The URL can be used to link to this page

Home My WebLink AboutR-81-0174ItsI UPOORTIVE VV f 7 4 RESOLUTION NO. A RESOLUTION URGING SENATORS CHILES AND HAWKINS, AND REPRESENTATIVES FASCELL, LEHMAN AND PEPPER, TO SUPPORT LEGISLATION S-321 TO COUNTER I.R.S. REVENUE PROCEDURE 80-55, IN ORDER TO PROTECT THE. INTEGRITY OF THE BOND MARKET; FURTHER DIRECTING THE, CITY CLERK TO FORWARD COPIES OF THIS RESOLUTION TO CERTAIN DESIGNATED PUBLIC: OFFTG1ALS. WHEREAS, a recent ruling by 7.I:.S., known as Revenue. Procedure 80-55, which States that banks will no longer be allowed to deduct the interest thev pay on negotiated time deposit accounts of state and local governmental units if banks use tax exempt issues as colIntcral to secure the deposits; and 1'111 REAS, this ruling, which was issued by I.R.S. with- out prior consultation with respresentatives from states, local governments, or the banking industry, will have an adverse impact on the municipal bond market; NOW, fHl:Itl?1'(1RE, BE TT RESOLVED BY THI: COMMISSION 0I. THE CITY 017 MIA1\11 , FLORIDA: Section 1. Senator Lawton M. Chiles and Senator Paula Hawkins, Repre:sentatives Dante Fascell, William Lehman and l/ Claude Pepper, are hereby urged to support legislation S-321 , to counter a recant ruling by I.R.S., known as Revenue Proced- ure SO-55, which states that banks will no longer be allowed to deduct the interest they pay on negotiated time deposit accounts of state and local governmental units if banks use tax exempt issues as collateral to secure the deposits; and, if possible, to co-sponsor legislation S-321 with Senator I.lovd Bentsen and Senator Alan Dixon in order to protect the integrity of the municipal bond market. iipoCU�,�EI`IT i�!pEX li tJ t r ITEM N0.t -------------------------------------------------------------- l/ Senator Lloyd Bentsen and Senator Alan Dixon have co- sponsored legislation S-321, that would permit financial institutions to deduct as a business expense interest paid on time deposits which are secured by ples""o`f'_~ tax exempt securities. ;:~y Ci"' F' Q 5 1 MOLUTION W1.8..1 . r ..' 7 Section 2. The City Clerk is hereby directed to send a copy of this resolution to the: Honorable Lloyd Bentsen Honorable Lawton M. Chiles Honorable Alan Dixon honorable Dante Fascell Honorable Paula linwki.ns Honorable iJilliam Lehman Honorable Claude Pepper PASSED AND ADOPTED this 17 day of 1981. ATTEST : ( CI` 11 CLERK MARCH , M_AURICE A. FERRE �1 A Y O R APPROVED AS TO FOR:-1 AND CORRECTNESS: ROBERT�F. C:LARK ACTING CITY ATTORNEY -2- ° Maw March 27, 1981 RALPH G. ONGIE City Clerk MATTY HIRAI Assistant City Clerk DEPUTY CITY CLERKS Robert E. Tingley Georgia M. little Ilia Teems Svhia M. Mendoza Evelio Rizo MICROFILM DIVISION Dorothy Brown Domingo Acosta The Honorable Lloyd Bentsen U. S. Senate Russell Senate Building Washington, D. C. 20510 Dear Senator Bentsen: Enclosed herein please find copy of Resolution No. 81-174 passed and adopted by the City of Miami Commission at its meeting held on March 17, 1981 in connection with "Legis- lation S-321 to Counter I.R.S. Revenue Procedure 80-55". On behalf of the City, thank you, for your kind attention. Ve truly yours, rTY'H'1� RAI ASSISTANT CITY CLERK MH:smm Enclosure CF1IC! !)F"HF CITI CLERK City Hall 1 3500 Pan American Drive / Miami. Florida 33133 .' S79-6065 FA CITY IOF MIA0•11. FLO,RIDA 1 N)_ I _ FICE MEM.6PORAN, DUM To Richard L. Fosmoen City Manager rp %I Carlos E. Garcia Acting Director of Finance February 22, 1981 Agenda Item �C� 1;1 =PFvcss Attached Resolution It is recommended that the attached Resolution urging the Florida Senators and Representatives Fascell, Lehman