I
104TH CONGRESS
1ST SESSION
H. R. 1913
To reform and improve the rural electrification loan programs under the
Rural Electrification Act of 1936.
IN THE HOUSE OF REPRESENTATIVES
JUNE 22, 1995
Mr. BAKER of Louisiana introduced the following bill; which was referred to
the Committee on Agriculture
A BILL
To reform and improve the rural electrification loan
programs under the Rural Electrification Act of 1936.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ‘‘Rural Electrification
Loan Reform Act of 1995’’.
SEC. 2. FINDINGS.
Congress finds that—
(1) the Rural Electrification Administration
was created to facilitate the electrification of rural
America by providing low-interest loans to electric
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cooperative associations and other entities for the
purpose of constructing and improving rural electric
systems;
(2) more than 99 percent of the residents in
rural areas of the United States now have affordable
and reliable electric service;
(3) a large volume of loans, at subsidized inter-
est rates, continue to be made under the Rural Elec-
trification Act of 1936 to electric cooperative bor-
rowers who could obtain financing at reasonable
rates and terms from a source other than the Fed-
eral Government and these borrowers have become
significant and successful participants in an increas-
ingly competitive electric utility industry; and
(4) the Federal Government should make elec-
tric utility loans only to entities that cannot other-
wise obtain credit at reasonable rates and terms
from commercial lenders, as it does with Federal
loan programs to farmers and small businesses.
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TITLE I—IMPROVEMENTS TO THE RURAL
ELECTRIFICATION LOANS PROGRAMS
SEC. 101. REFERENCES TO THE RURAL ELECTRIFICATION
ACT OF 1936.
As used in this title, the term ‘‘the Act’’ shall mean
the ‘‘Rural Electrification Act of 1936’’ (7 U.S.C. 901 et
seq.).
SEC. 102. CONFORMING AMENDMENT.
The Act is amended by striking ‘‘TITLE I—RURAL
ELECTRIFICATION’’ immediately prior to section 1 (7
U.S.C. 901).
SEC. 103. OBJECTIVE OF THE ACT; INVESTIGATIONS AND
REPORTS.
Effective October 1, 1995, section 2 of the Act (7
U.S.C. 902) is amended to read as follows:
‘‘OBJECTIVE OF THE ACT; INVESTIGATIONS AND REPORTS
‘‘SEC. 2. (a) The objective of this Act is to authorize
and empower the Secretary to make loans for the purposes
of—
‘‘(1) furnishing and improving electric energy
services in rural areas of the several States and Ter-
ritories of the United States,
‘‘(2) assisting rural electric borrowers to imple-
ment demand side management practices, energy
conservation programs, and on-grid and off-grid re-
newable energy systems, and
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‘‘(3) furnishing and improving telephone service
in such areas.
‘‘(b) The Secretary may make, or cause to be made,
studies, investigations, and reports concerning the avail-
ability of adequate electric and telephone services in rural
areas of the United States and its Territories and to pub-
lish and disseminate information with respect thereto.’’.
SEC. 104. APPLICATION OF STATE LAWS OR ORDINANCES
CONCERNING ELECTRIC SERVICE.
The Act is amended by adding, after section 2 (7
U.S.C. 902), the following new sections:
‘‘STATE REGULATION OF ELECTRIC UTILITY SERVICE
‘‘SEC. 2A. Nothing contained in this Act shall be con-
strued to deprive any State commission, board, or other
agency of jurisdiction, under any State law, now or here-
after effective to regulate electric service.
‘‘APPLICATION OF STATE LAW
‘‘SEC. 2B. (a) Nothing in this Act is intended to pre-
vent a State or political subdivision thereof from enacting
and enforcing a law or ordinance concerning the curtail-
ment, limitation, or geographic area of service provided
by an electric borrower under this Act if such law or ordi-
nance provides for the just compensation of the borrower
for any condemnation, forfeiture, or involuntary sale of a
facility, property, right, or franchise of the borrower that
secures a loan made under this Act. Any such condemna-
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tion, forfeiture, or involuntary sale shall not be construed
as interfering with the purposes of this Act.
‘‘(b)(1) Not later than 30 days after a borrower re-
ceives such compensation, the Secretary shall require the
borrower to use the proceeds of such compensation to pre-
pay, without penalty, all or any portion of the outstanding
balance on any loan that was made or guaranteed under
this Act for which the Secretary holds a mortgage to, or
other security interest in, the facility, property, right, or
franchise for which the compensation was provided.
