HomeMy WebLinkAboutResolution - 2091 - Tax Reform Proposals - Opposition To President Regan's Limits On Municipal Bonds - 07/25/1985JCR:da
RESOLUTION
Resolution #2091
July 25, 1985
Agenda Item #21
WHEREAS, on May 29, 1985, President Reagan submitted his tax proposal
for "fairness, growth and simplicity" to Congress; and
WHEREAS, the City Council of the City of Lubbock is cognizant and
supported of the general concept of the President's proposals; and
WHEREAS, the City Council recognizes that all citizens need to voice
there support of the President's over all program to their elected repre-
sentative; and
WHEREAS, the City Council has determined that the tax proposal as
submitted by the President is inappropriate in its treatment of the
tax-exempt status of municipal bonds; and
WHEREAS, the President's proposals would deny tax-exempt status to
bonds where the private sector benefits directly or indirectly from the use
of more than one percent of the proceeds of the bond issue; would eliminate
all advance refundings of tax-exempt bonds; would restrict the investment
of bond proceeds; would require that certain earnings from the investment
of bond proceeds be paid to the U.S. Treasury Department; would require
that an Internal Revenue Service information report be filed for every bond
issue; and would impose additional taxes on banks that purchase tax-exempt
bonds; and
WHEREAS, each of the President's proposed limitations on tax-exempt
municipal bonds would adversely affect the City of Lubbock by increasing
borrowing costs, requiring continuous administrative review of bond issues
and the use made of facilities financed with such issues, requiring filings
with the Internal Revenue Service and review by the Internal Revenue
Service of each bond issue, and jeopardizing the tax -exemption on bonds
where the private sector benefits directly or indirectly from the use of
more than one percent of a project financed by such bonds; and
WHEREAS, the President's municipal bond proposals will result in an
increase in costs which must be passed on to the residents of the City of
Lubbock, will reduce the ability of the City of Lubbock to provide vital
public services to such residents and will impose added federal bureau-
cratic controls over the provision of such services;
BE IT, THEREFORE, RESOLVED, that the City Council of the City of
Lubbock goes on record as opposing the limitations and restrictions on
municipal bonds proposed by the President, which, if enacted into law would
adversely affect all tax-exempt municipal bonds, including bonds issued by
the City of Lubbock; and
BE IT FURTHER RESOLVED, that copies of this Resolution shall be sent
to members of Congress urging them to oppose the provisions of the Presi-
dent's tax proposals which would impose new limitations on the issuers and
purchasers of municipal bonds.
Passed by the City Council this�_'�5th day of
ATTEST:
___ it Ranetta Boyd, City Secretary
APPROVED AS TO CONTENT:
016� j Q1 , � I � 5: Fz�_
bert Massengale, Assist.Ant City
Manager for Financial Services
APPROVED AS TO FORM:
ottifi C. Ross, Jr., City Attorney
- 2 -
July , 1985.
LARRY COMBEST Room 1529
19TH DISTRICT, TEXAS LONGWORTH HOUSE OFFICE BUILDING
WASHINGTON, DC 20515
(202) 225-4005
COMMITTEE ON AGRICULTURE
COMMITTEE ON THE v"Al."onareoo of the ttiteb *tater Room 6
FEDERAL BUILRoom
DING
DISTRICT OF COLUMBIA LUBBOCK, TX 79401
COMMITTEE ON SMALL BUSINESS wouge of Reprezentatibeg (806) 763-1611
Room 201
June 26, 19 8 6 400 WEST 4TH STREET
ODessA, TX 79761
(915) 337-1669
Ms. Ranette Boyd
City Secretary
City of Lubbock
Post Office Box 2000
Lubbock, Texas 79457
Dear Ranette:
Thank you for contacting me regarding the tax-exempt bond
provisions of the Senate tax reform plan. I am glad to have the
benefit of your views on this controversial piece of
legislation.
True tax reform, in my view, must incorporate the three
principles originally set forth by President Reagan: it must
simplify the tax code, it must be fair, and it must promote
economic growth. While the overall Senate plan seems to go
further in reaching those goals than the House bill, several
provisions like those affecting tax-exempt bonds remain points
of concern.
The Senate recently passed its tax reform package by a vote of
97-3. I intend to follow carefully the progress of the House
and Senate conference committee as Members attempt to resolve
the differences between the two bills. When the House considers
the tax reform conference package, I will vote with your views
and the best interest of West Texas taxpayers firmly in mind.
Again, thank you for taking the time to share your views. If I
may ever be of assistance, please do not hesitate to let me
know.
incerely,
arry Co I
st
LC/lb