13FOSTER PEPPERPLC
September 16 2015
Kodiak Island Borough Alaska
Alaska Municipal BondBank
Re Kodiak Island Borough Alaska
$6210000 General Obligation School Bond 2015 Series
We have served as co-bondcounsel to Kodiak Island Borough Alaska the Borough in
connection with theissuance of the above-referencedbond the 2015A Bond and in that capacity have
examined such law andsuch certified proceedings and other documents as we have deemed necessary to
render this opinion As tomatters of fact material to this opinion we have relied upon representations
contained in the certified proceedings and other certifications of public officials furnishedto us without
undertaking to verify the same byindependent investigation
The2OISABond is issued by the Boroughpursuant to Resolution No FY2016-05 the
Resolution under and in accordance with the Constitution 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 opinion concerning the completeness or
accuracy of any official statement offering circular orother sales or disclosure material relating to the
issuance of the 20 ISA Bond or otherwise used in connection with the 2015ABond or the Alaska
Municipal BondBank General Obligation Bonds 2015 Series Three the Bond Bank Bonds portion
of the proceeds of which are being used to acquire the 20 ISA Bond or otherwise used in connection with
the 201 SABond or the BondBank Bonds
Under theInternal Revenue Code of 1986 as amended the Code the Borough is required to
comply with certain requirements after thedate of issuance of the 2O1SA Bond in orderto maintain the
exclusion of the interest on the 2015ABond from gross income for federal income tax purposes
including without limitation requirementsconcerning the qualified use of 2O1SA Bond proceeds and the
facilities financed or refinanced with 20 ISA Bond proceeds limitations on investing gross proceeds of
the 20 ISA Bond in higher yielding investments in certain circumstances and the arbitrage rebate
requirement to the extent applicable to the 20 ISA Bond The Borough has covenanted in the Resolution
to comply with those requirements but if the Borough fails to comply with those requirements interest
on the 2O1SABond could become taxableretroactiveto thedate of issuance of the 2O1SA 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 201 SABond to the purchaser
thereof and full payment therefor it is our opinion that under existing law
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5466920 SEATTLE WASHINGTON SPOKANE WASHINGTON
Kodiak island Borough Alaska
Alaska Municipal BondBank
September 20 15
Page
The Borough is duly organized and legallyexisting municipal corporation under the
laws of theState of Alaska
TheLoan Agreement between the Borough and the Alaska Municipal BondBank dated
as of September 2015 relating to the 2015A Bond hasbeen 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 the extentthat enforcement of payment may be limited by
bankruptcy insolvency or other laws affecting creditors rights and by the application of equitable
principles and the exercise of judicial discretion in appropriate cases
The 2015ABond 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 the ordinances
and resolutions of the Borough relating thereto
The 201 5A Bond constitutes valid and binding general obligation of the Borough
payable from annual ad valorem taxesto be levied without limitation as torateor amount on all of the
taxable property within the Borough except only to the extentthat enforcement of payment may be
limited by bankruptcy insolvency or other laws affecting creditors rights and by the application of
equitable principles and theexercise ofjudicial discretion in appropriate cases
Assuming complianceby the Borough after thedate of issuance of the 2015ABond with
applicable requirements of the Code the interest on the 201 5ABond is excluded from gross income for
federal income tax purposes and is not an item of tax preference for purposes of the alternative minimum
tax applicable to individuals however while interest on the 2015ABond also is not an item of tax
preference for purposes of thealternative minimum tax applicable to corporations interest on the 2015A
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 2015ABond
received by certain corporations may be subject to tax and interest on the 2015ABond received by
foreign corporations with United States branches may be subject to foreign branch profits tax
Interest on the 2015A Bond is free from taxation by the State of Alaska except for
transfer estate and inheritance taxes and except to the extent interest on the 201 5A Bond received by
corporations andtaken 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
We express no opinion regarding any otherfederal or state tax consequences of receipt of interest
on the 20l5A Bond
This opinion is given as of thedate hereot and we assume no obligation toreviseor supplement
this opinion to reflect any factsor circumstances that may hereafter come to our attention or any changes
in law that may hereafter occur
5466920
Kodiak Island Borough Alaska
Alaska Municipal BondBank
September 16 2015
Page
We bring to your attentionthefactthat the foregoingopinions are expressions of our professional
judgment on the matters expressly addressed anddo notconstitute guarantees of result No attorney-
client relationship has existedor exists between our firm and the Alaska Municipal BondBank in
connection with the 2015A Bond or by virtue of this letter
Respectfully submitted
FOSTER PEPPER PLLC
5466920.l