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of Special Tax School District Number Revenue Bonds, Series 1964, are eligible One, Broward County, Florida, are eli- for purchase, dealing in, underwriting gible for purchase, dealing in, under- and unlimited holding by National writing and unlimited holding under Banks. paragraph Seventh of 12 U.S.C. 24.
(29 F.R. 8470, July 7, 1964) (29 F.R. 7594, June 13, 1964) § 1.142 City of Atlanta and Fulton § 1.143 Revised Ruling on the Music County Recreation Authority
Center Lease Company, Los Angeles, (Georgia) Revenue Bonds, Series California. 1964
(a) Request. The Comptroller of the (a) Request. The Comptroller of the Currency has been requested to reconCurrency has been requested to rule that sider an earlier ruling, issued on July 18, the $18,000,000 City of Atlanta and Ful- 1962, and published at $ 1.113, that bonds ton County Recreation Authority of the Music Center Lease Company, Los (Georgia), Revenue Bonds, Series 1964, Angeles, California, are ineligible for inare eligible for purchase, dealing in, un- vestment by National Banks under paraderwriting and unlimited holding by Na- graph Seventh of 12 U.S.C. 24. tional Banks under paragraph Seventh (b) Opinion. (1) The Music Center of 12 U.S.C. 24.
Lease Company is a nonprofit corpora(b) Opinion. (1) The proceeds from tion acting for Los Angeles County whose the sale of these bonds will be used to assets and net revenue, after discharge construct an athletic stadium in the City of its bonds or other evidences of inof Atlanta, Georgia. The Authority, a debtedness, will be dedicated to LOS body corporate and politic, was created Angeles County. for this purpose in 1960 by a special act (2) The County of Los Angeles has of the General Assembly of the State of leased to the Music Center Lease ComGeorgia. Pursuant to the authorization pany for a period of 30 years certain contained in the State Constitution and property in the civic center area of downthe special the City of Atlanta and town Los Angeles. The lease company the County of Fulton have entered into a will construct, in accordance with plans contract with the Authority. Under this and specifications furnished by the contract, the City has unconditionally County, a pavilion and related facilities undertaken to pay the Authority sums which it will in turn lease back to the sufficient to pay the principal of and in- County for a period of 30 years. These terest on these bonds as they mature. facilities are for the use of the public as Payments so made by the City are to be an auditorium and music center. The used solely for the payment of the prin- cost of construction is estimated at $18,cipal of and interest on these bonds. The 850,000 and will be financed by $6,000,000 City has also undertaken to levy such in contributions and $13,730,000 of leasetaxes as may be required to enable it to hold mortgage bonds. The bonds will fulfill its agreement. The County, in have a serial maturity beginning with turn, has agreed to reimburse the City $30,000, due in 1965 and gradually into the extent of one-third of each pay- creasing to $825,000 in 1991, the final ment made by the City pursuant to the maturity. contract.
(3) The basic security supporting the (2) The City of Atlanta, a political bonds is the lease to the County for the subdivision of the State of Georgia, pos- use of the pavilion, at an annual rental sessing resources sufficient to justify of $845,000 upon completion, which is faith and credit has, as authorized by the estimated to be November 1, 1964. Constitution and laws of Georgia, thus These bonds are further secured by all pledged its full faith and credit to make buildings and improvements constructed payments to the Authority of amounts on the above-described land. The paywhich will be sufficient to provide for all ments from the County should be suffirequired payments in connection with cient to cover the interest on the bonds these bonds.
and amortize the principal upon matu(c) Ruling. Following the principles rity. It now appears that there is suffiand definitions set forth in § 1.3 (d) and cient demand for these bonds such as (e), it is our conclusion that the $18,- would enable a bank to liquidate its hold000,000 City of Atlanta and Fulton ings with reasonable promptness at a County Recreation Authority (Georgia), price that corresponds reasonably to its
fair value. Therefore, there is evidence for a bank to make a determination that the obligor will be able to perform all that it undertakes to perform in connection with the security, including all debt service requirements.
