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U.S. Code as of:
01/19/04
Section 1825. Issuance of notes, debentures, bonds, and other obligations; exemption from taxation
(a) General rule
All notes, debentures, bonds, or other such obligations issued by
the Corporation shall be exempt, both as to principal and interest,
from all taxation (except estate and inheritance taxes) now or
hereafter imposed by the United States, by any Territory,
dependency, or possession thereof, or by any State, county,
municipality, or local taxing authority: Provided, That interest
upon or any income from any such obligations and gain from the sale
or other disposition of such obligations shall not have any
exemption, as such, and loss from the sale or other disposition of
such obligations shall not have any special treatment, as such,
under the Internal Revenue Code, or laws amendatory or
supplementary thereto. The Corporation, including its franchise,
its capital, reserves, and surplus, and its income, shall be exempt
from all taxation now or hereafter imposed by the United States, by
any Territory, dependency, or possession thereof, or by any State,
county, municipality, or local taxing authority, except that any
real property of the Corporation shall be subject to State,
Territorial, county, municipal, or local taxation to the same
extent according to its value as other real property is taxed.
(b) Other exemptions
When acting as a receiver, the following provisions shall apply
with respect to the Corporation:
(1) The Corporation including its franchise, its capital,
reserves, and surplus, and its income, shall be exempt from all
taxation imposed by any State, county, municipality, or local
taxing authority, except that any real property of the
Corporation shall be subject to State, territorial, county,
municipal, or local taxation to the same extent according to its
value as other real property is taxed, except that,
notwithstanding the failure of any person to challenge an
assessment under State law of such property's value, such value,
and the tax thereon, shall be determined as of the period for
which such tax is imposed.
(2) No property of the Corporation shall be subject to levy,
attachment, garnishment, foreclosure, or sale without the consent
of the Corporation, nor shall any involuntary lien attach to the
property of the Corporation.
(3) The Corporation shall not be liable for any amounts in the
nature of penalties or fines, including those arising from the
failure of any person to pay any real property, personal
property, probate, or recording tax or any recording or filing
fees when due.
This subsection shall not apply with respect to any tax imposed (or
other amount arising) under the Internal Revenue Code of 1986.
(c) Limitation on borrowing
(1) Cost estimate for outstanding obligations, guarantees, and
liabilities
As soon as practicable after August 9, 1989, the Corporation
shall estimate the aggregate cost to the Corporation for all
outstanding obligations and guarantees of the Corporation which
were issued, and all outstanding liabilities which were incurred,
by the Corporation before August 9, 1989.
(2) Estimate of notes and other obligations required
Before issuing an obligation or making a guarantee, the
Corporation shall estimate the cost of such obligations or
guarantees.
(3) Inclusion of estimates in financial statements
The Corporation shall -
(A) reflect in its financial statements the estimates made by
the Corporation under paragraphs (1) and (2) of the aggregate
amount of the costs to the Corporation for outstanding
obligations and other liabilities, and
(B) make such adjustments as are appropriate in the estimate
of such aggregate amount not less frequently than quarterly.
(4) Estimate of other assets required
The Corporation shall -
(A) estimate the market value of assets held by it as a
result of case resolution activities, with a reduction for
expenses expected to be incurred by the Corporation in
connection with the management and sale of such assets;
(B) reflect the amounts so estimated in its financial
statements; and
(C) make such adjustments as are appropriate of such market
value not less than quarterly.
(5) Maximum amount limitation on outstanding obligations
Notwithstanding any other provisions of this chapter, the
Corporation may not issue or incur any obligation, if, after
issuing or incurring the obligation, the aggregate amount of
obligations of the Bank Insurance Fund or Savings Association
Insurance Fund, respectively, outstanding would exceed the sum of
-
(A) the amount of cash or the equivalent of cash held by the
Bank Insurance Fund or Savings Association Insurance Fund,
respectively;
(B) the amount which is equal to 90 percent of the
Corporation's estimate of the fair market value of assets held
by the Bank Insurance Fund or the Savings Association Insurance
Fund, respectively, other than assets described in subparagraph
(A); and
(C) the total of the amounts authorized to be borrowed from
the Secretary of the Treasury pursuant to section 1824(a) of
this title.
(6) "Obligation" defined
(A) In general
For purposes of paragraph (5), the term "obligation" includes
-
(i) any guarantee issued by the Corporation, other than
deposit guarantees;
(ii) any amount borrowed pursuant to section 1824 of this
title; and
(iii) any other obligation for which the Corporation has a
direct or contingent liability to pay any amount.
(B) Valuation of contingent liabilities
The Corporation shall value any contingent liability at its
expected cost to the Corporation.
(d) Full faith and credit
The full faith and credit of the United States is pledged to the
payment of any obligation issued after August 9, 1989, by the
Corporation, with respect to both principal and interest, if -
(1) the principal amount of such obligation is stated in the
obligation; and
(2) the term to maturity or the date of maturity of such
obligation is stated in the obligation.
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