Page:United States Statutes at Large Volume 79.djvu/964

 924

69 Stat. 663.

PU BLIC LAW 89-237-OCT. 4, 1965

[79

STAT.

lished pursuant to subsedtion (a) of this section shall be paid to the production credit associations and other financing institutions to which such reserve is allocated on the books of the bank.". SEC. 2. The F a r m Credit Act of 1933, as amended, is amended— (a) by adding the following at the end of subsection (b) of section 22 thereof (12 U.S.C. 1131f (b)): "When so specified in the approval by the Federal intermediate credit bank, such dividends may be paid even though the amount in the surplus account provided for in subsection (a) is less than the minimum prescribed by the bank. If the bylaws of a production credit association so provide, (1) any remaining net earnings at the end of a fiscal year may be distributed on a patronage basis in class A stock of the association and, when the United States does not hold class A stock in the association, also in money, and (2) any part of the earnings for the fiscal j'^ear in excess of operating expenses held in the surplus account may be allocated to borrowers on a patronage basis. With the approval of the Federal intermediate credit bank, amounts so allocated may be distributed, oldest allocations first, in class A stock of the association issued as of the date of the allocation and, when the United States does not hold class A stock in the association, also in money. As used in the second preceding sentence 'on a patronage basis' means in the proportion that the amount of interest earned on the loans of each borrower bears to the total interest earned on the loans of all borrowers during the the fiscal year."; and (b) by adding the following as a separate paragraph at the end of section 23 thereof (12 U.S.C. 1131g): "As a further means of providing capital, a production credit association may, upon such terms and conditions as may be provided in its bylaws, require borrowers to invest in an equity reserve in the association. Amounts so invested by each borrower shall be subject to a lien for the indebtedness of the borrower to the association, application on such indebtedness in event of default by the borrower, charges for losses of the association which are in excess of other loss reserves and surplus, and any portion of the amounts so invested which have not been so used and no longer are required for the purposes of the association may be returned to the borrower by revolving or retirement, all as may be provided in said bylaws." Approved October 4, 1965.

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