and interest on these Bonds and the expenses of CSPE. In the event that one or more participants fail or refuse to make any payment to CSPE and such failure continues for 60 days, each other participant's payment will be automatically increased to make up the difference, provided such increase is not in excess of 25 percent of its original participation.

(c) Ruling. It is the conclusion of this Office that a bank may in these circumstances determine that there is adequate evidence that this obligor will be able to perform all that it undertakes to perform, including all debt service requirements, and that the 1964 Revenue Bonds of the Columbia Storage Power Exchange, East Winatehee, Washington, meet requirments of § 1.5(a) and, therefore, 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, and for investment by state banks which are members of the Federal Reserve System pursuant to 12 U.S.C. 335.

[29 F.R. 12298, Aug. 27, 1964] § 1.146

School Building Revenue Bonds, Series of 1964, of the Corry Area Schools Authority, Erie and Warren Counties, Pennsylvania.

(a) Request. The Comptroller of the Currency has been requested to rule that the $570,000 School Building Revenue Bonds, Series of 1964, of the Corry Area Schools Authority, Erie and Warren Counties, Pennsylvania, are eligible for purchase, dealing in, underwriting and unlimited holding by National Bank under the provisions of Paragraph Seventh of 12 U.S.C. 24.

(b) Opinion. (1) The proceeds of the bonds will be used for additions and improvements to the existing senior high school building. The Corry Area Schools Authority is a body corporate and politic organized under the Municipal Authorities Act of Pennsylvania pursuant to resolutions of the School Districts of the City of Corry, Borough of Elgin, Townships of Concord, Wayne, Columbus, and Spring Creek. The Authority has entered into a lease agreement with each of the School Districts pursuant to which the Districts have agreed to deposit in the debt service fund of the Authority amounts equal to the average annual principal and interest requirements of this Series of Bonds as well as the amount necessary to cover annual ad

ministrative expenses of the Authority in connection with this issue of bonds.

(2) School Districts in the Commonwealth of Pennsylvania may enter into long-term leases for school buildings if all obligations thereunder can be met from "current revenues," which the Supreme Court of Pennsylvania has defined as being taxes for the ensuing year and all liquid assets, such as delinquent taxes, licenses, appropriations from the Commonwealth, fines and other revenues which, in the judgment of the authorities of the School Districts are collectible. Under the Public School Code of 1949, School Districts are permitted to impose an annual tax on all taxable real estate of sufficient millage to provide funds to pay rentals due any municipal authority, and the Commonwealth of Pennsylvania may render financial assistance to the School Districts by means of a system of reimbursement in the current fiscal year, based on expenditures of the School Districts made in the preceding fiscal year, as prescribed by a certain formula. In addition, Pennsylvania law prescribes that where any School District fails to pay rental due a Municipal Authority pursuant to a lease, the State Superintendent of Public Instructions may notify such District of its obligation, withhold out of any State appropriation due such District an amount equal to the amount of rental owing and pay such amount to the Municipal Authority.

(3) The bonds of the Authority are the general obligations of a public authority of the Commonwealth of Pennsylvania. Its resources include the obligation of the School Districts to make rental payments which will be sufficient to provide for all required payments in connection with the bonds. These lease rental obligations are supported by the taxing powers of the School Districts and are buttressed by the financial assistance of the Commonwealth of Pennsylvania, and supervision as to payment of rentals by the State Superintendent of Public Instructions. The Commonwealth has thus undertaken to provide for the payment of the obligations of its duly constituted Authority.

(c) Ruling. It is our conclusion, therefore, based upon principles applied in prior rulings of this Office, that the $570,000 School Building Revenue Bonds, Series of 1964, of the Corry Area Schools Authority, Erie and Warren Counties, Pennsylvania, are "public securities" as set forth in § 1.3 (e) and are, therefore,

eligible for purchase, dealing in, underwriting and unlimited holding under Paragraph Seventh of 12 U.S.C. 24. [29 F.R. 12300, Aug. 27, 1964]

§ 1.147 Merced River Development Revenue Bonds.

(a) Request. The Comptroller of the Currency has been requested to rule that the $36 million Merced Irrigation District, California, Merced River Development Revenue Bonds are eligible for investment by National Banks within the limitations of Paragraph Seventh of 12 U.S.C. 24.

(b) Opinion. (1) The Merced Irrigation District organized in 1919 in the San Joaquin Valley, California, covers an area of 163,864 acres of which 110,401 acres are irrigated. Proceeds of the $36 million bonds will be used to enlarge the Exchequer Dam, so as to utilize the water of the Merced River to increase the water storage, produce hydroelectric power, irrigate additional land, and improve flood control. A total expenditure of $130 million has been authorized to finance this development.

