4.2. SR 10-18-1999 - Laserfiche WebLink

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General The above is not a comprehensive list of all federal tax consequences which may arise from the receipt or accrual of interest on the Bonds. The receipt or accrual of interest on the Bonds may otherwise affect the federal income tax (or Minnesota income tax or franchise tax) liability of the recipient based on the particular taxes to which the recipient is subject and the particular tax status of other items of income or deductions. Bond Counsel expresses no opinion regarding any such consequences. All prospective purchasers of the Bonds are advised to consult their own tax advisors as to the tax consequences of, or tax considerations for, purchasing OJ holding the Bonds. BANK-QUALIFIED TAX-EXEMPT OBLIGATIONS The City will designate the Bonds as "qualified tax-exempt obligations" for purposes of Section 265(b)(3) of the Internal Revenue Code of 1986, as amended, relating to the ability of financial institutions to deduct from income for federal income tax purposes, interest expense that is allocable to carrying and acquiring tax-exempt obligations. RATING An application for a rating of the Bonds has been made to Moody's Investors Service ("Moody's"), 99 Church Street, New York, New York. If a rating is assigned, it will reflect only the opinion of Moody's. Any explanation of the significance of the rating may be obtained only from Moody's. There is no assurance that a rating, if assigned, will continue for any given period of time, or that such rating will not be revised or withdrawn, if in the judgment of Moody's, circumstances so warrant. A revision or withdrawal of the rating may have an adverse effect on the market price of the Bonds. YEAR 2000 ISSUES Background Many existing computer programs use only the last two digits to refer to a year. These programs do not properly recognize a year that begins with "20" rather than "19". If not corrected, many computer applications could fail or create erroneous results, possibly affecting an organization's operations, financial condition, or ability to make timely payments on its indebtedness. Assessment The City is actively working on its Year 2000 issues and has completed an assessment of all computer hardware, software and imbedded compute~ chips for potential non-compliance. The City has upgraded and/or replaced hardware and software that is not in compliance. The City believes that the majority of remediation has been completed and any issues not yet addressed -7-