103D CONGRESS

1ST SESSION S. 1167

AN ACT

To amend the Rural Electrification Act of 1936 to

grams, and for other purposes.restructure the electric and telephone loan pro-
103D CONGRESS

1ST SESSION S. 1167

AN ACT

To amend the Rural Electrification Act of 1936 to restructure the electric and telephone loan programs, and for

other purposes.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. SHORT TITLE.

4 This Act may be cited as the ‘‘Rural Electrification

5 Loan Restructuring Act of 1993’’.
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1 SEC. 2. ELECTRIC AND TELEPHONE LOAN PROGRAMS.

2 (a) LOAN PROGRAMS UNDER THE RURAL ELEC3 TRIFICATION ACT OF 1936.—

4 (1) INSURED LOAN PROGRAMS.—Section 305 of

5 the Rural Electrification Act of 1936 (7 U.S.C. 935)

6 is amended—

7 (A) by striking subsections (b) and (d);

8 (B) by redesignating subsection (c) as sub9 section (b); and

10 (C) by inserting after subsection (b) (as so

11 redesignated) the following new subsections:

12 ‘‘(c) INSURED ELECTRIC LOANS.—

13 ‘‘(1) HARDSHIP LOANS.—

14 ‘‘(A) IN GENERAL.—The Administrator

15 shall make insured electric loans, to the extent

16 of qualifying applications for the loans, at an

17 interest rate of 5 percent per year to any appli18 cant for a loan who meets each of the following

19 requirements:

20 ‘‘(i) The average revenue per kilowatt21 hour sold by the applicant is not less than

22 120 percent of the average revenue per kil23 owatt-hour sold by all utilities in the State

24 in which the applicant provides service.

25 ‘‘(ii) The average residential revenue

26 per kilowatt-hour sold by the applicant is
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1 not less than 120 percent of the average

2 residential revenue per kilowatt-hour sold

3 by all utilities in the State in which the ap4 plicant provides service.

5 ‘‘(iii) The average per capita income

6 of the residents receiving electric service

7 from the applicant is less than the average

8 per capita income of the residents of the

9 State in which the applicant provides serv10 ice, or the median household income of the

11 households receiving electric service from

12 the applicant is less than the median

13 household income of the households in the

14 State.

15 ‘‘(B) SEVERE HARDSHIP LOANS.—In addi16 tion to hardship loans that are made under sub17 paragraph (A), the Administrator may make an

18 insured electric loan at an interest rate of 5

19 percent per year to an applicant for a loan if,

20 in the sole discretion of the Administrator, the

21 applicant has experienced a severe hardship.

22 ‘‘(C) LIMITATION.—The Administrator

23 may not make a loan under this paragraph to

24 an applicant for the purpose of furnishing or

25 improving electric service to a consumer located
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1 in an urban area (as defined by the Bureau of

2 the Census) if the average number of consum3 ers per mile of line of the total electric system

4 of the applicant exceeds 17.

5 ‘‘(2) MUNICIPAL RATE LOANS.—

6 ‘‘(A) IN GENERAL.—The Administrator

7 shall make insured electric loans, to the extent

8 of qualifying applications for the loans, at the

9 interest rate described in subparagraph (B) for

10 the term or terms selected by the applicant pur11 suant to subparagraph (C).

12 ‘‘(B) INTEREST RATE.—

13 ‘‘(i) IN GENERAL.—Subject to clause

14 (ii), the interest rate described in this sub15 paragraph on a loan to a qualifying appli16 cant shall be—

17 ‘‘(I) the interest rate determined

18 by the Administrator to be equal to

19 the current market yield on outstand20 ing municipal obligations with remain21 ing periods to maturity similar to the

22 term selected by the applicant pursu23 ant to subparagraph (C), but not

24 greater than the rate determined

25 under section 307(a)(3)(A) of the
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1 Consolidated Farm and Rural Devel2 opment Act (7 U.S.C. 1927(a)(3)(A))

3 that is based on the current market

4 yield on outstanding municipal obliga5 tions; plus

6 ‘‘(II) if the applicant for the loan

7 makes an election pursuant to sub8 paragraph (D) to include in the loan

9 agreement the right of the applicant

10 to prepay the loan, a rate equal to the

11 amount by which—

12 ‘‘(aa) the interest rate on

13 commercial loans for a similar

14 period that afford the borrower

15 such a right; exceeds

16 ‘‘(bb) the interest rate on

17 commercial loans for the period

18 that do not afford the borrower

19 such a right.

