I

103D CONGRESS

1ST SESSION H. R. 3123

To increase the interest rates electric and telephone borrowers pay under

the lending programs administered by the Rural Electrification Administration and otherwise restructure the lending programs carried out by

that Administration.

IN THE HOUSE OF REPRESENTATIVES

SEPTEMBER 22, 1993

Mr. DE LA GARZA (for himself, Mr. ROBERTS, Mr. ENGLISH of Oklahoma,

Mr. COMBEST, and Mr. BOEHNER) introduced the following bill; which

was referred to the Committee on Agriculture

A BILL

To increase the interest rates electric and telephone borrowers pay under the lending programs administered by

the Rural Electrification Administration and otherwise

restructure the lending programs carried out by that

Administration.

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’’.

6 SEC. 2. ELECTRIC AND TELEPHONE LOAN PROGRAMS.

7 (a) INSURED ELECTRIC AND TELEPHONE LOANS.—
2

HR 3123 IH

1 (1) IN GENERAL.—Section 305 of the Rural

2 Electrification Act of 1936 (7 U.S.C. 935) is amend3 ed—

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

5 (B) by redesignating subsection (c) as sub6 section (b); and

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

8 redesignated) the following new subsections:

9 ‘‘(c) INSURED ELECTRIC LOANS.—

10 ‘‘(1) HARDSHIP LOANS.—

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

12 shall make insured electric loans, to the extent

13 of qualifying applications for the loans, at an

14 interest rate of 5 percent per year to any appli15 cant for a loan who meets each of the following

16 requirements:

17 ‘‘(i) The average revenue per kilowatt18 hour sold by the applicant is not less than

19 120 percent of the average revenue per kil20 owatt-hour sold by all utilities in the State

21 in which the applicant provides service.

22 ‘‘(ii) The average residential revenue

23 per kilowatt-hour sold by the applicant is

24 not less than 120 percent of the average

25 residential revenue per kilowatt-hour sold
3

HR 3123 IH

1 by all utilities in the State in which the ap2 plicant provides service.

3 ‘‘(iii) The average per capita income

4 of the residents receiving electric service

5 from the applicant is less than the average

6 per capita income of the residents of the

7 State in which the applicant provides serv8 ice, or the median household income of the

9 households receiving electric service from

10 the applicant is less than the median

11 household income of the households in the

12 State.

13 ‘‘(B) SEVERE HARDSHIP LOANS.—In addi14 tion to hardship loans that are made under sub15 paragraph (A), the Administrator may make an

16 insured electric loan at an interest rate of 5

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

18 in the sole discretion of the Administrator, the

19 applicant has experienced a severe hardship.

20 ‘‘(C) LIMITATION.—The Administrator

21 may not make a loan under this paragraph to

22 an applicant for the purpose of furnishing or

23 improving electric service to a consumer located

24 in an urban area (as defined by the Bureau of

25 the Census) if the average number of consum-
4

HR 3123 IH

1 ers per mile of line of the total electric system

2 of the applicant exceeds 17.

3 ‘‘(2) MUNICIPAL RATE LOANS.—

4 ‘‘(A) IN GENERAL.—The Administrator

5 shall make insured electric loans, to the extent

6 of qualifying applications for the loans, at the

7 interest rate described in subparagraph (B) for

8 the term or terms selected by the applicant pur9 suant to subparagraph (C).

10 ‘‘(B) INTEREST RATE.—

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

12 (ii), the interest rate described in this sub13 paragraph on a loan to a qualifying appli14 cant shall be—

15 ‘‘(I) the interest rate determined

16 by the Administrator to be equal to

17 the current market yield on outstand18 ing municipal obligations with remain19 ing periods to maturity similar to the

20 term selected by the applicant pursu21 ant to subparagraph (C), but not

22 greater than the rate determined

23 under section 307(a)(3)(A) of the

24 Consolidated Farm and Rural Devel25 opment Act (7 U.S.C. 1927(a)(3)(A))
5

HR 3123 IH

1 that is based on the current market

2 yield on outstanding municipal obliga3 tions; plus

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

5 makes an election pursuant to sub6 paragraph (D) to include in the loan

7 agreement the right of the applicant

8 to prepay the loan, a rate equal to the

9 amount by which—

10 ‘‘(aa) the interest rate on

11 commercial loans for a similar

12 period that afford the borrower

13 such a right; exceeds

14 ‘‘(bb) the interest rate on

15 commercial loans for the period

16 that do not afford the borrower

17 such a right.

