§ 1.197

Urban Redevelopment Authority of Pittsburgh, Residential Land Reserve Fund Bonds.

(a) Request. The Comptroller of the Currency has been requested to rule that the $6 million Urban Redevelopment Authority of Pittsburgh, Residential Land Reserve Fund Bonds, 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 Urban Redevelopment Authority of Pittsburgh is a public pody, corporate and politic, created under the Urban Redevelopment Law of the Commonwealth of Pennsylvania, exercising the public powers of the Commonwealth as an agency thereof. It has authority to acquire property for redevelopment by purchase or by eminent domain, borrow money, issue bonds, cooperate with the city of Pittsburgh and to enter into contracts necessary or convenient to the exercise of its powers. The city of Pittsburgh is authorized under the Redevelopment Cooperation Law of the Commonwealth of Pennsylvania to do all things necessary or convenient to aid and cooperate in the redevelopment undertaken by the Authority including entering into agreements, incurring expenses, and appropriating funds.

(2) The city of Pittsburgh has entered into a cooperation agreement with the Authority to provide for the acquisition, improvement, and management of property for redevelopment through the establishment of a residential land reserve fund. The Authority proposes to issue these bonds to establish such a reserve fund. Under the cooperation agreement the City has agreed to pay the Authority, or its assignees, amounts which, together with other available funds, will be sufficient to meet the annual interest and principal payments on these bonds. The City, which possesses general powers of taxation, has thus committed its faith and credit in support of the bonds.

(c) Ruling. It is our conclusion, therefore, that the $6 million Urban Redevelopment Authority of Pittsburgh, Residential Land Fund Bonds, are general obligations of a State, or a political subdivision thereof, under paragraph Seventh of 12 U.S.C. 24, and, as such,

are eligible for purchase, dealing in, underwriting, and unlimited holding by national banks.

[32 F.R. 13805, Oct. 4, 1967]

§ 1.198 Visalia Area Hospital Authority Revenue Bonds (California).

(a) Request. The Comptroller of the Currency has been requested to rule that the $4,300,000 Visalia Area Hospital Authority Revenue Bonds 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 Visalia Area Hospital Authority is a public entity created pursuant to the laws of California by an agreement between the City of Visalia and Kaweah-Delta Hospital District to construct and finance hospital facilities to be leased to the City and to be subleased by the City to, and operated by, the District. The Authority is issuing these bonds for that purpose.

(2) Kaweah-Delta Hospital District is a municipal corporation created pursuant to the laws of California to provide hospital services within a district which includes the City of Visalia and a part of Tulare County. Under the law the District is managed by elected directors and may be financed by assessment on real and personal property within the District.

(3) Under separate lease rental agreements the City has unconditionally promised to pay annual rentals to the Authority in an amount sufficient to meet annual interest and principal payments on the bonds and the District has unconditionally promised to pay annual rentals to the City in amounts at least equal to the rental payments which the City has promised to make to the Authority. The City and the District, each of which possesses general powers of taxation, have thus each committed its faith and credit in support of the bonds.

(c) Ruling. It is our conclusion therefore, that the $4,300,000 Visalia Area Hospital Authority Revenue Bonds are general obligations of a State or a political subdivision thereof under paragraph Seventh of 12 U.S.C. 24 and accordingly are eligible for purchase, dealing in, underwriting and unlimited holding by national banks under paragraph Seventh of 12 U.S.C. 24.

[32 F.R. 15544, Nov. 8, 1967]

§ 1.199 Upland Civic Center Building Authority Revenue Bonds (California).

(a) Request. The Comptroller of the Currency has been requested to rule that the $1,080,000 Upland Civic Center Building Authority Revenue Bonds 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 Upland Civic Center Building Authority is a public entity created under the laws of California by an agreement between the City of Upland and the County of San Bernardino. Under this agreement the Authority is authorized to acquire land, construct and lease public buildings and to issue bonds to finance such projects. The Authority is issuing these bonds for the purpose of constructing a headquarters fire station and a new library which will be leased to the City. This construction represents the first stage of a planned Civic Center development.

(2) Under the lease rental agreement the City has unconditionally promised to pay annual rentals to the Authority in an amount sufficient to meet annual interest and principal payments on these bonds as well as other necessary expenses. The City, which possesses general powers of taxation has thus committed its faith and credit in support of the bonds.

