ExploreUK home

0-9 | A | B | C | D | E | F | G | H | I | J | K | L | M | N | O | P | Q | R | S | T | U | V | W | X | Y | Z

[429] > Image [429] of Minutes of the University of Kentucky Board of Trustees, 1986-05-jun25.

Part of Minutes of the University of Kentucky Board of Trustees

Potential bidders are put on notice that at the time that the Bonds are offered for sale, (a) the "Tax Reform Act of 1985," also known as H.R. 3838, 99th Congress, First Session (the "Tax Bill"), has been passed by the House of Representatives on December 17, 1985, with a provision that many of its provisions are effective retroactive to January 1, 1986, (b) a "Joint Statement" on the effective dates of pending tax reform legislation (the "Joint Statement") has been issued by the Chairman and Ranking Members of both the Ways and Means Committee of the United States House of Representatives and the Finance Committee of the United States Senate, together with the Secretary of the United States Treasury Department, dated March 14, 1986, and (c) it is not known at present whether such Tax Bill will also be passed by the United States Senate and approved by the President, the final form in which same will be enacted, if any, and what retroactive date, if any, will be included in such law. In order to assure purchasers of the Bonds that interest thereon will continue to be exempt from all Federal and Kentucky income taxation (except that income from these Bonds may constitute an item of "tax-preference" in the income of property and casualty insurance companies because of the nature of the total tax-preference items of such bondowners), the Board of Trustees has covenanted to and with the owners of such Bonds that (1) the Board will take all actions necessary to comply with the effective provisions of such Tax Bill, (2) the Board of Trustees will take no actions which will violate any of the provisions of such Tax Bill, (3) none of the proceeds of the Bonds will be used for any purpose which would cause the interest on the Bonds to become subject to Federal income taxation, either under the provisions of existing Federal law or under the new Tax Bill, if enacted and signed into law in the form as same exists at the time of issuance of the Bonds, if such Tax Bill as enacted reflects the postponement of effective dates to the extent endorsed in the Joint Statement, and (4) the Board of Trustees reserves the right to amend the Resolution authorizing these Bonds without obtaining the consent of the owners of the Bonds (i) to whatever extent shall, in the opinion of Bond Counsel, be deemed necessary to assure that interest on the Bonds shall be exempt from Federal income taxation, and (ii) to whatever extent shall be permissible (without jeopardizing such tax exemption or the security of the bondowners) to eliminate or reduce any restrictions concerning the Project, the investment of the proceeds of the Bonds, or the application of such proceeds or of the revenues of the Project; and the purchasers of the Bonds are deemed to have relied fully upon these covenants and undertakings on the part of the Board of Trustees as part of the consideration for purchase of such Bonds. To the extent that the Board of Trustees obtains an opinion of nationally recognized bond counsel to the effect that non-compliance would not subject interest on the Bonds to Federal income taxes or Kentucky income taxes, the Board of Trustees shall not be required to comply with the foregoing provisions. It is noted that the United States Senate Finance Committee has, on May 6, 1986, approved and recommended to the Senate a Senate version of a tax reform bill which includes a provision that interest on all municipal bonds will constitute a "tax preference" item in the income of corporations. -4-