ORDER NO. 30956 DESIGNATE THE $1,030,000.00 LOAN TRANSACTION WITH BANC OF AMERICA PUBLIC CAPITAL CORD A BANK QUALIFIED TRANSACTION Came to be heard this the 25th day of August, 2008, with a motion made by Commissioner Letz, seconded by Commissioner Williams. The Court unanimously approved by a vote of 4-0-0 to: Authorize County Judge to submit the amended for 8038-G to the Internal Revenue Service to designate the $1,030,000.00 Loan Transaction with Banc of America Public Capital Corp a bank qualified transaction for purposes of 256(b)(3) of the Internal Revenue Code, with all the paperwork to be approved and prepared by our bond counsel, Mr. Tom Spurgeon. 9 309 I~ COMMISSIONERS' COURT AGENDA REQUEST MADE BY: MEETING DATE: Jeannie Hargis August 25, 2008 OFFICE: Auditor's Office TIME PREFERRED: None SUBJECT: Consider, Discuss and Take Appropriate Action to Designate the $1,030,000 2007 Loan Transaction with Banc of America Public Capital Corp a Bank Qualified Transaction for purposes of 265 (b) (3) of the Internal Revenue Code and authorize the County Judge to submit an amended Form 8038-G to the Internal Revenue Service. Banc of American wants to designate the 2007 issue as a designated Bank Qualified Issue and transfer it to a sister company which is a commercial bank. The bank will receive additional tax advantages in doing so. This will have no negative effect on the County, but we will have to amend IRS Form 8038-G. Attached is the original letter from Banc of America as well as emails from the County Financial Advisor, Robert Henderson and the County Attorney, Tom Spurgeon. EXECUTIVE SESSION REQUESTED: (PLEASE STATE REASON) NAME OF PERSON ADDRESSING THE COURT: Jeannie Hargis ESTIMATED LENGTH OF PRESENTATION: 5 minutes IF PERSONNEL MATTER -NAME OF EMPLOYEE: Time for submitting this request for Court to assure that the matter is posted in accordance with Title 5, Chapter 551 and 552, Government Code, is as follows: Meeting scheduled for Mondays THIS REQUEST RECEIVED BY: THIS RQUEST RECEIVED ON: 5:00 PM previous Tuesday @ .M. All Agenda Requests will be screened by the County Judge's Office to determine if adequate information has been prepared for the Court's formal consideration and action at time of Court Meetings. Your cooperation will be appreciated and contribute towards your request being addressed at the earliest opportunity. See Agenda Request Rules Adopted by Commissioners' Court. BankofAmerica~, I August 11, 2008 DUSTY TRAYLOR KERR, TX COUNTY OF TEXAS COUNTY 700 MAIN ST., ROOM 103 KERRVII.LE, TX 78028 Re: $1,030,000.00 closed on 3/16/2007 ("Transaction") Dear Banc of .America Public Capital Corp Customer: It has come to our attention that your Transaction with Banc of America Public Capital Corp may be a "Bank Qualified" transaction for purposes of 265 (b) (3) of the Internal Revenue Code. This is based upon our belief that in the calendar yeaz you closed the Transaction, you were issuing less than $10,000,000 in tax exempt obligations. As a result, we intend to transfer your Transaction to Bank of America, N.A. and, as your authorized representative, submit an amended Form 8038-G to the Internal Revenue Service with the box at line item 38 checked to indicate a small issuer exemption since your confirmation below will serve as your concurrence of such designation. If you believe the foregoing assumption is incorrect, please let us know by contacting Tessie Panganiban at 415.765.7404. Otherwise, please sign the acknowledgement line below consenting to the foregoing and return to us either: via fax to 415.343.0533, in the enclosed envelope or by sending us an e-mail confirmation to: 'Tessie.G.Panganiban C bankofamerica.com. Thank you very much for your cooperation. Best regards, Vice President BANC OF AMERICA PUBLIC CAPITAL CORP Accepted and Agreed: By: Name: Title: Bank of America Banc of America Public Capital Corp, CAS-705-04-O1 555 California Street, 4'" Floor, San Francisco, CA 94104 Recycled Paper Jeannie Hargis From: Henderson, Robert [Robert.Henderson@rbccm.com] .sent: Monday, August 18, 2008 6:14 PM To: Tom Spurgeon; Jeannie Hargis Cc: Traylor, Robert D Subject: RE: Scan Data from FX-7OEOC6 I agree with Tom, the County, through its Bond Counsel, should maintain control of the document. Bob Robert V. Henderson Managing Director RBC Capital Markets 153 Treeline Park, Suite 100 San Antonio, TX 78209 Phone: 210-805-1118 Fax: 210-805-1119 Cell: 210-240-4614 -----Original Message----- From: Tom Spurgeon [mailto:tspurgeon@mphlegal.com] Sent: Monday, August 18, 2008 5:11 PM To: Henderson, Robert; Jeannie Hargis Cc: Traylor, Robert D Subject: RE: Scan Data from FX-70EOC6 Jeannie and Bob: Bob is correct about what they are asking to do and I have no problem with the filing of an Amended 8038-G to simply check line 38 to show that it was a QTEO transaction; however, I would prefer that the County sign the amended form and provide it to them to file so that we essentially have control of what is actually being filed. I would