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.I, <br />CITY OF NORTH OLMSTED <br />RESOLUTION N0. 86- 31 <br />BY: MAYOR AND ENTIRE COUNCIL <br />A RESOLUTION TO EXPRESS OPPOSITION BY THE CITY OF NOKTH <br />OLMSTED TO THE PROVISIONS OF H.R. 3838 RELATING TO STATE <br />AND LOCAL GOVERNMENT OBLIGATIONS AND URGING CONGRESS NOT <br />TO ENACT THOSE PROVISIONS, AND REQUESTING IMMEDIATE <br />ACTION TO POSTONE THE EFFECTIVE DATE EVEN OF THOSE <br />PENDING PROVISIONS. <br />WHEREAS, on Decernber 17, 1985 the United States House of <br />Representatives passed H.R. 3838, entitled the "Tax Reform Act of 1985", <br />with a general effective date of January 1, 1986; and <br />WHEREAS, H.R. 3838 imposes new, complex and ambiguous federal <br />requirements, conditions, prohibitions and limitations for the interest on <br />new obligations of the City of North Olmsted, and of other state and local <br />gover mnents, to be and to remain exempt from federal income tax, including: <br />expenditure of at least 5% of the proceeds within 30 days and 100% within <br />three years; restricting particular uses of proceeds even though determined <br />by the City of North Olmsted to be for needed essential governmental <br />programs permitted under State law; and restricting investment income on <br />moneys of the City of North Olmsted, and requiring the City of North <br />Olmsted to pay over to the United States treasury certain earnings on <br />investments of its own money; and <br />WHEREAS, many of these provisions of H.R. 3838 impose many practical <br />and legal problems that will in many cases make it impossible or more <br />expensive for the City of North Olmsted to finance essential governmental <br />projects with tax-exempt obligations, thereby substantially increasing the <br />costs of those projects, making the City of North Olmsted less able <br />economically to provide essential governrnental services and facilities to <br />its citizens and to carry out needed and permissible local public programs, <br />and unduly and unnecessarily burdening the tax and rate payers of the City <br />of North Olmsted; and <br />WHEP.EAS, other provisions of H.R. 3838 directly and indirectly force <br />increases in interest costs in eliminating or limiting many of the <br />potential purchasers of the City of North OlMSted's obligations by, for <br />example, disallowing interest expense deductions of financial institutions, <br />relating to tax-exempt obligations, and disallowing property and casualty