Res 1987-111 - Laserfiche WebLink

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Marcos, Texas"; and subsequent to passage of the Act, the CTHEA's articles of incorporation and bylaws were amended with respect to such income to provide that "any and all income of the Corporation after payment of expenses, debt service, and the creation of reserves for the same shall be utilized for the acquisition of loans or educational expenses incurred by or for the benefit of students in conformity with and to the extent not limited by applicable law or shall be paid over to the United States," in order to permit CTHEA to continue to issue bonds pursuant to the provisions of the 1986 Code to acquire such student loans: WHEREAS, it has come to the attention of the City that CTHEA has substantial funds and net assets which, under the terms of the 1954 Code, would have been properly payable to the city to the extent such funds. are not used to acquire additional student loan notes and which might" still be properly payable to the City if the CTHEA and its articles of incorporation and bylaws with respect to the disposition of its income and assets are amended to read as they existed immediately prior to the effective date of the Act: WHEREAS, the City has determined that termination of CTHEA's ability to issue future bonds will not detrimentally affect the availability of student loans in the area presently serviced by CTHEA, and the City's receipt of any such funds from CTHEA, as previously provided by law, will benefit the City and all of its citizens by providing funds for municipal functions that otherwise must be provided by City debt or taxes: WHEREAS, it is hereby found that it is necessary and appropriate that a private letter ruling should be obtained from the Internal Revenue Service with respect to the effect that such payment to the City by CTHEA, assuming no future CTHEA bonds are issued, would have on the tax exempt status of the interest on CTHEA's previously issued bonds, that CTHEA is the proper party to submit a request for such ruling, and that such ruling request must present actual, as opposed to hypothetical, facts: and, WHEREAS, the City desires that such private letter ruling be sought and obtained without delay, under substantially the procedures and conditions hereinafter set forth: now, therefore, BE IT RESOLVED BY THE CITY TEXAS: COUNCI L OF THE CITY OF SAN MARCOS, SECTION 1. Findings. The statements contained in the preamble of this Resolution are true and correct and are adopted as findings of fact hereby. SECTION 2. Request to CTHEA. In order to determining if funds of CTHEA may be paid over to detrimental effect upon the tax exempt status of CTHEA's outstanding bonds, the City hereby requests by and through its board of directors, take the without delay: aid the City in the City without a the interest on that CTHEA, acting following actions (a) Resolve that CTHEA will issue no further honds unless and until the Internal Revenue Ser:vi.ce issues a private letter ruling holding that CTHEA1s payment of all or any part of its income and funds over to the City of San lIarcos will have an adverse effect on the tax exempt status of the interest on CTHEA1s previously issued bonds; (b) Amend the CTHEA articles of incorporation and bylaws to provide as they did prior to the 1987 amendments to those documents, or amend the CTHEA bylaws and articles of incorporation to provide as they did prior to the 198ì amendments to those documents effective on the date of receipt of a private ruling request which is favorable to the City if this alternate procedure is deefled acceptable by Cityls bond counsel; {d Direct CTHRAls bond counsel to prepare a private letter ruling request to be submitted to the Internal Revenue Service upon approval thereof by the City; and, (d) If a private letter ruling request has been sent to IRS by CTHEA or its attorneys as of the effective date of this resolution, a copy shall be furnished to the City immediately.