VILLAGE OF TAOS SKI VALLEY, NEW MEXICO

RESOLUTION NO. 99-33

AUTHORIZING DECLARATIONS OF OFFICIAL INTENT TO REIMBURSE ORIGINAL EXPENDITURES FROM NOTE AND BOND PROCEEDS; AND DECLARING AN EMERGENCY

          Capitalized words used in the following preambles have the same meaning as defined in Section 1 of this Resolution unless the context requires otherwise.

          WHEREAS, the Reimbursement Regulations prescribe conditions under which proceeds of bonds will be deemed "spent" for purposes of Sections 103 and 141 through 150 of the Code when used to reimburse the Issuer of the Bonds for Original Expenditures that were paid before the Bonds were issued, so that, upon reimbursement, the Bond proceeds so used will not continue to be subject to the requirements or restrictions of those sections of the Code or under the Reimbursement Regulations; and

          WHEREAS, certain provisions of the Reimbursement Regulations require, with some exceptions, that not later than 60 days after payment of the Original Expenditure there be adopted a declaration of Official Intent to reimburse the Original Expenditure with proceeds of a debt obligation if a valid Reimbursement Allocation is later to be made with respect thereto; and

          WHEREAS, the Village of Taos Ski Valley, New Mexico desires to take steps to comply with the Reimbursement Regulations.

          NOW, THEREFORE, BE IT RESOLVED BY THE VILLAGE COUNCIL, THE GOVERNING BODY OF THE VILLAGE OF TAOS SKI VALLEY, NEW MEXICO, AS FOLLOWS:

          Section 1. Definitions. The following definitions apply to the terms used in this Resolution:

          "Authorized Officer" means the Mayor or Mayor Pro-Tem or another officer of the Village designated by a certificate signed by the Mayor or Mayor Pro-Tem, a certified copy of which shall be filed in the official records of the Village, except that with respect to a Conduit Borrower, the Authorized Officer shall be the chief fiscal officer of the Conduit Borrower or any other officer or employee of the Conduit Borrower who, at the time, has authority to exercise functions of the chief financial officer.

          "Bonds" means and includes bonds, notes, certificates and any other obligations of the Village included in the meaning of the term "bond," within the meaning of Code Section 150(a)(1) and the applicable Treasury Regulations issued under Code Section 150, including Section 1.150-1(b) of the Treasury Regulations.

          "Capital Expenditure" means any cost of a type that is properly chargeable to capital account (or would be so chargeable with a proper election or with the application of the definition of placed in service under U.S. Treasury Regulations Section 1.150-2(c)) under general Federal income tax principles. For example, costs incurred to acquire, construct, or improve land, buildings, and equipment generally are capital expenditures. Whether an expenditure is a capital expenditure is determined at the time the expenditure is paid with respect to the property.

          "Code" means the Internal Revenue Code of 1986, as amended.

          "Conduit Borrower" means the obligor on a purpose investment (as defined in Treasury Regulations Section 1.148-1). For example, if the Issuer invests proceeds in a purpose investment in the form of a loan, lease, installment sale obligation, or similar obligation to another entity and the obligor uses the proceeds to carry out the governmental purpose of the issue, the obligor is a conduit borrower. A conduit borrower is an Unrelated Entity with respect to the Village to which the proceeds of a Reimbursement Bond are to be loaned or otherwise provided.

          "Cost of Issuance" means costs to the extent incurred in connection with, and allocable to, the issuance of an issue, within the meaning of Code Section 147(g). For example, costs of issuance include the following costs but only to the extent incurred in connection with, and allocable to, the borrowing: underwriters' spread; counsel fees; financial advisory fees; rating agency fees; trustee fees; paying agent fees; bond registrar, certification and authentication fees; accounting fees; printing costs for bonds and offering documents; public approval process costs; engineering and feasibility study costs; guarantee fees, other than for qualified guarantees (as defined in U.S. Treasury Regulations Section 1.148-4(f)); and similar costs.

          "Declaration of Official Intent" means the Issuer's declaration of intent to reimburse an Original Expenditure with proceeds of a debt obligation.

          "Governing Body" means the Council of the Village.

          "Issuer" means the Village or, if applicable, a Conduit Borrower unless the context or provision clearly indicates otherwise.

          "Original Expenditure" means an expenditure for a governmental purpose that is originally paid from a source other than a Reimbursement Bond.

          "Placed in Service" means, with respect to a facility, the date on which, based on all the facts and circumstances:

(1) the facility has reached a degree of completion which would permit its operation at substantially its design level; and

(2) the facility is, in fact, in operation at such level.

          "Public Record" means "public record" as that term is used in Sections 14-2-1 et seq., NMSA 1978, as amended.

          "Qualified Expenditure" means an Original Expenditure which is a Capital Expenditure, a Cost of Issuance or another expenditure described in Reimbursement Regulations Section 1.150-2(d)(3), and which is the subject of a proper Reimbursement Allocation, or is subject to an exemption with respect thereto in accordance with Section 5 below.

          "Reasonable Expectations or Reasonableness" means, with respect to the Issuer's expectations or actions, that such expectations or actions are reasonable only if a prudent person in the same circumstances as the Village would have those same expectations or take those same actions, based on the objective facts and circumstances. Factors relevant to a determination of reasonableness are set forth in Treasury Regulations Section 1.148-1(b).

          "Reimbursement or reimburse" means the restoration to the Village of money temporarily advanced from other funds of the Village and spent for Qualified Expenditures before the issuance of the Reimbursement Bonds. "Reimbursement" or "reimburse" does not include the refunding or retiring of Bonds previously issued and sold to, or borrowings from, Unrelated Entities.