18 ‘‘(ii) MAXIMUM RATE.—The interest

19 rate described in this subparagraph on a

20 loan to an applicant for the loan shall not

21 exceed 7 percent if—

22 ‘‘(I) the average number of con23 sumers per mile of line of the total

24 electric system of the applicant is less

25 than 5.50; or
6

HR 3123 IH

1 ‘‘(II)(aa) the average revenue per

2 kilowatt-hour sold by the applicant is

3 more than the average revenue per

4 kilowatt-hour sold by all utilities in

5 the State in which the applicant pro6 vides service; and

7 ‘‘(bb) the average per capita in8 come of the residents receiving electric

9 service from the applicant is less than

10 the average per capita income of the

11 residents of the State in which the ap12 plicant provides service, or the median

13 household income of the households

14 receiving electric service from the ap15 plicant is less than the median house16 hold income of the households in the

17 State.

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

19 not apply to a loan to be made to an appli20 cant for the purpose of furnishing or im21 proving electric service to consumers lo22 cated in an urban area (as defined by the

23 Bureau of the Census) if the average num24 ber of consumers per mile of line of the
7

HR 3123 IH

1 total electric system of the applicant ex2 ceeds 17.

3 ‘‘(C) LOAN TERM.—

4 ‘‘(i) IN GENERAL.—Subject to clause

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

6 paragraph may select the term for which

7 an interest rate shall be determined pursu8 ant to subparagraph (B), and, at the end

9 of the term (and any succeeding term se10 lected by the applicant under this subpara11 graph), may renew the loan for another

12 term selected by the applicant.

13 ‘‘(ii) MAXIMUM TERM.—

14 ‘‘(I) APPLICANT.—The applicant

15 may not select a term that ends more

16 than 35 years after the beginning of

17 the first term the applicant selects

18 under clause (i).

19 ‘‘(II) ADMINISTRATOR.—The Ad20 ministrator may prohibit an applicant

21 from selecting a term that would re22 sult in the total term of the loan being

23 greater than the expected useful life

24 of the assets being financed.
8

HR 3123 IH

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 service area of

24 the applicant is not more than 4.
9

HR 3123 IH

1 ‘‘(ii) The applicant is capable of pro2 ducing net income or margins before inter3 est of not less than 100 percent (but not

4 more than 300 percent) of the interest re5 quirements on all of the outstanding and

6 proposed loans of the applicant.

7 ‘‘(iii) The Administrator has approved

8 a telecommunications modernization plan

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

10 the plan was developed by telephone bor11 rowers under this title, the applicant is a

12 participant in the plan.

13 ‘‘(iv) The average number of subscrib14 ers per mile of line in the area included in

15 the proposed loan is not more than 17.

16 ‘‘(B) AUTHORITY TO WAIVE TIER RE17 QUIREMENT.—The Administrator may waive

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

19 case in which the Administrator determines

20 (and sets forth the reasons for the waiver in

21 writing) that the requirement would prevent

22 emergency restoration of the telephone system

23 of the applicant or result in severe hardship to

24 the applicant.
10

HR 3123 IH

1 ‘‘(C) EFFECT OF LACK OF FUNDS.—On re2 quest of any applicant who is eligible for a loan

3 under this paragraph for which funds are not

4 available, the applicant shall be considered to

5 have applied for a loan under title IV.

6 ‘‘(2) COST-OF-MONEY LOANS.—

7 ‘‘(A) IN GENERAL.—The Administrator

8 may make insured telephone loans for the ac9 quisition, purchase, and installation of tele10 phone lines, systems, and facilities (other than

11 buildings used primarily for administrative pur12 poses, vehicles not used primarily in construc13 tion, and customer premise equipment) related

14 to the furnishing, improvement, or extension of

15 rural telecommunications service, at an interest

16 rate equal to the then current cost of money to

17 the Government of the United States for loans

18 of similar maturity, but not more than 7 per19 cent per year, to any applicant for a loan who

20 meets the following requirements:

21 ‘‘(i) The average number of subscrib22 ers per mile of line in the service area of

23 the applicant is not more than 15.

24 ‘‘(ii) The applicant is capable of pro25 ducing net income or margins before inter-
11

HR 3123 IH

1 est of not less than 100 percent (but not

2 more than 500 percent) of the interest re3 quirements on all of the outstanding and

4 proposed loans of the applicant.

