SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Municipal Securities 
Disclosure Act of 2016’’. 
SEC. 2. CERTAIN PRIVATE ACTIVITY BONDS SUBJECT TO 
REGISTRATION. 
Section 3(a)(2) of the Securities Act of 1933 (15 
U.S.C. 77c(a)(2)) is amended by striking ‘‘or any security 
which is an industrial development bond’’ and all that fol-
lows through ‘‘section 103(c) does not apply to such secu-
rity;’’. 
SEC. 3. MUNICIPAL SECURITIES DISCLOSURE. 
(a) IN GENERAL.—Section 15B of the Securities Ex-
change Act of 1934 (15 U.S.C. 78o–4) is amended— 
(1) in subsection (e)(8), by inserting after ‘‘mu-
nicipal corporate instrumentality of a State’’ the fol-
lowing: ‘‘or of a political subdivision of a State’’; and 
(2) by adding at the end the following: 
‘‘(f) MUNICIPAL SECURITIES DISCLOSURE.— 
‘‘(1) PERIODIC REPORTS AND REPORTS OF CER-
TAIN ENUMERATED EVENTS.— 
‘‘(A) IN GENERAL.—Any issuer of, or obli-
gated person with respect to, municipal securi-
ties which has outstanding during any portion 
of a fiscal year an aggregate principal amount 
of municipal securities exceeding such sums as 
determined by the Commission shall prepare 
VerDate Sep 11 2014 
04:40 Dec 14, 2016
Jkt 069200
PO 00000
Frm 00002
Fmt 6652
Sfmt 6201
E:\BILLS\H6488.IH
H6488
lotter on DSK5VPTVN1PROD with BILLS
annual periodic reports and, in a timely man-
ner, reports of certain enumerated events, as 
defined by rule or regulation of the Commis-
sion, in such form and in such time periods as 
the Commission may prescribe as being nec-
essary or appropriate in the public interest or 
for the protection of investors. 
‘‘(B) DEADLINE.—The Commission shall 
determine the deadline for when a periodic re-
port described under subparagraph (A) shall be 
prepared. 
‘‘(C) AUTHORITY
TO
SCALE
REQUIRE-
MENTS.—In issuing rules to carry out subpara-
graphs (A) and (B), the Commission may set 
different requirements for different classes of 
issuers or other obligated persons, including for 
issuers or other obligated persons of different 
sizes, as appropriate. 
‘‘(2) OFFICIAL STATEMENTS FOR PRIMARY OF-
FERINGS.— 
‘‘(A) IN GENERAL.—It shall be unlawful 
for any issuer of, or obligated person with re-
spect to, municipal securities that offers or sells 
an issue of municipal securities in a public of-
fering, the aggregate principal amount of which 
VerDate Sep 11 2014 
04:40 Dec 14, 2016
Jkt 069200
PO 00000
Frm 00003
Fmt 6652
Sfmt 6201
E:\BILLS\H6488.IH
H6488
lotter on DSK5VPTVN1PROD with BILLS
exceeds an amount to be determined by the 
Commission, to make use of the mails or any 
means or instrumentality of interstate com-
merce to effect any transaction in, or to induce 
or attempt to induce the purchase or sale of, 
any municipal security unless such issuer or 
other obligated person, prior to the offer or 
sale, prepares and disseminates an official 
statement in accordance with such rules and 
regulations as the Commission may prescribe as 
being necessary or appropriate in the public in-
terest or for the protection of investors. 
