HomeMy WebLinkAboutCCRes_86-12No . R-86-12
CITY OF FALCON HEIGHTS
•
C O U N C I L R E S O L U T I O N
______ Date Febr arv 12, 1986
A RESOLUTION RELATING TO THE TAX REFORM ACT OF 1985,
H.R. 3838
RESOLVED, That the City Council of the City of Falcon heights and its
legal and financial advisors have studied and discussed the provisions
of H.R. 3838.
RESOLVED, That these provisions in H.R. 3838 that deal with tax exempt
bonds will seriously affect state and localities.
RESOLVED, That the specific concern relate to the following provisions
listed below:
1) Requires five percent (5~) of all bond proceeds dispersed or spent
within thirty (30) days of bond closing.
2) Requires all bond proceeds to be dispersed within six months of
closing or arbitrage rebates must be filed with the federal
government during the life of the bond issue.
• 3) Requires all bond proceeds for property acquisition or easement
acquisition be dispersed within thirty (30) days of closing.
4) Distinguishes between essential and non-essential bond portions.
Non-essential bonds would be subject to volume cap restrictions
within federal/state guidelines that would be finalized over the
next year.
5) Taxable bonds would be sold for projects when five percent or more
of the bond proceeds (up to five million dollars) were loaned or
ten percent or more of the bond proceeds (up to ten million dollars)
-- _ are used by persons other than a government unit, directly or indirectly.
Moved by Mayor Baldwin Approved by f ,~ ~~ J
Mayor
Seconded by Councilmember Ciernia
Yeas Nays
~ALDWIN ~ in Favor
~IERNIA
Y~RD ~ Against
CHENOWETH
.;dopte3 by Council February 26, 1986
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Dat
Attested by . ,~~~{'
Clerk Administrate
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Date
R-86-12
• 6) Provides for bond issues to be taxable for failure to comply with
federal government additional administrative reports listing the
owners of the bonds and documents complying with new arbitrage
calculations.
RESOLVED, That these provisions will result in higher issuance costs when
tax exempt bonds are issued, higher interest costs for tax exempt bonds
and additional administrative expenses after tax exempt bonds are issued.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Falcon
Heights that:
1) Existing federal arbitrage rules and regulations adequately
deal with the dispersement of bond proceeds issued by
governmental entities that provide governmental services.
2) The federal government should not impose any volume cap
limits on tax exempt bonds issued by governmental entitles to
provide governmental services.
3) The federal government remove the retroactive taxability
requirement on tax exempt bonds issued after January 1, 1986.
4) The proposed effective date for any federal law be
• established only after the federal law is signed by the President
and after state and/or local governments have time to adopt the
necessary legislation but in no event shall the effective date be
sooner than January 1, 1987.