5 ‘‘(iii) The Administrator has approved

6 a telecommunications modernization plan

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

8 the plan was developed by telephone bor9 rowers under this title, the applicant is a

10 participant in the plan.

11 ‘‘(B) CONCURRENT LOAN AUTHORITY.—

12 On request of any applicant for a loan under

13 this paragraph during any fiscal year, the Ad14 ministrator shall—

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

16 a loan under this paragraph and a loan

17 under section 408; and

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

19 loan, make a loan to the applicant under

20 this paragraph in an amount equal to the

21 amount that bears the same ratio to the

22 total amount of loans for which the appli23 cant is eligible under this paragraph and

24 under section 408, as the amount made

25 available for loans under this paragraph
12

HR 3123 IH

1 for the fiscal year bears to the total

2 amount made available for loans under this

3 paragraph and under section 408 for the

4 fiscal year.

5 ‘‘(C) EFFECT OF LACK OF FUNDS.—On re6 quest of any applicant who is eligible for a loan

7 under this paragraph for which funds are not

8 available, the applicant shall be considered to

9 have applied for a loan guarantee under section

10 306.

11 ‘‘(3) STATE TELECOMMUNICATIONS MOD12 ERNIZATION PLANS.—

13 ‘‘(A) APPROVAL.—If, not later than 1 year

14 after final regulations are promulgated to carry

15 out this paragraph, the public utility commis16 sion of any State develops a telecommunications

17 modernization plan that meets the requirements

18 of subparagraph (B), the Administrator shall

19 approve the plan for the State. If a State does

20 not develop a plan in accordance with the re21 quirements of the preceding sentence, the Ad22 ministrator shall approve any telecommuni23 cations modernization plan for the State that

24 meets the requirements that is developed by a

25 majority of the borrowers of telephone loans
13

HR 3123 IH

1 made under this title who are located in the

2 State.

3 ‘‘(B) REQUIREMENTS.—For purposes of

4 subparagraph (A), a telecommunications mod5 ernization plan must, at a minimum, meet the

6 following objectives:

7 ‘‘(i) The plan must provide for the

8 elimination of party line service.

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

10 availability of telecommunications services

11 for improved business, educational, and

12 medical services.

13 ‘‘(iii) The plan must encourage and

14 improve computer networks and informa15 tion highways for subscribers in rural

16 areas.

17 ‘‘(iv) The plan must provide for—

18 ‘‘(I) subscribers in rural areas to

19 be able to receive through telephone

20 lines—

21 ‘‘(aa) multiple voices;

22 ‘‘(bb) video images; and

23 ‘‘(cc) data at a rate of at

24 least 1,000,000 bits of informa25 tion per second; and
14

HR 3123 IH

1 ‘‘(II) the proper routing of infor2 mation to subscribers.

3 ‘‘(v) The plan must provide for uni4 form deployment schedules to ensure that

5 advanced services are deployed at the same

6 time in rural and nonrural areas.

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

8 additional requirements for service stand9 ards as may be required by the Adminis10 trator.

11 ‘‘(C) FINALITY OF APPROVAL.—A tele12 communications modernization plan approved

13 under subparagraph (A) may not subsequently

14 be disapproved. Notwithstanding paragraphs

15 (1)(A)(iii) and (2)(A)(iii), and section

16 408(b)(4)(C), the Administrator and the Gov17 ernor of the telephone bank may make a loan

18 to a borrower serving a State that does not

19 have a telecommunication modernization plan

20 approved by the Administrator if the loan is

21 made less than 1 year after the Administrator

22 has adopted final regulations implementing this

23 paragraph.’’.
15

HR 3123 IH

1 (2) RURAL TELEPHONE BANK LOAN PRO2 GRAM.—Section 408 of such Act (7 U.S.C. 948) is

3 amended—

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

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

6 and inserting ‘‘, (2) for the acquisition, pur7 chase, and installation of telephone lines, sys8 tems, and facilities (other than buildings used

9 primarily for administrative purposes, vehicles

10 not used primarily in construction, and cus11 tomer premise equipment) related to the fur12 nishing, improvement, or extension of rural tele13 communications service,’’;

14 (B) in subsection (b)—

15 (i) by striking paragraph (4) and in16 serting the following new paragraph:

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

18 make a loan under this section only to an applicant

19 for the loan who meets the following requirements:

20 ‘‘(A) The average number of subscribers

21 per mile of line in the service area of the appli22 cant is not more than 15.