‘‘(B) CONTENTS.—The official statement 
described in subparagraph (A) shall contain 
such information as the Commission may, in its 
discretion, by rule or regulation prescribe, in-
cluding— 
‘‘(i) an identification and description 
of the issuer of, or any other obligated per-
son with respect to, the securities being of-
fered; 
‘‘(ii) a description of any legal limita-
tion on the incurrence of indebtedness by 
the issuer, other obligated person, or the 
taxing authority of the issuer; 
VerDate Sep 11 2014 
04:40 Dec 14, 2016
Jkt 069200
PO 00000
Frm 00004
Fmt 6652
Sfmt 6201
E:\BILLS\H6488.IH
H6488
lotter on DSK5VPTVN1PROD with BILLS
‘‘(iii) a description of the issuer’s or 
other obligated person’s debt structure, in-
cluding 
information 
with 
respect 
to 
amounts of authorized and outstanding 
debt, estimated amount of short-term debt, 
character of amortization provisions of 
debt, sinking fund requirements, security 
for debt, nature and extent of guaranteed 
debt, and debt service requirements; 
‘‘(iv) a description of the nature and 
extent of other material contingent liabil-
ities or commitments of the issuer or other 
obligated person that could affect timely 
repayment of the subject debt, including 
any loans or alternative financings; 
‘‘(v) if any payment of principal or in-
terest on any security of the issuer or any 
predecessor thereof has been defaulted on, 
or has been postponed or delayed, during 
the 10 years preceding the date of the offi-
cial statement, a description of the date, 
amounts, and circumstances of such de-
fault, postponement, or delay and of the 
terms of any succeeding arrangements 
thereof; 
VerDate Sep 11 2014 
04:40 Dec 14, 2016
Jkt 069200
PO 00000
Frm 00005
Fmt 6652
Sfmt 6201
E:\BILLS\H6488.IH
H6488
lotter on DSK5VPTVN1PROD with BILLS
‘‘(vi) if the securities are supported by 
taxes (including special assessments or 
payments in lieu of taxes)— 
‘‘(I) a description of the issuer’s 
or other obligated person’s tax author-
ity and structure relating to the spe-
cific tax or taxes that serve as secu-
rity for the debt over the 5 years pre-
ceding the date of the official state-
ment, including the nature of taxes 
levied, tax rates, real and personal 
property valuation and assessment 
procedures, amounts of property valu-
ations and assessments, amounts of 
tax levies, amounts of tax collections, 
and delinquent tax procedures and ex-
perience; 
‘‘(II) if the applicable taxes have 
not been levied as of the date of the 
official statement, an estimate of the 
future tax revenues during the term 
of the securities, including the basis 
for such estimate; and 
‘‘(III) 
a 
description 
of 
the 
issuer’s or other obligated person’s 
VerDate Sep 11 2014 
04:40 Dec 14, 2016
Jkt 069200
PO 00000
Frm 00006
Fmt 6652
Sfmt 6201
E:\BILLS\H6488.IH
H6488
lotter on DSK5VPTVN1PROD with BILLS
major taxpayers relating to the spe-
cific tax or taxes that serve as secu-
rity for the debt; 
‘‘(vii) if material to the type of debt 
being offered, the financial statements of 
the issuer or other obligated person— 
‘‘(I) in such detail and form, and 
for such periods beginning not earlier 
than the 5th fiscal year of the issuer 
or other obligated person ending be-
fore the date of the official statement, 
as the Commission may prescribe; and 
‘‘(II) for any fiscal year begin-
ning on or after December 31, 2015, 
that are audited and reported on by 
an independent public, or certified ac-
countant or examiner from an inde-
pendent State agency authorized by 
law to perform such functions, in such 
manner as the Commission may pre-
scribe; 
‘‘(viii) a description of the offering, 
including amount to be offered, price, plan 
of distribution, and underwriting arrange-
ments and compensation; 
VerDate Sep 11 2014 
04:40 Dec 14, 2016
Jkt 069200
PO 00000
Frm 00007
Fmt 6652
Sfmt 6201
E:\BILLS\H6488.IH
H6488
lotter on DSK5VPTVN1PROD with BILLS
‘‘(ix) a description of the securities to 
be offered, including whether the securities 
are secured by collateral or property, or 
other credit enhancements, events of de-
fault, payment of principal and interest, 
sinking fund, redemption, debt reserve 
funds, priority, and rights of security hold-
ers to bring suit against the issuer or other 
obligated person; 
‘‘(x) a description of any project or 
enterprise of the issuer or other obligated 
person to be financed from the proceeds of 
the securities being offered, a description 
of the competitive environment for such 
project or enterprise, including any major 
changes in such competitive environment 
in the last 10 years, any engineering or fi-
nancial feasibility reports or studies on the 
construction and operation of the project 
or enterprise, and a description of any ad-
ditional financing required to complete the 
project or enterprise, including whether 
and when such additional financing has 
been, or will be, procured; 
VerDate Sep 11 2014 
04:40 Dec 14, 2016
Jkt 069200
PO 00000
Frm 00008
Fmt 6652
Sfmt 6201
E:\BILLS\H6488.IH
H6488
lotter on DSK5VPTVN1PROD with BILLS
‘‘(xi) a description of the intended use 
of the proceeds of the offering; 
‘‘(xii) a statement of counsel’s opinion 
as to the legality, validity, and enforce-
ability of the issuance of the securities to 
be offered; 
‘‘(xiii) a description of any material 
conflicts of interest of the issuer or other 
obligated person, and any other party in-
volved in the offering; and 
‘‘(xiv) such other similar and specific 
information as the Commission may by 
rule or regulation require as necessary or 
appropriate in the public interest or for the 
protection of investors. 
‘‘(C) PRELIMINARY FORM OF CERTAIN IN-
FORMATION.—In the case of an official state-
ment prepared for an issue of municipal securi-
ties before any sale of such issue, the informa-
tion specified in clauses (viii) and (ix) of sub-
paragraph (B) may be set forth in preliminary 
form. 