(c) Ruling. It is our conclusion that a bank may in these circumstances determine that there is adequate evidence that this nonprofit company will be able to perform all that it undertakes to perform and that the Leasehold Mortgage Bonds of the Music Center Lease Company, Los Angeles, California, meet the requirements of $ 1.5(a) and are eligible for investment by National Banks under the provisions and subject to the 10 percent limitation of paragraph Seventh of 12 U.S.C. 24. (29 F.R. 12299, Aug. 27, 1964) § 1.144 Fresno City-County Community
and Convention Center Authority
Revenue Bonds. (a) Request. The Comptroller of the Currency has been requested to rule that the $8,500,000, Revenue Bonds, Series A, of the Fresno City-County Community and Convention Center Authority, California are eligible for purchase, dealing in, underwriting and unlimited holding by National Banks under Paragraph Seventh of 12 U.S.C. 24.
(b) Opinion (1) The proceeds from the sale of these bonds will be used to purchase land located three blocks from the new eighty-five acre shopping mall in the center of Fresno, and to construct thereon a Community and Convention Center. The Authority is a public entity separate and apart from the City of Fresno and the County of Fresno which was created by a Joint Exercise of Powers Agreement by said city and county as prescribed by California law. Pursuant to the authorization contained in the laws of California and in the above described Agreement, the City of Fresno has entered into a forty-year lease with the Authority whereby the City unconditionally agrees to pay scheduled rentals which will be sufficient in each year to pay principal and interest on these bonds as such comes due. The City also agrees to pay all other charges, carry insurance, maintain the property and to provide all utilities, maintenance and management for the Community and Convention Center.
(2) As a “Charter City" under California law, Fresno may levy unlimited taxes for debt or operational purposes. The County of Fresno agrees to contribute annually $170,000 to the City as long as the Authority has outstanding bonds but in no event for a period longer than thirty years in consideration of the City operating the facilities for the benefit of the inhabitants of the entire County. The City of Fresno, a political subdivision of the State of California, which possesses resources sufficient to justify faith and credit, has, as authorized by the constitution and laws of California, thus pledged its full faith and credit to make payments to the Authority of amounts which will be sufficient to provide for all required payments in connection with these bonds.
(c) Ruling. Following the principals and definitions set forth in § 1.3 (d) and (e), it is our conclusion that the $8,500,000 Revenue Bonds, Series A of the Fresno City-County Community and Convention Center Authority, California, are eligible for purchase, dealing in, underwriting and unlimited holding by National Banks. [29 F.R. 12299, Aug. 27, 1964] § 1.145 Columbia Storage Power Ex
change Revenue Bonds. (a) Request. The Comptroller of the Currency has been requested to rule on the eligibility of the $320,700,000 Columbia Storage Power Exchange Revenue Bonds of the Columbia Storage Power Exchange for investment by National Banks pursuant to Paragraph Seventh of 12 U.S.C. 24, and for investment by state banks which are members of the Federal Reserve System pursuant to 12 U.S.C. 335.
(b) Opinion. (1) Pursuant to a treaty dated January 17, 1961, between Canada and the United States, Canada is entitled to one-half of the increase in dependable capacity and average annual usable energy in the United States resulting from the construction and operation of three storage dams in British Columbia Canada has agreed to sell this Entitlement to the Columbia Storage Power Exchange (CSPE) for $254.4 million for a term of years expiring 30 years from the respective dates on which the storage dams are required to be fully operative for power purposes.
