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Legality
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<br /> The Bonds are subject to approval as to certain matters by Dorsey & Whitney of Minneapolis, 1 - - - - - - - - - - - - - - - I - -
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<br /> Minnesota as Bond Counsel. Bond Counsel has not participated in the preparation of this 1 N IA °N I m ' m m M1"Q Q ' M1 ' ° Q ' m 11
<br /> 1 0) m m O N 1 0 1 Q W"- N N N 1 m I co N I Q 1 to 11
<br /> Official Statement except for guidance .concerning the following section, 'Tax Exemption," and ` ; = I C7 I ; r I ' ° ' Q 1'
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<br /> will not pass upon its accuracy, completeness, or sufficiency. Bond Counsel has not examined
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<br /> nor attempted to examine or verify, any of the financial or statistical statements, or data
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<br /> contained in this Official Statement, and will express no opinion with respect thereto. A legal ` ' °M1 e °A 1 1 Q- M1 m
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<br /> opinion substantially in the form as set out in Appendix I herein will be delivered at closing. _ , _ /o W m° 1 m I N O In N Q M1 M I M1 I 1 10 N 1
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<br /> If- m <'- I 01 I 11'1�cn N Pf Cn I O I T I O Ij7 r' I IlY 11
<br /> I C7 i I Q 1 W 11
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<br /> Tax Exemption
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<br /> In the opinion of Dorsey & Whitney, as Bond Counsel, under federal and Minnesota laws, m ff ° 01 m ; I ° /�^Q ; ; N Of N Q N ;
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<br /> regulations, rulings and decisions in effect on the date of issuance of the Bonds, interest on the �, _ m 1 Q I N .-to N I N I N I a 01 A I
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<br /> Bonds is not includable in gross income for federal income tax purposes or in taxable net m L-LL a "
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<br /> income of individuals, estates and trusts for Minnesota income tax purposes. Interest on the U a
<br /> Bonds is includable in taxable income of corporations and financial institutions for purposes of
<br /> the Minnesota franchise tax. Certain provisions of the Internal Revenue Code of 1986 as Q N m I N I m I ° I Q I m a I 1' I'
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<br /> amended (the "Code"), however, impose continuing requirements that must be met after the - r m e N ; N ;
<br /> issuance of the Bonds in order for interest thereon to be and remain not includable in federal m > = A - ' ° ' m ' m ' - ' 1- Q M1 I
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<br /> O L 7 O I 1 1'1 I Go I A I A N 1— I O 11
<br /> gross income and in Minnesota taxable net income. Noncompliance with such requirements If
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<br /> by the City may cause the interest on the Bonds to be includable in gross income for purposes
<br /> of federal income taxation and in taxable net income for purposes of Minnesota income
<br /> taxation, retroactive to the date of issuance of the Bonds, irrespective in some cases of the N m m ; I Q ; Q ; N
<br /> date on which such noncompliance is ascertained. No provision has been made for _ N Q I ° ' A ' A ' O 0 O m 11
<br /> 0- O 0 1 0 1 O I C I O 1 O O I O 11
<br /> redemption of or for an increase in the interest rate on the Bonds in the event that interest on m ' - I I - 1 - - 1 11
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<br /> 4;0 1 In I C9 I C7 I I r' P1 O I 1() 11
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<br /> the Bonds becomes includable in federal gross income or Minnesota taxable income. < 0 U-
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<br /> Interest on the Bonds is not an item of tax preference includable in alternative minimum taxable
<br /> income for purposes of the federal alternative minimum tax applicable to all taxpayers or the LL A 10 m °A I ° I °N W 10 I n I I � ° I m
<br />to
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<br /> Minnesota alternative minimum tax applicable to individuals, estates and trusts but is = < °_m c M1 ' °' ' °=°°=Q-° ' "' ' ° '
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<br /> includable in adjusted current earnings in determining the alternative minimum taxable income �, L = m m A , �- I N N m N I Q 1 l0 1
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<br /> of corporations for purposes of the alternative minimum tax and the environmental tax imposed ° ° m
<br /> by Section 59A of the Code. Interest on the Bonds may be includable in the income of a 1
<br /> foreign corporation for purposes of the branch profits tax imposed by Section 884 of the Code °a
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<br /> and is includable in the net investment income of foreign insurance companies for purposes of ' ` L LU
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<br /> Section 842(b) of the Code. In the case of an insurance company subject to the tax imposed W Z
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<br /> by Section 831 of the Code, the amount which otherwise would be taken into account as J o
<br /> losses incurred under Section 832(b)(5) of the Code must be reduced by an amount equal to W Z W
<br /> fifteen percent of the interest on the Bonds that is received or accrued during the taxable year. o W=W m N
<br /> Section 86 of the Code requires recipients of certain Social Security and railroad retirement _W y=
<br /> benefits to take into account, in determining the taxability of such benefits, receipts or accruals .. W o W ° L
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<br /> of interest on the Bonds. Passive investment income, including interest on the Bonds, may be W J W m o
<br /> subject to federal income taxation under Section 1375 of the Code for a Subchapter S W
<br /> corporation that has Subchapter C earnings and profits at the close of the taxable year if o o _ °'LL
<br /> greater than twenty-five percent of the gross receipts of such Subchapter S corporation is m > = m > 0 '
<br /> passive investment income. Section 265 of the Code denies a deduction for interest on d,o °
<br /> indebtedness incurred or continued to purchase or car the Bonds or, in the case of a W m H: m If_3 °a m '
<br /> indeb p carry
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<br /> financial institution, that portion of the holder's interest expense allocated to interest on the �, € m L m m •� O °-- a = °
<br /> Bonds, except with respect to certain financial institutions (within the meaning of Section 265(b) J m L - m E ° ° L w x
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<br /> of the Code). m ° °' ` ` `" ` > > m" m " ° n _w " m
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<br /> The foregoing is not intended to be an exhaustive discussion of collateral tax consequences ^r C ° U m 11- °^ m 0 m X T m " z
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<br /> arising from receipt of interest on the Bonds. Prospective purchasers or holders of the Bonds = IV ° m o ` m m ° m Y 0 L J ° W L ° 0 L
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<br /> should consult their tax advisors with respect to collateral tax consequences, including without � W W o W I.L. I.L.
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