US (United States) Code. Title 7. Chapter 31: Rural electrification and telephone service

Codificación normativa de EEUU (Estados Unidos). Legislación federal estadounidense # Agriculture

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publicidad

-CITE-

7 USC CHAPTER 31 - RURAL ELECTRIFICATION AND TELEPHONE

SERVICE 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 31 - RURAL ELECTRIFICATION AND TELEPHONE SERVICE

.

-HEAD-

CHAPTER 31 - RURAL ELECTRIFICATION AND TELEPHONE SERVICE

-MISC1-

SUBCHAPTER I - RURAL ELECTRIFICATION

Sec.

901. Short title.

902. General authority of Secretary of Agriculture.

(a) Loans.

(b) Investigations and reports.

903. Authorization of appropriations.

904. Loans by Secretary of Agriculture for electrical plants and

transmission lines; preferences; consent of State authorities.

905. Repealed.

906. Funding for administrative expenses.

906a. Use of funds outside the United States or its territories

prohibited.

907. Acquisition of property pledged for loans; disposition; sale

of pledged property by borrower.

908. Repealed.

909. Administration on nonpolitical basis; dismissal of officers or

employees for violating provision.

910. Repealed.

911. Acceptance of services of Federal or State officers;

application of civil service laws; expenditures for supplies and

equipment.

911a. Repealed.

912. Extension of time for repayment of loans.

912a. Rescheduling and refinancing of loans.

913. Definitions.

914. Separability.

915. Purchase of financial and credit reports.

916. Criteria for loans.

917. Prohibition on restricting water and waste facility services

to electric customers.

(a) Prohibition.

(b) Ensuring compliance.

(c) ''Rural development programs'' defined.

(d) Regulations.

918. General prohibitions.

(a) No consideration of borrower's level of general

funds.

(b) Loan origination fees.

(c) Consultants.

918a. Energy generation, transmission, and distribution facilities

efficiency grants and loans in rural communities with extremely

high energy costs.

(a) In general.

(b) Authorization of appropriations.

918b. Acquisition of existing systems in rural communities with

high energy costs.

SUBCHAPTER II - RURAL TELEPHONE SERVICE

921. Congressional declaration of policy.

921a. Policy of financing of rural telephone program.

921b. Policy of expansion of markets for debentures.

922. Loans for rural telephone service.

923. State regulation of telephone service.

924. Definition of telephone service and rural area.

925. Loan feasibility.

926. Certain rural development investments by qualified telephone

borrowers not treated as dividends or distributions.

(a) In general.

(b) ''Qualified telephone borrower'' defined.

927. General duties and prohibitions.

(a) Duties.

(b) Prohibitions.

928. Prompt processing of telephone loans.

SUBCHAPTER III - RURAL ELECTRIC AND TELEPHONE DIRECT LOAN PROGRAMS

930. Congressional declaration of policy.

931. Rural Electrification and Telephone Revolving Fund.

931a. Level of loan programs under Rural Electrification and

Telephone Revolving Fund.

932. Liabilities and uses of Rural Electrification and Telephone

Revolving Fund.

(a) Liabilities and obligations of fund.

(b) Uses of fund assets.

(c) Separate electric and telephone accounts.

933. Moneys in the Rural Electrification and Telephone Revolving

Fund.

934. Authorized financial transactions; interim notes; purchase of

obligations for resale; sale of notes and certificates; liens.

935. Insured loans; interest rates and lending levels.

(a) In general.

(b) Insured loans.

(c) Insured electric loans.

(d) Insured telephone loans.

936. Guaranteed loans; accommodation and subordination of liens;

interest rates; assignability of guaranteed loans and related

guarantees.

936a. Prepayment of loans.

(a) Conditions for prepayment.

(b) Charges on prepayment prohibited.

(c) Disqualification for prepayment on finding of

adverse affect on Federal Financing Bank.

(d) Amount of permissible prepayments; establishment

of eligibility criteria.

(e) Assignability and transferability of guarantees

of loans.

936b. Sale or prepayment of direct or insured loans.

(a) Discounted prepayment by borrowers of electric

loans.

(b) Mergers of electric borrowers.

936c. Refinancing and prepayment of FFB loans.

(a) In general.

(b) Penalty.

(c) Loan terms and conditions after refinancing.

(d) Maximum rate option.

936d. Eligibility of distribution borrowers for loans, loan

guarantees, and lien accommodations.

936e. Administrative prohibitions applicable to certain electric

borrowers.

(a) In general.

(b) Subordination or sharing of liens.

(c) Issuance of regulations.

(d) Authority of Secretary.

937. Loans from other credit sources.

938. Full faith and credit of the United States.

939. Loan terms and conditions.

940. Refinancing of rural development loans.

940a. Repealed.

940b. Use of funds.

940c. Cushion of credit payments program.

(a) Establishment.

(b) Uses of cushion of credit payments.

940c-1. Guarantees for bonds and notes issued for electrification

or telephone purposes.

(a) In general.

(b) Limitations.

(c) Fees.

(d) Guarantees.

(e) Authorization of appropriations.

(f) Termination.

940d. Limitations on authorization of appropriations.

(a) ''Adjustment percentage'' defined.

(b) Fiscal years 1994 through 1998.

(c) Funding levels.

(d) Availability of funds for insured loans.

940e. Expansion of 911 access.

(a) In general.

(b) Authorization of appropriations.

SUBCHAPTER IV - RURAL TELEPHONE BANK

941. Telephone Bank.

(a) Establishment.

(b) General purposes.

(c) Status; payments in lieu of property taxes.

942. General powers.

943. Special provisions governing telephone bank as a Federal

Agency until conversion of ownership, control, and operation.

(a) Supervision and direction of Secretary of

Agriculture; free postage and priority of debts

restrictions.

(b) Use of facilities and services of employees of

Secretary of Agriculture.

(c) Wholly owned Government corporation.

(d) Appointment and compensation of personnel.

(e) Tort claims and litigation.

944. Governor of telephone bank; functions, powers, and duties.

944a. Publication of rural telephone bank policies and regulations.

945. Board of directors.

(a) In general.

(b) Membership.

(c) Elections.

(d) Compensation.

(e) Succession.

(f) Chairperson.

(g) Bylaws.

(h) Meetings.

(i) Annual report.

(j) Open meetings.

946. Capitalization.

(a) Federal and borrower subscriptions; Federal

limitation; report to President, transmittal to

Congress; net collection proceeds.

(b) Stock classification; voting stock; one vote

rule.

(c) Class A stock; issuance to Secretary of

Agriculture and redemption; cumulative return.

(d) Class B stock; borrowers as holders; dividend

prohibition; patronage refunds.

(e) Class C stock; borrowers as purchasers;

dividends.

(f) Special fund equivalents.

(g) Patronage refunds from remaining earnings after

provision for operating expenses, reserves for

losses, payments in lieu of taxes, and returns

on class A and C stock.

(h) Reserve for losses due to interest rate

fluctuations.

(i) Investment of RTB Equity Fund.

947. Borrowing power; telephone debentures; issuance; interest

rates; terms and conditions; ratio to paid-in capital and

retained earnings; investments in debentures; debentures as

security; purchase and sale of debentures by the Secretary of the

Treasury; treatment as public debt transactions of the United

States; exclusion of transactions from budget totals.

948. Lending power.

(a) Loans for prescribed purposes; requisite

conditions.

(b) Terms and conditions of loans; restrictions on

loans.

(c) Payment schedule; adjustment; loan period.

(d) Borrowers to determine amortization period for

rural telephone bank loans.

(e) Interest on loans and advances.

949. Telephone bank receipts; availability for obligations and

expenditures.

950. Conversion of ownership, control, and operation of telephone

bank.

(a) Transfer of powers and authority from Secretary

of Agriculture to Telephone Bank Board;

cessation of Presidential appointees as Board

members and reduction in number of Board

members; status of telephone bank.

(b) Restrictions of section 948(a)(2) of this title

inapplicable to loans upon redemption and

retirement of class A stock.

(c) Congressional review.

950a. Liquidation or dissolution of telephone bank.

950b. Borrower net worth.

SUBCHAPTER V - RURAL ECONOMIC DEVELOPMENT

950aa. Additional powers and duties.

950aa-1. Repealed.

SUBCHAPTER VI - RURAL BROADBAND ACCESS

950bb. Access to broadband telecommunications services in rural

areas.

(a) Purpose.

(b) Definitions.

(c) Loans and loan guarantees.

(d) Eligible entities.

(e) Broadband service.

(f) Technological neutrality.

(g) Terms and conditions for loans and loan

guarantees.

(h) Use of loan proceeds to refinance loans for

deployment of broadband service.

(i) Reports.

(j) Funding.

(k) Termination of authority.

-SECREF-

CHAPTER REFERRED TO IN OTHER SECTIONS

This chapter is referred to in sections 918b, 950aaa-2, 1926,

1981, 6941, 6942 of this title; title 12 section 2129; title 16

sections 590z-7, 824k; title 43 sections 485h, 1764.

-CITE-

7 USC SUBCHAPTER I - RURAL ELECTRIFICATION 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 31 - RURAL ELECTRIFICATION AND TELEPHONE SERVICE

SUBCHAPTER I - RURAL ELECTRIFICATION

.

-HEAD-

SUBCHAPTER I - RURAL ELECTRIFICATION

-SECREF-

SUBCHAPTER REFERRED TO IN OTHER SECTIONS

This subchapter is referred to in sections 931, 939 of this

title.

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7 USC Sec. 901 01/06/03

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TITLE 7 - AGRICULTURE

CHAPTER 31 - RURAL ELECTRIFICATION AND TELEPHONE SERVICE

SUBCHAPTER I - RURAL ELECTRIFICATION

-HEAD-

Sec. 901. Short title

-STATUTE-

This chapter may be cited as the ''Rural Electrification Act of

1936''.

-SOURCE-

(May 20, 1936, ch. 432, title I, Sec. 1, 49 Stat. 1363; 1939 Reorg.

Plan No. II, Sec. 5, eff. July 1, 1939, 4 F.R. 2732, 53 Stat.

1434; Oct. 28, 1949, ch. 776, Sec. 2, 63 Stat. 948; Pub. L.

103-354, title II, Sec. 235(a)(1), Oct. 13, 1994, 108 Stat. 3220.)

-MISC1-

AMENDMENTS

1994 - Pub. L. 103-354 added section catchline and text and

struck out former text which read as follows: ''There is hereby

created and established an agency of the United States to be known

as the 'Rural Electrification Administration', all of the powers of

which shall be exercised by an Administrator, who shall be

appointed by the President, by and with the advice and consent of

the Senate, for a term of ten years, and who shall receive a salary

of $10,000 per year. This chapter may be cited as the 'Rural

Electrification Act of 1936'.''

1949 - Act Oct. 28, 1949, inserted ''title I,'' in credit of act

May 20, 1936.

SHORT TITLE OF 1993 AMENDMENT

Pub. L. 103-129, Sec. 1, Nov. 1, 1993, 107 Stat. 1356, provided

that: ''This Act (enacting sections 936d, 936e, and 2008e of this

title, amending sections 902, 904, 913, 918, 924, 935, 936c, 937,

939, 940d, 946, 948, 1926, and 2006f of this title, and enacting

provisions set out as a note below) may be cited as the 'Rural

Electrification Loan Restructuring Act of 1993'.''

SHORT TITLE OF 1992 AMENDMENT

Pub. L. 102-428, Sec. 1, Oct. 21, 1992, 106 Stat. 2183, provided

that: ''This Act (amending section 936b of this title) may be cited

as the 'Rural Electrification Administration Improvement Act of

1992'.''

SHORT TITLE OF 1990 AMENDMENT

Pub. L. 101-624, title XXIII, Sec. 2351(a), Nov. 28, 1990, 104

Stat. 4038, provided that: ''This subtitle (subtitle F (Sec.

2351-2368) of title XXIII of Pub. L. 101-624, enacting sections 918

and 925 to 928 of this title, amending sections 924, 932, 935, 936,

939, 945, 946, 948, and 950 of this title, and enacting provisions

set out as notes under this section and section 946 of this title)

may be cited as the 'Rural Telecommunications Improvements Act of

1990'.''

SHORT TITLE OF 1976 AMENDMENT

Pub. L. 94-570, Sec. 1, Oct. 20, 1976, 90 Stat. 2701, provided:

''That this Act (amending sections 931 and 935 of this title and

enacting provisions set out as a note under section 935 of this

title) may be cited as the 'Rural Electrification Administration

Technical Amendments Act of 1976'.''

REGULATIONS

Pub. L. 103-129, Sec. 6, Nov. 1, 1993, 107 Stat. 1367, provided

that: ''Except as provided in section 2(b) of the Rural

Electrification Act of 1936 (7 U.S.C. 902(b)) and section 370 of

the Consolidated Farm and Rural Development Act (7 U.S.C. 2008e),

as added by sections 2(c)(1)(C) and 5 of this Act, not later than

45 days after the date of enactment of this Act (Nov. 1, 1993),

interim final regulations shall be issued by -

''(1) the Administrator of the Rural Electrification

Administration to carry out the amendments made by this Act (see

Short Title of 1993 Amendment note above) to programs

administered by the Administrator;

''(2) the Administrator of the Rural Development Administration

to carry out the amendments made by this Act to programs

administered by the Administrator; and

''(3) the Secretary of Agriculture to carry out the amendments

made by this Act to programs administered by the Farmers Home

Administration.''

-TRANS-

TRANSFER OF FUNCTIONS

Functions of all officers, agencies, and employees of Department

of Agriculture transferred with certain exceptions, to Secretary of

Agriculture by 1953 Reorg. Plan No. 2, Sec. 1, eff. June 4, 1953,

18 F.R. 3219, 67 Stat. 633, set out as a note under section 2201 of

this title.

Rural Electrification Administration and its functions and

activities transferred to Department of Agriculture, to be

administered therein by Administrator under general direction and

supervision of Secretary of Agriculture, by 1939 Reorg. Plan No.

II, set out in the Appendix to Title 5, Government Organization and

Employees. See also sections 401 to 404 of that plan for provisions

relating to transfer of functions, records, property, personnel,

and funds.

-MISC5-

FINDINGS; STATEMENT OF POLICY

Pub. L. 101-624, title XXIII, Sec. 2352, Nov. 28, 1990, 104 Stat.

4038, provided that:

''(a) Findings. - The Congress finds that -

''(1) making modern telecommunications technology and services

available in rural areas in the United States promotes economic

development and improves the quality of life in rural areas; and

''(2) the efficient operation of the Rural Telephone Bank and

the Rural Electrification Administration telephone loan programs

is essential to the continued development of the

telecommunications infrastructure in rural areas in the United

States.

''(b) Statement of Policy. - It is the policy of the Congress

that the Rural Telephone Bank and the Rural Electrification

Administration make loans that facilitate the development and

enhancement of the rural telecommunications infrastructure in order

to make modern telecommunications technology and services available

at reasonable rates to the greatest practicable number of people in

rural areas in the United States.''

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7 USC Sec. 902 01/06/03

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TITLE 7 - AGRICULTURE

CHAPTER 31 - RURAL ELECTRIFICATION AND TELEPHONE SERVICE

SUBCHAPTER I - RURAL ELECTRIFICATION

-HEAD-

Sec. 902. General authority of Secretary of Agriculture

-STATUTE-

(a) Loans

The Secretary of Agriculture (referred to in this chapter as the

''Secretary'') is authorized and empowered to make loans in the

several States and Territories of the United States for rural

electrification and for the purpose of furnishing and improving

electric and telephone service in rural areas, as provided in this

chapter, and for the purpose of assisting electric borrowers to

implement demand side management, energy conservation programs, and

on-grid and off-grid renewable energy systems.

(b) Investigations and reports

The Secretary may make, or cause to be made, studies,

investigations, and reports regarding matters, including financial,

technological, and regulatory matters, affecting the condition and

progress of electric, telecommunications, and economic development

in rural areas, and publish and disseminate information with

respect to the matters.

-SOURCE-

(May 20, 1936, ch. 432, title I, Sec. 2, 49 Stat. 1363; Oct. 28,

1949, ch. 776, Sec. 2, 3, 63 Stat. 948; Pub. L. 103-129, Sec.

2(c)(1), Nov. 1, 1993, 107 Stat. 1363; Pub. L. 103-354, title II,

Sec. 235(a)(2), (13), Oct. 13, 1994, 108 Stat. 3220, 3221; Pub. L.

104-127, title VII, Sec. 771, Apr. 4, 1996, 110 Stat. 1149.)

-MISC1-

AMENDMENTS

1996 - Pub. L. 104-127, Sec. 771(1), inserted section catchline.

Subsec. (a). Pub. L. 104-127, Sec. 771(1), (2), inserted heading,

substituted ''The Secretary of Agriculture (referred to in this

chapter as the 'Secretary') is'' for ''The Secretary of Agriculture

is'', struck out ''and the furnishing of electric energy to persons

in rural areas who are not receiving central station service''

after ''rural electrification'', and substituted ''systems.'' for

''systems; to make, or cause to be made, studies, investigations,

and reports concerning the condition and progress of the

electrification of and the furnishing of adequate telephone service

in rural areas in the several States and Territories; and to

publish and disseminate information with respect thereto.''

Subsec. (b). Pub. L. 104-127, Sec. 771(3), added subsec. (b) and

struck out former subsec. (b) which read as follows: ''By January

1, 1994, the Secretary shall issue interim regulations to implement

the authority contained in subsection (a) of this section to make

loans for the purpose of assisting electric borrowers to implement

demand side management, energy conservation programs, and on-grid

and off-grid renewable energy systems. If the regulations are not

issued by January 1, 1994, the Secretary shall consider any demand

side management, energy conservation, or renewable energy program,

system, or activity that is approved by a State agency to be

eligible for the loans.''

1994 - Pub. L. 103-354 substituted ''Secretary of Agriculture''

for ''Administrator'' in subsec. (a) and ''Secretary'' for

''Administrator'' in two places in subsec. (b).

1993 - Pub. L. 103-129 designated existing provisions as subsec.

(a), substituted ''electric and telephone service in rural areas,

as provided in this chapter, and for the purpose of assisting

electric borrowers to implement demand side management, energy

conservation programs, and on-grid and off-grid renewable energy

systems;'' for ''telephone service in rural areas, as hereinafter

provided;'', and added subsec. (b).

1949 - Act Oct. 28, 1949, authorized loans to furnish and improve

rural telephone service; and inserted ''title I,'' in credit of act

May 20, 1936.

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7 USC Sec. 903 01/06/03

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TITLE 7 - AGRICULTURE

CHAPTER 31 - RURAL ELECTRIFICATION AND TELEPHONE SERVICE

SUBCHAPTER I - RURAL ELECTRIFICATION

-HEAD-

Sec. 903. Authorization of appropriations

-STATUTE-

There are authorized to be appropriated such sums as are

necessary to carry out this chapter.

-SOURCE-

(May 20, 1936, ch. 432, title I, Sec. 3, 49 Stat. 1364; June 21,

1938, ch. 554, title IV, Sec. 401, 52 Stat. 818; Sept. 21, 1944,

ch. 412, title V, Sec. 501, 503, 504, 58 Stat. 739, 740; July 30,

1947, ch. 356, title I, Sec. 1, 61 Stat. 546; Oct. 28, 1949, ch.

776, Sec. 2, 4(a)-(d), 63 Stat. 948; June 15, 1955, ch. 139, Sec.

1, 69 Stat. 131; Pub. L. 92-12, Sec. 3(a), May 7, 1971, 85 Stat.

37; Pub. L. 93-32, Sec. 3, May 11, 1973, 87 Stat. 70; Pub. L.

103-354, title II, Sec. 235(a)(3), (13), Oct. 13, 1994, 108 Stat.

3220, 3221; Pub. L. 104-127, title VII, Sec. 772(a), Apr. 4, 1996,

110 Stat. 1149.)

-MISC1-

AMENDMENTS

1996 - Pub. L. 104-127 amended section generally, inserting

section catchline and substituting current provisions for

provisions relating to funds of Secretary, including provisions for

loans by Secretary of the Treasury, authorization of

appropriations, allotment of funds for loans in States, loans of

unallotted funds, and unexpended funds and limitation on use.

1994 - Pub. L. 103-354 substituted ''Secretary'' for

''Administrator, upon the request and approval of the Secretary of

Agriculture,'' and for ''Administrator appointed pursuant to the

provisions of this chapter or from the Administrator of the Rural

Electrification Administration established by Executive Order

Numbered 7037'' in first sentence of subsec. (a) and substituted

''Secretary'' for ''Administrator'' wherever appearing.

1973 - Subsec. (f). Pub. L. 93-32 struck out subsec. (f) which

made provision for the disposition of payments on loans that had

been made by the Administrator.

1971 - Subsec. (f). Pub. L. 92-12 inserted introductory text

''Except as otherwise provided in sections 931 and 946(a) of this

title''.

1955 - Subsec. (c). Act June 15, 1955, reduced the funds which

may be allotted for loans from fifty to twenty-five per centum of

the available or appropriated sum, and inserted two provisos.

Subsec. (d). Act June 15, 1955, substituted ''75 per centum'' for

''50 per centum'', and ''25 per centum'' for ''10 per centum''.

Subsec. (e). Act June 15, 1955, substituted ''25 per centum'' for

''10 per centum''.

1949 - Act Oct. 28, 1949, Sec. 2, inserted ''title I,'' in credit

of act May 20, 1936.

Subsec. (a). Act Oct. 28, 1949, Sec. 4(a), authorized loans for

financing facilities to render telephone service.

Subsec. (c). Act Oct. 28, 1949, Sec. 4(b), substituted ''for

loans for rural electrification pursuant to sections 904 and 905 of

this title'' for ''for the purposes of this chapter''.

Subsec. (d). Act Oct. 28, 1949, Sec. 4(c), inserted ''rural

electrification'' after ''available for''.

Subsec. (e). Act Oct. 28, 1949, Sec. 4(d), inserted ''for rural

electrification loans'' after ''sums'' in proviso.

1947 - Subsec. (a). Act July 30, 1947, amended subsec. (a)

generally, and among other things transferred from the

Reconstruction Finance Corporation to the Secretary of the Treasury

the power to make loans.

Subsec. (f). Act July 30, 1947, substituted Secretary of the

Treasury for Reconstruction Finance Corporation.

1944 - Subsec. (a). Act Sept. 21, 1944, struck out ''The

Reconstruction Finance Corporation is hereby authorized and

directed to make loans to the Administrator, upon his request

approved by the President, not exceeding in aggregate amounts

$50,000,000 for the fiscal year ending June 30, 1937, and

$100,000,000 for the fiscal year ending June 30, 1939, with

interest at 3 per centum per annum'' and inserted in lieu thereof

''The Reconstruction Finance Corporation is hereby authorized and

directed to make loans to the Administrator, upon the request and

approval of the Secretary of Agriculture, in such amounts in the

aggregate for each fiscal year commencing with the fiscal year

ending June 30, 1945, as the Congress may from time to time

determine to be necessary, with interest at a rate of 1 3/4 per

centum per annum'', changed colon to period following ''numbered

70037'', inserted ''Interest rates on the unpaid balance of any

loans made by the Reconstruction Finance Corporation to the

Administrator prior to the effective date of this amendment shall

be adjusted to a rate of 1 3/4 per centum per annum'', inserted

sentence ''The amount of the notes, bonds, debentures, and other

such obligations which the Reconstruction Finance Corporation is

authorized and empowered to issue and to have outstanding at any

one time under existing law is hereby increased by an amount

sufficient to carry out the provisions hereof'', and substituted

''thirty-five years'' for ''twenty-five years'' in second proviso.

Subsec. (b). Act Sept. 21, 1944, struck out subsec. (b) limiting

amount of appropriation and renewal of appropriations to eight

years after June 30, 1938, and inserted a new subsec. (b).

Subsec. (e). Act Sept. 21, 1944, struck out ''and provided

further, that no loans shall be made by the Reconstruction Finance

Corporation to the Administrator after June 30, 1939'', and changed

colon to period after ''territories''.

1938 - Subsecs. (a), (e). Act June 21, 1938, inserted ''and

$100,000,000 for the fiscal year ending June 30, 1939'' after

''June 30, 1937,'' in subsec. (a), and substituted ''June 30,

1939'' for ''June 30, 1937'' in subsec. (e).

EFFECTIVE DATE OF 1973 AMENDMENT

Amendment by Pub. L. 93-32 effective May 11, 1973, see section 12

of Pub. L. 93-32, set out as an Effective Date note under section

930 of this title.

EFFECTIVE DATE OF 1971 AMENDMENT

Amendment by Pub. L. 92-12 effective May 7, 1971, see section 7

of Pub. L. 92-12, set out as an Effective Date note under section

921a of this title.

RESTRICTIONS ON BORROWER

Section 401 of act June 21, 1938, as amended by Pub. L. 103-182,

title III, Sec. 381(d), Dec. 8, 1993, 107 Stat. 2129; Pub. L.

103-354, title II, Sec. 235(b)(3), Oct. 13, 1994, 108 Stat. 3221;

Pub. L. 103-465, title III, Sec. 342(g), Dec. 8, 1994, 108 Stat.

4954, in addition to amending subsecs. (a) and (e), provided in

part as follows: ''In making loans pursuant to this title (title IV

of such act) and pursuant to the Rural Electrification Act of 1936

(this chapter), the Secretary of Agriculture shall require that, to

the extent practicable and the cost of which is not unreasonable,

the borrower agree to use in connection with the expenditure of

such funds only such unmanufactured articles, materials, and

supplies, as have been mined or produced in the United States or in

any eligible country, and only such manufactured articles,

materials, and supplies as have been manufactured in the United

States or in any eligible country substantially all from articles,

materials, or supplies mined, produced, or manufactured, as the

case may be, in the United States or in any eligible country. For

purposes of this section, an 'eligible country' is any country that

applies with respect to the United States an agreement ensuring

reciprocal access for United States products and services and

United States suppliers to the markets of that country, as

determined by the United States Trade Representative.''

(Amendment by section 342(g) of Pub. L. 103-465 to section 401 of

act June 21, 1938, set out above, effective on the date on which

the WTO Agreement enters into force with respect to the United

States (Jan. 1, 1995), see section 344(b) of Pub. L. 103-465, set

out as an Effective Date of 1994 Amendment note under section 2512

of Title 19, Customs Duties.)

(Amendment by subsec. 381(d) of Pub. L. 103-182 to section 401 of

act June 21, 1938, set out above, effective on the date the North

American Free Trade Agreement enters into force with respect to the

United States (Jan. 1, 1994), see section 381(e) of Pub. L.

103-182, set out as an Effective Date of 1993 Amendment note under

section 2511 of Title 19, Customs Duties.)

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 904, 907, 922 of this

title.

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7 USC Sec. 904 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 31 - RURAL ELECTRIFICATION AND TELEPHONE SERVICE

SUBCHAPTER I - RURAL ELECTRIFICATION

-HEAD-

Sec. 904. Loans by Secretary of Agriculture for electrical plants

and transmission lines; preferences; consent of State

authorities

-STATUTE-

The Secretary is authorized and empowered, from the sums

hereinbefore authorized, to make loans for rural electrification to

persons, corporations, States, Territories, and subdivisions and

agencies thereof, municipalities, peoples' utility districts and

cooperative, nonprofit, or limited-dividend associations, organized

under the laws of any State or Territory of the United States, for

the purpose of financing the construction and operation of

generating plants, electric transmission and distribution lines or

systems for the furnishing and improving of electric service to

persons in rural areas, including by assisting electric borrowers

to implement demand side management, energy conservation programs,

and on-grid and off-grid renewable energy systems, and loans, from

funds available under section 903 of this title, to cooperative

associations and municipalities for the purpose of enabling said

cooperative associations, and municipalities to the extent that

such indebtedness was incurred with respect to electric

transmission and distribution lines or systems or portions thereof

serving persons in rural areas, to discharge or refinance long-term

debts owned by them to the Tennessee Valley Authority on account of

loans made or credit extended under the terms of the Tennessee

Valley Authority Act of 1933, as amended (16 U.S.C. 831 et seq.):

Provided, That the Secretary, in making such loans, shall give

preference to States, Territories, and subdivisions and agencies

thereof, municipalities, peoples' utility districts, and

cooperative, nonprofit, or limited-dividend associations, the

projects of which comply with the requirements of this chapter.

Such loans shall be on such terms and conditions relating to the

expenditure of the moneys loaned and the security therefor as the

Secretary shall determine and may be made payable in whole or in

part out of the income, except that no loan for the construction,

operation, or enlargement of any generating plant shall be made

unless the consent of the State authority having jurisdiction in

the premises is first obtained. Loans under this section shall not

be made unless the Secretary finds and certifies that in his

judgment the security therefor is reasonably adequate and such loan

will be repaid within the time agreed.

-SOURCE-

(May 20, 1936, ch. 432, title I, Sec. 4, 49 Stat. 1365; Sept. 21,

1944, ch. 412, title V, Sec. 502(a), 503, 58 Stat. 739, 740; Dec.

23, 1944, ch. 725, 58 Stat. 925; June 29, 1948, ch. 703, 62 Stat.

1070; Oct. 28, 1949, ch. 776, Sec. 2, 4(e), 63 Stat. 948; June 15,

1955, ch. 139, Sec. 2, 69 Stat. 132; Pub. L. 103-129, Sec. 2(c)(2),

Nov. 1, 1993, 107 Stat. 1363; Pub. L. 103-354, title II, Sec.

235(a)(13), Oct. 13, 1994, 108 Stat. 3221; Pub. L. 104-127, title

VII, Sec. 773, Apr. 4, 1996, 110 Stat. 1149.)

-REFTEXT-

REFERENCES IN TEXT

The Tennessee Valley Authority Act of 1933, as amended, referred

to in text, is act May 18, 1933. ch. 32. 48 Stat. 58, as amended,

which is classified generally to chapter 12A (Sec. 831 et seq.) of

Title 16, Conservation. For complete classification of this Act to

the Code, see section 831 of Title 16 and Tables.

