1990-03-07 Minutes - Laserfiche WebLink

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r~ ~~ r~ ~J • so warrant. A revision or withdrawal of the rating may have an adverse effect on the market price of the Bonds. Litigation Neither the Authority nor the Commission is affecting either the validity of the Issue or the meet their financial obligations. aware of any threatened or pending litigation ability of the Authority and the Commission to Legality The Bonds are subject to approval as to certain matters by Baker & Daniels, Indianapolis, Indiana, as Bond Counsel. Bond Counsel has not participated in the preparation of this Official Statement and will not pass upon its accuracy, completeness, or sufficiency. Bond Counsel has not examined nor attempted to examine or verify, any of the financial or statistical statements, or data contained in this Official Statement, and will express no opinion with respect thereto. A legal opinion in substantially the form set out in Appendix I herein will be delivered at closing. Tax Matters In the opinion of Baker & Daniels, Indianapolis, Indiana, Bond Counsel, under law existing and in effect on the date of such opinion, and assuming continuing compliance by the Authority with its Tax Covenants (as hereinafter defined), the interest on the Bonds is excludable from gross income for purposes of Federal income taxation pursuant to Section 103 of the Code as in effect on the date of delivery of the Bonds. In the opinion of Bond Counsel, interest on the Bonds is exempt from income taxation in the State of Indiana under existing law, except that such interest is included for the purpose of computing the adjusted gross income upon which the Indiana franchise tax on financial institutions is imposed. The form of opinion that. Bond Counsel proposes to render upon the delivery of the Bonds is attached to this Official Statement as Appendix I. As amended by the Tax Reform Act of 1986, the Code prescribes a number of qualifications and conditions, including continuing issuer compliance, for the interest on state and local government obligations to be and remain excludable from gross income for federal income tax purposes. Under the Trust Agreement, the Authority has made certain covenants (the 'Tax Covenants") not to take any action or to fail to take any action with respect to the proceeds of the Bonds or any investment earnings thereon which would result in constituting the Bonds as "arbitrage bonds" under the Code or would otherwise cause the interest on the Bonds to cease to be excludable from gross income for purposes of Federal income taxation. The Authority shall comply with the arbitrage rebate requirements under Section 148 of the Code to the extent applicable. Noncompliance with the foregoing Tax Covenants may cause the interest on the Bonds to be includable in gross income for federal income tax purposes retroactively to the date of issuance of the Bonds. Further, even assuming compliance by the Authority with its Tax Covenants, certain provisions of the Code may affect certain owners of the Bonds. The Code imposes alternative minimum taxation on corporations (as defined for Federal income tax purposes) and individuals. The Bonds are not "private activity bonds" for the purpose of treatment of interest thereon as a direct preference item in calculating the alternative minimum tax. However, for corporations (as defined for federal income tax purposes) in tax years beginning after 1986 and before 1990, the alternative minimum tax is determined under the Code at 20% of each corporation's alternative minimum taxable income. Such alternative minimum taxable. income includes 50% of the -11 -