(c) Ruling. It is our conclusion, therefore, that the $1,080,000 Upland Civic Center Building Authority Revenue Bonds are general obligations of a State or a political subdivision thereof under paragraph Seventh of 12 U.S.C. 24 and, accordingly, are eligible for purchase, dealing in, underwriting and unlimited holding by national banks under paragraph Seventh of 12 U.S.C. 24. [32 F.R. 15918, Nov. 21, 1967]

(b) Opinion. (1) The Parking Authority of the City of Upland is a public body corporate and politic created by the laws of California but authorized to function only upon a finding of need. The City Council has made the appropriate finding and, in accordance with the law, has declared itself to be the parking authority. Under the law a parking authority is authorized to issue revenue bonds to finance public parking facilities and may issue such bonds without obtaining the approval of the electors of the city where the bonds are issued to finance a project which is to be leased to the city and where the principal of and interest on the bonds are to be payable from rentals paid by the city under such lease. The Authority is issuing these bonds to finance the acquisition and construction of parking facilities which will be leased to the City and used to provide free public parking.

(2) Under the lease rental agreement the City has unconditionally promised to pay annual rentals to the Authority in an amount sufficient to meet annual interest and principal payments on these bonds as well as other necessary expenses. The City has also established a new business license tax, authorized under California law for the purpose of providing funds for the improvement of parking and business in specified areas, and proposes to pay a portion of the rentals from the proceeds of this tax. The lease specifically provides however that the City's obligation to pay rentals is a general obligation and is not limited to payment from any specific source. The City which possesses general powers of taxation has thus committed its faith and credit in support of the bonds.

(c) Ruling. It is our conclusion therefore that the $245,000 (1967) Parking Revenue Bonds of the Parking Authority of the City of Uplandare general obligations of a State or a political subdivision thereof under paragraph Seventh of 12 U.S.C. 24 and, accordingly, are eligible for purchase, dealing in, underwriting and unlimited holding by national banks.

[32 F.R. 15918, Nov. 21, 1967] § 1.201

Bergen County Sewer Authority (New Jersey).

(a) Request. The Comptroller of the Currency has been requested to rule that the bonds of the Bergen County Sewer

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Authority 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 Bergen County Sewer Authority, established under the laws of the State of New Jersey by a resolution of the Board of Chosen Freeholders of the County of Bergen, is a body politic and corporate and a governmental instrumentality of the State. The Authority has power under New Jersey law to finance, construct, acquire, and operate a sewer system within its district. For this purpose it has issued its bonds which are now outstanding in the amount of $34,962,000 and proposes to issue additional bonds in the amount of $3,630,000.

(2) A number of Bergen County municipalities have as authorized by New Jersey law entered into perpetual service contracts with the Authority. These contracts provide for the payment by the municipalities of service charges calculated, as required by law, to provide such amounts (in addition to other available funds) as will be required by the Authority for payments of principal and interest of any of its bonds or other obligations, operating expenses, maintenance of reserves, and to extinguish any existing deficits. These municipalities which possess general powers of taxation have thus committed their faith and credit in support of the bonds of the Authority.

(c) Ruling. It is our conclusion therefore that the bonds of the Bergen County Sewer Authority are general obligations of a State or a political subdivision thereof under paragraph Seventh of 12 U.S.C. 24 and, accordingly, are eligible for purchase, dealing in, underwriting, and unlimited holding by national banks. [32 F.R. 16391, Nov. 30, 1967]

§ 1.202 Carlsbad Building Authority Revenue Bonds (California).

(a) Request. The Comptroller of the Currency has been requested to rule on the eligibility of the $460,000 Carlsbad Building Authority Revenue Bonds for purchase, dealing in, underwriting and unlimited holding by national banks under paragraph Seventh of 12 U.S.C. 24.

(b) Opinion. (1) The Carlsbad Building Authority is a public entity created under the laws of California by an agree

ment between the City of Carlsbad and the County of San Diego. Under this agreement the Authority is authorized to acquire land, construct and lease public buildings and to issue bonds to finance such projects. The Authority is issuing these bonds for the purpose of constructing a civic center, which will be leased to the City and which will include facilities for City Offices, City Council Chambers and the Police.