-MISC2-

AMENDMENTS

1996 - Pub. L. 104-127, in first sentence, struck out ''for the

furnishing of electric energy to persons in rural areas who are not

receiving central station service and'' after ''transmission and

distribution lines or systems'' and substituted ''section 903 of

this title,'' for ''the provisions of sections 903(d) and 903(e) of

this title but without regard to the 25 per centum limitation

therein contained,'', in second sentence, substituted '', except

that'' for '': Provided, further, That all such loans shall be

self-liquidating within a period of not to exceed thirty-five

years, and shall bear interest at the rate of 2 per centum per

annum; interest rates on the unmatured and unpaid balance of any

loans made pursuant to this section prior to September 21, 1944,

shall be adjusted to 2 per centum per annum, and the maturity date

of any such loans may be readjusted to occur at a date not beyond

thirty-five years from the date of such loan: And provided further,

That'', and in third sentence, struck out ''and section 905 of this

title'' before ''shall not be made''.

1994 - Pub. L. 103-354 substituted ''Secretary'' for

''Administrator''.

1993 - Pub. L. 103-129 inserted ''and for the furnishing and

improving of electric service to persons in rural areas, including

by assisting electric borrowers to implement demand side

management, energy conservation programs, and on-grid and off-grid

renewable energy systems'' after ''central station service''.

1955 - Act June 15, 1955, substituted ''25 per centum'' for ''10

per centum''.

1949 - Act Oct. 28, 1949, inserted ''for rural electrification''

after ''to make loans'' in first sentence, and inserted ''title

I,'' in credit of act May 20, 1936.

1948 - Act June 29, 1948, permitted certain municipalities to

refinance with R.E.A. their indebtedness with T.V.A.

1944 - Act Dec. 23, 1944, inserted provision authorizing loans to

cooperative associations to enable them to discharge or refinance

debts owed to the Tennessee Valley Authority.

Act Sept. 21, 1944, extended limit of self-liquidating period

from 25 to 35 years and changing the rate of interest.

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 907, 912, 922, 931, 932,

936b, 940c-1, 948 of this title; title 16 section 2708.

-CITE-

7 USC Sec. 905 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 31 - RURAL ELECTRIFICATION AND TELEPHONE SERVICE

SUBCHAPTER I - RURAL ELECTRIFICATION

-HEAD-

Sec. 905. Repealed. Pub. L. 104-127, title VII, Sec. 774(a), Apr.

4, 1996, 110 Stat. 1150

-MISC1-

Section, acts May 20, 1936, ch. 432, title I, Sec. 5, 49 Stat.

1365; Sept. 21, 1944, ch. 412, title V, Sec. 502(b), 58 Stat. 739;

Oct. 28, 1949, ch. 776, Sec. 2, 63 Stat. 948; Oct. 13, 1994, Pub.

L. 103-354, title II, Sec. 235(a)(13), 108 Stat. 3221, related to

loans for electrical and plumbing equipment and persons eligible

for such loans.

-CITE-

7 USC Sec. 906 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 31 - RURAL ELECTRIFICATION AND TELEPHONE SERVICE

SUBCHAPTER I - RURAL ELECTRIFICATION

-HEAD-

Sec. 906. Funding for administrative expenses

-STATUTE-

For the purpose of administering this chapter and for the purpose

of making the studies, investigations, publications, and reports

herein provided for, there is authorized to be appropriated, out of

any money in the Treasury not otherwise appropriated, such sums as

shall be necessary.

-SOURCE-

(May 20, 1936, ch. 432, title I, Sec. 6, 49 Stat. 1365; Oct. 28,

1949, ch. 776, Sec. 2, 63 Stat. 948; Pub. L. 94-124, Sec. 3, Nov.

4, 1975, 89 Stat. 677; Pub. L. 103-437, Sec. 4(a)(3), Nov. 2, 1994,

108 Stat. 4581; Pub. L. 104-127, title VII, Sec. 775, Apr. 4, 1996,

110 Stat. 1150.)

-MISC1-

AMENDMENTS

1996 - Pub. L. 104-127 struck out at end ''On or before February

15, of each calendar year beginning with calendar year 1976, or

such other date as may be specified by the appropriate committee,

the Secretary of Agriculture shall testify before the House

Committee on Agriculture and the Senate Committee on Agriculture,

Nutrition, and Forestry and provide justification in detail of the

amount requested in the budget to be appropriated for the next

fiscal year for the purpose of administering this chapter and for

the purpose of making the studies, investigations, publications,

and reports herein authorized.''

1994 - Pub. L. 103-437 substituted ''Committee on Agriculture,

Nutrition, and Forestry'' for ''Committee on Agriculture and

Forestry''.

1975 - Pub. L. 94-124 inserted requirement that the Secretary of

Agriculture testify before the House Committee on Agriculture and

the Senate Committee on Agriculture and Forestry each calendar year

on or before February 15th or other date specified by the

Committees to provide justification in detail of the amount

requested in the budget to be appropriated for the next fiscal

year.

1949 - Act Oct. 28, 1949, inserted ''title I,'' in credit of act

May 20, 1936.

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in section 911 of this title.

-CITE-

7 USC Sec. 906a 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 31 - RURAL ELECTRIFICATION AND TELEPHONE SERVICE

SUBCHAPTER I - RURAL ELECTRIFICATION

-HEAD-

Sec. 906a. Use of funds outside the United States or its

territories prohibited

-STATUTE-

No funds provided under this chapter shall be used outside the

United States or any of its territories.

-SOURCE-

(Pub. L. 93-32, Sec. 10, May 11, 1973, 87 Stat. 71.)

-COD-

CODIFICATION

Section was not enacted as part of the Rural Electrification Act

of 1936 which comprises this chapter.

-MISC3-

EFFECTIVE DATE

Section effective May 11, 1973, see section 12 of Pub. L. 93-32,

set out as a note under section 930 of this title.

-CITE-

7 USC Sec. 907 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 31 - RURAL ELECTRIFICATION AND TELEPHONE SERVICE

SUBCHAPTER I - RURAL ELECTRIFICATION

-HEAD-

Sec. 907. Acquisition of property pledged for loans; disposition;

sale of pledged property by borrower

-STATUTE-

The Secretary is authorized and empowered to bid for and purchase

at any foreclosure or other sale, or otherwise to acquire, property

pledged or mortgaged to secure any loan made pursuant to this

chapter; to pay the purchase price and any costs and expenses

incurred in connection therewith from the sums authorized in

section 903 of this title; to accept title to any property so

purchased or acquired in the name of the United States of America;

to operate or lease such property for such period as may be deemed

necessary or advisable to protect the investment therein, but not

to exceed five years after the acquisition thereof; and to sell

such property so purchased or acquired, upon such terms and for

such consideration as the Secretary shall determine to be

reasonable.

No borrower of funds under sections 904 or 922 of this title

shall, without the approval of the Secretary, sell or dispose of

its property, rights, or franchises, acquired under the provisions

of this chapter, until any loan obtained from the Rural

Electrification Administration, including all interest and charges,

shall have been repaid.

-SOURCE-

(May 20, 1936, ch. 432, title I, Sec. 7, 49 Stat. 1365; Oct. 28,

1949, ch. 776, Sec. 2, 4(f), 63 Stat. 948; Pub. L. 103-354, title

II, Sec. 235(a)(13), Oct. 13, 1994, 108 Stat. 3221.)

-MISC1-

AMENDMENTS

1994 - Pub. L. 103-354 substituted ''Secretary'' for

''Administrator'' wherever appearing.

1949 - Act Oct. 28, 1949, inserted ''or section 922'' after

''904'' in second par., and inserted ''title I,'' in credit of act

May 20, 1936.

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in section 932 of this title.

-CITE-

7 USC Sec. 908 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 31 - RURAL ELECTRIFICATION AND TELEPHONE SERVICE

SUBCHAPTER I - RURAL ELECTRIFICATION

-HEAD-

Sec. 908. Repealed. Pub. L. 104-127, title VII, Sec. 776, Apr. 4,

1996, 110 Stat. 1150

-MISC1-

Section, acts May 20, 1936, ch. 432, title I, Sec. 8, 49 Stat.

1366; Oct. 28, 1949, ch. 776, Sec. 2, 63 Stat. 948; Oct. 13, 1994,

Pub. L. 103-354, title II, Sec. 235(a)(4), 108 Stat. 3221, related

to transfer of functions of Rural Electrification Administration

created by Executive Order No. 7037.

-CITE-

7 USC Sec. 909 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 31 - RURAL ELECTRIFICATION AND TELEPHONE SERVICE

SUBCHAPTER I - RURAL ELECTRIFICATION

-HEAD-

Sec. 909. Administration on nonpolitical basis; dismissal of

officers or employees for violating provision

-STATUTE-

This chapter shall be administered entirely on a nonpartisan

basis, and in the appointment of officials, the selection of

employees, and in the promotion of any such officials or employees,

no political test or qualification shall be permitted or given

consideration, but all such appointments and promotions shall be

given and made on the basis of merit and efficiency. If the

Secretary herein provided for is found by the President of the

United States to be guilty of a violation of this section, he shall

be removed from office by the President, and any appointee or

selection of officials or employees made by the Secretary who is

found guilty of a violation of this chapter shall be removed by the

Secretary.

-SOURCE-

(May 20, 1936, ch. 432, title I, Sec. 9, 49 Stat. 1366; Oct. 28,

1949, ch. 776, Sec. 2, 63 Stat. 948; Pub. L. 103-354, title II,

Sec. 235(a)(13), Oct. 13, 1994, 108 Stat. 3221.)

-MISC1-

AMENDMENTS

1994 - Pub. L. 103-354 substituted ''Secretary'' for

''Administrator'' wherever appearing.

1949 - Act Oct. 28, 1949, inserted ''title I,'' in credit of act

May 20, 1936.

-CITE-

7 USC Sec. 910 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 31 - RURAL ELECTRIFICATION AND TELEPHONE SERVICE

SUBCHAPTER I - RURAL ELECTRIFICATION

-HEAD-

Sec. 910. Repealed. Pub. L. 104-127, title VII, Sec. 777, Apr. 4,

1996, 110 Stat. 1150

-MISC1-

Section, acts May 20, 1936, ch. 432, title I, Sec. 10, 49 Stat.

1366; Oct. 28, 1949, ch. 776, Sec. 2, 63 Stat. 948; Apr. 21, 1976,

Pub. L. 94-273, Sec. 11(1), 90 Stat. 378; Oct. 13, 1994, Pub. L.

103-354, title II, Sec. 235(a)(13), 108 Stat. 3221, required

Secretary to present annually to Congress, not later than Apr. 20,

report of Secretary's activities under this chapter.

-CITE-

7 USC Sec. 911 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 31 - RURAL ELECTRIFICATION AND TELEPHONE SERVICE

SUBCHAPTER I - RURAL ELECTRIFICATION

-HEAD-

Sec. 911. Acceptance of services of Federal or State officers;

application of civil service laws; expenditures for supplies

and equipment

-STATUTE-

In order to carry out the provisions of this chapter the

Secretary may accept and utilize such voluntary and uncompensated

services of Federal, State, and local officers and employees as are

available, and he may appoint and fix the compensation of

attorneys, engineers, and experts and he may, subject to the

civil-service laws, appoint such other officers and employees as he

may find necessary and prescribe their duties. The Secretary is

authorized, from sums appropriated pursuant to section 906 of this

title, to make such expenditures (including expenditures for

personal services; supplies and equipment; lawbooks and books of

reference; directories and periodicals; travel expenses; rental at

the seat of government and elsewhere; the purchase, operation, or

maintenance of passenger-carrying vehicles; and printing and

binding) as are appropriate and necessary to carry out the

provisions of this chapter.

-SOURCE-

(May 20, 1936, ch. 432, title I, Sec. 11, 49 Stat. 1366; Oct. 28,

1949, ch. 776, Sec. 2, 63 Stat. 948; Pub. L. 103-354, title II,

Sec. 235(a)(13), Oct. 13, 1994, 108 Stat. 3221.)

-REFTEXT-

REFERENCES IN TEXT

The civil service laws, referred to in text, are set forth in

Title 5, Government Organization and Employees. See, particularly,

section 3301 et seq. of Title 5.

-COD-

CODIFICATION

Provisions which authorized the appointment and fixing of

compensation of attorneys, engineers, and experts ''without regard

to the provisions of the civil service laws applicable to officers

and employees of the United States'' were omitted from the Code as

obsolete and superseded. Such appointments are now subject to the

civil service laws unless specifically excepted by those laws or by

laws enacted subsequent to Executive Order 8743, Apr. 23, 1941,

issued by the President pursuant to act Nov. 26, 1940, ch. 919,

title I, Sec. 1, 54 Stat. 1211, which covered most excepted

positions into the classified (competitive) civil service. The

Order is set out as a note under section 3301 of Title 5,

Government Organization and Employees. As to the compensation of

such personnel, sections 1202 and 1204 of the Classification Act of

1949, 63 Stat. 972, 973, repealed the Classification Act of 1923

and all other laws or parts of laws inconsistent with the 1949 Act.

The Classification Act of 1949 was repealed by Pub. L. 89-554,

Sept. 6, 1966, Sec. 8(a), 80 Stat. 632, and reenacted as chapter 51

and subchapter III of chapter 53 of Title 5. Section 5102 of Title

5 now contains the applicability provisions of the 1949 Act, and

section 5103 of Title 5 authorizes the Office of Personnel

Management to determine the applicability to specific positions and

employees.

-MISC3-

AMENDMENTS

1994 - Pub. L. 103-354 substituted ''Secretary'' for

''Administrator'' in two places.

1949 - Act Oct. 28, 1949, inserted ''title I,'' in credit of act

May 20, 1936.

-CITE-

7 USC Sec. 911a 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 31 - RURAL ELECTRIFICATION AND TELEPHONE SERVICE

SUBCHAPTER I - RURAL ELECTRIFICATION

-HEAD-

Sec. 911a. Repealed. Pub. L. 103-354, title II, Sec. 235(a)(5),

Oct. 13, 1994, 108 Stat. 3221

-MISC1-

Section, act May 20, 1936, ch. 432, title I, Sec. 11A, as added

Nov. 28, 1990, Pub. L. 101-624, title XXIII, Sec. 2350, 104 Stat.

4037; amended Dec. 13, 1991, Pub. L. 102-237, title VII, Sec.

703(a), 105 Stat. 1881, related to Assistant Administrator for

Economic Development.

-CITE-

7 USC Sec. 912 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 31 - RURAL ELECTRIFICATION AND TELEPHONE SERVICE

SUBCHAPTER I - RURAL ELECTRIFICATION

-HEAD-

Sec. 912. Extension of time for repayment of loans

-STATUTE-

(a) The Secretary is authorized and empowered to extend the time

of payment of interest or principal of any loans made by the

Secretary pursuant to this chapter, except that, with respect to

any loan made under section 904 or 922 of this title, the payment

of interest or principal shall not be extended more than five years

after such payment shall have become due.

(b)(1) Subject to limitations established in appropriations Acts,

the Secretary shall permit any borrower to defer the payment of

principal and interest on any insured or direct loan made under

this chapter under circumstances described in this subsection,

notwithstanding any limitation contained in subsection (a) of this

section, except that such deferment shall not be permitted based on

the determination of the Secretary of the financial hardship of the

borrower.

(2)(A) In the case of deferments made to enable the borrower to

provide financing to local businesses, the deferment shall be

repaid in equal installments, without the accrual of interest, over

the 60-month period beginning on the date of the deferment, and the

total amount of such payments shall be equal to the amount of the

payment deferred.

(B) In the case of deferments made to enable the borrower to

provide community development assistance, technical assistance to

businesses, and for other community, business, or economic

development projects not included under subparagraph (A), the

deferment shall be repaid in equal installments, without the

accrual of interest, over the 120-month period beginning on the

date of the deferment, and the total amount of such payments shall

be equal to the amount of the payment deferred.

(3)(A) A borrower may defer its debt service payments only in an

amount equal to an investment made by such borrower as described in

paragraph (2).

(B) The amount of the deferment shall not exceed 50 percent of

the total cost of a community or economic development project for

which a deferment is provided under this subsection.

(C) The total amount of deferments under this subsection during

each of the fiscal years 1990 through 1993 shall not exceed 3

percent of the total payments due during such fiscal year from all

borrowers on direct and insured loans made under this chapter and

shall not exceed 5 percent of such total payments due in each

subsequent fiscal year.

(D) At the time of a deferment, the borrower shall make a payment

to a cushion of credit account established and maintained pursuant

to section 940c of this title in an amount equal to the amount of

the payment deferred. The balance of such account shall not be

reduced by the borrower below the level of the unpaid balance of

the payment deferred. Subject to limitations established in annual

appropriations Acts, such cushion of credit amounts and any other

cushion of credit and advance payments of any borrower shall be

included in the interest differential calculation under section

940c(b)(2)(A) of this title.

(4) The Secretary shall undertake all reasonable efforts to

permit the full amount of deferments authorized by this subsection

during each fiscal year.

-SOURCE-

(May 20, 1936, ch. 432, title I, Sec. 12, 49 Stat. 1366; Oct. 28,

1949, ch. 776, Sec. 2, 4(f), 63 Stat. 948; Pub. L. 101-624, title

XXIII, Sec. 2344, Nov. 28, 1990, 104 Stat. 4028; Pub. L. 103-354,

title II, Sec. 235(a)(13), Oct. 13, 1994, 108 Stat. 3221; Pub. L.

104-127, title VII, Sec. 774(b), Apr. 4, 1996, 110 Stat. 1150.)

-MISC1-

AMENDMENTS

1996 - Subsec. (a). Pub. L. 104-127 substituted '', except that,

with respect to any loan'' for '': Provided, however, That with

respect to any loan'' and struck out '', and with respect to any

loan made under section 905 of this title, the payment of principal

or interest shall not be extended more than two years after such

payment shall have become due: And provided further, That the

provisions of this section shall not apply to any obligations or

the security therefor which may be held by the Reconstruction

Finance Corporation under the provisions of section 903 of this

title'' after ''such payment shall have become due''.

1994 - Subsecs. (a), (b)(1), (4). Pub. L. 103-354 substituted

''Secretary'' for ''Administrator'' wherever appearing.

1990 - Pub. L. 101-624 designated existing provisions as subsec.

(a) and added subsec. (b).

1949 - Act Oct. 28, 1949, inserted ''or section 922'' after

''904'' in first proviso, and inserted ''title I,'' in credit of

act May 20, 1936.

-TRANS-

ABOLITION OF RECONSTRUCTION FINANCE CORPORATION

Section 6(a) of 1957 Reorg. Plan No. 1, eff. June 30, 1957, 22

F.R. 4633, 71 Stat. 647, set out in the Appendix to Title 5,

Government Organization and Employees, abolished Reconstruction

Finance Corporation.

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in section 912a of this title.

-CITE-

7 USC Sec. 912a 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 31 - RURAL ELECTRIFICATION AND TELEPHONE SERVICE

SUBCHAPTER I - RURAL ELECTRIFICATION

-HEAD-

Sec. 912a. Rescheduling and refinancing of loans

-STATUTE-

In addition to the loan extension authority provided in section

912 of this title, the Secretary of Agriculture is authorized to

adjust and readjust the schedules for payment of principal and

interest on loans to borrowers under programs administered by the

Secretary under this chapter, and to extend the maturity date of

any such loan to a date not beyond forty years from the date of

such loan where he determines such action is necessary because of

the impairment of the economic feasibility of the system, or the

loss, destruction, or damage of the property of such borrowers as a

result of a major disaster.

-SOURCE-

(Pub. L. 91-606, title II, Sec. 236(a), Dec. 31, 1970, 84 Stat.

1754; Pub. L. 103-354, title II, Sec. 235(b)(1), Oct. 13, 1994, 108

Stat. 3221.)

-COD-

CODIFICATION

Section was enacted as part of the Disaster Relief Act of 1970,

and not as part of the Rural Electrification Act of 1936 which

constitutes this chapter. Section was formerly classified to

section 4455(a) of Title 42, The Public Health and Welfare.

-MISC3-

AMENDMENTS

1994 - Pub. L. 103-354 substituted ''Secretary under this

chapter'' for ''Rural Electrification Administration''.

EFFECTIVE DATE

Section effective Dec. 31, 1970, see section 304 of Pub. L.

91-606, set out as an Effective Date of 1970 Amendment note under

section 165 of Title 26, Internal Revenue Code.

-CITE-

7 USC Sec. 913 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 31 - RURAL ELECTRIFICATION AND TELEPHONE SERVICE

SUBCHAPTER I - RURAL ELECTRIFICATION

-HEAD-

Sec. 913. Definitions

-STATUTE-

As used in this chapter the term ''rural area'', except as

provided in section 924(b) of this title, shall be deemed to mean

any area of the United States not included within the boundaries of

any urban area, as defined by the Bureau of the Census, and such

term shall be deemed to include both the farm and nonfarm

population thereof; the term ''farm'' shall be deemed to mean a

farm as defined in the publications of the Bureau of the Census;

the term ''person'' shall be deemed to mean any natural person,

firm, corporation, or association; the term ''Territory'' shall be

deemed to include any insular possession of the United States; and

the term ''Secretary'' shall be deemed to mean the Secretary of

Agriculture.

-SOURCE-

(May 20, 1936, ch. 432, title I, Sec. 13, 49 Stat. 1367; Oct. 28,

1949, ch. 776, Sec. 2, 63 Stat. 948; Pub. L. 103-129, Sec. 2(c)(3),

Nov. 1, 1993, 107 Stat. 1363; Pub. L. 103-354, title II, Sec.

235(a)(6), Oct. 13, 1994, 108 Stat. 3221.)

-MISC1-

AMENDMENTS

1994 - Pub. L. 103-354 inserted before period at end ''; and the

term 'Secretary' shall be deemed to mean the Secretary of

Agriculture''.

1993 - Pub. L. 103-129 inserted '', except as provided in section

924(b) of this title,'' before ''shall be deemed to mean'' and

substituted ''urban area, as defined by the Bureau of the Census''

for ''city, village, or borough having a population in excess of

fifteen hundred inhabitants,''.

1949 - Act Oct. 28, 1949, inserted ''title I,'' in credit of act

May 20, 1936.

-CITE-

7 USC Sec. 914 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 31 - RURAL ELECTRIFICATION AND TELEPHONE SERVICE

SUBCHAPTER I - RURAL ELECTRIFICATION

-HEAD-

Sec. 914. Separability

-STATUTE-

If any provision of this chapter, or the application thereof to

any person or circumstances, is held invalid, the remainder of the

chapter and the application of such provision to other persons or

circumstances shall not be affected thereby.

-SOURCE-

(May 20, 1936, ch. 432, title I, Sec. 14, 49 Stat. 1367; Oct. 28,

1949, ch. 776, Sec. 2, 63 Stat. 948.)

-MISC1-

AMENDMENTS

1949 - Act Oct. 28, 1949, inserted ''title I,'' in credit of act

May 20, 1936.

-CITE-

7 USC Sec. 915 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 31 - RURAL ELECTRIFICATION AND TELEPHONE SERVICE

SUBCHAPTER I - RURAL ELECTRIFICATION

-HEAD-

Sec. 915. Purchase of financial and credit reports

-STATUTE-

The Secretary of Agriculture is authorized to purchase such

financial and credit reports as may be necessary to carry out the

Secretary's authorized work: Provided, That purchases under this

authority shall not be made unless provision is made therefor in

the applicable appropriation and the cost thereof is not in excess

of limitations prescribed therein.

-SOURCE-

(Sept. 21, 1944, ch. 412, title V, Sec. 505, 58 Stat. 740; Pub. L.

103-354, title II, Sec. 235(b)(2), Oct. 13, 1994, 108 Stat. 3221.)

-COD-

CODIFICATION

Section was enacted as part of the Department of Agriculture

Organic Act of 1944, and not as part of the Rural Electrification

Act of 1936 which constitutes this chapter.

-MISC3-

AMENDMENTS

1994 - Pub. L. 103-354 substituted ''Secretary of Agriculture''

for ''Rural Electrification Administration'' and ''the

Secretary's'' for ''its''.

-CITE-

7 USC Sec. 916 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 31 - RURAL ELECTRIFICATION AND TELEPHONE SERVICE

SUBCHAPTER I - RURAL ELECTRIFICATION

-HEAD-

Sec. 916. Criteria for loans

-STATUTE-

In order to insure coordination of electric generation and

transmission financing under this chapter with the national energy

policy, the Secretary in making or guaranteeing loans for the

construction, operation, or enlargement of generating plants or

electric transmission lines or systems, shall consider such general

criteria consistent with the provisions of this chapter as may be

published by the Secretary of Energy.

-SOURCE-

(May 20, 1936, ch. 432, title I, Sec. 16, as added Pub. L. 95-91,

title VII, Sec. 709(f), Aug. 4, 1977, 91 Stat. 608; amended Pub. L.

103-354, title II, Sec. 235(a)(13), Oct. 13, 1994, 108 Stat. 3221.)

-MISC1-

AMENDMENTS

1994 - Pub. L. 103-354 substituted ''Secretary'' for

''Administrator'' before ''in making''.

-CITE-

7 USC Sec. 917 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 31 - RURAL ELECTRIFICATION AND TELEPHONE SERVICE

SUBCHAPTER I - RURAL ELECTRIFICATION

-HEAD-

Sec. 917. Prohibition on restricting water and waste facility

services to electric customers

-STATUTE-

(a) Prohibition

Assistance under any rural development program administered by

the Secretary or any agency of the Department of Agriculture shall

not be conditioned on any requirement that the recipient of the

assistance accept or receive electric service from any particular

utility, supplier, or cooperative.

(b) Ensuring compliance

The Secretary shall establish, by regulation, adequate safeguards

to ensure that assistance under any rural development program is

not subject to such a condition. The safeguards shall include

periodic certifications and audits, and appropriate measures and

sanctions against any person violating, or attempting to violate

subsection (a) of this section.

(c) ''Rural development programs'' defined

In this section, the term ''rural development program'' means the

following:

(1) Sections 304(b), 306, 306A, 306C, 306D, 310B, and 375 (7

U.S.C. 2008j) and subtitle E (7 U.S.C. 2009 et seq.) of the

Consolidated Farm and Rural Development Act (7 U.S.C. 1924(b),

1926, 1926a, 1926c, 1926d, and 1932).

(2) Subtitle G (FOOTNOTE 1) of title XVI and sections 2281 (42

U.S.C. 5177a), 2333, and 2381 (7 U.S.C. 950aaa-2, 3125b) of the

Food, Agriculture, Conservation, and Trade Act of 1990.

(FOOTNOTE 1) See References in Text note below.

(3) Subtitle C of title IX of the Food, Agriculture,

Conservation, and Trade Act Amendments of 1991 (Public Law

102-237; 7 U.S.C. 5930 note).

(4) Section 1323(b) of the Food Security Act of 1985 (Public

Law 99-198; 7 U.S.C. 1932 note).

(5) Title V (7 U.S.C. 2661 et seq.) and section 603(c) (7

U.S.C. 2204a) of the Rural Development Act of 1972.

(6) Sections 905 and 940a (FOOTNOTE 1) of this title and

subchapter IV of this chapter.

(d) Regulations

Not later than 60 days after April 4, 1996, the Secretary shall

issue final regulations to ensure compliance with subsection (a) of

this section.

-SOURCE-

(May 20, 1936, ch. 432, title I, Sec. 17, as added Pub. L. 104-127,

title VII, Sec. 778, Apr. 4, 1996, 110 Stat. 1150.)

-REFTEXT-

REFERENCES IN TEXT

The Consolidated Farm and Rural Development Act, referred to in

subsec. (c)(1), is Pub. L. 87-128, title III, Aug. 8, 1961, 75

Stat. 307, as amended. Subtitle E of the Act is classified

generally to subchapter V (Sec. 2009 et seq.) of chapter 50 of this

title. For complete classification of this Act to the Code, see

Short Title note set out under section 1921 of this title and

Tables.

The Food, Agriculture, Conservation, and Trade Act of 1990,

referred to in subsec. (c)(2), is Pub. L. 101-624, Nov. 28, 1990,

104 Stat. 3359, as amended. Subtitle G of title XVI of the Act,

known as the Alternative Agricultural Research and

Commercialization Act of 1990, was classified generally to

subchapter VI (Sec. 5901 et seq.) of chapter 88 of this title prior

to repeal by Pub. L. 107-171, title VI, Sec. 6201(a), May 13, 2002,

116 Stat. 418. For complete classification of this Act to the Code,

see Short Title of 1990 Amendments note set out under section 1421

of this title and Tables.

The Rural Development Act of 1972, referred to in subsec. (c)(5),

is Pub. L. 92-419, Aug. 30, 1972, 86 Stat. 657, as amended. Title

V of the Act is classified generally to subchapter II (Sec. 2661 et

seq.) of chapter 59 of this title. For complete classification of

this Act to the Code, see Short Title note set out under section

1921 of this title and Tables.

Sections 905 and 940a of this title, referred to in subsec.

(c)(6), were repealed by Pub. L. 104-127, title VII, Sec. 774(a),

780, Apr. 4, 1996, 110 Stat. 1150, 1151.

-MISC2-

PRIOR PROVISIONS

A prior section 917, act May 20, 1936, ch. 432, title I, Sec. 17,

as added Nov. 28, 1990, Pub. L. 101-624, title XXIII, Sec. 2343,

104 Stat. 4027, related to establishment of technical assistance

unit to provide advice and technical assistance to electric and

telephone borrowers under this chapter, prior to repeal by Pub. L.

102-237, title VII, Sec. 703(b), Dec. 13, 1991, 105 Stat. 1881.

-CITE-

7 USC Sec. 918 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 31 - RURAL ELECTRIFICATION AND TELEPHONE SERVICE

SUBCHAPTER I - RURAL ELECTRIFICATION

-HEAD-

Sec. 918. General prohibitions

-STATUTE-

(a) No consideration of borrower's level of general funds

The Secretary and the Governor of the telephone bank shall not

deny or reduce any loan or loan advance under this chapter based on

a borrower's level of general funds.

(b) Loan origination fees

The Secretary and the Governor of the telephone bank may not

charge any fee or charge not expressly provided in this chapter in

connection with any loan made or guaranteed under this chapter.

(c) Consultants

(1) In general

To facilitate timely action on applications by borrowers for

financial assistance under this chapter and for approvals

required of the Rural Electrification Administration pursuant to

the terms of outstanding loan or security instruments or

otherwise, the Secretary may use consultants funded by the

borrower, paid for out of the general funds of the borrower, for

financial, legal, engineering, and other technical advice and

services in connection with the review of the application by the

Rural Electrification Administration.

(2) Conflicts of interest

The Secretary shall establish procedures for the selection and

the provision of technical services by consultants to ensure that

the consultants have no financial or other conflicts of interest

in the outcome of the application of the borrower.

