HomeMy WebLinkAboutRESOLUTIONS - 01011981 - 1981-337 Y� f
IN THE BOARD OF SUPERVISORS
OF
CONTRA COSTA COUNTY, STATE OF CALIFORNIA
In the Matter of }
Opposing Implementation of }
IRS Revenue Procedure 80-55 RESOLUTION NO. $1/337
WHEREAS on December 15, 1980 the Internal Revenue Service
issued Revenue Procedure 80-55; and
WHEREAS said Revenue Procedure would prohibit banks from
deducting interest they pay on state and local government time
deposits if the banks use tax exempt securities as collateral to
secure the deposits; and
WHEREAS such rulings, if implemented, would seriously disrupt
the collateralization of certain county investments, lower the
rates of interest paid for such investments, and restrict the
choice of depository to only a few of those now available; and
WHEREAS the implementation of such ruling would have a
detrimental effect on the cash management practices of local
governments as well as an adverse impact on the tax exempt bond
market; and
WHEREAS Revenue Procedure 80-55 dramatically changes the
rules the Internal Revenue Service has followed in the past; i.e. ,
that Section 265 (2) did not apply to interest paid by banks on
governmental deposits secured by tax exempt obligations; and
WHEREAS the proposed Revenue Procedure was issued without
prior discussion with officials in the banking industry or other
parties who would be directly affected by this ruling.
NOW, THEREFORE, BE IT RESOLVED BY THE BOARD OF SUPERVISORS
OF CONTRA COSTA COUNTY, CALIFORNIA that the Commissioner of the
Internal Revenue Service is urged to suspend implementation of
proposed IRS Procedure 80-55 pending a thorough analysis of the
impact such a ruling would have on the financial administration
of state and local governments.
BE IT FURTHER RESOLVED that the County Supervisors
Association of California and other local agencies are urged to
adopt a similar resolution.
PASSED BY THE BOARD on March 24, 1981 by the following vote :
AYES: Supervisors Fanden, Schroder, McPeak,
Torlakson, Powers .
NOES : None
ABSENT: Nene
R T1F1F-D COPY
1 terrify that tflis (s a f�fll' true & Correct copy of the original
document which ss or,flu in my office.ATTEST:J.R.OLSSONT ,
ty,Clerk Ckrk.&ex-officio Clerk of said Board of Supervisors by
CC : County Administrator Mpu
County Treasurer- AZLTax. Collector
,RESOLUTION NO. 81/337