‘‘(3) FORM OF INFORMATION AND ACCOUNTING 
METHODS.—The Commission may— 
VerDate Sep 11 2014 
04:40 Dec 14, 2016
Jkt 069200
PO 00000
Frm 00009
Fmt 6652
Sfmt 6201
E:\BILLS\H6488.IH
H6488
lotter on DSK5VPTVN1PROD with BILLS
‘‘(A) prescribe, for reports and official 
statements prepared pursuant to this sub-
section, the form in which the required informa-
tion, including financial statements, shall be set 
forth, and the accounting methods to be fol-
lowed in the preparation of financial state-
ments; or 
‘‘(B) recognize forms for such information 
and accounting methods for such financial 
statements that are established by a standard 
setting body recognized by the Commission. 
‘‘(4) INTERNAL CONTROLS AND SYSTEMS FOR 
LARGE ISSUERS.— 
‘‘(A) IN
GENERAL.—Any issuer of, or 
other obligated person with respect to, munic-
ipal securities with outstanding municipal secu-
rities the aggregate principal amount of which 
exceeds $10,000,000 shall adopt internal con-
trols and systems, including written policies and 
procedures that, at a minimum— 
‘‘(i) clearly identify the officials re-
sponsible for each aspect of disclosure de-
scribed in paragraph (2)(B); 
VerDate Sep 11 2014 
04:40 Dec 14, 2016
Jkt 069200
PO 00000
Frm 00010
Fmt 6652
Sfmt 6201
E:\BILLS\H6488.IH
H6488
lotter on DSK5VPTVN1PROD with BILLS
‘‘(ii) clearly state the process by which 
official statements described by paragraph 
(2)(A) are drafted and reviewed; and 
‘‘(iii) provide checks and balances to 
ensure adequate supervision and reason-
able disbursement of responsibilities. 
‘‘(B) STATEWIDE SYSTEMS.—The Commis-
sion may provide by rule that the provisions of 
this paragraph may be satisfied with respect to 
an issuer or other obligated person within a 
State by a statewide system of disclosure con-
trols and disclosure education for such State.’’. 
(b) SAFE HARBOR FOR FORWARD-LOOKING STATE-
MENTS.—Section 21E(a) of the Securities Exchange Act 
of 1934 (15 U.S.C. 78u–5(a)) is amended— 
(1) by redesignating paragraphs (2), (3), and 
(4) as paragraphs (3), (4), and (5), respectively; 
(2) by inserting after paragraph (1) the fol-
lowing: 
‘‘(2) an issuer or other obligated person that is 
subject to and in compliance with the requirements 
of section 15B(f);’’; 
(3) in paragraph (3), as so redesignated, by 
striking ‘‘such issuer’’ and inserting ‘‘an issuer or 
VerDate Sep 11 2014 
04:40 Dec 14, 2016
Jkt 069200
PO 00000
Frm 00011
Fmt 6652
Sfmt 6201
E:\BILLS\H6488.IH
H6488
lotter on DSK5VPTVN1PROD with BILLS
other obligated person described in paragraph (1) or 
(2)’’; 
(4) in paragraph (4), as so redesignated, by 
striking ‘‘such issuer making a statement on behalf 
of such issuer’’ and inserting ‘‘an issuer or other ob-
ligated person described in paragraph (1) or (2) 
making a statement on behalf of such issuer or other 
obligated person’’; and 
(5) in paragraph (5), as so redesignated, by 
striking ‘‘such issuer or information derived from in-
formation provided by such issuer’’ and inserting 
‘‘an issuer or other obligated person described in 
paragraph (1) or (2) or information derived from in-
formation provided by such issuer or other obligated 
person’’. 
(c) CONFORMING AMENDMENTS.— 
(1) DEFINITION
OF
EXEMPTED
SECURITY.— 
Section 3(a)(12)(B)(ii) of the Securities Exchange 
Act of 1934 (15 U.S.C. 78c(a)(12)(B)(ii)) is amend-
ed by striking ‘‘sections 15 and 17A’’ and inserting 
‘‘sections 15, 15B(f) and 17A’’. 
(2) AUTHORITY TO EXEMPT ISSUERS.—Section 
12(h) of the Securities Exchange Act of 1934 (15 
U.S.C. 78l(h)) is amended by striking ‘‘or 15(d)’’ 
and inserting ‘‘15(d), or 15B(f)’’. 
VerDate Sep 11 2014 
04:40 Dec 14, 2016
Jkt 069200
PO 00000
Frm 00012
Fmt 6652
Sfmt 6201
E:\BILLS\H6488.IH
H6488
lotter on DSK5VPTVN1PROD with BILLS
SEC. 4. EFFECTIVE DATE. 
Each amendment made by this Act shall take effect 
on the date that the Securities and Exchange Commis-
sion— 
(1) determines is appropriate in the public in-
terest and for the protection of investors; and 
(2) notifies the Congress of such determination. 
Æ 
VerDate Sep 11 2014 
04:40 Dec 14, 2016
Jkt 069200
PO 00000
Frm 00013
Fmt 6652
Sfmt 6301
E:\BILLS\H6488.IH
H6488
lotter on DSK5VPTVN1PROD with BILLS