(3) Payment of costs

The Secretary may not, without the consent of the borrower,

require, as a condition of processing an application for

approval, that the borrower agree to pay the costs, fees, and

expenses of consultants hired to provide technical or advisory

services to the Secretary.

(4) Contracts, grants, and agreements

The Secretary may enter into such contracts, grants, or

cooperative agreements as are necessary to carry out this

section.

(5) Use of consultants

Nothing in this subsection shall limit the authority of the

Secretary to retain the services of consultants from funds made

available to the Secretary or otherwise.

-SOURCE-

(May 20, 1936, ch. 432, title I, Sec. 18, as added Pub. L. 101-624,

title XXIII, Sec. 2353, Nov. 28, 1990, 104 Stat. 4039; amended Pub.

L. 103-129, Sec. 2(c)(4), Nov. 1, 1993, 107 Stat. 1364; Pub. L.

103-354, title II, Sec. 235(a)(13), Oct. 13, 1994, 108 Stat. 3221.)

-MISC1-

AMENDMENTS

1994 - Pub. L. 103-354 substituted ''Secretary'' for

''Administrator'' wherever appearing.

1993 - Pub. L. 103-129 designated existing provisions as subsec.

(a), inserted heading, and added subsecs. (b) and (c).

-CITE-

7 USC Sec. 918a 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 31 - RURAL ELECTRIFICATION AND TELEPHONE SERVICE

SUBCHAPTER I - RURAL ELECTRIFICATION

-HEAD-

Sec. 918a. Energy generation, transmission, and distribution

facilities efficiency grants and loans in rural communities

with extremely high energy costs

-STATUTE-

(a) In general

The Secretary, acting through the Rural Utilities Service, may -

(1) in coordination with State rural development initiatives,

make grants and loans to persons, States, political subdivisions

of States, and other entities organized under the laws of States

to acquire, construct, extend, upgrade, and otherwise improve

energy generation, transmission, or distribution facilities

serving communities in which the average residential expenditure

for home energy is at least 275 percent of the national average

residential expenditure for home energy (as determined by the

Energy Information Agency using the most recent data available);

(2) make grants and loans to the Denali Commission established

by the Denali Commission Act of 1998 (42 U.S.C. 3121 note; Public

Law 105-277) to acquire, construct, extend, upgrade, and

otherwise improve energy generation, transmission, or

distribution facilities serving communities described in

paragraph (1); and

(3) make grants to State entities, in existence as of November

9, 2000, to establish and support a revolving fund to provide a

more cost-effective means of purchasing fuel where the fuel

cannot be shipped by means of surface transportation.

(b) Authorization of appropriations

(1) In general

There are authorized to be appropriated to carry out this

section $50,000,000 for fiscal year 2001 and such sums as are

necessary for each subsequent fiscal year.

(2) Limitation on planning and administrative expenses

Not more than 4 percent of the amounts made available under

paragraph (1) may be used for planning and administrative

expenses.

-SOURCE-

(May 20, 1936, ch. 432, title I, Sec. 19, as added Pub. L. 106-472,

title III, Sec. 301, Nov. 9, 2000, 114 Stat. 2069.)

-REFTEXT-

REFERENCES IN TEXT

The Denali Commission Act of 1998, referred to in subsec. (a)(2),

is title III of div. C of Pub. L. 105-277, Oct. 21, 1998, 112

Stat. 2681-637, which is set out as a note under section 3121 of

Title 42, The Public Health and Welfare.

-CITE-

7 USC Sec. 918b 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 31 - RURAL ELECTRIFICATION AND TELEPHONE SERVICE

SUBCHAPTER I - RURAL ELECTRIFICATION

-HEAD-

Sec. 918b. Acquisition of existing systems in rural communities

with high energy costs

-STATUTE-

On and after November 28, 2001, notwithstanding any other

provision of law, the Administrator of the Rural Utilities Service

shall use the authorities provided in the Rural Electrification Act

of 1936 (7 U.S.C. 901 et seq.) to finance the acquisition of

existing generation, transmission and distribution systems and

facilities serving high cost, predominantly rural areas by entities

capable of and dedicated to providing or improving service in such

areas in an efficient and cost effective manner.

-SOURCE-

(Pub. L. 107-76, title VII, Sec. 748, Nov. 28, 2001, 115 Stat.

738.)

-REFTEXT-

REFERENCES IN TEXT

The Rural Electrification Act of 1936, referred to in text, is

act May 20, 1936, ch. 432, 49 Stat. 1363, as amended, which is

classified generally to this chapter (Sec. 901 et seq.). For

complete classification of this Act to the Code, see section 901 of

this title and Tables.

-COD-

CODIFICATION

Section was enacted as part of the Agriculture, Rural

Development, Food and Drug Administration, and Related Agencies

Appropriations Act, 2002, and not as part of the Rural

Electrification Act of 1936 which comprises this chapter.

-MISC3-

PRIOR PROVISIONS

Provisions similar to those in this section were contained in the

following prior appropriation act:

Pub. L. 106-387, Sec. 1(a) (title I, Sec. 771), Oct. 28, 2000,

114 Stat. 1549, 1549A-45.

-CITE-

7 USC SUBCHAPTER II - RURAL TELEPHONE SERVICE 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 31 - RURAL ELECTRIFICATION AND TELEPHONE SERVICE

SUBCHAPTER II - RURAL TELEPHONE SERVICE

.

-HEAD-

SUBCHAPTER II - RURAL TELEPHONE SERVICE

-SECREF-

SUBCHAPTER REFERRED TO IN OTHER SECTIONS

This subchapter is referred to in sections 931, 939 of this

title.

-CITE-

7 USC Sec. 921 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 31 - RURAL ELECTRIFICATION AND TELEPHONE SERVICE

SUBCHAPTER II - RURAL TELEPHONE SERVICE

-HEAD-

Sec. 921. Congressional declaration of policy

-STATUTE-

It is declared to be the policy of the Congress that adequate

telephone service be made generally available in rural areas

through the improvement and expansion of existing telephone

facilities and the construction and operation of such additional

facilities as are required to assure the availability of adequate

telephone service to the widest practicable number of rural users

of such service.

-SOURCE-

(Oct. 28, 1949, ch. 776, Sec. 1, 63 Stat. 948.)

-COD-

CODIFICATION

Section is composed of the first sentence of section 1 of act

Oct. 28, 1949. The second sentence of section 1 of that act, which

provided that: ''In order to effectuate this policy, the Rural

Electrification Act of 1936 (this chapter) is amended as

hereinafter provided'', is omitted from the Code.

Section was not enacted as part of title II of the Rural

Electrification Act of 1936 which comprises subchapter II of this

chapter.

-CITE-

7 USC Sec. 921a 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 31 - RURAL ELECTRIFICATION AND TELEPHONE SERVICE

SUBCHAPTER II - RURAL TELEPHONE SERVICE

-HEAD-

Sec. 921a. Policy of financing of rural telephone program

-STATUTE-

It is hereby declared to be the policy of the Congress that the

growing capital needs of the rural telephone systems require the

establishment of a rural telephone bank which will furnish assured

and viable sources of supplementary financing with the objective

that said bank will become an entirely privately owned, operated,

and financed corporation. The Congress further finds that many

rural telephone systems require financing under the terms and

conditions provided in this subchapter.

-SOURCE-

(Pub. L. 92-12, Sec. 1, May 7, 1971, 85 Stat. 29.)

-COD-

CODIFICATION

The last sentence of section 1 of Pub. L. 92-12 provided that:

''In order to effectuate this policy, the Rural Electrification Act

of 1936, as amended (7 U.S.C. 921-924), is amended as hereinafter

provided.''

Section was not enacted as part of title II of the Rural

Electrification Act of 1936 which comprises this subchapter.

-MISC3-

EFFECTIVE DATE

Section 7 of Pub. L. 92-12 provided that: ''This Act (enacting

sections 921a, 931, 932, and 941 to 950b of this title and amending

sections 903(f) and 922 of this title) shall take effect upon

enactment (May 7, 1971).''

RESERVATION OF RIGHT TO REPEAL, ALTER, OR AMEND PUB. L. 92-12

Section 6 of Pub. L. 92-12 provided that: ''The right to repeal,

alter, or amend this Act (enacting sections 921a, 931, 932, and 941

to 950b of this title, amending sections 903 and 922 of this title

and sections 856 and 868 of former Title 31, and enacting

provisions set out as notes under sections 856 and 868 of former

Title 31) is expressly reserved.''

-CITE-

7 USC Sec. 921b 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 31 - RURAL ELECTRIFICATION AND TELEPHONE SERVICE

SUBCHAPTER II - RURAL TELEPHONE SERVICE

-HEAD-

Sec. 921b. Policy of expansion of markets for debentures

-STATUTE-

It is hereby declared to be the policy of the Congress that the

Rural Telephone Bank should have the capability of obtaining

adequate funds for its supplementary financing program at the

lowest possible costs. In order to effectuate this policy, it will

be necessary to expand the market for debentures to be issued by

the Telephone Bank.

-SOURCE-

(Pub. L. 92-324, Sec. 1, June 30, 1972, 86 Stat. 390.)

-COD-

CODIFICATION

The last sentence of section 1 of Pub. L. 92-324 provided that:

''The Rural Electrification Act of 1936, as amended (7 U.S.C.

901-950(b)), is therefore further amended as hereinafter

provided.''

Section was not enacted as part of the title II of the Rural

Electrification Act of 1936 which comprises this subchapter.

-MISC3-

EFFECTIVE DATE

Section 4 of Pub. L. 92-324 provided that: ''This Act (enacting

this section and amending section 947 of this title) shall take

effect upon enactment (June 30, 1972).''

RESERVATION OF RIGHT TO REPEAL, ALTER, OR AMEND PUB. L. 92-324

Section 3 of Pub. L. 92-324 provided that: ''The right to repeal,

alter, or amend this Act (enacting this section and amending

section 947 of this title) is expressly reserved.''

-CITE-

7 USC Sec. 922 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 31 - RURAL ELECTRIFICATION AND TELEPHONE SERVICE

SUBCHAPTER II - RURAL TELEPHONE SERVICE

-HEAD-

Sec. 922. Loans for rural telephone service

-STATUTE-

From such sums as are from time to time made available by the

Congress to the Secretary for such purpose, pursuant to section 903

of this title, the Secretary is authorized and empowered to make

loans to persons now providing or who may hereafter provide

telephone service in rural areas, to public bodies now providing

telephone service in rural areas and to cooperative, nonprofit,

limited dividend, or mutual associations. Except as otherwise

provided by this subchapter, such loans shall be made under the

same terms and conditions as are provided in section 904 of this

title, for the purpose of financing the improvement, expansion,

construction, acquisition, and operation of telephone lines,

facilities, or systems to furnish and improve telephone service in

rural areas: Provided, however, That the Secretary, in making such

loans, shall give preference to persons providing telephone service

in rural areas, to public bodies now providing telephone service in

rural areas, and to cooperative, nonprofit, limited, dividend, or

mutual associations: And provided further, That for a period of one

year from and after October 28, 1949, applications for loans

received by the Secretary from persons who on October 28, 1949, are

engaged in the operation of existing telephone service in rural

areas shall be considered and acted upon before action is taken

upon any application received from any other person for any loan to

finance the furnishing or improvement of telephone service to

substantially the same subscribers. The Secretary in making such

loans shall, insofar as possible, obtain assurance that the

telephone service to be furnished or improved thereby will be made

available to the widest practical number of rural users. When it

is determined by the Secretary to be necessary in order to furnish

or improve telephone service in rural areas, such loans may be made

for the improvement, expansion, construction, acquisition, and

operation of telephone lines, facilities, or systems without regard

to their geographical location. The Secretary is further

authorized and empowered to make loans for the purpose of

refinancing outstanding indebtedness of persons furnishing

telephone service in rural areas: Provided, That such refinancing

shall be determined by the Secretary to be necessary in order to

furnish and improve telephone service in rural areas: And provided

further, That such refinancing shall constitute not more than 40

per centum of any loan made under this subchapter. Loans under

this section shall not be made unless the Secretary finds and

certifies that in his judgment the security therefor is reasonably

adequate and such loan will be repaid within the time agreed, nor

shall such loan be made in any State which now has or may hereafter

have a State regulatory body having authority to regulate telephone

service and to require certificates of convenience and necessity to

the applicant unless such certificate from such agency is first

obtained. In a State in which there is no such agency or

regulatory body legally authorized to issue such certificates to

the applicant, no loan shall be made under this section unless the

Secretary shall determine (and set forth his reasons therefor in

writing) that no duplication of lines, facilities, or systems,

providing reasonably adequate services will result therefrom.

-SOURCE-

(May 20, 1936, ch. 432, title II, Sec. 201, as added Oct. 28, 1949,

ch. 776, Sec. 5, 63 Stat. 948; amended Pub. L. 92-12, Sec. 3(b),

May 7, 1971, 85 Stat. 37; Pub. L. 103-354, title II, Sec.

235(a)(13), Oct. 13, 1994, 108 Stat. 3221.)

-MISC1-

AMENDMENTS

1994 - Pub. L. 103-354 substituted ''Secretary'' for

''Administrator'' wherever appearing.

1971 - Pub. L. 92-12 inserted '', to public bodies now providing

telephone service in rural areas'' after ''areas'' in first

sentence and after ''areas'' in first proviso of second sentence.

EFFECTIVE DATE OF 1971 AMENDMENT

Amendment by Pub. L. 92-12 effective May 7, 1971, see section 7

of Pub. L. 92-12, set out as an Effective Date note under section

921a of this title.

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 907, 912, 927, 931, 932,

940c-1, 946, 948, 950b of this title.

-CITE-

7 USC Sec. 923 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 31 - RURAL ELECTRIFICATION AND TELEPHONE SERVICE

SUBCHAPTER II - RURAL TELEPHONE SERVICE

-HEAD-

Sec. 923. State regulation of telephone service

-STATUTE-

Nothing contained in this chapter shall be construed to deprive

any State commission, board, or other agency of jurisdiction, under

any State law, now or hereafter effective, to regulate telephone

service which is not subject to regulation by the Federal

Communications Commission, under the Communications Act of 1934 (47

U.S.C. 151 et seq.), including the rates for such service.

-SOURCE-

(May 20, 1936, ch. 432, title II, Sec. 202, as added Oct. 28, 1949,

ch. 776, Sec. 5, 63 Stat. 948.)

-REFTEXT-

REFERENCES IN TEXT

The Communications Act of 1934, referred to in text, is act June

19, 1934, ch. 652, 48 Stat. 1064, as amended, which is classified

principally to chapter 5 (Sec. 151 et seq.) of Title 47,

Telegraphs, Telephones, and Radiotelegraphs. For complete

classification of this Act to the Code, see section 609 of Title 47

and Tables.

-CITE-

7 USC Sec. 924 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 31 - RURAL ELECTRIFICATION AND TELEPHONE SERVICE

SUBCHAPTER II - RURAL TELEPHONE SERVICE

-HEAD-

Sec. 924. Definition of telephone service and rural area

-STATUTE-

(a) As used in this subchapter, the term ''telephone service''

shall be deemed to mean any communication service for the

transmission or reception of voice, data, sounds, signals,

pictures, writing, or signs of all kinds by wire, fiber, radio,

light, or other visual or electromagnetic means, and shall include

all telephone lines, facilities, or systems used in the rendition

of such service; but shall not be deemed to mean message telegram

service or community antenna television system services or

facilities other than those intended exclusively for educational

purposes, or radio broadcasting services or facilities within the

meaning of section 153(o) (FOOTNOTE 1) of title 47.

(FOOTNOTE 1) See References in Text note below.

(b) As used in this subchapter, the term ''rural area'' shall be

deemed to mean any area of the United States not included within

the boundaries of any incorporated or unincorporated city, village,

or borough having a population in excess of 5,000 inhabitants.

-SOURCE-

(May 20, 1936, ch. 432, title II, Sec. 203, as added Oct. 28, 1949,

ch. 776, Sec. 5, 63 Stat. 948; amended Pub. L. 87-862, Oct. 23,

1962, 76 Stat. 1140; Pub. L. 101-624, title XXIII, Sec. 2354, Nov.

28, 1990, 104 Stat. 4039; Pub. L. 103-129, Sec. 2(c)(5), Nov. 1,

1993, 107 Stat. 1364.)

-REFTEXT-

REFERENCES IN TEXT

Section 153 of title 47, referred to in subsec. (a), was

subsequently amended and no longer contains a subsec. (o). However,

the term ''broadcasting'' is defined elsewhere in that section.

-MISC2-

AMENDMENTS

1993 - Subsec. (b). Pub. L. 103-129 substituted ''5,000'' for

''one thousand five hundred''.

1990 - Subsec. (a). Pub. L. 101-624 inserted ''or reception''

after ''transmission'' and ''data,'' after ''voice,'', and

substituted ''by wire, fiber, radio, light, or other visual or

electromagnetic means'' for ''through the use of electricity

between the transmitting and receiving apparatus''.

1962 - Subsec. (a). Pub. L. 87-862 included the transmission of

sounds, signals, pictures, writing, or signs of all kinds within

''telephone service'', and substituted ''message telegram service

or community antenna television system services or facilities other

than those intended exclusively for educational purposes'' for

''telegraph services or facilities''.

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 913, 948 of this title.

-CITE-

7 USC Sec. 925 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 31 - RURAL ELECTRIFICATION AND TELEPHONE SERVICE

SUBCHAPTER II - RURAL TELEPHONE SERVICE

-HEAD-

Sec. 925. Loan feasibility

-STATUTE-

The Secretary and the Governor of the telephone bank may not, as

a condition of making a telephone loan to an applicant therefor,

require the applicant to -

(1) increase the rates charged to the applicant's customers or

subscribers; or

(2) increase the applicant's ratio of -

(A) net income or margins before interest; to

(B) the interest requirements on all of the applicant's

outstanding and proposed loans.

-SOURCE-

(May 20, 1936, ch. 432, title II, Sec. 204, as added Pub. L.

101-624, title XXIII, Sec. 2355, Nov. 28, 1990, 104 Stat. 4039;

amended Pub. L. 103-354, title II, Sec. 235(a)(13), Oct. 13, 1994,

108 Stat. 3221.)

-MISC1-

AMENDMENTS

1994 - Pub. L. 103-354 substituted ''Secretary'' for

''Administrator''.

-CITE-

7 USC Sec. 926 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 31 - RURAL ELECTRIFICATION AND TELEPHONE SERVICE

SUBCHAPTER II - RURAL TELEPHONE SERVICE

-HEAD-

Sec. 926. Certain rural development investments by qualified

telephone borrowers not treated as dividends or distributions

-STATUTE-

(a) In general

The Secretary and the Governor of the telephone bank shall not -

(1) treat any amount invested by any qualified telephone

borrower for any purpose described in section 2204b(c)(2) of this

title (including any investment in, or extension of credit,

guarantee, or advance made to, an affiliated company of the

borrower, that is used by such company for such a purpose) as a

dividend or distribution of capital to the extent that,

immediately after such investment, the aggregate of such

investments does not exceed 1/3 of the net worth of the borrower;

or

(2) require a qualified telephone borrower to obtain the

approval of the Secretary or the Governor of the telephone bank

in order to make an investment described in paragraph (1).

(b) ''Qualified telephone borrower'' defined

As used in subsection (a) of this section, the term ''qualified

telephone borrower'' means a person -

(1) to whom a telephone loan has been made or guaranteed under

this chapter; and

(2) whose net worth is at least 20 percent of the total assets

of such person.

-SOURCE-

(May 20, 1936, ch. 432, title II, Sec. 205, as added Pub. L.

101-624, title XXIII, Sec. 2356, Nov. 28, 1990, 104 Stat. 4039;

amended Pub. L. 103-354, title II, Sec. 235(a)(13), Oct. 13, 1994,

108 Stat. 3221.)

-MISC1-

AMENDMENTS

1994 - Subsec. (a). Pub. L. 103-354 substituted ''Secretary'' for

''Administrator'' in two places.

-CITE-

7 USC Sec. 927 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 31 - RURAL ELECTRIFICATION AND TELEPHONE SERVICE

SUBCHAPTER II - RURAL TELEPHONE SERVICE

-HEAD-

Sec. 927. General duties and prohibitions

-STATUTE-

(a) Duties

The Secretary and the Governor of the telephone bank shall -

(1) notwithstanding section 553(a)(2) of title 5, cause to be

published in the Federal Register, in accordance with subsections

(b) through (e) of section 553 of such title, all rules,

regulations, bulletins, and other written policy standards

governing the operations of the telephone loan and loan guarantee

programs administered under this chapter other than those

relating to agency management and personnel;

(2) in evaluating the feasibility of a telephone loan to be

made to a borrower for telephone services, use -

(A) with respect to items for which the regulatory authority

with jurisdiction over the provision of such services has

approved the depreciation rates used by the borrower, such

approved rates; and

(B) with respect to other items, the average of the

depreciation rates used by borrowers of telephone loans made

under this chapter;

(3) annually determine and publish the average described in

paragraph (2)(B); and

(4) make loans for all purposes for which telephone loans are

authorized under section 922 or 948 of this title, to the extent

of qualifying applications therefor.

(b) Prohibitions

The Secretary and the Governor of the telephone bank shall not -

(1) rescind an insured telephone loan, or a Rural Telephone

Bank loan, made under this chapter without the consent of the

borrower, unless all of the purposes for which telephone loans

have been made to the borrower under this chapter have been

accomplished with funds provided under this chapter;

(2) regulate the order or sequence of advances of funds under

telephone loans made under this chapter to any borrower who has

received any combination of telephone loans from the Secretary,

the Rural Telephone Bank, or the Federal Financing Bank; or

(3) deny a loan or advance to, or take any other adverse action

against, an applicant for, or a borrower of, a telephone loan

under this chapter for any reason that is not based on a rule,

regulation, bulletin, or other written policy standard that has

not been published pursuant to section 553 of title 5.

-SOURCE-

(May 20, 1936, ch. 432, title II, Sec. 206, as added Pub. L.

101-624, title XXIII, Sec. 2357, Nov. 28, 1990, 104 Stat. 4040;

amended Pub. L. 103-354, title II, Sec. 235(a)(7), (13), Oct. 13,

1994, 108 Stat. 3221.)

-MISC1-

AMENDMENTS

1994 - Pub. L. 103-354 substituted ''Secretary'' for

''Administrator'' in subsecs. (a) and (b) and ''Secretary'' for

''Rural Electrification Administration'' in subsec. (b)(2).

-CITE-

7 USC Sec. 928 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 31 - RURAL ELECTRIFICATION AND TELEPHONE SERVICE

SUBCHAPTER II - RURAL TELEPHONE SERVICE

-HEAD-

Sec. 928. Prompt processing of telephone loans

-STATUTE-

Within ten days after the end of the second and fourth calendar

quarters of each year, the Secretary shall submit to the Committee

on Agriculture and the Committee on Appropriations of the House of

Representatives, and to the Committee on Agriculture, Nutrition,

and Forestry and the Committee on Appropriations of the Senate, a

report -

(1) identifying each completed application for a telephone loan

under section 935 of this title, a guarantee of a telephone loan

under section 936 of this title, or a loan under section 948 of

this title, that has not been finally acted upon within ninety

days after the date the completed application is submitted; and

(2) stating the reasons for the failure to finally act upon the

completed applications within such ninety-day period.

-SOURCE-

(May 20, 1936, ch. 432, title II, Sec. 207, as added Pub. L.

101-624, title XXIII, Sec. 2358, Nov. 28, 1990, 104 Stat. 4041;

amended Pub. L. 103-354, title II, Sec. 235(a)(13), Oct. 13, 1994,

108 Stat. 3221.)

-MISC1-

AMENDMENTS

1994 - Pub. L. 103-354 substituted ''Secretary'' for

''Administrator''.

-CITE-

7 USC SUBCHAPTER III - RURAL ELECTRIC AND TELEPHONE

DIRECT LOAN PROGRAMS 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 31 - RURAL ELECTRIFICATION AND TELEPHONE SERVICE

SUBCHAPTER III - RURAL ELECTRIC AND TELEPHONE DIRECT LOAN PROGRAMS

.

-HEAD-

SUBCHAPTER III - RURAL ELECTRIC AND TELEPHONE DIRECT LOAN PROGRAMS

-SECREF-

SUBCHAPTER REFERRED TO IN OTHER SECTIONS

This subchapter is referred to in section 948 of this title.

-CITE-

7 USC Sec. 930 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 31 - RURAL ELECTRIFICATION AND TELEPHONE SERVICE

SUBCHAPTER III - RURAL ELECTRIC AND TELEPHONE DIRECT LOAN PROGRAMS

-HEAD-

Sec. 930. Congressional declaration of policy

-STATUTE-

It is hereby declared to be the policy of the Congress that

adequate funds should be made available to rural electric and

telephone systems through direct, insured and guaranteed loans at

interest rates which will allow them to achieve the objectives of

this chapter and that such rural electric and telephone systems

should be encouraged and assisted to develop their resources and

ability to achieve the financial strength needed to enable them to

satisfy their credit needs from their own financial organizations

and other sources at reasonable rates and terms consistent with the

loan applicant's ability to pay and achievement of this chapter's

objectives.

-SOURCE-

(Pub. L. 93-32, Sec. 1, May 11, 1973, 87 Stat. 65.)

-COD-

CODIFICATION

The last sentence of section 1 of Pub. L. 93-32 provided that:

''The Rural Electrification Act of 1936, as amended (7 U.S.C.

901-950(b)), is therefore further amended as hereinafter

provided.''

Section was not enacted as part of the Rural Electrification Act

of 1936 which comprises this chapter.

-MISC3-

EFFECTIVE DATE

Section 12 of Pub. L. 93-32 provided that: ''This Act (enacting

sections 906a, 930, and 933 to 940 of this title, amending sections

903, 931, 932, 945, 946, 947, and 948 of this title, and enacting

provisions set out as notes under this section) shall take effect

upon enactment (May 11, 1973).''

RESERVATION OF RIGHT TO REPEAL, ALTER, OR AMEND PUB. L. 93-32

Section 11 of Pub. L. 93-32 provided that: ''The right to repeal,

alter, or amend, this Act (enacting sections 906a, 930, and 933 to

940 of this title, amending sections 903, 931, 932, 945, 946, 947,

and 948 of this title, and enacting provisions set out as notes

under this section) is expressly reserved.''

-CITE-

7 USC Sec. 931 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 31 - RURAL ELECTRIFICATION AND TELEPHONE SERVICE

SUBCHAPTER III - RURAL ELECTRIC AND TELEPHONE DIRECT LOAN PROGRAMS

-HEAD-

Sec. 931. Rural Electrification and Telephone Revolving Fund

-STATUTE-

There is hereby established in the Treasury of the United States

a fund, to be known as the Rural Electrification and Telephone

Revolving Fund (hereinafter referred to as the ''fund''),

consisting of:

(1) all notes, bonds, obligations, liens, mortgages, and

property delivered or assigned to the Secretary pursuant to loans

heretofore or hereafter made under sections 904, 905, (FOOTNOTE

1) and 922 of this title and under this subchapter, as of May 11,

1973, and all proceeds from the sales hereunder of such notes,

bonds, obligations, liens, mortgages, and property, which shall

be transferred to and be assets of the funds;

(FOOTNOTE 1) See References in Text note below.

(2) undisbursed balances of electric and telephone loans made

under sections 904, 905, (FOOTNOTE 1) and 922 of this title,

which as of May 11, 1973, shall be transferred to and be assets

of the fund;

(3) all collections of principal and interest received on and

after July 1, 1972, on notes, bonds, judgments, or other

obligations made or held under subchapters I and II of this

chapter and under this subchapter, except for net collection

proceeds previously appropriated for the purchase of class A

stock in the Rural Telephone Bank, which shall be paid into and

be assets of the fund;

(4) all appropriations for interest subsidies and losses

required under this subchapter which may hereafter be made by the

Congress and the unobligated balances of any funds made available

for loans under the item ''Rural Electrification Administration''

in the Department of Agriculture and Agriculture-Environmental

and Consumer Protection Appropriations Acts;

(5) moneys borrowed from the Secretary of the Treasury pursuant

to section 934(a) of this title;

(6) shares of the capital stock of the Rural Telephone Bank

purchased by the United States pursuant to section 946(a) of this

title and moneys received from said bank upon retirement of said

shares of stock in accordance with the provisions of subchapter

IV of this chapter, which said shares and moneys shall be assets

of the fund.

-SOURCE-

(May 20, 1936, ch. 432, title III, Sec. 301, as added Pub. L.

92-12, Sec. 2, May 7, 1971, 85 Stat. 29; amended Pub. L. 93-32,

Sec. 2, May 11, 1973, 87 Stat. 66; Pub. L. 94-570, Sec. 2, Oct. 20,

1976, 90 Stat. 2701; Pub. L. 103-354, title II, Sec. 235(a)(13),

Oct. 13, 1994, 108 Stat. 3221; Pub. L. 104-127, title VII, Sec.

772(b)(1), Apr. 4, 1996, 110 Stat. 1149.)

-REFTEXT-

REFERENCES IN TEXT

Section 905 of this title, referred to in pars. (1) and (2), was

repealed by Pub. L. 104-127, title VII, Sec. 774(a), Apr. 4, 1996,

110 Stat. 1150.

-MISC2-

AMENDMENTS

1996 - Pub. L. 104-127 struck out ''(a)'' before ''There is

hereby'' in introductory provisions and struck out

''notwithstanding section 903(a) of this title,'' before ''all

collections'' in par. (3).

1994 - Subsec. (a)(1). Pub. L. 103-354 substituted ''Secretary''

for ''Administrator''.

1976 - Subsec. (a)(4). Pub. L. 94-570 provided for inclusion in

the fund the unobligated balances of any funds made available for

loans under item ''Rural Electrification Administration'' in the

Department of Agriculture and Agriculture-Environmental and

Consumer Protection Appropriation Acts.

1973 - Pub. L. 93-32 substituted provisions establishing the

Rural Electrification and Telephone Revolving Fund and enumerating

its constituent parts, for provisions establishing a rural

telephone account in the United States Treasury.

EFFECTIVE DATE OF 1976 AMENDMENT

Amendment by Pub. L. 94-570 effective Oct. 20, 1976, see section

4 of Pub. L. 94-570, set out as a note under section 935 of this

title.

