cap is $327,812,490.
