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Questions and Answers <br />Page 2 <br />7. Will cities be able to borrow money from the pool for purposes for which it <br />is expected cities will not be able to individually issue tax - exempt debt <br />after September 1, 1986? <br />A. Under current forms of proposed federal tax reform legislation, if the <br />pool's bonds are issued prior to the date of new federal tax <br />legislation, it is expected that the proceeds may be used for certain <br />purposes and upon certain conditions (e.g. most tax increment <br />financings) which were permitted and in effect prior to the new tax <br />bill. <br />8. Will the loans be subject to new, more restrictive arbitrage regulations as <br />proposed by the U.S. Senate and House? <br />A. Again under current forms of tax reform legislation, the arbitrage <br />restrictions are not expected to apply to the pool's bonds. <br />9. When will the pool be first available for use? <br />A. Late fall, 1986. <br />10. Will the pool provide for all purposes for which cities can issue debt, or <br />will certain types of debt issuance not be accepted by the pool? <br />A. The pool is intended to provide financing during a three -year loan <br />origination period for all purposes for which cities can now issue debt <br />under Minnesota law except for those projects which, under present law <br />(prior to passage of a tax reform bill in 1986), will require industrial <br />development bond allocation. <br />19 <br />