Van Kampen Focus Portfolios,
Municipal Series 339
August 17, 2000
EXHIBIT 3.3
WINSTON & STRAWN
200 Park Avenue
New York, New York 10166-4193
August 17, 2000
Van Kampen Focus Portfolios, Municipal Series 339
c/o The Bank of New York, As Trustee
101 Barclay Street, 17 West
New York, New York 10286
Dear Sirs:
We have acted as special counsel for the Van Kampen Focus Portfolios,
Municipal Series 339 (the "Fund") consisting of Pennsylvania Insured Municipals
Income Trust, Series 250 (individually the "Trust") for the purpose of
determining the applicability of certain New York taxes under the circumstances
hereinafter described.
The Fund is created pursuant to a Trust Agreement (the "Indenture"),
dated as of today (the "Date of Deposit") among Van Kampen Funds Inc. (the
"Depositor"), American Portfolio Evaluation Services, a division of Van Kampen
Investment Advisory Corp., as Evaluator, and The Bank of New York as Trustee
(the "Trustee"). As described in the prospectus relating to the Fund dated today
to be filed as an amendment to a registration statement previously filed with
the Securities and Exchange Commission (File Number 333-41822) under the
Securities Act of 1933, as amended (respectively the "Prospectus" and the
"Registration Statement"), the objectives of the Fund are the generation of
income exempt from Federal taxation and as regards the Trust exempt, to the
extent indicated in the Prospectus, from income tax, if any, of the State
denominated in the name of that Trust. No opinion is expressed herein with
regard to the Federal or State tax aspects (other than New York) of the bonds,
the Fund, the Trust and units of the Trust (the "Units"), or any interest, gains
or losses in respect thereof.
As more fully set forth in the Indenture and in the Prospectus, the
activities of the Trustee will include the following:
On the Date of Deposit, the Depositor will deposit with the Trustee
with respect to the Trust, the total principal amount of interest bearing
obligations and/or contracts for the purchase thereof together with an
irrevocable letter of credit in the amount required for the purchase price and
accrued interest, if any, and, as to those trusts denominated as "Insured", an
insurance policy purchased by the Depositor evidencing the insurance
guaranteeing the timely payment of principal and interest of the obligations
comprising the corpus of those Trusts other than those obligations the timely
payment of principal and interest of which are guaranteed by an insurance policy
purchased by the issuer thereof or a prior owner, which may include the
Depositor prior to the Date of Deposit, as more fully set forth in the
Prospectus with respect to the Trust.
We understand with respect to the obligations described in the
preceding paragraph which are deposited into a trust denominated as "Insured"
that all insurance, whether purchased by the Depositor, the issuer or a prior
owner, provides, or will provide, that the amount paid by the insurer in respect
of any bond may not exceed the amount of principal and interest due on the bond
and such payment will in no event relieve the issuer from its continuing
obligation to pay such defaulted principal and interest in accordance with the
terms of the obligation.
The Trustee will not participate in the selection of the obligations to
be deposited in the Fund, and, upon the receipt thereof, will deliver to the
Depositor a registered certificate for the number of Units representing the
entire capital of the Trust as more fully set forth in the Prospectus. The
Units, which are represented by certificates ("Certificates"), will be offered
to the public by the Prospectus upon the effectiveness of the Registration
Statement.
The duties of the Trustee, which are ministerial in nature, will
consist primarily of crediting the appropriate accounts with interest received
by the Trust and with the proceeds from the disposition of obligations held in
the Trust and the distribution of such interest and proceeds to the Unit holders
of that Trust. The Trustee will also maintain records of the registered holders
of Certificates representing an interest in each of the Trusts and administer
the redemption of Units by such Certificate holders and may perform certain
administrative functions with respect to an automatic investment option.
Generally, obligations held in the Fund may be removed therefrom by the
Trustee only upon redemption prior to their stated maturity, at the direction of
the Depositor in the event of an advance refunding or upon the occurrence of
certain other specified events which adversely affect the sound investment
character of the Fund, such as default by the issuer in payment of interest or
principal on the obligation and no provision for payment is made therefor either
pursuant to the portfolio insurance in the case of trusts denominated as
"Insured" or otherwise and the Depositor fails to instruct the Trustee, within
thirty (30) days after notification, to hold such obligation.
Prior to the termination of the Fund, the Trustee is empowered to sell
Bonds, from a list furnished by the Depositor, only for the purpose of redeeming
Units tendered to it and of paying expenses for which funds are not available.
The Trustee does not have the power to vary the investment of any Unit holder in
the Fund, and under no circumstances may the proceeds of sale of any obligations
held by the Fund be used to purchase new obligations to be held therein.
Article 9-A of the New York Tax Law imposes a franchise tax on business
corporations, and, for purposes of that Article, Section 208(1)(d) defines the
term "corporation" to include, among other things, "any business conducted by a
trustee or trustees wherein interest or ownership is evidenced by certificate or
other written instrument."