20 ‘‘(ii) MAXIMUM RATE.—The interest

21 rate described in this subparagraph on a

22 loan to an applicant for the loan shall not

23 exceed 7 percent if—

24 ‘‘(I) the average number of con25 sumers per mile of line of the total
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1 electric system of the applicant is less

2 than 5.50; or

3 ‘‘(II)(aa) the average revenue per

4 kilowatt-hour sold by the applicant is

5 more than the average revenue per

6 kilowatt-hour sold by all utilities in

7 the State in which the applicant pro8 vides service; and

9 ‘‘(bb) the average per capita in10 come of the residents receiving electric

11 service from the applicant is less than

12 the average per capita income of the

13 residents of the State in which the ap14 plicant provides service, or the median

15 household income of the households

16 receiving electric service from the ap17 plicant is less than the median house18 hold income of the households in the

19 State.

20 ‘‘(iii) EXCEPTION.—Clause (ii) shall

21 not apply to a loan to be made to an appli22 cant for the purpose of furnishing or im23 proving electric service to consumers lo24 cated in an urban area (as defined by the

25 Bureau of the Census) if the average num-
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1 ber of consumers per mile of line of the

2 total electric system of the applicant ex3 ceeds 17.

4 ‘‘(C) LOAN TERM.—

5 ‘‘(i) IN GENERAL.—Subject to clause

6 (ii), the applicant for a loan under this

7 paragraph may select the term for which

8 an interest rate shall be determined pursu9 ant to subparagraph (B), and, at the end

10 of the term (and any succeeding term se11 lected by the applicant under this subpara12 graph), may renew the loan for another

13 term selected by the applicant.

14 ‘‘(ii) MAXIMUM TERM.—

15 ‘‘(I) APPLICANT.—The applicant

16 may not select a term that ends more

17 than 35 years after the beginning of

18 the first term the applicant selects

19 under clause (i).

20 ‘‘(II) ADMINISTRATOR.—The Ad21 ministrator may prohibit an applicant

22 from selecting a term that would re23 sult in the total term of the loan being

24 greater than the expected useful life

25 of the assets being financed.
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1 ‘‘(D) CALL PROVISION.—The Adminis2 trator shall offer any applicant for a loan under

3 this paragraph the option to include in the loan

4 agreement the right of the applicant to prepay

5 the loan on terms consistent with similar provi6 sions of commercial loans.

7 ‘‘(3) OTHER SOURCE OF CREDIT NOT RE8 QUIRED IN CERTAIN CASES.—The Administrator

9 may not require any applicant for a loan made

10 under this subsection who is eligible for a loan under

11 paragraph (1) to obtain a loan from another source

12 as a condition of approving the application for the

13 loan or advancing any amount under the loan.

14 ‘‘(d) INSURED TELEPHONE LOANS.—

15 ‘‘(1) HARDSHIP LOANS.—

16 ‘‘(A) IN GENERAL.—The Administrator

17 shall make insured telephone loans, to the ex18 tent of qualifying applications for the loans, at

19 an interest rate of 5 percent per year, to any

20 applicant who meets each of the following re21 quirements:

22 ‘‘(i) The average number of subscrib23 ers per mile of line in the proposed service

24 area of the applicant is not more than 4.
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1 ‘‘(ii) The applicant is capable of pro2 ducing net income or margins, after inter3 est payments on the loan applied for, of

4 not less than 100 percent (but not more

5 than 300 percent) of the interest require6 ments on all of the outstanding and pro7 posed loans of the applicant.

8 ‘‘(iii) The Administrator has approved

9 a telecommunications modernization plan

10 for the State under paragraph (3) and, if

11 the plan was developed by telephone bor12 rowers under this title, the applicant is a

13 participant in the plan.

14 ‘‘(B) AUTHORITY TO WAIVE TIER RE15 QUIREMENT.—The Administrator may waive

16 the requirement of subparagraph (A)(ii) in any

17 case in which the Administrator determines

18 (and sets forth the reasons for the waiver in

19 writing) that the requirement would prevent

20 emergency restoration of the telephone system

21 of the applicant or result in severe hardship to

22 the applicant.

