§ 1825. — Issuance of notes, debentures, bonds, and other obligations; exemption from taxation.
[Laws in effect as of January 24, 2002]
[Document not affected by Public Laws enacted between
January 24, 2002 and December 19, 2002]
[CITE: 12USC1825]
TITLE 12--BANKS AND BANKING
CHAPTER 16--FEDERAL DEPOSIT INSURANCE CORPORATION
Sec. 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.
(Sept. 21, 1950, ch. 967, Sec. 2[15], 64 Stat. 890; Pub. L. 101-73,
title II, Sec. 219, Aug. 9, 1989, 103 Stat. 261; Pub. L. 102-242, title
I, Sec. 102(a), (c), Dec. 19, 1991, 105 Stat. 2236, 2237; Pub. L. 103-
325, title VI, Sec. 602(a)(43), Sept. 23, 1994, 108 Stat. 2290; Pub. L.
104-208, div. A, title II, Sec. 2704(d)(14)(R), Sept. 30, 1996, 110
Stat. 3009-493.)
References in Text
The Internal Revenue Code, referred to in subsecs. (a) and (b), is
classified to Title 26, Internal Revenue Code.
Prior Provisions
Section is derived from subsec. (p) of former section 264 of this
title. See Codification note set out under section 1811 of this title.
Amendments
1996--Subsec. (c)(5). Pub. L. 104-208, which directed substitution
of ``the Deposit Insurance Fund'' for ``the Bank Insurance Fund or
Savings Association Insurance Fund, respectively'' in introductory
provisions and in subpar. (A) and ``the Deposit Insurance Fund'' for
``the Bank Insurance Fund or the Savings Association Insurance Fund,
respectively'' in subpar. (B), was not executed. See Effective Date of
1996 Amendment note below.
1994--Subsec. (c)(1). Pub. L. 103-325 substituted ``obligations,
guarantees, and liabilities'' for ``obligations liabilities'' in
heading.
1991--Subsec. (c)(5), (6). Pub. L. 102-242, Sec. 102(a), added pars.
(5) and (6) and struck out former par. (5) which provided for a 10-
percent-minimum net worth requirement for Bank Insurance Fund or Savings
Association Insurance Fund and former par. (6) which provided exception
for up to $5,000,000,000 in additional liabilities beyond limitations of
par. (5).
Subsec. (c)(7). Pub. L. 102-242, Sec. 102(c), struck out par. (7)
which provided for calculation of net worth and asset valuation of Bank
Insurance Fund and the Savings Association Insurance Fund for purposes
of par. (5).
1989--Subsec. (a). Pub. L. 101-73 designated existing provision as
subsec. (a), inserted heading, and added subsecs. (b) to (d).
Effective Date of 1996 Amendment
Amendment by Pub. L. 104-208 effective Jan. 1, 1999, if no insured
depository institution is a savings association on that date, see
section 2704(c) of Pub. L. 104-208, set out as a note under section 1821
of this title.
GAO Reports
Section 102(b) of Pub. L. 102-242, as amended by Pub. L. 103-325,
title III, Sec. 327, Sept. 23, 1994, 108 Stat. 2230; Pub. L. 104-66,
title II, Sec. 2061, Dec. 21, 1995, 109 Stat. 729, directed Comptroller
General to submit report to congressional committees, not later than 90
days after end of any calendar quarter in which Federal Deposit
Insurance Corporation had any outstanding obligations pursuant to
section 1824 of this title, on Corporation's compliance at the end of
that quarter with subsec. (c) of this section, prior to repeal by Pub.
L. 104-316, title I, Sec. 106(c), Oct. 19, 1996, 110 Stat. 3831.
Section Referred to in Other Sections
This section is referred to in sections 1821, 1823, 1824, 1827 of
this title; title 26 section 597.
