EXHIBIT 3.4
MILLER, CANFIELD, PADDOCK AND STONE, P.L.C.
840 West Long Lake Road, Suite 200
Troy, Michigan 48098-6358
July 27, 2000
Van Kampen Focus Portfolios,
Municipal Series 337
In care of
Van Kampen Funds Inc.
17W110 22nd Street
Oakbrook Terrace, Illinois 60181
The Bank of New York through
its Wall Street Trust division
as Trustee of Van Kampen Focus Portfolios,
Municipal Series 337
101 Barclay Street
New York, New York 10286
Re: Van Kampen Focus Portfolios, Municipal Series 337
(Michigan Insured Municipals Income Trust, Series 161)
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Gentlemen:
We have acted as special Michigan counsel to you as sponsors and
trustees of Van Kampen Focus Portfolios, Municipal Series 337 (Michigan Insured
Municipals Income Trust, Series 161) referred to above (the "Fund"). You have
asked that we, acting in such capacity, render an opinion to you with respect to
certain matters relating to the issuance of the units of fractional undivided
interest in the Fund (the "Units") pursuant to a Registration Statement on Form
S-6 filed with the Securities and Exchange Commission (the "Commission") under
the Securities Act of 1933, as amended (the "Registration Statement").
You have requested our opinion as to the applicability to the Michigan
Insured Municipals Income trust and Municipals Income Trust (the "Michigan
Trust") and the holders of Units (the "Holders"), each of which Units represents
the ownership of a specified fractional undivided interest in the assets of the
Michigan Trust, of the Michigan Income Tax Act (M.C.L.A. ss.ss. 206.1 et seq.;
M.S.A. ss.ss. 7.557 (101) et seq.) (the "Michigan Income Tax"), the City Income
Tax Act (M.C.L.A. SS 141.501 et seq.; M.S.A. ss.ss. 5.3194 (1) et seq.), which
incorporates the "Uniform City Income Tax Ordinance," the First Class School
District excise tax upon income (M.C.L.A. ss. 380.451; M.S.A. ss.15.4451)
(collectively, the "income tax laws"), the Michigan Single Business Tax Act
(M.C.L.A. ss.ss. 208.1 et seq.; M.S.A. ss.ss.7.558 (1) et seq.) (the "Single
Business Tax") and the Michigan Tax on Ownership of Intangible Personal Property
(M.C.L.A. ss.ss. 205.131 et seq.; M.S.A. ss.ss. 7.556 (1) et seq.) (the
"Intangibles Tax"). The total repeal of the Intangibles Tax was effective
January 1, 1998 (1995 PA 4 and 5). The Michigan Income Tax rate was reduced from
4.4 percent to 4.2 percent for year 2000; 4.2 percent for year 2001; 4.1 percent
for year 2002; 4.0 percent for year 2003; and 3.9 percent for year 2004 and
after (1999 PA 1-6). The Single Business Tax will be phased-out over a
twenty-three year period, assuming specified Budget Stabilization Fund levels
are maintained, at a rate of one-tenth of one percent per year, beginning in
1999 (1999 PA 115). The City Income Tax Act was amended, for cities with a
population of 750,000 or more, such as Detroit, to require, over a ten-year
period, a gradual total reduction of their respective city income tax rates of
one percent for residents and one-half of one percent for non-residents. This
gradual rate reduction is effective for tax years beginning on or after July 1,
1999, and each July 1 thereafter, unless a city requests a suspension of a
reduction under specified economic conditions (1998 PA 500). You have also
requested our opinion regarding the tax status of proceeds payable from an
insurance policy to be obtained by either the Fund or by the issuer of the Bonds
involved, guaranteeing prompt payment of principal and interest on all Bonds in
the portfolio of the Fund.
The Michigan Trust, its formation, its proposed method of operation,
the rights of owners of Certificates representing Units, the nature of such
ownership and the portfolio of investments of the Michigan Trust are described
and set forth in the Prospectus dated July 27, 2000, filed with the Securities
and Exchange Commission in Registration No. 333-41818. In giving our opinion set
forth hereunder, we have relied upon the facts contained in such Registration
Statement, including the fact that, at the respective dates of issuance of the
underlying Debt Obligations, opinions of bond counsel to the respective Michigan
authorities issuing such Debt Obligations were given with respect to the
validity of the Debt Obligations and the exemption of the same, and of the
interest thereon, from Michigan taxation.
