03 Prelim. Official Statement - Laserfiche WebLink

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The City has entered into abatement agreements with the following companies and has adopted criteria therefor, which is a prerequisite to the execution of abatement agreements. Additional information concerning the City's abatement policy and agreements may be obtained from the City. Company Name Abatement Abatement Beqinninq Date Expiration Date Paris Warehouse 107 Lamar Power Partners, LP Campbell Soup Company (PACE) Turner International Piping The Earthgrains Company 1-1-99 12-31-03 1-1-99 12-31-05 1-1-00 12-31-06 1-1-00 12-31-06 1-1-01 12-31-07 ADDITIONAL TAX COLLECTIONS Municipal Sales Tax Collections The City has adopted the provisions of Article 1065c, Section 9, Vernon's Texas Civil Statutes, which provides for the maximum levy of a one percent sales tax which may be used by the City for any lawful purpose except that the City may not pledge any of the anticipated sales tax revenue to secure the payment of obligations or other indebtedness. Net collections on a calendar year basis are shown in Table 15 of Appendix A. Optional Sales Tax The Tax Code provides certain cities and counties the option of assessing a maximum one-half percent (1/2%) sales tax on retail sates of taxable items for the purpose of reducing its ad valorem taxes, if approved by a majority of the voters in a local option election. If the additional tax is approved and levied, the ad valorem property tax levy must be reduced by the amount of the estimated sales tax revenues to be generated in the current year. Further the Tax Code provides certain cities the option of assessing a maximum one-half percent (I/2%) sales tax on retail sa[es of taxable items for economic development purposes, if approved by a majority of the voters in a local option election. On registered voters of the City approved the imposition of a %% additional sales tax for property tax reduction and a ¼% additional sales tax for economic development purposes, Levy of the additional sales taxes began on October 1, 1993, and the City received its first payment in December 1993. TAX MATTERS Opinion On the date of initial delivery of the Bonds, McCall, Parkhurst & Horton L.L.P., Dallas, Texas, Bond Counsel, will render their opinion that, in accordance with statutes, regulations, published rulings and court decisions existing on the date thereof, (1) interest on the Bonds for federal income tax purposes will be excludable from the "gross income" of the holders thereof and (2) the Bonds will not be treated as "specified private activity bonds" the interest on which would be included as an alternative minimum tax preference item under Section 57(a)(5) of the Internal Revenue Code of 1986 (the "Code"). Except as stated above, Bond Counsel will express no opinion as to any other federal, state or local tax consequences of the purchase, ownership or disposition of the Bonds. (See Appendix C - "Form of Legal Opinion of Bond Counsel ~ herein.) in rendering their opinion, Bond Counsel will rely upon (a) the Issuer's federal tax certificate, and (b) covenants of the Issuer with respect to arbitrage, the application of the proceeds to be received from the issuance and sale of the Bonds and certain other matters. Failure of the Issuer to comply with these representations or covenants could cause the interest on the Bonds to become includable in gross income retroactively to the date of issuance of the Bonds. The law upon which Bond Counsel has based their opinion is subject to change by the United States Congress and to subsequent judicial and administrative interpretation by the courts and the Department of the Treasury. There can be no assurance that such law or the interpretation thereof will not be changed in a manner which would adversely affect the tax treatment of the purchase, ownership or disposition of the Bonds. Collateral Federal Income Tax Consequences The following discussion is a summary of certain collateral federal income tax consequences resulting from the purchase, ownership or disposition of the Bonds, This discussion is based on existing statutes, regulations, published rulings and court decisions, all of which are subject to change or modification, retroactively. 18