Section 4
SEC. 4. Section seventy-seven of the same Act is hereby amended to read as follows: "SEC. 77. Issuance of Preferred Shares of Stock to Finance Acquisition of Farm Lots and Other Assets. — The Bank shall issue, from time to time, preferred shares of stock in such quantities as may be necessary to pay the landowners in accordance with Sections eighty and eighty-one of this Code, and for acquisition of other assets should the seller elect to accept such payment. The amount of shares that the Bank may issue shall not exceed the aggregate amount needed to pay the landowners in the proportion prescribed in said Section eighty of this Code. The Board of Directors shall include as a necessary part of the by-laws that it shall issue under Section seventy-five of this Code, such formula as it deems adequate for determining the net asset value of its holdings as a guide and basis for the issuance of preferred shares. The shares of stock issued under the authority of this provision shall be guaranteed a rate of return of at least six per centum per annum. In the event that the earnings of the Bank for any single fiscal year are not sufficient to enable the Bank, after making reasonable allowance for administration, contingencies and growth, to declare dividends at the guaranteed rate, the amount equivalent to the difference between the Bank's earnings available for dividends and that necessary to pay the guaranteed rate shall be paid by the Bank out of its own assets but the Government shall, on the same day that the Bank make such payment reimburse the latter in full, for which purpose such amounts as may be necessary to enable the Government to make such reimbursements are hereby appropriated out of any moneys in the National Treasury not otherwise appropriated. The Bank shall give sufficient notice to the Budget Commissioner and the Secretary of Finance in the event that it is not able to pay the guaranteed rate of return on any fiscal period. The guaranteed rate of return on these shares shall not preclude the holders thereof from participating at a percentage higher than six per centum should the earnings of the Bank for the corresponding fiscal period exceed the guaranteed rate of return. The Board of Directors shall declare and distribute dividends within three months after the close of each fiscal year at the guaranteed rate unless a higher rate of return is justified by the Bank's earnings after making reasonable allowance for administration, contingencies and growth, in which case, dividends shall be declared and distributed at a higher rate. The capital gains derived from the sale or transfer of such shares and all income derived therefrom in the form of dividends shall be fully tax-exempt."