Capital Budgeting And Finance

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A legal concept that underlies local government capital leasing in California and certain other states. Under the concept, a long-term capital lease is a year-to-year transaction. The local government lessee is obligated to make annual lease payments only as the lessor makes available the leased property. This prevents the lease "obligations" from being classified as long-term debt subject to state debt limits and voter approval requirements. See also nonappropriation.

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Abatement

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Interest earned but not yet paid. In debt sales, interest begins to accrue on the "dated date" for the debt. This date often precedes the closing date by days or weeks. In buying the debt, the underwriters must pay the issuer the accrued interest for the period from the dated date to the closing date, as well as the debt proceeds. The issuer will apply this accrued interest to the first interest payment to investors.

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Accrued interest

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Tax levied on the value of property. Also generally called a property tax. General obligation bonds issued by most local governments are secured by unlimited property tax-levying authority. See also general obligation bond.

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Ad valorem tax