CC Resolution No. 9201660
RESOLUTION NO. 920
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
BAYTOWN, TEXAS, URGING THE UNITED STATES CONGRESS TO
ENACT NO LEGISLATION TO TAX OR RESTRICT THE CONTINUED
ISSUANCE OF TAX-EXEMPT OBLIGATIONS OF STATE AND LOCAL
GOVERNMENT.
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WHEREAS, the municipalities and counties of Texas finance capital projects
for various purposes defined as public by State law through the issuance of
obligations whose interest is exempt from Federal income taxation; and
WHEREAS, the projects financed with said obligations provide for the benefit
of all area citizens and build roads, schools, sewer lines, public and charitable
hospitals, and low-income housing among other facilities; and
WHEREAS, the tax exemption of said obligations has lowered the cost of
borrowing for all states and localities in turn lowering the cost of providing
essential projects and services at the state and local level; and
WHEREAS, the tax -exemption on said obligations is not a mere tax
expenditure but stems from the Constitutional doctrine of reciprocal immunity which
exempts from Federal income taxation interest earned on state and local
government obligations; and
WHEREAS, certain proposals considered by the United States Congress would
severely restrict the ability of states and localities to issue such obligations for
public purposes as defined by duly enacted State statute and prohibit the use of
government and private enterprise partnerships to provide efficient and cost-
effective delivery of services thereby impairing the ability of state and local
officials to determine public priorities within their jurisdictions and the most
appropriate method of financing those priorities; and
WHEREAS, certain proposals being considered by the United States Congress
would subject the interest earned on said obligations to Federal income taxation or
eliminate the ability of financial institutions to deduct the cost incurred in buying
and carrying tax-exempt obligations and would adversely affect the continued
efficient functioning of the entire market for state and local government obligations
thereby raising the cost of borrowing for state and local government and
consequently raising the cost of government; NOW THEREFORE,
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF BAYTOWN,
TEXAS:
1661
Section 1: That the United States Congress is urged to enact no legislation
which would limit the ability of State and local government to issue tax-exempt
obligations for public purposes as defined by duly enacted State law, tax the
interest on said obligations, or eliminate the ability of financial institutions to
deduct the costs of purchasing or carrying such obligations.
Section 2: This resolution shall take effect immediately from and after its
passage by the City Council of the City of Baytown.
INTRODUCED, READ, and PASSED by the affirmative vote of the City
Council of the City of Baytown, this the 13th day of August, 1985.
M O. HLITTO, Mayor
ATTEST:
CC
EILEEN P. HALL, City Clerk
APPROVED-
DALL• G,Attorney�r