All 69 Stat. 664. 39 Stat. 360. 12 USC 691-698. 12 USC 751-756. TITLE III-FEDERAL LAND BANK SYSTEM SEC. 301. Sections 3, 7, and 8 of the Federal Farm Loan Act, as amended, are amended— (a) by changing next to the last paragraph of section 3 to read as follows: "The Farm Credit Administration shall prescribe a form for the statement of condition of national farm loan associations and land banks under its supervision, which shall be filled out by each such association or bank and transmitted to said administration as required by it."; (b) by changing the fifth sentence of the fourth paragraph of section 7 to read as follows: "He shall make a report to the Farm Credit Administration as required by it upon forms to be provided for that purpose."; and (c) by deleting the last sentence of section 8. SEC. 302. The last paragraph of section 5 of the Federal Farm Loan Act, as amended, is repealed. SEC. 303. Section 10 of the Federal Farm Loan Act, as amended, is amended by adding at the end thereof a new paragraph as follows: Reports on value "Notwithstanding any other provision of this Act to the contrary, of security, etc.subject to the approval of the Farm Credit Administration, the inves 12 USC 857. 12 USC 771, 772. tigation and the written report or reports on the value of the security offered for a Federal land bank loan, which otherwise are required by this section to be made by land bank appraisers appointed under the authority of section 3 of this Act, may be made, in accordance with appraisal standards prescribed by the Farm Credit Administration, by any person (including a person who is secretary-treasurer of a national farm loan association) designated so to do by the Federal land bank of the district; a Federal land bank is authorized to make a loan, if otherwise authorized, on the basis of such an investigation and report by a person so designated; and a loan so made shall be eligible as collateral for farm loan bonds under section 19 of this Act, if otherwise qualified thereunder: Provided, That, within one year, the land bank shall obtain a written report on the security for the loan by a land bank appraiser appointed under section 3 of this Act, in terms and form prescribed by the Farm Credit Administration, and such a loan shall be eligible as collateral for farm loan bonds thereafter only if such report by a land bank appraiser establishes that the security meets the standards prescribed by the Farm Credit Administration for a land bank loan, and in no event shall any such loan thereafter be carried as such collateral for bonds at more than 65 per centum of the normal value of the security as determined by such land bank appraiser. Except as otherwise specifically provided in this paragraph, all provisions of this Act relating to loans made through national farm loan associations shall, insofar as applicable, apply with respect to loans made on such investigations and written reports by such designated persons." SEC. 304. Section 12 of the Federal Farm Loan Act, as amended, is amended (a) by changing paragraph "Fourth" to read as follows: "Such loans may be made for general agricultural purposes and other requirements of the owner of the land mortgaged, under rules and regulations of the Farm Credit Administration."; (b) by striking out the period at the end of the second sentence of paragraph "Fifth" and adding the following: "; and, consistent with community standards, the appraisal may also reflect home advantages, and the availability to a typical operator of the property of earnings from other dependable sources to supplement the normal earning power of the farm."; All 69 Stat. 665. (c) by striking out "the raising of livestock" wherever it appears in next to the last sentence of paragraph "Sixth" and substituting therefor "farming operations" and by striking out of such sentence "Land Bank Commissioner" and substituting therefor "Farm Credit Administration"; and (d) by striking out "$100,000" from paragraph "Seventh" and substituting therefor "$200,000" and by striking out of such sentence "but loans to any one borrower shall not exceed $25,000 unless approved by the Land Bank Commissioner," and substituting "but loans to any one borrower shall not exceed $100,000 unless approved by the Farm Credit Administration,". SEC. 305. Paragraph "Nineteenth" of section 13 of the Federal Farm 12 USC 781. Loan Act, as amended, is amended by adding at the end thereof a new sentence as follows: "Such a deferment may be permitted for other purposes for a period not exceeding five years under regulations prescribed by the Farm Credit Administration.". 902. SEC. 306. (a) That part of section 23 of the Federal Farm Loan Act, 12 USC 901as amended, which precedes the last paragraph, is amended to read as follows: "Every Federal land bank shall semiannually carry to reserve account a sum not less than 50 per centum of its net earnings until said reserve account shall show a credit balance equal to the outstanding capital stock of said land bank. After said reserve is equal to the outstanding capital stock 10 per centum of the net earnings shall be added thereto semiannually until said reserve account shall show a credit balance equal to 150 per centum of the outstanding capital stock of said land bank, and any land bank having a credit balance in said reserve account in excess of 150 per centum of its outstanding capital stock may withdraw such excess from said reserve account with the approval of the Farm Credit Administration. Whenever said reserve shall have been impaired it shall be fully restored before any dividends are paid. "After deducting the 50 per centum or the 10 per centum hereinbefore directed to