GFOA of the US & Canada

Committees Develop Five Public Policy Statements for Executive Board Review

During the committees meeting in Washington, D.C., January 24-25, 2008, the standing committees approved five public policy statements to be considered by the Executive Board at its spring meeting. Upon approval by the Executive Board, these policy statements will be voted on by the GFOA membership at the 2008 annual business meeting held June 17 in Ft. Lauderdale in conjunction with the GFOA’s annual conference. Below is a brief description of the policies.

To reflect the recent development of other post employment benefit trusts, the Committee on Retirement and Benefits Administrations approved revisions to two policy statements, Direction of the Investment of State and Local Government Retirement Systems and Governing Statutes for Public Pension Plan Investments.

The Governmental Budgeting and Fiscal Policy Committee revised the GFOA’s Taxation of Remote Commerce policy (formerly Taxation of Interstate Mail Order Sales, originally adopted by the GFOA’s membership in 1986). The new policy maintains the position that collection of taxes on remote sales should be mandated, and furthermore states that the appropriate tax—based on the purchase price of the good or service—should be collected and remitted to local governments.

The Governmental Debt Management Committee approved two new policies. The first, Federal Home Loan Banks (FHLB) as Providers of Tax-Exempt Letters of Credit, supports legislation to allow Federal Home Loan Banks to offer letters of credit to municipal bond issuers without jeopardizing the tax-exempt status of the bonds. The second, Patenting of Tax Strategies and Techniques in Public Finance, speaks to the emergence of tax patents being issued for business practices and tax strategies, including municipal bond transactions. The committee suggests that the GFOA support legislation that would prohibit the patenting of such practices. Without such legislation, state and local governments may be subject to greater issuance costs, possible penalties, and patent litigation exposure, and could be precluded from executing their own transactions.