(2) CSPE was organized on May 11, ligated to pay to the participant, for pay1964, under the nonprofit, nonstock cor- ment to CSPE an amount of cash equal poration law of the State of Washington to the amount by which such payments to act as the single purchaser of the Ca- are reduced. Beginning April 1969, the nadian Entitlement for the benefit and aggregate annual payments to CSPE are with the approval of three Public Utility required to be sufficient to pay principal Districts in the State of Washington
and interest on these Bonds and the exwhich own hydroelectric projects on the penses of CSPE. In the event that one main stream of the Columbia River. The or more participants fail or refuse to corporate purposes of CSPE are limited make any payment to CSPE and such to the execution, performance and en
failure continues for 60 days, each other forement of the contracts and inden- participant's payment will be automatitures necessary to make a single pur
cally increased to make up the difference, chase of the Canadian Entitlement, to provided such increase is not in excess of incur indebtedness necessary to finance
25 percent of its original participation. such purchase, and to dispose of the
(c) Ruling. It is the conclusion of Canadian Entitlement under such ar
this Office that a bank may in these cirrangements as may be necessary to retire
cumstances determine that there is adesuch indebtedness and pay the necessary
quate evidence that this obligor will be incidental expenses of the corporation.
able to perform all that it undertakes to (3) The proceeds from the sale of the perform, including all debt service reBonds will be used by CSPE to purchase
quirements, and that the 1964 Revenue the Canadian Entitlement and to pay the
Bonds of the Columbia Storage Power estimated corporate expenses of CSPE
Exchange, East Winatehee, Washingand interest on the Bonds to and includ- ton, meet requirements of $ 1.5(a) and, ing April 1, 1969. As security for these
therefore, are eligible for investment by Bonds, CSPE has entered into Canadian
National Banks under the provisions and Entitlement Exchange Agreements with
subject to the 10 percent limitation of the Bonneville Power Administrator act
Paragraph Seventh of 12 U.S.C. 24, and ing on behalf of himself and the United
for investment by state banks which are States Government, and participants
members of the Federal Reserve System consisting of 14 utility districts, 11 mu
pursuant to 12 U.S.C. 335. nicipalities, 12 cooperatives and four [29 F.R. 12298, Aug. 27, 1964) utility companies. The Exchange Agreements provide for the transfer and as
§ 1.146 School Building Revenue signment by CSPE of 100 percent of the
Bonds, Series of 1964, of the Corry Canadian Entitlement to the participants
Area Schools Authority, Erie and on a percentage share basis and the
Warren Counties, Pennsylvania. transfer and assignment by the partici- (a) Request. The Comptroller of the pants of the Canadian Entitlement to the Currency has been requested to rule that Bonneville Power Administrator in ex- the $570,000 School Building Revenue change for specified annual amounts of Bonds, Series of 1964, of the Corry Area capacity and energy to be made available
Schools Authority, Erie and Warren during the period from April 1, 1968, Counties, Pennsylvania, are eligible for through March 31, 2003. The Exchange
purchase, dealing in, underwriting and Agreements provide that the obligation unlimited holding by National Bank of the Administrator to make available under the provisions of Paragraph such capacity and energy to the partici- Seventh of 12 U.S.C. 24. pants is unconditional and is not affected (b) Opinion. (1) The proceeds of the by any failure by Canada to construct, bonds will be used for additions and immaintain or operate the storage dams.
