14LEVESQUE LAW GROUP LLC
3380 Street Suite 202
Anchorage Alaska 99503
Phone 907 261-8935
Fax 206 309-0667
February 20 2014 Email joelevesquelawgroup.com
Kodiak Island Borough Alaska
Alaska Municipal BondBank
Re Kodiak Island Borough Alaska
$22660000 General Obligation School Bond 2014 Series
We have served as co-bondcounsel 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 examinedsuch law and such certified proceedings
and other documents as we have deemed necessary to render this opinion As to
matters offactmaterialto 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 by independent investigation
The2014Bond is issued by the Borough pursuant to Resolution No FY2014-24
the Resolution under and in accordance with the Constitution and laws of theState
of Alaska and the ordinances and resolutionsof the Borough
We have not been engaged to review and thus express no opinion concerning
the completeness or accuracy of any official statement offering circular or othersales or
disclosure material relating to the issuance of the 2014Bond or otherwise used in
connection with the 2014Bond 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 Revenue Code of 1986 as amended the Code the
Borough is required to comply withcertain requirements after the date of issuance of
the 2014Bond in order to maintaintheexclusion of the interest on the 2014 Bond from
gross income for federal income tax purposes including without limitation
requirements concerning the qualified use of 2014Bond proceeds and the facilities
financed or refinanced with 2014Bond proceeds limitations on investing gross
proceeds of the 2014Bond in higher yielding investments in certain circumstances and
the arbitrage rebate requirement to theextent applicable to the 2014 BondThe
LEVESQUE LAW GROUP LLC
Kodiak Island Borough Alaska
Alaska Municipal BondBank
February 20 2014
Page
Borough hascovenanted in theResolution to comply with those requirements but if the
Borough fails to comply with those requirements interest on the 2014Bond could
become taxable retroactiveto the date of issuance of the 2014 Bond We have not
undertaken anddo not undertake to monitorthe Boroughs compliance with such
requirements
Based upon the foregoing as of the date of initial delivery of the 2014Bond to
the purchaser thereof and full payment therefor it is our opinion that under existing law
The Borough is duly organized and legally existing municipalcorporation
under the laws of theState of Alaska
The Loan Agreement between the Borough and the Alaska Municipal
BondBank dated as of February 2014 relating to the 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 to theextent that enforcement of payment may be limited by bankruptcy
insolvency or other laws affecting creditors rights and by the application of equitable
principles and theexercise of judicial discretion in appropriate cases
The 2014Bond has been duly authorized and issued by the Borough and
is issued in full compliance with the provisions of the Constitution and laws of theState
of Alaska and ordinances and resolutionsof the Borough relating thereto
Assuming complianceby the Borough after the date of issuance of the
2014Bond with applicablerequirements of the Code the interest on the 2014Bond is
excluded from gross income for federal income tax purposes and is not an itemoftax
preference for purposes of the alternative minimum tax applicable to individuals
however while interest on the 2014Bond also is not an item of tax preference for
purposes of the alternative 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 the alternative minimum tax applicable to
corporations interest on the 2014 Bond received by certain corporations may be
subject to tax and interest on the 2014Bond received by foreign corporations with
United States branches may be subject to foreign branch profits tax
Interest on the 2014Bond is free from taxation by theState of Alaska
except for transfer estate and inheritance taxes and except to the extent interest on the
2014Bond 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 affect the corresponding provisions of theState of Alaska corporate
income tax
LEVESQUE LAW GROUP LLC
Kodiak Island Borough Alaska
Alaska Municipal BondBank
February 20 2014
Page
We express no opinion regarding any other federalorstatetax 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 facts or circumstances that may
hereafter come to our attention or any changes in law that may hereafter occur
We bring to your attention the factthat the foregoingopinions are expressions of
our professional judgment on thematters expressly addressed anddo not constitute
guarantees of result No attorney-clientrelationship has existed or exists between our
firm and the Alaska Municipal BondBank in connection with the 2014Bond or by virtue
of this letter
Respecifully submitted
LEVESQUE LAW GROUP LLC
Joseph Levesque