23 ‘‘(C) EFFECT OF LACK OF FUNDS.—On re24 quest of any applicant who is eligible for a loan

25 under this paragraph for which funds are not
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1 available, the applicant shall be considered to

2 have applied for a loan under title IV.

3 ‘‘(2) COST-OF-MONEY LOANS.—

4 ‘‘(A) IN GENERAL.—The Administrator

5 may make insured telephone loans for the ac6 quisition, purchase, and installation of tele7 phone lines, systems, and facilities (other than

8 buildings used primarily for administrative pur9 poses, vehicles not used primarily in construc10 tion, and customer premise equipment) related

11 to the furnishing, improvement, or extension of

12 rural telecommunications service, at an interest

13 rate equal to the then current cost of money to

14 the Government of the United States for loans

15 of similar maturity, but not more than 7 per16 cent per year, to any applicant for a loan who

17 meets the following requirements:

18 ‘‘(i) The average number of subscrib19 ers per mile of line in the service area of

20 the applicant is not more than 15.

21 ‘‘(ii) The applicant is capable of pro22 ducing net income or margins, before in23 terest payments on the loan applied for, of

24 not less than 100 percent (but not more

25 than 500 percent) of the interest require-
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1 ments on all of the outstanding and pro2 posed loans of the applicant.

3 ‘‘(iii) The Administrator has approved

4 a telecommunications modernization plan

5 for the State under paragraph (3), and, if

6 the plan was developed by telephone bor7 rowers under this title, the applicant is a

8 participant in the plan.

9 ‘‘(B) CALL PROVISION.—The Adminis10 trator shall offer any applicant for a loan under

11 this paragraph the option to include in the loan

12 agreement the right of the applicant to prepay

13 the loan on terms consistent with similar provi14 sions of commercial loans.

15 ‘‘(C) CONCURRENT LOAN AUTHORITY.—On

16 request of any applicant for a loan under this

17 paragraph during any fiscal year, the Adminis18 trator shall—

19 ‘‘(i) consider the application to be for

20 a loan under this paragraph and a loan

21 under section 408; and

22 ‘‘(ii) if the applicant is eligible for a

23 loan, make a loan to the applicant under

24 this paragraph in an amount equal to the

25 amount that bears the same ratio to the
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1 total amount of loans for which the appli2 cant is eligible under this paragraph and

3 under section 408, as the amount made

4 available for loans under this paragraph

5 for the fiscal year bears to the total

6 amount made available for loans under this

7 paragraph and under section 408 for the

8 fiscal year.

9 ‘‘(D) EFFECT OF LACK OF FUNDS.—On

10 request of any applicant who is eligible for a

11 loan under this paragraph for which funds are

12 not available, the applicant shall be considered

13 to have applied for a loan guarantee under sec14 tion 306.

15 ‘‘(3) STATE TELECOMMUNICATIONS MOD16 ERNIZATION PLANS.—

17 ‘‘(A) APPROVAL.—If, not later than 180

18 days after final regulations are promulgated to

19 carry out this paragraph, the public utility com20 mission of any State develops a telecommuni21 cations modernization plan that meets the re22 quirements of subparagraph (B), the Adminis23 trator shall approve the plan for the State. If

24 a State does not develop a plan in accordance

25 with the requirements of the preceding sen-
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1 tence, the Administrator shall approve any tele2 communications modernization plan for the

3 State that meets the requirements that is devel4 oped by a majority of the borrowers of tele5 phone loans made under this title who are lo6 cated in the State.

7 ‘‘(B) REQUIREMENTS.—For purposes of

8 subparagraph (A), a telecommunications mod9 ernization plan must, at a minimum, meet the

10 following objectives:

11 ‘‘(i) The plan must provide for the

12 elimination of party line service.

13 ‘‘(ii) The plan must provide for the

14 availability of telecommunications services

15 for improved business, educational, and

16 medical services.

17 ‘‘(iii) The plan must encourage and

18 improve computer networks and informa19 tion highways for subscribers in rural

20 areas.

