§ 1716b. — Partition of Federal National Mortgage Association into Federal National Mortgage Association and Government National Mortgage Association; assets and liabilities; operations.
[Laws in effect as of January 24, 2002]
[Document not affected by Public Laws enacted between
January 24, 2002 and December 19, 2002]
[CITE: 12USC1716b]
TITLE 12--BANKS AND BANKING
CHAPTER 13--NATIONAL HOUSING
SUBCHAPTER III--NATIONAL MORTGAGE ASSOCIATIONS
Sec. 1716b. Partition of Federal National Mortgage Association
into Federal National Mortgage Association and Government
National Mortgage Association; assets and liabilities;
operations
The purposes of this title include the partition of the Federal
National Mortgage Association as heretofore existing into two separate
and distinct corporations, each of which shall have continuity and
corporate succession as a separated portion of the previously existing
corporation. One of such corporations, to be known as Federal National
Mortgage Association, will be a Government-sponsored private
corporation, will retain the assets and liabilities of the previously
existing corporation accounted for under section 1719 of this title, and
will continue to operate the secondary market operations authorized by
such section 1719. The other, to be known as Government National
Mortgage Association, will remain in the Government, will retain the
assets and liabilities of the previously existing corporation accounted
for under sections 1720 \1\ and 1721 of this title, and will continue to
operate the special assistance functions and management and liquidating
functions authorized by such sections 1720 \1\ and 1721.
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\1\ See References in Text note below.
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(Pub. L. 90-448, title VIII, Sec. 801, Aug. 1, 1968, 82 Stat. 536.)
References in Text
This title, referred to in text, means title VIII of Pub. L. 90-448,
which enacted this section, amended sections 24, 378, 1431, 1436, 1464,
1716, 1717 to 1723a, 1723c and 1757 of this title, section 709 of Title
18, Crimes and Criminal Procedure, section 846 of former Title 31, Money
and Finance, section 1820 [now 3720] of Title 38, Veterans' Benefits,
section 612 of former Title 40, Public Buildings, Property, and Works,
and sections 1452b, 3534 and 3535 of Title 42, The Public Health and
Welfare, and enacted provisions set out as notes under this section and
section 1721 of this title.
Section 1720 of this title, referred to in text, was repealed by
Pub. L. 98-181, title IV, Sec. 483(a), Nov. 30, 1983, 97 Stat. 1240.
Codification
Section was enacted as part of the Housing and Urban Development Act
of 1968, and not as part of the National Housing Act which comprises
this chapter or the Federal National Mortgage Association Charter Act
which comprises this subchapter.
Effective Date
Section 808 of title VIII of Pub. L. 90-448 provided that: ``The
amendments made by this title [enacting this section and amending
sections 24, 378, 1431, 1436, 1464, 1716, 1717 to 1723a, 1723c and 1757
of this title, section 709 of Title 18, Crimes and Criminal Procedure,
section 846 of former Title 31, Money and Finance, section 1820 [now
3720] of Title 38, Veterans' Benefits, section 612 of former Title 40,
Public Buildings, Property, and Works, sections 1452b, 3534 and 3535 of
Title 42, The Public Health and Welfare, and notes under this section
and section 1721 of this title] shall be effective from and after a
date, no more than one hundred and twenty days following the date of
enactment of this Act [Aug. 1, 1968], as established by the Secretary of
Housing and Urban Development. Notice of the establishment of such
effective date shall be published in the Federal Register at least
thirty days prior thereto.''
Savings Provision
Section 809 of Pub. L. 90-448 provided that:
``(a) No cause of action by or against the Federal National Mortgage
Association existing prior to the effective date established pursuant to
section 808 [set out above] shall abate by reason of the enactment of
this title. Any such cause of action may thereafter be asserted by or
against the appropriate corporate body named in section 302(a)(2) of the
National Housing Act [section 1717(a)(2) of this title].
``(b) No suit, action, or other proceeding commenced by or against
the Federal National Mortgage Association, or any officer thereof in his
official capacity, prior to the effective date established pursuant to
section 808 shall abate by reason of the enactment of this title. A
court may at any time thereafter during the pendency of any such
litigation, on its own motion or that of any party, order that the
litigation may be maintained by or against the appropriate corporate
body named in section 302(a)(2) of the National Housing Act [section
1717(a)(2) of this title] or the appropriate corresponding officer
thereof.''
Transitional Provisions
Section 810 of Pub. L. 90-448, as amended by Pub. L. 91-609, title
IX, Sec. 901(e), Dec. 31, 1970, 84 Stat. 1807; Pub. L. 93-383, title
VIII, Sec. 806(l), Aug. 22, 1974, 88 Stat. 728; Pub. L. 99-514, Sec. 2,
Oct. 22, 1986, 100 Stat. 2095, provided that:
``(a) On the effective date established pursuant to section 808 of
this Act [set out above], each share of outstanding nonvoting common
stock, with a par value of $100 per share, of the Federal National
Mortgage Association shall be changed into and shall become one share of
voting common stock, without par value, of such corporation. For the
purposes of the Internal Revenue Code of 1986 [formerly I.R.C. 1954,
Title 26], no gain or loss is recognized by the holders of such stock on
such change, and the basis and holding period of such stock in the hands
of the stockholders immediately after such change are the same as the
basis and holding period of such stock in their hands immediately prior
to such change.
``(b), (c). [Repealed. Pub. L. 93-383, title VIII, Sec. 806(l), Aug.
22, 1974, 88 Stat. 728].
``(d) Those persons who are the officers and employees of the
Federal National Mortgage Association immediately prior to the effective
date established pursuant to section 808 [set out as a note above] shall
become the officers and employees of the Government National Mortgage
Association on such date. The Federal National Mortgage Association and
the Government National Mortgage Association shall provide by contract
for the conditions and methods under which and by which the Federal
National Mortgage Association during the transitional period may employ
those individuals who are employees of the Government National Mortgage
Association on such effective date; and may provide by contract for the
operation by either of such corporations of any of the functions of the
other. The Secretary of Housing and Urban Development shall make every
reasonable effort to place in other comparable Federal positions any
individuals who are career or career-conditional employees of the
Government National Mortgage Association on such effective date and who
are subsequently during the transitional period neither employed by the
Federal National Mortgage Association nor retained by the Government
National Mortgage Association.''
