1998-10-19 Resolution 130 - Laserfiche WebLink

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. environmental laws certain liens may be imposed on property of the Authority from time to time, but the Authority has no reason to believe, under existing law, that any such lien would have priority over the lien on the property taxes pledged to owners of the Refunding Bonds. The various legal opinions to be delivered concurrently with the delivery of the Refunding Bonds will be qualified as to the enforceability of the various legal instruments by limitations imposed by the valid exercise of the constitutional powers of the State of Indiana and the United States of America and bankruptcy, reorganization, insolvency or other similar laws affecting the rights of creditors generally, and by general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law). These exceptions would encompass any exercise of federal, State or local police powers in a manner consistent with the public health and welfare. Enforceability of the Trust Agreement and the Lease in a situation where such enforcement may adversely affect public health and welfare maybe subject to these police powers. TAX MATTERS In the opinion of Baker & Daniels, South Bend, Indiana ("Bond Counsel"), under existing law, interest on the Refunding Bonds is excludable from gross income under section 103 of the Internal Revenue Code of 1986, as amended and in effect on the date of delivery of the Refunding Bonds (the "Code"), for federal income tax purposes. This opinion relates only to the excludability from gross income of interest on the Refunding Bonds for federal income tax purposes under section 103 of the Code and is conditioned on continuing compliance by .the '~ Authority with the Tax Covenants (hereinafter defined). Failure to comply with the Tax Covenants could cause interest on the Refunding Bonds to become includable in gross income for federal income tax purposes retroactive to the date of issuance of the Refunding Bonds. In the opinion of Bond Counsel, under existing laws, regulations, published rulings and judicial decisions, interest. on the Refunding Bonds is exempt from taxation. in. the .State of Indiana for all purposes except the Indiana financial institutions tax and the Indiana inheritance tax. The Code imposes certain requirements which must be met subsequent to the issuance of the Refunding Bonds as a condition to the excludability from gross income of interest on the Refunding Bonds for federal income tax purposes. Should the Refunding Bonds bear interest that is not excludable from gross income for federal income tax purposes, the market value of the Refunding Bonds would be materially and adversely affected. The Tax Covenants include covenants that (i) the Authority will not take or fail to take any action with respect to the Refunding Bonds, if such action or omission would result in the interest on the Refunding Bonds becoming includable in gross income for federal income tax purposes under Section 103 of the Code, and the Authority will not act in any other manner which would adversely affect such excludability of interest on the Refunding Bonds from gross income for federal income tax purposes; (ii) the Authority will not make any investment or do any other act or thing during the period that the Refunding Bonds are outstanding which would cause the Refunding Bonds to be "arbitrage bonds" within the meaning of Section 148 of the Code; and (iii) if required by the Code, the Authority will rebate any necessary amounts to the United States of America in compliance with Section 148 of the Code. -16-