provements to the existing senior high In the case of certain emergencies, the school building. The Corry Area Schools Administrator may interrupt or reduce Authority is a body corporate and politic deliveries of capacity or energy to a par- organized under the Municipal Authoriticipant and not be liable for damage ties Act of Pennsylvania pursuant to sustained by a participant as a result. resolutions of the School Districts of the If for any other reason the Adminis
City of Corry, Borough of Elgin, Towntrator does not make capacity or energy ships of Concord, Wayne, Columbus, and available to a participant, payments by Spring Creek. The Authority has enthe participant to CSPE shall be reduced
tered into a lease agreement with each accordingly and the Administrator is ob
of the School Districts pursuant to which the Districts have agreed to deposit in the in prior rulings of this Office, that the debt service fund of the Authority $570,000 School Building Revenue Bonds, amounts equal to the average annual Series of 1964, of the Corry Area Schools principal and interest requirements of Authority, Erie and Warren Counties, this Series of Bonds as well as the
Pennsylvania, are "public securities” as amount necessary to cover annual ad- set forth in $ 1.3(e) and are, therefore, ministrative expenses of the Authority eligible for purchase, dealing in, underin connection with this issue of bonds. writing and unlimited holding under
(2) School Districts in the Common- Paragraph Seventh of 12 U.S.C. 24. wealth of Pennsylvania may enter into
[29 F.R. 12300, Aug. 27, 1964) long-term leases for school buildings if all obligations thereunder can be met
§ 1.147 Merced River Development from “current revenues,” which the
Revenue Bonds. Supreme Court of Pennsylvania has de- (a) Request. The Comptroller of the fined as being taxes for the ensuing year Currency has been requested to rule that and all liquid assets, such as delinquent the $36 million Merced Irrigation Distaxes, licenses, appropriations from the trict, California, Merced River DevelopCommonwealth, fines and other revenues ment Revenue Bonds are eligible for inwhich, in the judgment of the authori- vestment by National Banks within the ties of the School Districts are collectible. limitations of Paragraph Seventh of 12 Under the Public School Code of 1949, U.S.C. 24. School Districts are permitted to impose (b) Opinion (1) The Merced Irrian annual tax on all taxable real estate
gation District organized in 1919 in the of sufficient millage to provide funds to San Joaquin Valley, California, covers pay rentals due any municipal authority, an area of 163,864 acres of which 110,401 and the Commonwealth of Pennsylvania acres are irrigated. Proceeds of the $36 may render financial assistance to the million bonds will be used to enlarge the School Districts by means of a system Exchequer Dam, so as to utilize the water of reimbursement in the current fiscal of the Merced River to increase the water year, based on expenditures of the School storage, produce hydroelectric power Districts made in the preceding fiscal irrigate additional land, and improve year, as prescribed by a certain formula.
flood control. A total expenditure of In addition, Pennsylvania law prescribes $130 million has been authorized to fithat where any School District fails to nance this development. pay rental due a Municipal Authority (2) These bonds will be secured by pursuant to a lease, the State Superin- revenues accruing under a power contendent of Public Instructions may notify tract which provides for the sale of all such District of its obligation, withhold
hydroelectric power generated to the out of any State appropriation due such Pacific Gas and Electric Company. UnDistrict an amount equal to the amount der the power contract which becomes of rental owing and pay such amount effective upon “the full operation date" to the Municipal Authority.
or July 1, 1970, whichever is earlier, P. (3) The bonds of the Authority are the G. & E. obligates itself to pay $815 thougeneral obligations of a public authority sand semi-annually to cover debt service of the Commonwealth of Pennsylvania. on the bonds plus an additional $22,500 Its resources include the obligation of monthly to cover operating and maintethe School Districts to make rental pay- nance expenses until July 1, 2014, ments which will be sufficient to provide
whether or not the project is operating. for all required payments in connection (c) Ruling. A National Bank may with the bonds. These lease rental obli- in these circumstances prudently detergations are supported by the taxing mine that there is adequate evidence powers of the School Districts and are that the District will be able to perform buttressed by the financial assistance of all that it undertakes to perform and the Commonwealth of Pennsylvania, and that the $36 million Merced Irrigation supervision as to payment of rentals by District, California, Merced River Dethe State Superintendent of Public In- velopment Revenue Bonds meet the restructions. The Commonwealth has quirements of $ 1.5(a) and are eligible thus undertaken to provide for the pay- for investment by National Banks under ment of the obligations of its duly con- the provisions and subject to the 10 perstituted Authority.
cent limitation of Paragraph Seventh of (c) Ruling. It is our conclusion, 12 U.S.C. 24. therefore, based upon principles applied [29 F.R. 13568, Oct. 2, 1964)
§ 1.148 Oklahoma City Airport Trustees (3) The trustees have irrevocably Bonds.
