An Act to amend the Federal Farm LoAn Act and the Farm Credit Act of 1933 to provide means for expediting the retirement of Government capital in the Federal intermediate credit banks, including an increase in the debt permitted such banks in relations to their capital and provision for the production credit associations to acquire additional capital stock therein, to provide for allocating certain earnings of such banks and associations to their users, and for other purposes
PL 89-237 (H.R.4152), enacted 10/04/1965

922 
PUBLIC LAW 89-237-OCT. 4, 1965 
[79 
STAT. 
66 Stat. 163. 
Repeal, 
75 Stat. 650. 
8 u s e 1101. 
(j) The title preceding section 249 is amended to read as follows: 
*'lffiCORD o r ADMISSION FOR PERMANENT RESIDENCE I N T H E CASE OF CER-
T A I N ALIENS W H O ENTERED T H E UNITED STATES PRIOR TO J U L Y 1, 1 9 2 4 , 
OR J U N E 3 0 , 1 9 4 8 " . 
SEC 23. (a) The table of contents (Title II—Immigration, chap-
ter 1) of the Immigration and Nationality Act, is amended to read as 
follows: 
"CHAPTER 1—SELECTION SYSTEM 
"Sec. 201. Numerical limitations. 
"Sec. 202. Numerical limitation to any single foreign state. 
"Sec. 203. Allocation of immigrant visas. 
"Sec. 204, Procedure for granting immigrant status. 
"Sec, 205, Revocation of approval of petitions. 
"Sec, 206. Unused imonigralnt visas." 
(b) The table of contents (Title II—Immigration, chapter 3) of 
the Immigration and Nationality Adt, is amended by changing the 
designation of section 224 to read as follows: 
"Sec. 224. Immediate relative and special immigrant visas." 
(c) The table of contents (Title II—Immigration, chapter 5) of the 
Immigration and Nationality Adt is amended by changing the desig-
nation of section 249 to read as follows: 
"Sec. 249. Record of admission for permanent residence in the case of certain 
aliens vsrho entered the United States prior to July 1, 1924, or June 
30, 1948." 
SEC 24. Paragraph (6) of section 101(b) is repealed. 
Approved October 3, 1965, 3:25 p.m. 
October 4, 1965 
[H, R, 4152] 
Public Law 89-237 
AN ACT 
To amend the Federal Farm Loan Act and the Farm Credit Act of 1933 to 
provide means for expediting the retirement of Government capital in the 
Federal intermediate credit banks, including an increase in the debt permitted 
such banks in relation to their capital and provision for the production credit 
associations to acquire additional capital stock therein, to provide for allocat-
ing certain earnings of such banks and associations to their users, and for 
other purposes. 
Federal Farm 
Loan Act and 
Farm Credit Act 
of 1933, amend-
ments. 
70 Stat. 663, 
49 Stat. 315, 
70 Stat. 660. 
Be it enacted hy the Senate and House of Refresentatvoes 
of the 
United States of America in Congress assembled, That the Federal 
Farm Loan Act, as amended, is hereby amended— 
(a) by inserting immediately before the semicolon at the end 
of paragraph (1) of section 202(a) thereof (12 U.S.C. 1031(1)) 
the following: "or without collateral to the extent authorized 
under rules and regulations prescribed by the Farm Credit Admin-
istration" ; 
(b) by striking out '•''Provided'''' and all that follows it in section 
203(a) thereof (12 U.S.C. 1041) and substituting therefor the 
following: ''''Provided, That the aggregate amount of the outstand-
ing debentures and similar obligations issued by the Federal 
intermediate credit banks shall not exceed twelve times the surplus 
and paid-in capital of all such banks."; 
(c) in section 205(a) thereof (12 U.S.C. 1061(a))— 
(i) by substituting "one-eighth" for "one-sixth" in the ninth 
sentence of para^rapn (1) ; and 
(ii) by inserting the following as two separate paragraphs 
between the eleventh and twelfth sentences of paragraph (2) : 
"Each Federal intermediate credit bank, with the approval of 
the Farm Credit Administration, may determine the amount of 
79 STAT. ] 
PUBLIC LAW 89-237-OCT. 4, 1965 
923 
additional class B stock in the bank to be subscribed for by the 
production credit associations in the farm credit district served by 
the bank in order to provide capital to meet the credit needs of 
the bank. The amount so determined shall be allotted among the 
production credit associations in the district upon such basis that, 
as nearly as may be practicable, the sum or the class B stock 
already owned and the additional amount to be subscribed for by 
each association will be in the same proportion to the total 
amount of class B stock already owned and to be subscribed for 
by all of the associations in the district that the average indebted-
ness (loans and discounts) of each association to the bank during 
the immediately preceding three fiscal years is of the average of 
such indebtedness of all production credit associations to the bank 
during such three-year period. Each production credit associa-
tion shall subscribe for class B stock in the bank in the amount so 
allotted to it. 
