FEDERAL AGRICULTURAL MORTGAGE CORPORATION

TITLE VIII OF FARM CREDIT ACT OF 1971

(As added by Public Law 100-233; 101 Stat. 1686; 12 U.S.C. 2279aa et seq.)

TITLE VIII-AGRICULTURAL MORTGAGE SECONDARY MARKET

SEC. 8.0. DEFINITIONS.

For purposes of this title:

(1) AGRICULTURAL REAL ESTATE. The term "agricultural real estate" means—

(A) a parcel or parcels of land, or a building or structure affixed to the parcel or parcels, that

(i) is used for the production of one or more agricultural commodities or products; and

(ii) consists of a minimum acreage or is used in producing minimum annual receipts, as determined by the Corporation; or

(B) a principal residence that is a single family, moderate-priced residential dwelling located in a rural area, excluding

(i) any community having a population in excess of 2,500 inhabitants; and

(ii) any dwelling with a purchase price exceeding $100,000 (as adjusted for inflation).

(2) BOARD.-The term "Board" means

(A) the interim board of directors established in section 8.2(a); and

(B) the permanent board of directors established in section 8.2(b);

as the case may be.

(3)

CERTIFIED

means

FACILITY.-The term "certified facility"

(A) a secondary marketing agricultural loan facility that is certified under section 8.5; or

(B) The Corporation and any affiliate thereof, but only with respect to qualified loans described in paragraph (9)(B).

(4) CORPORATION.-The term "Corporation" means the Federal Agricultural Mortgage Corporation established in section 8.1.

(5) GUARANTEE.-The term "guarantee" means the guarantee of timely payment of the principal and interest on securities representing interests in, or obligations backed by, pools of qualified loans, in accordance with this title.

(6) INTERIM BOARD.-The term "interim board" means the interim board of directors established in section 8.2(a).

(7) ORIGINATOR.-The term "originator" means any Farm Credit System institution, bank, insurance company, business and industrial development company, savings and loan association, association of agricultural producers, agricultural cooperative, commercial finance company, trust company, credit union, or other entity that originates and services agricultural mortgage loans.

(8) PERMANENT BOARD.-The term "permanent board" means the permanent board of directors established in section 8.2(b). (9) QUALIFIED LOAN.-The term "qualified loan" means an obligation

(A)(i) that is secured by a fee-simple or leasehold mortgage with status as a first lien, on agricultural real estate located in the United States that is not subject to any legal or equitable claims deriving from a preceding fee-simple or leasehold mortgage;

(ii) of—

(I) a citizen or national of the United States or an alien lawfully admitted for permanent residence in the United States; or

(II) a private corporation or partnership whose members, stockholders, or partners holding a majority interest in the corporation or partnership are individuals described in subclause (I); and

(iii) of a person, corporation, or partnership that has training or farming experience that, under criteria established by the Corporation, is sufficient to ensure a reasonable likelihood that the loan will be repaid according to its terms; or

(B) that is the portion of a loan guaranteed by the Secretary of Agriculture pursuant to the Consolidated Farm and Rural Development Act (7 U.S.C. 1921 et seq.), except that

(i) subsections (b) through (f) of section 8.6, and sections 8.7, 8.8, and 8.9, shall not apply to the portion of a loan guaranteed by the Secretary or to an obligation, pool, or security representing an interest in or obligation backed by a pool of obligations relating to the portion of a loan guaranteed by the Secretary; and

(ii) the portion of a loan guaranteed by the Secretary shall be considered to meet all standards for qualified loans for all purposes under this Act. (10) STATE. The term "State" has the meaning given such term in section 5.51. [12 U.S.C. 2279aa]

SEC. 8.1. FEDERAL AGRICULTURAL MORTGAGE CORPORATION.

(a) ESTABLISHMENT.

(1) IN GENERAL.-There is hereby established a corporation to be known as the Federal Agricultural Mortgage Corporation, which shall be a federally chartered instrumentality of the United States.

(2) INSTITUTION WITHIN FARM CREDIT SYSTEM.-The Corporation shall be an institution of the Farm Credit System. (3) LIABILITY.

(A) CORPORATION.-The Corporation shall not be liable for any debt or obligation of any other institution of the Farm Credit System.

(B) SYSTEM INSTITUTIONS.—The Farm Credit System and System institutions (other than the Corporation) shall not be liable for any debt or obligation of the Corporation. (b) DUTIES.-The Corporation shall

(1) in consultation with originators, develop uniform underwriting, security appraisal, and repayment standards for qualified loans;

(2) determine the eligibility of agricultural mortgage marketing facilities to contract with the Corporation for the provision of guarantees for specific mortgage pools; and

(3) provide guarantees for the timely repayment of principal and interest on securities representing interests in, or obligations backed by, pools of qualified loans. [12 U.S.C. 2279aa-1]

SEC. 8.2. BOARD OF DIRECTORS.

(a) INTERIM BOARD.—

(1) NUMBER AND APPOINTMENT.-Until the permanent board of directors established in subsection (b) first meets with a quorum of its members present, the Corporation shall be under the management of an interim board of directors composed of 9 members appointed by the President within 90 days after the date of the enactment of this title as follows:

(A) 3 members appointed from among persons who are representatives of banks, other financial institutions or entities, and insurance companies.

