RES 88015 - Laserfiche WebLink

Tax Exemption In the opinion of Bond Counsel, under existing laws, regulations, rulings and .~udicial decisions, interest on the Bonds is exempt from personal income taxes imposed by the State of California, is excluded from gross income for federal income tax purposes, and is not an item of tax preference for urposes of the federal alternative minimum tax imposed on individuals and corporations. I~wever, Bond Counsel notes that, with respect to corporations (as. defined for federal income tax purposes), interest on the bonds will be included in determining corporate adjusted net book income (adjusted current earnings for taxable years ending after December 31, 1989), a portion of which may increase the alternative minimum taxable income of such corporations. Bond Counsel's opinion as to the exclusion from gross income of interest on the Bonds is subject to the condition that the City comply with all requirements of the Internal Revenue Code of 1986 (the "Code") which must be satisfied subsequent to the issuance of the bonds to assure that such interest will not become includable in ross income for federal income tax · u~oses. Failure to comply with such re uirements cou~ cause the interest on the Bonds to ~e ~ncluded in gross income for feder~ income tax purposes retroactive to the date of ~ssuance of the bonds. The Ci has covenanted to comply with all such requirements. Bond Counsel will not undertake to ~Yetermine (or to inform any person) whether an actions taken .(or not taken) or events occurring after the issuance of the Bonds may affect t~e tax status of ~nterest on the Bonds. Although Bond Counsel has rendered an opinion that interest on the Bonds is excluded from gross income for federal income tax purposes, the accrual or receipt of interest on the Bonds may otherwise affect the federal income tax liability of the recipient. The extent of these other tax consequences will depend upon the recipient's particular tax status and/or other items of income or deductions. Bond Counsel expressed no opinion regarding any such consequences. Accordingly, all potential purchasers should consult their tax advisors before buying any of the Bonds. Underwriting The purchase price to be paid to the City for all the Bonds is 97% of par. The Underwriter intends to offer the Bonds to the ublic initially at the prices and/or yields set forth on the cover age of this Preliminary Official Statement plus accrued interest if any from. the date of t~ Bonds, which prices or yields may subsequently change withbut reqmrement of prior notice. The Underwriter reserves the right to join with dealers and other underwriters in offering the bonds to the public. The Underwriter may offer and sell the Bonds to certain dealers (including deposit~n Bonds into investment trusts) at prices lower than the public offering prices, and such dena~ers may allow any such discounts on sales to other dealers. In reoffering Bonds to the public, the Underwriter may overallot or effect transactions which stabilize or maintain the market prices for Bonds at levels above those which might otherwise prevail. Such stabilization, if commenced, may be discontinued at any time. No Rating No rating has been sought or obtained for the Bonds.