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designates the issue as "qualified tax-exempt nbLigatiorIS" under Section 265 of the Internal Revenue Code of 1986 - The Notes have not been designated by the County as "qualified tax-exempt. obligations" for purposes of 7,Pcti0n 165 of the Internal. Revenue Code of 1986. Financial institutions purchasing or hoLding the Notes should consult their professional tAx advL90r.s to deter -Ln- the .effect upon their federal inr_ome tax liability of the interest expense disAILOwAnre related to hnlrling the N -A e . Property and Casualty insurance Company income Taxes tender the Internal Revenue Code of 1486, a reduction in the loss rest•rve deduction for property and casualty insurers is required t,� take account of the fact that deductible additions to reserves may come out of income not subject to federal income tax. In arl,iition, a portion of the dividends rereive1 ny a property An -1 casualty insurer attributable to tax-exempt inr•nme is not dednrt.ible by the reripient for fodorAL income tax purposes. The internal Revanvte Code of 1966 provides generally that t.hes. provisions are affective for tax years beginning after December' 31, 1986, An,l with t-spect to obligations arTttred after August 7, 1986. Fr,�t,t ty awl casualty insurers shnuld Consult their professionAl tax •Hv isors for a full explanation of the effect of these prnvini,,nn upon their income tax Liabllity. Nt)H ARBITRACK BOHDS The County has covenanted in the Resolutions with the purchasers of the Bonds and the Notes, as the case may be, that. it will make no use of the proceeds of the Bonds or the Notes, as the case MAY be, which, if such use had reasonably been expected on the date of issue of the Bonds or the Notes, as the CARP MAY be, would have caused the same to be "arbitrage bonds," and has further covenanted in the Note Resolution to comply with the requirements of Section 103 and 148 of the Internal Revenue Code of 1986, as amended, and regulations promulgated thereunder from time to time, during the term of the Notes. officials of the County have executed a certificate concerning the use of the proceeds of the Notes in conformity with regulations issued under Sections 103 and 148 of the Code. 32