Data processing: financial – business practice – management – or co – Automated electrical financial or business practice or... – Finance
Reexamination Certificate
1999-05-04
2002-09-03
Olszewski, Robert P. (Department: 2167)
Data processing: financial, business practice, management, or co
Automated electrical financial or business practice or...
Finance
Reexamination Certificate
active
06446047
ABSTRACT:
This invention relates to a novel municipal bond product, a method of making the bonds available to purchasers using a general purpose computer programmed to perform specific functions, and an apparatus which comprises a specific use computer which carries out the various functions needed to process bond-related transactions. The purpose of the invention is to provide a financial instrument that can be sold to property owners for the purpose of protecting the holder from future ad valorem tax increases, and using computer processing technology to enhance the manner and efficiency with which the products are made available to the public.
Through the repurchasing mechanism, the Bond provides the Municipality with a fine level of control on the outstanding debt of the Bond Issue. This reduces the need and cost to perform conventional bond refinancing through a call and reissuing a new municipal bond for the entire amount.
The Bond reacts in the opposite manner from conventional municipal bonds in regards to inflation and interest rates. Where as a conventional bond's value goes down as these rates go up, a Tax Abatement Bond is worth more. Thus the Bond is an excellent method for diversifying a portfolio.
The instrument will be a municipal bond offered and sold by the ad valorem taxing authority with a coupon designed to service the ad valorem tax at the current levels for as long as the holder owns the house and the bond. Depending upon the local law, it would either contain an express tax abatement provision for the property or a mandatory yield increase matching future inflation in the ad valorem tax rate.
While the following disclosure describes bonds designed for homeowners, the concept is applicable for all real estate that is taxed by a municipal authority. The variations from type of real estate and the changes in wording of a particular bond does not preclude these variances from carrying out the concept or permitting the entire group of bonds to fall within this patent application.
SUMMARY OF THE INVENTION
It is an object of the invention to provide a municipal bond type of investment which will protect property owners from tax increases during the period of ownership.
It is another object of the invention to provide a municipal bond type of investment which will enable municipalities and similar governmental entities to gain access to additional sources of low-cost revenue.
It is another object of the invention to provide a municipal bond type of investment which will provide investment institutions with an additional product which can be marketed at low cost and in large volumes.
It is another object of the invention to provide a municipal bond type of investment which will facilitate proper, legal sale and transfer of the investment.
It is another object of the invention to provide a municipal bond type of investment which will permit both the property owner and the municipality to take fill advantage of current Federal and state tax laws.
It is another object of the invention to provide a municipal bond type of investment which may promote civic involvement by property owners in the community.
These and other objects of the present invention are achieved in the preferred embodiments disclosed below by providing a data processing system for creating and administering a bond issue by a bond manager for a municipal taxing authority of a community. The apparatus comprises a database configured to store for retrieval selected information regarding creation and administration of the bond issue, means for storing and processing data representing information needed to determine bond utilization in the community governed by the municipal taxing authority, and means for storing and processing data representing information about a specific real estate purchaser, the real estate to be purchased, the use to which the real estate will be put, and projected purchaser income and income growth to predict whether participation in a primary bond issue would be financially beneficial to the purchaser.
Means are also provided for storing and processing data representing information about the condition of the bond issue to enable the bond manager and the municipal taxing authority to determine the capacity ofthe municipal taxing authority to repurchase bonds from real estate sellers, for storing and processing data representing taxes serviced by the bond issue, for storing and processing data representing improvements made to the property and whether those improvements require a change in the tax value of the property, and for storing and processing data representing conditions for closing the bond issue.
An embodiment ofthe method of creating and administering a bond issue by a bond manager for a municipal taxing authority of a community according to the invention comprises the steps of providing a database configured to store for retrieval selected information regarding creation and administration of the bond issue, storing and processing data representing information needed to determine bond utilization in the community governed by the municipal taxing authority, storing and processing data representing information about a specific real estate purchaser, the real estate to be purchased, the use to which the real estate will be put, and projected purchaser income and income growth to predict whether participation in a primary bond issue would be financially beneficial to the purchaser, storing and processing data representing information about the condition of the bond issue to enable the bond manager and the municipal taxing authority to determine the capacity of the municipal taxing authority to repurchase bonds from real estate sellers, storing and processing data representing taxes serviced by the bond issue, storing and processing data representing improvements made to the property and whether those improvements require a change in the tax value of the property, and storing and processing data representing conditions for closing the bond issue.
According to one preferred embodiment of the invention, the step of storing and processing data representing information needed to determine bond utilization in the community governed by the municipal taxing authority comprises the steps of, analyzing support for the bond issue in the community, forecasting the length of time of property ownership, determining terms for issuance of the bonds, projecting municipality growth, expenditures, taxbase, population and other indicators such as inflation and unemployment rates, utilizing the data stored and processed to determine estimates of future property values and municipal property taxes; and utilizing the estimates thus obtained to determine an offering price for the bond.
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“Bond Basics”, Bond Buyer, Dec. 20, 1999.*
Zweig, Jason, “Annual funds survey: Out of the frying pan”, Forbes v156n5, Aug. 28, 1995, pp. 170-171.
Brier Daniel L.
Brier Frederick N.
Adams, Schwartz & Evans P.A.
Jaketic Bryan
Olszewski Robert P.
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