HomeMy WebLinkAbout1985-27 Opposing all the Restrictions for Municipal Bonds Contained in the President's Tax Simplification ProposalRE50LUTION N0. 27
Series of 1985
A RESOLUTION OPPOSING ALE THE RESTRICTIONS FOR MUNICIPAL
BONDS CONTAINED IN THE PRESIDENT"S TAX SIMPLIFICATION
PROPOSAL
WHEREAS, the President's tax simplification proposal which has been submitted to
Congress places numerous restrictions on municipal bonds, generally eliminating the
tax exempt status under certain circumstances; and
WHEREAS, interest on obligations issued by State ar local government would be
taxable if more than one percent (1%) of the proceeds were used directly or indirectly
by any person other than a State or local gavernment; and
WHEREAS, issuers of all tax exempt bonds would be required..to rebate to the U.S..
Treasury "excess" arbitrage on public purpose bands; and
WHEREAS, advance refunding would be prohibited for all tax exempt bonds unless the
proceeds are used immediately to retire prior bond issues; and
WHEREAS, early issuance of bonds for projects would be halted; and
WHEREAS, the deductibility of the carrying costs for bank purchases of municipal
bonds is eliminated; and
WHEREAS, the President's proposal would retain the current provision which removes
the tax exemption for any municipal bond backed by a letter of credit from a financial
institution which has federal deposit insurance such as FDIC; and
WHEREAS, these proposals from the Administration affect about eighty percent 80~)
of the municipal bond market today overall and will significantly alter the ability of
municipalities to finance major capital and economic development projects using tax
exempt instruments.
NOW, THERE FORE, be it resolved by the Town Council of the Town of Vail as follows:
The.Towrr Council strongly opposes the restrictions upon the municipal bond
market as set forth in the President's proposal and as further described herein above.
Dated this 15th day of October 1985.
Z
u
Paul R. John Playor
ATTEST:
A~.
Pamela A. Brandmeyer, T~wn Clerk