AMENDMENTS RELATED TO SECTION 41S OF THE 1987 ACT.

SEC. 408. AMENDMENTS RELATED TO SECTION 41S OF THE 1987 ACT. (a) The title heading of title VII is amended to read as follows: “TITLE VII—RESTRUCTURING OF SYSTEM INSTITUTIONS” (b) Section 7.0 is amended— (1) by striking out “Two or more” and inserting in lieu thereof “The”; and (2) in paragraph (3), by striking out “in accordance” and all that follows through “by” and inserting in lieu thereof “with each association entitled to cast a number of votes equal to the number of its voting”. (c) Section 7.1 is amended to read as follows: “SEC. 7.1. BOARD OF DIRECTORS. “Each merged bank shall elect a board of directors of such number, for such term, in such manner, and with such qualifications, as may be required in its bylaws, except that at least one member shall be elected by the other directors, which member shall not be a director, officer, employee, or stockholder of a System institution.”. (d) Subtitle A of title VII is amended by striking out sections 7.3 and 7.4 and inserting in lieu thereof the following: “SEC. 7.3. CAPITALIZATION. “In accordance with section 4.3A, each merged bank shall provide, through bylaws and subject to Farm Credit Administration regulations, for the capitalization of the bank and the manner in which bank stock shall be issued, held, transferred, and retired and bank earnings distributed.”. (e) Subtitle A of title VII is amended by redesignating section 7.5 as section 3.29, and by transferring such section, as so amended, to the end of part B of title III. (f) Section 7.6(a) is amended— (1) by striking out “Assignments.—” and inserting in lieu thereof “Voluntary Transfers.—”; (2) by striking out “assign” and inserting in lieu thereof “transfer”; (3) by striking out “sections 1.6 through 1.9” and inserting in lieu thereof “this Act”; (4) by striking out “assignment” and inserting in lieu thereof “transfer”; and (5) in paragraph (3), by striking out “7.6” and inserting in lieu thereof “7.8, respectively”. (g) Section 7.6(b) is amended— 102 STAT. 1002 (1) by striking out “an assignment described in subsection (a)” and inserting in lieu thereof “a transfer described in subsection (a) or (d)”; and (2) in paragraph (2), by striking out “Federal land” the first place it appears. (h) Section 7.6(c) is amended— (1) by striking out “assignments or”; and (2) by striking out the second sentence. (i) The section heading and text of section 7.7 are amended to read as follows: “(d) Mandatory Transfer.—On the merger of one or more production credit associations with one or more Federal land bank associations, the bank supervising the Federal land bank association shall transfer all of the direct lending authority of the bank in the territory served by such Federal land bank association to such merged association.”. (j) The provision amended by subsection (i) of this section, as so amended, is hereby transferred to the end of section 7.6, where such transferred provision shall become a new subsection (d). (k) Section 7.8(b)(2) is amended by striking out the second sentence. (l) Section 7.8 is amended by striking out paragraphs (2) and (3) of subsection (c) and subsection (d) and inserting in lieu thereof the following: “(2) Capitalization.—In accordance with section 4.3A, each merged association shall provide, through bylaws and subject to Farm Credit Administration regulations, for the capitalization of the association and the manner in which association stock shall be issued, held, transferred, and retired, and association earnings shall be distributed.”. (m) Subtitle B of title VII is amended by redesignating chapter 3 as chapter 4, and by inserting before section 7.9 the following: “Chapter 3—Reconsideration”. (n) Section 7.9(a) is amended— (1) in paragraph (1), by striking out “section 5.17(a)(2)” and inserting in lieu thereof “this Act”; (2) in paragraph (5), by inserting “or 7.13” before the semicolon; (3) in paragraph (6), by striking out “and” and inserting in lieu thereof “or”; (4) in paragraph (7), by striking out “7.13” and inserting in lieu thereof “7.12”; and (5) by redesignating paragraphs (5), (6), and (7), as paragraphs (4), (5), and (6), respectively. (o) Section 7.9(b)(2) is amended— (1) by striking out the third comma; and (2) by inserting “banks or” after “such”. (p) Section 7.11(a)(1) is amended— (1) by striking out “or assignment”; and (2) by striking out “such institutions” and inserting in lieu thereof “the institutions involved”. (q) Section 7.12(b) is amended to read as follows: “(b) Powers and Capitalization.— Sections 7.2 and 7.3 shall apply to banks merged under this section.”. 102 STAT. 1003 (r) Section 7.12(c)(2)(B) is amended by striking out “members” and inserting in lieu thereof “directors”. (s) Section 7.13(a)(4) is amended by striking out “Bank” and inserting in lieu thereof “Banks involved”. (t) Section 7.13(b) is amended by striking out “(b), (c), and (d)” and inserting in lieu thereof “(b) and (c)”. (u) Title VII is amended by adding at the end the following new subtitle: “Subtitle E—Taxation of Merger Transactions “SEC 7.14. TRANSACTIONS TO ACCOMPLISH MERGERS EXEMPT FROM CERTAIN STATE TAXES. “No State or political subdivision thereof may treat the merger or consolidation of two or more institutions of the Farm Credit System under this title or title IV of the Agricultural Credit Act of 1987 as resulting in a change of ownership of any property owned by any of such merging or consolidating institutions, for purposes of any law of such State or political subdivision providing for reassessment of property on the occurrence of a change of ownership or imposing a tax on the ownership or transfer of property.”.