be deducted for credit to reserve account, any Federal land bank may declare a dividend or dividends to shareholders of the whole or any part of the balance of its net earnings, but only with the approval of the Farm Credit Administration. "The reserves of land banks shall be invested in accordance with rules and regulations prescribed by the Farm Credit Administration." (b) The second sentence of section 24 of the Federal Farm Loan 12 USC 911Act, as amended, is amended by striking out the period at the end 915. thereof and adding the following: "until said reserve account shall show a credit balance equal to 50 per centum of the outstanding capital stock of said association, and any association having a credit balance in said reserve account in excess of 50 per centum of its outstanding capital stock may withdraw such excess from said reserve account with the approval of the Farm Credit Administration.". (c) The amendments made by (a) and (b) of this section shall Effective become effective on the next January 1, or July 1 whichever first date. succeeds enactment hereof. SEC. 307. Section 601 (a) of the Department of Agriculture Organic 58 Stat. 740. Act of 1944 is amended by inserting after "Federal land banks,", the 12 USC 832. second time it appears therein, "national farm loan associations,"; by striking out "joint-stock land banks," wherever it appears therein; and by striking out the period at the end thereof and inserting", except that the amounts apportioned to national farm loan associations shall be assessed against and collected from the Federal land bank of the district which may in turn collect such amounts from the associations in a manner approved by the Farm Credit Administration.". All 69 Stat. 666. 12 USC 640b. 12 USC 640d. 12 USC 636c. Separability. TITLE IV-MISCELLANEOUS PROVISIONS SEC. 401. (a) Section 5 (b) of the Farm Credit Act of 1937, as amended, is amended by changing the sixth sentence thereof to read as follows: "After the date of enactment of the Farm Credit Act of 1955, no person shall be eligible for election or appointment to membership on said Board if such person has within one year next preceding the commencement of the term been a salaried officer or employee of the Farm Credit Administration, or a salaried officer or employee of any corporation operating under the supervision of the Farm Credit Administration.". (b) Section 5 (d) of the Farm Credit Act of 1937, as amended, is amended (1) by substituting "six months" for "three months" wherever it occurs in paragraph (2) thereof; and (2) by adding at the end thereof a new paragraph as follows: "(4) As directed by the Farm Credit Administration, the election of a director under section 5 (d) (2) by any group may be begun any time within six months before the expiration of the term of office to which the director is to succeed, subject to the required determination being made as of the date six months before the expiration of such term of office that a director so elected by such group is to serve in lieu of a district director (or third district director)." SEC. 402. Section 4 of the Farm Credit Act of 1953 is amended (a) by inserting in the first proviso in subsection (a) "all persons so tied shall be considered designated as nominees" in lieu of "the procedure prescribed therein shall be followed again until the tie is broken"; (b) by inserting before the period at the end of the second sentence of subsection (b) ", except that one full term of six years shall be considered to include an additional four months if the particular term is one which was legally extended for an additional four months"; and (c) by adding the following additional sentence at the end of subsection (c): "All terms of office which otherwise would expire on November 30 of any year following enactment of the Farm Credit Act of 1955 are extended four months to expire on the following March 31 so that the term of office of all successors to the terms so extended shall begin with the first day of April.". SEC. 403. (a) If any provision of this Act, or the application thereof to any person or circumstance, is held invalid, the remainder of the Act, and the application of such provisions to other persons or circumstances, shall not be affected thereby. (b) The right to alter, amend, or repeal this Act is hereby expressly reserved. Approved August 11, 1955. To merge production credit corporations in Federal intermediate credit banks; to provide for retirement of Government capital in Federal intermediate credit banks; to provide for supervision of production credit associations; and for other purposes. Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That this Act may Farm Credit be cited as the "Farm Credit Act of 1956". DECLARATION OF POLICY SEC. 2. It is declared to be the policy of the Congress to continue to provide agriculture with a sound, dependable, and effective source of credit; to promote the efficiency of the farm credit system by merging production credit corporations in Federal intermediate credit banks and to facilitate increased farmer participation in the management, control, and ownership of the merged banks and retirement of Government capital therein; to encourage and promote the continued growth and development of the production credit associations as self-supporting cooperative lending institutions operating on a sound credit basis with maximum local authority to determine credit needs and loan policies consistent with the maintenance of a national production credit system; and to continue to provide other financing institutions making loans to farmers and ranchers with the right to borrow from and rediscount with such merged banks on a basis comparable with the production credit associations regardless of the ownership of such banks. The provisions of this Act shall be construed in keeping with this declaration of policy. TITLE I-PRODUCTION CREDIT SYSTEM SEC. 101. MERGER OF PRODUCTION CREDIT CORPORATIONS IN FEDERAL INTERMEDIATE CREDIT BANKS-(a) TRANSFER OF ASSETS.