Based on the above, it is our opinion that:
The Michigan Trust and the owners of Units will, in our opinion, be
treated for purposes of the Michigan income tax laws and the Single Business Tax
in substantially the same manner as they are for purposes of the Federal income
tax laws, as currently enacted. Accordingly, we have relied upon the opinion of
Messrs. Chapman and Cutler as to the applicability of Federal income tax under
the Internal Revenue Code of 1986, as currently amended, to the Michigan Trust
and the Holders of Units.
Under the income tax laws of the State of Michigan, the Michigan Trust
is not an association taxable as a corporation; the income of the Michigan Trust
will be treated as the income of the Holders of Units of the Michigan Trust and
be deemed to have been received by them when received by the Michigan Trust.
Interest on the Debt Obligations in the Michigan Trust which is exempt from tax
under the Michigan income tax laws when received by the Michigan Trust will
retain its status as tax exempt interest to the Holders of Units of the Michigan
Trust.
For purposes of the Michigan income tax laws, each Holder of Units of
the Michigan Trust will be considered to have received his pro rata share of
interest on each Debt Obligation in the Michigan Trust when it is received by
the Michigan Trust, and each Holder will have a taxable event when the Michigan
Trust disposes of a Debt Obligation (whether by sale, exchange, redemption or
payment at maturity) or when the Unit Holder redeems or sells his Unit, to the
extent the transaction constitutes a taxable event for Federal income tax
purposes. The tax cost of each Unit to a Unit Holder will be established and
allocated for purposes of the Michigan income tax laws in the same manner as
such cost is established and allocated for Federal income tax purposes.
The Michigan Single Business Tax replaced the tax on corporate and
financial institution income under the Michigan Income Tax, and the intangible
tax with respect to those intangibles of persons subject to the Single Business
Tax the income from which would be considered in computing the Single Business
Tax. Persons are subject to the Single Business Tax only if they are engaged in
"business activity," as defined in the Act. Under the Single Business Tax, both
interest received by the Michigan Trust on the underlying Debt Obligations and
any amount distributed from the Michigan Trust to a Unit Holder, if not included
in determining taxable income for Federal income tax purposes, is also not
included in the adjusted tax base upon which the Single Business Tax is
computed, of either the Michigan Trust or the Unit Holders. If the Michigan
Trust or the Unit Holders have a taxable event for Federal income tax purposes
when the Michigan Trust disposes of a Debt Obligation (whether by sale,
exchange, redemption or payment at maturity) or the Holder redeems or sells his
Unit, an amount equal to any gain realized from such taxable event which was
included in the computation of taxable income for Federal income tax purposes
(plus an amount equal to any capital gain of an individual realized in
connection with such event but excluded in computing that individual's Federal
taxable income) will be included in the tax base against which, after
allocation, apportionment and other adjustments, the Single Business Tax is
computed. The tax base will be reduced by an amount equal to any capital loss
realized from such a taxable event, whether or not the capital loss was deducted
in computing Federal taxable income in the year the loss occurred. Holders
should consult their tax advisor as to their status under Michigan law.
Any proceeds paid under an insurance policy issued to the Trustee of
the Fund, or paid under individual policies obtained by issuers of Bonds, which,
when received by the Unit Holders, represent maturing interest on defaulted
obligations held by the Trustee, will be excludable from the Michigan income tax
laws and the Single Business Tax if, and to the same extent as, such interest
would have been so excludable if paid by the issuer of the defaulted
obligations. While treatment under the Michigan Intangibles Tax is not premised
upon the characterization of such proceeds under the Internal Revenue Code, the
Michigan Department of Treasury should adopt the same approach as under the
Michigan income tax laws and the Single Business tax.
Chapman and Cutler of 111 West Monroe Street, Chicago, Illinois 60603,
are entitled to rely on this opinion as though it were addressed to them.
We also advise you that, as the Tax Reform Act of 1986 eliminated the
capital gain deduction for tax years beginning after December 31, 1986, the
federal adjusted gross income, the computation base for the Michigan Income Tax,
of a Unit Holder will be increased accordingly to the extent such capital gains
are realized when the Michigan Trust disposes of a Debt Obligation or when the
Unit Holder redeems or sells a Unit, to the extent such transaction constitutes
a taxable event for Federal income tax purposes.
We hereby consent to the reference to Miller, Canfield, Paddock and
Stone, P.L.C. under the heading "Michigan Tax Status" in the Prospectus relating
to the Michigan Trust which is part of the Registration Statement in
Registration No. 333-41818 the Securities and Exchange Commission under the
Securities Act of 1933, as amended, and to the filing of this opinion as an
exhibit to said registration statement.
Yours very truly,
MILLER, CANFIELD, PADDOCK AND STONE, P.L.C.
