AGO 85-18.

Case Date:December 11, 1985
Colorado Attorney General Opinions 1985. AGO 85-18. December 11, 1985Department of Law Attorney General Opinion FORMAL OPINION of DUANE WOODARD Attorney General Opinion No. 85-18 AG Alpha No. LO AD AGAOT Morgan Smith Executive Director Department of Local Affairs 1313 Sherman, Room 518 Denver, CO 80203 RE: Conformity with the federal "Deficit Reduction Act of 1984" of Colorado statutes relating to state private activity bond limit allocations.Dear Mr. Smith: This letter is in response to your request, pursuant to section 24-32-1411, C.R.S. (1985 Supp.), for an opinion concerning whether Colorado's statutory provisions relating to the allocation of its private activity bond limit, i.e., sections 24-32-1401 through 24-32-1411, C.R.S. (1985 Supp.), are in conformity with section 621 of the federal "Deficit Reduction Act of 1984," Pub. L. No. 98-369, 98 Stat. 915 (the "federal Act"). QUESTION PRESENTED AND CONCLUSION Whether Colorado's statutory allocation of the state's private activity bond ceiling among "issuing authorities," as defined in section 24-32-1402(9), C.R.S. (1985 Supp.), is in conformity with the federal Act. It is my opinion that it is. ANALYSIS The Internal Revenue Code, section 103(n), I.R.C. (1985), (fn1) limits the total principal amount of private activity bonds, the interest on which is exempt under section 103(a), I.R.C. (1985), which may be issued by a state and its political subdivisions during each calendar year. Included in the definition of private activity bonds are industrial development bonds (defined in section 103(b), I.R.C. (1985)) and student loan bonds (defined in section 103(n)(8), I.R.C. (1985)). Section 103(n)(7)(A), I.R.C. (1985). Although the federal Act established a formula for allocating the state ceiling on private activity bonds among state agencies and other issuers, it permitted states to establish different methods of allocation. Section 103(n)(6), I.R.C. (1985). Sections 24-32-1401 through 1411, C.R.S. (1985 Supp.) were enacted to provide an alternate allocation formula for Colorado. Pursuant to section 24-32-1403, C.R.S. (1985 Supp.), one hundred percent of the state ceiling has initially been allocated to the state for reallocation as follows: (1) 40 percent among four statewide issuing authorities (fn2) in amounts established by the Department of Local Affairs...

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