Res 1988-007 - Laserfiche WebLink

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RA TINGS A pplications for contract ratings on this issue have been made to Moody's Investors Service, Inc. and Standard & Poor's Corporation. An explanation of the significance of such ratings may be obtained from the company furnishing the rating. The ratings reflect only the respective views of such organizations and the City makes no representation as to the appropriateness of the ratings. There is no assurance that such ratings will continue for any given period of time or that they wiJl not be revised downward or withdrawn entirely by either or both of such rating companies, if in the judgment of either or both companies, circumstances so warrant. Any such downward revision or withdrawal of such ratings, or either of them, may have an adverse effect on the market price of the Bonds and Certificates. TAX EXEMPTION The Bonds and Certificates, in the opinion of Bond Counsel, will not be "private activity bonds" within the meaning of Section I1¡.1(a) of the Internal Revenue Code of 1986 (the "Code"). Accordingly, interest on the Bonds and Certificates will not be treated as a preference item under the alternative minimum tax provisions of the Code as applicable to individuals and corporations, except that interest on the Bonds and Certificates will be included in the "adjusted net book income" or the "adjusted current earnings" of a corporation for purposes of computing the alternative minimum tax and the environmental tax imposed on a corporation. Furthermore in the opinion of Bond Counsel, the Bonds and Certificates will be "qualified tax exempt obligations" under Section 265 (b)(3) of the Code, relating to financial institutions, and interest on the Bonds and Certificates will be excludable from gross income under Section IO3(a) of the Code. The statutes, applicable regulations, published rulings of the Internal Revenue Service and court decisions on which such opinions are based are subject to change. These opinions are dependent in part on future compliance by the City with certain post-issuance requirements of the Code, including the arbitrage rebate requirements. Failure to comply with such requirements may cause the interest on the Bonds and Certificates to be includable in gross income retroactive to the date of issue. In this connection, various covenants and representations will be made by the City in the documents authorizing the issuance of the Bonds and Certificates that are designed to provide assurance of compliance with.such requirements, and for purpose of its opinions, Bond Counsel will assume compliance by the City -therewith. In addition such opinions are based upon representations and certifications of the City pertaining to the use, expenditure and investment of the proceeds of the Bonds and Certificates. Except as described above, Bond Counsel expresses no opinion with respect to any other federal, state or local tax consequences under present law or proposed legislation resulting from the receipt or accrual of interest on, or the acquisition, ownership or disposition of, the Bonds and Certificates. Prospective purchasers of the Bonds and Certificates should be aware that the ownership of tax-exempt obligations such as the Bonds and Certificates may result in collateral federal tax consequences to, among others, property and casualty insurance companies, certain foreign corporations doing business in the United States, individual recipients of Social Security or Railroad Retirement benefits, taxpayers who may be deemed to have incurred or continued indebtedness to purchase or carry tax-exempt obligations, stockholders of corporations receiving or accruing tax-exempt interest and S corporations with Subchapter C earnings and profits. Prospective purchasers should consult their own tax advisors as to the applicability to these and other such collateral consequences to their particular circumstances. The form of Bond Counsel's opinion is set forth in Appendix B hereto. REGISTRATION AND QUALIFICATION OF BONDS AND CERTIFICATES FOR SALE The sale of the Bonds and Certificates has not been registered under the Federal Securities Act of 1933, as amended, in reliance upon the exemption provided thereunder by Section 3(a) (2); and the Bonds and Certificates have not been qualified under the Securities Act of Texas in reliance upon various exemptions contained therein; nor have the Bonds and Certificates been qualified under the securities acts of any jurisdiction. The City assumes no responsibility for qualification of the Bonds and Certificates under the securities laws of any jurisdiction in which the Bonds and Certificates may be sold, assigned, pledged, hypothecated or otherwise transferred. This disclaimer of responsibiHty for qualification for sale or other disposition of the Bonds and Certificates shall not be construed as an interpretation of any kind with regard to the availability of any exemption from securities registration provisions. - 24-