(2) Under the lease rental agreement the City has unconditionally promised to pay annual rentals to the Authority in an amount sufficient to meet annual interest and principal payments on these bonds as well as other necessary expenses. The City which possesses general powers of taxation has thus committed its faith and credit in support of the bonds.

(c) Ruling. It is our conclusion, therefore, that the $460,000 Carlsbad Building Authority Revenue Bonds are general obligations of a State or a political subdivision thereof under paragraph Seventh of 12 U.S.C. 24 and, accordingly, are eligible for purchase, dealing in, underwriting and unlimited holding by national banks under paragraph Seventh of 12 U.S.C. 24.

[32 F.R. 17574, Dec. 8, 1967]

§ 1.203 Water and Sewer Improvement Bonds, Series 1967, of the Northwest Houston Water Supply Corp.

(a) Request. The Comptroller of the Currency has been requested to rule on the eligibility of the $2,200,000 Water and Sewer Improvement Bonds, Series 1967, of the Northwest Houston Water Supply Corp. for purchase, dealing in, underwriting and unlimited holding by national banks under paragraph Seventh of 12 U.S.C. 24.

(b) Opinion. (1) The Northwest Houston Water Supply Corp. was organized at the request and for the benefit of the City of Houston as a nonprofit water supply corporation under a provision of Texas law which authorizes the formation of such a corporation for the exclusive purpose of furnishing a water supply or sewer service or both to cities and others. The Corporation is authorized to issue bonds to finance the acquisition of water and sewer projects. A city is authorized by law to enter into a contract for the purchase of water and sewer systems

from such a corporation and to agree to make periodic payments to the corporation in amounts which together with other income of the corporation will be sufficient to pay the principal of and interest on the bonds of the corporation. The law also authorizes a city to provide for the levying of a tax to make such payments.

(2) The Corporation has entered into a contract with the City of Houston under which the Corporation will finance and construct a water and sewer system for a suburban area immediately adjacent to the City and the City will annex the area and purchase the system. Construction of the project will be assisted by a federal grant of $1 million. The Corporation is issuing these bonds to finance the remaining costs.

(3) In the purchase contract the City has unconditionally promised to make periodic payments to the corporation in amounts which will be sufficient to pay the principal of and interest on these bonds. The contract also provides that the periodic payments shall be payable from a continuing, direct annual ad valorem tax on all taxable property in the City sufficient to make such payments in each year and the City has by ordinance levied such a tax. The City which possesses general powers of taxation has thus committed its faith and credit in support of the bonds.

(c) Ruling. It is our conclusion, therefore, that the $2,200,000 Water and Sewer Improvement Bonds, Series 1967, of the Northwest Houston Water Supply Corp. are general obligations of a State or a political subdivision thereof under paragraph Seventh of 12 U.S.C. 24 and, accordingly, are eligible for purchase, dealing in, underwriting and unlimited holding by national banks.

[32 F.R. 17926, Dec. 15, 1967]

§ 1.204 Wisconsin University Building Corporation and the Wisconsin State Agencies Building Corporation.

(a) Request. The Comptroller of the Currency has been requested to consider whether the rulings of September 25, 1964, that bonds of the Wisconsin University Building Corporation and the Wisconsin State Agencies Building Corporation are public securities and therefore eligible for purchase, dealing in, underwriting, and unlimited holding by national banks (§§ 1.150 and 1.151) are now applicable with respect to outstand

ing and future bond issues of the two corporations.

(b) Opinion. (1) The State of Wisconsin has authorized The Regents of the University of Wisconsin, The Board of Regents of State Colleges and the Department of Public Welfare to enter into long-term lease rental agreements with a nonprofit corporation for the construction and financing of buildings and other improvements related to activities under their control.

(2) The Wisconsin University Building Corporation is a nonprofit corporation organized under the provisions of the Wisconsin Nonstock Corporation law for the purpose of acquiring, financing and improving real estate and leasing such improved real estate to the University of Wisconsin. The Wisconsin State Agencies Building Corporation is also a nonprofit corporation organized under the provisions of the same law for the purpose of constructing buildings and other improvements for University, State college, and general State purposes.