EFFECTIVE DATE OF 1973 AMENDMENT

Amendment by Pub. L. 93-32 effective May 11, 1973, see section 12

of Pub. L. 93-32, set out as an Effective Date note under section

930 of this title.

EFFECTIVE DATE

Section effective May 7, 1971, see section 7 of Pub. L. 92-12,

set out as a note under section 921a of this title.

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in section 946 of this title.

-CITE-

7 USC Sec. 931a 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 31 - RURAL ELECTRIFICATION AND TELEPHONE SERVICE

SUBCHAPTER III - RURAL ELECTRIC AND TELEPHONE DIRECT LOAN PROGRAMS

-HEAD-

Sec. 931a. Level of loan programs under Rural Electrification and

Telephone Revolving Fund

-STATUTE-

On and after October 28, 1991, no funds in this Act or any other

Act shall be available to carry out loan programs under the Rural

Electrification and Telephone Revolving Fund at levels other than

those provided for in advance in appropriations Acts.

-SOURCE-

(Pub. L. 102-142, title III, Oct. 28, 1991, 105 Stat. 903.)

-COD-

CODIFICATION

Section was enacted as part of the Agriculture, Rural

Development, Food and Drug Administration, and Related Agencies

Appropriations Act, 1992, and not as part of the Rural

Electrification Act of 1936 which comprises this chapter.

-CITE-

7 USC Sec. 932 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 31 - RURAL ELECTRIFICATION AND TELEPHONE SERVICE

SUBCHAPTER III - RURAL ELECTRIC AND TELEPHONE DIRECT LOAN PROGRAMS

-HEAD-

Sec. 932. Liabilities and uses of Rural Electrification and

Telephone Revolving Fund

-STATUTE-

(a) Liabilities and obligations of fund

The notes of the Secretary to the Secretary of the Treasury to

obtain funds for loans under sections 904, 905, (FOOTNOTE 1) and

922 of this title, and all other liabilities against the

appropriations or assets in the fund in connection with

electrification and telephone loan operations shall be liabilities

of the fund, and all other obligations against such appropriations

or assets in the fund arising out of electrification and telephone

loan operations shall be obligations of the fund.

(FOOTNOTE 1) See References in Text note below.

(b) Uses of fund assets

The assets of the fund shall be available only for the following

purposes:

(1) loans which could be insured under this subchapter, and for

advances in connection with such loans and loans previously made,

as of May 11, 1973, under sections 904, 905, (FOOTNOTE 1) and 922

of this title;

(2) payment of principal when due (without interest) on

outstanding loans to the Secretary from the Secretary of the

Treasury for electrification and telephone purposes and payment

of principal and interest when due on loans to the Secretary from

the Secretary of the Treasury pursuant to section 934(a) of this

title;

(3) payment of amounts to which the holder of notes is entitled

on insured loans: Provided, That payments other than final

payments need not be remitted to the holder until due or until

the next agreed annual, semiannual, or quarterly remittance date;

(4) payment to the holder of insured notes of any defaulted

installment or, upon assignment of the note of the Secretary at

his request, the entire balance due on the note;

(5) purchase of notes in accordance with contracts of insurance

entered into by the Secretary;

(6) payment in compliance with contracts of guarantee;

(7) payment of taxes, insurance, prior liens, expenses

necessary to make fiscal adjustments in connection with the

application, and transmittal of collections or necessary to

obtain credit reports on applicants or borrowers, expenses for

necessary services, including construction, inspections,

commercial appraisals, loan servicing, consulting business

advisory or other commercial and technical services, and other

program services, and other expenses and advances authorized in

section 907 of this title in connection with insured loans. Such

items may be paid in connection with guaranteed loans after or in

connection with the acquisition of such loans or security thereof

after default, to the extent determined to be necessary to

protect the interest of the Government, or in connection with any

other activity authorized in this chapter;

(8) payment of the purchase price and any costs and expenses

incurred in connection with the purchase, acquisition, or

operation of property pursuant to section 907 of this title.

(c) Separate electric and telephone accounts

(1) The Secretary shall maintain two separate accounts within the

fund, which shall be known as the electric account and the

telephone account, respectively.

(2)(A) The Secretary shall account for the assets, liabilities,

income, expenses, and equity of the fund attributable to

electrification loan operations in the electric account.

(B) The Secretary shall account for the assets, liabilities,

income, expenses, and equity of the fund attributable to telephone

loan operations in the telephone account.

(3)(A) The assets accounted for in the electric account shall be

available solely for electrification loan operations under this

chapter.

(B) The assets accounted for in the telephone account shall be

available solely for telephone loan operations under this chapter

(other than under subchapter IV of this chapter).

-SOURCE-

(May 20, 1936, ch. 432, title III, Sec. 302, as added Pub. L.

92-12, Sec. 2, May 7, 1971, 85 Stat. 30; amended Pub. L. 93-32,

Sec. 2, May 11, 1973, 87 Stat. 66; Pub. L. 101-624, title XXIII,

Sec. 2359, Nov. 28, 1990, 104 Stat. 4041; Pub. L. 103-354, title

II, Sec. 235(a)(13), Oct. 13, 1994, 108 Stat. 3221; Pub. L.

104-127, title VII, Sec. 772(b)(2), Apr. 4, 1996, 110 Stat. 1149.)

-REFTEXT-

REFERENCES IN TEXT

Section 905 of this title, referred to in subsecs. (a) and

(b)(1), was repealed by Pub. L. 104-127, title VII, Sec. 774(a),

Apr. 4, 1996, 110 Stat. 1150.

-MISC2-

AMENDMENTS

1996 - Subsec. (b)(2). Pub. L. 104-127 struck out ''pursuant to

section 903(a) of this title'' after ''purposes''.

1994 - Subsecs. (a), (b)(2), (4), (5), (c)(1), (2). Pub. L.

103-354 substituted ''Secretary'' for ''Administrator'' wherever

appearing.

1990 - Subsec. (c). Pub. L. 101-624 added subsec. (c).

1973 - Pub. L. 93-32 substituted provisions setting out the

liabilities of the Rural Electrification and Telephone Revolving

Fund and the allowable purposes for which fund assets shall be

available, for provisions, that the monies in the rural telephone

account should remain on deposit in the Treasury of the United

States until disbursed.

EFFECTIVE DATE OF 1973 AMENDMENT

Amendment by Pub. L. 93-32 effective May 11, 1973, see section 12

of Pub. L. 93-32, set out as an Effective Date note under section

930 of this title.

EFFECTIVE DATE

Section effective May 7, 1971, see section 7 of Pub. L. 92-12,

set out as a note under section 921a of this title.

-CITE-

7 USC Sec. 933 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 31 - RURAL ELECTRIFICATION AND TELEPHONE SERVICE

SUBCHAPTER III - RURAL ELECTRIC AND TELEPHONE DIRECT LOAN PROGRAMS

-HEAD-

Sec. 933. Moneys in the Rural Electrification and Telephone

Revolving Fund

-STATUTE-

Moneys in the fund shall remain on deposit in the Treasury of the

United States until disbursed.

-SOURCE-

(May 20, 1936, ch. 432, title III, Sec. 303, as added Pub. L.

93-32, Sec. 2, May 11, 1973, 87 Stat. 67.)

-MISC1-

EFFECTIVE DATE

Section effective May 11, 1973, see section 12 of Pub. L. 93-32,

set out as a note under section 930 of this title.

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in section 939 of this title.

-CITE-

7 USC Sec. 934 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 31 - RURAL ELECTRIFICATION AND TELEPHONE SERVICE

SUBCHAPTER III - RURAL ELECTRIC AND TELEPHONE DIRECT LOAN PROGRAMS

-HEAD-

Sec. 934. Authorized financial transactions; interim notes;

purchase of obligations for resale; sale of notes and

certificates; liens

-STATUTE-

(a) The Secretary is authorized to make and issue interim notes

to the Secretary of the Treasury for the purpose of obtaining funds

necessary for discharging obligations of the fund and for making

loans, advances and authorized expenditures out of the fund. Such

notes shall be in such form and denominations and have such

maturities and be subject to such terms and conditions as may be

agreed upon by the Secretary and the Secretary of the Treasury.

Such notes shall bear interest at a rate fixed by the Secretary of

the Treasury, taking into consideration the current average market

yield of outstanding marketable obligations of the United States

having maturities comparable to the notes issued by the Secretary

under this section. The Secretary of the Treasury is authorized

and directed to purchase any notes of the Secretary issued

hereunder, and, for that purpose, the Secretary of the Treasury is

authorized to use as a public debt transaction the proceeds from

the sale of any securities issued under chapter 31 of title 31, and

the purposes for which such securities may be issued under such

chapter are extended to include the purchase of notes issued by the

Secretary. All redemptions, purchases, and sales by the Secretary

of the Treasury of such notes shall be treated as public debt

transactions of the United States: Provided, however, That such

interim notes to the Secretary of the Treasury shall not be

included in the totals of the budget of the United States

Government and shall be exempt from any general limitation imposed

by statute on expenditures and net lending (budget outlays) of the

United States.

(b) The Secretary of the Treasury is authorized and directed to

purchase for resale obligations insured through the fund when

offered by the Secretary. Such resales shall be upon such terms and

conditions as the Secretary of the Treasury shall determine.

Purchases and resales by the Secretary of the Treasury hereunder

shall not be included in the totals of the budget of the United

States Government and shall be exempt from any general limitation

imposed by statute on expenditures and not lending (budget outlays)

of the United States.

(c) The Secretary may, on an insured basis or otherwise, sell and

assign any notes in the fund or sell certificates of beneficial

ownership therein to the Secretary of the Treasury or in the

private market. Any sale by the Secretary of notes individually or

in blocks shall be treated as a sale of assets for the purposes of

chapter 11 of title 31, notwithstanding the fact that the

Secretary, under an agreement with the purchaser or purchasers,

holds the debt instruments evidencing the loans and holds or

reinvests payments thereon as trustee and custodian for the

purchaser or purchasers of the individual note or of the

certificate of beneficial ownership in a number of such notes.

Security instruments taken by the Secretary in connection with any

notes in the fund may constitute liens running to the United States

notwithstanding the fact that such notes may be thereafter held by

purchasers thereof.

-SOURCE-

(May 20, 1936, ch. 432, title III, Sec. 304, as added Pub. L.

93-32, Sec. 2, May 11, 1973, 87 Stat. 67; amended Pub. L. 103-354,

title II, Sec. 235(a)(13), Oct. 13, 1994, 108 Stat. 3221.)

-COD-

CODIFICATION

In subsecs. (a) and (c), ''chapter 31 of title 31'', ''such

chapter'', and ''chapter 11 of title 31'' substituted for ''the

Second Liberty Bond Act, as amended'', ''such Act, as amended'',

and ''the Budget and Accounting Act, 1921 (31 U.S.C. 1 et seq.)'',

respectively, on authority of Pub. L. 97-258, Sec. 4(b), Sept. 13,

1982, 96 Stat. 1067, the first section of which enacted Title 31,

Money and Finance.

-MISC3-

AMENDMENTS

1994 - Pub. L. 103-354 substituted ''Secretary'' for

''Administrator'' wherever appearing.

EFFECTIVE DATE

Section effective May 11, 1973, see section 12 of Pub. L. 93-32,

set out as a note under section 930 of this title.

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 931, 932, 939 of this

title.

-CITE-

7 USC Sec. 935 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 31 - RURAL ELECTRIFICATION AND TELEPHONE SERVICE

SUBCHAPTER III - RURAL ELECTRIC AND TELEPHONE DIRECT LOAN PROGRAMS

-HEAD-

Sec. 935. Insured loans; interest rates and lending levels

-STATUTE-

(a) In general

The Secretary is authorized to make insured loans under this

subchapter and at the interest rates hereinafter provided to the

full extent of the assets available in the fund, subject only to

limitations as to amounts authorized for loans and advances as may

be from time to time imposed by the Congress of the United States

for loans to be made in any one year, which amounts shall remain

available until expended: Provided, That the Congress in the annual

appropriation Act may also authorize the transfer of any excess

cash in the fund for deposit into the Treasury as miscellaneous

receipts: And provided further, That any such loans and advances

shall not be included in the totals of the budget of the United

States Government and shall be exempt from any general limitation

imposed by statute on expenditures and net lending (budget outlays)

of the United States.

(b) Insured loans

Loans made under this section shall be insured by the Secretary

when purchased by a lender. As used in this chapter, an insured

loan is one which is made, held, and serviced by the Secretary, and

sold and insured by the Secretary hereunder; such loans shall be

sold and insured by the Secretary without undue delay.

(c) Insured electric loans

(1) Hardship loans

(A) In general

The Secretary shall make insured electric loans, to the

extent of qualifying applications for the loans, at an interest

rate of 5 percent per year to any applicant for a loan who

meets each of the following requirements:

(i) The average revenue per kilowatt-hour sold by the

applicant is not less than 120 percent of the average revenue

per kilowatt-hour sold by all utilities in the State in which

the applicant provides service.

(ii) The average residential revenue per kilowatt-hour sold

by the applicant is not less than 120 percent of the average

residential revenue per kilowatt-hour sold by all utilities

in the State in which the applicant provides service.

(iii) The average per capita income of the residents

receiving electric service from the applicant is less than

the average per capita income of the residents of the State

in which the applicant provides service, or the median

household income of the households receiving electric service

from the applicant is less than the median household income

of the households in the State.

(B) Severe hardship loans

In addition to hardship loans that are made under

subparagraph (A), the Secretary may make an insured electric

loan at an interest rate of 5 percent per year to an applicant

for a loan if, in the sole discretion of the Secretary, the

applicant has experienced a severe hardship.

(C) Limitation

Except as provided in subparagraph (D), the Secretary may not

make a loan under this paragraph to an applicant for the

purpose of furnishing or improving electric service to a

consumer located in an urban area (as defined by the Bureau of

the Census) if the average number of consumers per mile of line

of the total electric system of the applicant exceeds 17.

(D) Extremely high rates

In addition to hardship loans that are made under

subparagraphs (A) and (B), the Secretary shall make insured

electric loans, to the extent of qualifying applications for

the loans, at an interest rate of 5 percent per year to any

applicant for a loan whose residential revenue exceeds 15.0

cents per kilowatt-hour sold. A qualifying application from

such an applicant for the purpose of furnishing or improving

electric service to a consumer located outside of an urbanized

area shall not be subject to the conditions or limitation of

subparagraph (A) or (C).

(2) Municipal rate loans

(A) In general

The Secretary shall make insured electric loans, to the

extent of qualifying applications for the loans, at the

interest rate described in subparagraph (B) for the term or

terms selected by the applicant pursuant to subparagraph (C).

(B) Interest rate

(i) In general

Subject to clause (ii), the interest rate described in this

subparagraph on a loan to a qualifying applicant shall be -

(I) the interest rate determined by the Secretary to be

equal to the current market yield on outstanding municipal

obligations with remaining periods to maturity similar to

the term selected by the applicant pursuant to subparagraph

(C), but not greater than the rate determined under section

1927(a)(3)(A) of this title that is based on the current

market yield on outstanding municipal obligations; plus

(II) if the applicant for the loan makes an election

pursuant to subparagraph (D) to include in the loan

agreement the right of the applicant to prepay the loan, a

rate equal to the amount by which -

(aa) the interest rate on commercial loans for a

similar period that afford the borrower such a right;

exceeds

(bb) the interest rate on commercial loans for the

period that do not afford the borrower such a right.

(ii) Maximum rate

The interest rate described in this subparagraph on a loan

to an applicant for the loan shall not exceed 7 percent if -

(I) the average number of consumers per mile of line of

the total electric system of the applicant is less than

5.50; or

(II)(aa) the average revenue per kilowatt-hour sold by

the applicant is more than the average revenue per

kilowatt-hour sold by all utilities in the State in which

the applicant provides service; and

(bb) the average per capita income of the residents

receiving electric service from the applicant is less than

the average per capita income of the residents of the State

in which the applicant provides service, or the median

household income of the households receiving electric

service from the applicant is less than the median

household income of the households in the State.

(iii) Exception

Clause (ii) shall not apply to a loan to be made to an

applicant for the purpose of furnishing or improving electric

service to consumers located in an urban area (as defined by

the Bureau of the Census) if the average number of consumers

per mile of line of the total electric system of the

applicant exceeds 17.

(C) Loan term

(i) In general

Subject to clause (ii), the applicant for a loan under this

paragraph may select the term for which an interest rate

shall be determined pursuant to subparagraph (B), and, at the

end of the term (and any succeeding term selected by the

applicant under this subparagraph), may renew the loan for

another term selected by the applicant.

(ii) Maximum term

(I) Applicant

The applicant may not select a term that ends more than

35 years after the beginning of the first term the

applicant selects under clause (i).

(II) Secretary

The Secretary may prohibit an applicant from selecting a

term that would result in the total term of the loan being

greater than the expected useful life of the assets being

financed.

(D) Call provision

The Secretary shall offer any applicant for a loan under this

paragraph the option to include in the loan agreement the right

of the applicant to prepay the loan on terms consistent with

similar provisions of commercial loans.

(3) Other source of credit not required in certain cases

The Secretary may not require any applicant for a loan made

under this subsection who is eligible for a loan under paragraph

(1) to obtain a loan from another source as a condition of

approving the application for the loan or advancing any amount

under the loan.

(d) Insured telephone loans

(1) Hardship loans

(A) In general

The Secretary shall make insured telephone loans, to the

extent of qualifying applications for the loans, at an interest

rate of 5 percent per year, to any applicant who meets each of

the following requirements:

(i) The average number of subscribers per mile of line in

the service area of the applicant is not more than 4.

(ii) The applicant is capable of producing net income or

margins before interest of not less than 100 percent (but not

more than 300 percent) of the interest requirements on all of

the outstanding and proposed loans of the applicant.

(iii) The Secretary has approved a telecommunications

modernization plan for the State under paragraph (3) and, if

the plan was developed by telephone borrowers under this

subchapter, the applicant is a participant in the plan.

(iv) The average number of subscribers per mile of line in

the area included in the proposed loan is not more than 17.

(B) Authority to waive tier requirement

The Secretary may waive the requirement of subparagraph

(A)(ii) in any case in which the Secretary determines (and sets

forth the reasons for the waiver in writing) that the

requirement would prevent emergency restoration of the

telephone system of the applicant or result in severe hardship

to the applicant.

(C) Effect of lack of funds

On request of any applicant who is eligible for a loan under

this paragraph for which funds are not available, the applicant

shall be considered to have applied for a loan under subchapter

IV of this chapter.

(2) Cost-of-money loans

(A) In general

The Secretary may make insured telephone loans for the

acquisition, purchase, and installation of telephone lines,

systems, and facilities (other than buildings used primarily

for administrative purposes, vehicles not used primarily in

construction, and customer premise equipment) related to the

furnishing, improvement, or extension of rural

telecommunications service, at an interest rate equal to the

then current cost of money to the Government of the United

States for loans of similar maturity, but not more than 7

percent per year, to any applicant for a loan who meets the

following requirements:

(i) The average number of subscribers per mile of line in

the service area of the applicant is not more than 15, or the

applicant is capable of producing net income or margins

before interest of not less than 100 percent (but not more

than 500 percent) of the interest requirements on all of the

outstanding and proposed loans of the applicant.

(ii) The Secretary has approved a telecommunications

modernization plan for the State under paragraph (3) and, if

the plan was developed by telephone borrowers under this

subchapter, the applicant is a participant in the plan.

(B) Concurrent loan authority

On request of any applicant for a loan under this paragraph

during any fiscal year, the Secretary shall -

(i) consider the application to be for a loan under this

paragraph and a loan under section 948 of this title; and

(ii) if the applicant is eligible for a loan, make a loan

to the applicant under this paragraph in an amount equal to

the amount that bears the same ratio to the total amount of

loans for which the applicant is eligible under this

paragraph and under section 948 of this title, as the amount

made available for loans under this paragraph for the fiscal

year bears to the total amount made available for loans under

this paragraph and under section 948 of this title for the

fiscal year.

(C) Effect of lack of funds

On request of any applicant who is eligible for a loan under

this paragraph for which funds are not available, the applicant

shall be considered to have applied for a loan guarantee under

section 936 of this title.

(3) State telecommunications modernization plans

(A) Approval

If, not later than 1 year after final regulations are

promulgated to carry out this paragraph, any State, either by

statute or through the public utility commission of the State,

develops a telecommunications modernization plan that meets the

requirements of subparagraph (B), the Secretary shall approve

the plan for the State. If a State does not develop a plan in

accordance with the requirements of the preceding sentence, the

Secretary shall approve any telecommunications modernization

plan for the State that meets the requirements that is

developed by a majority of the borrowers of telephone loans

made under this subchapter who are located in the State.

(B) Requirements

For purposes of subparagraph (A), a telecommunications

modernization plan must, at a minimum, meet the following

objectives:

(i) The plan must provide for the elimination of party line

service.

(ii) The plan must provide for the availability of

telecommunications services for improved business,

educational, and medical services.

(iii) The plan must encourage and improve computer networks

and information highways for subscribers in rural areas.

(iv) The plan must provide for -

(I) subscribers in rural areas to be able to receive

through telephone lines -

(aa) conference calling;

(bb) video images; and

(cc) data at a rate of at least 1,000,000 bits of

information per second; and

(II) the proper routing of information to subscribers.

(v) The plan must provide for uniform deployment schedules

to ensure that advanced services are deployed at the same

time in rural and nonrural areas.

(vi) The plan must provide for such additional requirements

for service standards as may be required by the Secretary.

(C) Finality of approval

A telecommunications modernization plan approved under

subparagraph (A) may not subsequently be disapproved.

Notwithstanding paragraphs (1)(A)(iii) and (2)(A)(iii),

(FOOTNOTE 1) and section 948(b)(4)(C) (FOOTNOTE 2) of this

title, the Secretary and the Governor of the telephone bank may

make a loan to a borrower serving a State that does not have a

telecommunication modernization plan approved by the Secretary

if the loan is made less than 1 year after the Secretary has

adopted final regulations implementing this paragraph.

(FOOTNOTE 1) So in original. Probably should be paragraph

''(2)(A)(ii)''.

(FOOTNOTE 2) So in original. Probably should be section

''948(b)(4)(B)''.

-SOURCE-

(May 20, 1936, ch. 432, title III, Sec. 305, as added Pub. L.

93-32, Sec. 2, May 11, 1973, 87 Stat. 68; amended Pub. L. 94-570,

Sec. 3, Oct. 20, 1976, 90 Stat. 2701; Pub. L. 97-35, title I, Sec.

165(a), Aug. 13, 1981, 95 Stat. 379; Pub. L. 101-624, title XXIII,

Sec. 2361, Nov. 28, 1990, 104 Stat. 4042; Pub. L. 103-129, Sec.

2(a)(1), (c)(6), Nov. 1, 1993, 107 Stat. 1356, 1364; Pub. L.

103-354, title II, Sec. 235(a)(8), (13), Oct. 13, 1994, 108 Stat.

3221.)

-MISC1-

AMENDMENTS

1994 - Pub. L. 103-354 substituted ''Secretary'' for

''Administrator'' in heading for subsec. (c)(2)(C)(ii)(II) and

wherever appearing in text.

1993 - Pub. L. 103-129, Sec. 2(c)(6)(A), amended section

catchline generally.

Subsec. (a). Pub. L. 103-129, Sec. 2(c)(6)(A), inserted heading.

Subsec. (b). Pub. L. 103-129, Sec. 2(a)(1)(A), (B), (c)(6)(B),

redesignated subsec. (c) as (b), inserted heading, and struck out

former subsec. (b) which read as follows: ''Insured loans made

under this subchapter shall bear interest at 5 per centum per

annum, except that the Administrator may make insured loans to

electric or telephone borrowers at a lesser interest rate, but not

less than 2 per centum per annum, if, in the Administrator's sole

discretion, the Administrator finds that the borrower -

''(1) has experienced extreme financial hardship; or

''(2) cannot, in accordance with generally accepted management

and accounting principles and without charging rates to its

customers or subscribers so high as to create a substantial

disparity between such rates and the rates charged for similar

service in the same or nearby areas by other suppliers, provide

service consistent with the objectives of this chapter.''

Subsec. (c). Pub. L. 103-129, Sec. 2(a)(1)(C), added subsec. (c).

Former subsec. (c) redesignated (b).

Subsec. (d). Pub. L. 103-129, Sec. 2(a)(1)(A), (C), added subsec.

(d) and struck out former subsec. (d) which read as follows: ''The

Administrator shall make a telephone loan under this subchapter to

an applicant therefor who is otherwise qualified to receive such a

loan at the highest interest rate (but not less than the lowest

interest rate, nor higher than the highest interest rate, specified

in subsection (b) of this section) at which the borrower would be

capable of producing net income or margins before interest payments

of at least 100 percent (but not more than 150 percent) of the

interest requirements on all of the applicant's outstanding and

proposed loans.''

1990 - Subsec. (d). Pub. L. 101-624 added subsec. (d).

1981 - Subsec. (b). Pub. L. 97-35 substituted provisions

establishing an interest rate at 5 per centum per annum and a lower

rate, but not less than 2 per cent, under the enumerated criteria,

for provisions establishing standard and special rates, with

special rates applicable under enumerated criteria.

1976 - Subsec. (b). Pub. L. 94-570 struck out from introductory

text ''meets either of the following conditions'' after ''borrower

which''; limited par. (1) to the telephone borrowers, substituting

provision for an average subscriber density of three or fewer per

mile at the end of the most recent calendar year ending at least

six months before approval of the loan for prior provision for an

average consumer or subscriber density of two or fewer per mile;

substituted in par. (2) provision, limited to electric borrowers,

respecting having an average consumer density of two or fewer per

mile or an average adjusted plant revenue ratio of over 9.0 at end

of the most recent calendar year ending at least six months before

approval of the loan, determination of such ratio, and defining sum

of distribution plant and general plant, gross revenue, and cost of

power for prior provision for and average gross revenue per mile

which is at least $450 below the average gross revenue per mile of

REA-financed electric systems, in the case of electric borrowers,

or at least $300 below the average gross revenue per mile of

REA-financed telephone systems, in the case of telephone borrowers;

and inserted in proviso of par. (2) ''to a telephone or electric

borrower'' after ''make a loan''.

EFFECTIVE DATE OF 1981 AMENDMENT

Section 165(d) of Pub. L. 97-35 provided that: ''The amendments

made by subsection (a) of this section (amending this section)

shall apply to loans the applications for which are received by the

Rural Electrification Administration after July 24, 1981.''

EFFECTIVE DATE OF 1976 AMENDMENT; INTEREST RATE

Section 4 of Pub. L. 94-570 provided that: ''This Act (amending

this section and section 931 of this title) shall take effect upon

enactment (Oct. 20, 1976) except that insured loans made pursuant

to applications for such loans which would otherwise lose

eligibility for special rate financing upon such enactment,

received by the Rural Electrification Administration and still

pending on the date of enactment of this Act (Oct. 20, 1976), shall

bear interest as determined under section 305(b) of the Rural

Electrification Act of 1936 before its amendment by this Act

(former provisions of subsec. (b) of this section).''

EFFECTIVE DATE

Section effective May 11, 1973, see section 12 of Pub. L. 93-32,

set out as a note under section 930 of this title.

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 928, 936b, 939, 940,

940d, 948 of this title.

-CITE-

7 USC Sec. 936 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 31 - RURAL ELECTRIFICATION AND TELEPHONE SERVICE

SUBCHAPTER III - RURAL ELECTRIC AND TELEPHONE DIRECT LOAN PROGRAMS

-HEAD-

Sec. 936. Guaranteed loans; accommodations and subordination of

liens; interest rates; assignability of guaranteed loans and

related guarantees

-STATUTE-

The Secretary may provide financial assistance to borrowers for

purposes provided in this chapter by guaranteeing loans, in the

full amount thereof, made by the Rural Telephone Bank, National

Rural Utilities Cooperative Finance Corporation, and any other

legally organized lending agency, or by accommodating or

subordinating liens or mortgages in the fund held by the Secretary

as owner or as trustee or custodian for purchases of notes from the

fund, or by any combination of such guarantee, accommodation, or

subordination. The Secretary shall not provide such assistance to

any borrower of a telephone loan under this chapter unless the

borrower specifically applies for such assistance. No fees or

charges shall be assessed for any such guarantee, accommodation, or

subordination. With respect to guarantees issued by the Secretary

under this section, on the request of the borrower of any such loan

so guaranteed, the loan shall be made by the Federal Financing Bank

and at a rate of interest that is not more than the rate of

interest applicable to other similar loans then being made or

purchased by the Bank. Guaranteed loans shall bear interest at the

rate agreed upon by the borrower and the lender. Guaranteed loans,

and accommodation and subordination of liens or mortgages, may be

made concurrently with an insured loan. The amount of guaranteed

loans shall be subject only to such limitations as to amounts as

may be authorized from time to time by the Congress of the United

States: Provided, That any amounts guaranteed hereunder shall not

be included in the totals of the budget of the United States

Government and shall be exempt from any general limitation imposed

by statute on expenditures and net lending (budget outlays) of the

United States. As used in this subchapter a guaranteed loan is one

which is initially made, held, and serviced by a legally organized

lending agency and which is guaranteed by the Secretary hereunder.

A guaranteed loan, including the related guarantee, may be assigned

to the extent provided in the contract of guarantee executed by the

Secretary under this subchapter; the assignability of such loan and

guarantee shall be governed exclusively by said contract of

guarantee.

-SOURCE-

(May 20, 1936, ch. 432, title III, Sec. 306, as added Pub. L.

93-32, Sec. 2, May 11, 1973, 87 Stat. 69; amended Pub. L. 94-124,

Sec. 1, Nov. 4, 1975, 89 Stat. 677; Pub. L. 97-35, title I, Sec.

165(b), Aug. 13, 1981, 95 Stat. 379; Pub. L. 101-624, title XXIII,

Sec. 2362, Nov. 28, 1990, 104 Stat. 4042; Pub. L. 103-354, title

II, Sec. 235(a)(13), Oct. 13, 1994, 108 Stat. 3221.)

-MISC1-

AMENDMENTS

1994 - Pub. L. 103-354 substituted ''Secretary'' for

''Administrator'' wherever appearing.

1990 - Pub. L. 101-624 inserted provisions prohibiting

Administrator from providing assistance to telephone borrower

unless borrower specifically applies therefor.

1981 - Pub. L. 97-35 inserted provisions relating to loans made

by Federal Financing Bank with respect to guarantees issued under

this section, and substituted ''an insured loan'' for ''a loan

insured at the standard rate''.

