WASHINGTON -- Columbus, Ohio, is poised to sell $27.12 million of tax-exempt refunding bonds tomorrow in a controversial transaction to prepay, at a discount, money it owes a state pension fund.

The transaction is controversial because federal officials and some lawyers have warned it could run afoul of 1986 tax law changes enacted to prohibit tax-exempt bond proceeds from being directly or indirectly used for pension funds and invested on an unrestricted basis

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