Agenda Packets - 1987/09/14 - Laserfiche WebLink

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L uullll league of minnesota cities FEDERAL LEGISLATIVE FL-1. Federal Tax Policy Modifications The League also supports the removal of multi -family nous:ng nvnuo ��•° the state -by -state per capita volume limits imposed by the 1986 Tax Reform Act. There must also be adjustments in the limits placed on the eligibility and application of the low income housing tax credit to the financing of such projects. Finally, the League supports actions by the National League of Cities to join in the lawsuit filed by the National Finance officers Association to reverse federal tax reform provisions which impose an alternative minimum tax on municipal bond interest. New reporting and arbitrage provisions can also result in retroactive tax liability for cities. Restrictions; that nreceivelimit on the amountpal of t s that �' arlev is t e city investm ent 5 e proceeds to a level no higher than the rate of interest Y paying on such bonds. These restrictions can also result in rebates to th^ U.S. Treasury and often present difficult and costly record -keeping and computation functions at the local level to avoid potential tax liability. Minnesota cities have experienced severe reductions in their authority to issue tax-exempt bonds since the enactment of the 1986 Tax Reform to Act. The limits placed on authority rev ouselevelsx0fpb ndnds activi.ty in represented a loss of 84 percent p volume limits, further Minnesota. In addition to problems paused by restrictions on public purpose bond authority have curtailed opportunities for public -private cooperation in the development and and management of projects deemed to be in the public interest at the local level. Loss of value of commercial and rental properties is also viewed as a likely outcome of tax reform as well as increased instances of ,loorare made properties wherens on initial investments decline - 65 - 83 university avenue east. St. paul. minnesota 5E 101 [6121227-5600