(2) These bonds will be secured by revenues accruing under a power contract which provides for the sale of all hydroelectric power generated to the Pacific Gas and Electric Company. Under the power contract which becomes effective upon "the full operation date" or July 1, 1970, whichever is earlier, P. G. & E. obligates itself to pay $815 thousand semi-annually to cover debt service on the bonds plus an additional $22,500 monthly to cover operating and maintenance expenses until July 1, 2014, whether or not the project is operating.

(c) Ruling. A National Bank may in these circumstances prudently determine that there is adequate evidence that the District will be able to perform all that it undertakes to perform and that the $36 million Merced Irrigation District, California, Merced River Development Revenue Zonds 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. 13568, Oct. 2, 1964]

Bonds, Series one through ten, are eligible for dealing in, underwriting, and unlimited holding by National Banks under the provisions of Paragraph Seventh of 12 U.S.C. 24.

(b) Opinion. (1) The purpose of the Oklahoma City Airport Trust, which was established by a Trust indenture dated April 1, 1956, pursuant to Oklahoma law, is to provide financing for the construction of facilities now used and to be used as a permanent Aeronautical Center by the Federal Aviation Administration and to plan, develop and operate airports and air navigation facilities for the use and benefit of Oklahoma City. The Trust estate, which consists primarily of leasehold rights demised to the trustee by the beneficiary, Oklahoma City, includes Will Rogers Airport, Tulakes Airport, Cimarron Airport, and certain other real estate and personal property.

(2) The trustees have issued, pursuant to the foregoing Trust indenture, from July 1, 1956, to May 1, 1963, Oklahoma City Airport Trustees Bonds in ten series, with varying maturities all payable on parity of up to 27 years. The bond-financed facilities of the Center have been leased to the United States Government whose rental obligations are unconditional for a 20-year term, ending June 30, 1983, with certain renewal options. This lease, which combines nine earlier leases, provides the primary security for Series one through nine of the bonds. The rentals thereunder are payable at a rate sufficient to cover debt service requirements over the life of each series of bonds with additional annual payments being made for maintenance, insurance and ground rental. Series ten of the bonds is secured by a similar 20year lease with rental to begin on January 1, 1965. A secondary source of funds pledged to the debt service requirements of the bonds is the gross revenues of the City's three airports leased to the Trust from Oklahoma City. Under its lease agreement with the Trust, Oklahoma City has agreed to provide, if necessary, from its general funds, all costs of operation and maintenance of all the airport and facilities therein.

(3) The trustees have irrevocably pledged the full faith and credit of the Trust to the payment of the principal and interest on the subject bonds. The lease rental payments from the United States Government, and the income from the operations of the three airports make the Oklahoma City Airport Trust

an obligor possessing resources sufficient to justify faith and credit. The bonds of the Trust are the general obligations of a political subdivision of the State of Oklahoma as defined in §1.3 (d) and (e).

(c) Ruling. It is the conclusion of this Office that the subject bonds are "public securities" as set forth in § 1.3 (c), issued pursuant to 12 U.S.C. 24 Paragraph Seventh, and are therefore eligible for dealing in, underwriting and unlimited holding by National Banks. [29 F.R. 13798, Oct. 7, 1964]

§ 1.149 Bonds of the Woods Hole, Martha's Vineyard, and Nantucket Steamship Authority.

(a) Request. The Comptroller of the Currency has been requested to rule on the eligibility of the $150,000 Steamship Bonds dated March 1, 1961, and similar bonds of the Woods Hole, Martha's Vineyard, and Nantucket Steamship Authority for dealing in, underwriting and unlimited holding by National Banks under the provisions of Paragraph Seventh of 12 U.S.C. 24.

(b) Opinion. (1) The Woods Hole, Martha's Vineyard, and Nantucket Steamship Authority, a body corporate and a public instrumentality of the Commonwealth of Massachusetts, was created by an Act of the Massachusetts Legislature to succeed to the assets and liabilities of the old New Bedford, Woods Hole, Martha's Vineyard and Nantucket Steamship Authority, and to provide marine transportation between certain mainland ports and offshore islands in Massachusetts.

This new Authority,

which has the power to issue bonds to finance ships, equipment, terminals, and its various other requirements, has issued $150,000 Steamship Bonds to provide funds for the purpose of constructing, equipping and furnishing offices for the Authority at Woods Hole to replace offices of the old Authority in New Bedford.

