The Municipal Advisory Council of Texas (MAC) is a non-profit membership corporation organized exclusively for non-profit purposes described in section 501(c)(6) of the Internal Revenue Code, including specifically “to promote effective and efficient investment banking, underwriting, trading and sales of municipal debt by collecting, maintaining and distributing information relating to issuing entities.” Membership is open to any entity that is authorized to and actively engaged in the business of underwriting or buying and selling municipal debt issued by the State of Texas or its state agencies or political subdivisions and municipalities. The MAC was organized in 1954 and presently has 75 member firms.

WHO BENEFITS?

The MAC is the only source, in Texas, of comprehensive financial information regarding municipal debt issuers. Its information services provide benefits to issuers, broker-dealers, investors, state government and the citizens of Texas. By achieving its mission, the efficiencies the MAC provides the industry result in direct benefits to the tax and rate payers of Texas in the form of reduced interest costs on new issues. Issuers benefit through better primary offering pricing as a result of a strong secondary market. Partly as a result of the MAC’s efforts, Texas issuers have one of the best continuing disclosure compliance rates in the nation, which also helps keep borrowing costs low. Issuers also benefit by using MAC supplied overlapping debt statements, free state wide publication of legal notices and a bond calendar as well as from the broker-dealers ability to search the MAC database for refunding opportunities and present issuers with proposals to once again save on interest costs. Broker-dealers are able to efficiently obtain the information that they need to satisfy suitability rules, confirm continuing disclosure compliance, and meet other regulatory requirements when engaging in secondary market transactions. Institutional and retail investors benefit from a more liquid secondary market and the security of knowing current financial information will be available for their investments.

INFORMATION SERVICES

In furtherance of its mission, MAC collects, maintains and distributes information related to Texas municipal debt issuers through a variety of programs.

Texas Municipal Reports. The MAC publishes and regularly updates nearly 5,000 Texas Municipal Reports (TMRs), which are a collection of financial and economic data on each state agency and local government issuer. Each TMR includes, at a minimum, an issuer's outstanding debt and debt service schedule, its basic financial operating statements, its economic background, and a list of its finance-related officials. The TMRs also include vital tax information for issuers with tax-supported debt. To facilitate TMR production, MAC analysts utilize data from audits, continuing disclosure filings, official statements, county appraisal districts, the State Comptroller's office, and various websites. The MAC uses the information from issuers with overlapping jurisdictions to calculate their overlapping tax-supported debt burdens. TMRs and additional information, such as bond ratings, trade data from the Municipal Securities Rulemaking Board (MSRB) and associated documents, are available on-line and are updated by the MAC daily.

State Information Depository and Former CPO. In 1995, the MAC has been designated by the Governor of the State of Texas as the State Information Depository (SID) for the State of Texas. Through the MAC’s database, issuers and broker-dealers are able to confirm the date of filings and compliance. In an effort to improve disclosure in Texas, the MAC provided a disclosure reminder service to issuers with continuing disclosure filing requirements. In the initial year of this service compliance rates increased from 74% to 92%. Studies of national disclosure filing trends have reported only 44-80% compliance. The MAC has been a leader in facilitating compliance with SEC Rule 15c2-12. In addition, at the request of the MSRB, the Government Finance Officers Association, and other national municipal securities organizations known as the “Muni Council,” the MAC developed and maintained a free CPO or “central post office” through which issuers throughout the U.S. were able to make a one-stop electronic filing of continuing disclosure information from 2005 through 2009 when the MSRB’s EMMA system became operational.

Service to State Agencies. The MAC supplies information regarding Texas municipal debt issuers to four state agencies for use in related programs: The Texas Bond Review Board, which is charged with approving and monitoring debt issued by Texas state agencies; the Texas Water Development Board, which runs a state bond bank to finance water resource and clean water projects by purchasing local government debt issued for that purpose; the Texas Education Agency, which manages a financial guaranty program for school district debt backed by the state’s Permanent School Fund (PSF); and the Texas Public Finance Authority, which provides financing for the construction or acquisition of facilities for State agencies.

Texas Bond Reporter. The MAC publishes the Texas Bond Reporter, a weekly magazine that provides the upcoming week's competitive and negotiated sale calendar, scheduled bond elections, material event notices, and other timely issuer updates. The Texas Bond Reporter qualifies as a financial journal published in the state for purposes of laws and bond covenants requiring publication of notices. The MAC publishes issuer notices without charge.

Bond Calendar. The MAC maintains a calendar of scheduled bond sales on its website. The online bond calendar is available to the general public, includes offering documents, and encourages competitive bids from around the country.

Sales Results. The MAC retrieves and posts on its website the results of all sales of new issue Texas municipal debt. Financial advisers use this data to update issuers’ pricing and cash flow expectations, and broker-dealers use the information in bidding on or otherwise pricing subsequent offerings.

Underwriting Assessment Policy. The MAC's principal source of revenue is per bond assessments imposed on municipal securities underwritings of the MAC's voluntary broker-dealer members, although the MAC also receives rental, investment and other income. Under the MAC's budget policy, estimated assessment revenue may not exceed estimated expenses of collecting, maintaining and distributing issuer information.

Legislative Resource. The MAC is not a lobbying organization and does not advocate for or against the passage of legislation or adoption of regulations. The MAC does not have a political action committee and does not make or coordinate political contributions or contributions to bond referenda campaigns. Consistent with its articles of incorporation, which provide that no substantial part of the MAC’s activities may consist of influencing legislation, MAC’s time and expense attributable to communications with legislators are modest and substantially less than the MAC’s annual non-assessment revenue. The MAC provides information to the state legislature and state agencies, often at their request, to assist them in gauging the potential and expected impacts of proposed legislation and regulations on the ability of municipal issuers to raise capital. To assure compliance with state law, all such communications are made by the MAC’s Executive Director, who is registered and files required reports with the Texas Ethics Commission.

PUBLIC RECOGNITION

In his salute to the MAC membership on the occasion of its 50th Anniversary, Texas Governor Rick Perry stated:

“For five decades, Texas has flourished because of the services this organization provides. Airports and schools, highway and waterways, health facilities and sports venues have all been built as a result of your leadership. More Texas families have jobs, our economy has grown and our environment is cleaner. Thank you for making an extraordinary difference in Texas.”

The MAC received the 1995 Municipal Industry Contribution Award from the National Federation of Municipal Analysts (NFMA). In recognizing the MAC for its service to the state's municipal bond community, the NFMA said:

"Chartered in 1954, the MAC's mission has been ongoing disclosure and surveillance of Texas municipal issues. In doing so, the MAC has created liquidity for local issues and has gained a national reputation. The NFMA recognizes the MAC as a forerunner and leader of the industry's disclosure efforts."

The MAC was also awarded the Tanya Gritz Award for Excellence in Public Finance by the State Debt Management Network in 2004 and a Special Award for Excellence and Innovation in Disclosure by The Municipal Forum of New York in 2007.

The results of MAC’s more than 50 years of public service can be seen throughout the State of Texas. Its work has redounded to the benefit the citizens and taxpayers of the State.

HISTORY

At inception, membership consisted of 38 municipal securities broker-dealer firms and its board originally consisted of twelve trustees. The organization they devised and the programs they projected were without equal in conceptions or in purpose ---- nor, as it turns out, in accomplishment, which has so richly embellished the Council's years of service to the public and the municipal bond industry.

Today, the MAC is governed by a ten-member Board of Trustees. Each board member is elected to serve a three year term.