prefer not to designate BofA as the County's "authorized representative" to complete and file the amended return. I will prepare an Amended Form 8038-G and send to you either later today or in the morning. Tom Thomas K. Spurgeon McCall, Parkhurst & Horton L.L.P. 700 N. St. Mary's, Suite 1525 San Antonio, Texas 78205 Telephone: 210-225-2800 Telecopy: 210-225-2984 E-mail: tspurgeon@mphlegal.com -----Original Message----- From: Henderson, Robert [mailto:Robert.Henderson@rbccm.com] Sent: Monday, August 18, 2008 4:11 PM To: Jeannie Hargis; Tom Spurgeon Cc: Traylor, Robert D Subject: RE: Scan Data from FX-70EOC6 Jeannie, The fist of the letter is that they wish to have the 2007 issue designated as a bank Qualified issue and transfer it to a sister company which is a commercial bank. They will 1 receive additional tax advantages in doing so. This would have no negative effect on the County BUT, It is important that we defer to Tom Spurgeon. They are indicating that they will change a formal document (the IRS Form 8038-G) and I don't know if changing such a form after the fact would be problematic. Let's see what Tom says. Bob Robert V. Henderson Managing Director RBC Capital Markets 153 Treeline Park, Suite 100 San Antonio, TX 78209 Phone: 210-805-1118 Fax: 210-805-1119 Cell: 210-240-4614 -----Original Message----- From: Jeannie Hargis [mailto:jhargis@co.kerr.tx.us] Sent: Monday, August 18, 2008 3:32 PM To: Henderson, Robert; 'Tom Spurgeon' Subject: FW: Scan Data from FX-70EOC6 Good Afternoon to Both of you, I-just received the attached letter from Bank of America regarding the 2007 Note that we closed on last year. Can you please review the letter and let me know what I need to do? Thank you, Jeannie Hargis Paula "Jeannie" Hargis, CPA Kerr County Auditor 700 Main Street Kerrville, Texas 78028 830-792-2237 830-792-2238 - FAX -----Original Message----- From: audit@co.kerr.tx.us [mailto:audit@co.kerr.tx.us] Sent: Monday, August 18, 2008 3:08 PM To: jhargis@co.kerr.tx.us Subject: Scan Data from FX-70EOC6 This E-Mail (including any attachments) may contain privileged or confidential information. It is intended only for the addressee(s) indicated above. The sender does not waive any of its rights, privileges or other protections respecting this information. Any distribution, copying or other use of this E-Mail or the information it contains, by other than an intended recipient, is not sanctioned and is prohibited. If you received this E-Mail in error, please delete it and advise the sender (by return E- +'` Mail or otherwise) immediately. This E-Mail (including any attachments) has been scanned for viruses. 2 It is believed to be free of any virus or other defect that might affect any computer system into which it is received and opened. However, it is the responsibility of the recipient to ensure that it is virus free. ,~~-The sender accepts no responsibility for any loss or damage arising in any way from its use. E-Mail received by or sent from RBC Capital Markets is subject to review by Supervisory personnel. Such communications are retained and may be produced to regulatory authorities or others with legal rights to the information. IRS CIRCULAR 230 NOTICE: TO COMPLY WITH U.S. TREASURY REGULATIONS, WE ADVISE YOU THAT ANY U.S. FEDERAL TAX ADVISE INCLUDED IN THIS COMMUNICATION IS NOT INTENDED OR WRITTEN TO BE USED, AND CANNOT BE USED, TO AVOID ANY U.S. FEDERAL TAX PENALTIES OR TO PROMOTE, MARKET, OR RECOMMEND TO ANOTHER PARTY ANY TRANSACTION OR MATTER. Disclosure Under IRS Circular 230: McCall, Parkhurst & Horton L.L.P. informs you that any tax advice contained in this communication, including any attachments, was not intended or written to be used, and cannot be used, for the purpose of avoiding federal tax related penalties or promoting, marketing or recommending to another party any transaction or matter addressed herein. CONFIDENTIALITY NOTICE This e-mail message from McCall, Parkhurst & Horton L.L.P. is intended only for the individual or entity to which it is addressed. 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This E-Mail (including any attachments) has been scanned for viruses. It is believed to be free of any virus or other defect that might affect any computer system into which it is received and opened. However, it is the responsibility of the recipient to ensure that it is virus free. The sender accepts no responsibility for any loss or damage arising in any way from its use. E-Mail received by or sent from RBC Capital Markets is subject to review by Supervisory personnel. Such communications are retained and may be produced to regulatory authorities or others with legal rights to the information. ~ IRS CIRCULAR 230 NOTICE: TO COMPLY WITH U.S. TREASURY REGULATIONS, WE ADVISE YOU THAT ANY U.S. FEDERAL TAX ADVISE INCLUDED IN THIS COMMUNICATION IS NOT INTENDED OR WRITTEN TO BE USED, AND CANNOT BE USED, TO AVOID ANY U.S. FEDERAL TAX PENALTIES OR TO PROMOTE, MARKET, 3 OR RECOMMEND TO ANOTHER PARTY ANY TRANSACTION OR MATTER.