Part 2 - Laserfiche WebLink

Home Browse Search

5.6 Investments and Dispositions. 5.6.1 General Rule. No Investment Property may be acquired with Gross Proceeds for an amount (including transaction costs, except as otherwise provided in Section 1 .148- 5(e) of the Treasury Regulations) in excess of the fair market value of such Investment Property. No Investment Property may be sold or otherwise disposed of for an amount (including transaction costs, except as otherwise provided in Section 1 .148-5(e) of the Treasury Regulations) less than the fair market value of the Investment Property. 5.6.2 Fair Market Value. In general, the fair market value of any Investment Property is the price at which a willing buyer would pay to a willing seller to acquire the Investment Property, with no amounts paid to artificially reduce or increase the yield on such Investment Property. This Section 5.6 sets forth certain safe harbors for determining fair market value. Other methods may be used to establish fair market value, provided, however, that such methods comply with the requirements of Section 1 .148-5(d)(6) of the Treasury Regulations. 5.6.3 Arm's Length Purchase and Sale. If Investment Property is acquired pursuant to an arm's length transaction without regard to any amount paid to reduce the yield on the Investment Property, the fair market value of the Investment Property shall be the amount paid for the Investment Property (without increase for transaction costs, except as otherwise provided in Section 1.148-5(e) of the Treasury Regulations). If Investment Property is sold or otherwise disposed of in an arm's length transaction without regard to any reduction in the disposition price to reduce the Rebate Requirement, the fair market value of the Investment Property shall be the amount realized from the sale or other disposition of the Investment Property (without reduction for transaction costs, except as otherwise provided in Section 1 .148-5(e) of the Treasury Regulations). 5.6.4 United States Treasury Securities -State and Local Government Series. If a United States Treasury obligation is acquired directly from or disposed of directly to the United States Department of the Treasury (as in the case of the United States Treasury Securities - State and Local Government Series ("SLGS") obligations), such acquisition or disposition shall be treated as establishing a market for the obligation and as establishing the fair market value of the obligation. 5.6.5 Investment Contracts. The purchase price of any Investment Property acquired pursuant to an investment contract (within the meaning of Section 1 .148-5(d)(6)(iii) of the Treasury Regulations) shall be determined as provided in this Section 5.6.5. No investment contract shall be acquired with Gross Proceeds unless the requirements of this Section are satisfied. With respect to any investment contract the City and the Authority will obtain from any provider of the investment contract, broker thereof or other party, such information, certification or representation as will enable the City and the Authority to determine that the requirements of this Section 5.6.5 are satisfied. The purchase price of an investment contract will be considered to be fair market value if: (i) the City and the Authority have made (or have had made on their behalves) a bona fide solicitation for the investment contract. The solicitation must have specified the material terms of the investment contract, including the collateral security requirements for the investment contract, if any, and, unless the moneys invested pursuant to such investment contract will be held in a float fund or reasonably required reserve or replacement fund, the City's reasonably expected drawdown schedule for the moneys to be invested; LA1-69477.4 16