1969-4238r~~
RESOLUTION N0. 4238
RESOLUTION RELATING TO TAXATION OF MUNICIPAL
BOND. INTEREST
WHEREAS, a Bill in the United States Congress, designated as H. R. 13270 - the Tax
Reform Act, contains provisions for partial taxation of municipal bond interest, and
WHEREAS, such Bill has now passed the United States House of Representatives and
such proposals of similar purport are pending in the United States Senate, and
WHEREAS, the taxation of municipal bond interest would render or would tend to
render municipal bonds unsaleable or saleable only in such rates as to be grossly ex-
cessive, and
WHEREAS, new increases in municipal bond rates are ordinarily borne by increased
real estate taxes and increased special arse"ssments, and ~~
WHEREAS, this throws the burden of increased interest costs largely upon home owners
who are ala~eady burdened by heavy real estate taxes, and
WHEREAS, any proposal to subsidize municipalities for the additional interest expense
resulting from the tax of municipal bond interest would require agreement between the
municipality and the United States government, and
WHEREAS, the immense amount and valuation of kind of municipal bonds which would
equine such subsidy, would create a problem of unmanageable complexity of federal
unicipality administration, and
WHEREAS, any such arrangement would severely intend to impede or would prevent the
issuance of bonds for more urgently needed public improvements such as sanitary sewers,
water mains, storm sewers, police and fire fighting facilities, etc., and
WHEREAS, any such proposal would require communities which have already taxed them-
selves for the making o€ necessary public improvements to subsidize the making of public
improvements in areas where they have been neglected or deferred far other reasons and
would cause an additional tax burden on the taxpayers and communities which have dis-
charged their responsibility in making necessary public improvements; `
NOW THEREFORE, BE IT RESOLVED by the City Council of the City of Richfield, Minnesota,
as follows:
1. This council strongly opposes any federal legislation which would provide for
the taxation of municipal bond interest even if such taxation were to be coupled with some
program far the subsidizing of municipalities for increased interest-costs resulting from
such taxationo
2. The Mayor is hereby authorized and directed to cou~municate this opposition to the
members of Congress representing the City of Richfield, and to such other members of Congress
as he shall deem appropriate.
Passed by the City Council of the City of Richfield, Minnesota, this 25th day of August,
969®
TTEST:
omas J. an Clerk
tan ey . son ayor
SET