(B) 3 members appointed from among persons who are representatives of the Farm Credit System institutions.

(C) 2 members appointed from among persons who are farmers or ranchers who are not serving, and have not served, as directors or officers of any financial institution or entity, of which not more than 1 may be a stockholder of any Farm Credit System institution.

(D) 1 member appointed from among persons who represent the interests of the general public and are not serving, and have not served, as directors or officers of any financial institution or entity.

(2) POLITICAL AFFILIATION.-Not more than 5 members of the interim board shall be of the same political party.

(3) VACANCY.-A vacancy in the interim board shall be filled in the manner in which the original appointment was made. (4) CONTINUATION OF MEMBERSHIP.-If—

(A) any member of the interim board who was appointed to such board from among persons who are representatives of banks, other financial institutions or entities, insurance companies, or Farm Credit System institutions ceases to be such a representative; or

(B) any member who was appointed from among persons who are not or have not been directors or officers of any

financial institution or entity becomes a director or an officer of any financial institution or entity;

such member may continue as a member for not longer than the 45-day period beginning on the date such member ceases to be such a representative or becomes such a director or officer, as the case may be.

(5) TERMS.-The members of the interim board shall be appointed for the life of such board.

(6) QUORUM.-5 members of the interim board shall constitute a quorum.

(7) CHAIRPERSON.-The President shall designate 1 of the members of the interim board as the chairperson of the interim board.

(8) MEETINGS.-The interim board shall meet at the call of the chairperson or a majority of its members.

(9) VOTING COMMON STOCK.—

(A) INITIAL OFFERING.-Upon the appointment of sufficient members of the interim board to convene a meeting with a quorum present, the interim board shall arrange for an initial offering of common stock and shall take whatever other actions are necessary to proceed with the operations of the Corporation.

(B) PURCHASERS.-Subject to subparagraph (C), the voting common stock shall be offered to banks, other financial entities, insurance companies, and System institutions under such terms and conditions as the interim board may adopt.

(C) DISTRIBUTION.-The voting stock shall be fairly and broadly offered to ensure that no institution or institutions acquire a disproportionate amount of the total amount of voting common stock outstanding of a class and that capital contributions and issuances of voting common stock for the contributions are fairly distributed between entities eligible to hold class A and class B stock, as provided under section 8.4.

(10) TERMINATION.-The interim board shall terminate when the permanent board of directors established in subsection (b) first meets with a quorum present.

(b) PERMANENT BOARD.

(1) ESTABLISHMENT.-Immediately after the date that banks, other financial institutions or entities, insurance companies, and System institutions have subscribed and fully paid for at least $20,000,000 of common stock of the Corporation, the Corporation shall arrange for the election and appointment of a permanent board of directors. After the termination of the interim board, the Corporation shall be under the management of the permanent board.

(2) COMPOSITION.-The permanent board shall consist of 15 members, of which

(A) 5 members shall be elected by holders of common stock that are insurance companies, banks, or other financial institutions or entities;

(B) 5 members shall be elected by holders of common stock that are Farm Credit System institutions; and

(C) 5 members shall be appointed by the President, by and with the advice and consent of the Senate

(i) which members shall not be, or have been, officers or directors of any financial institutions or entities;

(ii) which members shall be representatives of the general public;

(iii) of which members not more than 3 shall be members of the same political party; and

(iv) of which members at least 2 shall be experienced in farming or ranching.

(3) PRESIDENTIAL APPOINTEES.-The President shall appoint the members of the permanent board referred to in paragraph (2)(C) not later than the later of

(A) the date referred to in paragraph (1); or

(B) the expiration of the 270-day period beginning on the date of the enactment of this title. (4) VACANCY.

(A) ELECTED MEMBERS.-Subject to paragraph (6), a vacancy among the members elected to the permanent board in the manner described in subparagraph (A) or (B) of paragraph (2) shall be filled by the permanent board from among persons eligible for election to the position for which the vacancy exists.

(B) APPOINTED MEMBERS.-A vacancy among the members appointed to the permanent board under paragraph (2)(C) shall be filled in the manner in which the original appointment was made.

(5) CONTINUATION OF MEMBERSHIP.—If—

(A) any member of the permanent board who was appointed or elected to the permanent board from among persons who are representatives of banks, other financial institutions or entities, insurance companies, or Farm Credit System institutions ceases to be such a representative; or

(B) any member who was appointed from persons who are not or have not been directors or officers of any financial institution or entity becomes a director or an officer of any financial institution or entity;

such member may continue as a member for not longer than the 45-day period beginning on the date such member ceases to be such a representative, officer, or employee or becomes such a director or officer, as the case may be.

(6) TERMS.

(A) APPOINTED MEMBERS.-The members appointed by the President shall serve at the pleasure of the President. (B) ELECTED MEMBERS.-The members elected under subparagraphs (A) and (B) of subsection (b)(2) shall each be elected annually for a term ending on the date of the next annual meeting of the common stockholders of the Corporation and shall serve until their successors are elected