pledged the full faith and credit of the (a) Request. The Comptroller of the
Trust to the payment of the principal Currency has been requested to rule that and interest on the subject bonds. The the Oklahoma City Airport Trustees
lease rental payments from the United Bonds, Series one through ten, are eligi
States Government, and the income ble for dealing in, underwriting, and un- from the operations of the three airports limited holding by National Banks under
make the Oklahoma City Airport Trust the provisions of Paragraph Seventh of an obligor possessing resources sufficient 12 U.S.C. 24.
to justify faith and credit. The bonds (b) Opinion. (1) The purpose of the
of the Trust are the general obligations Oklahoma City Airport Trust, which was
of a political subdivision of the State of established by a Trust indenture dated
Oklahoma as defined in § 1.3 (d) and (e). April 1, 1956, pursuant to Oklahoma law, (c) Ruling. It is the conclusion of is to provide financing for the construc
this Office that the subject bonds are tion of facilities now used and to be used "public securities” as set forth in § 1.3 as a permanent Aeronautical Center by (c), issued pursuant to 12 U.S.C. 24 the Federal Aviation Agency and to plan,
Paragraph Seventh, and are therefore develop and operate airports and air
eligible for dealing in, underwriting and navigation facilities for the use and ben- unlimited holding by National Banks. efit of Oklahoma City. The Trust estate, [29 F.R. 13798, Oct. 7, 1964) which consists primarily of leasehold rights demised to the trustee by the bene- § 1.149 Bonds of the Woods Hole, Marficiary, Oklahoma City, includes Will tha's Vineyard, and Nantucket Rogers Airport, Tulakes Airport, Cimar
Steamship Authority. ron Airport, and certain other real estate
(a) Request. The Comptroller of the and personal property.
Currency has been requested to rule on (2) The trustees have issued, pursu
the eligibility of the $150,000 Steamship ant to the foregoing Trust indenture,
Bonds dated March 1, 1961, and similar from July 1, 1956, to May 1, 1963, Okla
bonds of the Woods Hole, Martha's Vinehoma City Airport Trustees Bonds in ten
yard, and Nantucket Steamship Authorseries, with varying maturities all pay
ity for dealing in, underwriting and unable on parity of up to 27 years. The
limited holding by National Banks under bond-financed facilities of the Center
the provisions of Paragraph Seventh of have been leased to the United States
12 U.S.C. 24. Government whose rental obligations are
(b) Opinion (1) The Woods Hole, unconditional for a 20-year term, ending
Martha's Vineyard, and Nantucket June 30, 1983, with certain renewal
Steamship Authority, a body corporate options. This lease, which combines
and a public instrumentality of the nine earlier leases, provides the primary
Commonwealth of Massachusetts, was security for Series one through nine of
created by an Act of the Massachusetts the bonds. The rentals thereunder are
Legislature to succeed to the assets and payable at a rate sufficient to cover debt
liabilities of the old New Bedford, Woods service requirements over the life of each
Hole, Martha's Vineyard and Nantucket series of bonds with additional annual
Steamship Authority, and to provide payments being made for maintenance,
marine transportation between certain insurance and ground rental. Series ten
mainland ports and offshore islands in of the bonds is secured by a similar 20
Massachusetts. This new Authority, year lease with rental to begin on Jan
which has the power to issue bonds to uary 1, 1965. A secondary source of
finance ships, equipment, terminals, and funds pledged to the debt service require- its various other requirements, has isments of the bonds is the gross revenues sued $150,000 Steamship Bonds to proof the City's three airports leased to the
vide funds for the purpose of constructTrust from Oklahoma City. Under its
ing, equipping and furnishing offices for lease agreement with the Trust, Okla- the Authority at Woods Hole to replace homa City has agreed to provide, if offices of the old Authority in New necessary, from its general funds, all Bedford. costs of operation and maintenance of (2) If the annual income of the all the airport and facilities therein. Authority is not sufficient to meet the