(3) The proceeds of the bonds issued and to be issued by these corporations are for the construction of facilities to be leased to the University, the State colleges or the Department of Public Welfare, respectively, on long-term leases. Rental payments under the leases are in an amount determined to be sufficient to pay the principal of and interest on the bonds issued in connection with the project. While funds from various sources are available for the payment of the lease rentals the law specifically provides that the State shall be liable and may be sued on contract for accrued rentals and for any other default under any such lease.

(4) The State of Wisconsin, which possesses general powers of taxation, has thus pledged its full faith and credit to make payments to the corporations of amounts sufficient to provide for all required payments in connection with these bonds.

(c) Ruling. It is our conclusion, therefore, that bonds of the Wisconsin University Building Corporation and the Wisconsin State Agencies Building Corporation are general obligations of the State of Wisconsin under paragraph Seventh of 12 U.S.C. 24 and, accordingly, are eligible for purchase, dealing in, underwriting, and unlimited holding by national banks.

[32 F.R. 20945, Dec. 29, 1967]

§ 1.205

Los Angeles Convention and Exhibition Center Authority.

(a) Request. The Comptroller of the Currency has been requested to rule on the eligibility of the $18 million Los Angeles Convention and Exhibition Center Authority Revenue Bonds, Series A, for purchase, dealing in, underwriting, and unlimited holding by national banks under paragraph Seventh of 12 U.S.C. 24.

(b) Opinion. (1) The Los Angeles Convention and Exhibition Center Authority is a public entity created under the laws of California by an agreement between the City of Los Angeles and the County of Los Angeles. Under this agreement the Authority is authorized to construct and lease to the City a convention and exhibition center and to issue bonds to finance the project. The Authority is issuing these bonds (Series A) to finance the acquisition of the site, demolition, architectural fees, and miscellaneous financing expenses for the Los Angeles Convention and Exhibition Center. It is expected that $20,500,000 Series B bonds will be issued later to finance construction of the center.

(2) Under the lease rental agreement the City has unconditionally promised to pay annual rentals to the Authority in an amount sufficient to meet annual interest and principal payments on both the Series A and Series B bonds as well as other necessary expenses. The City which possess general powers of taxation has thus committed its faith and credit in support of the bonds.

(c) Ruling. It is our conclusion, therefore, that the $18 million Los Angeles Convention and Exhibition Center Authority Revenue Bonds, Series A, are general obligations of a State or a political subdivision thereof under paragraph Seventh of 12 U.S.C. 24 and, accordingly, are eligible for purchase, dealing in, underwriting, and unlimited holding by national banks under paragraph Seventh of 12 U.S.C. 24.

[33 F.R. 2764, Feb. 9, 1968]

Bond and Building Commission, State of Louisiana for purchase, dealing in, underwriting, and unlimited holding by national banks under paragraph Seventh of 12 U.S.C. 24.

(b) Opinion. (1) The State Bond and Building Commission is a body politic and corporate of the State of Louisiana created by an Act of the Louisiana Legislature to finance construction and improvement of public buildings located in the State, including projects for the Louisiana State University, the State Board of Education, and various educational, correctional, and penal institutions and State parks. These bonds are the final part of $95 million of bonds which the Legislature has authorized the Commission to issue for this purpose and are payable on a parity with the $90 million previously issued.

(2) There is pledged and dedicated to the payment of the principal and interest on these bonds certain beer taxes subject to a prior charge of amounts required to pay the debt service on previously issued Veterans' Bonus Bonds. The unpledged portion of the beer tax now amounts to $17 million per year.

(3) Under the Act a Bond Security and Redemption Fund has been established in the State Treasury for the purpose of retiring the bonds of the Commission. The revenues payable to this fund include all monies, receipts, and funds received from taxes, licenses, fees, and permits, including all bonus receipts collected from the sale of mineral leases, lease rentals, royalties, and other miscellaneous revenues, receipts, and surplus funds dedicated to or collected for the State's General Fund. Revenues which during the past 5 years have amounted to more than $100 million per year are now paid into the Bond Security and Redemption Fund. From this Fund the State Treasurer is directed to first set aside and pay to the Commission the amount required in each fiscal year for the payment of the principal and interest on its outstanding bonds and then to transfer all remaining monies into the General Fund. The amount which may thus be set aside and paid to the Commission in any fiscal year is limited to $6,500,000 but the annual debt service requirement for the bonds of the Commission will be less than that amount.