HomeMy WebLinkAboutResolutions - 1989.09.28 - 17202Miscellaneous Resolution # 89246 September 28, 1989
BY: Government & Transportation Committee-Richard G. Skarritt, Chairperson
RE: Federal Legislation HR 3137 & HR 3138 (Support) Providing Relief
from the Arbitrage Rebate Requirement to Bond Issuers
TO THE OAKLAND COUNTY BOARD OF COMMISSIONERS
Mr. Chairperson, Ladies and Gentlemen:
WHEREAS arbitrage is earned by issuers of tax-exempt bonds
investing proceeds of a tax-exempt borrowing in taxable securities,
thereby earning the difference in the interest rates between taxable
and tax-exempt securities; and
WHEREAS this has been an extremely cumbersome procedure,
complicated further by the fact that it has taken the U. S. Treasury
two and a half years to develop 243 pages of regulations which cover
only part of the necessary rules to determine the amount of rebate;
and
WHEREAS even in cases where no rebate is required, all the
administrative expenses of the rebate must be incurred to substantiate
that a rebate payment is not due; and
WHEREAS Congressman Beryl F. Anthony of Arkansas has
introduced legislation providing an alternative to the existing
arbitrage rebate rules which are generally considered neither workable
nor understandable; and
WHEREAS HR 3138 provides state and local govenment bond
issuers and alternative to "spend out" the bond proceeds over a
three-year period and use arbitrage earnings to cover project costs.
If the bond issuer does not meet annual percentage spend out
requirements in any of the three years, a penalty must be paid to
the federal government; and
WHEREAS Representative Anthony's companion bill HR 3137 would
stop the issuance of hedge bonds whose prime purpose is to provide
a buffer against rising interest rates and not for a specific public
purpose; and
WHEREAS HR 3138 will benefit state and local governments that
spend bond proceeds expeditiously and HR 3137 encourages the timely
issuance of bonds.
NOW THEREFORE BE IT RESOLVED that the Oakland County Board
of Commissioners takes a position supporting HR 3137 and HR 3138.
BE IT FURTHER RESOLVED that copies of this resolution be sent
to the Oakland County Congressional Delegation and to the County's
Legislative Agent.
Mr. Chairperson, on behalf of the Government & Transportation
Committee, I move the adoption of the foregoing resolution.
GOVERNMENT & TRANSPORTATION COMMITTEE
'day of September 1989
• ALLEN, County Clerk/Register of [
:Resolution # 89246 ' September 28, 1989
Moved by Skarritt supported by Luxon the resolution be adopted.
AYES: Luxon, McConnell, McPherson, Moffitt, Oaks, Olsen, Pernick, Rewold,
Skarritt, Wolf, Aaron, Bishop, Caddell, Calandro, Crake, Ferrens, Gosling,
Hobart, Johnson, R. Kuhn, Law. .(21)
NAYS: None. (0)
A sufficient majority having voted therefor, the resolution was adopted.
STATE OF MICHIGAN)
COUNTY OF OAKLAND)
I, Lynn D. Allen, Clerk of the County of Oakland and having a seal,
do hereby certify that I have compared the annexed copy of the attached
resolution adopted by the Oakland County Board of Commissioners . at their regular
meeting held on 'September 28, 1989
with the original record . thereof now remaining in my office, and
that it is a true and correct transcript therefrom, and of the
whole thereof.
In Testimony Whereof, I have hereunto set my hand and affixed the
seal of said County at Pontiac, Michigan
this 28th