1975 - Pub. L. 94-124 authorized assignment of guaranteed loans

and their related guarantees and inserted ''initially'' before

''made, held, and serviced'' in provision defining guaranteed loans

as that term is used in this subchapter.

EFFECTIVE DATE

Section effective May 11, 1973, see section 12 of Pub. L. 93-32,

set out as a note under section 930 of this title.

PREPAYMENT OF LOANS

Pub. L. 99-349, title I, July 2, 1986, 100 Stat. 713, related to

the prepayment of loans made by the Federal Financing Bank, and

guaranteed by the Administrator of the Rural Electrification

Administration, prior to repeal by Pub. L. 99-509, title I, Sec.

1011(b), Oct. 21, 1986, 100 Stat. 1876.

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 928, 935, 936a, 936c, 939

of this title.

-CITE-

7 USC Sec. 936a 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 31 - RURAL ELECTRIFICATION AND TELEPHONE SERVICE

SUBCHAPTER III - RURAL ELECTRIC AND TELEPHONE DIRECT LOAN PROGRAMS

-HEAD-

Sec. 936a. Prepayment of loans

-STATUTE-

(a) Conditions for prepayment

Except as provided in subsection (c) of this section, a borrower

of a loan made by the Federal Financing Bank and guaranteed under

section 936 of this title may prepay such loan (or any loan advance

thereunder) by paying the outstanding principal balance due on the

loan (or advance), if -

(1) the loan is outstanding on July 2, 1986;

(2) private capital, with the existing loan guarantee, is used

to replace the loan; and

(3) the borrower certifies that any savings from such

prepayment will be passed on to its customers or used to improve

the financial strength of the borrower in cases of financial

hardship.

(b) Charges on prepayment prohibited

No sums in addition to the payment of the outstanding principal

balance due on the loan may be charged as the result of such

prepayment against the borrower, the fund, or the Secretary.

(c) Disqualification for prepayment on finding of adverse affect on

Federal Financing Bank

(1) A borrower will not qualify for prepayment under this section

if, in the opinion of the Secretary of the Treasury, to prepay in

such borrower's case would adversely affect the operation of the

Federal Financing Bank.

(2) Paragraph (1) shall be effective in fiscal year 1987 only for

any loan the prepayment of the principal amount of which will cause

the cumulative amount of net proceeds from all such prepayments

made during such year to exceed $2,017,500,000.

(d) Amount of permissible prepayments; establishment of eligibility

criteria

(1) The Secretary shall permit, subject to subsection (a) of this

section, prepayments of principal on loans in fiscal year 1987

under this section or Public Law 99-349 in such amounts as to

realize net proceeds from all such prepayments in fiscal year 1987

in an amount not less than $2,017,500,000.

(2) The Secretary shall establish -

(A) eligibility criteria to ensure that any loan prepayment

activity required to be carried out under this subsection will be

directed to those cooperative borrowers in greatest need of the

benefits associated with prepayment, as determined by the

Secretary; and

(B) such other eligibility criteria as the Secretary determines

are necessary to carry out this subsection.

(e) Assignability and transferability of guarantees of loans

Any guarantee of a loan prepaid under this section shall be fully

assignable under the provisions of section 936 of this title and

transferable. However, the Secretary may require that any such

guarantee, if transfered (FOOTNOTE 1) or assigned, be transferred

or assigned to a loan or security that, if sold, will be grouped

with nonguaranteed loans or securities and sold in a manner to

ensure that such sale will not unreasonably compete with the

marketing of obligations of the United States.

(FOOTNOTE 1) So in original. Probably should be

''transferred''.

-SOURCE-

(May 20, 1936, ch. 432, title III, Sec. 306A, as added Pub. L.

99-509, title I, Sec. 1011(a), Oct. 21, 1986, 100 Stat. 1875;

amended Pub. L. 103-354, title II, Sec. 235(a)(7), (13), Oct. 13,

1994, 108 Stat. 3221.)

-REFTEXT-

REFERENCES IN TEXT

Public Law 99-349, referred to in subsec. (d)(1), is Pub. L.

99-349, July 2, 1986, 100 Stat. 710, known as the Urgent

Supplemental Appropriations Act, 1986. Provisions of title I of

Pub. L. 99-349 relating to prepayment of loans were set out as a

note under section 936 of this title and were repealed by Pub. L.

99-509, title I, Sec. 1011(b), Oct. 21, 1986, 100 Stat. 1876. For

complete classification of this Act to the Code, see Tables.

-MISC2-

AMENDMENTS

1994 - Pub. L. 103-354 substituted ''Secretary'' for ''Rural

Electrification Administration'' in subsec. (b) and ''Secretary''

for ''Administrator'' wherever appearing in subsecs. (d) and (e).

PREPAYMENT OF RURAL ELECTRIFICATION LOANS DURING FISCAL YEAR 1988

Pub. L. 100-203, title I, Sec. 1401, Dec. 22, 1987, 101 Stat.

1330-20, provided that:

''(a) Eligibility to Prepay. - Notwithstanding subsections (c),

(d), and (e) of section 306A of the Rural Electrification Act of

1936 (7 U.S.C. 936a(c), (d), and (e)), during fiscal year 1988, a

borrower of a loan made by the Federal Financing Bank and

guaranteed under section 306 of such Act (7 U.S.C. 936) may, at the

option of the borrower, prepay such loan (or any loan advance

thereunder) in accordance with subsections (a) and (b) of section

306A of such Act, except that any prepayment that would cause the

total amount of such prepayments during fiscal year 1988 to exceed

$2,000,000,000 shall be subject solely to the approval of the

Secretary of the Treasury.

''(b) Priority for Approval. - In determining which borrowers

shall be permitted to prepay loans under subsection (a):

''(1) The Administrator of the Rural Electrification

Administration shall give priority to those 8 borrowers that were

determined by the Administrator, prior to the date of the

enactment of this Act (Dec. 22, 1987), to be eligible to prepay,

or that prepaid, an advance under section 306A of such Act (7

U.S.C. 936a) (as in effect prior to the date of the enactment of

this Act), except that to retain such priority a borrower shall -

''(A) notify the Administrator in writing, within 30 days

after the issuance of regulations to carry out this section, of

the intent of the borrower to prepay; and

''(B) complete such prepayment by disbursing funds to the

Federal Financing Bank to prepay loan advances within 120 days

after the issuance of such regulations.

''(2) In considering requests for prepayment under subsection

(a) by borrowers not described in paragraph (1), the

Administrator shall permit prepayment based on the order in which

borrowers are prepared to disburse funds to the Federal Financing

Bank to complete such prepayments. If more than 1 borrower is so

prepared at the same time, and if the combined amount of such

prepayments would cause the total amount of prepayments during

fiscal year 1988, under this section, to exceed $2,000,000,000,

the Administrator shall -

''(A) base the determination on the date on which prepayment

applications have been submitted; or

''(B) permit partial prepayment by two or more borrowers.

''(c) Regulations. - Not later than 30 days after the date of

enactment of this Act (Dec. 22, 1987), the Administrator of the

Rural Electrification Administration shall issue such regulations

as are necessary to carry at this section.

''(d) Study. - Not later than January 1, 1989, the Comptroller

General of the United States shall -

''(1) study -

''(A) all benefits provided by Federal Financing Bank lending

and the procedures and conditions for the prepayment of current

Federal Financing Bank loans;

''(B) the benefits and costs to Federal Financing Bank

borrowers of making prepayments; and

''(C) alternative conditions and procedures for prepayment of

all Federal Financing Bank loans to balance Federal benefits

with Federal costs; and

''(2) submit to Congress a report describing the results of

such study, together with any appropriate recommendations.''

PREPAYMENT OF GUARANTEED LOANS; RESTRICTIONS

Pub. L. 100-202, Sec. 101(k) (title VI, Sec. 633), Dec. 22, 1987,

101 Stat. 1329-322, 1329-356, provided that: ''Hereafter,

notwithstanding section 306A(c), (d), and (e) of the Rural

Electrification Act of 1936, as amended (7 U.S.C. 936a(c), (d),

(e)), a borrower of a loan made by the Federal Financing Bank and

guaranteed under section 306 of such Act (7 U.S.C. 936) may, at the

option of the borrower, prepay such loan (or any loan advance

thereunder) in accordance with section 306A(a) and (b) of such Act:

Provided, That any prepayment in excess of $2,500,000,000 shall be

subject to the approval of the Secretary of the Treasury.''

Pub. L. 100-71, title I, July 11, 1987, 101 Stat. 429, provided

in part that: ''Hereafter, notwithstanding section 306A(d) of the

Rural Electrification Act of 1936 (7 U.S.C. 936a(d)), a borrower of

a loan made by the Federal Financing Bank and guaranteed under

section 306 of such Act (7 U.S.C. 936) may, at the option of the

borrower, prepay such loan (or any loan advance thereunder) in

accordance with section 306A of such Act.''

REGULATIONS

Section 1011(c) of Pub. L. 99-509 provided that: ''The Secretary

of Agriculture shall issue regulations to implement this section

(enacting sections 936a and 936b of this title and repealing

provisions set out as a note under section 936 of this title)

within 60 days after the date of enactment of this Act (Oct. 21,

1986). Such regulations -

''(1) shall facilitate prepayment of loans under section 306A

of the Rural Electrification Act of 1936 (this section), as added

by subsection (a); and

''(2) may not require any rural utility that is a borrower of

loans subject to section 306A to make unreasonable reductions in

rates to its customers as a condition of such prepayment.''

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in title 26 section 501.

-CITE-

7 USC Sec. 936b 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 31 - RURAL ELECTRIFICATION AND TELEPHONE SERVICE

SUBCHAPTER III - RURAL ELECTRIC AND TELEPHONE DIRECT LOAN PROGRAMS

-HEAD-

Sec. 936b. Sale or prepayment of direct or insured loans

-STATUTE-

(a) Discounted prepayment by borrowers of electric loans

(1) In general

Except as provided in paragraph (2), a direct or insured loan

made under this chapter shall not be sold or prepaid at a value

that is less than the outstanding principal balance on the loan.

(2) Exception

On request of the borrower, an electric loan made under this

chapter, or a portion of such a loan, that was advanced before

May 1, 1992, or has been advanced for not less than 2 years,

shall be sold to or prepaid by the borrower at the lesser of -

(A) the outstanding principal balance on the loan; or

(B) the present value of the loan discounted from the face

value at maturity at the rate established by the Secretary.

(3) Discount rate

The discount rate applicable to the prepayment under this

subsection of a loan or loan advance shall be the then current

cost of funds to the Department of the Treasury for obligations

of comparable maturity to the remaining term of the loan.

(4) Tax exempt financing

If a borrower prepays a loan under this subsection using tax

exempt financing, the discount shall be adjusted to ensure that

the borrower receives a benefit that is equal to the benefit the

borrower would receive if the borrower used fully taxable

financing. The borrower shall certify in writing whether the

financing will be tax exempt and shall comply with such other

terms and conditions as the Secretary may establish that are

reasonable and necessary to carry out this subsection.

(5) Eligibility

(A) In general

A borrower that has prepaid an insured or direct loan shall

under this chapter in the same manner as other borrowers,

except that -

(i) a borrower that has prepaid a loan, either before or

after October 21, 1992, at a discount rate as provided by

paragraph (3), shall not be eligible, except at the

discretion of the Secretary, to apply for or receive direct

or insured loans under this chapter during the 120-month

period beginning on the date of the prepayment; and

(ii) a borrower that prepaid a loan before October 21,

1992, at a discount rate greater than that provided by

paragraph (3), shall not be eligible -

(I) except at the discretion of the Secretary, to apply

for or receive direct or insured loans described in clause

(i) during the 180-month period beginning on the date of

the prepayment; or

(II) to apply for or receive direct or insured loans

described in clause (i) until the borrower has repaid to

the Federal Government the sum of -

(aa) the amount (if any) by which the discount the

borrower received by reason of the prepayment exceeds the

discount the borrower would have received had the

discount been based on the cost of funds to the

Department of the Treasury at the time of the prepayment;

and

(bb) interest on the amount described in item (aa), for

the period beginning on the date of the prepayment and

ending on the date of the repayment, at a rate equal to

the average annual cost of borrowing by the Department of

the Treasury.

(B) Effect on existing agreements

If a borrower and the Secretary have entered into an

agreement with respect to a prepayment occurring before October

21, 1992, this paragraph shall supersede any provision in the

agreement relating to the restoration of eligibility for loans

under this chapter.

(C) Distribution borrowers

A distribution borrower not in default on the repayment of

loans made or insured under this chapter shall be eligible for

discounted prepayment as provided in this subsection. For the

purpose of determining eligibility for discounted prepayment

under this subsection or eligibility for assistance under this

chapter, a default by a borrower from which a distribution

borrower purchases wholesale power shall not be considered a

default by the distribution borrower.

(6) Definitions

As used in this subsection:

(A) Direct loan

The term ''direct loan'' means a loan made under section 904

of this title.

(B) Insured loan

The term ''insured loan'' means a loan made under section 935

of this title.

(b) Mergers of electric borrowers

Notwithstanding subsection (a) of this section, a direct or

insured loan may be prepaid by an electric borrower at the lesser

of the outstanding principal balance due thereon or the present

value thereof discounted from the face value at maturity at the

rate set by the Secretary if the borrower is an electrical

organization which resulted from a merger or consolidation between

a borrower and an organization which, prior to October 1, 1987,

prepaid its direct or insured loans pursuant to this section.

Prepayments by a borrower hereunder shall be made not later than

one year after the effective date of the merger, consolidation, or

other transaction. The discount rate to be set by the Secretary

for direct or insured loans prepayments hereunder shall be based on

the current cost of funds to the Department of the Treasury for

obligations of comparable maturity to those being prepaid. If a

borrower prepays using tax exempt financing, the discount shall be

adjusted to make the discount equivalent to fully taxable

financing. The borrower shall certify in writing whether the

financing will be tax exempt and shall comply with such other terms

and conditions as the Secretary may establish which are reasonable

and necessary to implement this provision. As used in this

section, the term ''direct loan'' means a loan made under section

904 of this title.

-SOURCE-

(May 20, 1936, ch. 432, title III, Sec. 306B, as added Pub. L.

99-509, title I, Sec. 1011(a), Oct. 21, 1986, 100 Stat. 1876;

amended Pub. L. 101-624, title XXIII, Sec. 2387, Nov. 28, 1990, 104

Stat. 4051; Pub. L. 102-428, Sec. 2, Oct. 21, 1992, 106 Stat. 2183;

Pub. L. 103-354, title II, Sec. 235(a)(13), Oct. 13, 1994, 108

Stat. 3221.)

-COD-

CODIFICATION

October 21, 1992, referred to in subsec. (a)(5)(A), (B), was in

the original ''the date of enactment of this subsection'', which

was translated as meaning the date of enactment of Pub. L. 102-428,

which amended subsec. (a) generally, to reflect the probable intent

of Congress.

-MISC3-

AMENDMENTS

1994 - Pub. L. 103-354 substituted ''Secretary'' for

''Administrator'' wherever appearing.

1992 - Subsec. (a). Pub. L. 102-428, Sec. 2(a), amended subsec.

(a) generally. Prior to amendment, subsec. (a) read as follows:

''A direct or insured loan made under this chapter shall not be

sold or prepaid at a value less than the face value of any

outstanding principal balance on such loan, except when sold to or

prepaid by the borrower at the lesser of the outstanding principal

balance due on the loan or the loan's present value discounted from

the face value at maturity at the rate set by the Administrator.

The exception contained in the preceding sentence shall be

effective for the period ending September 30, 1987.''

Subsec. (b). Pub. L. 102-428, Sec. 2(b), inserted heading.

1990 - Pub. L. 101-624 designated existing provisions as subsec.

(a) and added subsec. (b).

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in title 26 section 501.

-CITE-

7 USC Sec. 936c 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 31 - RURAL ELECTRIFICATION AND TELEPHONE SERVICE

SUBCHAPTER III - RURAL ELECTRIC AND TELEPHONE DIRECT LOAN PROGRAMS

-HEAD-

Sec. 936c. Refinancing and prepayment of FFB loans

-STATUTE-

(a) In general

A borrower of a loan made by the Federal Financing Bank and

guaranteed under section 936 of this title may, at the option of

the borrower, refinance or prepay the loan or an advance on the

loan, or any portion of the loan or advance.

(b) Penalty

(1) Determination of penalty

A penalty shall be assessed against a borrower that refinances

or prepays a loan or loan advance, or any portion of a loan or

advance, under this section. Except as provided in paragraph

(2), the penalty shall be equal to the lesser of -

(A) the difference between the outstanding principal balance

of the loan being refinanced and the present value of the loan

discounted at a rate equal to the then current cost of funds to

the Department of the Treasury for obligations of comparable

maturity to the loan being refinanced or prepaid;

(B) 100 percent of the amount of interest for 1 year on the

outstanding principal balance of the loan or loan advance, or

any portion of the loan or advance, being refinanced,

multiplied by the ratio that -

(i) the number of quarterly payment dates between the date

of the refinancing or prepayment and the maturity date for

the loan advance; bears to

(ii) the number of quarterly payment dates between the

first quarterly payment date that occurs 12 years after the

end of the year in which the amount being refinanced was

advanced and the maturity date of the loan advance; and

(C)(i) the present value of 100 percent of the amount of

interest for 1 year on the outstanding principal balance of the

loan or loan advance, or any portion of the loan or advance,

being refinanced or prepaid; plus

(ii) for the interval between the date of the refinancing or

prepayment and the first quarterly payment date that occurs 12

years after the end of the year in which the amount being

refinanced or prepaid was advanced, the present value of the

difference between -

(I) each payment scheduled for the interval on the loan

amount being refinanced or prepaid; and

(II) the payment amounts that would be required during the

interval on the amounts being refinanced or prepaid if the

interest rate on the loan were equal to the then current cost

of funds to the Department of the Treasury for obligations of

comparable maturity to the loan being refinanced or prepaid.

(2) Limitation

(A) In general

Except as provided in subparagraph (B), the penalty provided

by paragraph (1)(A) shall be required for refinancing or

prepayment under this section.

(B) Exception

In the case of a loan advanced under an agreement that

permits the refinancing or prepayment of the loan advance based

on the payment of 1 year of interest on the outstanding

principal balance of the loan advance, a borrower may, in lieu

of the penalty required by paragraph (1)(A), pay a penalty as

provided by -

(i) paragraph (1)(B), if the loan advance has reached the

12-year maturity required under the loan agreement for the

refinancing or prepayment; or

(ii) paragraph (1)(C), if the loan advance has not reached

the 12-year maturity required under the loan agreement for

the refinancing or prepayment.

(3) Financing of penalty

(A) In general

In the case of a refinancing under this section, a borrower

may, at the option of the borrower, meet the penalty

requirements of paragraph (1) by -

(i) making a payment in the amount of the required penalty

at the time of the refinancing; or

(ii) increasing the outstanding principal balance of the

loan advance guaranteed by the Secretary that is being

refinanced under this section by the amount of the penalty.

(B) Increased principal

If a borrower meets the penalty requirements of paragraph (1)

by increasing the outstanding principal balance of the loan

advance that is being refinanced, the borrower shall make a

payment at the time of the refinancing equal to 2.5 percent of

the amount of the penalty that is added to the outstanding

principal balance of the loan.

(c) Loan terms and conditions after refinancing

(1) In general

On the payment of a penalty as provided by subsection (b) of

this section, the loan or loan advance, or any portion of the

loan or advance, shall be refinanced at the interest rate

described in paragraph (2) for a term selected by the borrower

pursuant to paragraph (3), except that this paragraph shall not

apply if the loan advance, or any portion of the advance, is

prepaid by the borrower.

(2) Interest rate

The interest rate on a loan refinanced under this section shall

be determined to be equal to the then current cost of funds to

the Department of the Treasury for obligations of comparable

maturity to a term selected by the borrower pursuant to paragraph

(3), except that such rate shall not be greater than 7 percent

per year, subject to subsection (d) of this section.

(3) Loan term

Subject to paragraph (4), the borrower of a loan that is

refinanced under this section -

(A) shall select the term for which an interest rate shall be

determined pursuant to paragraph (2); and

(B) at the end of the term (and any succeeding term selected

by the borrower under this paragraph), may renew the loan for

another term selected by the borrower.

(4) Maximum term

The borrower may not select a term pursuant to paragraph (3)

that ends after the maturity date set for the loan before the

refinancing of the loan under this section.

(5) Existing loans

In the case of the refinancing of a loan of a borrower pursuant

to this section and the inclusion of a penalty in the outstanding

principal balance of the refinanced loan pursuant to subsection

(b)(3) of this section -

(A) the refinancing and inclusion of the penalty shall not be

subject to appropriations or limited by the amount provided

during a fiscal year for new loans, loan guarantees, or other

credit activity;

(B) the request of the borrower for the refinancing under

this section may not be denied or delayed; and

(C) the borrower may not be limited in the selection of any

refinancing or prepayment option provided by this section to

the borrower.

(d) Maximum rate option

(1) In general

Except as provided in paragraphs (2), (3), and (4), a borrower

of a loan or loan advance, or any portion of the loan or advance,

that is refinanced under this section shall have the option of

ensuring that the interest rate on such loan, loan advance, or

portion thereof does not exceed 7 percent per year.

(2) Limitation

A borrower may not exercise the option under paragraph (1) in

the case of a loan or loan advance, or portion thereof, if the

total amount of such loans for which such option would be

exercised exceeds 50 percent of the outstanding principal balance

of the loans made to such borrower and guaranteed under section

936 of this title.

(3) Fee

A borrower that exercises the maximum rate option under

paragraph (1) shall, at the time of exercising such option, pay a

fee equal to 1 percent of the outstanding principal balance of

such loan or loan advance, or portion thereof, for which such

option is exercised. Such fee shall be in addition to the

penalties and other payments required under subsection (b) of

this section.

(4) Sunset

The option provided under paragraph (1) shall not be available

in the case of any loan or loan advance, or portion thereof,

unless a written request to exercise such option is sent to the

Secretary not later than 1 year after the effective date of

regulations issued to carry out the Rural Electrification Loan

Restructuring Act of 1993.

-SOURCE-

(May 20, 1936, ch. 432, title III, Sec. 306C, as added Pub. L.

103-66, title I, Sec. 1201(a), Aug. 10, 1993, 107 Stat. 327;

amended Pub. L. 103-129, Sec. 2(c)(10), Nov. 1, 1993, 107 Stat.

1365; Pub. L. 103-354, title II, Sec. 235(a)(13), Oct. 13, 1994,

108 Stat. 3221.)

-REFTEXT-

REFERENCES IN TEXT

The Rural Electrification Loan Restructuring Act of 1993,

referred to in subsec. (d)(4), is Pub. L. 103-129, Nov. 1, 1993,

107 Stat. 1356. Section 6 of Pub. L. 103-129 relates to the

issuance of regulations to carry out amendments made by the Act and

is set out as a note under section 901 of this title. For complete

classification of this Act to the Code, see Short Title of 1993

Amendment note set out under section 901 of this title and Tables.

-MISC2-

AMENDMENTS

1994 - Subsecs. (b)(3)(A)(ii), (d)(4). Pub. L. 103-354

substituted ''Secretary'' for ''Administrator''.

1993 - Subsec. (c)(2). Pub. L. 103-129, Sec. 2(c)(10)(A),

inserted before period at end '', except that such rate shall not

be greater than 7 percent per year, subject to subsection (d) of

this section''.

Subsec. (d). Pub. L. 103-129, Sec. 2(c)(10)(B), added subsec.

(d).

REGULATIONS

Section 1201(b) of Pub. L. 103-66 provided that: ''Not later than

45 days after the date of enactment of this section (Aug. 10,

1993), the Administrator of the Rural Electrification

Administration shall issue interim final regulations to carry out

the amendment made by subsection (a) (enacting this section).''

-CITE-

7 USC Sec. 936d 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 31 - RURAL ELECTRIFICATION AND TELEPHONE SERVICE

SUBCHAPTER III - RURAL ELECTRIC AND TELEPHONE DIRECT LOAN PROGRAMS

-HEAD-

Sec. 936d. Eligibility of distribution borrowers for loans, loan

guarantees, and lien accommodations

-STATUTE-

For the purpose of determining the eligibility of a distribution

borrower not in default on the repayment of a loan made or

guaranteed under this chapter for a loan, loan guarantee, or lien

accommodation under this subchapter, a default by a borrower from

which the distribution borrower purchases wholesale power shall not

-

(1) be considered a default by the distribution borrower;

(2) reduce the eligibility of the distribution borrower for

assistance under this chapter; or

(3) be the cause, directly or indirectly, of imposing any

requirement or restriction on the borrower as a condition of the

assistance, except such requirements or restrictions as are

necessary to implement a debt restructuring agreed on by the

power supply borrower and the Government.

-SOURCE-

(May 20, 1936, ch. 432, title III, Sec. 306D, as added Pub. L.

103-129, Sec. 2(c)(7), Nov. 1, 1993, 107 Stat. 1364.)

-CITE-

7 USC Sec. 936e 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 31 - RURAL ELECTRIFICATION AND TELEPHONE SERVICE

SUBCHAPTER III - RURAL ELECTRIC AND TELEPHONE DIRECT LOAN PROGRAMS

-HEAD-

Sec. 936e. Administrative prohibitions applicable to certain

electric borrowers

-STATUTE-

(a) In general

For the purpose of relieving borrowers of unnecessary and

burdensome requirements, the Secretary, guided by the practices of

private lenders with respect to similar credit risks, shall issue

regulations, applicable to any electric borrower under this chapter

whose net worth exceeds 110 percent of the outstanding principal

balance on all loans made or guaranteed to the borrower by the

Secretary, to minimize those approval rights, requirements,

restrictions, and prohibitions that the Secretary otherwise may

establish with respect to the operations of such a borrower.

(b) Subordination or sharing of liens

At the request of a private lender providing financing to such a

borrower for a capital investment, the Secretary shall,

expeditiously, either offer to share the government's lien on the

borrower's system or offer to subordinate the government's lien on

that property financed by the private lender.

(c) Issuance of regulations

In issuing regulations implementing this section, the Secretary

may establish requirements, guided by the practices of private

lenders, to ensure that the security for any loan made or

guaranteed under this chapter is reasonably adequate.

(d) Authority of Secretary

Nothing in this section limits the authority of the Secretary to

establish terms and conditions with respect to the use by borrowers

of the proceeds of loans made or guaranteed under this chapter or

to take any other action specifically authorized by law.

-SOURCE-

(May 20, 1936, ch. 432, title III, Sec. 306E, as added Pub. L.

103-129, Sec. 2(c)(7), Nov. 1, 1993, 107 Stat. 1365; amended Pub.

L. 103-201, Sec. 1, Dec. 17, 1993, 107 Stat. 2342; Pub. L. 103-354,

title II, Sec. 235(a)(8), (13), Oct. 13, 1994, 108 Stat. 3221.)

-MISC1-

AMENDMENTS

1994 - Pub. L. 103-354 substituted ''Secretary'' for

''Administrator'' in heading of subsec. (d) and wherever appearing

in text.

1993 - Pub. L. 103-201 inserted ''certain'' before ''electric''

in section catchline and amended text generally. Prior to

amendment, text read as follows: ''The Administrator may not

require prior approval of, impose any requirement, restriction, or

prohibition with respect to the operations of, or deny or delay the

granting of a lien accommodation to, any electric borrower under

this chapter whose net worth exceeds 110 percent of the outstanding

principal balance on all loans made or guaranteed to the borrower

by the Administrator.''

REGULATIONS

Section 2 of Pub. L. 103-201 provided that: ''The Administrator

of the Rural Electrification Administration shall issue interim

final regulations implementing this Act (amending this section) not

later than 180 days after enactment (Dec. 17, 1993). If the

regulations are not issued within such period of time, the

Administrator may not, until the Administrator issues such

regulations, require prior approval of, establish any requirement,

restriction, or prohibition, with respect to the operations of any

electric borrower under the Rural Electrification Act of 1936 (7

U.S.C. 90 et seq.) whose net worth exceeds 110 percent of the

outstanding principal balance on all loans made or guaranteed to

the borrower by the Administrator.''

-CITE-

7 USC Sec. 937 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 31 - RURAL ELECTRIFICATION AND TELEPHONE SERVICE

SUBCHAPTER III - RURAL ELECTRIC AND TELEPHONE DIRECT LOAN PROGRAMS

-HEAD-

Sec. 937. Loans from other credit sources

-STATUTE-

When it appears to the Secretary that the loan applicant is able

to obtain a loan for part of his credit needs from a responsible

cooperative or other credit source at reasonable rates and terms

consistent with the loan applicant's ability to pay and the

achievement of this chapter's objectives, he may request the loan

applicant to apply for and accept such a loan concurrently with an

insured loan, subject, however, to full use being made by the

Secretary of the funds made available hereunder for such insured

loans under this subchapter. The Secretary may not request any

applicant for an electric loan under this chapter to apply for and

accept a loan in an amount exceeding 30 percent of the credit needs

of the applicant.

-SOURCE-

(May 20, 1936, ch. 432, title III, Sec. 307, as added Pub. L.

93-32, Sec. 2, May 11, 1973, 87 Stat. 70; amended Pub. L. 97-35,

title I, Sec. 165(c), Aug. 13, 1981, 95 Stat. 379; Pub. L. 103-129,

Sec. 2(c)(8), Nov. 1, 1993, 107 Stat. 1365; Pub. L. 103-354, title

II, Sec. 235(a)(13), Oct. 13, 1994, 108 Stat. 3221.)

-MISC1-

AMENDMENTS

1994 - Pub. L. 103-354 substituted ''Secretary'' for

''Administrator'' wherever appearing.

1993 - Pub. L. 103-129 inserted at end ''The Administrator may

not request any applicant for an electric loan under this chapter

to apply for and accept a loan in an amount exceeding 30 percent of

the credit needs of the applicant.''

1981 - Pub. L. 97-35 substituted ''an insured loan'' for ''a loan

insured at the standard rate''.

EFFECTIVE DATE

Section effective May 11, 1973, see section 12 of Pub. L. 93-32,

set out as a note under section 930 of this title.

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 939, 940c-1 of this

title.

