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California City to Finance Tribal Casino

30 July 2004

LOS ANGELES – As reported by the Associated Press: "A Southern California city plans to issue a $145 million bond to pay for a tribe's new casino and hotel, a practice under scrutiny by the Internal Revenue Service in at least one state.

"The city of Banning in Riverside County intends to float a bond in August for the Morongo Band of Mission Indians, which will use the money for its resort under construction about 80 miles east of Los Angeles.

"Under the deal, the tribe will pay off the debt in 15 years and Banning will receive an estimated $1 million in proceeds.

"The IRS, however, has shunned the practice of communities issuing bonds for lucrative purposes.

"…Morongo consultant Waltona Manion said the tribe would avoid paying fees and obtain a lower interest rate by having someone else issue the bond…" http://www.lasvegassun.com/sunbin/stories/gaming/2004/jul/30/517261713.html

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