Tab_73LEVE SQUE LAW KGROUP, .!.I
Joseph N. Levesque
Shane E. Levesque, Of Counsel
3380 C Street, Suite 202
Anchorage, Alaska 99503
Phone: (907) 261-8935
Fax: (206) 309-0667
Website: levesquelawgroup.com
November 3, 2016
Aleutians East Borough, Alaska
Alaska Municipal Bond Bank
Re: Aleutians East Borough, Alaska
$17,155,000 General Obligation Refunding Bond, 2016
We have served as co-bond counsel to the Aleutians East Borough, Alaska (the
"Borough"), in connection with the issuance of the above referenced bond (the "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 to matters of fact material to 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.
The Bond is issued by the Borough pursuant to Resolution 17-05 (the "Bond
Resolution") under and in accordance with the Constitution and laws of the State 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 or other sales or disclosure
material relating to the issuance of the Bond or the Alaska Municipal Bond Bank General
Obligation and Refunding Bonds, 2016 Series Three and 2016 Series Four (AMT) (the "Bond
Bank Bonds"), a portion of the proceeds of which are being used to acquire the Bond, or
otherwise used in connection with the Bond or the Bond Bank Bonds.
Under the Internal Revenue Code of 1986, as amended (the "Code"), the Borough is
required to comply with certain requirements after the date of issuance of the Bond in order to
maintain the exclusion of the interest on the Bond from gross income for federal income tax
purposes, including, without limitation, requirements concerning the qualified use of Bond
proceeds and the facilities financed or refinanced with Bond proceeds, limitations on investing
gross proceeds of the Bond in higher yielding investments in certain circumstances and the
arbitrage rebate requirement to the extent applicable to the Bond. The Borough has covenanted
in the Bond Resolution to comply with those requirements, but if the Borough fail§ to comply
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Aleutians East Borough, Alaska
Alaska Municipal Bond Bank
November 3, 2016
Page 2
with those requirements, interest on the Bond could become taxable retroactive to the date of
issuance of the Bond. We have not undertaken and do not undertake to monitor the Borough's
compliance with such requirements.
Based upon the foregoing, as of the date of initial delivery of the Bond to the purchaser
thereof and full payment therefor, it is our opinion that under existing law:
1. The Borough is a duly organized and legally existing second class borough under
the laws of the State of Alaska.
2. The Amendatory Loan Agreement between the Borough and the Alaska
Municipal Bond Bank dated as of October 18, 2016, relating to the Bond, has been duly
authorized and executed by the Borough and is a valid and binding obligation of the Borough,
enforceable against the Borough in accordance with its terms.
3. The Bond has been duly authorized and executed by the Borough and is issued in
full compliance with the provisions of the Constitution and laws of the State of Alaska and the
ordinances and resolutions of the Borough relating thereto.
4. The Bond constitutes a valid and binding general obligation of the Borough
payable from annual ad valorem taxes to be levied without limitation as to rate or amount on all
of the taxable property within the Borough, except only to the extent that 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.
5. Assuming compliance by the Borough after the date of issuance of the Bond with
applicable requirements of the Code, the interest on the Bond 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 Bond also is not an item
of tax preference for purposes of the alternative minimum tax applicable to corporations, interest
on the 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 Bond received by certain S corporations may be subject to tax, and interest on the Bond
received by foreign corporations with United States branches may be subject to a foreign branch
profits tax. We express no opinion regarding any other federal tax consequences of receipt of
interest on the Bonds.
6. Interest on the Bond is free from taxation by the State of Alaska except for
transfer, estate and inheritance taxes.
We express no opinion regarding any other federal or state tax consequences of receipt of
interest on the Bond.
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Aleutians East Borough, Alaska
Alaska Municipal Bond Bank
November 3, 2016
Page 3
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 fact that the foregoing opinions are expressions of our
professional judgment on the matters expressly addressed and do not constitute guarantees of
result. No attorney-client relationship has existed or exists between our firm and the Alaska
Municipal Bond Bank in connection with the Bond or by virtue of this letter.
Respectfully submitted,
LEVESQUE LAW GROUP, LLC
Joseph N. Levesque
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