(2) If the annual income of the Authority is not sufficient to meet the "cost of service", which term includes debt service of its bonds, the Authority must notify the State Treasurer of such deficiency and the Commonwealth of Massachusetts must pay the amount of the deficiency to the Authority for payment to its creditors and bondholders. Deficiency payments by the Commonwealth which are not covered by appropriations of its legislature are to be

assessed against the towns of Falmouth and Nantucket, and the County of Dukes in proportions of 10, 40 and 50 percent, respectively. The amount assessed against the County of Dukes is in turn assessed against the towns in the County. The amounts assessed against all the towns for reimbursement to the Commonwealth are raised through the exercise of the general power of property taxation which they have under applicable laws.

(3) The towns of Falmouth and Nantucket, and the various towns of the County of Dukes, which are political subdivisions of the Commonwealth of Massachusetts, possessing resources sufficient to justify faith and credit, have, as authorized by the laws of Massachusetts, pledged their 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. It is the conclusion of this Office that the $150,000 Steamship Bonds dated March 1, 1961, and similar bonds of the Woods Hole, Martha's Vineyard, and Nantucket Steamship Authority are "public securities" as set forth in § 1.3(c), issued pursuant to 12 U.S.C. 24 Paragraph Seventh, and are therefore eligible for purchase, dealing in, underwriting and unlimited holding by National Banks.

[29 F.R. 13568, Oct. 2, 1964]

§ 1.150

Dormitory Bonds of 1962 of the Wisconsin University Building Corporation.

(a) Request. The Comptroller of the Currency has been requested to rule on the eligibility of the $5,300,000 Dormitory Bonds of 1962 of the Wisconsin University Building Corporation for dealing in, underwriting, and unlimited holding by National Banks under the provisions of Paragraph Seventh of 12 U.S.C. 24.

(b). Opinion. (1) The Wisconsin University Building Corporation, a non-stock corporation whose income is not distributable to its members, directors, or officers, was organized in 1925 pursuant to the Wisconsin statutes. The Corporation's Board of Directors consists of five members from the staff of the University of Wisconsin and its purpose is to acquire, finance and improve real estate, and to lease such improved real estate to the University of Wisconsin.

(2) The State of Wisconsin, acting through the regents of the University

of Wisconsin, a body corporate and instrumentality of the State created for the purpose of providing higher education, intends to employ the Corporation as a means of constructing and financing a new dormitory at the University of Wisconsin. The Corporation will issue $5,300,000 of bonds to finance the construction of this dormitory to be leased to the Regents. The payment of principal and interest on these obligations is secured by a pledge of the net lease rental payments paid by the Regents, as lessee, which will be sufficient to satisfy all debt service requirements on the bonds. Rental payments due the Corporation from the Regents are to be paid from monies appropriated by the State which will be liable for accrued rentals, and any default under any lease or sublease.

(3) The State of Wisconsin, possessing resources sufficient to justify faith and credit, has as authorized by the laws of Wisconsin thus pledged its full faith and credit to make payments to the Corporation, through the Regents, of amounts sufficient to provide for all required payments in connection with these bonds. The Dormitory Bonds of 1962 are, therefore, general obligations of a state or political subdivision thereof within the meaning of § 1.3 (d) and (e).

(c) Ruling. It is the conclusion of this Office that the $5,300,000 Dormitory Bonds of 1962 of the Wisconsin University Building Corporation are "public securities" as set forth in § 1.3(c), issued pursuant to 12 U.S.C. 24, Paragraph Seventh, and are therefore eligible for dealing in underwriting, and unlimited holding by National Banks.

[29 F.R. 13569, Oct. 2, 1964]

§ 1.151

Wisconsin State Agencies Building Corporation.

(a) Request. The Comptroller of the Currency has been requested to rule that the $8,325,000 Educational Facilities Building Bonds, Series A of 1958; the $10,685,000 Educational Facilities Building Bonds, Series A of 1959; the $9,775,000 Educational Facilities Building Bonds, Series A of 1961; the $9,500,000 Welfare Department Facilities Building Bonds, Series A of 1961; the $12,185,000 Educational Facilities Building Bonds, Series A of 1962; and subsequent series of Bonds to be hereafter issued and secured under the statutes, or under stat

utes containing substantially the same relevant and material provisions as the statutes, pursuant to which the foregoing Bonds were issued by the Wisconsin State Agencies Building Corporation, as being 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. (1) The State of Wisconsin has provided for the financing of the State building program by authorizing The Regents of the University of Wisconsin, The Board of Regents of State colleges or 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.

