Document: 482 U.S. 182 107 S.Ct. 2312 96 L.Ed.2d 152 ROCKFORD LIFE INSURANCE COMPANY, Appellantv.ILLINOIS DEPARTMENT OF REVENUE et al. No. 86-251. Argued March 31, 1987. Decided June 8, Syllabus Under financial instruments commonly known as "Ginnie Maes," the issuing private institution has primary obligation of making timely principal and interest payments. However, in order to attract investors into mortgage market, Ginnie Maes also contain a provision whereby Government National Mortgage Association, corporation, guarantees payment if issuer defaults. After state taxing officials included value appellant's Mae portfolio calculating net assets, appellant filed suit challenging its annual property tax assessment. The courts rejected contention that could not be taxed under constitutional principle intergovernmental immunity Revised Statutes § 3701, which exempts from taxation "all stocks, bonds, Treasury notes, other obligations United States." Held: are exempt 3701. statutory phrase "other States" refers only or securities same type those specifically enumerated. fundamentally different enumerated Government's guarantor is secondary contingent. Nor indirect, contingent, unliquidated promise makes protected by immunity. purpose prevent States federal manner an adverse effect on States' borrowing ability. Maes' failure include binding governmental pay specified sums at dates renders any threat power far too attenuated support Pp. 187-192. 112 Ill.2d 174, 97 Ill.Dec. 405, 492 N.E.2d 1278 (1986), affirmed. STEVENS, J., delivered opinion for unanimous Court. Erwin N. Griswold, Washington, D.C., appellant. Patricia Rosen, Chicago, Ill., appellees. Justice STEVENS 1 This case involves Maes." These issued institutions, obliged make set forth certificates. Association (GNMA) payments will made scheduled. question presented today whether these immunity, relevant statute.1 2 Prior 1979 changes Illinois' law, Rockford Life Insurance Company (Rockford) paid assessed capital stock. In 1978, Illinois authorities Rockford's their calculation corporation's assets. challenged assessment County Treasurer action collect full amount ($723,053.70). uniformly were taxes,2 reasoning "the here 'other within meaning 3701," inquiries identical this case. 176-184, 406-410, 1278, 1279-1283 (1986). We noted probable jurisdiction,3 479 947, 430, 93 380 now affirm. 3 * involved standard bearing title "Mortgage Backed Certificate Guaranteed Association." App. 56. True title, GNMA pledges "full faith credit secure instrument. guarantee, function GNMA, wholly owned government corporation Department Housing Urban Development, market minimizing risk loss.4 See 12 U.S.C. 1716(a). There uncontradicted evidence record supporting conclusion GNMA's guarantee responsible ready marketability securities. That described instrument, however. duty monthly falls squarely certificate.5 4 certificate party, generally institution, possesses pool federally guaranteed mortgages.6 Those individual mortgages product transactions between borrowers lending institutions. It provides source funds, well security, promises holder qualified assembled issuer, enters agreement with authorizing sell one more certificates, each proportionately based backed all designated pool, GNMA. thereafter may "mortgage-backed certificates" holders such Rockford. administers collecting mortgagors remitting amounts certificates holders. costs regulatory duties covered fee charged issuer. Unless defaults certificate, no funds used connection issuance sale securities, administration mortgages, 5 case, see n. 5, supra, required continue even becomes delinquent. event, pursue remedies against mortgagor, mortgage, but does have rights implicated fails meet event proceeds directly But actual loss minimal because secured separate fidelity bond post. 24 CFR 390.1 II 6 contained mortgage-backed held pledge States."7 mean it "obligation" subject exemption Constitution statute. Because codified 31 3124(a) "principally restatement rule," Memphis Bank & Trust Co. v. Garner, 459 392, 397, 103 692, 695, 74 562 (1983), we shall first decide statute requires exempted taxes, then consider doctrine broader exemption. 7 At time case,8 Rev.Stat. amended, 742 (1976 ed.), provided Notes, States, State municipal local authority" (emphasis added). text sentence words appear, rules construction, earlier legislation was enactment statute, consistent obligations" "only enumerated." Smith Davis, 323 111, 117, 65 157, 160, 89 L.Ed. (1944). longstanding interpretation resolves before us. named Most significantly, they neither direct nor certain States. As provides, bears payments—the contingent.9 short, guarantor—not obligor. distinction than adequate our do qualify purposes 8 taxes. owed money construction company work had performed open account. computing assets purposes, sought exclude Federal Government, Court debt exempt. concluded "a unilateral, creditor's claim, itself bind way increases affects public debt, cannot said instrumentality immunity," U.S., 114, S.Ct., 159, went explain claim differed 9 "vitally instrumentalities past recognized constitutionally taxation. Such instance been characterized (1) written documents, (2) interest, (3) (4) specific Congressional authorization, pledged pay." Id., 114-115, 159. 