-CITE-

7 USC Sec. 938 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 31 - RURAL ELECTRIFICATION AND TELEPHONE SERVICE

SUBCHAPTER III - RURAL ELECTRIC AND TELEPHONE DIRECT LOAN PROGRAMS

-HEAD-

Sec. 938. Full faith and credit of the United States

-STATUTE-

Any contract of insurance or guarantee executed by the Secretary

under this subchapter shall be an obligation supported by the full

faith and credit of the United States and incontestable except for

fraud or misrepresentation of which the holder had actual knowledge

at the time it became a holder.

-SOURCE-

(May 20, 1936, ch. 432, title III, Sec. 308, as added Pub. L.

93-32, Sec. 2, May 11, 1973, 87 Stat. 70; amended Pub. L. 94-124,

Sec. 2, Nov. 4, 1975, 89 Stat. 677; Pub. L. 103-354, title II, Sec.

235(a)(13), Oct. 13, 1994, 108 Stat. 3221.)

-MISC1-

AMENDMENTS

1994 - Pub. L. 103-354 substituted ''Secretary'' for

''Administrator''.

1975 - Pub. L. 94-124 substituted ''of which the holder had

actual knowledge at the time it became a holder'' for ''of which

the holder has actual knowledge''.

EFFECTIVE DATE

Section effective May 11, 1973, see section 12 of Pub. L. 93-32,

set out as a note under section 930 of this title.

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in section 939 of this title.

-CITE-

7 USC Sec. 939 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 31 - RURAL ELECTRIFICATION AND TELEPHONE SERVICE

SUBCHAPTER III - RURAL ELECTRIC AND TELEPHONE DIRECT LOAN PROGRAMS

-HEAD-

Sec. 939. Loan terms and conditions

-STATUTE-

Loans made from or insured through the fund shall be for the same

purposes and on the same terms and conditions as are provided for

loans in subchapters I and II of this chapter except as otherwise

provided in sections 933 to 938 inclusive. The preceding sentence

shall not be construed to make section 948(b)(2) or 950b of this

title applicable to this subchapter.

-SOURCE-

(May 20, 1936, ch. 432, title III, Sec. 309, as added Pub. L.

93-32, Sec. 2, May 11, 1973, 87 Stat. 70; amended Pub. L. 101-624,

title XXIII, Sec. 2360, Nov. 28, 1990, 104 Stat. 4042; Pub. L.

103-129, Sec. 2(b)(2), Nov. 1, 1993, 107 Stat. 1363; Pub. L.

104-127, title VII, Sec. 779, Apr. 4, 1996, 110 Stat. 1151.)

-MISC1-

AMENDMENTS

1996 - Pub. L. 104-127 struck out subsec. (a) designation and

heading ''In general'' and heading and text of subsec. (b). Prior

to amendment, text read as follows: ''The term of any telephone

loan made under this subchapter shall be determined by the borrower

at the time the loan application is submitted.''

1993 - Subsec. (a). Pub. L. 103-129 inserted at end ''The

preceding sentence shall not be construed to make section 948(b)(2)

or 950b of this title applicable to this subchapter.''

1990 - Pub. L. 101-624 designated existing provisions as subsec.

(a) and added subsec. (b).

EFFECTIVE DATE

Section effective May 11, 1973, see section 12 of Pub. L. 93-32,

set out as a note under section 930 of this title.

-CITE-

7 USC Sec. 940 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 31 - RURAL ELECTRIFICATION AND TELEPHONE SERVICE

SUBCHAPTER III - RURAL ELECTRIC AND TELEPHONE DIRECT LOAN PROGRAMS

-HEAD-

Sec. 940. Refinancing of rural development loans

-STATUTE-

At the request of the borrower, the Secretary is authorized and

directed to refinance with loans which will be insured under this

chapter at the interest rates provided in section 935 of this title

any loans made for rural electric and telephone facilities under

any provision of the Consolidated Farm and Rural Development Act (7

U.S.C. 1921 et seq.).

-SOURCE-

(May 20, 1936, ch. 432, title III, Sec. 310, as added Pub. L.

93-32, Sec. 2, May 11, 1973, 87 Stat. 70; amended Pub. L. 103-354,

title II, Sec. 235(a)(13), Oct. 13, 1994, 108 Stat. 3221.)

-REFTEXT-

REFERENCES IN TEXT

The Consolidated Farm and Rural Development Act, referred to in

text, is title III of Pub. L. 87-128, Aug. 8, 1961, 75 Stat. 307,

as amended, which is classified principally to chapter 50 (Sec.

1921 et seq.) of this title. For complete classification of the

Act to the Code, see Short Title note set out under section 1921 of

this title and Tables.

-MISC2-

AMENDMENTS

1994 - Pub. L. 103-354 substituted ''Secretary'' for

''Administrator''.

EFFECTIVE DATE

Section effective May 11, 1973, see section 12 of Pub. L. 93-32,

set out as a note under section 930 of this title.

-CITE-

7 USC Sec. 940a 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 31 - RURAL ELECTRIFICATION AND TELEPHONE SERVICE

SUBCHAPTER III - RURAL ELECTRIC AND TELEPHONE DIRECT LOAN PROGRAMS

-HEAD-

Sec. 940a. Repealed. Pub. L. 104-127, title VII, Sec. 780, Apr. 4,

1996, 110 Stat. 1151

-MISC1-

Section, act May 20, 1936, ch. 432, title III, Sec. 311, as added

Oct. 18, 1986, Pub. L. 99-500, Sec. 101(m) (title VI, Sec. 623),

100 Stat. 1783-308, 1783-333, and Oct. 30, 1986, Pub. L. 99-591,

Sec. 101(m) (title VI, Sec. 623), 100 Stat. 3341-308, 3341-333;

amended Oct. 13, 1994, Pub. L. 103-354, title II, Sec. 235(a)(7),

(13), 108 Stat. 3221, related to privatization demonstration

program.

-CITE-

7 USC Sec. 940b 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 31 - RURAL ELECTRIFICATION AND TELEPHONE SERVICE

SUBCHAPTER III - RURAL ELECTRIC AND TELEPHONE DIRECT LOAN PROGRAMS

-HEAD-

Sec. 940b. Use of funds

-STATUTE-

A borrower of an insured or guaranteed electric loan under this

chapter may, without restriction or prior approval of the

Secretary, invest its own funds or make loans or guarantees, not in

excess of 15 percent of its total utility plant.

-SOURCE-

(May 20, 1936, ch. 432, title III, Sec. 312, as added Pub. L.

100-203, title I, Sec. 1402, Dec. 22, 1987, 101 Stat. 1330-21;

amended Pub. L. 103-354, title II, Sec. 235(a)(13), Oct. 13, 1994,

108 Stat. 3221.)

-MISC1-

AMENDMENTS

1994 - Pub. L. 103-354 substituted ''Secretary'' for

''Administrator''.

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in section 950aa of this title.

-CITE-

7 USC Sec. 940c 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 31 - RURAL ELECTRIFICATION AND TELEPHONE SERVICE

SUBCHAPTER III - RURAL ELECTRIC AND TELEPHONE DIRECT LOAN PROGRAMS

-HEAD-

Sec. 940c. Cushion of credit payments program

-STATUTE-

(a) Establishment

(1) In general

The Secretary shall develop and promote a program to encourage

borrowers to voluntarily make deposits into cushion of credit

accounts established within the Rural Electrification and

Telephone Revolving Fund.

(2) Interest

Amounts in each cushion of credit account shall accrue interest

to the borrower at a rate of 5 percent per annum.

(3) Balance

A borrower may reduce the balance of its cushion of credit

account only if the amount obtained from the reduction is used to

make scheduled payments on loans made or guaranteed under this

chapter.

(b) Uses of cushion of credit payments

(1) In general

(A) Cash balance

Cushion of credit payments shall be held in the Rural

Electrification and Telephone Revolving Fund as a cash balance

in the cushion of credit accounts of borrowers.

(B) Interest

All cash balance amounts (obtained from cushion of credit

payments, loan payments, and other sources) held by the Fund

shall bear interest to the Fund at a rate equal to the weighted

average rate on outstanding certificates of beneficial

ownership issued by the Fund.

(C) Credits

The amount of interest accrued on the cash balances shall be

credited to the Fund as an offsetting reduction to the amount

of interest paid by the Fund on its certificates of beneficial

ownership.

(2) Rural economic development subaccount

(A) Maintenance of account

The Secretary shall maintain a subaccount within the Rural

Electrification and Telephone Revolving Fund to which shall be

credited, on a monthly basis, a sum determined by multiplying

the outstanding cushion of credit payments made after October

1, 1987, by the difference (converted to a monthly basis)

between the average weighted interest rate paid on outstanding

certificates of beneficial ownership issued by the Fund and the

5 percent rate of interest provided to borrowers on cushion of

credit payments.

(B) Grants

The Secretary is authorized, from the interest differential

sums credited this subaccount and from any other funds made

available thereto, to provide grants or zero interest loans to

borrowers under this chapter for the purpose of promoting rural

economic development and job creation projects, including

funding for project feasibility studies, start-up costs,

incubator projects, and other reasonable expenses for the

purpose of fostering rural development.

(C) Repayments

In the case of zero interest loans, the Secretary shall

establish such reasonable repayment terms as will ensure

borrower participation.

(D) Proceeds

All proceeds from the repayment of such loans shall be

returned to the subaccount.

(E) Number of grants

Such loans and grants shall be made during each fiscal year

to the full extent of the amounts held by the rural economic

development subaccount, subject only to limitations as may be

from time-to-time imposed by law.

-SOURCE-

(May 20, 1936, ch. 432, title III, Sec. 313, as added Pub. L.

100-203, title I, Sec. 1403, Dec. 22, 1987, 101 Stat. 1330-21;

amended Pub. L. 103-354, title II, Sec. 235(a)(13), Oct. 13, 1994,

108 Stat. 3221.)

-MISC1-

AMENDMENTS

1994 - Subsecs. (a)(1), (b)(2)(A) to (C). Pub. L. 103-354

substituted ''Secretary'' for ''Administrator''.

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 912, 940c-1, 6944 of this

title.

-CITE-

7 USC Sec. 940c-1 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 31 - RURAL ELECTRIFICATION AND TELEPHONE SERVICE

SUBCHAPTER III - RURAL ELECTRIC AND TELEPHONE DIRECT LOAN PROGRAMS

-HEAD-

Sec. 940c-1. Guarantees for bonds and notes issued for

electrification or telephone purposes

-STATUTE-

(a) In general

Subject to subsection (b) of this section, the Secretary shall

guarantee payments on bonds or notes issued by cooperative or other

lenders organized on a not-for-profit basis if the proceeds of the

bonds or notes are used to make loans for any electrification or

telephone purpose eligible for assistance under this chapter,

including section 904 or 922 of this title or to refinance bonds or

notes issued for such purposes.

(b) Limitations

(1) Outstanding loans

A lender shall not receive a guarantee under this section for a

bond or note if, at the time of the guarantee, the total

principal amount of such guaranteed bonds or notes outstanding of

the lender would exceed the principal amount of outstanding loans

of the lender for electrification or telephone purposes that have

been made concurrently with loans approved for such purposes

under this chapter.

(2) Generation of electricity

The Secretary shall not guarantee payment on a bond or note

issued by a lender, the proceeds of which are used for the

generation of electricity.

(3) Qualifications

The Secretary may deny the request of a lender for the

guarantee of a bond or note under this section if the Secretary

determines that -

(A) the lender does not have appropriate expertise or

experience or is otherwise not qualified to make loans for

electrification or telephone purposes;

(B) the bond or note issued by the lender would not be

investment grade quality without a guarantee; or

(C) the lender has not provided to the Secretary a list of

loan amounts approved by the lender that the lender certifies

are for eligible purposes described in subsection (a) of this

section.

(4) Interest rate reduction

(A) In general

Except as provided in subparagraph (B), a lender may not use

any amount obtained from the reduction in funding costs as a

result of the guarantee of a bond or note under this section to

reduce the interest rate on a new or outstanding loan.

(B) Concurrent loans

A lender may use any amount described in subparagraph (A) to

reduce the interest rate on a loan if the loan is -

(i) made by the lender for electrification or telephone

projects that are eligible for assistance under this chapter;

and

(ii) made concurrently with a loan approved by the

Secretary under this chapter for such a project, as provided

in section 937 of this title.

(c) Fees

(1) In general

A lender that receives a guarantee issued under this section on

a bond or note shall pay a fee to the Secretary.

(2) Amount

The amount of an annual fee paid for the guarantee of a bond or

note under this section shall be equal to 30 basis points of the

amount of the unpaid principal of the bond or note guaranteed

under this section.

(3) Payment

A lender shall pay the fees required under this subsection on a

semiannual basis.

(4) Rural economic development subaccount

Subject to subsection (e)(2) of this section, fees collected

under this subsection shall be -

(A) deposited into the rural economic development subaccount

maintained under section 940c(b)(2)(A) of this title, to remain

available until expended; and

(B) used for the purposes described in section 940c(b)(2)(B)

of this title.

(d) Guarantees

(1) In general

A guarantee issued under this section shall -

(A) be for the full amount of a bond or note, including the

amount of principal, interest, and call premiums;

(B) be fully assignable and transferable; and

(C) represent the full faith and credit of the United States.

(2) Limitation

To ensure that the Secretary has the resources necessary to

properly examine the proposed guarantees, the Secretary may limit

the number of guarantees issued under this section to 5 per year.

(3) Department opinion

On the timely request of a lender, the General Counsel of the

Department of Agriculture shall provide the Secretary with an

opinion regarding the validity and authority of a guarantee

issued to the lender under this section.

(e) Authorization of appropriations

(1) In general

There are authorized to be appropriated such sums as are

necessary to carry out this section.

(2) Fees

To the extent that the amount of funds appropriated for a

fiscal year under paragraph (1) are not sufficient to carry out

this section, the Secretary may use up to 1/3 of the fees

collected under subsection (c) of this section for the cost of

providing guarantees of bonds and notes under this section before

depositing the remainder of the fees into the rural economic

development subaccount maintained under section 940c(b)(2)(A) of

this title.

(f) Termination

The authority provided under this section shall terminate on

September 30, 2007.

-SOURCE-

(May 20, 1936, ch. 432, title III, Sec. 313A, as added Pub. L.

107-171, title VI, Sec. 6101(a), May 13, 2002, 116 Stat. 413.)

-MISC1-

REGULATIONS AND IMPLEMENTATION

Pub. L. 107-171, title VI, Sec. 6101(b), May 13, 2002, 116 Stat.

415, provided that:

''(1) Regulations. - Not later than 180 days after the date of

enactment of this Act (May 13, 2002), the Secretary of Agriculture

shall promulgate regulations to carry out the amendments made by

this section (enacting this section).

''(2) Implementation. - Not later than 240 days after the date of

enactment of this Act (May 13, 2002), the Secretary shall implement

the amendment made by this section (enacting this section).''

-CITE-

7 USC Sec. 940d 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 31 - RURAL ELECTRIFICATION AND TELEPHONE SERVICE

SUBCHAPTER III - RURAL ELECTRIC AND TELEPHONE DIRECT LOAN PROGRAMS

-HEAD-

Sec. 940d. Limitations on authorization of appropriations

-STATUTE-

(a) ''Adjustment percentage'' defined

As used in this section, the term ''adjustment percentage''

means, with respect to a fiscal year, the percentage (if any) by

which -

(1) the average of the Consumer Price Index (as defined in

section 1(f)(5) of title 26) for the 1-year period ending on July

31 of the immediately preceding fiscal year; exceeds

(2) the average of the Consumer Price Index (as so defined) for

the 1-year period ending on July 31, 1993.

(b) Fiscal years 1994 through 1998

In the case of each of fiscal years 1994 through 1998, there are

authorized to be appropriated to the Secretary such sums as may be

necessary for the cost of loans in the following amounts, for the

following purposes:

(1) Electric hardship loans

For loans under section 935(c)(1) of this title -

(A) for fiscal year 1994, $125,000,000; and

(B) for each of fiscal years 1995 through 1998, $125,000,000,

increased by the adjustment percentage for the fiscal year.

(2) Electric municipal rate loans

For loans under section 935(c)(2) of this title -

(A) for fiscal year 1994, $600,000,000; and

(B) for each of fiscal years 1995 through 1998, $600,000,000,

increased by the adjustment percentage for the fiscal year.

(3) Telephone hardship loans

For loans under section 935(d)(1) of this title -

(A) for fiscal year 1994, $125,000,000; and

(B) for each of fiscal years 1995 through 1998, $125,000,000,

increased by the adjustment percentage for the fiscal year.

(4) Telephone cost-of-money loans

For loans under section 935(d)(2) of this title -

(A) for fiscal year 1994, $198,000,000; and

(B) for each of fiscal years 1995 through 1998, $198,000,000,

increased by the adjustment percentage for the fiscal year.

(c) Funding levels

The Secretary shall make insured loans under this subchapter for

the purposes, in the amounts, and for the periods of time specified

in subsection (b) of this section, as provided in advance in

appropriations Acts.

(d) Availability of funds for insured loans

Amounts made available for loans under section 935 of this title

are authorized to remain available until expended.

-SOURCE-

(May 20, 1936, ch. 432, title III, Sec. 314, as added Pub. L.

101-508, title I, Sec. 1201, Nov. 5, 1990, 104 Stat. 1388-7;

amended Pub. L. 103-129, Sec. 2(b)(1), Nov. 1, 1993, 107 Stat.

1362; Pub. L. 103-354, title II, Sec. 235(a)(13), Oct. 13, 1994,

108 Stat. 3221.)

-MISC1-

AMENDMENTS

1994 - Subsecs. (b), (c). Pub. L. 103-354 substituted

''Secretary'' for ''Administrator''.

1993 - Pub. L. 103-129 amended section generally, substituting

provisions authorizing appropriations for the cost of electric

hardship loans, electric municipal rate loans, telephone hardship

loans, and telephone cost-of-money loans under section 935 of this

title for fiscal years 1994 through 1998 for provisions directing

the Administrator to make insured loans from the Rural

Electrification and Telephone Revolving Fund under section 931 of

this title for fiscal years 1991 through 1995, to reduce the

amounts of such loans to obtain funds to guarantee the loans, and

to guarantee the loans upon request of the borrower at 90 percent

of the principal and interest.

EFFECTIVE DATE

Section effective Nov. 29, 1990, see section 1301 of Pub. L.

101-508, set out as an Effective Date of 1990 Amendment note under

section 511r of this title.

-CITE-

7 USC Sec. 940e 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 31 - RURAL ELECTRIFICATION AND TELEPHONE SERVICE

SUBCHAPTER III - RURAL ELECTRIC AND TELEPHONE DIRECT LOAN PROGRAMS

-HEAD-

Sec. 940e. Expansion of 911 access

-STATUTE-

(a) In general

Subject to such terms and conditions as the Secretary may

prescribe, the Secretary may make telephone loans under this

subchapter to borrowers of loans made by the Rural Utilities

Service, State or local governments, Indian tribes (as defined in

section 450b of title 25), or other public entities for facilities

and equipment to expand or improve 911 access and integrated

emergency communications systems in rural areas.

(b) Authorization of appropriations

There are authorized to be appropriated such sums as are

necessary to carry out this section for each of fiscal years 2002

through 2007.

-SOURCE-

(May 20, 1936, ch. 432, title III, Sec. 315, as added Pub. L.

107-171, title VI, Sec. 6102, May 13, 2002, 116 Stat. 415.)

-CITE-

7 USC SUBCHAPTER IV - RURAL TELEPHONE BANK 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 31 - RURAL ELECTRIFICATION AND TELEPHONE SERVICE

SUBCHAPTER IV - RURAL TELEPHONE BANK

.

-HEAD-

SUBCHAPTER IV - RURAL TELEPHONE BANK

-SECREF-

SUBCHAPTER REFERRED TO IN OTHER SECTIONS

This subchapter is referred to in sections 917, 931, 932, 935 of

this title.

-CITE-

7 USC Sec. 941 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 31 - RURAL ELECTRIFICATION AND TELEPHONE SERVICE

SUBCHAPTER IV - RURAL TELEPHONE BANK

-HEAD-

Sec. 941. Telephone Bank

-STATUTE-

(a) Establishment

There is hereby established a body corporate to be known as the

Rural Telephone Bank (hereinafter called the telephone bank).

(b) General purposes

The general purposes of the telephone bank shall be to obtain an

adequate supply of supplemental funds to the extent feasible from

non-Federal sources, to utilize said funds in the making of loans

under section 948 of this title, and to conduct its operations to

the extent practicable on a self-sustaining basis.

(c) Status; payments in lieu of property taxes

The telephone bank shall be deemed to be an instrumentality of

the United States, and shall, for the purposes of jurisdiction and

venue, be deemed a citizen and resident of the District of

Columbia. The telephone bank is authorized to make payments to

State, territorial, and local governments in lieu of property taxes

upon real property and tangible personal property which was subject

to State, territorial, and local taxation before acquisition by the

telephone bank. Such payment may be in the amounts, at the times,

and upon such terms as the telephone bank deems appropriate but the

telephone bank shall be guided by the policy of making payments not

in excess of the taxes which would have been payable upon such

property in the condition in which it was acquired.

-SOURCE-

(May 20, 1936, ch. 432, title IV, Sec. 401, as added Pub. L. 92-12,

Sec. 2, May 7, 1971, 85 Stat. 30.)

-MISC1-

EFFECTIVE DATE

Section effective May 7, 1971, see section 7 of Pub. L. 92-12,

set out as a note under section 921a of this title.

-CITE-

7 USC Sec. 942 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 31 - RURAL ELECTRIFICATION AND TELEPHONE SERVICE

SUBCHAPTER IV - RURAL TELEPHONE BANK

-HEAD-

Sec. 942. General powers

-STATUTE-

To carry out the specific powers herein authorized, the telephone

bank shall have power to (a) adopt, alter, and use a corporate

seal; (b) sue and be sued in its corporate name; (c) make

contracts, leases, and cooperative agreements, or enter into other

transactions as may be necessary in the conduct of its business,

and on such terms as it may deem appropriate; (d) acquire, in any

lawful manner, hold, maintain, use, and dispose of property:

Provided, That the telephone bank may only acquire property needed

in the conduct of its banking operations or pledged or mortgaged to

secure loans made hereunder or in temporary operation or

maintenance thereof: Provided further, That any such pledged or

mortgaged property so acquired shall be disposed of as promptly as

is consistent with prudent liquidation practices, but in no event

later than five years after such acquisition; (e) accept gifts or

donations of services or of property in aid of any of the purposes

herein authorized; (f) appoint such officers, attorneys, agents,

and employees, vest them with such powers and duties, fix and pay

such compensation to them for their services as the telephone bank

may determine; (g) determine the character of and the necessity for

its obligations and expenditures, and the manner in which they

shall be incurred, allowed, and paid; (h) execute, in accordance

with its bylaws, all instruments necessary or appropriate in the

exercise of any of its powers; (i) collect or compromise all

obligations assigned to or held by it and all legal or equitable

rights accruing to it in connection with the payment of such

obligations until such time as such obligations may be referred to

the Attorney General for suit or collection; and (j) exercise all

such other powers as shall be necessary or incidental to carrying

out its functions under this subchapter.

-SOURCE-

(May 20, 1936, ch. 432, title IV, Sec. 402, as added Pub. L. 92-12,

Sec. 2, May 7, 1971, 85 Stat. 30.)

-MISC1-

EFFECTIVE DATE

Section effective May 7, 1971, see section 7 of Pub. L. 92-12,

set out as a note under section 921a of this title.

-CITE-

7 USC Sec. 943 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 31 - RURAL ELECTRIFICATION AND TELEPHONE SERVICE

SUBCHAPTER IV - RURAL TELEPHONE BANK

-HEAD-

Sec. 943. Special provisions governing telephone bank as a Federal

agency until conversion of ownership, control, and operation

-STATUTE-

Until the ownership, control, and operation of the telephone bank

is converted as provided in section 950(a) of this title and not

thereafter -

(a) Supervision and direction of Secretary of Agriculture; free

postage and priority of debts restrictions

the telephone bank shall be an agency of the United States and

shall be subject to the supervision and direction of the

Secretary of Agriculture (hereinafter called the Secretary):

Provided, however, That the telephone bank shall at no time be

entitled to transmission of its mail free of postage, nor shall

it have the priority of the United States in the payment of debts

out of bankrupt, insolvent, and decedents' estates;

(b) Use of facilities and services of employees of Secretary of

Agriculture

in order to perform its responsibilities under this subchapter,

the telephone bank may partially or jointly utilize the

facilities and the services of employees of the Secretary,

without cost to the telephone bank;

(c) Wholly owned Government corporation

the telephone bank shall be subject to the provisions of

chapter 91 of title 31, in the same manner and to the same extent

as if it were included in the definition of ''wholly owned

Government corporation'' as set forth in section 9101 of title

31;

(d) Appointment and compensation of personnel

the telephone bank may without regard to the civil service

(FOOTNOTE 1) classification laws appoint and fix the compensation

of such officers and employees of the telephone bank as it may

deem necessary;

(FOOTNOTE 1) So in original. The word ''and'' probably should

appear after ''civil service''.

(e) Tort claims and litigation

the telephone bank shall be subject to the provisions of

sections 517, 519, and 2679 of title 28.

-SOURCE-

(May 20, 1936, ch. 432, title IV, Sec. 403, as added Pub. L. 92-12,

Sec. 2, May 7, 1971, 85 Stat. 31; amended Pub. L. 103-354, title

II, Sec. 235(a)(9), Oct. 13, 1994, 108 Stat. 3221.)

-REFTEXT-

REFERENCES IN TEXT

The civil service classification laws, referred to in subsec.

(d), probably should refer to civil service and classification

laws. The civil service laws are set forth in Title 5, Government

Organization and Employees. See, particularly, section 3301 et seq.

of Title 5. The classification laws are set forth in chapter 51 and

subchapter III of chapter 53 of Title 5.

-COD-

CODIFICATION

In subsec. (c), ''chapter 91 of title 31'' and ''section 9101 of

title 31'' substituted for ''the Government Corporation Control

Act, as amended (31 U.S.C. 841 et seq.)'' and ''section 101 of said

Act (31 U.S.C. 846)'', respectively, on authority of Pub. L.

97-258, Sec. 4(b), Sept. 13, 1982, 96 Stat. 1067, the first section

of which enacted Title 31, Money and Finance.

-MISC3-

AMENDMENTS

1994 - Subsec. (b). Pub. L. 103-354 substituted ''Secretary'' for

''Rural Electrification Administration or of any other agency of

the Department of Agriculture''.

EFFECTIVE DATE

Section effective May 7, 1971, see section 7 of Pub. L. 92-12,

set out as a note under section 921a of this title.

-CITE-

7 USC Sec. 944 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 31 - RURAL ELECTRIFICATION AND TELEPHONE SERVICE

SUBCHAPTER IV - RURAL TELEPHONE BANK

-HEAD-

Sec. 944. Governor of telephone bank; functions, powers, and duties

-STATUTE-

Subject to the provisions of section 950 of this title, the

Secretary shall designate an official of the Department of

Agriculture who shall serve as the chief executive officer of the

telephone bank (herein called the Governor of the telephone bank).

Except as to matters specifically reserved to the Telephone Bank

Board in this subchapter, the Governor of the telephone bank shall

exercise and perform all functions, powers, and duties of the

telephone bank.

-SOURCE-

(May 20, 1936, ch. 432, title IV, Sec. 404, as added Pub. L. 92-12,

Sec. 2, May 7, 1971, 85 Stat. 31; amended Pub. L. 103-354, title

II, Sec. 235(a)(10), Oct. 13, 1994, 108 Stat. 3221.)

-MISC1-

AMENDMENTS

1994 - Pub. L. 103-354 substituted ''the Secretary shall

designate an official of the Department of Agriculture who'' for

''the Administrator of the Rural Electrification Administration''.

EFFECTIVE DATE

Section effective May 7, 1971, see section 7 of Pub. L. 92-12,

set out as a note under section 921a of this title.

-CITE-

7 USC Sec. 944a 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 31 - RURAL ELECTRIFICATION AND TELEPHONE SERVICE

SUBCHAPTER IV - RURAL TELEPHONE BANK

-HEAD-

Sec. 944a. Publication of rural telephone bank policies and

regulations

-STATUTE-

Notwithstanding the exemption contained in section 553(a)(2) of

title 5, the Governor of the telephone bank shall cause to be

published in the Federal Register, in accordance with section 553

of title 5, all rules, regulations, bulletins, and other written

policy standards governing the operation of the telephone bank's

programs relating to public property, loans, grants, benefits, or

contracts. After September 30, 1988, the telephone bank may not

deny a loan or advance to, or take any other adverse action

against, any applicant or borrower for any reason which is based

upon a rule, regulation, bulletin, or other written policy standard

which has not been published pursuant to such section.

-SOURCE-

(Pub. L. 100-203, title I, Sec. 1414, Dec. 22, 1987, 101 Stat.

1330-27.)

-COD-

CODIFICATION

Section was enacted as part of the Agricultural Reconciliation

Act of 1987 and as part of the Omnibus Budget Reconciliation Act of

1987, and not as part of the Rural Electrification Act of 1936

which comprises this chapter.

-CITE-

7 USC Sec. 945 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 31 - RURAL ELECTRIFICATION AND TELEPHONE SERVICE

SUBCHAPTER IV - RURAL TELEPHONE BANK

-HEAD-

Sec. 945. Board of directors

-STATUTE-

(a) In general

The management of the telephone bank, within the limitations

prescribed by law, shall be vested in a board of directors (in this

subchapter referred to as the ''Telephone Bank Board'').

(b) Membership

The Telephone Bank Board shall consist of thirteen individuals,

as follows:

(1) Presidential appointees

The President shall appoint seven individuals to serve on the

Telephone Bank Board who shall serve at the pleasure of the

President -

(A) five of whom shall be officers or employees of the

Department of Agriculture and not officers or employees of the

Secretary; and

(B) two of whom shall be from the general public and not

officers or employees of the Federal Government.

(2) Cooperative members

The cooperative-type entities, and organizations controlled by

such entities, that hold class B or class C stock shall elect

three individuals to serve on the Telephone Bank Board for a term

of two years, by a plurality vote of the stockholders voting in

the election.

(3) Commercial members

The commercial-type entities, and the organizations controlled

by such entities, that hold class B or class C stock shall elect

three individuals to serve on the Telephone Bank Board for a term

of two years, by a plurality vote of the stockholders voting in

the election.

