verse effect on, the Farm Credit System institu-
tion.
‘‘(4) LIABILITY OR LEGAL EXPENSE.—The term
‘liability or legal expense’ means—
‘‘(A) a legal or other professional expense
incurred in connection with any claim, proceed-
ing, or action;
‘‘(B) the amount of, and any cost incurred
in connection with, any settlement of any claim,
proceeding, or action; and
‘‘(C) the amount of, and any cost incurred
in connection with, any judgment or penalty im-
posed with respect to any claim, proceeding, or
action.
‘‘(5) PAYMENT.—The term ‘payment’ means—
‘‘(A) a direct or indirect transfer of any
funds or any asset; and
‘‘(B) any segregation of any funds or assets
for the purpose of making, or under an agree-
ment to make, any payment after the date on
which the funds or assets are segregated, without
regard to whether the obligation to make the
payment is contingent on—
‘‘(i) the determination, after that date,
of the liability for the payment of the
amount; or
‘‘(ii) the liquidation, after that date, of
the amount of the payment.
‘‘(b) PROHIBITION.—The Corporation may prohibit or
limit, by regulation or order, any golden parachute pay-
ment or indemnification payment by a Farm Credit Sys-
tem institution (including any conservator or receiver of
the Federal Agricultural Mortgage Corporation) in troubled
condition (as defined in regulations issued by the Corpora-
tion).
‘‘(c) FACTORS TO BE TAKEN INTO ACCOUNT.—The
Corporation shall prescribe, by regulation, the factors to be
considered by the Corporation in taking any action under
subsection (b). The factors may include—
‘‘(1) whether there is a reasonable basis to believe
that an institution-related party has committed any
fraudulent act or omission, breach of trust or fidu-
ciary duty, or insider abuse with regard to the Farm
Credit System institution involved that has had a
material effect on the financial condition of the insti-
tution;
‘‘(2) whether there is a reasonable basis to believe
that the institution-related party is substantially re-
sponsible for the insolvency of the Farm Credit Sys-
tem institution, the appointment of a conservator or
receiver for the institution, or the institution’s trou-
bled condition (as defined in regulations prescribed by
the Corporation);
‘‘(3) whether there is a reasonable basis to believe
that the institution-related party has materially vio-
lated any applicable law or regulation that has had
a material effect on the financial condition of the in-
stitution;
‘‘(4) whether there is a reasonable basis to believe
that the institution-related party has violated or con-
spired to violate—
‘‘(A) section 215, 657, 1006, 1014, or 1344
of title 18, United States Code; or
‘‘(B) section 1341 or 1343 of title 18, Unit-
ed States Code, affecting a Farm Credit System
institution;
‘‘(5) whether the institution-related party was in
a position of managerial or fiduciary responsibility;
and
‘‘(6) the length of time that the party was related
to the Farm Credit System institution and the degree
to which—
‘‘(A) the payment reasonably reflects com-
pensation earned over the period of employment;
and
‘‘(B) the compensation represents a reason-
able payment for services rendered.
‘‘(d) CERTAIN PAYMENTS PROHIBITED.—No Farm
Credit System institution may prepay the salary or any
liability or legal expense of any institution-related party
if the payment is made—
‘‘(1) in contemplation of the insolvency of the in-
stitution or after the commission of an act of insol-
vency; and
‘‘(2) with a view to, or with the result of—
‘‘(A) preventing the proper application of
the assets of the institution to creditors; or
‘‘(B) preferring 1 creditor over another
creditor.
‘‘(e) RULE OF CONSTRUCTION.—Nothing in this sec-
tion—
‘‘(1) prohibits any Farm Credit System institu-
tion from purchasing any commercial insurance pol-
icy or fidelity bond, so long as the insurance policy
or bond does not cover any legal or liability expense
of an institution described in subsection (a)(2); or
‘‘(2) limits the powers, functions, or responsibil-
ities of the Farm Credit Administration.’’.
SEC. 219. FARM CREDIT SYSTEM INSURANCE CORPORATION
BOARD OF DIRECTORS.
(a) IN GENERAL.—Section 5.53 of the Farm Credit
Act of 1971 (12 U.S.C. 2277a–2) is amended to read as
follows:
‘‘SEC. 5.53. BOARD OF DIRECTORS.
‘‘(a) ESTABLISHMENT.—The Corporation shall be
managed by a Board of Directors that shall consist of the
members of the Farm Credit Administration Board.
‘‘(b) CHAIRMAN.—The Board of Directors shall be
chaired by any Board member other than the Chairman
of the Farm Credit Administration Board.’’.
(b) CONFORMING AMENDMENTS.—
(1) Section 5314 of title 5, United States Code,
is amended by striking ‘‘Chairperson, Board of Direc-
tors of the Farm Credit System Insurance Corpora-
tion.’’.
(2) Section 5315 of title 5, United States Code,
is amended by striking ‘‘Members, Board of Directors
of the Farm Credit System Insurance Corporation.’’.
SEC. 220. INTEREST RATE REDUCTION PROGRAM.
Section 351(a) of the Consolidated Farm and Rural
Development Act (7 U.S.C. 1999) is amended—
(A) by striking ‘‘SEC. 351. (a) The’’ and in-
serting the following:
‘‘SEC. 351. INTEREST RATE REDUCTION PROGRAM.
‘‘(a) ESTABLISHMENT OF PROGRAM.—
‘‘(1) IN GENERAL.—The’’; and
(B) by adding at the end the following:
‘‘(2) TERMINATION OF AUTHORITY.—The author-
ity provided by this subsection shall terminate on
September 30, 2002.’’.
SEC. 221. LIABILITY FOR MAKING CRIMINAL REFERRALS.
(a) IN GENERAL.—Any institution of the Farm Credit
System, or any director, officer, employee, or agent of a
Farm Credit System institution, that discloses to a Govern-
ment authority information proffered in good faith that
may be relevant to a possible violation of any law or regula-
tion shall not be liable to any person under any law of
the United States or any State—
(1) for the disclosure; or
(2) for any failure to notify the person involved
in the possible violation.
(b) NO PROHIBITION ON DISCLOSURE.—Any institu-
tion of the Farm Credit System, or any director, officer,
employee, or agent of a Farm Credit System institution,
may disclose information to a Government authority that
may be relevant to a possible violation of any law or regula-
tion.
TITLE III—IMPLEMENTATION
AND EFFECTIVE DATE
SEC. 301. IMPLEMENTATION.
The Secretary of Agriculture and the Farm Credit Ad-
ministration shall promulgate regulations and take other
required actions to implement the provisions of this Act not
later than 90 days after the effective date of this Act.
SEC. 302. EFFECTIVE DATE.
Except as otherwise provided in this Act, this Act and
the amendments made by this Act shall become effective on
the date of enactment.
Attest:
Clerk.