quiring a site appropriate for a school building, erecting thereon a suitable school building and leasing the same to the School City of Elkhart, a school district and political subdivision of the State of Indiana.

(2) The bonds mature serially from January 1967 to January 1989. They are payable from revenues derived from a net lease of the facilities by the Corporation to the School City of Elkhart. Said net lease rentals are payable from a sinking fund derived by the levy of unlimited ad valorem property taxes by the School City of Elkhart. The School Building Corporation Act requires a school city to levy sufficient taxes each year to pay the annual lease rental. Rental payments under the lease are in an amount determined to be sufficient to pay the debt service and administrative expenses in connection with the bond issue. The Corporation has entered into a trust agreement mortgaging the school premises with the St. Joseph Valley Bank in Elkhart, as trustee, under the terms of which lease rentals will be paid to the trustee for deposit in a sinking fund to pay interest and principal on the bonds.

(3) The School City of Elkhart, a political subdivision of the State of Indiana -possessing resources sufficient to justify faith and credit, has, as authorized by the laws of Indiana, pledged its full faith and credit to make payments to the Corporation of amounts which will be sufficient to provide for all required payments in connection with these bonds.

(c) Ruling. It is the conclusion of this Office that the $4,675,000 First Mortgage Bonds issued by the Elkhart High School Building Corporation, as set forth above, are "public securities" as defined in § 1.3 (c), issued pursuant to Paragraph Seventh of 12 U.S.C. 24, and are therefore eligible for dealing in, underwriting, and unlimited holding by National Banks.

[29 F.R. 14435, Oct. 21, 1964]

§ 1.158

Mobile County, Ala., Board of School Commissioners Capital Outlay School Warrants.

(a) Request. The Comptroller of the Currency has reconsidered his ruling with respect to whether the $1,500,000 Mobile County, Ala., Board of School Commissioners Capital Outlay School Warrants dated February 1, 1961, and similar warrants issued by Board of School Commissioners pursuant to the same statutory authority are eligible for dealing in, underwriting and unlimited holding by National Banks pursuant to the provisions of paragraph seventh of 12 U.S.C. 24.

(b) Opinion. The warrants were is sued by the Board of School Commissioners of Mobile County, a public instrumentality, pursuant to the Alabama School Warrant Act. They mature at various maturity dates from February 1962 until 1979, being callable after February 1966, in inverse numerical order on any interest payment date, and they are payable from the proceeds of a county-wide ad valorem tax on the assessed valuation of all taxable property in Mobile County. This tax has been duly authorized at elections in said county to be levied annually until 1991, and it has been irrevocably pledged for payment of the principal and interest on the warrants.

(c) Rulings. Upon reconsideration, it is the conclusion of this Office that the $1,500,000 Mobile County Board of School Commissioners Capital Outlay School Warrants and similar warrants issued by Board of School Commissioners pursuant to the same statutory authority and which are supported by the same payment and security provisions are "public securities" as defined in § 1.3(c) issued pursuant to paragraph seventh of 12 U.S.C. 24, and are therefore eligible for dealing in, underwriting, and unlimited holding by National Banks.

[30 F.R. 3856, Mar. 25, 1965]

§ 1.159

Bonds of the Dormitory Authority of the State of New York. (a) Request. The Comptroller of the Currency has been requested to rule as to the application of the ten percent investment limitation of paragraph Seventh of 12 U.S.C. 24 to bonds issued by the Dormitory Authority of the State of New York and whether this limitation may be separately applied to the aggregate bonds of each college for which the Authority has issued bonds, or whether, all bonds issued by the Authority for various colleges in New York must be combined in applying this limitation.

(b) Opinion. (1) As was noted in our ruling of September 14, 1962, relating to the eligibility for investment by National Banks in the $8,630,000 Dormitory Authority of the State of New York, 3.60 percent Dormitory Revenue Bonds of 1957 (State University of New York), (§ 1.115) the Authority is a public benefit corporation, created in 1944 to provide dormitories and related facilities at colleges in the State of New York. The bonds issued by the Authority to help finance the construction of dormitories and related facilities of a particular college are, in each instance, payable solely from the revenue derived from the lease of such facilities by the Authority to the particular college.

