1995-01-09 Regular Meeting - Laserfiche WebLink

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v • DRAFT OF 12x18/94 (LETTERHEAD OF AKIN, GUMP, STRAUSS, HAUER & FELD, L.L.P.) Mr. Harold P. Pfeiffer City of La Porte 619 Brownell 604 West Fairmont La Porte, TX 77571 _ La Porte, Tezas 77571 January 10, 1994 _ CITY OF LA PORTE, TEXAS PROMISSORY NOTE, dated January 10, 1994 IN THE PRINCIPAL AMOUNT OF $575,000 WE HAVE ACTED AS "BOND COUNSEL" for City of La Porte, Tezas (the "City"), the issuer of the note described above (the "Note") for the sole purpose of rendering an opinion with respect to the legality and validity of the Note under the Constitution and the laws of the State of Texas and the exclusion from gross income of the interest on the Note for federal income tax purposes, and for no other purpose. WE HAVE EXAMINED the applicable and pertinent provisions of the Constitution and laws of the State of Tezas; an ordinance of the City Council of the City (the "Council") authorizing the Note adopted on January 9, 1995 (the "Ordinance") and other pertinent instruments authorizing and relating to the issuance of the Note. In such examination, we have assumed the authenticity of all documents submitted to us as originals, the conformity to original copies of all documents submitted to us as certified copies, and the truth and accuracy of the statements contained in such documents. We have also examined applicable provisions of the Internal Revenue Code of 1986, as amended (the "Code"), court decisions, Treasury Regulations, and published rulings of the Internal Revenue Service as we have deemed relevant. We have also examined a photocopy of the executed Note. BASED ON SAID EXAMINATION IT IS OUR OPINION THAT the Note has been authorized, issued, and delivered in accordance with law; the Note constitutes a valid and legally binding obligation of the City enforceable in accordance with its terms except as the enforceability thereof may be limited by bankruptcy, insolvency, reorganization, moratorium, liquidation, and other similar laws now or hereafter enacted relating to creditors' rights generally; and the Note constitutes a valid and legally binding obligation of the City secured by and payable, together with other obligations, from the collection of ad valorem taxes by the City. IN OUR OPINION, except as discussed below, the interest on the Note is excludable from the gross income of the owners for federal income tax purposes under the statutes, regulations, published rulings, and court decisions existing on the date of this opinion. We are further of the opinion that the Note is not a "private activity bond" and that, accordingly, interest on the Note will not be included as an individual or corporate alternative minimum tax preference item under section 57(a)(5) of the Code. In expressing the aforementioned opinions, we have relied on, and assume compliance by the City with, certain representations and covenants regarding the use and investment of the proceeds of the Note. We call your attention to the fact that failure by the City to comply with such representations and covenants may cause the interest on the Note to become includable in gross income retroactively to the date of issuance of the Note. We call your attention to the fact that the interest on tax-exempt obligations, such as the Note, is included as an adjustment for book income or adjusted earnings and profits to calculate Page 1 of 2 pages