2018-105 - Laserfiche WebLink

Home Browse Search

Section 6. Tax Covenants. 6.01. General Tax Exemption Covenant. The City covenants and agrees with the holder from time to time of the Certificate that it will not take or permit to be taken by any of its officers, employees or agents any action which would cause the interest on the Certificate to become subject to taxation under the Internal Revenue Code of 1986, as amended (the "Code"), and the Treasury Regulations promulgated thereunder, in effect at the time of such actions, and that it will take or cause its officers, employees or agents to take, all affirmative action within its power that may be necessary to ensure that such interest will not become subject to taxation under the Code and applicable Treasury Regulations, as presently existing or as hereafter amended and made applicable to the Certificate, 6.02. Rebate. (a) The City will comply with requirements necessary under the Code to establish and maintain the exclusion from gross income of the interest on the Certificate under Section 103 of the Code, including without limitation requirements relating to temporary periods for investments, limitations on amounts invested at a yield greater than the yield on the Certificate, and the rebate of excess investment earnings to the United States, if the Certificates (together with other obligations reasonably expected to be issued in calendar year 2018) exceed the small issuer exception amount of $5,000,000. (b) For purposes of qualifying for the small issuer exception to the federal arbitrage rebate requirements, the City finds, determines and declares that the aggregate face amount of all tax-exempt bonds (other than private activity bonds) issued by the City (and all subordinate entities of the City) during the calendar year in which the Certificate is issued and outstanding at one time is not reasonably expected to exceed $5,000,000, all within the meaning of Section .148(f)(4)(D) of the Code. 6.03. Private Activity Bond Status. The City further covenants not to use the proceeds of the Certificate or the Equipment or to cause or permit them to be used, in such a manner as to cause the Certificate to be a "private activity bond" within the meaning of Sections 103 and 141 through 150 of the Code, 6.04. Qualified Tax -Exempt Obligations. In order to qualify the Certificate as a "qualified tax-exempt obligation" within the meaning of Section 265(b)(3) of the Code, the City makes the following factual statements and representations: (a) the Certificate is not a "private activity bonds" as defined in Section 141 of the Code; (b) the City hereby designates the Certificate as a "qualified tax-exempt obligations" for purposes of Section 265(b)(3) of the Code; (e) the reasonably anticipated amount of tax-exempt obligations (other than private activity bonds that are not qualified 501 (c)(3) bonds) which will be issued by the City (and all subordinate entities of the City) during calendar year 2018 will not exceed $10,000,000; and 536168v2 JSB LA515-53 7