Series 7 practice questionmediumDebt Securities — Municipal Bonds — Assessment Bonds
Special assessment bonds are repaid by:
- AAll taxpayers in the municipality equally
- BOnly the property owners who benefit directly from the improvement financed✓ Correct answer
- CThe state government's general fund
- DRevenue from utility operations
Explanation
Why B — Only the property owners who benefit directly from the improvement financed
Special assessment bonds (also called special tax bonds) are repaid through assessments levied only on the property owners who directly benefit from the public improvement project, such as new sidewalks, sewer lines, or street lighting in a specific neighborhood. Only the assessed properties bear the cost, not the general taxpaying public of the entire municipality.
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