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It is apparent from the text of its explanatory statement that the SEC has not focused its attention on the typical airport revenue bond situation where a large number of airline and concessionaire leases may be committed to support the revenue bonds issued. The exclusion mentioned in the text relating to revenue producing public projects operated by the governmental entity itself, does not cover the airport situation definitely enough and, in any event, is not contained in the rule itself. Thus, at the minimum, the airlines should want to have the rule clarified so as to expressly exclude revenue bonds issued for general airport improvement purposes.

The so-called special facility bonds, which are issued to finance a hangar, office building or similar facility to be leased to a single airport tenant, present a greater problem. It seems certain that the SEC intends these to be covered by the proposed rule. The not uncommon situation in which airport revenue bonds are issued to finance both general airport improvements and certain special facilities falls somewhere in between.

This matter is of sufficient importance to warrant the submission of comments to the SEC by the airline industry. Therefore, unless some objection is expressed, we will undertake to prepare a response to the SEC's notice based on the comments and suggestions received from the members. Arguments to be used in support of the exclusion of special facilities bonds, or at least those special facilities financed through general airport revenue bond issues, would be particularly helpful.

In order to meet the March 29, 1968 filing date, we will need to have your comments in hand no later than Monday, March 25, 1968.

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The Treasury proposal to end, by administrative regulation, the tax exempt statue of "industrial development bonds" is not yet ripe for public comment. The notice of proposed rule making on this subject should be issued by the end of this week. There is some reason to believe that at least some types of airport revenue bonds will be excluded, but whether this exclusion will be broad enough for our purposes remains to be seen. The proposed regulation will be forwarded to you by a subsequent memorandum as soon as it is received. 

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