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Resolutions Adopted at the
67th Annual Conference of Mayors
New Orleans, Louisiana
June 11-15, 1999 |
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COMMUNITY DEVELOPMENT AND HOUSING
FEDERAL HOME LOAN BANKS
WHEREAS, Section 149(b) of the Internal Revenue Code permits Government Sponsored
Agencies (GSES) such as FANNIEMAE, the Federal National Mortgage Association and the
Government National Mortgage Association (GINNYMAE) as well as the Federal Housing
Administration and the Veteran's Administration to issue letters of credit to credit
enhance tax exempt economic development bonds; and
WHEREAS, the Federal Home Loan Banks were omitted from the list of GSES
permitted to issue such letters of credit due to the fact that the Federal Home Loan Banks
were not issuing letters of credit to credit enhance bonds when the other GSES were
listed; and
WHEREAS, amending Section 149(b) to add the Federal Home Loan Banks to the list
of other GSES permit bonds would allow the Federal Home Loan Banks to better carry out
their ongoing mission of supporting housing and community development lending; and
WHEREAS, obtaining credit enhancement from triple A rated Federal Home Loan
Banks for tax exempt economic development bonds would significantly lower the costs to
municipalities and therefore increase their capacity to create jobs and generate new tax
revenue for the municipalities and the federal government; and
WHEREAS, the proposed amendment has been scored by the Joint Tax Committee at
only $6 million over five years which loss of revenue will be recouped many times over by
local economic development,
NOW, THEREFORE, BE IT RESOLVED that The U.S. Conference of Mayors urges the
Congress to pass an amendment to Section 149(b) of the Internal Revenue Code adding
"any letter of credit issued by a Federal Home Loan Bank" to the list of
permissible letters of credit enhancing tax exempt economic development bonds.
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