EXHIBIT 3.3
WINSTON & STRAWN
200 PARK AVENUE
NEW YORK, NY 10166-4193
November 16, 2000
Van Kampen Focus Portfolios Insured Income Trust, Series 76
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
Insured Income Trust, Series 76 (individually the "Trust" and in the aggregate
the "Trusts" or the "Fund") for purposes 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., an affiliate of the Depositor, 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 heretofore filed with the Securities and Exchange Commission (File
number 333-49542) under the Securities Act of 1933, as amended (the "Prospectus"
and the "Registration Statement"), the objectives of the Fund are the generation
of a high level of current income and the conservation of capital through a
diversified investment in a fixed portfolio primarily consisting of long-term
corporate debt securities. It is noted that no opinion is expressed herein with
regard to the Federal tax aspects of the bonds, the Fund, units of the Fund (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 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, along with the
policy purchased by the Depositor evidencing insurance guaranteeing timely
payment of principal and interest on some of the obligations comprising the
corpus of the Trusts as more fully set forth in the Prospectus and the
Registration Statement. All other obligations included in the deposit described
above will be covered by insurance obtained by the issuer of such obligations or
by a prior owner, which may be the Depositor prior to the Date of Deposit,
guaranteeing timely payment of principal and interest, or will be U.S. Treasury
obligations.
We understand that all insurance policies described in the preceding
paragraph, whether purchased by the Depositor, a prior owner or the issuer,
provide, 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 Trusts and, upon the receipt thereof, will deliver to the
Depositor a registered certificate for the number of Units representing the
entire capital of the Fund as more fully set forth in the Prospectus and the
Registration Statement. The Units, which are represented by certificates
("Certificates"), will be offered to the public 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 Fund and with the proceeds from the disposition of obligations held in
the Fund and the distribution of such interest and proceeds to the Unit holders.
The Trustee will also maintain records of the registered holders of Certificates
representing an interest in the Fund and administer the redemption of Units by
such Certificate holders and may perform certain administrative functions with
respect to an automatic reinvestment option and a conversion 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 obligations, and no provision for payment is made therefor
either pursuant to the portfolio insurance 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, on 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(l)(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 Dept1949).
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)(C) 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 credit-worthiness or soundness of the
issuer of the obligations is in question or in which cash is needed to pay
redeeming Unit holders or to pay expenses, or where the Fund is liquidated
subsequent 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. See TSB-M-78(9)(c), New York Department of
Taxation and Finance, June 23, 1978.
By letter, dated today, Messrs. Chapman and Cutler, counsel for the
Depositor, rendered their opinion that each Unit holder will be considered as
owning a share of each asset of the Fund in the proportion that the number of
Units held by such holder bears to the total number of Units outstanding and the
income of the Fund will be treated as the income of each Unit holder 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 Fund 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 Fund will be treated as the income of the
Unit holders under the income tax laws of the State and City of New
York; and
3. Unit holders who are not residents of the State of New York
are not subject to the income tax laws 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.
We hereby consent to the filing of this Opinion 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