and Pepper, to support legis- lation 5-321 to counter I.R.S. Revenue Procedure 80-55. FILE A recent ruling by I.R.S., known as Revenue Procedure 80-55, states that banks will no longer be allowed to deduct the interest they pay on nego- tiated time deposit accounts of state and local governmental units if banks use tax exempt issues as collateral to secure the deposits. The ruling is to take effect on ?lay 31, 1981. In practice, the ruling -- Revenue Procedure 80-55 -- is likelv to result in state and local governments earning less interest on their deposits, and they will have to pay higher interest rates on bonds they sell. Banks are the major buyers of tax exempt securities of state and local. governments, holding more than 45 percent of all state and local debt. Senator Bentsen and Senator Dixon have cosponsored legislation 5-321, that would permit financial institutions to deduct as a business expense interest paid on time deposits which are secured by pledges of tax exempt securities, and will, in fact, cancel Revenue Procedure 80-55. cc: Law Department, R. Clark b o 6 ALAN J. DIXON ILLINOIS 'Zs ! nif eb ,cif of ez zenaf WASHINGTON. D.C. 20510 Apr11 S, 1981 ,.Is. ?Tatty Hi ra i Assistant City Clerk City of 'Miami City [Tall, 5500 11,111 American Drive mull, I'lorida .531J3 Dear ?Iatt� lhanl:s so much for N•our oracious letter regarding Resolution No. 81-17-1. i' ll trN• to 111�,l •s he worthv of your confidence. Please feel free to allays call on nle when you believe I can he of service to you and the city of Miami. Kindest personal rci;ards. `,SUPPO7�?TIVE p Q UV1 r- t .s FOLLOVT? Sincerely, :11,u1 ,7. ll•.011 WILLIAM LEHMAN ISM DISTRICT, FLORIDA COMMITTEE: APPROPRIATIONS SUBCOMMITTEE ON FOREIGN OPERATIONS SUBCOMMITTEE ON TRANSPORTATION SUBCOMMITTEE ON 01"RICT OF COLUMBIA conarto of the aniteb *tatev Nowt of 3tepreoentatibeg b(ngton. D.QC. 20515 April 15, 1981 Matty Hirai Assistant City Clerk City of Miami 3500 Pan American Drive Miami , Florida 33133 Dear Ms. Hirai: WASHINGTON OVMtts 21147 RAYBURN HOUSE OFFICE BUILDING WASHINGTON. D.C. 20319 (202) 22542tI DISTRICT OFFICE: 2020 NE. 11630 STREET NORTH MIAMI BEACH. FLORIDA 33162 (305) 949-73f8 PLEASE REPLY TO DISTRICT OFFICE C3 Your letter and copy of Resolution No. 81-174 adopted by the City of Miami Commission on March 17, 1981 has been received. I appreciate having the views of the Commission on S-321, a bill designed to counter the recent Internal Revenue Service ruling known as Revenue Procedure 80-55. t-lith best wishes, I am !JL/11 Sincerely, WILLIAM LEHIAAN F�lemher of ConnrPSs THIS STATIONERY PRINTED ON PAPER MADE WITH RECYCLED FIBERS DANTE B. FASCELL 15TH DISTRICT, FLORIDA COMMITTEES: FOREIGN AFFAIRS CHAIRMAN: INTERNATIONAL OPERATIONS SUBCOMMITTEE MEMBER: INTERNATIONAL SECURITY AND SCIENTIFIC AFFAIRS SUBCOMMITTEE GOVERNMENT OPERATIONS MEMBER: LEGISLATION AND NATIONAL SECURITY SUBCOMMITTEE COMMISSION ON SECURITY AND COOPERATION IN EUROPE CHAIRMAN CANADA—UNITED STATES INTERPARLIAMENTARY GROUP CO-CHAIRMAN. U.S. DELEGATION Congrefo of the Mniteb *tatez joouoe of 3iepreontatim �A�fjittgtott, �.�. 