2002-07-22 Regular Meeting and Workshop Meeting

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e e (i) Levy an ad valorem tax that will be sufficient to provide funds to pay the current interest on the Bonds and to provide the necessary sinking fi.md, all as described in this Ordinance; and (ii) Keep proper books of record and account in which full, true, and correct entries will be made of all <!e~lings, activities, and transactions relating to the Fun<ls created. pursuant to this Ordinance, and all books, documents, and vouchers relating thereto shall at all reasonable times be made available for inspection upon request from any Owner. (c) Covenants Regarding Tax Matters. The City covenants to take any action to maintain, or refrain from any action which would adversely affect, the treatment of the Bonds as obligations described in section 103 of the Internal Revenue Code of 1986, as amended (the "Code"), the interest on which is not includable in "gross income" for federal income tax purposes. In furtherance thereof, the City specifically covenants as follows: (i) To refrain from taking any action which would result in the Bonds being treated as "private activity bonds" within the meaning of section 141(a) of the Code; (ii) To take any action to assure that no more than lO% of the proceeds of the Bonds or the projects financed therewith are used for any "private business use," as defined in section 141(b)(6) of the Code or, if more than 10% of the I'roceeds or the projects financed therewith are so used, that amounts, whether or not received by the City with respect to such private business use, do not under the tenus of this Resolution or any underlying arrangement, directly or indirectly, secure or provide for the payment of more than 10% of the debt service on the Bonds, in contravention of section l41(b)(2) of the Code; (iii) To take any action to assure that in the event that the "I'rivate business use" described in paragraph (ii) hereof exceeds 5% of the proceeds of the Bonds or the prQjects financed therewith, then the amount in excess of 5% is used for a "private business use" which is "related" and not "disproportionate," within the meaning of section 14l(b)(3) of the Code, to the governmental use; (iv) To take \lilY action to assure that no amount which is greater than the lesser of $5,000,000 or 5% of the proceeds of the Bonds is directly or indirectly used to finance loans to persons, other than state or local governmental units, in contravention of section l4l(c) of the Code; (v) To refrain from taking any action which would result in the Bonds being "federally guaranteed" within the meaning of section 149(b) of the Code; (vi) Exc;ept to the ext~t permitted by ~ection 148 of th~ Ccx:j.e and the regulations and rulings therellllder, to refrain from using any portion of the proceeds of the Bonds, directly or indirectly, to acquire or to replace funds which were used, directly or indirectly, to ac~uire investment property (as defined in section 148(b)(2) of the Code) which produces a materially higher yield over the term of the Bonds. (vii) To otherwise restrict the use of the proceed.s of the Bonds or amounts treated as proceeds of the Bonds, as may be necessary, so that the Bonds do not otherwise contravene the requirements of section 148 of the Code (relating to arbitrage) and, to the extent applicable, section 149(d) of the Code (relating to advance refundings); (viii) Except to the extent otherwis~ provided in section 148(t) of the Code and the regulations and rulings thereunder, to pay to the United States of America at least once during each five year period (beginning on the date of delivery of the Bonds) an amollllt that is at least equal to 90% of the "Excess Earnings," within the meaning of section 148(t) of the Code, and to pay to the United States of America, not later th\lll 60 days after the Bonds have been paid in full, 100% of the amount then required to be paid as a result of Excess Earnings llllder section 148(t) of the Code; (ix) To maintain such records as will enable the City to fulfill its respol1sibilities under this subsection and sections 141 and 148 of the Code and to retain such records for at least six years following the final payment of principal and interest on the Bonds; and 063939.0001 AUSTIN 280348 13