21 ‘‘(iv) The plan must provide for—

22 ‘‘(I) subscribers in rural areas to

23 be able to receive through telephone

24 lines—

25 ‘‘(aa) multiple voices;
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1 ‘‘(bb) video images; and

2 ‘‘(cc) data at a rate of at

3 least 1,000,000 bits of informa4 tion per second; and

5 ‘‘(II) the proper routing of infor6 mation to subscribers.

7 ‘‘(v) The plan must provide for uni8 form deployment schedules to ensure that

9 advanced services are deployed at the same

10 time in rural and nonrural areas.

11 ‘‘(vi) The plan must provide for such

12 additional requirements for service stand13 ards as may be required by the Adminis14 trator.

15 ‘‘(C) FINALITY OF APPROVAL.—

16 ‘‘(i) IN GENERAL.—A telecommuni17 cations modernization plan approved under

18 subparagraph (A) may not subsequently be

19 disapproved. Notwithstanding subsection

20 (c)(1)(A)(iii), subsection (c)(2)(A)(iii), and

21 section 408(b)(4)(C), the Administrator

22 and the Governor of the telephone bank

23 may make a loan to a borrower serving a

24 State that does not have a telecommuni25 cation modernization plan approved by the
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1 Administrator if the loan is made less than

2 1 year after the Administrator has adopted

3 final regulations implementing subsection

4 (c)(3).’’.

5 (2) RURAL TELEPHONE BANK LOAN PRO6 GRAM.—Section 408 of such Act (7 U.S.C. 948) is

7 amended—

8 (A) in subsection (a), by striking ‘‘, (2)’’

9 and all that follows through ‘‘408 of this Act,’’

10 and inserting ‘‘, (2) for the acquisition, pur11 chase, and installation of telephone lines, sys12 tems, and facilities (other than buildings used

13 primarily for administrative purposes, vehicles

14 not used primarily in construction, and cus15 tomer premise equipment) related to the fur16 nishing, improvement, or extension of rural tele17 communications service,’’; and

18 (B) in subsection (b)—

19 (i) by striking paragraph (4) and in20 serting the following new paragraph:

21 ‘‘(4) The Governor of the telephone bank may

22 make a loan under this section only to an applicant

23 for the loan who meets the following requirements:
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1 ‘‘(A) The average number of subscribers

2 per mile of line in the service area of the appli3 cant is not more than 15.

4 ‘‘(B) The applicant is capable of producing

5 net income or margins, after interest payments

6 on the loan applied for, of not less than 100

7 percent (but not more than 500 percent) of the

8 interest requirements on all of the outstanding

9 and proposed loans of the applicant.

10 ‘‘(C) The Administrator has approved,

11 under section 305(d)(3), a telecommunications

12 modernization plan for the State in which the

13 applicant is located, and, if the plan was devel14 oped by telephone borrowers under title III, the

15 applicant is a participant in the plan.’’;

16 (ii) in paragraph (8)—

17 (I) by inserting ‘‘(A)’’ after

18 ‘‘(8)’’;

19 (II) by striking ‘‘if such prepay20 ment is not made later than Septem21 ber 30, 1988’’ and inserting ‘‘except

22 for any prepayment penalty provided

23 for in a loan agreement entered into

24 before the date of enactment of the
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1 Omnibus Budget Reconciliation Act of

2 1993’’; and

3 (III) by adding at the end the

4 following new subparagraph:

5 ‘‘(B) If a borrower prepays part or all of a loan

6 made under this section, then, notwithstanding sec7 tion 407(b), the Governor of the telephone bank

8 shall use the full amount of the prepayment to repay

9 obligations of the telephone bank issued pursuant to

10 section 407(b) before October 1, 1991, to the extent

11 any such obligations are outstanding.’’; and

12 (iii) by adding at the end the follow13 ing new paragraphs:

14 ‘‘(9) On request of any applicant for a loan

15 under this section during any fiscal year, the Gov16 ernor of the telephone bank shall—

17 ‘‘(A) consider the application to be for a

18 loan under this section and a loan under section

19 305(d)(2); and

20 ‘‘(B) if the applicant is eligible for a loan,

21 make a loan to the applicant under this section

22 in an amount equal to the amount that bears

23 the same ratio to the total amount of loans for

24 which the applicant is eligible under this section

25 and under section 305(d)(2), as the amount
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1 made available for loans under this section for

2 the fiscal year bears to the total amount made

3 available for loans under this section and under

4 section 305(d)(2) for the fiscal year.