(2) The Authority, although the issuer and nominal obligor of these bonds, is a conduit through which the individual colleges make payment of the bonds issued for their respective benefit and for which they are the sole source of repayment. Whether the bonds issued for a particular college are eligible for investment by National Banks must be determined by an analysis of the ability of the

particular college to perform all that it undertakes to perform in connection with the bonds, including all debt service requirements, and of the marketability of such bonds as required by § 1.5.

(c) Ruling. Accordingly, in applying the ten percent investment limitation of paragraph Seventh of 12 U.S.C. 24 and of 1.6, to bonds issued by the Dormitory Authority of the State of New York, such limitation may be applied separately to bonds issued for a particular college when such bonds are repayable solely by that particular college. In these circumstances, the college is the obligor within the meaning of § 1.6(a). [29 F.R. 15077, Nov. 7, 1964]

§ 1.160 Export-Import Bank Portfolio Fund Participation Certificates.

(a) Request. The Comptroller of the Currency has been requested to rule that various series of Export-Import Bank Portfolio Fund Participation Certificates, are eligible for purchase without limit by national banks.

(b) Opinion. This Office has previously ruled (§ 7.4 of this title) that Participation Certificates, Series "A" of 1962, which were issued and guaranteed by the Export-Import Bank of Washington, were eligible for purchase without limitation by national banks.

(c) Ruling. Where Participation Certificates are issued and guaranteed by the Export-Import Bank of Washington, which is an independent agency of the United States Government, such certificates are, under applicable statutes and regulations, eligible for purchase without limitation by national banks. [29 F.R. 15693, Nov. 24, 1964]

§ 1.161 City of Anaheim (California) Stadium, Inc. Lease-Rental Bonds.

(a) Request. The Comptroller of the Currency has been requested to rule on the eligibility of the $21,500,000 City of Anaheim Stadium, Inc. Lease-Rental Bonds for investment by national banks under the provisions of paragraph Seventh of 12 U.S.C. 24.

(b) Opinion. (1) The City of Anaheim Stadium, Inc., a nonprofit corporation acting for the City of Anaheim, Calif., was created to issue its leaserental bonds to finance the construction on leased land of a stadium, together with associated facilities, which is to be suitable for baseball, football and other outdoor sports events and exhibitions.

(2) The lease-rental bonds mature serially from April 1967, to April 2001, and their maturities run concurrently with the term of the lease agreement

commencing January 1967, and ending April 2001. The bonds are payable from revenues derived from a net lease of the stadium facilities by the corporation to the Ctiy of Anaheim and the City obligates itself generally to pay the lease rentals free and clear of all expenses or charges whatsoever and in an amount sufficient to pay in full the semiannual maturities of principal of and interest on the lease-rental bonds and all other reasonable expenses of the Corporation.

(c) Ruling. It is the conclusion of this Office that a national bank may in these circumstances determine that there is adequate evidence that the Corporation will be able to perform all that it undertakes to perform and that the $21,500,000 City of Anaheim Stadium, Inc. LeaseRental Bonds meet the requirements of § 1.5(a) of the Investment Securities Regulation, and are, therefore, eligible for investment by national banks under the provisions and subject to the ten percent limitation of paragraph Seventh of 12 U.S.C. 24.

[29 F.R. 17087, Dec., 15, 1964]

chusetts Port Authority Revenue Refunding and Improvement Bonds, dated July 1, 1964, for investment by national banks under the provisions of paragraph seventh of 12 U.S.C. 24.