Such subscriptions shall be subject to call and 
payment therefor shall be made at such times and in such amounts 
as may be determined by the bank. 
"Whenever the relative amounts of class B stock in a Federal 
intermediate credit bank owned by the production credit associa-
tions differ substantially from the proportion indicated in the 
preceding paragraph, and additional subscriptions to class B stock 
through which such proportion could be reestablished are not 
contemplated, the Federal intermediate credit bank, with the 
approval of the Farm Credit Administration, may direct either 
separately or in combination such transfers, retirements, and 
reissuance of outstanding class B stock among the associations 
as will reestablish the aforesaid proportion as nearly as may be 
practicable. 
Outstanding class B stock which is transferred or 
retired for this purpose shall be the oldest stock held by the asso-
ciation and the bank shall pay the association therefor at the 
fair book value thereof not exceeding par and collect therefor 
from any production credit association to which such stock is 
transferred or reissued."; and 
(d) in section 206 thereof (12 U.S.C. 1072) — 
7o stat. 662. 
(i) by striking out "equal to 25 per centum of the outstanding 
capital stock and participation certificates of the bank" from 
clause (3) of the first sentence of subsection (a); 
(ii) by striking out the second sentence of subsection (a) and 
inserting in lieu thereof as a separate paragraph the following: 
"Amounts applied to reserve account as provid^ in (3) above, either 
heretofore or hereafter, shall be allocated on the same patronage basis 
and have the same tax treatment as is provided in subsection (b) of 
this section for patronage refunds. Such allocations of reserve account 
shall be subject to a first lien as additional collateral for any indebted-
ness of the holders thereof to the bank and in any case where such 
indebtedness is in default may be retired and canceled for application 
on such indebtedness, and, in case of liquidation or dissolution of a 
holder thereof, such reserve account allocations may be retired, all as 
is provided for capital stock and participation certificates in section 
205 of this Act. At the end of any fiscal year that the reserve account 
of any bank exceeds 25 per centum of its oultstanding capital stock 
and participation certificates, such excess may be distributed, oldest 
allocations first, in class B stock and participation certificates issued as 
of the date of the allocations and, whenever the bank has no class A 
stock outstanding, also in money."; and 
(iii) by inserting immediately before the last sentence of sub-
section (c) the following new sentence: "Any of the reserve estab-
69 Stat. 663. 
924 
PU BLIC LAW 89-237-OCT. 4, 1965 
[79 STAT. 
lished pursuant to subsedtion (a) of this section shall be paid to 
the production credit associations and other financing institu-
tions to which such reserve is allocated on the books of the bank.". 
SEC. 2. The Farm Credit Act of 1933, as amended, is amended— 
(a) by adding the following at the end of subsection (b) of sec-
tion 22 thereof (12 U.S.C. 1131f (b)) : "When so specified in the 
approval by the Federal intermediate credit bank, such dividends 
may be paid even though the amount in the surplus account pro-
vided for in subsection (a) is less than the minimum prescribed by 
the bank. If the bylaws of a production credit association so pro-
vide, (1) any remaining net earnings at the end of a fiscal year 
may be distributed on a patronage basis in class A stock of the 
association and, when the United States does not hold class A stock 
in the association, also in money, and (2) any part of the earnings 
for the fiscal j'^ear in excess of operating expenses held in the sur-
plus account may be allocated to borrowers on a patronage basis. 
With the approval of the Federal intermediate credit bank, 
amounts so allocated may be distributed, oldest allocations first, 
in class A stock of the association issued as of the date of the allo-
cation and, when the United States does not hold class A stock in 
the association, also in money. As used in the second preceding 
sentence 'on a patronage basis' means in the proportion that the 
amount of interest earned on the loans of each borrower bears to 
the total interest earned on the loans of all borrowers during the 
the fiscal year."; and 
(b) by adding the following as a separate paragraph at the 
end of section 23 thereof (12 U.S.C. 1131g) : 
"As a further means of providing capital, a production credit asso-
ciation may, upon such terms and conditions as may be provided in 
its bylaws, require borrowers to invest in an equity reserve in the 
association. Amounts so invested by each borrower shall be subject 
to a lien for the indebtedness of the borrower to the association, 
application on such indebtedness in event of default by the borrower, 
charges for losses of the association which are in excess of other 
loss reserves and surplus, and any portion of the amounts so invested 
which have not been so used and no longer are required for the pur-
poses of the association may be returned to the borrower by revolving 
or retirement, all as may be provided in said bylaws." 
Approved October 4, 1965.