5 ‘‘(10) On request of any applicant who is eligi6 ble for a loan under this section for which funds are

7 not available, the applicant shall be considered to

8 have applied for a loan under section 305(d)(2).’’.

9 (3) FUNDING.—Section 314 of such Act (7

10 U.S.C. 940d) is amended to read as follows:

11 ‘‘SEC. 314. LIMITATIONS ON AUTHORIZATION OF APPRO12 PRIATIONS.

13 ‘‘(a) DEFINITION OF ADJUSTMENT PERCENTAGE.—

14 As used in this section, the term ‘adjustment percentage’

15 means, with respect to a fiscal year, the percentage (if

16 any) by which—

17 ‘‘(1) the average of the Consumer Price Index

18 (as defined in section 1(f)(5) of the Internal Reve19 nue Code of 1986) for the 1-year period ending on

20 July 31 of the immediately preceding fiscal year; ex21 ceeds

22 ‘‘(2) the average of the Consumer Price Index

23 (as so defined) for the 1-year period ending on July

24 31, 1993.
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1 ‘‘(b) FISCAL YEARS 1994 THROUGH 1998.—In the

2 case of each of fiscal years 1994 through 1998, there are

3 authorized to be appropriated to the Administrator such

4 sums as may be necessary for the cost of loans in the fol5 lowing amounts, for the following purposes:

6 ‘‘(1) ELECTRIC HARDSHIP LOANS.—For loans

7 under section 305(c)(1)—

8 ‘‘(A) for fiscal year 1994, $125,000,000;

9 and

10 ‘‘(B) for each of fiscal years 1995 through

11 1998, $125,000,000, increased by the adjust12 ment percentage for the fiscal year.

13 ‘‘(2) ELECTRIC MUNICIPAL RATE LOANS.—For

14 loans under section 305(c)(2)—

15 ‘‘(A) for fiscal year 1994, $600,000,000;

16 and

17 ‘‘(B) for each of fiscal years 1995 through

18 1998, $600,000,000, increased by the adjust19 ment percentage for the fiscal year.

20 ‘‘(3) TELEPHONE HARDSHIP LOANS.—For

21 loans under section 305(d)(1)—

22 ‘‘(A) for fiscal year 1994, $125,000,000;

23 and
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1 ‘‘(B) for each of fiscal years 1995 through

2 1998, $125,000,000, increased by the adjust3 ment percentage for the fiscal year.

4 ‘‘(4) TELEPHONE COST-OF-MONEY LOANS.—

5 For loans under section 305(d)(2)—

6 ‘‘(A) for fiscal year 1994, $198,000,000;

7 and

8 ‘‘(B) for each of fiscal years 1995 through

9 1998, $198,000,000, increased by the adjust10 ment percentage for the fiscal year.

11 ‘‘(c) FUNDING LEVELS.—The Administrator shall

12 make insured loans under this title for the purposes, in

13 the amounts, and for the periods of time specified in sub14 section (b), as provided in advance in appropriations Acts.

15 ‘‘(d) AVAILABILITY OF FUNDS FOR INSURED

16 LOANS.—Amounts made available for loans under section

17 305 are authorized to remain available until expended.’’.

18 (4) MISCELLANEOUS AMENDMENTS.—

19 (A) Section 2 of such Act (7 U.S.C. 902)

20 is amended—

21 (i) by inserting ‘‘(a)’’ before ‘‘The Ad22 ministrator’’;

23 (ii) by striking ‘‘telephone service in

24 rural areas, as hereinafter provided;’’ and

25 inserting ‘‘electric and telephone service in
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1 rural areas, as provided in this Act, and

2 for the purpose of assisting electric bor3 rowers to implement demand side manage4 ment and energy conservation programs;’’;

5 and

6 (iii) by adding at the end the follow7 ing new subsection:

8 ‘‘(b) Not later than January 1, 1994, the Adminis9 trator shall issue interim regulations to implement the au10 thority contained in subsection (a) to make loans for the

11 purpose of assisting electric borrowers to implement de12 mand side management and energy conservation pro13 grams. If the regulations are not issued by January 1,

14 1994, the Administrator shall consider any demand side

15 management program that is approved by a State agency

16 to be eligible for the loans.’’.

