LOAN LOSS AMORTIZATION FOR AGRICULTURAL BANKS.

SEC. 801. LOAN LOSS AMORTIZATION FOR AGRICULTURAL BANKS. Section 13 of the Federal Deposit Insurance Act (12 U.S.C. 1823) is amended by adding at the end thereof the following: “(j) Loan Loss Amortization for Certain Banks.— “(1) Eligibility.— The appropriate Federal banking agency shall permit an agricultural bank to take the actions referred to in paragraph (2) if it finds that— “(A) there is no evidence that fraud or criminal abuse on the part of the bank led to the losses referred to in paragraph (2); and “(B) the agricultural bank has a plan to restore its capital, not later than the close of the amortization period established under paragraph (2), to a level prescribed by the appropriate Federal banking agency. “(2) Seven-year loss amortization.— (A) Any loss on any qualified agricultural loan that an agricultural bank would otherwise be required to show on its annual financial statement for any year between December 31, 1983, and January 1, 1992, may be amortized on its financial statements over a period of not to exceed 7 years, as provided in regulations issued by the appropriate Federal banking agency. “(B) An agricultural bank may reappraise any real estate or other property, real or personal, that it acquired coincident to the making of a qualified agricultural loan and that it owned on January 1, 1983, and any such additional property that it acquires prior to January 1, 1992. Any loss that such bank would otherwise be required to show on its annual financial statements as the result of any such reappraisal may be amortized on its financial statements over a period of not to exceed 7 years, as provided in regulations issued by the appropriate Federal banking agency. “(3) Regulations.— Not later than 90 days after the date of enactment of this subsection, the appropriate Federal banking agency shall issue regulations implementing this subsection with respect to banks that it supervises, including regulations implementing the capital restoration requirement of paragraph (1)(B). “(4) Definitions.— As used in this subsection— “(A) the term ‘agricultural bank’ means a bank— 101 STAT. 657 “(i) the deposits of which are insured by the Federal Deposit Insurance Corporation; “(ii) which is located in an area the economy of which is dependent on agriculture; “(iii) which has assets of $100,000,000 or less; and “(iv) which has— “(I) at least 25 percent of its total loans in qualified agricultural loans; or “(II) fewer than 25 percent of its total loans in qualified agricultural loans but which the appropriate Federal banking agency or State bank commissioner recommends to the Corporation for eligibility under this section, or which the Corporation, on its motion, deems eligible; and “(B) the term ‘qualified agricultural loan’ means a loan made to finance the production of agricultural products or livestock in the United States, a loan secured by farmland or farm machinery, or such other category of loans as the appropriate Federal banking agency may deem eligible. “(5) Maintenance of portfolio.— As a condition of eligibility under this subsection, the agricultural bank must agree to maintain in its loan portfolio a percentage of agricultural loans which is not lower than the percentage of such loans in its loan portfolio on January 1, 1986.”.