[Congressional Bills 103th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4379 Received in Senate (RDS)]
103d CONGRESS
2d Session
H. R. 4379
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
September 30 (legislative day, September 12), 1994
Received
_______________________________________________________________________
AN ACT
To amend the Farm Credit Act of 1971 to enhance the ability of the
banks for cooperatives to finance agriculture exports, and for other
purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Farm Credit System Agricultural
Export and Risk Management Act''.
SEC. 2. PARTICIPATION DEFINED.
Section 3.1(11)(B) of the Farm Credit Act of 1971 (12 U.S.C.
2122(11)(B)) is amended by adding at the end the following new clause:
``(iv) As used in this subparagraph, the term `participate'
or `participation' refers to multilender transactions,
including syndications, assignments, loan participations,
subparticipations, or other forms of the purchase, sale, or
transfer of interests in loans, other extensions of credit, or
other technical and financial assistance.''.
SEC. 3. AGRICULTURAL EXPORT FINANCING.
Section 3.7(b) of the Farm Credit Act of 1971 (12 U.S.C. 2128(b))
is amended--
(A) in paragraph (1)--
(i) by striking ``assistance to (A)'' and inserting
``assistance to'';
(ii) by striking ``the export or'' and inserting
``the''; and
(iii) by striking ``and (B)'' and all that follows
through ``subparagraph (A): Provided, That a'' and
inserting ``if the''; and
(B) by striking paragraph (2) and inserting the following
new paragraph:
``(2)(A) A bank for cooperatives may make or participate in loans
and commitments to, and extend other technical and financial assistance
to--
``(i) any domestic or foreign party for the export,
including (where applicable) the cost of freight, of
agricultural commodities or products thereof, farm supplies, or
aquatic products from the United States under policies and
procedures established by the bank to ensure that the
commodities, products, or supplies are originally sourced,
where reasonably available, from one or more eligible
cooperative associations described in section 3.8(a) on a
priority basis, except that if the total amount of the balances
outstanding on loans made by a bank under this clause that--
``(I) are made to finance the export of
commodities, products, or supplies that are not
originally sourced from a cooperative, and
``(II) are not guaranteed or insured, in an amount
equal to at least 95 percent of the amount loaned, by a
department, agency, bureau, board, commission, or
establishment of the United States or a corporation
wholly-owned directly or indirectly by the United
States,
exceeds an amount that is equal to 50 percent of the bank's
capital, then a sufficient interest in the loans shall be sold
by the bank for cooperatives to commercial banks and other non-
System lenders to reduce the total amount of such outstanding
balances to an amount not greater than an amount equal to 50
percent of the bank's capital; and
``(ii) except as provided in subparagraph (B), any domestic
or foreign party in which an eligible cooperative association
described in section 3.8(a) (including, for the purpose of
facilitating its domestic business operations only, a
cooperative or other entity described in section 3.8(b)(1)(A))
has an ownership interest, for the purpose of facilitating the
domestic or foreign business operations of the association,
except that if the ownership interest by an eligible
cooperative association, or associations, is less than 50
percent, the financing shall be limited to the percentage held
in the party by the association or associations.
``(B) A bank for cooperatives shall not use the authority provided
in subparagraph (A)(ii) to provide financial assistance to a party for
the purpose of financing the relocation of a plant or facility from the
United States to another country.''.
SEC. 4. CONFORMING AMENDMENT.
Section 3.8(b)(1) of the Farm Credit Act of 1971 (12 U.S.C.
2129(b)(1)) is amended--
(A) by striking subparagraph (B);
(B) by redesignating subparagraphs (C), (D), and (E) as
subparagraphs (B), (C), and (D), respectively; and
(C) by aligning the margin of subparagraph (D) (as so
redesignated) so as to align with the margin of subparagraph
(C) (as so redesignated).
SEC. 5. LOAN PARTICIPATION AUTHORITY FOR FARM CREDIT BANKS AND DIRECT
LENDER ASSOCIATIONS.
(a) In General.--Title IV of the Farm Credit Act of 1971 (12 U.S.C.
2151 et seq.) is amended by inserting after section 4.18 (12 U.S.C.
2206) the following new section:
``SEC. 4.18A. AUTHORITY OF FARM CREDIT BANKS AND DIRECT LENDER
ASSOCIATIONS TO PARTICIPATE IN LOANS TO SIMILAR ENTITIES
FOR RISK MANAGEMENT PURPOSES.
``(a) Definitions.--As used in this section:
``(1) Participate and participation.--The terms
`participate' and `participation' shall have the meaning
provided in section 3.1(11)(B)(iv).
``(2) Similar entity.--The term `similar entity' means a
person that--
``(A) is not eligible for a loan from the Farm
Credit Bank or association; and
``(B) has operations that are functionally similar
to a person that is eligible for a loan from the Farm
Credit Bank or association in that the person derives a
majority of the income of the person from, or has a
majority of the assets of the person invested in, the
conduct of activities that are functionally similar to
the activities that are conducted by an eligible
person.
``(b) Loan Participation Authority.--Notwithstanding any other
provision of this Act, any Farm Credit Bank or direct lender
association chartered under this Act may participate in any loan of a
type otherwise authorized under title I or II made to a similar entity
by any person in the business of extending credit, except that a Farm
Credit Bank or direct lender association may not participate in a loan
under this section if--
``(1) the participation would cause the total amount of all
participations by the Farm Credit Bank or association under
this section involving a single credit risk to exceed 10
percent (or the applicable higher lending limit authorized
under regulations issued by the Farm Credit Administration if
the stockholders of the respective Farm Credit Bank or
association so approve) of the total capital of the Farm Credit
Bank or association;
``(2) the participation by the Farm Credit Bank or
association would equal or exceed 50 percent of the principal
of the loan or, when taken together with participations in the
loan by other Farm Credit System institutions, would cause the
cumulative amount of the participations by all Farm Credit
System institutions in the loan to equal or exceed 50 percent
of the principal of the loan;
``(3) the participation would cause the cumulative amount
of participations that the Farm Credit Bank or association has
outstanding under this section to exceed 15 percent of the
total assets of the Farm Credit Bank or association; or
``(4) the loan is of the type authorized under section
1.11(b) or 2.4(a)(2).
``(c) Prior Approval Required.--
``(1) In general.--With respect to a similar entity that is
eligible to borrow from a bank for cooperatives under title
III, the authority of a Farm Credit Bank or association to
participate in a loan to the entity under this section shall be
subject to the prior approval of the bank for cooperatives
having, at the time the loan is made, the greatest loan volume
in the State in which the headquarters office of the similar
entity is located.
``(2) Terms and conditions.--Approval under paragraph (1)
may be granted on an annual basis and under such terms and
conditions as may be agreed on between the Farm Credit Bank or
association, as the case may be, and the bank for cooperatives
granting the approval.
``(3) Approval by supervising farm credit bank.--An
association may not participate in a loan to a similar entity
under this section without the approval of the supervising Farm
Credit Bank or the association.''.
SEC. 6. CONFORMING AMENDMENTS.
Section 3.1(11)(B)(i)(I)(bb) of the Farm Credit Act of 1971 (12
U.S.C. 2122(11)(B)(i)(I)(bb)) is amended--
(A) by striking ``the other banks for cooperatives under
this subparagraph'' and inserting ``other Farm Credit System
institutions''; and
(B) by striking ``all banks for cooperatives'' and
inserting ``all Farm Credit System institutions''.
Passed the House of Representatives September 29, 1994.
Attest:
DONNALD K. ANDERSON,
Clerk.