§ 1.290 City of Atlanta and Fulton County Recreation Authority (Georgia).

(a) Request. The Comptroller of the Currency has been requested to rule on the eligibility of the $17 million City of Atlanta and Fulton County Recreation Authority Revenue Bonds, Series 1970, 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 construct an indoor coliseum in the downtown section of the City of Atlanta, Ga. The Authority, a body corporate and politic, was created for this and related purposes in 1960 by a special act of the General Assembly of the State of Georgia. Pursuant to the authorization contained in the State Constitution and the special act, the City of Atlanta and the County of Fulton have entered into a contract with the Authority. Under this contract, the City has unconditionally undertaken to pay the Authority sums sufficient to pay the principal of and interest on these bonds as they mature. Payments so made by the City are to be used solely for the payment of the principal of and interest on these bonds. The City has also undertaken to levy such taxes as may be required to enable it to fulfill its agreement. The County, in turn, has agreed to reimburse the City to the extent of one-third of each payment made by the City pursuant to the contract.

(2) The City of Atlanta, a political subdivision of the State of Georgia, possessing general powers of taxation, has, as authorized by the Constitution and laws of Georgia, 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. It is our conclusion that the $17 million City of Atlanta and Fulton County Recreation Authority Revenue Bonds, Series 1970, are general obligations of a State or a political subdivision thereof under paragraph Seventh of 12 U.S.C. 24 and according

ly are eligible for purchase, dealing in, underwriting and unlimited holding by national banks. (Comptroller's letter dated Jan. 20, 1971.)

[36 FR 2595, Feb. 9, 1971]

§ 1.291 Penn Central Transportation Co. Trustees' certificates.

(a) Request. The Comptroller of the Currency has been requested to rule on the eligibility of the $100 million certificates issued by the Trustees of Penn Central Transportation Co. and guaranteed by the Secretary of Transportation for purchase, dealing in, underwriting and unlimited holding by national banks under paragraph Seventh of 12 U.S.C. 24.

(b) Opinion. (1) The Secretary of Transportation is authorized by the Emergency Rail Services Act of 1970 to guarantee certificates issued by the trustees of a railroad undergoing reorganization. In an opinion of January 12, 1971, addressed to the Secretary of Transportation, the Attorney General of the United States ruled that the Secretary's guarantee of a certificate pursuant to the Act brings into being a general obligation of the United States backed by its full faith and credit, and that the holders of certificates so guaranteed hold valid general obligations of the United States and are in a position to look to the United States for payment, if necessary.

(2) The Act provides that any guarantee made by the Secretary under the Act shall be conclusive evidence that such guarantee complies fully with the provisions of the Act and shall be valid and incontestable in the hands of a holder of a guaranteed certificate except for fraud or material misrepresentation on the part of such holder. The Act also makes appropriate provision to enable the Secretary of Transportation to borrow from the Secretary of the Treasury the funds which he needs to carry out his responsibilities under the guarantee.

(3) Penn Central Transportation Co. is a railroad undergoing reorganization. The court has approved the issuance of the certificates, and the Secretary of Transportation will guarantee the timely payment of the principal thereof and the interest thereon.

(c) Ruling. It is our conclusion that the $100 million certificates issued by the Trustees of Penn Central Transportation Co. and guaranteed by the Secretary of Transportation are obligations of the United States and are eligible for purchase, dealing in, underwriting and unlimited holding by national banks under paragraph Seventh of 12 U.S.C. 24. (Comptroller's letter dated Jan. 21, 1971.)

[36 FR 2596, Feb. 9, 1971]

§ 1.292 Parking Authority of the County of Los Angeles.

(a) Request. The Comptroller of the Currency has been requested to rule on the eligibility of the $2,060,000 1971 Revenue Bonds of the Parking Authority of the County of Los Angeles for purchase, dealing in, underwriting and unlimited holding by national banks under paragraph Seventh of 12 U.S.C. 24.

(b) Opinion. (1) The Parking Authority of the County of Los Angeles is a public body corporate and politic created by the laws of California but authorized to function only upon a finding of need. The Board of Supervisors of the County of Los Angeles 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 county where the bonds are issued to finance a project which is to be leased to the county and where the principal of and interest on the bonds are to be payable from rentals paid by the county under such lease. The Authority is issuing these bonds to finance the acquisition and construction at the Los Angeles County-University of Southern California Medical Center, a county-owned general and teaching hospital, of two parking structures which will be leased to and operated by the County.

(2) Under the lease rental agreement the County 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 County which possesses general powers of taxation has thus committed its faith and credit in support of the bonds.

(c) Ruling. It is our conclusion that the $2,060,000 1971 Revenue Bonds of the Parking Authority of the County of Los Angeles 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. (Comptroller's letter dated Feb. 1, 1971.)

[36 FR 2596, Feb. 9, 1971]

§ 1.293 Los Angeles County-Frank G. Bonelli Regional Park and Recreation Area Authority.