(b) Opinion. (1) The Massachusetts Port Authority, a body corporate and a public instrumentality of the Commonwealth of Massachusetts, was created to assume and coordinate the control, operation and management of the Mystic River Bridge, Logan International Airport (Boston), Hanscom Field (Bedford) and certain Port properties in Boston, and to construct or acquire additional facilities when authorized by the legislature of the Commonwealth. The bonds were issued to redeem, on October 1, 1969, all of the then outstanding Authority Revenue Bonds, Series A, dated February 1, 1959, and to pay certain costs of extensions and improvements to the Airport and Port Properties of the Authority.

(2) The bonds mature serially from 1969 to 1989 and are payable from the tolls and revenues (over and above the costs of operation and maintenance) from the properties owned by the Authority. The Authority is obligated to fix and collect revenues for the use of its properties sufficient to pay the cost of maintaining, repairing and operating the properties and to pay the principal of and the interest on all bonds issued by the Authority as the same become due. The projections of revenues from the properties appear to be sufficient to pay the debt service and administrative expenses of the bond issue as well as the operating expenses of the properties.

(c) Ruling. It is the conclusion of this Office that a national bank may, in these circumstances, determine that there is adequate evidence that the Authority will be able to perform all that it undertakes to perform and that the $107,500,000 Massachusetts Port Authority Revenue Refunding and Improvement Bonds, dated July 1, 1964, meet the requirements of § 1.5(a) and, therefore, are eligible for investment by national banks under the provision and subject to the 10 percent limitation of paragraph Seventh of 12 U.S.C. 24.

[29 F.R. 18053, Dec. 19, 1964]

§ 1.163

State of Kansas Board of Regents Revenue Bonds.

(a) Request. The Comptroller of the Currency has been requested to rule regarding the application of the 10 percent investment limitation of paragraph Seventh of 12 U.S.C. 24 to revenue bonds issued by the Board of Regents of the State of Kansas. The inquiry is whether this limitation may be applied separately to the aggregate bonds of each college or university for which the Board of Regents has issued bonds, or whether, in applying this limitation, all bonds issued by the Board of Regents for the various colleges and universities subject to its control must be combined.

(b) Opinion. (1) The governing and control of State-owned colleges and universities in Kansas has been vested by law in the Board of Regents which appoints for each school a Chief Administrative Officer. The Board of Regents is authorized to issue revenue bonds to finance the construction of buildings at State-owned colleges and universities, and is obligated to fix, maintain, and collect such fees and charges for the use of such buildings as will produce revenues sufficient to pay the costs of operation, maintenance, and debt service, and to provide a reasonable reserve fund. The Board of Regents limits its liability in connection with a particular bond issue to the revenue generated by the building financed by that bond issue. The colleges and universities are agents for the Board of Regents and have no obligation to pay the debt service on such bonds.

(2) In our ruling of November 3, 1964, relating to the Bonds of the Dormitory Authority of the State of New York (§ 1.159), it was held that the 10 percent investment limitation of paragraph Seventh of 12 U.S.C. 24 may be applied separately to bonds issued for a particular college by the Authority because the Authority, although the issuer and nominal obligor of those bonds, is a conduit through which the individual colleges and universities make payment of the

bonds issued for their respective benefit and for which they are the sole source of repayment. As was noted in that ruling, the eligibility of such bonds issued for a particular college as investments for National Banks must be determined by an analysis of the ability of the particular college to perform all that it undertakes to perform in connection with the bonds, including all debt service requirements, and of the marketability of such bonds as required by § 1.5. In addition, it must also be noted that of the colleges and universities for which the Dormitory Authority issues bonds, one is the State University of New York, and all of the remaining are colleges and universities which are privately owned and supported. None of these schools are in any way subject to the control of the Authority. Each school is controlled and operated as a separate and independent economic unit. Moreover, each school is generally obligated to pay all expenses of maintaining the facilities financed by the bonds issued for it and to pay to the Authority rentals sufficient to cover debt service and administrative expenses in connection with their respective bond issues.

