Feeling Insecure-A State View of Whether Investors in Municipal General Obligation Bonds Have a Mere Promise to Pay or a Binding Obligation

The City of Detroit's filing for municipal bankruptcy in July, 2013, has added to a continuing controversy of whether general obligation bondholders have a secured lien. The City of Detroit claimed its general obligation bondholders did not have a fully secured lien because the law of the state of Michigan did not create a statutory lien. Without the creation of a lien by state law, during the insolvency or bankruptcy of municipalities, general obligation bondholders will potentially have a mere promise to pay versus a binding obligation to pay, and therefore, will not have a secured lien. Treating otherwise secured general obligation bonds as unsecured will create more risk for investors and increase the cost of borrowing for cities. This article discusses the treatment of general obligation bonds in recent municipal bankruptcies; identifies the states that create a binding obligation to pay general obligation bondholders; describes problems of not treating general obligation bonds as secured; and proposes that states create clear laws that grant statutory liens for general obligation bondholders

Feeling Insecure—A State View of Whether Investors in Municipal General Obligation Bonds Have a Mere Promise to Pay or a Binding Obligation

The City of Detroit\u27s filing for municipal bankruptcy in July, 2013, has added to a continuing controversy of whether general obligation bondholders have a secured lien. The City of Detroit claimed its general obligation bondholders did not have a fully secured lien because the law of the state of Michigan did not create a statutory lien. Without the creation of a lien by state law, during the insolvency or bankruptcy of municipalities, general obligation bondholders will potentially have a mere promise to pay versus a binding obligation to pay, and therefore, will not have a secured lien. Treating otherwise secured general obligation bonds as unsecured will create more risk for investors and increase the cost of borrowing for cities. This article discusses the treatment of general obligation bonds in recent municipal bankruptcies; identifies the states that create a binding obligation to pay general obligation bondholders; describes problems of not treating general obligation bonds as secured; and proposes that states create clear laws that grant statutory liens for general obligation bondholders

Cut - and That\u27s a Wrap - The Film Industry\u27s Fleecing of State Tax Incentive Programs

When film production costs in California skyrocketed in the 1990s, states began creating tax incentive programs to attract film industry production. Currently, thirty-seven states have some type of film industry incentives and twenty-two states offer film tax credits. The 2014 movie Divergent, based on a science fiction book trilogy that takes place in a future post-apocalypse Chicago, cost $85 million to create,$30 million of which was spent in Illinois. The film producers promised to produce 1,000 jobs and in return received over $5 million in Illinois film tax credits. Did the reduction of tax revenue collected by the state of Illinois result in net economic growth? Recent economic studies suggest that tax incentive programs for the film industry often do not produce the promised economic returns. Nonetheless, state film industry tax incentives remain popular with state economic-development departments. The program costs are increasing and represent significant expenditures in state budgets with the potential for negative effects on state economies. States cannot continue to afford lost tax revenue that does not produce net economic growth. Most state tax incentive programs are focused on four major industries: manufacturing, agriculture, energy (oil, gas, and mining), and the film industry. The film industry shares the same issues of accountability as other industries. However, unique to the film industry is the difficulty in measuring economic growth from the temporary jobs generated and less public scrutiny of net economic growth due to the novelty and allure of film production to the public. States have limited resources and cannot afford costly multi-million-dollar tax-incentive programs for the film industry that do not produce the promised results. This Article examines the effectiveness of state tax incentives for the film industry and proposes solutions for more effective and efficient use of state tax revenue to promote economic development

Was the Deal Worth it? : The Dilemma of States with Ineffective Economic Incentives Programs

