[Congressional Bills 103th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4379 Introduced in House (IH)]

103d CONGRESS
  2d Session
                                H. R. 4379

  To amend the Farm Credit Act of 1971 to enhance the ability of the 
 banks for cooperatives to finance agricultural exports, and for other 
                               purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                              May 10, 1994

Mr. de la Garza (for himself, Mr. Roberts, Mr. Johnson of South Dakota, 
Mr. Combest, Mr. Penny, and Mr. Allard) introduced the following bill; 
           which was referred to the Committee on Agriculture

_______________________________________________________________________

                                 A BILL


 
  To amend the Farm Credit Act of 1971 to enhance the ability of the 
 banks for cooperatives to finance agricultural 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. REFERENCES.

    Except as otherwise specifically provided, whenever in this Act a 
section is amended, repealed, or referenced, such amendment, repeal, or 
reference shall be considered to be made to that section of the Farm 
Credit Act of 1971 (12 U.S.C. 2001 et seq.).

SEC. 3. PARTICIPATION DEFINED.

    Section 3.1(11)(B) (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' means multi-lender transactions including, 
        but not limited to, 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. 4. AGRICULTURAL EXPORT FINANCING.

    (a) Section 3.7(b)(1) (12 U.S.C. 2128(b)(1)) is amended by--
            (1) striking ``assistance to (A)'' and inserting 
        ``assistance to'';
            (2) striking ``the export or'' and inserting ``the''; and
            (3) striking ``, and (B)'' and all that follows through 
        ``subparagraph (A)''.
    (b) Section 3.7(b) (12 U.S.C. 2128(b)) is further amended by 
striking paragraph (2) and inserting the following new paragraph:
    ``(2)(A) A bank for cooperatives is authorized to make or 
participate in loans and commitments to, and to 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, farm supplies, or aquatic 
        products from the United States under policies and procedures 
        established by the bank for cooperatives to ensure that such 
        commodities, products, or supplies are originally sourced, 
        where reasonably available, from one or more eligible 
        cooperative associations on a priority basis; and
            ``(ii) except as provided in subparagraph (B), any domestic 
        or foreign party in which an eligible cooperative association 
        (as defined in section 3.8) has an ownership interest, for the 
        purpose of facilitating the association's domestic or foreign 
        business operations: Provided, That if the ownership interest 
        by an eligible cooperative association, or associations, is 
        less than 50 percent, then such financing shall be limited to 
        the percentage held in the party by such association or 
        associations.
    ``(B) A bank for cooperatives shall not use the authority provided 
in paragraph (2)(A)(ii) to provide financial assistance to a party for 
the purpose of financing the relocation of plants or facilities from 
the United States to another country.''.

SEC. 5. CONFORMING AMENDMENT.

    Section 3.8(b)(1) (12 U.S.C. 2129(b)(1)) is amended by--
            (1) striking subparagraph (B); and
            (2) redesignating subparagraphs (C), (D), and (E) as 
        subparagraphs (B), (C), and (D), respectively.

SEC. 6. LOAN PARTICIPATION AUTHORITY FOR FARM CREDIT BANKS AND DIRECT 
              LENDER ASSOCIATIONS.

    Title IV (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) In General.--Notwithstanding any other provision of this Act, 
any Farm Credit Bank or direct lender association chartered under this 
Act is authorized to participate in any loan of a type otherwise 
authorized under titles I and 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) such 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 Farm Credit Bank's or 
        association's total capital;
            ``(2) such participation by the Farm Credit Bank or 
        association would itself equal or exceed 50 percent of the 
        principal of the loan or, when taken together with 
        participations in the loan by other Farm Credit Banks and 
        associations under this section, would cause the cumulative 
        amount of the participations by all Farm Credit Banks and 
        associations in the loan to equal or exceed 50 percent of the 
        principal of the loan;
            ``(3) such 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 its 
        total assets; or
            ``(4) the loan is of the type authorized under section 
        1.11(b) or 2.4(a)(2).
    ``(b) Similar Entity Defined.--For the purposes of this section, 
the term `similar entity' means a person or entity that, while not 
eligible for a loan from the Farm Credit Bank or association, has 
operations functionally similar to a person or entity eligible for a 
loan from the Farm Credit Bank or association in that it derives a 
majority of its income from, or has a majority of its assets invested 
in, the conduct of activities functionally similar to those conducted 
by an eligible person.
    ``(c) Prior Approval Required.--
            ``(1) 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 such 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 similar entity's headquarters office is located.
            ``(2) Approval under paragraph (1) of this subsection 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) An association may not participate in a loan to a 
        similar entity under this section without the approval of the 
        association's supervising Farm Credit Bank.
    ``(d) Definition.--For purposes of this section, the term 
`participate' or `participation' shall have the same meaning as 
provided in section 3.1(11)(B).''.

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