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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. (July 17, 1916, ch. 245, $ 23, 39 Stat. 379; Jan. 23, 1932, ch.9, $3 (a), (b), 47 Stat. 13; Aug. 11, 1955, ch. 785, title III, § 306 (a), 69 Stat. 665.)

Act 1

12 U. S. C. $ 903

F. F. L. Act S 23

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Payment of franchise tax before dividends; rate

Nothwithstanding any other provision of this subchapter and subchapter III of this chapter, in the case of a Federal land bank having outstanding capital stock held by the United States during the whole or any part of a fiscal year, said bank shall, after complying with the reserve requirements of sections 901 and 902 of this title and before declaring any dividends to shareholders, pay to the United States a franchise tax equal to 25 per centum of its net earnings then remaining, not to exceed, however, a rate of return of such Government capital calculated at a rate equal to the computed average annual rate of interest on all public issues of public debt obligations of the United States issued during the fiscal year ending next before such tax is due, as certified to the Farm Credit Administration by the Secretary of the Treasury. (July 17, 1916, ch. 245, § 23, 39 Stat. 379; Aug. 6, 1953, ch. 335, § 10, 67 Stat. 395.)

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Reserves and Dividends
of National Farm Loan Associations

12 U. S. C. $ 911

F. F. L. Act § 24

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Amount carried to reserve account

Every national farm loan association shall, out of its net earnings, semiannually carry to reserve account a sum not less than 10 per centum of such net earnings until said reserve account shall show à credit balance equal to 25 per centum of the outstanding capital stock of said association. After said reserve has reached the sum of 25 per centum of the outstanding capital stock, 5 per centum of the net earnings shall be semiannually added thereto 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. (July 17, 1916, ch. 245, § 24, 39 Stat. 379; Jan. 23, 1932, ch. 9, § 4, 47 Stat. 13; Aug. 11, 1955, ch. 785, title

12 U. S. C. $ 912

F. F. L. Act 24

Making good impairment of reserve

Whenever the reserve shall have been impaired it shall be fully restored before any dividends are paid. (July 17, 1916, ch. 245, $ 24, 39 Stat. 379; Jan. 23, 1932, ch. 9, § 4, 47 Stat. 13.)

12 U. S. C. $ 913

F. F. L. Act $ 24

Dividends on balance of net earnings

After deducting the 10 per centum or the 5 per centum hereinbefore directed to be credited to reserve account, said association may at its discretion declare a dividend to shareholders of the whole or any part of the balance of said net earnings: Provided, That the declaration and payment of any such dividend shall be subject to the approval of the Land Bank Commissioner. (July 17, 1916, ch. 245, $ 24, 39 Stat. 379; Jan. 23, 1932, ch. 9, § 4, 47 Stat. 13; June 3, 1935, ch. 164, § 4, 49 Stat. 315.)

Abolishment of office of Land Bank Commissioner, see section 636f (a) of this title.

12 U. S. C. $ 914

F. F. L. Act § 24

Investment of reserves

The reserves of farm loan associations shall be invested in accordance with rules and regulations to be prescribed by the Farm Credit Administration. (July 17, 1916, ch. 245, $ 24,39 Stat. 379; Ex. Ord. No.6084, Mar. 27, 1933.)

12 U. S. C. § 915

F. F. L. Act $ 24

Disposition of reserve on liquidation

Whenever any farm loan association shall be voluntarily liquidated a sum equal to its reserve account as herein required shall be paid to and become the property of the Federal land bank in which such loan association may be a shareholder. (July 17, 1916, ch. 245, § 24, 39 Stat. 379.)

Defaulted Farm Loans

12 U. S. C. $ 921

F. F. L. Act $ 25

Mortgage held by Federal land bank; notice to indorsing association; making good default

If there shall be default under the terms of any indorsed first mortgage held by a Federal land bank under the provisions of this chapter the national farm loan association through which said mortgage was received by said Federal land bank shall be notified of said default. Said

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association may thereupon be required, within 30 days after such notice,
to make good such default, either by payment of the amount unpaid
thereon in cash or by the substitution of an equal amount of Federal
farm loan bonds, with all unmatured coupons attached. (July 17,
1916, ch. 245, § 25, 39 Stat. 380; Mar. 4, 1923, ch. 252, title III, § 310,
42 Stat. 1477.)

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Exemption from Taxation

12 U. S. C. $ 931

F. F. L. Act 5 26

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Federal land banks; national farm loan
associations; mortgages and bonds
as instrumentalities of Government

Every Federal land bank and every national farm loan association,
including the capital and reserve or surplus therein and the income de-
rived therefrom, shall be exempt from Federal, State, municipal, and
local taxation, except taxes upon real estate held, purchased, or taken
by said bank or association under the provisions of sections 761 and 781
of this title. First mortgages executed to Federal land banks, or to
joint stock land banks, and farm loan bonds issued under the provisions
of this chapter, shall be deemed and held to be instrumentalities of the
Government of the United States, and as such they and the income
derived therefrom shall be exempt from Federal, State, municipal, and
local taxation. (July 17, 1916, ch. 245, § 26, 39 Stat. 380.)