          "Reimbursement Allocation" means an allocation in writing that evidences an Issuer's use of proceeds of a Reimbursement Bond to reimburse an Original Expenditure. An allocation made within 30 days after the issue date of a Reimbursement Bond may be treated as made on the date of issue.

          "Reimbursement Bond" means the portion of an issue of Bonds that is allocated to reimburse an Original Expenditure that was paid before the issue date.

          "Reimbursement Regulations" means Section 1.150-2 of the Treasury Regulations, and any amendments thereto, or superseding regulations, whether in proposed, temporary or final form, at the time applicable, prescribing conditions under which the proceeds of a Reimbursement Bond, when allocated to a reimbursement, will be treated as "spent" for all or any purposes of Sections 103 and 141 through 150 of the Code.

          "Treasury Regulations" means the United States Treasury Regulations promulgated under or applicable to the Code.

          "Unrelated Entities" means entities not in the same "controlled group", within the meaning of Treasury Regulations Section 1.150-1(e), as the Village.

          "Village" means the Village of Taos Ski Valley, New Mexico.

          Section 2. Authorization To Declare Official Intent and To Make Reimbursement Allocation. Each Authorized Officer is authorized to prepare for the Governing Body’s approval a Declaration of Official Intent with respect to Original Expenditures for which exists a Reasonable Expectation of reimbursement, in accordance with applicable authorizations, policies and practices, from the proceeds of a Reimbursement Bond, and pursuant to such Declaration of Official Intent after approval by the Governing Body, to make a timely Reimbursement Allocation of the proceeds of the Reimbursement Bond to reimburse Qualified Expenditures, and to take any other action as may be appropriate, all at the times and in the manners required under the Reimbursement Regulations to satisfy the requirements for treating proceeds used for reimbursement to be treated as "spent" for purposes of Sections 103 and 141 through 150 of the Code.

          Section 3. Operating Rules for Reimbursement Expenditures. Pursuant to the Reimbursement Regulations, a Reimbursement Allocation is treated as an expenditure of proceeds of a Reimbursement Bond for the governmental purpose of the Original Expenditure on the date of the Reimbursement Allocation only if:

(a) the Village adopts a declaration of Official Intent for the Original Expenditure not later than 60 days after payment of the Original Expenditure; and

(b) the Reimbursement Allocation is made not later than 18 months (or, under certain circumstances as described in Section 1.150-2(d)(2)(ii) of the Reimbursement Regulations, three years) after the later of:

                                    (i) the date the Original Expenditure is paid; or

                                    (ii) the date the project is Placed in Service or abandoned, but in no event more than three years (subject to the provisions of Section 1.150-2(d)(2)(ii) of the Reimbursement Regulations) after the Original Expenditure is paid.

          Section 4. Requirements for Declarations of Official Intent. Each Declaration of Official Intent will satisfy the following rules:

(a) Form of Declaration. The Declaration of Official Intent shall be in the form of either a Village resolution or specific legislative authorization for the issuance of obligations for, or otherwise pertaining to, a particular project.

(b) Project Description. The Declaration of Official Intent will generally describe the project for which the Original Expenditure is paid and state the maximum principal amount of obligations expected to be issued for the project.

(c) Reasonableness of Declaration. On the date of the Declaration of Official Intent, the Village will have determined that it has a Reasonable Expectation that it will reimburse the Original Expenditure with proceeds of a Reimbursement Bond.

          Section 5. Exceptions to Operating Rules. The rules set forth in (a) and (b) of Section 4 herein, relating to the adoption of a Declaration of Official Intent and the making of a Reimbursement Allocation, respectively, do not apply to:

(a) Costs of Issuance of any Bond or to an amount not in excess of the lesser of $100,000 or five percent of the proceeds of the issue (the "de minimis exception", as set forth in Section 1.150-2(f)(1) of the Reimbursement Regulations); or

(b) any preliminary expenditures, up to an amount not in excess of 20 percent of the aggregate issue price of the issue or issues that finance or are reasonably expected by the Issuer to finance the project for which the preliminary expenditures were incurred (the "preliminary expenditures exception", as set forth in Section 1.150-2(f)(2) of the Reimbursement Reguations). Preliminary expenditures include architectural, engineering, surveying, soil testing, Costs of Issuance, and similar costs that are incurred prior to the commencement of acquisition, construction, or rehabilitation of a project, other than land acquisition, site preparation, and similar costs incident to commencement of construction.

          Section 6. Public Inspection of Declaration of Official Intent. Each Declaration of Official Intent shall, within the earlier of ten days after the Declaration of Official Intent is declared or the date of issue of the Reimbursement Bond, and ending on, and including the date of issue of the Reimbursement Bond, be made available for public inspection during normal business hours on every business day at the main administrative office of the Village or at the customary location of the Village’s Public Records that are available to the general public.

          Section 7. Conduit Issues. This Resolution shall not, unless the Village otherwise specifically provides in a later Declaration of Official Intent, be applicable with respect to Bonds issued for or on behalf of a Conduit Borrower.

          Section 8. Effective Date. Because of the need to timely pay Original Expenditures which shall be the subjects of Declarations of Official Intent, upon due adoption of this Resolution it shall be recorded in the regular book of official records of the proceedings of the Village, and shall be in full force and effect upon such adoption.

          PASSED AND ADOPTED by the Governing Body of the Village of Taos Ski Valley this 6th day of July, 1999.

(SEAL)                                                     ___________________________________

                                                                Mayor

Attested By:

_____________________________

Clerk