Agency

(2) The Wisconsin State Building Corporation is a nonprofit corporation organized under the provisions of the Wisconsin Nonstock Corporation Law for the purpose of constructing buildings and other improvements for State university and State college purposes as well as for general State purposes. The proceeds of the bonds issued and to be issued by the Corporation are for the construction of facilities for ieasing to the State university, the State colleges or the Department of Public Welfare, respectively, on long-term net 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 may be pledged for the payment of the lease rentals, the State has provided standing appropriations of sums sufficient to pay the rentals on duly authorized projects and it has also specifically provided that it shall be liable and may be sued on contract for accrued rentals and for any other default under any such lease.

(3) The State of Wisconsin, possessing resources sufficient to justify faith and credit, has as authorized by the laws of Wisconsin thus pledged its full faith and credit to make payments to the corporation of amounts sufficient to provide for all required payments in connection with these bonds. These various issues of bonds are, therefore, general obligations of a State or political subdivision thereof within the meaning of § 1.3 (d) and (e).

(c) Ruling. It is the conclusion of this Office that the various issues of

bonds of the Wisconsin State Agencies 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. 13569, Oct. 2, 1964]

§ 1.152 Chicago Transit Authority Equipment Trust Certificates.

(a) Request. The Comptroller of the Currency has been requested to rule that the outstanding Chicago Transit Authority Equipment Trust Certificates, through Series 11, are eligible for investment by National Banks within the limitations of Paragraph Seventh of 12 U.S.C. 24.

(b) Opinion. (1) The Chicago Transit Authority is an independent public agency established by a special Act of the Illinois Legislature in 1945 to acquire, unify, and modernize all major mass transit facilities serving Chicago and its major suburbs. The Equipment Trust Certificates of the Authority are secured by title to standard rolling stock held by the Harris Trust and Savings Bank, as trustee, and leased to the Authority. The lease rental payments of the Authority are used by the trustee to pay interest and principal of the Certificates, all of which are payable on parity.

(2) These Trust Certificates constitute a binding obligation of the Chicago Transit Authority payable solely out of and secured by a pledge of revenues derived by its transportation system, subject, however, to the debt service requirements of Revenue Bonds issued by the Authority. The Authority is required by statute and under the terms of certain Trust Agreements securing its Revenue Bonds and Equipment Trust Certificates, to adjust the rates so as to aways meet, from earnings, all of its financial requirements.

(3) In 1947 the Authority began operating its mass transit system, and during each of the next sixteen years it was able to cover the debt service requirement of its Revenue Bonds. Since July 1950, when the Authority issued its first Equipment Trust Certificates, all interest has been paid promptly when due, and all principal retired on or before schedule. Retirement of these Certificates as of December 31, 1963, was equiv

alent to 77.29 percent of the $49,485,000 debt incurred. A comparison of the Authodity's demonstrated cash producing ability during the last five years with all future debt service requirements for outstanding Certificates and Bonds, during the year 1964 through 1976, when all Trust Certificates are scheduled to mature, indicates that its earnings at the current level will cover the maximum debt service requirements of any year through 1976, by 1.92 times. The depreciated value of the equipment securing the outstanding Certificates during their life greatly exceeds the amount of the Certificates.

(c) Ruling. It is the conclusion of this Office that a National Bank may in these circumstances at this time prudently determine that there is adequate evidence that the Authority will be able to perform all that it undertakes to perform and that the outstanding Equipment Trust Certificates, through Series 11, of the Chicago Transit Authority meet the requirement of § 1.5(a) and are therefore 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. 13570, Oct. 2, 1964

§ 1.153 Hospital authority of Cobb County, Georgia.

(a) Request. The Comptroller of the Currency has been requested to rule that the $1,850,000, 334 percent Revenue Certificates of the Hospital Authority of Cobb County, Georgia issued on June 1, 1964 are eligible for dealing in, underwriting and unlimited holding by National Banks pursuant to Paragraph Seventh of 12 U.S.C. 24.

(b) Opinion. (1) The Hospital Authority of Cobb County, created pursuant to the Hospital Authorities Law of the State of Georgia, as a public corporate body for the purpose of constructing and financing a hospital for the County, has issued Certificates the proceeds from which are being used to finance the construction of the hospital and related facilities. These Certificates are payable from the revenues from the Authority's contract with Cobb County made pursuant to the "Hospital Authorities Law" and funds derived from any other source. Under this contract, the County has agreed to pay for the period of the outstanding Certificates, ending in 1985, the Authority annually