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EXHIBIT 3.3
(ON ORRICK, HERRINGTON & SUTCLIFFE, LLP LETTERHEAD)
OCTOBER 3, 2000
Nuveen Investments
333 W. Wacker Drive
Chicago, Illinois 60606
The Chase Manhattan Bank
Nuveen Administration Department
4 New York Plaza - 3rd Floor
New York, New York 10004-2413
Re: Nuveen Tax-Free Unit Trust - Series 1196
California Insured Trust 344
Dear Sirs:
We have acted as special California counsel for Nuveen Investments, as Depositor
of the above captioned trust(s) (each a "Trust"), in connection with the
issuance under the Trust Agreement dated October 3, 2000, among Nuveen
Investments, as Depositor, and The Chase Manhattan Bank, as Trustee, of units of
fractional undivided interest in each Trust (the "Units") in exchange for
certain bonds, as well as "regular-way" and "when-issued" contracts for the
purchase of bonds (such bonds and contracts are hereinafter referred to
collectively as the "Securities").
In connection therewith, we have examined such corporate records, certificates
and other documents and such questions of law as we have deemed necessary or
appropriate for the purpose of this opinion, and, on the basis of such
examination, and upon existing provisions of the Revenue and Taxation Code of
the State of California, with respect to each Trust, we are of the opinion that:
1.--The Trust is not an association taxable as a corporation and the income of
the Trust will be treated as the income of the unitholders under the income tax
laws of California.
2.--Interest on the underlying Securities (which may include bonds or other
obligations issued by the governments of Puerto Rico, the Virgin Islands, Guam,
or the Northern Mariana Islands) which is exempt from tax under California
personal income tax and property tax laws when received by the Trust will, under
such laws, retain its status as tax-exempt interest when distributed to
unitholders. However, interest on the underlying securities attributed to a
unitholder which is a corporation subject to the California franchise tax laws
may be includable in such corporation's gross income for purposes of determining
its California franchise tax.
3.--Under California income tax law, each unitholder in the Trust will have a
taxable event when the Trust disposes of a security (whether by sale, exchange,
redemption, or payment at maturity) or when the unitholder redeems or sells
Units. Because of the requirement that tax cost basis be reduced to reflect
amortization of bond premium, under some circumstances a unitholder may realize
taxable gain when Units are sold or redeemed for an amount equal to, or less
than, their original cost. The total tax cost of each Unit to a unitholder is
allocated among each of the bond issues held in the Trust (in accordance with
the proportion of the Trust comprised by each bond issue) in order to determine
his per unit tax cost for each bond issue; and the tax cost reduction
requirements relating to amortization of bond premium will apply separately to
the per unit cost of each bond issue. Unitholders' bases in their Units, and the
bases for their fractional interest in each Trust asset, may have to be adjusted
for their pro rata share of accrued interest received, if any, on securities
delivered after the unitholders' respective settlement dates.
4.--Under the California personal property tax laws, bonds (including the
Securities) or any interest therein is exempt from such tax.
5.--Proceeds paid under an insurance policy, if any, issued to the Trustee of
the Trust with respect to the Securities which represent maturing interest on
defaulted obligations held by the Trustee will be exempt from California
personal income tax if, and to the same extent as, such interest would have been
so exempt if paid by the issuer of the defaulted obligations.
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6.--Under Section 17280(b)(2) of the California Revenue and Taxation Code,
interest on indebtedness incurred or continued to purchase or carry Units of the
Trust is not deductible for the purposes of the California personal income tax.
While there presently is no California authority interpreting this provision,
Section 17280(b)(2) directs the California Francise Tax Board to prescribe
regulations determining the proper allocation and apportionment of interest
costs for this purpose. The Franchise Tax Board has not yet proposed or
prescribed such regulations. In interpreting the generally similar Federal
provision, the Internal Revenue Service has taken the position that such
indebtedness need not be directly traceable to the purchase or carrying of Units
(although the Service has not contended that a deduction for interest on
indebtedness incurred to purchase or improve a personal residence or to purchase
goods or services for personal consumption will be disallowed). In the absence
of conflicting regulations or other California authority, the California
Franchise Tax Board generally has interpreted California statutory tax
provisions in accord with Internal Revenue Service interpretations of similar
Federal provisions.
Opinions relating to the validity of securities and the exemption of interest
thereon from State of California income tax are rendered by bond counsel to the
issuing authority at the time securities are issued and we have relied solely
upon such opinions, or, as to securities not yet delivered, forms of such
opinions contained in official statements relating to such securities. Except in
certain instances in which we acted as bond counsel to issuers of securities,
and as such made a review of proceedings relating to the issuance of certain
securities at the time of their issuance, we have not made any review of
proceedings relating to the issuance of securities or the bases of bond
counsels' opinions.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement (File No. 333-46604) relating to the Units referred to
above and to the use of our name and to the reference to our firm in said
Registration Statement and in the related Prospectus.
Very truly yours,
ORRICK, HERRINGTON & SUTCLIFFE, LLP
(BY KENNETH G. WHYBURN)
