Loading...
13FOSTERPEPPER February 20 2014 Kodiak Island Borough Alaska Alaska Municipal BondBank Re Kodiak Island Borough Alaska $22660000 General Obligation School Bond 2014 Series We have served as co-bond counsel to Kodiak Island Borough Alaska the Borough in connection with the issuance of the above-referenced bond the 2014 Bond and in that capacity have examined such law and such certified proceedings and other documents as we have deemed necessary to render this opinion As tomatters of factmaterialto this opinion we have relied upon representations contained in the certified proceedings and other certifications of public officials furnished to us without undertaking to verify the same byindependent investigation The 2014 Bond is issued by the Borough pursuant to Resolution No FY20 14-24 the Resolution under and in accordance with theConstitution and laws of theState of Alaska and the ordinances and resolutions of the Borough We have not been engaged to review and thus express no opinionconcerning the completeness or accuracy of any official statement offering circular orothersalesordisclosurematerial relating to the issuance of the 2014 Bond or otherwise used in connection with the 2014 Bond or the Alaska Municipal BondBank General Obligation Bonds 2014 Series One the Bond Bank Bonds portion of the proceeds of which are being used to acquire the 2014 Bond or otherwise used in connection with the 2014 Bond or the BondBank Bonds Under the Internal RevenueCode of 1986 as amended the Code the Borough is required to comply with certain requirements after the date of issuance of the 2014 Bond in order to maintain the exclusion of the interest on the 2014 Bond from gross income for federal income tax purposes including without limitation requirementsconcerning the qualified use of 2014 Bond proceeds and the facilities financed or refinanced with 2014 Bond proceeds limitations on investing gross proceeds of the 2014 Bond in higher yielding investments in certain circumstances and the arbitrage rebate requirement to the extent applicable tothe 2014 Bond The Borough hascovenanted in the Resolution to comply with those requirements but if the Borough fails to comply with those requirements interest on the 2014 Bond could become taxableretroactivetothe date of issuance of the 2014 Bond We have not undertaken anddo not undertake to monitor the Boroughs compliance with such requirements Based upon the foregoing as of the date of initial delivery of the 2014 Bond to the purchaser thereof and full payment therefor it is our opinion that under existing law The Borough is duly organized and legallyexisting municipal corporation under the laws of theState of Alaska TEL 206.447.4400 FAX 206.447.9700 1111 THIRD AVENUE SUITE3400 SEATTLE WASHINGTON 981013299 WWW.FOSTER.COM 51350595.1 SEATTLE WASHINGTON SPOKANE WASHINGTON Kodiak Island Borough Alaska Alaska Municipal BondBank February 20 2014 Page The Loan Agreement between the Borough and the Alaska Municipal BondBank dated as of February 2014 relating tothe 2014 Bond has been duly authorized executed and delivered by the Borough and is valid and binding obligation of the Borough enforceable against the Borough in accordance with its terms except only totheextent that enforcement of payment may be limited by bankruptcyinsolvency or other laws affecting creditors rights and by the application of equitable principles and theexercise ofjudicial discretion in appropriate cases The 2014 Bond has been duly authorized and issued by the Borough and is issued in full compliance with the provisions of theConstitution and laws of theState of Alaska and ordinances and resolutions of the Borough relating thereto Assuming complianceby the Borough after the date of issuance of the 2014 Bond with applicable requirements of the Code the interest on the 2014 Bond is excluded from gross income for federal income tax purposes and is not an itemof tax preference for purposes of thealternative minimum tax applicable to individuals however while interest on the 2014 Bond also is not an itemof tax preference for purposes of thealternative minimum tax applicable to corporations interest on the 2014 Bond received by corporations is to be taken into account in the computation of adjusted current earnings for purposes of thealternative minimum tax applicable to corporations interest on the 2014 Bond received by certain corporations may be subject to tax and interest on the 2014 Bond received by foreigncorporations with United States branches may be subject to foreign branch profits tax Interest on the 2014 Bond is free from taxation by theState of Alaska except for transfer estate and inheritance taxes and except to theextent interest on the 2014 Bond received by corporations and taken into account in the computation of adjusted current earnings for purposes of the alternative minimum tax applicable to corporations may affectthe corresponding provisions of theState of Alaska corporate income tax We express no opinionregarding any otherfederalorstatetax consequences of receipt of interest on the 2014 Bond This opinion is given as of the date hereof and we assume no obligation to revise or supplement this opinion to reflect any factsor circumstances that may hereafter come to our attention or any changes in law that may hereafter occur We bring to your attentionthefactthatthe foregoingopinions are expressions of our professional judgment on thematters expressly addressed anddo not constitute guarantees of result No attorney client relationship has existedor exists between our firm and the Alaska Municipal BondBank in connection with the 2014 Bond or by virtue of thisletter Respectfullysubmitted FcLz-Pe- 51350595.1