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R-99-34 <br /> <br />A RESOLUTION AUTHORIZING THE ISSUANCE AND SALE OF QUALIFIED ZONE <br />ACADEMY BONDS. <br /> <br />WHEREAS, the federal Taxpayer Relief Act of 1997 added a new section, Section 1397E, to the <br />Internal Revenue Code of 1986, as amended (the "Tax Code"), to authorize a new type of debt <br />instrument known as a qualified zone academy bond CQZAB"); and <br /> <br />WHEREAS, QZABs are taxable bonds issued by a state or local government the proceeds of <br />which are to be used to improve certain eligible public schools; and <br /> <br />WHEREAS, in lieu of receiving all or a portion of periodic interest payments from the issuer, an <br />eligible holder of a QZAB receives a federal income tax credit for each year the QZAB is <br />outstanding; and <br /> <br />WHEREAS, the federal income tax credits provided by Section 1397E of the Tax Code are <br />designed to compensate the QZAB holder for lending money to the issuer and to function as <br />payments of interest on the QZAB; the intent of the federal tax credits is to permit the QZAB to <br />be issued with little or no stated interest or original issue discount; and <br /> <br />WHEREAS, Section 1397E of the Tax Code sets forth a number of certification and similar <br />requirements to be satisfied for a valid issuance of QZABs, including, without limitation, the <br />following: <br /> <br />A requirement that 95 percent of the proceeds of a QZAB issue be used for a <br />qualified purpose with respect to a qualified zone academy established by an <br />eligible local education agency; <br /> <br />A requirement that the QZAB issuer certify that it has written assurances that the <br />private business contribution requirement of Section 1397E(d)(2) of the Tax Code <br />will be met with respect to the academy; and <br /> <br />A requirement that the eligible local education agency specify the type and quality <br />of contributions from private entities acceptable to be counted as "qualified <br />contributions" for purposes of the private business contribution requirement; and <br /> <br />WHEREAS, for purposes of this resolution: <br /> <br /> The term "qualified purpose" means, with respect to any qualified zone academy, <br /> (I) rehabilitating or repairing the public school facility in which the academy is <br /> established, and (ii) providing equipment for use at such academy. <br /> <br /> The term "qualified zone academy" means any public school (or academic program <br /> <br /> <br />