12 U.S.C. § 2074 | Production credit association capitalization

(a)

In general

section 2154a of this titleIn accordance with , each production credit association shall provide, through its bylaws and subject to Farm Credit Administration regulations, for its capitalization and the manner in which its stock shall be issued, held, transferred, and retired and, except as provided in subsection (b), its earnings distributed.

(b)

Application of earnings

At the end of each fiscal year, each production credit association shall apply the amount of the earnings of the association for the fiscal year in excess of the operating expenses of the association (including provision for valuation reserves against loan assets in accordance with generally accepted accounting principles)—

(1)

first, to the restoration of the impairment (if any) of capital; and

(2)

second, to the establishment and maintenance of the surplus accounts, the minimum aggregate amount of which shall be prescribed by the Farm Credit Bank.

(c)

Patronage

When the bylaws of an association so provide and subject to the general directions of the Farm Credit Administration, available net earnings at the end of any fiscal year may be distributed on a patronage basis in stock, participation certificates, or in cash. Any part of the earnings of the fiscal year in excess of the operating expenses for such year held in the surplus account may be allocated to patrons on a patronage basis.

Pub. L. 92–181, title II, § 2 Pub. L. 100–233, title IV, § 401Jan. 6, 1988101 Stat. 1632 Pub. L. 102–552, title V, § 501Oct. 28, 1992106 Stat. 4129(.3, as added , , ; amended , , .)

Editorial Notes

Prior Provisions

Pub. L. 92–181, title II, § 2Dec. 10, 197185 Stat. 593 Pub. L. 96–592, title II, § 203Dec. 24, 198094 Stat. 3440 Pub. L. 99–205, title II, § 205(e)(6)Dec. 23, 198599 Stat. 1704 Pub. L. 100–233, § 401A prior section 2074, .3, , ; , , ; , , , related to loans, discounts, participation, and leasing, prior to the general amendment of this subchapter by .

Amendments

Pub. L. 102–5521992—Subsec. (b). amended subsec. (b) generally. Prior to amendment, subsec. (b) read as follows: “Each production credit association at the end of each fiscal year shall apply the amount of the earnings of the association for such year in excess of the operating expenses of the association (including provision for valuation reserves against loan assets in an amount equal to one-half of 1 percent of the loans outstanding at the end of the fiscal year to the extent that such earnings in such year in excess of other operating expenses permit, or in such greater amounts as are deemed necessary under generally accepted accounting principles, until such reserves equal or exceed 3½ percent of the loans outstanding at the end of the fiscal year, beyond which 3½ percent further additions to such reserves may be made, if deemed necessary under generally accepted accounting principles) first to the restoration of the impairment, if any, of capital, and second, to the establishment and maintenance of the surplus accounts, the minimum aggregate amount of which shall be prescribed by the Farm Credit Bank.”

Statutory Notes and Related Subsidiaries

Effective Date

Pub. L. 100–233, title IV, § 401Jan. 6, 1988101 Stat. 1622Jan. 6, 1988, , , provided that this section is effective 6 months after .