Debt Obligations

State law authorizes the Authority to impose a sales tax on the sale within the Authority’s boundaries of all items subject to the state sales tax and a use tax on the use, storage or consumption within the Authority’s boundaries of any such taxable items purchased, leased or rented from a retailer, at a rate established by the Board in accordance with the Authority Act. The Board has established the rate at 1%, as authorized by public vote when the Authority was confirmed in 1978. The sales tax and use tax is referred to herein as the “sales tax.”

Commercial Paper Notes
The Authority has established a $400 million commercial paper program (“CP Program”) for the issuance of Sales and Use Tax Revenue Commercial Paper Notes (the “CP Notes”) in multiple separate series. The current maximum issuance capacity of the CP Program is $165 million, which is the amount of authorized CP Notes secured by credit facilities. The CP Notes are Senior Lien Obligations payable on a parity with the Obligations.

Contractual Obligations
Contractual obligations may be issued as Senior Lien Obligations on a parity with the Voted Sales Tax Bonds and may be issued to finance vehicles and other personal property.

Senior Lien
Under current State law, in addition to the Voted Sales Tax Bonds and other sales tax bonds approved by future elections, the Authority may issue certain other Senior Lien Obligations without an election, specifically (i) contractual obligations and (ii) commercial paper notes and Sales and Use Tax Bonds or notes with a five-year or shorter term.

Voter Authorized
In the 2003 Election, voters authorized the issuance of $640,000,000 of bonds payable from a pledge of 75% of the sales and use tax revenue collected by the Authority (the “Voted Sales Tax Bonds”) to fund projects for its transit system. The Authority has issued all of the bonds authorized at the 2003 Election.

In November 2019, voters approved a referendum relating to the authorization of its regional transit plan — METRONext.

METRONext contemplates the implementation of a regional transportation plan, including capital improvements and infrastructure, and authorizes approximately $3.5 billion in debt to fund a portion of phase one of such plan.

Learn more about the METRONext Moving Forward Plan

The Authority may hold one or more future elections to authorize additional sales tax bonds; however, none are planned at this time.

Lease Purchase
The Authority has established a Master Lease Purchase Program for the lease-purchase financing from time to time of equipment, including buses, bus rapid transit vehicles and rail rapid transit vehicles. The lease-purchase payments due under each lease purchase agreement are payable from sales and use taxes and other revenues, subject to appropriation on an annual basis, and are not secured by the Pledged Revenues. The Authority has entered into two lease-purchase agreements under the Master Lease Purchase Program.