(a) Request. The Comptroller of the Currency has been requested to rule on the eligibility of the $4 million Los Angeles County-Frank G. Bonelli Regional County Park and Recreation Area Authority, Bonelli Regional Park North Shore 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 Los Angeles County-Frank G. Bonelli Regional County Park and Recreation Area Authority originally called the Los Angeles County-Puddingstone Regional Park Authority, is a public entity created under the laws of California by an agreement between the County of Los Angeles and the Cities of Covina, Glendora, La Verne, Pomona, San Dimas, and Walnut. Under this agreement the Authority is authorized to acquire, construct, in whole or in part, and lease, in whole or in part, a regional public recreational area project and to finance such a project through the issuance of revenue bonds.

(2) The Authority is issuing these bonds to finance the second phase of construction of a regional park facility at the Puddingstone Reservoir State and County Recreation Area near the City of San Dimas. A 69-acre recreational area adjacent to the north shore of Puddingstone Dam Lake will be developed through the construction

I of a small lake and stream, parking Ilots, walks, paths, boat launching ramps, beaches, piers, comfort stations, picnic shelters, landscaping, and related facilities. The completed facilities will be leased to the County for ■ operation.

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

(c) Ruling. It is our conclusion that the $4 million Los Angeles CountyFrank G. Bonelli Regional County Park and Recreation Area Authority, Bonelli Regional Park North Shore 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. (Comptroller's letter dated Feb. 1, 1971.)

[36 FR 2596, Feb. 9, 1971]

§ 1.294

East Los Angeles County Facilities Authority.

(a) Request. The Comptroller of the Currency has been requested to rule on the eligibility of the $980,000 East Los Angeles County Facilities Authority Public Safety Facilities 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 East Los Angeles County Facilities Authority is a public entity created under the laws of California by an agreement between the City of Commerce, the City of Bell Gardens, and the County of Los Angeles. Under this agreement, the Authority is authorized to acquire, construct, maintain, operate, and lease public safety buildings and related facilities to be leased to and operated by the County, and to issue bonds to finance such projects. The Authority is issuing these bonds to finance the construc

tion of an addition to the East Los Angeles County Sheriff's Station.

(2) The County has unconditionally promised in the lease rental agreement 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 County which possesses general powers of taxation has thus committed its faith and credit in support of the bonds.

(c) Ruling. It is our conclusion that the $980,000 East Los Angeles County Facilities Authority Public Safety Facilities 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. (Comptroller's letter dated Feb. 1, 1971.)

[36 FR 2596, Feb. 9, 1971]

§ 1.295 Stadium Authority of the City of Pittsburgh.

(a) Request. The Comptroller of the Currency has been requested to rule on the eligibility of the $35 million Stadium Authority of the City of Pittsburgh, Stadium 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 Stadium Authority of the City of Pittsburgh is a body corporate and politic organized by the City of Pittsburgh pursuant to the Public Auditorium Authorities Law of the Commonwealth of Pennsylvania. The Authority is authorized by law to acquire, construct, improve, maintain and operate a public all purpose stadium and related facilities, to borrow money and to issue bonds. The law also authorizes the City to make annual grants from current revenues to the Authority to assist in defraying the costs of operation, maintenance, and debt service of the project and to enter into long-term agreements providing for the payment of such grants.

(2) The Authority has financed the construction of the stadium project by short-term borrowings in the principal amount of $35 million. These borrow

ings are evidenced by notes which mature on April 15, 1971. The proceeds of this bond issue will be used to repay the maturing notes.

(3) The City has entered into a longterm agreement to pay out of revenues of current and successive years an amount which, along with such other moneys as may be made available for such purposes, will be sufficient to pay all debt service requirements on the 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 $35 million Stadium Authority of the City of Pittsburgh, Stadium 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. (Acting Comptroller's letter dated February 10, 1971.)

[36 FR 6494, Apr. 6, 1971]

§ 1.296 Special Assessment Bonds, Muskego, Wis.

(a) Request. The Comptroller of the Currency has been requested to rule on the eligibility of the $715,000 Special Assessment B Bonds of the City of Muskego, Wis., for purchase, dealing in, underwriting and unlimited holding by national banks under paragraph Seventh of 12 U.S.C. 24.

(b) Opinion. (1) Under Wisconsin law, a municipality may issue area grouped special assessment bonds which are payable from the proceeds of all of the special assessments in a designated area. A municipality may also establish, either from its general fund or by the levy of an irrepealable and irrevocable general tax, a sinking fund for a particular bond issue in an amount not less than 15 percent of the special assessment installments due and collectible.

(2) The City of Muskego is issuing these area grouped special assessment bonds to anticipate the collection of deferred installments of special assessments for the installation of sanitary sewers. The City has established the

sinking fund authorized by law and has unconditionally promised to pay into it such amounts as may be necessary in any year to purchase at tax sale all delinquent special assessments and to direct the City Treasurer to make such purchases.