The Regulations promulgated under Section 208 provide as follows:
(b) The term corporation includes...any business conducted by
a trustee or trustees wherein interest or ownership is
evidenced by certificate or other written instrument.
(2) A business conducted by a trustee or trustees in which
interest or ownership is evidenced by certificate or other
written instrument includes, but is not limited to, an
association commonly referred to as a business trust or
Massachusetts trust. In determining whether a trustee or
trustees are conducting a business, the form of the agreement
is of significance but is not controlling. The actual
activities of the trustee or trustees, not their purposes and
powers, will be regarded as decisive factors in determining
whether a trust is subject to tax under Article 9-A of the Tax
Law. The mere investment of funds and the collection of income
therefrom with incidental replacement of securities and
reinvestment of funds, does not constitute the conduct of a
business in the case of a business conducted by a trustee or
trustees. 20 NYCRR 1-2.5(b).
New York cases dealing with the question of whether a trust will be
subject to the franchise tax have also delineated the general rule that where a
trustee merely invests funds and collects and distributes the income therefrom,
the trust is not engaged in business and is not subject to the franchise tax.
Burrell v. Lynch, 274 A.D. 347, 84 N.Y.S.2d 171 (3rd Dept. 1948), order
resettled, 274 A.D. 1073, 85 N.Y.S.2d 705 (3rd Dept.1949).
In an opinion of the Attorney General of the State of New York, 47 N.Y.
Att'y. Gen. Rep. 213 (Nov. 24, 1942), it was held that where the trustee of an
unincorporated investment trust was without authority to reinvest amounts
received upon the sales of securities and could dispose of securities making up
the trust only upon the happening of certain specified events or the existence
of certain specified conditions, the trust was not subject to the franchise tax.
See also Fibreboard Asbestos Compensation Trust (Advisory Opinion) Commission of
Taxation and Finance, TSB-A-97(3) and TSB-A-97(1)I, January 21, 1997, CCH NY St.
Tax Rep.P. 402-649; and Petition of Richards, TSB-A-94(2)I, Commissioner of
Taxation and Finance, February 1, 1994, CCH 1993-1994 NY New Matters Transfer
Binder atP. 401-477.
In the instant situation, the Trustee is not empowered to, and we
assume will not, sell obligations contained in the corpus of the Fund and
reinvest the proceeds therefrom. Further, the power to sell such obligations is
limited to circumstances in which the creditworthiness or soundness of the
obligation is in question or in which cash is needed to pay redeeming Unit
holders or to pay expenses, or where the Fund is liquidated pursuant to the
termination of the Indenture. Only in circumstances in which the issuer of an
obligation attempts to refinance it can the Trustee exchange an obligation for a
new security. In substance, the Trustee will merely collect and distribute
income and will not reinvest any income or proceeds, and the Trustee has no
power to vary the investment of any Unit holder in the Fund.
Under Subpart E of Part I, Subchapter J of Chapter 1 of the Internal
Revenue Code of 1986, as amended (the "Code"), the grantor of a trust will be
deemed to be the owner of the trust under certain circumstances, and therefore
taxable on his proportionate interest in the income thereof. Where this Federal
tax rule applies, the income attributed to the grantor will also be income to
him for New York income tax purposes. Ruling, Department of Taxation and
Finance, dated October 22, 1936).
By letter, dated today, Messrs. Chapman and Cutler, counsel for the
Depositor, rendered their opinion that each Unit holder of a Trust will be
considered as owning a share of each asset of that Trust in the proportion that
the number of Units held by such holder bears to the total number of Units
outstanding and the income of a Trust will be treated as the income of each Unit
holder of that Trust in said proportion pursuant to Subpart E of Part I,
Subchapter J of Chapter 1 of the Code.
Based on the foregoing and on the opinion of Messrs. Chapman and
Cutler, counsel for the Depositor, dated today, upon which we specifically rely,
we are of the opinion that under existing laws, rulings, and court decisions
interpreting the laws of the State and City of New York:
1. The Trust will not constitute an association taxable as a
corporation under New York law, and, accordingly, will not be subject to tax on
its income under the New York State franchise tax or the New York City general
corporation tax.
2. The income of the Trust will be treated as the income of the
Unitholders under the income tax laws of the State and City of New York.
3. Unit holders who are not residents of the State of New York are not
subject to the income tax law thereof with respect to any interest or gain
derived from the Fund or any gain from the sale or other disposition of the
Units, except to the extent that such interest or gain is from property employed
in a business, trade, profession or occupation carried on in the State of New
York.
In addition, we are of the opinion no New York State stock transfer tax
will be payable in respect of any transfer of the Certificates by reason of the
exemption contained in paragraph (a) of Subdivision 8 of Section 270 of the New
York Tax Law.
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We hereby consent to the filing of this opinion letter as an exhibit to
the Registration Statement relating to the Units and to the use of our name and
the reference to our firm in the Registration Statement and in the Prospectus.
Very truly yours,
WINSTON & STRAWN