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

24 net income or margins before interest of not

25 less than 100 percent (but not more than 500
16

HR 3123 IH

1 percent) of the interest requirements on all of

2 the outstanding and proposed loans of the ap3 plicant.

4 ‘‘(C) The Administrator has approved,

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

6 modernization plan for the State in which the

7 applicant is located and, if the plan was devel8 oped by telephone borrowers under title III, the

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

10 (ii) in paragraph (8)—

11 (I) by inserting ‘‘(A)’’ after

12 ‘‘(8)’’;

13 (II) by striking ‘‘if such prepay14 ment is not made later than Septem15 ber 30, 1988’’ and inserting ‘‘except

16 for any prepayment penalty provided

17 for in a loan agreement entered into

18 before the date of enactment of the

19 Omnibus Budget Reconciliation Act of

20 1993’’; and

21 (III) by adding at the end the

22 following new subparagraph:

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

24 made under this section, then, notwithstanding sec-
17

HR 3123 IH

1 tion 407(b), the Governor of the telephone bank

2 shall—

3 ‘‘(i) use the full amount of the prepayment

4 to repay obligations of the telephone bank is5 sued pursuant to section 407(b) before October

6 1, 1991, to the extent any such obligations are

7 outstanding; and

8 ‘‘(ii) in repaying the obligations, first repay

9 the advances bearing the greatest rate of inter10 est.’’; and

11 (iii) by adding at the end the follow12 ing new paragraphs:

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

14 under this section during any fiscal year, the Gov15 ernor of the telephone bank shall—

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

17 loan under this section and a loan under section

18 305(d)(2); and

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

20 make a loan to the applicant under this section

21 in an amount equal to the amount that bears

22 the same ratio to the total amount of loans for

23 which the applicant is eligible under this section

24 and under section 305(d)(2), as the amount

25 made available for loans under this section for
18

HR 3123 IH

1 the fiscal year bears to the total amount made

2 available for loans under this section and under

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

4 ‘‘(10) On request of any applicant who is eligi5 ble for a loan under this section for which funds are

6 not available, the applicant shall be considered to

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

8 and

9 (C) by adding at the end the following new

10 subsection:

11 ‘‘(e) Loans and advances made under this section on

12 or after November 5, 1990, shall bear interest at a rate

13 determined under this section, taking into account all as14 sets and liabilities of the telephone bank. This subsection

15 shall not apply to loans obligated before the date of enact16 ment of this subsection. Funds are not authorized to be

17 appropriated to carry out this subsection until the funds

18 are appropriated in advance to carry out this subsection.’’.

19 (b) FUNDING.—

20 (1) LIMITATIONS ON AUTHORIZATION OF AP21 PROPRIATIONS.—Section 314 of such Act (7 U.S.C.

22 940d) is amended to read as follows:
19

HR 3123 IH

1 ‘‘SEC. 314. LIMITATIONS ON AUTHORIZATION OF APPRO2 PRIATIONS.

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

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

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

6 any) by which—

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

8 (as defined in section 1(f)(5) of the Internal Reve9 nue Code of 1986) for the 1-year period ending on

10 July 31 of the immediately preceding fiscal year;

11 exceeds

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

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

14 31, 1993.

15 ‘‘(b) FISCAL YEARS 1994 THROUGH 1998.—In the

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

17 authorized to be appropriated to the Administrator such

18 sums as may be necessary for the cost of loans in the

19 following amounts, for the following purposes:

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

21 under section 305(c)(1)—

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

23 and

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

25 1998, $125,000,000, increased by the adjust26 ment percentage for the fiscal year.
20

HR 3123 IH

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

2 loans under section 305(c)(2)—

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

4 and

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

6 1998, $600,000,000, increased by the adjust7 ment percentage for the fiscal year.

8 ‘‘(3) TELEPHONE HARDSHIP LOANS.—For

9 loans under section 305(d)(1)—

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

11 and

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

13 1998, $125,000,000, increased by the adjust14 ment percentage for the fiscal year.

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

16 For loans under section 305(d)(2)—

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

18 and

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

20 1998, $198,000,000, increased by the adjust21 ment percentage for the fiscal year.

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

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

24 the amounts, and for the periods of time specified in sub25 section (b), as provided in advance in appropriations Acts.
21

HR 3123 IH

1 ‘‘(d) AVAILABILITY OF FUNDS FOR INSURED

2 LOANS.—Amounts made available for loans under section

3 305 are authorized to remain available until expended.’’.

