10A Action 2008 0602 Attach - Preliminary Official Statement

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the case of purchasers of the 2008 Bonds who purchase the 2008 Bonds after the initial offering of a substantial amount of such maturity. Owners of such 2008 Bonds should consult their own tax advisors with respect to the tax consequences of ownership of 2008 Bonds with original issue discount, including the treatment of purchasers who do not purchase in the original offering, the allowance of a deduction for any loss on a sale or other disposition, and the treatment of accrued original issue discount on such 2008 Bonds under federal individual and corporate alternative minimum taxes. Under the Code, original issue premium is amortized on an annual basis over the term of the 2008 Bond (said term being the shorter of the 2008 Bond's maturity date or its call date). The amount of original issue premium amortized each year reduces the adjusted basis of the owner of the 2008 Bond for purposes of determining taxable gain or loss upon disposition. The amount of original issue premium on a 2008 Bond is amortized each year over the term to maturity of the 2008 Bond on the basis of a constant interest rate compounded on each interest or principal payment date (with straightline interpolations between compounding dates). Amortized Bond premium is not deductible for federal income tax purposes. Owners of Premium 2008 Bonds, including purchasers who do not purchase in the original offering, should consult their own tax advisors with respect to State of Ca-ifornia personal income tax and federal income tax consequences of owning such 2008 Bonds. California Tax Status. In the further opinion of Bond Counsel, interest on the 2008 Bonds is exempt from California personal income taxes. Form of Bond Counsel Opinion. Bond Counsel expects to deliver an opinion at the time of issuance of the 2008 Bonds in substantially the same form set forth in Appendix E hereto. Other Tax Considerations. Owners of the 2008 Bonds should also be aware that the ownership or disposition of, or the accrual or receipt of interest on, the 2008 Bonds may have federal or state tax consequences other than as described above. Bond Counsel expresses no opinion regarding any federal or state tax consequences arising with respect to the 2008 Bonds other than as expressly described above. CERTAIN LEGAL MATTERS The legal opinion of Bond Counsel, approving the validity of the 2008 Bonds, in substantially the form attached hereto as Appendix E, will be made available to purchasers at the time of original delivery of the 2008 Bonds, and a copy thereof will be printed on each 2008 Bond. Bond Counsel will, as Disclosure Counsel, also deliver a disclosure letter to the Agency and the Underwriter regarding the contents of this Official Statement. Certain matters will be passed upon for the Agency by the Meyers, Nave, Riback, Silver & Wilson, San Leandro, California, as Agency Counsel. -40-