17 (B) Section 4 of such Act (7 U.S.C. 904)

18 is amended by inserting after ‘‘central station

19 service’’ the following: ‘‘and for the furnishing

20 and improving of electric service to persons in

21 rural areas, including by assisting electric bor22 rowers to implement demand side management

23 and energy conservation programs’’.

24 (C) Section 13 of such Act (7 U.S.C. 913)

25 is amended—
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1 (i) by inserting ‘‘, except as provided

2 in section 203(b),’’ before ‘‘shall be deemed

3 to mean any area’’; and

4 (ii) by striking ‘‘city, village, or bor5 ough having a population in excess of fif6 teen hundred inhabitants’’ and inserting

7 ‘‘urban area, as defined by the Bureau of

8 the Census’’.

9 (D) Section 203(b) of such Act (7 U.S.C.

10 924(b)) is amended by striking ‘‘one thousand

11 five hundred’’ and inserting ‘‘5,000’’.

12 (E) Section 305 of such Act (7 U.S.C.

13 935) (as amended by subsection (a)(1)) is fur14 ther amended—

15 (i) by striking ‘‘SEC. 305. INSURED

16 LOANS; INTEREST RATES AND LENDING

17 LEVELS.—(a) The’’ and inserting the fol18 lowing:

19 ‘‘SEC. 305. INSURED LOANS; INTEREST RATES AND LEND20 ING LEVELS.

21 ‘‘(a) IN GENERAL.—The’’; and

22 (ii) in subsection (b), by striking ‘‘(b)

23 Loans’’ and inserting ‘‘(b) INSURED

24 LOANS.—Loans’’.
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1 (F) Section 307 of such Act (7 U.S.C.

2 937) is amended by adding at the end the fol3 lowing new sentence: ‘‘The Administrator may

4 not request any applicant for an electric loan

5 under this Act to apply for and accept a loan

6 in an amount exceeding 30 percent of the credit

7 needs of the applicant.’’.

8 (G) Section 406 of such Act (7 U.S.C.

9 946) is amended by adding at the end the fol10 lowing new subsection:

11 ‘‘(i) The Governor of the telephone bank may invest

12 in obligations of the United States the amounts in the ac13 count in the Treasury of the United States numbered

14 12X8139 (known as the ‘RTB Equity Fund’).’’.

15 (H) Section 18 of such Act (7 U.S.C. 918)

16 is amended—

17 (i) by inserting ‘‘(a) NO CONSIDER18 ATION OF BORROWER’S LEVEL OF GEN19 ERAL FUNDS.—’’ before ‘‘The Adminis20 trator’’; and

21 (ii) by adding at the end the following

22 new subsections:

23 ‘‘(b) NO LOAN ORIGINATION FEES.—The Adminis24 trator and the Governor of the telephone bank may not

25 charge any fee or charge not expressly provided in this
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1 Act in connection with any loan made or guaranteed under

2 this Act.

3 ‘‘(c) CONSULTANTS.—

4 ‘‘(1) IN GENERAL.—To facilitate timely action

5 on applications by borrowers for financial assistance

6 under this Act and for approvals required of the

7 agency pursuant to the terms of outstanding loan or

8 security instruments or otherwise, the Administrator

9 may use consultants funded by the borrower, paid

10 for out of the general funds of the borrower, for fi11 nancial, legal, engineering, and other technical ad12 vice and services in connection with the review of the

13 application by the Rural Electrification Administra14 tion.

15 ‘‘(2) CONFLICTS OF INTEREST.—The Adminis16 trator shall establish procedures for the selection

17 and the provision of technical services by consultants

18 to ensure that the consultants have no financial or

19 other potential conflicts of interest in the outcome of

20 the application of the borrower.

21 ‘‘(3) PAYMENT OF COSTS.—The Administrator

22 may not, without the consent of the borrower, re23 quire, as a condition of processing an application for

24 approval, that the borrower agree to pay the costs,
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1 fees, and expenses of consultants hired to provide

2 technical or advisory services to the Administrator.

3 ‘‘(4) CONTRACTS, GRANTS, AND AGREE4 MENTS.—The Administrator may enter into such

5 contracts, grants, or cooperative agreements as are

6 necessary to carry out this section without regard to

7 any requirement for competition, section 3709 of the

8 Revised Statutes (41 U.S.C. 5) and section 3324 of

9 title 31, United States Code.

