Farm Credit System Agricultural Export and Risk Management Act
PL 103-376 (H.R.4379), enacted 10/19/1994

PUBLIC LAW 103-376—CKTT. 19, 1994 
108 STAT. 3497 
Public Law 103-376 
103d CJongress 
An Act 
To amend the FEurm 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 TTTLJE. 
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 syndica-
tions, 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 "assist-
ance to"; 
(ii) by striking "the export or" and inserting "the"; 
and 
(iii) by striking "and (B)" and aU 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 pgirticipate in 
loans and commitments to, and extend other technical and financial 
assistance to— 
"(i) any domestic or foreign party for the export, including 
(where appHcable) the cost of 
fi^^ight, 
of agricultural conmiod-
ities or products thereof, farm suppUes, or aquatic products 
fi:x)m the United States under poHcies and procedures estab-
lished by the bank to ensure that the conmiodities, products, 
or supplies are originally soiuxed, where reasonably available, 
fix)m one or more ehgible cooperative associations described 
in section 3.8(a) on a priority basis, except that if the total 
Oct. 19,1994 
[H.R. 4379] 
Farm Credit 
System 
Agricultural 
Export and Risk 
Management 
Act. 
12 u s e 2001 
note. 
108 STAT. 3498 
PUBLIC LAW 103-376—OCT. 19, 1994 
amount of the balances outstanding on loans made by a bank 
under this clause that— 
"(I) are made to finance the escport of commodities, 
products, or suppUes that are not originally sourced fix>m 
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 eUgible cooperative association 
described in section 3.8(a) (including, for the purpose of facilitat-
ing 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 owner-
ship interest by an eUgible cooperative association, or associa-
tions, is less tnan 50 percent, the financing shall be limited 
to the percentage held in the party by the association or associa-
tions. 
"(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 facihty 
troTR the Umted States to smother 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 redesignatmg subparagraphs (C), (D), and (E) as 
subparagraphs (B), (C), and (D), respectively; and 
(C) Dy aUgning the m a r ^ 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 BANES 
AND DIRECT LENDER ASSOCIATIONS. 
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: 
12 use 2206a. 
"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 'partici-
pate' £m.d 'participation' shall have the meaning provided in 
section 3. l(ll)(B)(iv). 
"(2) SIMILAR ENTITY.—The term 'similar entity' means a 
person that— 
PUBLIC LAW 103-376—OCT. 19, 1994 
108 STAT. 3499 
"(A) is not eligible for a loan fi:t)m the Farm Credit 
Bank or association; and 
"(B) has operations that are functionally similar to 
a person that is ehgible 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 msgority of 
the assets of the person invested in, the conduct of activities 
that are functionally similar to the activities that are con-
ducted 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 £uiy loan 
of a type otherwise authorized imder 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 aU 
participations by the Farm Credit Bank or association under 
this section involving a single credit risk to exceed 10 percent 
(or the appUcable higher lending limit authorized under regula-
tions issued by the Farm Credit Administration if the stockhold-
ers of the respective Farm Credit Bank or association so 
approve) of the total capital of the Farm Credit Bank or associa-
tion; 
"(2) the participation by the Farm Credit Bank or associa-
tion 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 eUgible to borrow from a bank for cooperatives under titie 
III, tihe authority of a Farm Credit Bank or association to 
participate in a loan to the entity \mder this section shall 
be subject to the prior approval of the bank for cooperatives 
having, at the time tlie loan is made, the greatest losin volimie 
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, sind 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 of the association.". 
108 STAT. 3500 
PUBLIC LAW 103-376—OCT. 19, 1994 
SEC. 6. CONFORMING AMENDMENTS. 
Section 3.1(ll)(B)(i)(I)(bb) of the Farm Credit Act of 1971 (12 
U.S.C. 2122(ll)(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 "aU banks for cooperatives" and inserting 
"all Farm Credit System institutions". 
Approved October 19, 1994. 
LEGISLATIVE HISTORY—H.R. 4379: 
CONGRESSIONAL RECORD, Vol. 140 (1994): 
Sept. 29, considered and passed House. 
Oct. 5, considered and passed Senate.