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RESOLUTION ED• 116-85
SCANNED
A RESOLUTION URGING CONGRESS NOT TO RESTRICT THE
USE OF PUBLIC PURPOSE MUNICIPAL BONDS.
WHEREAS, the House Ways and Means Committee has under consideration
a tax reform proposal which would severely restrict the authority
of cities to continue issuing traditional public purpose tax exempt
bonds; and
WHEREAS, under the Committee's proposal, a city's general obligation
or revenue bonds would lose tax exempt status if any private entity
benefited from the use of the financed facility or program by more
than five percent; and
WHEREAS, in many small cities many industries use more than five
percent of a city's water plant or sewer plant capacity; and
WHEREAS, the Committee's proposal would prohibit advance refunding
of traditional public purpose municipal bonds; and
WHEREAS, advance refunding enables municipalities to reduce interest
costs and to eliminate burdensome covenants; and
WHEREAS, the Committee's proposal would tax the interest on municipal
bonds issued to finance construction of water, sewer or solid waste
facilities if said facilities are publicly owned but operated by a
private entity; and
WHEREAS, the use of a private operator for a publicly owned water,
sewer or solid waste facility can result in savings to rate payers
and may be required to obtain operating guarantees from the contractors
who construct such facilities; and
WHEREAS, the Committee's proposal would eliminate all industrial
development revenue bonds except for single and multifamily housing
bonds; and
WHEREAS, the issuance of industrial development revenue bonds
by municipalities to promote manufacturing plants serves a legitimate
public purpose by alleviating unemployment.
ME, THEREFORE, BE IT RESOLVED BY THE BOARD OF DIRECTORS OF THE
CITY OF FAYEI•TEVILLE, ARKANSAS:
4.4
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Section 1. That the Board of Directors hereby strongly urges
Congress not to enact legislation which would:
(a) Restrict the authority of cities to continue issuing
tax exempt bonds for traditional public purposes;
(b) Tax a city's general obligation or revenue bonds if
a private entity benefited from the use of the financed
facility;
(c) Prohibit advance refunding of a city's general obligation
or revenue bonds; or,
(d) Prohibit a city from issuing industrial development
revenue bonds to finance construction or expansion
of manufacturing plants.
PASSED AND APPROVED this 5th
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day of Nnvemhpr , 1985.