Federal subsidies to state and local governments have been substantially reduced due to public opinion prioritizing the reduction of the federal deficit, the recent fiscal cliff legislation, and the federal budget sequester cuts. In addition, in many states, revenue collection from individual and corporate income tax is below prerecession levels. To address the reduction in federal funding and reduced revenue collections, state and local governments will increasingly rely on economic incentive programs to grow their economies through increased job creation and private capital investment within their jurisdictions. These economic incentive programs are no longer comprised of simple tax reductions for companies seeking expansion or relocation, but include financial incentives and direct investment programs. The cost of these incentives, both in expenditures and forgone tax revenue, represents a growing portion of state and local governments\u27 budgets and may subject them to steep budget deficits if the incentives do not produce net economic growth. Because of the budgetary risk and the increased reliance on these economic incentives, there is a need for state and local governments to account for the cost of these incentives and to measure their effectiveness. Effective state economic development requires growth in state economic activity that results in a net increase of revenue in relation to the cost of the incentives. To measure effectiveness, state and local governments must maintain reliable information on the cost of incentives, -institute mechanisms to limit or cap the costs of incentives, and hold businesses accountable for performing pursuant to incentive agreements

Cut—And That\u27s a Wrap —The Film Industry\u27s Fleecing of State Tax Incentive Programs

State tax incentives for the film industry will remain part of the economic development program of many states despite recent troubled programs and calls by public advocacy groups to reign in or eliminate such programs. Some states have reduced or eliminated their film industry incentive programs, but accountability remains an issue for the forty-five percent of states with film incentive programs that do not require audit verification or substantiation of the benefits gained from the programs. The U.S. film industry continues to grow and there is opportunity for states with well-developed programs and rigorous compliance standards to be successful—providing net economic growth from the granting of tax incentives to retain or attract film production. To truly account for economic growth from these programs, states must adopt standardized methods to measure the expenditures of film production companies and jobs created by their activities. If all states with these programs adopt these standards, state legislatures and the public will be able to more easily determine the success of such programs. These standards will also help create more reliable and accurate data to measure the success of a program. Linking the funding of these programs to a state’s budget process and limiting the appropriation of the funds for the programs to an annual basis will also help in managing the amount of incentives granted. Finally, states must be proactive in enforcing the covenants and promises made by film production companies and be willing to institute legal action to retrieve lost funds due to the failure to meet such covenants. For these proposals to be truly effective, all states granting tax incentives for the film industry must be willing to accept the standardized definitions and measurements. If only a few states agree to such provisions, they will be at a disadvantage as compared to other states who continue the “race to the bottom” to attract film production to their state. Adoption of these proposals will help prevent future “fleecing” of state economies

Who’s Going to Pick Up the Trash? Using the Build America Bond Program to Help State and Local Governments’ Cash Deficits

All over the United States, state and local governments are facing increasing revenue deficits due to the current economic recession. Even during good economic times, state and local governments experience temporary cash-flow deficits. State and local governments use short-term municipal bond debt to finance temporary cash-flow deficits caused by the normal erratic collection of tax revenue. The issuance of short-term debt secured by future tax revenue has always been a financing tool that helped local governments with cash-flow problems. The effects of the subprime mortgage crisis and the current recession threaten state and local governments’ ability to use this financial tool. The increased cost of issuing short-term debt, coupled with the general reduction of tax revenue collected due to the current recession, has restricted state and local governments’ ability to issue short-term debt. Without the use of affordable short-term debt, state and local governments are faced with severe cash-flow problems that threaten their ability to pay for services for their citizens. For example, local governments may be faced with the decision to layoff public safety workers such as fire fighters and police officers, reducing library and recreational park hours, or, in some cases, reducing trash pickup within their communities. To reduce the borrowing costs for state and local government issuers of short-term municipal bonds that are used to finance cash-flow deficits, this article proposes to utilize a federal subsidized taxable bond program similar to the Build America Bond program

Grade Incomplete: Examining the Securities and Exchange Commission\u27s Attempt to Implement Credit Rating and Certain Corporate Governance Reforms of Dodd-Frank

