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Los Angeles - Hay 15, 1951 AIRMAIL ^80-8 Mr. W.R. Rouse - Omaha: Referring to our telephone conversation relative to the status of the bonds proposed to be Issued by the Las Vegas Valley Water District. This district was created by Chapter 16? of the 1947 Statutes of Nevada and Is now in exist­ence and Is functioning to a certain extent having elected a Board of Directors and appointed a Manager and having secured certain engineering studies and loans fro® Clark County. The provisions relative to the Issuance of bonds Is found in Section 16 of Chapter 167 of the 194? statutes. Section 16 was amended in 1949 and Is found, as amended, In Chapter 160 of the 1949 Statutes* You will note In this amendment that It Is specifically provided, on Page 212, of the statutes, that the dis­trict shall be regarded as a political subdivision of the State of Nevada for the purposes of Chapter 236, Statutes of Nevada 1947. The Las Vegas Valley Water District Aot was further amended by the Nevada Legislature In 1931 by Assembly Bill 229, copy of which you have, and which is now known as Chapter 607. This chapter further amends Section 16 with respect to bond Issues. You^re, of course, familiar with Section 22 (b)(4) of the Internal Revenue Code vhloh declares that interests upon the obligations of a state, territory or any political subdivision is tax free. T h is section has been construed in Commerce Clearing House Federal Tax Guide, Section 577, Page 663 by defining the term "political subdivision". In view of the regulation in question and the sweeping powers of the district, as contained In the Nevada statutes above r e f e r r e d * t o , It Is my opinion that this would be considered such a political subdivision and would permit the interest on the bonds to be tax free.