(c) Elections

(1) Validity

An election under paragraph (2) or (3) of subsection (b) of

this section shall not be considered valid unless a majority of

the stockholders eligible to vote in the election have voted in

the election.

(2) Balloting

Balloting in an election under paragraph (2) or (3) of

subsection (b) of this section shall be conducted by mail

pursuant to the procedures authorized in the bylaws of the

telephone bank.

(3) No cumulative voting

Cumulative voting shall not be permitted in any election under

paragraph (2) or (3) of subsection (b) of this section.

(d) Compensation

(1) In general

Except as provided in paragraph (2), each member of the

Telephone Bank Board shall receive $100 per day for each day or

part thereof, not to exceed fifty days per year, spent in the

performance of their official duties, and shall be reimbursed for

travel and other expenses in such manner and subject to such

limitations as the Telephone Bank Board may prescribe.

(2) Exceptions

The five members of the Telephone Bank Board appointed under

subsection (b)(1)(A) of this section shall not receive

compensation by reason of their service on the Telephone Bank

Board.

(e) Succession

A member of the Telephone Bank Board may serve after the

expiration of the term of office of such member until the successor

for such member has taken office.

(f) Chairperson

The members of the Telephone Bank Board shall elect one of such

members to be the Chairperson of the Board, in accordance with the

bylaws of the telephone bank. The Chairperson shall preside at all

meetings of the Board and may vote on a matter before the Board

unless the vote would result in a tie vote on the matter.

(g) Bylaws

The Telephone Bank Board shall prescribe bylaws, not inconsistent

with law, regulating the manner in which the telephone bank's

business shall be conducted, its directors and officers elected,

its stock issued, held, and disposed of, its property transferred,

its bylaws amended, and the powers and privileges granted to it by

law exercised and enjoyed.

(h) Meetings

The Telephone Bank Board shall meet at such times and places as

it may fix and determine, but shall hold at least four regularly

scheduled meetings a year, and special meetings may be held on call

in the manner specified in the bylaws of the telephone bank.

(i) Annual report

The Telephone Bank Board shall make an annual report to the

Secretary for transmittal to the Congress on the administration of

this subchapter and any other matters relating to the effectuation

of the policies of this subchapter, including recommendations for

legislation.

(j) Open meetings

For purposes of section 552b of title 5, the Telephone Bank Board

shall be treated as an agency within the meaning of subsection

(a)(1) of such section.

-SOURCE-

(May 20, 1936, ch. 432, title IV, Sec. 405, as added Pub. L. 92-12,

Sec. 2, May 7, 1971, 85 Stat. 32; amended Pub. L. 93-32, Sec. 4,

May 11, 1973, 87 Stat. 70; Pub. L. 101-624, title XXIII, Sec.

2363(a), (b)(1), (c), Nov. 28, 1990, 104 Stat. 4042-4044; Pub. L.

103-354, title II, Sec. 235(a)(7), Oct. 13, 1994, 108 Stat. 3221.)

-MISC1-

AMENDMENTS

1994 - Subsec. (b)(1)(A). Pub. L. 103-354 substituted

''Secretary'' for ''Rural Electrification Administration''.

1990 - Pub. L. 101-624, Sec. 2363(a), substituted ''Board of

directors'' for ''Telephone Bank Board'' in section catchline.

Subsecs. (a) to (f). Pub. L. 101-624, Sec. 2363(a), struck out

subsecs. (a) to (f) and inserted new subsecs. (a) to (f): in

subsec. (a) struck out provisions relating to size of board, in

subsec. (b) substituted provisions relating to size of board and to

appointment and election of all board members for provisions naming

Administrator of Rural Electrification Administration and Governor

of Farm Credit Administration to board, and authorizing

presidential appointment of 5 other members, in subsec. (c)

substituted provisions relating to election of 6 cooperative and

commercial members for provisions authorizing presidential

appointment of initial 6 cooperative and commercial members, in

subsec. (d) substituted provisions relating to compensation for

provisions relating to interim election of 6 cooperative and

commercial members, in subsec. (e) substituted provisions relating

to succession for provisions relating to regular election of 6

cooperative and commercial members, and in subsec. (f) substituted

provisions relating to chairperson for provisions relating to

service after expiration of term, compensation and expenses.

Subsecs. (g) to (i). Pub. L. 101-624, Sec. 2363(b)(1), inserted

headings.

Subsec. (j). Pub. L. 101-624, Sec. 2363(c), added subsec. (j).

1973 - Subsec. (e). Pub. L. 93-32 substituted provisions

directing that the cooperative-type entities and organizations

holding class B and class C stock, voting as a separate class,

elect three directors to represent their class by a majority of the

stockholders voting in such class and that the commercial-type

entities and organizations holding class B and class C stock,

voting as a separate class, elect three directors to represent

their class by a majority of the stockholders voting in such class,

for provisions that three directors be elected from among the

directors, managers, and employees of cooperative-type entities and

organizations controlled by such entities holding class B or class

C stock and that three directors be elected from among the

directors, managers, and employees of commercial-type entities and

organizations controlled by such entities holding class B or class

C stock, and inserted provisions prohibiting cumulative voting.

EFFECTIVE DATE OF 1973 AMENDMENT

Amendment by Pub. L. 93-32 effective May 11, 1973, see section 12

of Pub. L. 93-32, set out as an Effective Date note under section

930 of this title.

EFFECTIVE DATE

Section effective May 7, 1971, see section 7 of Pub. L. 92-12,

set out as a note under section 921a of this title.

TERMINATION OF REPORTING REQUIREMENTS

For termination, effective May 15, 2000, of provisions in subsec.

(i) of this section relating to transmittal of annual report to

Congress, see section 3003 of Pub. L. 104-66, as amended, set out

as a note under section 1113 of Title 31, Money and Finance, and

page 45 of House Document No. 103-7.

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in section 950 of this title.

-CITE-

7 USC Sec. 946 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 31 - RURAL ELECTRIFICATION AND TELEPHONE SERVICE

SUBCHAPTER IV - RURAL TELEPHONE BANK

-HEAD-

Sec. 946. Capitalization

-STATUTE-

(a) Federal and borrower subscriptions; Federal limitation; report

to President, transmittal to Congress; net collection proceeds

The telephone bank's capital shall consist of capital subscribed

by the United States, by borrowers from the telephone bank, by

corporations and public bodies eligible to become borrowers from

the telephone bank, and by organizations controlled by such

borrowers, corporations, and public bodies. Beginning with the

fiscal year 1971 and for each fiscal year thereafter but not later

than fiscal year 1991, the United States shall furnish capital for

the purchase of class A stock and there are hereby authorized to be

appropriated such amounts, not to exceed $30,000,000 annually, for

such purchase until such class A stock shall equal $600,000,000:

Provided, That on or before July 1, 1975, the Secretary shall make

a report to the President for transmittal to the Congress on the

status of capitalization of the telephone bank by the United States

with appropriate recommendations. As used in this section and

section 931 of this title, the term ''net collection proceeds''

shall be deemed to mean payments from and after July 1, 1969, of

principal and interest on loans heretofore or hereafter made under

section 922 of this title, less an amount representing interest

payable to the Secretary of the Treasury on loans to the Secretary

for telephone purposes.

(b) Stock classification; voting stock; one vote rule

The capital stock of the telephone bank shall consist of three

classes, class A, class B, and class C, the rights, powers,

privileges, and preferences of the separate classes to be as

specified, not inconsistent with law, in the bylaws of the

telephone bank. Class B and class C stock shall be voting stock,

but no holder of said stock shall be entitled to more than one

vote, nor shall class B and class C stockholders, regardless of

their number, which are owned or controlled by the same person,

group of persons, firm, association, or corporation, be entitled in

any event to more than one vote.

(c) Class A stock; issuance to Secretary of Agriculture and

redemption; cumulative return

Class A stock shall be issued only to the Secretary on behalf of

the United States in exchange for capital furnished to the

telephone bank pursuant to subsection (a) of this section, and such

class A stock shall be redeemed and retired by the telephone bank

as soon as practicable after September 30, 1995, but not to the

extent that the Telephone Bank Board determines that such

retirement will impair the operations of the telephone bank:

Provided, That the minimum amount of class A stock that shall be

retired each year after said date shall equal the amount of class B

stock sold by the telephone bank during such year. Class A stock

shall be entitled to a return, payable from income, at the rate of

2 per centum per annum on the amounts of said class A stock

actually paid into the telephone bank. Such return shall be

cumulative and shall be payable annually into miscellaneous

receipts of the Treasury.

(d) Class B stock; borrowers as holders; dividend prohibition;

patronage refunds

Class B stock shall be held only by recipients of loans under

section 948 of this title. Borrowers receiving loan funds pursuant

to section 948(a)(1) or (2) of this title shall be required to

invest in class B stock 5 per centum of the amount of loan funds so

provided, by paying an amount equal to 5 per centum of the amount

of each loan advance, at the time of such advance. No dividends

shall be payable on class B stock. All holders of class B shall be

entitled to patronage refunds in class B stock under terms and

conditions to be specified in the bylaws of the telephone bank.

(e) Class C stock; borrowers as purchasers; dividends

Class C stock shall be available for purchase and shall be held

only by borrowers, or by corporations and public bodies eligible to

borrow under section 948 of this title, or by organizations

controlled by such borrowers, corporations and public bodies, and

shall be entitled to dividends in the manner specified in the

bylaws of the telephone bank. Such dividends shall be payable only

from income and, until all class A stock is retired, shall not

exceed the current average rate payable on its telephone

debentures.

(f) Special fund equivalents

If a firm, association, corporation, or public body is not

authorized under the laws of the jurisdiction in which it is

organized to acquire stock of the telephone bank, the telephone

bank shall, in lieu thereof, permit such organization to pay into a

special fund of the telephone bank a sum equivalent to the amount

of stock to be purchased. Each reference in this subchapter to

capital stock, or to class B, or class C stock, shall include also

the special fund equivalents of such stock, and to the extent

permitted under the laws of the jurisdiction in which such

organization is organized, a holder of special fund equivalents of

class B, or class C stock, shall have the same rights and status as

a holder of class B or class C stock, respectively. The rights and

obligations of the telephone bank in respect of such special fund

equivalent shall be identical to its rights and obligations in

respect of class B or class C stock, respectively.

(g) Patronage refunds from remaining earnings after provision for

operating expenses, reserves for losses, payments in lieu of

taxes, and returns on class A and C stock

After payment of all operating expenses of the telephone bank,

including interest on its telephone debentures, setting aside

appropriate funds for the reserve for loan losses, and making

payments in lieu of taxes, and returns on class A stock as provided

in subsection (c) of this section, and on class C stock, the

Telephone Bank Board shall annually set aside the remaining

earnings of the telephone bank for patronage refunds in accordance

with the bylaws of the telephone bank. The telephone bank may not

establish any reserve other than the reserves referred to in this

subsection and in subsection (h) of this section.

(h) Reserve for losses due to interest rate fluctuations

There is hereby established in the telephone bank a reserve for

losses due to interest rate fluctuations. Within 30 days after

December 22, 1987, the Governor of the telephone bank shall

transfer to the reserve for losses due to interest rate

fluctuations all amounts in the reserve for contingencies as of

December 22, 1987. All amounts so transferred shall not be

transferred, directly or indirectly, to the reserve for

contingencies. Amounts in the reserve for interest rate

fluctuations may be expended only to cover operating losses of the

telephone bank (other than losses attributable to loan defaults)

and only after taking into consideration any recommendations made

by the General Accounting Office under section 1413(b) of the

Omnibus Budget Reconciliation Act of 1987.

(i) Investment of RTB Equity Fund

The Governor of the telephone bank may invest in obligations of

the United States the amounts in the account in the Treasury of the

United States numbered 12X8139 (known as the ''RTB Equity Fund'').

-SOURCE-

(May 20, 1936, ch. 432, title IV, Sec. 406, as added Pub. L. 92-12,

Sec. 2, May 7, 1971, 85 Stat. 33; amended Pub. L. 93-32, Sec. 5,

May 11, 1973, 87 Stat. 70; Pub. L. 94-273, Sec. 2(2), Apr. 21,

1976, 90 Stat. 375; Pub. L. 97-98, title XVI, Sec. 1607, Dec. 22,

1981, 95 Stat. 1347; Pub. L. 100-203, title I, Sec. 1413(a), (c),

Dec. 22, 1987, 101 Stat. 1330-26; Pub. L. 101-624, title XXIII,

Sec. 2364, 2367(a), Nov. 28, 1990, 104 Stat. 4044; Pub. L. 103-129,

Sec. 2(c)(9), Nov. 1, 1993, 107 Stat. 1365; Pub. L. 103-354, title

II, Sec. 235(a)(11), (13), Oct. 13, 1994, 108 Stat. 3221; Pub. L.

104-127, title VII, Sec. 772(b)(3), Apr. 4, 1996, 110 Stat. 1149.)

-REFTEXT-

REFERENCES IN TEXT

Section 1413(b) of the Omnibus Budget Reconciliation Act of 1987,

referred to in subsec. (h), is section 1413(b) of Pub. L. 100-203,

title I, Dec. 22, 1987, 101 Stat. 1330-26, which is not classified

to the Code, and which mandated a study by the General Accounting

Office of the operations of the telephone bank and directed that

GAO report recommendations to Congress within 180 days of Dec. 22,

1987.

-MISC2-

AMENDMENTS

1996 - Subsec. (a). Pub. L. 104-127 struck out ''pursuant to

section 903(a) of this title'' after ''telephone purposes'' in last

sentence.

1994 - Pub. L. 103-354 substituted ''Secretary'' for

''Administrator'' in last sentence of subsec. (a) and ''Secretary''

for ''Administrator of the Rural Electrification Administration''

in subsec. (c).

1993 - Subsec. (i). Pub. L. 103-129 added subsec. (i).

1990 - Subsec. (d). Pub. L. 101-624, Sec. 2364, inserted before

period at end of second sentence '', by paying an amount equal to 5

per centum of the amount of each loan advance, at the time of such

advance''.

Subsec. (h). Pub. L. 101-624, Sec. 2367(a), inserted after second

sentence ''All amounts so transferred shall not be transferred,

directly or indirectly, to the reserve for contingencies.'' and

substituted ''Omnibus Budget Reconciliation'' for ''Rural Telephone

Bank Borrowers Fairness''.

1987 - Subsec. (g). Pub. L. 100-203, Sec. 1413(c), substituted

''the reserve for loan losses'' for ''reserves for losses'', and

inserted at end ''The telephone bank may not establish any reserve

other than the reserves referred to in this subsection and in

subsection (h) of this section.''

Subsec. (h). Pub. L. 100-203, Sec. 1413(a), added subsec. (h).

1981 - Subsec (a). Pub. L. 97-98, Sec. 1607(1), inserted ''but

not later than fiscal year 1991'' after ''thereafter,'' and

substituted ''$600,000'' for ''$300,000''.

Subsec. (c). Pub. L. 97-98, Sec. 1607(2), substituted ''September

30, 1995'' for ''September 30, 1985'', and struck out ''and after

the amount of class A and class B stock totals $400,000,000'' after

''said date''.

1976 - Subsec. (c). Pub. L. 94-273 substituted ''September'' for

''June''.

1973 - Subsec. (a). Pub. L. 93-92 struck out ''from net

collection proceeds in the rural telephone account created under

subchapter III of this chapter'' after ''appropriated''.

EFFECTIVE DATE OF 1990 AMENDMENT

Section 2368 of Pub. L. 101-624 provided that:

''(a) In General. - Except as provided in subsection (b), this

subtitle and the amendments made by this subtitle (subtitle F (Sec.

2351-2368) of title XXIII of Pub. L. 101-624, enacting sections 918

and 925 to 928 of this title, amending this section and sections

924, 932, 935, 936, 939, 945, 948, and 950 of this title and

enacting provisions set out as notes under section 901 of this

title) shall take effect on the date of enactment of this Act (Nov.

28, 1990).

''(b) Technical Amendments. - The amendments made by section 2367

(amending this section and section 948 of this title) shall take

effect as if such amendments had been included in chapter 2 (Sec.

1411-1414) of subtitle D of title I of the Omnibus Budget

Reconciliation Act of 1987 (Pub. L. 100-203) on the date of

enactment of such chapter (Dec. 22, 1987).''

EFFECTIVE DATE OF 1981 AMENDMENT

Amendment by Pub. L. 97-98 effective Dec. 22, 1981, see section

1801 of Pub. L. 97-98, set out as an Effective Date note under

section 4301 of this title.

EFFECTIVE DATE OF 1973 AMENDMENT

Amendment by Pub. L. 93-32 effective May 11, 1973, see section 12

of Pub. L. 93-32, set out as an Effective Date note under section

930 of this title.

EFFECTIVE DATE

Section effective May 7, 1971, see section 7 of Pub. L. 92-12,

set out as a note under section 921a of this title.

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 931, 948, 950 of this

title.

-CITE-

7 USC Sec. 947 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 31 - RURAL ELECTRIFICATION AND TELEPHONE SERVICE

SUBCHAPTER IV - RURAL TELEPHONE BANK

-HEAD-

Sec. 947. Borrowing power; telephone debentures; issuance; interest

rates; terms and conditions; ratio to paid-in capital and

retained earnings; investments in debentures; debentures as

security; purchase and sale of debentures by the Secretary of

the Treasury; treatment as public debt transactions of the

United States; exclusion of transactions from budget totals

-STATUTE-

(a) The telephone bank is authorized to obtain funds through the

public or private sale of its bonds, debentures, notes, and other

evidences of indebtedness (herein collectively called telephone

debentures). Telephone debentures shall be issued at such times,

bear interest at such rates, and contain such other terms and

conditions as the Telephone Bank Board shall determine: Provided,

however, That the amount of the telephone debentures which may be

outstanding at any one time pursuant to this section shall not

exceed twenty times the paid-in capital and retained earnings of

the telephone bank. Telephone debentures shall not be exempt,

either as to principal or interest, from any taxation now or

hereafter imposed by the United States, by any territory,

dependency, or possession thereof, or by any State or local taxing

authority. Telephone debentures shall be lawful investments and

may be accepted as security for all fiduciary, trust, and public

funds, the investment or deposit of which shall be under the

authority and control of the United States or any officer or

officers thereof.

(b) The Telephone Bank is also authorized to issue telephone

debentures to the Secretary of the Treasury, and the Secretary of

the Treasury may in his discretion purchase any such debentures,

and for such purpose the Secretary of the Treasury is authorized to

use as a public debt transaction the proceeds of the sale of any

securities hereafter issued under chapter 31 of title 31, as now or

hereafter in force, and the purposes for which securities may be

issued under chapter 31 of title 31 as now or hereafter in force

are extended to include such purchases. Each purchase of telephone

debentures by the Secretary of the Treasury under this subsection

shall be upon such terms and conditions as to yield a return at a

rate not less than a rate determined by the Secretary of the

Treasury, taking into consideration the current average yield on

outstanding marketable obligations of the United States of

comparable maturity. The Secretary of the Treasury may sell, upon

such terms and conditions and at such price or prices as he shall

determine, any of the telephone debentures acquired by him under

this subsection. All purchases and sales by the Secretary of the

Treasury of such debentures under this subsection shall be treated

as public debt transactions of the United States.

(c) Purchases and resales by the Secretary of the Treasury as

authorized in subsection (b) of this section shall not be included

in the totals of the budget of the United States Government and

shall be exempt from any general limitation imposed by statute on

expenditures and net lending (budget outlays) of the United States.

-SOURCE-

(May 20, 1936, ch. 432, title IV, Sec. 407, as added Pub. L. 92-12,

Sec. 2, May 7, 1971, 85 Stat. 34; amended Pub. L. 92-324, Sec. 2,

June 30, 1972, 86 Stat. 390; Pub. L. 93-32, Sec. 6, 7, May 11,

1973, 87 Stat. 70.)

-COD-

CODIFICATION

In subsec. (b), ''chapter 31 of title 31'' substituted for ''the

Second Liberty Bond Act'' on authority of Pub. L. 97-258, Sec.

4(b), Sept. 13, 1982, 96 Stat. 1067, the first section of which

enacted Title 31, Money and Finance.

-MISC3-

AMENDMENTS

1973 - Subsec. (a). Pub. L. 93-32, Sec. 6, increased from eight

times the paid-in capital and retained earnings of the telephone

bank to twenty times the paid-in capital and retained earnings of

the telephone bank the amount of telephone debentures which may be

outstanding at any one time and struck out provisions directing the

insertion by the telephone bank in all its telephone debentures of

appropriate language indicating that such telephone debentures

together with interest thereon are not guaranteed by the United

States and do not constitute a debt or obligation of the United

States or of any agency or instrumentality thereof other than the

telephone bank.

Subsec. (c). Pub. L. 93-32, Sec. 7, added subsec. (c).

1972 - Pub. L. 92-324 designated existing provisions as subsec.

(a) and added subsec. (b).

EFFECTIVE DATE OF 1973 AMENDMENT

Amendment by Pub. L. 93-32 effective May 11, 1973, see section 12

of Pub. L. 92-32, set out as an Effective Date note under section

930 of this title.

EFFECTIVE DATE OF 1972 AMENDMENT

Amendment by Pub. L. 92-324 effective June 30, 1972, see section

4 of Pub. L. 92-324, set out as an Effective Date note under

section 921b of this title.

EFFECTIVE DATE

Section effective May 7, 1971, see section 7 of Pub. L. 92-12,

set out as a note under section 921a of this title.

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in section 948 of this title.

-CITE-

7 USC Sec. 948 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 31 - RURAL ELECTRIFICATION AND TELEPHONE SERVICE

SUBCHAPTER IV - RURAL TELEPHONE BANK

-HEAD-

Sec. 948. Lending power

-STATUTE-

(a) Loans for prescribed purposes; requisite conditions

The Governor of the telephone bank shall make loans on behalf of

the telephone bank, to the extent that there are qualifying

applications therefor, subject only to limitations as to amounts

authorized for loans and advances as may be imposed by law enacted

by the Congress of the United States for loans to be made in any

one year, and in conformance with policies approved by the

Telephone Bank Board, to corporations and public bodies which have

received a loan or loan commitment pursuant to section 922 of this

title, or which have been certified by the Secretary to be eligible

for such a loan or loan commitment, (1) for the same purposes and

under the same limitations for which loans may be made under

section 922 of this title, (2) for the acquisition, purchase, and

installation of telephone lines, systems, and facilities (other

than buildings used primarily for administrative purposes, vehicles

not used primarily in construction, and customer premise equipment)

related to the furnishing, improvement, or extension of rural

telecommunications service, and (3) for the purchase of class B

stock required to be purchased under section 946(d) of this title

but not for the purchase of class C stock, subject, as to the

purposes set forth in (2) hereof, to the following provisos: That

in the case of any such loan for the acquisition of telephone

lines, facilities, or systems, the acquisition shall be approved by

the Secretary, the location and character thereof shall be such as

to improve the efficiency, effectiveness, or financial stability of

the telephone system of the borrower, and in respect of exchange

facilities for local services, the size of each acquisition shall

not be greater than the borrower's existing system at the time it

receives its first loan from the telephone bank, taking into

account the number of subscribers served, miles of line, and plant

investment. Loans and advances made under this section shall not

be included in the totals of the budget of the United States

Government and shall be exempt from any general limitation imposed

by statute on expenditures and net lending (budget outlays) of the

United States.

(b) Terms and conditions of loans; restrictions on loans

Loans under this section shall be on such terms and conditions as

the Governor of the telephone bank shall determine, subject,

however, to the following restrictions:

(1) Amortization period

All loans made under this section shall be fully amortized over

a period not to exceed fifty years.

(2) Preference in loans; election of loans for telephone system

with certain subscriber density per mile

Funds to be loaned under this chapter to any borrower shall be

loaned under this section in preference to section 922 of this

title if the borrower is eligible for such a loan and funds are

available therefor. Notwithstanding the foregoing or any other

provision of law, all loans made pursuant to this chapter for

facilities for telephone systems with an average subscriber

density of three or fewer per mile shall be made under section

922 of this title; but this provision shall not preclude the

making of such loans from the telephone bank at the election of

the borrower.

(3) Interest rate

(A) Loans under this section shall bear interest at the ''cost

of money rate''. The cost of money rate is defined as the

average cost of moneys to the telephone bank as determined by the

Governor, but not less than 5 per centum per annum.

(B) On and after December 22, 1987, advances made on or after

December 22, 1987, under loan commitments made on or after

October 1, 1987, shall bear interest at the rate determined under

subparagraph (C), but in no event at a rate that is less than 5

percent per annum.

(C) The rate determined under this subparagraph shall be -

(i) for the period beginning on the date the advance is made

and ending at the close of the fiscal year in which the advance

is made, the average yield (on the date of the advance) on

outstanding marketable obligations of the United States having

a final maturity comparable to the final maturity of the

advance; and

(ii) after the fiscal year in which the advance is made, the

cost of money rate for such fiscal year, as determined under

subparagraph (D).

(D) Within 30 days after the end of each fiscal year, the

Governor shall determine to the nearest 0.01 percent the cost of

money rate for the fiscal year, by calculating the sum of the

results of the following calculations:

(i) The aggregate of all amounts received by the telephone

bank during the fiscal year from the issuance of class A stock,

multiplied by the rate of return payable by the telephone bank

during the fiscal year, as specified in section 946(c) of this

title, to holders of class A stock, which product is divided by

the aggregate of the amounts advanced by the telephone bank

during the fiscal year.

(ii) The aggregate of all amounts received by the telephone

bank during the fiscal year from the issuance of class B stock,

multiplied by the rate at which dividends are payable by the

telephone bank during the fiscal year, as specified in section

946(d) of this title, to holders of class B stock, which

product is divided by the aggregate of the amounts advanced by

the telephone bank during the fiscal year. For purposes of the

calculation under this subparagraph, such rate shall be zero.

(iii) The aggregate of all amounts received by the telephone

bank during the fiscal year from the issuance of class C stock,

multiplied by the rate at which dividends are payable by the

telephone bank during the fiscal year, under section 946(e) of

this title, to holders of class C stock, which product is

divided by the aggregate of the amounts advanced by the

telephone bank during the fiscal year.

(iv)(I) The sum of the results of the calculations described

in subclause (II).

(II) The amounts received by the telephone bank during the

fiscal year from each issue of telephone debentures and other

obligations of the telephone bank, multiplied, respectively, by

the rates at which interest is payable during the fiscal year

by the telephone bank to holders of each issue, each of which

products is divided, respectively, by the aggregate of the

amounts advanced by the telephone bank during the fiscal year.

(v)(I) The amount by which the aggregate of the amounts

advanced by the telephone bank during the fiscal year exceeds

the aggregate of the amounts received by the telephone bank

from the issuance of class A stock, class B stock, class C

stock, and telephone debentures and other obligations of the

telephone bank during the fiscal year, multiplied by the

historic cost of money rate as of the close of the fiscal year

immediately preceding the fiscal year, which product is divided

by the aggregate of the amounts advanced by the telephone bank

during the fiscal year.

(II) For purposes of this clause, the term ''historic cost of

money rate'', with respect to the close of a preceding fiscal

year, means the sum of the results of the following

calculations: The amounts advanced by the telephone bank in

each fiscal year during the period beginning with fiscal year

1974 and ending with the preceding fiscal year, multiplied,

respectively, by the cost of money rate for the fiscal year (as

set forth in the table in subparagraph (E)) for fiscal years

1974 through 1987, and as determined by the Governor under this

subparagraph for fiscal years after fiscal year 1987), each of

which products is divided, respectively, by the aggregate of

the amounts advanced by the telephone bank during the period.

(E) For purposes of subparagraph (D)(II), the cost of money

rate for the fiscal years in which each advance was made shall be

as set forth in the following table:

The cost of money

For advances made in -

rate shall be -

Fiscal year 1974 5.01 percent

Fiscal year 1975 5.85 percent

Fiscal year 1976 5.33 percent

Fiscal year 1977 5.00 percent

Fiscal year 1978 5.87 percent

Fiscal year 1979 5.93 percent

Fiscal year 1980 8.10 percent

Fiscal year 1981 9.46 percent

Fiscal year 1982 8.39 percent

Fiscal year 1983 6.99 percent

Fiscal year 1984 6.55 percent

Fiscal year 1985 5.00 percent

Fiscal year 1986 5.00 percent

Fiscal year 1987 5.00 percent.

For purposes of this paragraph, the term ''fiscal year'' means

the 12-month period ending on September 30 of the designated

year.

(F)(i) Notwithstanding subparagraph (B), if a borrower holds a

commitment for a loan under this section made on or after October

1, 1987, and before December 22, 1987, part or all of the

proceeds of which have not been advanced as of December 22, 1987,

the borrower may, until the later of the date the next advance

under the loan commitment is made or 90 days after December 22,

1987, elect to have the interest rate specified in the loan

commitment apply to the unadvanced portion of the loan in lieu of

the rate which (but for this clause) would apply to the

unadvanced portion under this paragraph. If any borrower makes

an election under this clause with respect to a loan, the

Governor shall adjust the interest rate which applies to the

unadvanced portion of the loan accordingly.

(ii)(I) If the telephone bank, pursuant to section 947(b) of

this title, issues telephone debentures on any date to refinance

telephone debentures or other obligations of the telephone bank,

the telephone bank shall, in addition to any interest rate

reduction required by any other provision of this paragraph, for

the period applicable to the advance, reduce the interest rate

charged on each advance made under this section during the fiscal

year in which the refinanced debentures or other obligations were

originally issued by the amount applicable to the advance.

(II) For purposes of subclause (I), the term ''the period

applicable to the advance'' means the period beginning on the

issue date described in subclause (I) and ending on the earlier

of the date the advance matures or is completely prepaid.

(III) For purposes of subclause (I), the term ''the amount

applicable to the advance'' means an amount which fully reflects

that percentage of the funds saved by the telephone bank as a

result of the refinancing which is equal to the percentage

representation of the advance in all advances described in

subclause (I).

(IV) Within 60 days after any issue date described in subclause

(I), the Governor shall amend the loan documentation for each

advance described in subclause (I), as necessary, to reflect any

interest rate reduction applicable to the advance by reason of

this clause, and shall notify each affected borrower of the

reduction.

(G) Within 30 days after the publication of any determination

made under subparagraph (D), any affected borrower may obtain

review of the determination, or any other equitable relief as may

be determined appropriate, by the United States court of appeals

for the judicial circuit in which the borrower does business by

filing a written petition requesting the court to set aside or

modify such determination. On receipt of such a petition, the

clerk of the court shall transmit a copy of the petition to the

Governor. On receipt of a copy of such a petition from the clerk

of the court, the Governor shall file with the court the record

on which the determination is based. The court shall have

jurisdiction to affirm, set aside, or modify the determination.

