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HomeMy WebLinkAboutCity Council Resolution 1986-136CITY OF PLYNOM Pursuant to due call and notice thereof, a regular meeting of the City Cou the City of Plymouth, Minnesota, was held ont—die 3rd day of March The following members were present: Mayor Schneider, Councilmembers Sisk, Vasiliou Zitur and Crain The rollowing members were absent: None Coun ilmember Crain introduced the following Resolution and move adoption: RESOLUTION NO. 86- 136 SUPPORTING REVISION TO H.R. 3838 WHEREAS, the United States House of Representatives has passed the Tax Reform Act of 1385 (H.R. 3838); and WHEREAS, the City of Plymouth and its legal and financial advisors have studied and discussed the provisions of H.R. 3838; and WHEREAS, these provisions in N.R. 3838 that deal with tax exempt bonds will seriously affect state and localities; and WHEREAS, the following provisions are of specific concern to this City: 1. The requirement that 5% of net bond proceeds be disbursed or spent within 30 days of bond closing. 2. The requirement that all bond proceeds to be dispersed within six months of closing or arbitrage rebates must be filed with the federal government during the life of the bond issue. 3. The requirement that all bond proceeds for property acquisition or easement acquisition be dispersed within thirt,. days of closing. 4. The creation of distinctions between essential and non-essential bond portions. Non-essential bonds would be subject to volume cap restrictions within federal/state guidelines that would be finalized over the next year. 5. The requirement that taxable bonds would be sold for projects when five percent or more of the bond proceeds (up to five million dollars) are loaned or ten percent or more of the bond proceeds (up to ten million dollars) are used by persons other than a government unit, directly or indirectly. 6. The provision that bond Issues be taxable for failure to comply with federal government directives at any time during the course of the bond Issue retroactively back to the date of issuance. Page Two Resolution No. 86-136 7. The requirement that issuers of tax exempt bonds file with the federal goverment additional administrative reports listing the owners of the bonds and documents complying with new arbitrage calculations. WHEREAS, these provisions will result in higher issuance costs when tax exempt bonds are issued, higher interest costs for tax exempt bonds and additional administrative expenses after tax exempt bonds are issued. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF PLYMOUTH, that 1. Existing federal arbitrage rules and regulations adequately deal with the dispersement of bond proceeds issued by governrental entities that provide governmental services. 2, The federal government should not impose any volume cap limits on tax exempt bonds issut-d by governmental entities to provide governmental services. 3. The federal government remove the retroactive taxability requirement on tax exempt bonds issued after January 1, 1986. 4. The proposed effective date for any federal law be established only after the federal law is signed by the President and after state and/or local governments have time to adopt the necessary legislation but in no event shall the effective day be sooner than January 1, 1987. 5. Minnesota congressional representatives are urged to support revision to H.R. 3838 or similar legislation outlined above and to reject attempts to eliminate the Federal Tax deduetability of state and local taxes. The motion for adoption of the foregoing Resolution was duly seconded by QUncilmember Zitur , and upon vote being taken thereon, EKe following vote nfa-or t ereo : Mayor Schneider, Councilmembers Sisk, �Untliou. Z tur and Crain ine following voted against or abstained: None Whereupon the Resolution was declared duly passed and adopted.