- 9 -
published rate schedule. There are no specially negotiated rate
arrangements for the disposal of sewage among users of the sewage
system. The sewage disposal functions of petitioner’s sewage
system are available for general public use. The sewer demand
fees will secure and will be used to pay the debt service on the
bonds. Debt service on the bonds will require petitioner to
increase the sewer demand fees. Petitioner expects, as of the
issue date, that the sewer demand fees will pay more than 95
percent of the debt service on the bonds.
On June 2, 1998, petitioner adopted a resolution authorizing
the issuance of bonds (Series 1998A bonds). On September 17,
1998, petitioner issued taxable bonds of $31 million, the
proceeds of which, according to petitioner, were used to finance
the costs of the first phase of construction and acquisition in
the Geysers Alternative. Petitioner proposes to issue additional
bonds of $140 million to finance anticipated costs of completing
the project and expects to use $31 million of the issue to refund
the taxable bonds on a tax-exempt basis.
Discussion
A. Introduction
Gross income includes all income from whatever source
derived including interest. Sec. 61(a)(4). Under section
103(a), gross income does not include interest on any State or
local bond. However, section 103(a) does not apply to “Any
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Next
Last modified: May 25, 2011