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, , :~ h ~I ~l 0n \.;c~ ;,~ ~i I required in order for the interest on such bonds to qualify for exemption from the imposition of \j federal income tax; and " i' ~ 1 A J 1 j ! WHEREAS, the Project is located in the 10 square mile area of the City of Portsmouth, Virginia ("Portsmouth") and the City of Norfolk, Virginia ("Norfolk") which has been designated an empowerment zone under Section 1391(g) of the Code; WHEREAS, Section 1394(f)(l) of the Code provides that "new empowerment zone facility bonds" are exempt from the state volume cap restrictions of Section 146 of the Code if bonds are designated under Section 1394(f)(2)(A) of the Code for such purpose by the local government or governments which nominated the area to which the bonds relate for designation as an empowerment zone under Section 1391 (g) of the Code (a "new empowerment zone"); WHEREAS, Norfolk and Portsmouth jointly nominated the above-described area for designation as a new empowerment zone; WHEREAS, the aggregate face amount of bonds which may be designated under Section 1394(f)(2)(A) of the Code with respect to a new empowerment zone may not exceed $130,000,000 if such zone is in an urban area and the zone has a population of less than 100,000, and such limit will not be exceeded by the issuance of the proposed Bonds; WHEREAS, the Authority held a public hearing on April 17,2007, in compliance with the requirements of the Code and Section 15.2-4906 of the Act and after such public hearing did adopt a resolution to issue not to exceed $12,000,000 of its tax-exempt new empowerment zone facility revenue bonds for the Project, and recommended the public approval of the Bonds by this Council and the designation of the Bonds by this Council and the Council of the City of Norfolk, Virginia (the "Norfolk Council") as "new empowerment zone facility bonds" for purposes of Section 1394(f)(2)(A) of the Code (the "2007 Official Action Resolution"); and 2