Tax Policy: Use of Tax-Exempt Bonds in Oakland, California
GGD-86-110BR
Published: Jul 24, 1986. Publicly Released: Jul 24, 1986.
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Highlights
In response to a congressional request, GAO provided information on the use of tax-exempt bonds by Oakland, California, specifically: (1) transactions to sell and lease back city assets; and (2) allegations that Oakland planned to use bonds to give the Oakland Athletics baseball team a loan.
Recommendations
Matter for Congressional Consideration
| Matter | Status | Comments |
|---|---|---|
| Since it is unclear whether current tax law provisions apply to Oakland's proposed loan to the Oakland Athletics, Congress may want to clarify its intent. Should a clarification be warranted, two possible alternatives would be to: (1) change the language of current tax law provisions to clarify the restrictions on uses of tax-exempt financing; and (2) direct the Internal Revenue Service to determine the extent to which tax-exempt bonds are being used for private purposes and, if warranted, to determine what is needed to correct the situation. | Provisions in the recently passed Tax Reform Act of 1986, placed more stringent requirements on the tax exempt financing for private purposes. Thus, this action could be considered as taken with respect to the general issue of limiting private purpose bonds; although no specific action was taken or is contemplated with respect to Oakland's loan to the Oakland A's baseball team. |
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Municipal bondsState programsTax expendituresTax lawTax sheltersBond marketTax-exempt bondsMortgagesTaxesRevenue loss