(H) Within 5 days after determining the cost of money rate for

a fiscal year, the Governor shall -

(i) cause the determination to be published in the Federal

Register in accordance with section 552 of title 5; and

(ii) furnish a copy of the determination to the Comptroller

General of the United States.

(I) The telephone bank shall not sell or otherwise dispose of

any loan made under this section, except as provided in this

paragraph.

(4) Required qualifications of applicants

The Governor of the telephone bank may make a loan under this

section only to an applicant for the loan who meets the following

requirements:

(A) The average number of subscribers per mile of line in the

service area of the applicant is not more than 15, or the

applicant is capable of producing net income or margins before

interest of not less than 100 percent (but not more than 500

percent) of the interest requirements on all of the outstanding

and proposed loans of the applicant.

(B) The Secretary has approved, under section 935(d)(3) of

this title, a telecommunications modernization plan for the

State in which the applicant is located and, if the plan was

developed by telephone borrowers under subchapter III of this

chapter, the applicant is a participant in the plan.

(5) Certificate of convenience and necessity required from State

regulatory agency or statement of telephone bank's Governor

of nonduplication of lines, facilities, or systems

No loan shall be made in any State which now has or may

hereafter have a State regulatory body having authority to

regulate telephone service and to require certificates of

convenience and necessity to the applicant unless such

certificate from such agency is first obtained. In a State in

which there is no such agency or regulatory body legally

authorized to issue such certificates to the applicant, no loan

shall be made under this section unless the Governor of the

telephone bank shall determine (and set forth his reasons

therefor in writing) that no duplication of lines, facilities, or

systems, providing reasonably adequate services will result

therefrom.

(6) Definitions: telephone service; telephone lines, facilities,

or systems

As used in this section, the term telephone service shall have

the meaning prescribed for this term in section 924(a) of this

title, and the term telephone lines, facilities, or systems shall

mean lines, facilities, or systems used in the rendition of such

telephone service.

(7) Sale or disposal of property, rights, or franchises prior to

repayment of loan

No borrower of funds under this section shall, without approval

of the Governor of the telephone bank under rules established by

the Telephone Bank Board, sell or dispose of its property,

rights, or franchises, acquired under the provisions of this

chapter, until any loan obtained from the telephone bank,

including all interest and charges, shall have been repaid.

(8) Prepayment without penalty

(A) A borrower with a loan from the Rural Telephone Bank may

prepay such loan (or any part thereof) by paying the face amount

thereof without being required to pay the prepayment penalty set

forth in the note covering such loan, except for any prepayment

penalty provided for in a loan agreement entered into before

November 1, 1993.

(B) If a borrower prepays part or all of a loan made under this

section, then, notwithstanding section 947(b) of this title, the

Governor of the telephone bank shall -

(i) use the full amount of the prepayment to repay

obligations of the telephone bank issued pursuant to section

947(b) of this title before October 1, 1991, to the extent any

such obligations are outstanding; and

(ii) in repaying the obligations, first repay the advances

bearing the greatest rate of interest.

(9) Applications considered under this section and section

935(d)(2)

On request of any applicant for a loan under this section

during any fiscal year, the Governor of the telephone bank shall

-

(A) consider the application to be for a loan under this

section and a loan under section 935(d)(2) of this title; and

(B) if the applicant is eligible for a loan, make a loan to

the applicant under this section in an amount equal to the

amount that bears the same ratio to the total amount of loans

for which the applicant is eligible under this section and

under section 935(d)(2) of this title, as the amount made

available for loans under this section for the fiscal year

bears to the total amount made available for loans under this

section and under section 935(d)(2) of this title for the

fiscal year.

(10) Applications considered under section 935(d)(2)

On request of any applicant who is eligible for a loan under

this section for which funds are not available, the applicant

shall be considered to have applied for a loan under section

935(d)(2) of this title.

(c) Payment schedule; adjustment; loan period

The Governor of the telephone bank is authorized under rules

established by the Telephone Bank Board to adjust, on an amortized

basis, the schedule of payments of interest or principal of loans

made under this section upon his determination that with such

readjustment there is reasonable assurance of repayment: Provided,

however, That no adjustment shall extend the period of such loans

beyond fifty years.

(d) Borrowers to determine amortization period for rural telephone

bank loans

(1) Except as provided in paragraph (2), the term of any loan

made under this subchapter shall be determined by the borrower at

the time the application for the loan is submitted.

(2) The term of any loan made under this subchapter shall not

exceed the maximum term for which a loan may be made under section

904 of this title.

(e) Interest on loans and advances

Loans and advances made under this section on or after November

5, 1990, shall bear interest at a rate determined under this

section, taking into account all assets and liabilities of the

telephone bank. This subsection shall not apply to loans obligated

before November 1, 1993. Funds are not authorized to be

appropriated to carry out this subsection until the funds are

appropriated in advance to carry out this subsection.

-SOURCE-

(May 20, 1936, ch. 432, title IV, Sec. 408, as added Pub. L. 92-12,

Sec. 2, May 7, 1971, 85 Stat. 35; amended Pub. L. 93-32, Sec. 8, 9,

May 11, 1973, 87 Stat. 70, 71; Pub. L. 100-203, title I, Sec.

1411(b)(1), (c), 1412, Dec. 22, 1987, 101 Stat. 1330-22, 1330-23,

1330-26; Pub. L. 101-624, title XXIII, Sec. 2365, 2366, 2367(b),

Nov. 28, 1990, 104 Stat. 4044; Pub. L. 103-129, Sec. 2(a)(2), Nov.

1, 1993, 107 Stat. 1361; Pub. L. 103-354, title II, Sec.

235(a)(13), Oct. 13, 1994, 108 Stat. 3221; Pub. L. 104-66, title I,

Sec. 1011(y), Dec. 21, 1995, 109 Stat. 711.)

-MISC1-

AMENDMENTS

1995 - Subsec. (b)(3)(I), (J). Pub. L. 104-66 redesignated

subpar. (J) as (I) and struck out former subpar. (I) which read as

follows: ''The Comptroller General shall review, on an expedited

basis, each determination a copy of which is received from the

Governor and, within 15 days after the date of such receipt,

furnish Congress a report on the accuracy of the determination.''

1994 - Subsecs. (a), (b)(4)(B). Pub. L. 103-354 substituted

''Secretary'' for ''Administrator''.

1993 - Subsec. (a)(2). Pub. L. 103-129, Sec. 2(a)(2)(A),

substituted ''acquisition, purchase, and installation of telephone

lines, systems, and facilities (other than buildings used primarily

for administrative purposes, vehicles not used primarily in

construction, and customer premise equipment) related to the

furnishing, improvement, or extension of rural telecommunications

service'' for ''purposes of financing, or refinancing, the

construction, improvement, expansion, acquisition, and operation of

telephone lines, facilities, or systems, in order to improve the

efficiency, effectiveness, or financial stability of borrowers

financed under section 922 of this title and this section''.

Subsec. (b)(4). Pub. L. 103-129, Sec. 2(a)(2)(B)(i), added par.

(4) and struck out former par. (4) which related to adequacy of

security and capacity for repayment of loans made under this

section.

Subsec. (b)(8)(A). Pub. L. 103-129, Sec. 2(a)(2)(B)(ii),

designated existing provisions as subpar. (A), substituted ''except

for any prepayment penalty provided for in a loan agreement entered

into before November 1, 1993'' for ''if such prepayment is not made

later than September 30, 1988'', and added subpar. (B).

Subsec. (b)(9), (10). Pub. L. 103-129, Sec. 2(a)(2)(B)(iii),

added pars. (9) and (10).

Subsec. (e). Pub. L. 103-129, Sec. 2(a)(2)(C), added subsec. (e).

1990 - Subsec. (a). Pub. L. 101-624, Sec. 2365, substituted

''shall make loans on behalf of the telephone bank, to the extent

that there are qualifying applications therefor, subject only to

limitations as to amounts authorized for loans and advances as may

be imposed by law enacted by the Congress of the United States for

loans to be made in any one year, and'' for ''is authorized on

behalf of the telephone bank to make loans,''.

Subsec. (b)(3)(B). Pub. L. 101-624, Sec. 2367(b)(1), substituted

''the date of enactment of this subparagraph'' for ''the date of

enactment of this paragraph'' in the original text before

''advances'', which was translated as ''December 22, 1987'',

requiring no change in text.

Subsec. (b)(3)(D)(ii). Pub. L. 101-624, Sec. 2367(b)(2), inserted

''For purposes of the calculation under this subparagraph, such

rate shall be zero.''

Subsec. (b)(3)(E). Pub. L. 101-624, Sec. 2367(b)(3), substituted

''paragraph'' for ''subparagraph'' after ''of this''.

Subsec. (d). Pub. L. 101-624, Sec. 2366, added subsec. (d).

1987 - Subsec. (b)(3). Pub. L. 100-203, Sec. 1411(c), designated

existing provisions as subpar. (A) and added subpars. (B) to (J).

Subsec. (b)(4). Pub. L. 100-203, Sec. 1412, inserted at end ''For

purposes of determining the creditworthiness of a borrower for a

loan under this paragraph, the Governor shall assume that the loan,

if made, would bear interest at a rate equal to the average yield

(on the date of the determination) on outstanding marketable

obligations of the United States having a final maturity comparable

to the final maturity of the loan.''

Subsec. (b)(8). Pub. L. 100-203, Sec. 1411(b)(1), added par. (8).

1973 - Subsec. (a). Pub. L. 93-32, Sec. 8, inserted ''or which

have been certified by the Administrator to be eligible for such a

loan or loan commitments,'' preceding cl. (1) and inserted

provision that loans and advances not be included in the totals of

the budget of the United States Government and that such loans and

advances be exempt from any general limitation imposed by statute

expenditures and net lending (budget outlays) of the United States.

Subsec. (b)(3). Pub. L. 93-32, Sec. 9, substituted provisions for

a ''cost of money rate'' of interest with a ''not less than 5 per

centum per annum'' limit on such rate, for provisions for interest

''at the highest rate which meets the requirements set forth in

paragraph (4), consistent with the borrower's ability to pay such

interest rate and with achievement of the objectives of this

chapter'' with a ''not less than 4 per centum per annum'' limit on

such rate.

EFFECTIVE DATE OF 1990 AMENDMENT

Amendment by section 2367(b) of Pub. L. 101-624 effective as if

included in chapter 2 (Sec. 1411-1414) of subtitle D of title I of

the Omnibus Budget Reconciliation Act of 1987, Pub. L. 100-203, see

section 2368(b) of Pub. L. 101-624, set out as a note under section

946 of this title.

EFFECTIVE DATE OF 1973 AMENDMENT

Amendment by Pub. L. 93-32 effective May 11, 1973, see section 12

of Pub. L. 93-32, set out as an Effective Date note under section

930 of this title.

EFFECTIVE DATE

Section effective May 7, 1971, see section 7 of Pub. L. 92-12,

set out as a note under section 921a of this title.

CONGRESSIONAL FINDINGS COVERING INTEREST RATES AND LOAN PREPAYMENTS

Section 1411(a) of Pub. L. 100-203 provided that: ''Congress

finds that -

''(1) overcharging of Rural Telephone Bank borrowers has

resulted in $179,000,000 in excess profits and has imperiled

borrowers by raising costs to ratepayers;

''(2) borrowers will be able to seek redress under section

408(b)(3)(G) of the Rural Electrification Act of 1936 (subsec.

(b)(3)(G) of this section), as added by subsection (c), or may

leave the Rural Telephone Bank, but in no case may the Governor

of the Bank issue regulations requiring any penalty from

borrowers seeking to retire debt prior to maturity; and

''(3) any reduction in Federal Government expenditures in the

operation of the Rural Telephone Bank, from borrowers' conduct

resulting from the implementation of the amendments made by

subsections (b) and (c) (amending this section), should be

included in all calculations of the budget of the United States

Government, authorized under the Balanced Budget and Emergency

Deficit Control Reaffirmation Act of 1987 (title I of Pub. L.

100-119, see Short Title of 1987 Amendment note set out under

section 901 of Title 2, The Congress).''

PREPAYMENT REGULATIONS

Section 1411(b)(2) of Pub. L. 100-203 provided that: ''The

Governor of the Rural Telephone Bank shall issue regulations to

carry out the amendment made by paragraph (1) (amending this

section) within 30 days after the date of enactment of this Act

(Dec. 22, 1987). Such regulations shall implement the amendment

made by paragraph (1) without the addition of any restrictions not

set forth in such amendment.''

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 927, 928, 935, 939, 941,

946, 950, 950b of this title.

-CITE-

7 USC Sec. 949 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 31 - RURAL ELECTRIFICATION AND TELEPHONE SERVICE

SUBCHAPTER IV - RURAL TELEPHONE BANK

-HEAD-

Sec. 949. Telephone bank receipts; availability for obligations and

expenditures

-STATUTE-

Any receipts from the activities of the telephone bank shall be

available for all obligations and expenditures of the telephone

bank.

-SOURCE-

(May 20, 1936, ch. 432, title IV, Sec. 409, as added Pub. L. 92-12,

Sec. 2, May 7, 1971, 85 Stat. 36.)

-MISC1-

EFFECTIVE DATE

Section effective May 7, 1971, see section 7 of Pub. L. 92-12,

set out as a note under section 921a of this title.

-CITE-

7 USC Sec. 950 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 31 - RURAL ELECTRIFICATION AND TELEPHONE SERVICE

SUBCHAPTER IV - RURAL TELEPHONE BANK

-HEAD-

Sec. 950. Conversion of ownership, control, and operation of

telephone bank

-STATUTE-

(a) Transfer of powers and authority from Secretary of Agriculture

to Telephone Bank Board; cessation of Presidential appointees

as Board members and reduction in number of Board members;

status of telephone bank

Whenever fifty-one per centum of the maximum amount of class A

stock issued to the United States and outstanding at any time after

September 30, 1985, has been fully redeemed and retired pursuant to

section 946(c) of this title -

(1) the powers and authority of the Governor of the telephone

bank granted to the Secretary by this subchapter shall vest in

the Telephone Bank Board, and may be exercised and performed

through the Governor of the telephone bank, to be selected by the

Telephone Bank Board, and through such other employees as the

Telephone Bank Board shall designate;

(2) the five members of the Telephone Bank Board designated by

the President pursuant to section 945(b)(1)(A) of this title

shall cease to be members, and the number of Board members shall

be accordingly reduced to eight unless other provision is

thereafter made in the bylaws of the telephone bank;

(3) the telephone bank shall cease to be an agency of the

United States, but shall continue in existence in perpetuity as

an instrumentality of the United States and as a banking

corporation with all of the powers and limitations conferred or

imposed by this subchapter except such as shall have lapsed

pursuant to the provisions of this subchapter.

(b) Restrictions of section 948(a)(2) of this title inapplicable to

loans upon redemption and retirement of class A stock

When all class A stock has been fully redeemed and retired, loans

made by the telephone bank shall not continue to be subject to the

restrictions prescribed in the provisos to section 948(a)(2) of

this title.

(c) Congressional review

Congress reserves the right to review the continued operations of

the telephone bank after all class A stock has been fully redeemed

and retired.

-SOURCE-

(May 20, 1936, ch. 432, title IV, Sec. 410, as added Pub. L. 92-12,

Sec. 2, May 7, 1971, 85 Stat. 36; amended Pub. L. 94-273, Sec.

2(2), Apr. 21, 1976, 90 Stat. 375; Pub. L. 101-624, title XXIII,

Sec. 2363(b)(2), Nov. 28, 1990, 104 Stat. 4043; Pub. L. 103-354,

title II, Sec. 235(a)(11), Oct. 13, 1994, 108 Stat. 3221.)

-MISC1-

AMENDMENTS

1994 - Subsec. (a)(1). Pub. L. 103-354 substituted ''Secretary''

for ''Administrator of the Rural Electrification Administration''.

1990 - Subsec. (a)(2). Pub. L. 101-624 substituted ''section

945(b)(1)(A) of this title'' for ''section 945(b) of this title''.

1976 - Subsec. (a). Pub. L. 94-273 substituted ''September'' for

''June''.

EFFECTIVE DATE

Section effective May 7, 1971, see section 7 of Pub. L. 92-12,

set out as a note under section 921a of this title.

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 943, 944 of this title;

title 31 sections 9101, 9108.

-CITE-

7 USC Sec. 950a 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 31 - RURAL ELECTRIFICATION AND TELEPHONE SERVICE

SUBCHAPTER IV - RURAL TELEPHONE BANK

-HEAD-

Sec. 950a. Liquidation or dissolution of telephone bank

-STATUTE-

In the case of liquidation or dissolution of the telephone bank,

after the payment or retirement, as the case may be, first, of all

liabilities; second, of all class A stock at par; third, of all

class B stock at par; fourth, of all class C stock at par; then any

surpluses and contingency reserves existing on the effective date

of liquidation or dissolution of the telephone bank shall be paid

to the holders of class A and class B stock issued and outstanding

before the effective date of such liquidation or dissolution, pro

rata.

-SOURCE-

(May 20, 1936, ch. 432, title IV, Sec. 411, as added Pub. L. 92-12,

Sec. 2, May 7, 1971, 85 Stat. 37.)

-MISC1-

EFFECTIVE DATE

Section effective May 7, 1971, see section 7 of Pub. L. 92-12,

set out as a note under section 921a of this title.

-CITE-

7 USC Sec. 950b 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 31 - RURAL ELECTRIFICATION AND TELEPHONE SERVICE

SUBCHAPTER IV - RURAL TELEPHONE BANK

-HEAD-

Sec. 950b. Borrower net worth

-STATUTE-

Except as provided in subsection (b)(2) of section 948 of this

title, notwithstanding any other provision of law, a loan shall not

be made under section 922 of this title to any borrower which

during the immediately preceding year had a net worth in excess of

20 per centum of its assets unless the Secretary finds that the

borrower cannot obtain such a loan from the telephone bank or from

other reliable sources at reasonable rates of interest and terms

and conditions.

-SOURCE-

(May 20, 1936, ch. 432, title IV, Sec. 412, as added Pub. L. 92-12,

Sec. 2, May 7, 1971, 85 Stat. 37; amended Pub. L. 103-354, title

II, Sec. 235(a)(13), Oct. 13, 1994, 108 Stat. 3221.)

-MISC1-

AMENDMENTS

1994 - Pub. L. 103-354 substituted ''Secretary'' for

''Administrator''.

EFFECTIVE DATE

Section effective May 7, 1971, see section 7 of Pub. L. 92-12,

set out as a note under section 921a of this title.

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in section 939 of this title.

-CITE-

7 USC SUBCHAPTER V - RURAL ECONOMIC DEVELOPMENT 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 31 - RURAL ELECTRIFICATION AND TELEPHONE SERVICE

SUBCHAPTER V - RURAL ECONOMIC DEVELOPMENT

.

-HEAD-

SUBCHAPTER V - RURAL ECONOMIC DEVELOPMENT

-SECREF-

SUBCHAPTER REFERRED TO IN OTHER SECTIONS

This subchapter is referred to in section 6944 of this title.

-CITE-

7 USC Sec. 950aa 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 31 - RURAL ELECTRIFICATION AND TELEPHONE SERVICE

SUBCHAPTER V - RURAL ECONOMIC DEVELOPMENT

-HEAD-

Sec. 950aa. Additional powers and duties

-STATUTE-

The Secretary shall -

(1) provide advice and guidance to electric borrowers under

this chapter concerning the effective and prudent use by such

borrowers of the investment authority under section 940b of this

title to promote rural development;

(2) provide technical advice, troubleshooting, and guidance

concerning the operation of programs or systems that receive

assistance under this chapter;

(3) establish and administer various pilot projects through

electric and telephone borrowers that the Secretary determines

are useful or necessary, and recommend specific rural development

projects for rural areas;

(4) act as an information clearinghouse and conduit to provide

information to electric and telephone borrowers under this

chapter concerning useful and effective rural development efforts

that such borrowers may wish to apply in their areas of operation

and concerning State, regional, or local plans for long-term

rural economic development;

(5) provide information to electric and telephone borrowers

under this chapter concerning the eligibility of such borrowers

to apply for financial assistance, loans, or grants from other

Federal agencies and non-Federal sources to enable such borrowers

to expand their rural development efforts; and

(6) promote local partnerships and other coordination between

borrowers under this chapter and community organizations, States,

counties, or other entities, to improve rural development.

-SOURCE-

(May 20, 1936, ch. 432, title V, Sec. 501, as added Pub. L.

101-624, title XXIII, Sec. 2345, Nov. 28, 1990, 104 Stat. 4029;

amended Pub. L. 102-237, title VII, Sec. 703(c), Dec. 13, 1991, 105

Stat. 1881; Pub. L. 103-354, title II, Sec. 235(a)(12), (13), Oct.

13, 1994, 108 Stat. 3221; Pub. L. 104-127, title VII, Sec. 781(b),

Apr. 4, 1996, 110 Stat. 1151.)

-MISC1-

AMENDMENTS

1996 - Par. (7). Pub. L. 104-127 struck out par. (7) which read

as follows: ''administer a Rural Business Incubator Fund (as

established under section 950aa-1 of this title) that shall provide

technical assistance, advice, loans, or capital to business

incubator programs or for the creation or operation of small

business incubators in rural areas.''

1994 - Pub. L. 103-354 struck out ''of REA Administrator'' at end

of section catchline and substituted ''Secretary'' for

''Administrator'' in introductory provisions and par. (3).

1991 - Pars. (6) to (8). Pub. L. 102-237 inserted ''and'' at end

of par. (6), redesignated par. (8) as (7), and struck out former

par. (7) which read as follows: ''review the advice and

recommendations of the Rural Educational Opportunities Board as

established under section 601(f); and''.

EFFECTIVE DATE OF 1991 AMENDMENT

Amendment by Pub. L. 102-237 effective as if included in the

provision of the Food, Agriculture, Conservation, and Trade Act of

1990, Pub. L. 101-624, to which the amendment relates, see section

1101(b)(8) of Pub. L. 102-237, set out as a note under section 1421

of this title.

-CITE-

7 USC Sec. 950aa-1 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 31 - RURAL ELECTRIFICATION AND TELEPHONE SERVICE

SUBCHAPTER V - RURAL ECONOMIC DEVELOPMENT

-HEAD-

Sec. 950aa-1. Repealed. Pub. L. 104-127, title VII, Sec. 781(a),

Apr. 4, 1996, 110 Stat. 1151

-MISC1-

Section, act May 20, 1936, ch. 432, title V, Sec. 502, as added

Nov. 28, 1990, Pub. L. 101-624, title XXIII, Sec. 2345, 104 Stat.

4030; amended Dec. 13, 1991, Pub. L. 102-237, title VII, Sec.

703(d), 105 Stat. 1881; Oct. 13, 1994, Pub. L. 103-354, title II,

Sec. 235(a)(13), 108 Stat. 3221, provided for establishment of

Rural Business Incubator Fund.

-CITE-

7 USC SUBCHAPTER VI - RURAL BROADBAND ACCESS 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 31 - RURAL ELECTRIFICATION AND TELEPHONE SERVICE

SUBCHAPTER VI - RURAL BROADBAND ACCESS

.

-HEAD-

SUBCHAPTER VI - RURAL BROADBAND ACCESS

-CITE-

7 USC Sec. 950bb 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 31 - RURAL ELECTRIFICATION AND TELEPHONE SERVICE

SUBCHAPTER VI - RURAL BROADBAND ACCESS

-HEAD-

Sec. 950bb. Access to broadband telecommunications services in

rural areas

-STATUTE-

(a) Purpose

The purpose of this section is to provide loans and loan

guarantees to provide funds for the costs of the construction,

improvement, and acquisition of facilities and equipment for

broadband service in eligible rural communities.

(b) Definitions

In this section:

(1) Broadband service

The term ''broadband service'' means any technology identified

by the Secretary as having the capacity to transmit data to

enable a subscriber to the service to originate and receive

high-quality voice, data, graphics, and video.

(2) Eligible rural community

The term ''eligible rural community'' means any incorporated or

unincorporated place that -

(A) has not more than 20,000 inhabitants, based on the most

recent available population statistics of the Bureau of the

Census; and

(B) is not located in an area designated as a standard

metropolitan statistical area.

(c) Loans and loan guarantees

(1) In general

The Secretary shall make or guarantee loans to eligible

entities described in subsection (d) of this section to provide

funds for the construction, improvement, or acquisition of

facilities and equipment for the provision of broadband service

in eligible rural communities.

(2) Priority

In making or guaranteeing loans under paragraph (1), the

Secretary shall give priority to eligible rural communities in

which broadband service is not available to residential

customers.

(d) Eligible entities

(1) In general

To be eligible to obtain a loan or loan guarantee under this

section, an entity shall -

(A) have the ability to furnish, improve, or extend a

broadband service to an eligible rural community; and

(B) submit to the Secretary a proposal for a project that

meets the requirements of this section.

(2) State and local governments

A State or local government (including any agency, subdivision,

or instrumentality thereof (including consortia thereof)) shall

be eligible for a loan or loan guarantee under this section to

provide broadband services to an eligible rural community only

if, not later than 90 days after the Administrator has

promulgated regulations to carry out this section, no other

eligible entity is already offering, or has committed to offer,

broadband services to the eligible rural community.

(3) Subscriber lines

An entity shall not be eligible to obtain a loan or loan

guarantee under this section if the entity serves more than 2

percent of the telephone subscriber lines installed in the

aggregate in the United States.

(e) Broadband service

The Secretary shall, from time to time as advances in technology

warrant, review and recommend modifications of rate-of-data

transmission criteria for purposes of the identification of

broadband service technologies under subsection (b)(1) of this

section.

(f) Technological neutrality

For purposes of determining whether or not to make a loan or loan

guarantee for a project under this section, the Secretary shall use

criteria that are technologically neutral.

(g) Terms and conditions for loans and loan guarantees

Notwithstanding any other provision of law, a loan or loan

guarantee under subsection (c) of this section shall -

(1) bear interest at an annual rate of, as determined by the

Secretary -

(A) in the case of a direct loan -

(i) the cost of borrowing to the Department of the Treasury

for obligations of comparable maturity; or

(ii) 4 percent; and

(B) in the case of a guaranteed loan, the current applicable

market rate for a loan of comparable maturity; and

(2) have a term not to exceed the useful life of the assets

constructed, improved, or acquired with the proceeds of the loan

or extension of credit.

(h) Use of loan proceeds to refinance loans for deployment of

broadband service

Notwithstanding any other provision of this chapter, the proceeds

of any loan made or guaranteed by the Secretary under this chapter

may be used by the recipient of the loan for the purpose of

refinancing an outstanding obligation of the recipient on another

telecommunications loan made under this chapter if the use of the

proceeds for that purpose will further the construction,

improvement, or acquisition of facilities and equipment for the

provision of broadband service in eligible rural communities.

(i) Reports

Not later than 1 year after May 13, 2002, and biennially

thereafter, the Administrator shall submit to Congress a report

that -

(1) describes how the Administrator determines under subsection

(a)(1) of this section that a service enables a subscriber to

originate and receive high-quality voice, data, graphics, and

video; and

(2) provides a detailed list of services that have been granted

assistance under this section.

(j) Funding

(1) In general

Notwithstanding any other provision of law, of the funds of the

Commodity Credit Corporation, the Secretary shall make available

to carry out this section -

(A) $20,000,000 for each of fiscal years 2002 through 2005,

to remain available until expended; and

(B) $10,000,000 for each of fiscal years 2006 and 2007, to

remain available until expended.

(2) Television funds

(A) In general

The Secretary shall be entitled to receive, shall accept, and

shall use to carry out this section, without further

appropriation any funds made available under section

1109(a)(2)(B) of title 47.

(B) Use of television funds

The Secretary shall use any funds received under subparagraph

(A) in equal amounts for each remaining fiscal year on receipt

of the funds (including the fiscal year of receipt) through

fiscal year 2007.

(3) Authorization of appropriations

In addition to funds otherwise made available under this

subsection, there are authorized to be appropriated such sums as

necessary to carry out this section for each of fiscal years 2003

through 2007.

(4) Allocation of funds

(A) In general

From amounts made available for each fiscal year under this

subsection, the Secretary shall -

(i) establish a national reserve for loans and loan

guarantees to eligible entities in States under this section;

and

(ii) allocate amounts in the reserve to each State for each

fiscal year for loans and loan guarantees to eligible

entities in the State.

(B) Amount

The amount of an allocation made to a State for a fiscal year

under subparagraph (A) shall bear the same ratio to the amount

of allocations made for all States for the fiscal year as the

number of communities with a population of 2,500 inhabitants or

less in the State bears to the number of communities with a

population of 2,500 inhabitants or less in all States, as

determined on the basis of the latest available census.

(C) Unobligated amounts

Any amounts in the reserve established for a State for a

fiscal year under subparagraph (B) that are not obligated by

April 1 of the fiscal year shall be available to the Secretary

to make loans and loan guarantees under this section to

eligible entities in any State, as determined by the Secretary.

(k) Termination of authority

No loan or loan guarantee may be made under this section after

September 30, 2007.

-SOURCE-

(May 20, 1936, ch. 432, title VI, Sec. 601, as added Pub. L.

107-171, title VI, Sec. 6103(a), May 13, 2002, 116 Stat. 415.)

-MISC1-

REGULATIONS

Pub. L. 107-171, title VI, Sec. 6103(b), May 13, 2002, 116 Stat.

418, provided that:

''(1) In general. - Not later than 180 days after the date of

enactment of this Act (May 13, 2002), the Secretary of Agriculture

shall promulgate such regulations as are necessary to implement the

amendment made by subsection (a) (enacting this section).

''(2) Procedure. - The promulgation of the regulations shall be

made without regard to -

''(A) the notice and comment provisions of section 553 of title

5, United States Code;

''(B) the Statement of Policy of the Secretary of Agriculture

effective July 24, 1971 (36 Fed. Reg. 13804), relating to notices

of proposed rulemaking and public participation in rulemaking;

and

''(C) chapter 35 of title 44, United States Code (commonly

known as the 'Paperwork Reduction Act').

''(3) Congressional review of agency rulemaking. - In carrying

out this subsection, the Secretary shall use the authority provided

under section 808 of title 5, United States Code.''

-CITE-