20515 Mr. Matty Hirai Assistant City Clerk City of Miami City Hall 3500 Pan American Drive Miami, Florida 33133 Dear Mr. Hirai: April 8, 1981 Thant: you for contacting me. I appreciate your taking the time to provide me with a copy of the resolution adopted by the City of ?fiami in support of S. 321, legislation to withdraw the U.S. Internal Revenue Service Procedure 80-55 to disallow the exemption on interest paid by banks to state and local governments whose savings deposits are secured by tax-exempt bonds. T can certainly understand your concern. As you may know, S. 321 is currently pending before the Senate Finance Committee, with no action scheduled as yet. CHARLES R. O'RkaAN ADMINISTRATIVE ASSISTANT � 11.R. 1.375, the House version of this legislation, is pendin' before the House Ways and deans l.vuul,,LLL(2e. The Committee has not sched- uled action on this measure to date. However, you will be interested to know that I have been advised by the Committee Chairman that Procedure 80-55 was withdrau-n by the Internal Revenue Service on April 7th. You may be sure T will live my close attention to any subsequent action re- <�ardinr this matter. A;;ain, many thanks for contacting me. Sincerely, DANTL• R. FASCELL C-, Member of Congre, ' DBF/RS , DANtt EY. f'ASCELL ISTH DISTRICT, FLORIDA COMMITTEES: FOREIGN AFFAIRS CHAIRMAN: INTERNATIONAL OT`ERATIONS SUBCOMMITTEE M EMBER: INTERNATIONAL SECURITY AND SCIENTIFIC AFFAIRS SUBCOMMITTEE GOVERNMENT OPERATIONS MEMOER: LEGISLATION AND NATIONAL SECURITY SUBCOMMITTEE COMMISSION ON SECURITY AND COOPERATION IN EUROPE CHAIRMAN CANADA—UNITED STATES INTERPARLIAMENTARY GROUP CO-CHAIRMAN, U.S. DELEGATION Conarm; of dic Uniub Otato gpot of Aeproentatibeg W. ag1jingto", O.C. 20515 April 7, 1981 Ms. Tatty Hirai, Assistant City Clerk City of Miami - City Hall 3500 Pan American Drive Miami, Florida 33133 Dear pis. Hirai: Thank you for your letter and enclosures. CHARLES R. O'REGAN "•�� ADMINISTRATIVE ASSIST;�4 t4 `td I appreciate your interest in providing me with copies of the City Commission's resolutions in support of proposals to alleviate problems as- sociated with home purchases and the rental ilousing crisis in South Florida. I certainly a,,ree that government policies which, encourage deposits in savings institutions must be adopted to increase the capital available for the coil- struction of new homes and apartments. You will be interested to know that legislation has been introduced in the House of Representatives which would allow potential homeoc.-ners a Lax exemption of $3,000 a year, up to a maximum of $12,000 for use as a down pnyment on a first home. This measure, H.R. 645, is currently pCndilly, before the. House Mays and Means Committee. As you may know, I supported tale legislation enacted in the last Congress to broaden the tax exemption for dividends to include interest earned on Savings accounts and to increase that exemption from the first S100 per year for individuals and $200 per year for married couples to $200 and $400 respec- tively. This increase agent into effect on January 1st of this year and I would certainly consider enacting a permanent increase of an even greater amount in this tax exemption in order to encourage even greater savings. I also S11;11-e the concern that has been expressed over the need for decisive action to deal witli the severe rental housing shortage in our community. Congressional action must be taken to provide incentives which encourage the increased production and preservation of rental housing. Legislation has been introduced whicli would provide tax incentives to encourage the building or rehabilitation of rental housing. This measure, H.R. 1580, is also pending before the Ways and Means Committee. Please be assured that I will keep the points raised in the City Com- mission's resolutions in mind and will. certainly continue giving; my close atten- tion to efforts to encourage the production of rental housing and to encourage investment for the purpose of Home purchases. Ito Pr 'VE IN To f Ms. Matty Hirai April 7, 1981 Page 2 Again, many thanks for keeping me advised. Sincerely, DANTE, B. FASCELL Member of Congress DUF/dAC