*1 OFFICE OF THE ATTORNEY GENERAL OF TEXAS AUSTIN

Honorable Oee. “. aheprrard

Domptrolla of Fublfo Amounts

Auatln, Texas

“The quertioa ha to tnir llqmrtasnf M to whether a Preduot tfon owenlted on(Ler the Fede ad valora tnxoo. Ii w, ‘what pa to the nd mat valoaer tsx? nuah as brrias

o+rlght by the - e3 I8 its taxnbrr - stook taxabl 0 or Hatlonal Bratpa

~ln~lfd, of Tit&a 12, O.&GI.A., 08, prnmxa and duties of Pmduo- 2; U.S.C.A., authorl~~ rueh becribo a& pay top a&am A olatiion looatmd IFa pihe dir- ae nmount 8ufrlolont to /’ malrntaln the a held by it aad ot&er hoLdarm ai Clam A atoak equal, as nearly aa my be, Eo twenty pr ourturn et the rolwaa or loans ~m&icr or be iwile by said emooletioa.

‘l&t statute further ,pzwMor that the Wodaot~oa Credit Gvrpbn- tfon amy at any *lne require ths asmcrlatlon to re$irs e& aalioel 8took h&Ld by the 4OFpWQt.iOr? In euoh a8bOOleth&, ti irs the $Um- amt of‘ the corporation, t&e wsooiation bar rw~ourma arai~labls tbe?Qfoxo~

~Onarable Gee. H. Sheppard, page 2

35Otga llsd, O? Title 12, U.S.&A., roridea for the organisetltdn or Produotiun Credit Ammoiat 0~8. f

&motion ll31s, of said Tit18 12, U.S.C.A., ralatillg~ t0 thB OBpft51 StOOk OS PrOdUOtioil Credit ~a50aia- tioale, proviEee es t011ws:

-he atoek of auoh l wooietlona shall be di~idad into 8harea of $5 ssah~ and therr shall be two aJ.aaaaa Of Suoh atoak; (1) Ofa A atook whiah la to be had by Produotion Credit Corporations, and *iOh may be per- oh~ad held by Investors, and (2) slaaa B StOOk rzllsh my b. pumhaaed only by iarm? borrwers ?rmn the aaaooietion iudiriduala aligiblo to besore bormmara. C1a88 B stork only ~sh8l.l entitlod rotin(g ri$hta but oaoh holder oi auoh atoah shall bs entitled to no more than one rots. Ho olers B stock, or a&xy intera& therein right to receive dlridanda tharaan, shall bs tranatarred by set o? partiss or'op8~atIcm o? law sroept ta amthey ?armo~ borrewer or an individual ellglbls to bsowia ~a borrower, mad then onlg with tho approtal o? the disoeteza of the aaawlatlen. ?&oh holder,03 alas8 B atook, within two yoara arter he hea osased to bd a borrower, .sh&l erohaago auoh alas8 B atook l t the iair book ralw (not to axooad par) thereor, as 4rtermlnad by the aaoooietioa, * ror olua A atook. All ato@k shell shape in diridanil diatr1bat1ona without preferenca, but tile directors O? ths araooiation MJ, ia their dia6~a8ion, app&y the emoimt of any divldsnd payabla to a holdaT e? olaaa B stack to any indabtedneas of suoh holilar to the raaooiation. Olaae A atook shell be T;re?erred as to assata of the aaaoeiation upon liquidation. . . .*

Se&ion llPg, O? Title 12, U.S.D.A., praridea that

-ah Produotion Aarooiatfoo shall, Pador auoh ruler arid raguletiona as may bs pmaaribad by th8 Fmduotfon Credit Csr- porntion of the district with RFDFWal O? the O096ZnOr Of tha Fara Credit &M.nlatratlon, inrest its ?unds and make loana tar farmars far general agxlaultural purposes in the mmnar therein ~roolded.

section 11314543, o? Title 12, U.S.C.A., prO~lda8 that under orrrtein oonditlona the Prodnotion Crediti AaaoOiati0n IS authorized and ezxpowered to make laaaa to tarrfma ?or tha purpoao of enabling thsa to make home alte??aticma, repaim, end isprcne- m4nta, ati to aall, dlaaount, assign, or otherwise dlapae O?

any loans made by them fn the ma8mar provided ,th8rOin.

mmaabl8 Gao. 8. aheppard, page 9

Subchapter VI, of Chapter 7 Of Title 12, U.S.C.A., 18 entitled: "PROVISIGRS CWON TO PRODDCTION CRFDIT OORPORA- '1'1Oh5, PRODUC'TION GRZDIT Af3SGCIATIGhS, RFGIONAL ARD GRNTRAL RANKS PGR COOPERATIW3.* Section llJ80, of said Yubahapter VI, pzovidee as Iollows:

aThe Cmtral Rank iW Cooperativea, and the Produe- tlon Credit Corporatlon8, Produotiou Crsdit Arroolatiou8, and Bank8 for Cooperatlres, organized under thlm ohapter, and their obligationa, 8hall be deemed to be fnetrumeutall- tlor oi the United Statea, w a8 8ueh, any end all aotr8, dobenturaa, bondr, and other ouch obligations 188ued by such banks, ar8ooiatlon8, or oerpontlon8 shall b8 asmpt both aa to prinaipal aud Aatosrst tram all taxation (naept surtaxam, astate, Inheritance, and gift tame) hoa, or hero- after iapoesd by the United Stete8 or by say State, Terzl- torlsl, or looal taxing aathorltj. Suoh banks a88oolatlon8, oorporationa, their proprrtl, their iranehire8, aapltal, reserdPto8, surplu8, and other fund8, their inoam8, rball aaapt tmra all taxation now or hereafter inpored by the United States or by any State. Terrltorlsl. or looal