Following the financial crisis of 2007-2009, Congress passed the Dodd-Frank Act with stated goals, among others, of creating a sound economic foundation and protecting consumers. The Dodd-Frank Act creates several new agencies and restructures the financial regulatory system, yet controversies remain on the promulgation of new rules and the overall effectiveness in accomplishing the stated goals of the Act. This Article briefly discusses the status of rulemaking by newly created agencies and the restructured financial regulatory system mandated by the Dodd- Frank Act three years after its passage. Next, we focus on certain aspects of the SEC and its charge from Dodd-Frank to implement new agencies and regulations. Specifically, we examine the SEC efforts to establish the Office of Credit Ratings and its regulations and the SEC’s efforts related to additional executive compensation disclosure regulations required by Dodd-Frank

Measurement of χ c1 and χ c2 production with s√ = 7 TeV pp collisions at ATLAS

The prompt and non-prompt production cross-sections for the χ c1 and χ c2 charmonium states are measured in pp collisions at s√ = 7 TeV with the ATLAS detector at the LHC using 4.5 fb−1 of integrated luminosity. The χ c states are reconstructed through the radiative decay χ c → J/ψγ (with J/ψ → μ + μ −) where photons are reconstructed from γ → e + e − conversions. The production rate of the χ c2 state relative to the χ c1 state is measured for prompt and non-prompt χ c as a function of J/ψ transverse momentum. The prompt χ c cross-sections are combined with existing measurements of prompt J/ψ production to derive the fraction of prompt J/ψ produced in feed-down from χ c decays. The fractions of χ c1 and χ c2 produced in b-hadron decays are also measured

Measurements of fiducial and differential cross sections for Higgs boson production in the diphoton decay channel at s√=8 TeV with ATLAS

Measurements of fiducial and differential cross sections are presented for Higgs boson production in proton-proton collisions at a centre-of-mass energy of s√=8 TeV. The analysis is performed in the H → γγ decay channel using 20.3 fb−1 of data recorded by the ATLAS experiment at the CERN Large Hadron Collider. The signal is extracted using a fit to the diphoton invariant mass spectrum assuming that the width of the resonance is much smaller than the experimental resolution. The signal yields are corrected for the effects of detector inefficiency and resolution. The pp → H → γγ fiducial cross section is measured to be 43.2 ±9.4(stat.) − 2.9 + 3.2 (syst.) ±1.2(lumi)fb for a Higgs boson of mass 125.4GeV decaying to two isolated photons that have transverse momentum greater than 35% and 25% of the diphoton invariant mass and each with absolute pseudorapidity less than 2.37. Four additional fiducial cross sections and two cross-section limits are presented in phase space regions that test the theoretical modelling of different Higgs boson production mechanisms, or are sensitive to physics beyond the Standard Model. Differential cross sections are also presented, as a function of variables related to the diphoton kinematics and the jet activity produced in the Higgs boson events. The observed spectra are statistically limited but broadly in line with the theoretical expectations

Measurement of the production of a W boson in association with a charm quark in pp collisions at √s = 7 TeV with the ATLAS detector

The production of a W boson in association with a single charm quark is studied using 4.6 fb−1 of pp collision data at s√ = 7 TeV collected with the ATLAS detector at the Large Hadron Collider. In events in which a W boson decays to an electron or muon, the charm quark is tagged either by its semileptonic decay to a muon or by the presence of a charmed meson. The integrated and differential cross sections as a function of the pseudorapidity of the lepton from the W-boson decay are measured. Results are compared to the predictions of next-to-leading-order QCD calculations obtained from various parton distribution function parameterisations. The ratio of the strange-to-down sea-quark distributions is determined to be 0.96+0.26−0.30 at Q 2 = 1.9 GeV2, which supports the hypothesis of an SU(3)-symmetric composition of the light-quark sea. Additionally, the cross-section ratio σ(W + +c¯¯)/σ(W − + c) is compared to the predictions obtained using parton distribution function parameterisations with different assumptions about the s−s¯¯¯ quark asymmetry