HomeMy WebLinkAboutCity Council Resolution 495 RESOLUTION NO~ 495
A RESOLUTION OPPOSING CHANGE IN TAX-EXEMPT
STATUS OF MUNICIPAL BONDS
Resolved by the City Council of the City of Saratoga,
California, that,
Whereas, this Council is informed that the Congress
of the United States~ in seeking acceptable methods of
tax reform, is considering the possibility of removing
or otherwise changing the tax-exempt status of interest
on municipal obtigations~ or limiting individual tax pre-
ferences in such a manner as to directly affect the market
value of otherwise exempt securities, and that legislation
to this effect has been passed by the House of Representa-
tives, and,
Whereas, any such change would break faith with
holders of presently outstanding municipal obligations who
in purchasing such obligations accepted lower rates of interest
than could have been obtained elsewhere, under the assurance
that the interest on such municipal obligations would be
totally free of Federal taxation, and,
Whereas, any such change would reduce the attractiveness
to investors of future issues of municipal obligationsx
and would require that higher rates of interest be paid to
compensate for the proposed Federal taxation and to induce
investors to purchase municipal obligations, and since such
higher rates of interest would in turn require that higher
property taxes be levied to service and amortize municipal
debt,
Now, therefore~ it is determined and ordered that
this Council is opposed to any legislation which would rescind,
modify or in any way weaken the tax-exempt status of interest
on presently outstanding municipal obligations, it is further
determined and ordered that this Council is in like manner
opposed to any change in the tax-exempt status of the
interest on future issues of municipal obligations (unless
and until legislation proposing such change includes or is
accompanied by some acceptable system of directly compensating
municipalities issuing debt obligations for the additional
costs they will incur as the result of the proposed change),
2
and the honorable representatives of the State of California
in the Congress of the United States are respectfully urged
to oppose any such proposed legislation (including H.R. 13270,
91st Congress, 1st Session) with vigor and fortitude.
I hereby certify that the foregoing is a full, true
and correct copy of a resolution duly passed and adopted
by the City Council of the City of Saratoga, California,
at a regular meeting thereof held on the 3rd day
of September , 1969, by the following vote of the
members thereof:
Ayes, and in favor thereof, Councilmen T.vler,
None
Noes,
Ab sen t ~ Counc t lman ~ ande rs
ATTE..ST:
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