4 (2) RULE OF INTERPRETATION.—Section

5 309(a) of such Act (7 U.S.C. 939(a)) is amended by

6 adding at the end the following new sentence: ‘‘The

7 preceding sentence shall not be construed to make

8 section 408(b)(2) or 412 applicable to this title.’’.

9 (c) MISCELLANEOUS AMENDMENTS.—

10 (1) LOANS FOR RURAL ELECTRIFICATION.—

11 Section 2 of such Act (7 U.S.C. 902) is amended—

12 (A) by inserting ‘‘(a)’’ before ‘‘The Admin13 istrator’’;

14 (B) by striking ‘‘telephone service in rural

15 areas, as hereinafter provided;’’ and inserting

16 ‘‘electric and telephone service in rural areas, as

17 provided in this Act, and for the purpose of as18 sisting electric borrowers to implement demand

19 side management, energy conservation pro20 grams, and on-grid and off-grid renewable en21 ergy systems;’’; and

22 (C) by adding at the end the following new

23 subsection:

24 ‘‘(b) By January 1, 1994, the Administrator shall

25 issue interim regulations to implement the authority con-
22

HR 3123 IH

1 tained in subsection (a) to make loans for the purpose of

2 assisting electric borrowers to implement demand side

3 management, energy conservation programs, and on-grid

4 and off-grid renewable energy systems. If the regulations

5 are not issued by January 1, 1994, the Administrator

6 shall consider any demand side management, energy con7 servation, or renewable energy program, system, or activ8 ity that is approved by a State agency to be eligible for

9 the loans.’’.

10 (2) LOANS FOR ELECTRICAL PLANTS AND

11 TRANSMISSION LINES.—Section 4 of such Act (7

12 U.S.C. 904) is amended by inserting after ‘‘central

13 station service’’ the following: ‘‘and for the furnish14 ing and improving of electric service to persons in

15 rural areas, including by assisting electric borrowers

16 to implement demand side management, energy con17 servation programs, and on-grid and off-grid renew18 able energy systems’’.

19 (3) DEFINITIONS.—Section 13 of such Act (7

20 U.S.C. 913) is amended—

21 (A) by inserting ‘‘, except as provided in

22 section 203(b),’’ before ‘‘shall be deemed to

23 mean any area’’; and

24 (B) by striking ‘‘city, village, or borough

25 having a population in excess of fifteen hundred
23

HR 3123 IH

1 inhabitants’’ and inserting ‘‘urban area, as de2 fined by the Bureau of the Census’’.

3 (4) GENERAL PROHIBITIONS.—Section 18 of

4 such Act (7 U.S.C. 918) is amended—

5 (A) by inserting ‘‘(a) NO CONSIDERATION

6 OF BORROWER’S LEVEL OF GENERAL

7 FUNDS.—’’ before ‘‘The Administrator’’; and

8 (B) by adding at the end the following new

9 subsections:

10 ‘‘(b) LOAN ORIGINATION FEES.—The Administrator

11 and the Governor of the telephone bank may not charge

12 any fee or charge not expressly provided in this Act in

13 connection with any loan made or guaranteed under this

14 Act.

15 ‘‘(c) CONSULTANTS.—

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

17 on applications by borrowers for financial assistance

18 under this Act and for approvals required of the

19 Rural Electrification Administration pursuant to the

20 terms of outstanding loan or security instruments or

21 otherwise, the Administrator may use consultants

22 funded by the borrower, paid for out of the general

23 funds of the borrower, for financial, legal, engineer24 ing, and other technical advice and services in con-
24

HR 3123 IH

1 nection with the review of the application by the

2 Rural Electrification Administration.

3 ‘‘(2) CONFLICTS OF INTEREST.—The Adminis4 trator shall establish procedures for the selection

5 and the provision of technical services by consultants

6 to ensure that the consultants have no financial or

7 other potential conflicts of interest in the outcome of

8 the application of the borrower.

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

10 may not, without the consent of the borrower, re11 quire, as a condition of processing an application for

12 approval, that the borrower agree to pay the costs,

13 fees, and expenses of consultants hired to provide

14 technical or advisory services to the Administrator.

15 ‘‘(4) CONTRACTS, GRANTS, AND AGREE16 MENTS.—The Administrator may enter into such

17 contracts, grants, or cooperative agreements as are

18 necessary to carry out this section.

