EXPORT-IMPORT BANK GUARANTIES OF PARTICIPATION CERTIFICATES AND OTHER CONTRACTUAL LIABILITIES The Export-Import Bank's guaranties of participation certificates, as well as other types of contractual liabilities incurred by the Bank under the Export-Import Bank Act of 1945, as amended (July 31, 1945, c. 341, 59 Stat. 526; 12 U.S.C. 635), constitute general obligations of the United States. A holder of such a guaranty may reach beyond the assets of the Export-Import Bank to the United States for payment, if necessary. September 30, 1966. THE SECRETARY OF THE TREASURY. MY DEAR MR. SECRETARY: This is in response to your letter of September 2, 1966, forwarding a memorandum of law prepared by the General Counsel of the Export-Import Bank of Washington (Eximbank) and requesting my views on the question discussed in the memorandum, i.e., whether Eximbank's guaranties of the participation certificates it markets from time to time give rise to general obligations of the United States. As noted in the memorandum, my predecessor in the Office of Attorney General pointed out in 42 Op. A.G. 21 that: "A series of opinions of the Attorney General issued between 1953 and 1959 has established that a guaranty by a Government agency contracted pursuant to a congressional grant of authority for constitutional purposes is an obligation fully binding on the United States despite the absence of statutory language expressly pledging its 'faith' or 'credit' to the redemption of the guaranty and despite the possibility that a future appropriation might be necessary to carry out such redemption." That opinion was concerned with the nature of a guaranty of the former Development Loan Fund which, like Eximbank, was a Government corporation spe cifically authorized to issue guaranties in pursuance of its statutory functions. The opinion ruled that the Fund's guaranties constituted general obligations of the United States backed by its full faith and credit. I am of the view that the opinion is in point here and, I might add, applies not only to Eximbank's guaranties of participation certificates but also to the other contractual liabilities it is authorized to incur under its governing statute, the Export-Import Bank Act of 1945 (July 31, 1945, c. 341, 59 Stat. 526), as amended (12 U.S.C. 635), including its guaranty, insurance, coinsurance or reinsurance of exporters. In sum, I concur in the conclusion of the General Counsel of Eximbank to the effect that the persons who hold the guaranties incident to Eximbank's participation certificates, along with the persons in whose favor it has incurred other types of contractual liabilities in accordance with law, have acquired valid general obligations of the United States, and are therefore in a position to reach beyond Eximbank and its assets to the United States for a source of payment, if necessary. Sincerely, NICHOLAS DEB. KATZENBACH. PROVISION OF COMPENSATION BY STATES FOR REMOVAL OF BILLBOARDS UNDER THE HIGHWAY BEAUTIFICATION ACT OF 1965 Section 131 of title 23, United States Code (as amended by the Highway Beautification Act of 1965), which requires a reduction of 10 per cent in the total of Federal-aid highway funds apportioned to a State on or after January 1, 1968, if it has not imposed certain controls over outdoor advertising along interstate and primary highways, also requires, as a condition of avoidance of such reduction by a State, that it provide compensation for the removals of the outdoor advertising signs, displays and devices specified in subsection (g). More particularly, a State with authority under its own law to effect such removals by an exercise of police power is not excepted from the conditional requirement of providing compensation. The relevant precedents provide no basis for concluding that this conditional requirement of providing compensation is unconstitutional as to any State. THE SECRETARY OF COMMERCE. NOVEMBER 16, 1966. MY DEAR MR. SECRETARY: This is in response to your request for an opinion on two related questions arising out of section 131 of title 23, United States Code, as amended by the Highway Beautification Act of 1965.1 Section 131(b) of title 23 in general requires a reduction of 10 per cent in the total of Federal-aid highway funds apportioned by the Secretary of Commerce to a State on or after January 1, 1968, if he determines that it has not made provision for "effective control" of outdoor advertising within 660 feet of interstate and primary highways. "Effective control" is defined in section 131 (c) to mean that after January 1, 1968, outdoor advertising "shall, pursuant to this section, be limited to" signs, notices, displays and devices of specified kinds. Section 131 (g) reads as follows, in pertinent part: "(g) Just compensation shall be paid upon the removal of the following outdoor advertising signs, displays, and devices 1 October 22, 1965, Public Law 89-285, 79 Stat. 1028. |