(c) Ruling. The colleges and universities under the administration of the Board of Regents of the State of Kansas have no obligation of their own with respect to the bonds issued by the Board. In order to meet debt service requirements in connection with bonds issued by it for a facility of a particular school, the Board of Regents covenants to maintain a schedule of fees and charges which will provide a fund sufficient to meet such debt service requirements. Accordingly, in applying the 10 percent investment limitation of paragraph Seventh of 12 U.S.C. 24 and of § 1.6 to revenue bonds issued by the Board of Regents of the State of Kansas, such limitation must be applied to the aggregate of all bonds issued by the Board of Regents. In these circumstances, the Board of Regents is the obligor within the meaning of § 1.6. [30 F.R. 2651, Mar. 2, 1965]

§ 1.164

Federal National Mortgage Association Participation Certificates. (a) Request. The Comptroller of the Currency has been requested to rule that all participation certificates issued by the Federal National Mortgage Association in a fiduciary capacity are eligible for dealing in, underwriting, and unlimited holding by national banks pursuant to the provisions of paragraph Seventh of 12 U.S.C. 24.

(b) Opinion. As was noted in our ruling of October 2, 1964 (12 CFR 1.155), the Federal National Mortgage Association is authorized to act in a fiduciary and representative capacity and, in accord with a related trust indenture, to issue participations or other instruments as might be appropriate for financing purposes. The Association is also authorized, in its corporate capacity, to obligate itself for the timely payment of interest and principal by means of a guaranty of such participations or other instruments as it may issue in a fiduciary capacity. Paragraph Seventh of 12 U.S.C. 24 provides that the limitations and restrictions contained therein as to dealing in, underwriting and purchasing for its own account investment securities by a national bank shall not apply to "obligations, participations, or other instruments of or issued by the Federal National Mortgage Association."

(c) Ruling. It is the conclusion of this Office that all certificates of participation issued by the Federal National Mortgage Association in a fiduciary capacity in accord with a related trust indenture are "public securities" as defined in § 1.3 (c) of this part and are therefore eligible for dealing in, underwriting, and unlimited holding by National Banks under paragraph Seventh of 12 U.S.C. 24.

[30 F.R. 7371, June 4, 1965]

terial provisions as said Act, for dealing in, underwriting, and unlimited holding by National Banks under paragraph Seventh of 12 U.S.C. 24.

(b) Opinion. (1) The Illinois Building Authority is a body corporate and politic, the principal purpose of which is to build and otherwise provide such hospital, housing, penitentiary, administrative, classroom, library, recreational, laboratory, office, and other such facilities for use by the State of Illinois as the General Assembly of that State declares to be in the public interest. The Authority may borrow money and issue and sell bonds payable from revenues derived from leases of these facilities to State agencies and to others. The Authority is required to establish charges, fees, and rentals sufficient to pay maintenance and operation, unless the lease otherwise provides, and all principal and interest on the bonds.

(2) The proceeds from the sale of the foregoing bonds along with certain other funds will pay for the cost of facilities built and otherwise provided by the Authority. The payment of principal and interest on these bonds are and will be secured by Authority revenues derived from the leasing of its facilities to the various agencies of the State of Illinois and, if necessary, to other tenants. Payment of rent by a State agency to the Authority will be from appropriations by the General Assembly of the State of Illinois. Revenues from a particular facility which are not required to service bonds issued for such facility will be placed annually into a reserve account and, to the extent necessary, used for the purpose of meeting debt service requirements of all bonds of the Authority.

(c) Ruling. It is the conclusion of this Office that the $25,000,000 Illinois Building Authority Revenue Bonds, series of April 1964, and the $34,730,000 Illinois Building Authority Revenue Bonds, series of June 1965, and similar bonds issued by the Illinois Building Authority pursuant to the same statutory authority and which are supported by the same payment and security provisions are "public securities" as defined in § 1.3 (c) of this part issued pursuant to paragraph Seventh of 12 U.S.C. 24, and are, therefore, eligible for dealing in, underwriting, and unlimited holding by National Banks.

[30 F.R. 8328, June 30, 1965]