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61 <br />a Bond is amortized each year over the term to maturity of the Bond on the basis of a constant <br />interest rate compounded on each interest or principal payment date (with straight-line <br />interpolations between compounding dates). Amortized Bond premium is not deductible for <br />federal income tax purposes. Owners of premium Bonds, including purchasers who do not <br />purchase in the original offering, should consult their own tax advisors with respect to State of <br />California personal income tax and federal income tax consequences of owning such Bonds. <br />California Tax Status. In the further opinion of Bond Counsel, interest on the Bonds is <br />exempt from California personal income taxes. <br />Other Tax Considerations. Current and future legislative proposals, if enacted into law, <br />clarification of the Tax Code or court decisions may cause interest on the Bonds to be subject, <br />directly or indirectly, to federal income taxation or to be subject to or exempted from state income <br />taxation, or otherwise prevent beneficial owners from realizing the full current benefit of the tax <br />status of such interest. The introduction or enactment of any such legislative proposals, <br />clarification of the Tax Code or court decisions may also affect the market price for, or <br />marketability of, the Bonds. It cannot be predicted whether or in what form any such proposal <br />might be enacted or whether, if enacted, such legislation would apply to bonds issued prior to <br />enactment. <br />The opinions expressed by Bond Counsel are based upon existing legislation and <br />regulations as interpreted by relevant judicial and regulatory authorities as of the date of such <br />opinion, and Bond Counsel has expressed no opinion with respect to any proposed legislation or <br />as to the tax treatment of interest on the Bonds, or as to the consequences of owning or receiving <br />interest on the Bonds, as of any future date. Prospective purchasers of the Bonds should consult <br />their own tax advisors regarding any pending or proposed federal or state tax legislation, <br />regulations or litigation, as to which Bond Counsel expresses no opinion. <br />Owners of the Bonds should also be aware that the ownership or disposition of, or the <br />accrual or receipt of interest on, the Bonds may have federal or state tax consequences other <br />than as described above. Other than as expressly described above, Bond Counsel expresses no <br />opinion regarding other federal or state tax consequences arising with respect to the Bonds, the <br />ownership, sale or disposition of the Bonds, or the amount, accrual or receipt of interest on the <br />Bonds. See “APPENDIX E – Form of Opinion of Bond Counsel” for the form of opinion of Bond <br />Counsel to be delivered concurrently with the delivery of the Bonds. <br />LITIGATION <br />To the knowledge of the City, there is no controversy or litigation of any nature now <br />pending or threatened restraining or enjoining the execution and delivery of the Bonds, the <br />Indenture, the 2024 Installment Purchase Contract or in any way contesting or affecting the <br />validity of the Bonds or any proceedings of the City or the Authority taken with respect to the <br />execution and delivery thereof, or that would have a material adverse effect on the City’s ability <br />to pay the 2024 Installment Payments when due under the 2024 Installment Purchase Contract. <br />APPROVAL OF LEGALITY <br />The Bonds are offered when, as and if issued and received by the Underwriter and subject <br />to the approval as to their legality by Jones Hall, A Professional Law Corporation, San Francisco, <br />8.A. - Page 75 of 255 <br />703