-The production credit corporation in each farm credit district is hereby merged in the Federal intermediate credit bank of the district and all assets, funds, contracts, property, and records belonging to such corporation, except stock in production credit associations, are hereby transferred to and vested in such bank. All obligations and liabilities of the production credit corporation shall be assumed by the Federal intermediate credit bank of the district. Stock held by each production credit corporation in production credit associations is transferred to the Governor of the Farm Credit Administration and the Governor shall cancel an equal par amount of stock of the corporation. (b) SERVICES TO AND SUPERVISION OF PRODUCTION CREDIT ASSOCIATIONS. In order to carry out the declared policy of this Act with respect to the production credit associations, the Farm Credit Admin istration shall, by appropriate provisions in the charter and bylaws, or otherwise, provide for such organization and assignment of functions within the Federal intermediate credit banks as will assure proper supervision of and assistance to the production credit associations in a manner which will enable them to make sound credit available to farmers and ranchers. The income derived from the surplus transferred from the production credit corporation to the Federal intermediate credit bank of the district shall be used to pay expenses of the bank in providing such supervision and assistance, and expenses in excess of such income may be paid out of other resources of the bank. Aot of 1956. All 70 Stat. 660. (c) OFFICERS AND EMPLOYEES.-Notwithstanding any other provision of law, the employment of the officers and employees of each Federal intermediate credit bank and each production credit corporation is terminated on the effective date of this Act and the board of directors of the Federal intermediate credit bank shall, not later than sixty days prior to the effective date of this Act, take all necessary action to reemploy as of such effective date such of the officers and employees so terminated in such capacities as the board determines they are qualified and needed to carry out the functions, powers, and duties of the Federal intermediate credit bank. Such reemployment shall be subject to the approval of the Farm Credit Administration. SEC. 102. Section 205 of the Federal Farm Loan Act, as amended, is amended to read as follows: "CAPITAL STOCK "SEC. 205. (a) CLASSES OF STOCK; OWNERSHIP; DIVIDENDS; AND RETIREMENT OF STOCK.-Each Federal intermediate credit bank is authorized to issue class A and class B stock as follows: "(1) Class A stock shall have a par value of $100 per share and shall be issued to and held by the Governor of the Farm Credit Administration on behalf of the United States. Stock of each Federal intermediate credit bank held by the Secretary of the Treasury shall be transferred to the Governor who shall exchange such stock for an equal amount of class A stock of such bank. The Governor is authorized thereupon to reallocate the investment of the United States in such banks in such manner as he determines necessary to meet the needs of the respective banks. Any transfers of capital funds required as a result of such reallocation shall be made in four equal installments, the first of which shall be made on January 1, 1957, and one of which shall be made on the first day of each of the next succeeding three calendar years. Upon each such transfer of capital funds the Governor shall require an appropriate adjustment in the class A stock of each such bank. Stock of each production credit corporation held by the Governor (less the amount canceled pursuant to section 101 of the Farm Credit Act of 1956) shall be exchanged for an equal par amount of class A stock of the Federal intermediate credit bank in which such corporation is merged pursuant to section 101 of such Act. No dividends shall be paid on class A stock. Annually at the end of its fiscal year each such bank shall determine the amount of its class A stock which shall be retired. Whenever the total of the capital stock, participation certificates, surplus, and reserves of the bank is more than one-sixth of the highest month-end balance of debentures and other obligations issued by or for the bank, outstanding during the immediately preceding five years, the minimum amount of class A stock to be retired shall be the total amount of class B stock and participation certificates issued for that year. All class A stock shall be retired at par. The proceeds of such class A stock retirements of each bank shall be paid into the Treasury as miscellaneous receipts until there is so paid a sum equal to $30,000,000 plus the amount of class A stock of the bank issued in exchange for stock of the production credit corporation. The proceeds of any further such stock retirements shall be paid into the revolving fund established by section 5 (e) of the Farm Credit Act of 1933, as amended. The Governor of the Farm Credit Administration is authorized to purchase from time to time class A stock in any bank in such amount as he determines is needed to meet the credit needs of the bank and such revolving fund shall continue to be available for such purchases as provided in said section 5 (e). The Governor may at any time require the bank to retire such |