(3) The City, which possesses general powers of taxation has, as authorized by the laws of Wisconsin, thus pledged its full faith and credit in support of the bonds.

(c) Ruling. It is our conclusion that the $715,000 Special Assessment B Bonds of the City of Muskego, Wis., 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. (Acting Comptroller's letter dated Feb. 10, 1971.)

[36 FR 6494, Apr. 6, 1971]

§ 1.297 Asian Development Bank.

(a) Request. The Comptroller of the Currency has been requested to rule on the eligibility of the obligations of the Asian Development Bank for purchase, dealing in, underwriting and limited holding by national banks under paragraph Seventh of 12 U.S.C. 24.

(b) Opinion. (1) The Asian Development Bank is an international financial institution established in 1966 by international agreement among 31 countries in Europe, North America, Asia and the Far East. The Bank now has 35 members which have subscribed $1.004 billion of the Bank's $1.100 billion of authorized capital. One half of the subscribed capital ($502 million as of December 31, 1970) is in the form of "paid-in" capital and the other half remains "callable." The United States has contributed $200 million to the capital of the Bank, $100 million of which is in paid-in capital and $100 million in callable capital.

(2) The Bank's main purpose is to meet Asian development needs by providing loans and technical assistance for projects in regional developing member countries, as well as for international or regional entities concerned

with economic development. As of December 31, 1970, the Bank had ap= proved 43 loans totalling $329.2 million. They include loans to industrial =development banks in Pakistan, the Philippines, Singapore and Thailand, for highways in the Republic of China and South Korea, for tea factory modernization in Ceylon, for a water supply system and palm oil mills in Malaysia, for a petrochemical plant and fishing vessels in the Republic of China, for jute development in Nepal, and for cold storage and marketing facilities for fish, and transport and stevedoring facilities in South Korea. These loans are usually made for periods from 10 to 25 years; the Bank's recent loans bear interest at the rate of 72 percent per annum.

to

(3) The Bank is authorized borrow funds and thus far has marketed three issues of its debt obligations to raise additional funds for its ordinary lending operations. The first ($16.3 million) was marketed in Germany in 1969; the second ($5 million) and third ($16.6 million) were marketed in Austria and Japan, respectively, in 1970. It is contemplated that the Bank will shortly market an issue in the United States.

(c) Ruling. It is our conclusion that obligations issued by the Asian Development Bank for market in the United States are eligible for purchase by national banks. Under the provisions of 12 U.S.C. 24, specifically applying to obligations of the Bank, therefore, such obligations are eligible for purchase, dealing in, or underwriting by national banks, provided that no bank may hold them as a result of underwriting, dealing or purchasing for its own account in a total amount exceeding 10 percent of capital and surplus. For this purpose, obligations as to which a bank is under a commitment to purchase are deemed to be held by it. Under the provisions of 12 U.S.C. 335, this ruling is applicable to State member banks. (Comptroller's letter dated Mar. 19, 1971.)

[36 FR 6494, Apr. 6, 1971]

$ 1.298 University of Alaska Heating Corp. (a) Request. The Comptroller of the Currency has been requested to rule

on the eligibility of the $230,000 University of Alaska Heating Corp. Bonds, 1969 Series, for purchase, dealing in, underwriting and limited holding by natural banks under paragraph Seventh of 12 U.S.C. 24.

(b) Opinion. (1) The University of Alaska Heating Corporation is a nonprofit corporation formed in 1962 in response to a concurrent resolution of the Legislature of the State of Alaska to finance the construction of a heating plant for the University of Alaska. The Corporation in 1962 issued $3,900,000 of its bonds (1962 series) to finance the construction of a heating plant project on land leased to the Corporation by the University. The completed project has been leased to and is operated by the University. The Corporation, in response to a 1969 concurrent resolution of the Legislature, is issuing these bonds to finance the construction of additions to the heating plant.

(2) The University of Alaska has promised in the amended lease rental agreement to pay annual lease rentals to the Corporation out of funds legally available for that purpose in amounts sufficient to meet annual interest and principal payments on these bonds and the 1962 Series bonds.

(c) Ruling. It is our conclusion that the $2,300,000 University of Alaska Heating Corporation Bonds, 1969 Series, are obligations issued by an agency of a State for university purposes under paragraph Seventh of 12 U.S.C. 24 and are eligible for purchase, dealing in, underwriting and limited holding by national banks. (Comptroller's letter dated March 13, 1971.) [36 FR 6495, Apr. 6, 1971]

§ 1.299 City of Inglewood-Los Angeles County Civic Center Authority.

(a) Request. The Comptroller of the Currency has been requested to rule on the eligibility of the $17,750,000 City of Inglewood-Los Angeles County Civic Center Authority, Civic Center Revenue Bonds, Series B, for purchase, dealing in, underwriting and unlimited holding by national banks under paragraph Seventh of 12 U.S.C. 24.