10 ‘‘(5) USE OF CONSULTANTS.—Nothing in this

11 subsection shall limit the authority of the Adminis12 trator to retain the services of consultants from

13 funds made available to the Administrator or other14 wise.’’.

15 (I) Title III of such Act is amended by in16 serting after section 306B (7 U.S.C. 936b) the

17 following new sections:

18 ‘‘SEC. 306C. ELIGIBILITY OF DISTRIBUTION BORROWERS

19 FOR LOANS, LOAN GUARANTEES, AND LIEN

20 ACCOMMODATIONS.

21 ‘‘For the purpose of determining the eligibility of a

22 distribution borrower not in default on the repayment of

23 a loan made or guaranteed under this Act for a loan, loan

24 guarantee, or lien accommodation under this title, a de-
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1 fault by a borrower from which the distribution borrower

2 purchases wholesale power shall not—

3 ‘‘(1) be considered a default by the distribution

4 borrower;

5 ‘‘(2) reduce the eligibility of the distribution

6 borrower for assistance under this Act; or

7 ‘‘(3) be the cause, directly or indirectly, of im8 posing any requirement or restriction on the bor9 rower as a condition of the assistance, except such

10 requirements or restrictions as are necessary to im11 plement a debt restructuring agreed on by the power

12 supply borrower and the Government.

13 ‘‘SEC. 306D. ADMINISTRATIVE PROHIBITIONS APPLICABLE

14 TO ELECTRIC BORROWERS.

15 ‘‘The Administrator may not require prior approval

16 of, impose any requirement, restriction, or prohibition with

17 respect to the operations of, or deny or delay the granting

18 of a lien accommodation to, any electric borrower under

19 this Act whose net worth exceeds 110 percent of the out20 standing principal balance on all loans made or guaran21 teed to the borrower by the Administrator.’’.

22 (b) EXPANDED ELIGIBILITY FOR LOANS FOR WATER

23 AND WASTE DISPOSAL FACILITIES.—Section 306(a)(1) of

24 the Consolidated Farm and Rural Development Act (7

25 U.S.C. 1926(a)(1)) is amended by inserting after the first
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1 sentence the following new sentence: ‘‘The Secretary may

2 also make loans to any borrower to whom a loan has been

3 made under the Rural Electrification Act of 1936 (7

4 U.S.C. 901 et seq.), for the conservation, development,

5 use, and control of water, and the installation of drainage

6 or waste disposal facilities, primarily serving farmers,

7 ranchers, farm tenants, farm laborers, rural businesses,

8 and other rural residents.’’.

9 (c) RURAL ECONOMIC DEVELOPMENT.—Section 364

10 of the Consolidated Farm and Rural Development Act (7

11 U.S.C. 2006f) is amended by adding at the end the follow12 ing new subsection:

13 ‘‘(g) RURAL ECONOMIC DEVELOPMENT.—

14 ‘‘(1) IN GENERAL.—A borrower of a loan or

15 loan guarantee under the Rural Electrification Act

16 of 1936 (7 U.S.C. 901 et seq.) shall be eligible for

17 assistance under all programs administered by the

18 Rural Development Administration.

19 ‘‘(2) PARTICIPATION.—The Administrator of

20 the Rural Development Administration shall encour21 age and facilitate the full participation of borrowers

22 referred to in paragraph (1) in programs adminis23 tered by the Rural Development Administration.’’.

24 (d) REGULATIONS.—Not later than October 1, 1993,

25 interim final rules shall be issued by—
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1 (1) the Administrator of the Rural Electrifica2 tion Administration in the case of amendments made

3 by this section to programs administered by the Ad4 ministrator; and

5 (2) the Administrator of the Rural Development

6 Administration in the case of amendments made by

7 this section to programs administered by the Admin8 istrator.

9 (e) CONTINGENT EFFECTIVE DATE.—This section

10 and the amendments made by this section shall not be11 come effective if section 1202 (as reported by the Commit12 tee on the Budget of the Senate) is enacted.

Passed the Senate June 25 (legislative day, June

22), 1993.

Attest:

Secretary.
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