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

20 subsection shall limit the authority of the Adminis21 trator to retain the services of consultants from

22 funds made available to the Administrator or other23 wise.’’.

24 (5) DEFINITION OF RURAL AREA.—Section

25 203(b) of such Act (7 U.S.C. 924(b)) is amended by
25

HR 3123 IH

1 striking ‘‘one thousand five hundred’’ and inserting

2 ‘‘5,000’’.

3 (6) INSURED LOANS.—Section 305 of such Act

4 (7 U.S.C. 935) (as amended by subsection (a)(1)) is

5 further amended—

6 (A) by striking ‘‘SEC. 305. INSURED

7 LOANS; INTEREST RATES AND LENDING LEV8 ELS.—(a) The’’ and inserting the following:

9 ‘‘SEC. 305. INSURED LOANS; INTEREST RATES AND LEND10 ING LEVELS.

11 ‘‘(a) IN GENERAL.—The’’; and

12 (B) in subsection (b), by striking ‘‘(b)

13 Loans’’ and inserting ‘‘(b) INSURED LOANS.—

14 Loans’’.

15 (7) ELIGIBILITY OF DISTRIBUTION BORROW16 ERS; ADMINISTRATIVE PROHIBITIONS.—Title III of

17 such Act is amended by inserting after section 306B

18 (7 U.S.C. 936b) the following new sections:

19 ‘‘SEC. 306D. ELIGIBILITY OF DISTRIBUTION BORROWERS

20 FOR LOANS, LOAN GUARANTEES, AND LIEN

21 ACCOMMODATIONS.

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

23 distribution borrower not in default on the repayment of

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

25 guarantee, or lien accommodation under this title, a de-
26

HR 3123 IH

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. 306E. 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 (8) LOANS FROM OTHER CREDIT SOURCES.—

23 Section 307 of such Act (7 U.S.C. 937) is amended

24 by adding at the end the following new sentence:

25 ‘‘The Administrator may not request any applicant
27

HR 3123 IH

1 for an electric loan under this Act to apply for and

2 accept a loan in an amount exceeding 30 percent of

3 the credit needs of the applicant.’’.

4 (9) CAPITALIZATION.—Section 406 of such Act

5 (7 U.S.C. 946) is amended by adding at the end the

6 following new subsection:

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

8 in obligations of the United States the amounts in the ac9 count in the Treasury of the United States numbered

10 12X8139 (known as the ‘RTB Equity Fund’).’’.

11 (d) EXPANDED ELIGIBILITY FOR LOANS FOR WATER

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

13 the Consolidated Farm and Rural Development Act (7

14 U.S.C. 1926(a)(1)) is amended by inserting after the first

15 sentence the following new sentence: ‘‘The Secretary may

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

17 made under the Rural Electrification Act of 1936 (7

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

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

20 or waste disposal facilities, primarily serving farmers,

21 ranchers, farm tenants, farm laborers, rural businesses,

22 and other rural residents.’’.

23 (e) RURAL ECONOMIC DEVELOPMENT.—Section 364

24 of such Act (7 U.S.C. 2006f) is amended by adding at

25 the end the following new subsection:
28

HR 3123 IH

1 ‘‘(g) RURAL ECONOMIC DEVELOPMENT.—

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

3 loan guarantee under the Rural Electrification Act

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

5 assistance under all programs administered by the

6 Rural Development Administration.

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

8 the Rural Development Administration shall encour9 age and facilitate the full participation of borrowers

10 referred to in paragraph (1) in programs adminis11 tered by the Rural Development Administration.’’.

12 (f) REGULATIONS.—Except as provided in section

13 2(b) of the Rural Electrification Act of 1936, as added

14 by section 2(c)(1)(C) of this Act, not later than 45 days

15 after the date of enactment of this Act, interim final rules

16 shall be issued by—

17 (1) the Administrator of the Rural Electrifica18 tion Administration to carry out amendments made

19 by this Act to programs administered by the Admin20 istrator;

21 (2) the Administrator of the Rural Development

22 Administration to carry out amendments made by

23 this Act to programs administered by the Adminis24 trator; and
29

HR 3123 IH

1 (3) the Secretary of Agriculture to carry out

2 amendments made by this Act to programs adminis3 tered by the Farmers Home Administration.

Æ

HR 3123 IH——2

HR 3123 IH——3