Page:United States Statutes at Large Volume 69.djvu/705

 69 S T A T. J

PUBLIC LAW 347-AUG. 11, 1955

663

TITLE II — P R O D U C T I O N C R E D I T S Y S T E M SEC. 201. Section 21 of the F a r m Credit Act of 1933 is amended by 12 USC 113le. striking out of the fifth sentence the words "all stock shall share in dividend distributions without preference" and substituting therefor the words "Dividends may be paid on class A and class B stock without preference or on class A stock alone, as the board of directors of the association may determine". SEC. 202. Section 22 of the Farm Credit Act of 1933 is amended to ^^ use luif. read as follows: "SEC. 22. (a) Each production credit association shall, at the end of each fiscal year, apply the amount of its earnings in excess of operating expenses (including provision for reasonable valuation reserves) during such fiscal year, first, to the restoration of the impairment, if any, of capital; and, second, to the establishment and maintenance of a surplus account, the minimum amount of which shall be prescribed by the production credit corporation. "(b) A production credit association may pay dividends of not to exceed 7 per centum per annum when such payments are approved by the production credit corporation of the district and are consistent with policies established under regulations issued by the Farm Credit Administration." SEC. 203. The amounts in the guaranty fund reserve and the reserve account for bad and doubtful debts of each production credit association shall, as of the effective date of this title, be transferred to the surplus account of such association established pursuant to the provisions of section 22 of the Farm Credit Act of 1933 as amended by section 202 of this title. SEC. 204. Section 23 of the Farm Credit Act of 1933 is amended to ^^ use uaig. read as follows: "SEC. 23. Each production credit association shall, under such rules lomTfo'flrmerir'* and regulations as may be prescribed by the production credit corporation of the district with the approval of the Farm Credit Administration, invest its funds and make loans to farmers for general agricultural purposes. Such loans shall be made on such terms and conditions, at such rates of interest, and with such security as may be prescribed by the corporation. No borrower shall be indebted to the association at any one time in an amount in excess of 15 per centum of the capital and surplus of the association unless the loan has the prior approval of the corporation, or in excess of 35 per centum of the capital and surplus of the association unless the loan also has the prior approval of the Farm Credit Administration. Borrowers shall be required to own, at the time the loan is made, class B stock of the association in an amount equal in fair book value (not to exceed p a r), as determined by the association, to $5 per $100 or fraction thereof of the amount of the loan. Such stock shall not be canceled or retired upon payment of the loan but may be transferred or exchanged as provided in section 21 of this Act." SEC. 205. The last sentence of section 63 of the Farm Credit Act ^^ use lusc. of 1933 is hereby amended to read as follows: "The exemption provided herein shall not apply with respect to any production credit association or its property or income after the class A stock held in it by the production credit corporation has been retired, or with respect to the Central Bank for Cooperatives, or any production credit corporation or bank for cooperatives, or its property or income after the stock held in it by the United States has been retired."

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