10 With respect Maes, third element Davis clearly lacking, absence critical view behind doctrine. proposition essential aspect authority and, just Supremacy Clause bars property, Weston City Council Charleston, Pet. 449, 481 (1829); McCulloch Maryland, Wheat. 316, 579 (1819). lack fixed context concern immunity.10 Cf. Willcuts Bunn, 282 216, 225, 51 125, 126, 75 304 (1931); Hibernia Sav- ings Society San Francisco, 200 310, 315, 26 265, 267, 50 495 (1906); Plummer Coler, 178 115, 136, 20 829, 837, 44 998 (1900). Moreover, none received finance function. Indeed, given fees charges issuers, profit sharing, suggested fisc would benefit holding taxation.11 11 Appellant asserts Congress authorized salutary facilitating financing further purpose. job assess underlying merits program, opine wise Our task simply Constitution, Congress' silence, imposes hold not. III A court must proceed carefully when asked recognize established. remember concluding Smith, although spoken reference role applying well: 13 "All related statutes clear indication intent immunize interest-bearing needed carry necessary functions government. intent, largely should expanded modified degree judiciary." 119, 161. judgment 14 Affirmed. provided: "Except otherwise authority. extends every form require either thereon, both, considered, indirectly, computation tax, except nondiscriminatory franchise nonproperty taxes lieu thereof imposed corporations estate inheritance taxes." ed.). 1982 reformulation "without substantive change" Pub.L. 97-258, 4(a), Stat. 1067, appears some minor variations language, First Atlanta Bartow Tax Assessors, 470 583, 105 1516, 84 535 (1985), issue levied prior recodification, pre-1982 technically controls case." 585, 1, 1518, 1. Appellant's state-court variety state-law claims, claims 177, 185-187, 406, 410-411, 1279, 1283-1284 here. usually merit attention petition certiorari. divided appeals courts. aside courts, ever considered appear presents overly important law "which been, be, settled Court." Court's Rule 17.1(c). fact repealed 1979. Nonetheless, arises mandatory jurisdiction, 28 1257(2), allowed us factors deciding rule merits. "The Mortgage-Backed Securities Program means channeling Nation's markets housing market. guaranty them widely accepted sectors likely supply raised through residential loans. Through process, program serves increase overall available helps assure reasonable rates." Dept. Handbook 5500.1 Rev. 6, I Guide 1-1 (1984) (hereinafter Guide). representative read follow: "THE ISSUER, NAMED BELOW, PROMISES TO PAY THE ORDER OF: "ROCKFORD COMPANY "36 1695690 F "(HEREINAFTER CALLED HOLDER) sum $1,018,717 DOLS CTS amount, together thereon portions outstanding rate hereon, installments, adjustable below. All installments application reduction balance outstanding, until accruing thereon. "[T]he holder, collected remit below, less being due apportioned reason aforesaid base backing, prepayments early recoveries rate." 56-57. Sample published Guide, 39-43. Rockford, "modified pass-through securities" provide collections pool. 128 Ill.App.3d 302, 313, 83 470, 477, 596, 603 (2d Dist.1984). "straight "as collected," administrative costs. 390.5(a) (1986); 1-1. satisfy various requirements Authority (FHA) 390.3 addition FHA, Veterans Administration, another agency. Ibid. 1721(g). executed agency, rather itself, avoid 396, (1983). supra. contends obligor holder's sole recourse disagree. willing investor default own detract reality While enforce may, upon default, institute issuer's extinguish thereby absolute "subject unsatisfied therein securities." 390.15(b) 1721(g); New York Guardian Mortgagee Corp. Cleland, 473 F.Supp. 409, 411 (SDNY 1979). provides: An "issuer GNMA-guaranteed . holders." 2-1. statement supported regulations prohibit guaranteeing "if arrangement proposed satisfactorily [t]imely accordance terms 390.9(c) 19, 4.01 (issuer's contractual binds "remit manner"). "But effort made, here, establish unconstitutional character particular claiming remote impair government, overturning statutes, long established ordinary sphere legislation, ought something substantial act mere conjecture. injury obvious appreciable." 137-138, 837-838, loan preclude "long established" one. Board Comm'rs Montgomery Elston, 32 Ind. 27, (1869); S.S. Silberblatt, Inc. Comm'n York, N.Y.2d 635, 641, 186 N.Y.S.2d 646, 649-650, 159 195, 197-198, cert. denied, 361 912, 80 253, 183 (1959); 47 Op.N.C.Atty.Gen. 19 (1977) (concluding "obligation indicating Assistant Director agreed position). fact, during debate predecessors current Senator Sherman assured Senate bonds Pacific Railroad, Cong. Globe, 41st Cong., 2d Sess., 1591 (1870), discussing Act July 14, 1870, 16 272. Even there somewhat effect, privately necessarily invalid. Alabama King Boozer, 314 62 43, 86 (1941); Graves ex rel. O'Keefe, 306 466, 59 595, 927 (1939); James Dravo Contracting Co., 302 134, 58 208, 82 155 (1937). Immunity "may conferred Mexico, 455 720, 734, 102 1373, 1382, 71 580 (1982).

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