All income (except interest) derived from mortgages made, or obligations issued, after
May 28, 1938, by a joint stock land bank shall (notwithstanding section 26 of the Federal
Farm Loan Act, 12 U. S. C. 931–3) be included in gross income. (26 U. S. C. 76.)

Interest upon obligations, and dividends, earnings, or other income from shares, cer-
tificates, stock, or other evidences of ownership, and gain from the sale or other disposi-
tion of such obligations and evidences of ownership issued on or after March 28, 1942, by
the United States or any agency or instrumentality thereof have no exemption, as such,
and loss from the sale or other disposition of such obligations or evidences of ownership
shall not have any special treatment, as such, under the Internal Revenue Code, or laws
amendatory or supplementary thereto. (31 U. S. C. 742a.)

Lance mini 184,

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12 U. S. C. $ 932

F. F. L. Act § 26

Joint stock land banks; State taxation
of shareholder, limitations on

Nothing in sections 931—933 of this title shall prevent the shares
in any joint stock land bank from being included in the valuation of
the personal property of the owner or holder of such shares, in assess-
ing taxes imposed by authority of the State within which the bank is
located; but such assessment and taxation shall be in manner and sub-
ject to the conditions and limitations contained in section 548 of this
title with reference to the shares of national banking associations. (July

12 U. S. C. $ 933

F. F. L. Act $ 26

Federal and joint stock land banks; real property not exempt

Nothing in sections 931–933 of this title shall be construed to exempt the real property of Federal and joint stock land banks and national farm loan associations from either State, county, or municipal taxes, to the same extent, according to its value, as other real property is taxed. (July 17, 1916, ch. 245, $ 26, 39 Stat. 380.)

Investment in Farm Loan Bonds

12 U. S. C. $ 941

F. F. L. Act $ 27

Fiduciary and trust funds; security for public deposits

Farm loan bonds issued under the provisions of this chapter by Federal land banks or joint stock land banks shall be a lawful investment for all fiduciary and trust funds, and may be accepted as security for all public deposits. (July 17, 1916, ch. 245, $ 27, 39 Stat. 380.)

12 U. S. C. § 942

F. F. L. Act $ 27

Buying and selling by member banks of Federal Reserve System

Any member bank of the Federal Reserve System may buy and sell farm loan bonds issued under the authority of this chapter. (July 17, 1916, ch. 245, $ 27, 39 Stat. 380.)

12 U. S. C. $ 943

F. F. L. Act § 27

Buying and selling by reserve banks

Any Federal reserve bank may buy and sell farm loan bonds issued under this chapter to the same extent and subject to the same limitations placed upon the purchase and sale by said banks of State, county, district, and municipal bonds under section 355 of this title. (July 17, 1916, ch. 245, § 27, 39 Stat. 380.)

Examinations

12 U. S. C. $ 951

F. F. L. Act $ 28

Farm credit examiners; appointment; number

The Farm Credit Administration shall appoint as many farm credit examiners as in its judgment may be required to make careful examinations of the banks and associations permitted to do business under this subchapter and subchapter III of this chapter. (July 17, 1916, ch.

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245, § 28, 39 Stat. 381; Ex. Ord. No. 6084, Mar. 27, 1933; Aug. 19, 1937, ch. 704, § 20, 50 Stat. 710.)

12 U. S. C. $ 952

F. F. L. Act § 28

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Requirements, responsibilities, and penalties
applicable to examiners; examinations; reports

Farm credit examiners shall be subject to the same requirements, responsibilities, and penalties as are applicable to national bank examiners under chapters 2 and 3 of this title and other provisions of law. Whenever directed by the Farm Credit Administration, said examiners shall examine the condition of any national farm loan association and report the same to the Land Bank Commissioner. They shall examine and report the condition of every Federal land bank and joint stock land bank at least once each year. (July 17, 1916, ch. 245, § 28, 39 Stat. 381; Ex. Ord. No. 6084, Mar. 27, 1933; June 16, 1933, ch. 98, title VIII, § 80 (a), 48 Stat. 273; Aug. 19, 1937, ch. 704, $ 20,50 Stat. 710; July 12, 1943, ch. 215, § 1,57 Stat. 424.)

Abolishment of office of Land Bank Commissioner, see section 636f (a) of this title.

Federal for al public

$ 27

12 U. S. C. $ 953

F. F. 1. Act $ 28

sell 17,

Salaries of examiners

Farm credit examiners shall receive salaries to be fixed by the Farm Credit Administration. (July 17, 1916, ch. 245, $ 28, 39 Stat. 381; Ex. Ord. No. 6084, Mar. 27, 1933; Aug. 19, 1937, ch. 704, § 20, 50 Stat.

710.)

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National farm loan associations;
institution and conduct of receivership;
duties and powers of receivers

Upon receiving satisfactory evidence that any national farm loan association has failed to meet its outstanding obligations of any description the Farm Credit Administration may forthwith declare such association insolvent and appoint a receiver and require of him such bond and security as it deems proper: Provided, That no national farm loan association shall be declared insolvent by said administration until the total amount of defaults of current interest and amortization installments on loans indorsed by national farm loan associations shall amount to at least $150,000 in the farm credit district, unless such association shall have been in default for a period of two years. Such receiver, under the direction of the Farm Credit Administration, shall take possession of the

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