Laserfiche WebLink
===.1 <br />11111 [11=B league of minnesota cities <br />Federal Legislative Information <br />To: Mayors, Managers, Administrators, Clerks <br />From: Don Slater, Executive Director; Cathy Quiggle, Research Assistant <br />RE: Effect of the new tax legislation on the municipal bond market <br />The recently passed Tax Equity and Fiscal Responsibility Act of 1982 includes several <br />provisions which affect the municipal bond market. <br />One provision of the new law which will directly affect the municipal bond market is <br />the so- called minimum tax for corporations. After December 31, 1982 Corporations will <br />have to reduce by 15 percent the interest they deduct from their taxes on borrowings <br />that are used to buy or carry tax - exempt bonds. Corporations most affected by this <br />provision are banks which currently hold 45 percent of all tax - exempt bonds. This is <br />likely to drive up interest rates to issuers by reducing bank demand for bonds. <br />The Act also makes several changes in the Industrial Revenue Bond legislation. <br />Attached is a summary of the provisions affecting industrial revenue bonds. <br />DS:CQ:lw <br />Attach. <br />1 83 university avenue east, st. paul, minnesota 55101 (81 2) 227 -5600 <br />