‘‘(2) The Secretary shall also permit the borrower to
use any proceeds of such compensation, in excess of the
amount needed to prepay a loan under paragraph (1), to
prepay, without penalty, all or any portion of any other
loan of the borrower made under this Act.’’.
SEC. 105. REPEAL OF AUTHORITY FOR TREASURY LOANS.
Section 103 of the Act (7 U.S.C. 903) is repealed.
SEC. 106. REPEAL OF AUTHORIZATION FOR 2 PERCENT IN-
TEREST RATE ELECTRIC LOANS.
Section 4 of the Act (7 U.S.C. 904) is repealed.
SEC. 107. REPEAL OF AUTHORIZATION FOR 2 PERCENT
ELECTRICAL AND PLUMBING EQUIPMENT
LOANS.
Section 5 of the Act (7 U.S.C. 905) is repealed.
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SEC. 108. AUTHORIZATION FOR APPROPRIATIONS; REPEAL
OF REQUIREMENT FOR TESTIMONY; FEES
FOR NON-FINANCIAL ASSISTANCE AND SERV-
ICES.
Section 6 of the Act (7 U.S.C 906) is amended to
read as follows:
‘‘AUTHORIZATION OF APPROPRIATIONS: USER FEES FOR
NON-FINANCIAL ASSISTANCE AND SERVICES
‘‘SEC. 6. (a)(1) Except as provided for in paragraph
(2), there are hereby authorized to be appropriated, out
of any money in the Treasury not otherwise appropriated,
such funds as necessary for the purpose of administering
this Act and for the purpose of making the studies, inves-
tigations, publications, and reports provided for in section
2.
‘‘(2) For each of the fiscal years 1996 through 2000,
the amount authorized to be appropriated under para-
graph (1), or otherwise made available pursuant to this
Act, for the purpose of administering the rural electric
program, shall not exceed $15,000,000.
‘‘(b)(1) Effective October 1, 1995, the Secretary shall
establish a schedule of fees to charged for non-financial
assistance and services provided by the Secretary to loan
applicants, borrowers, and others pursuant to this Act.
Such assistance and services shall include, but not be lim-
ited to, those relating to accounting, personnel training,
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engineering, management auditing, data process the infor-
mation system of other Federal laws or State laws.
‘‘(2) In establishing the schedule of fees under para-
graph (1), the Secretary shall ensure that the amount of
each fee shall be sufficient to cover the reasonable cost
of the assistance or service provided, as determined by the
Secretary.
‘‘(3) The recipient of any non-financial service or as-
sistance provided by the Secretary shall pay to the Sec-
retary the amount of the fee as established in the fee
schedule for such service or assistance at such time as the
Secretary may require. All fees paid to the Secretary pur-
suant to this subsection shall be deposited in the Treasury
and shall be available to the Secretary, without fiscal year
limitation, to pay the cost of providing such non-financial
assistance and services pursuant to this Act.’’.
SEC. 109. CONFORMING AMENDMENTS.
Section 7 of this Act (7 U.S.C. 907) is amended by:
(a) In the first sentence, striking out ‘‘from the
sums authorized in section 3 of this Act’’, and in-
serting in lieu thereof ‘‘from funds made available
for the purposes of this Act’’.
(b) In the second sentence, by striking out ‘‘No
borrower of funds under sections 4 or 201’’ and in-
serting in lieu thereof ‘‘No borrower liable for the
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repayment of any telephone loan made under section
201, and, except as otherwise provided for in section
2B or any other provision of this Act, no borrower
who is liable on any rural electric loan made under
this Act.’’.
SEC. 110. REPEALED OF OBSOLETE PROVISION RELATING
TO TRANSFER OF CERTAIN FUNCTIONS.
(a) Section 8 of the Act (7 U.S.C. 908) is repealed.
(b) Any action made pursuant to section 8 prior to
its repeal by subsection (a) shall remain valid and in effect
unless otherwise revoked.
SEC. 111. EXPENDITURES FOR PERSONAL SERVICES, SUP-
PLIES, AND EQUIPMENT.
Section 11 of the Act (7 U.S.C. 911) is amended by
adding after ‘‘from sums appropriated pursuant to section
6’’ the following: ‘‘or from funds otherwise made available
for the purposes of administering this Act’’.
SEC. 112. PAYMENT DEFERRAL AUTHORITY.
Section 12 of the Act (7 U.S.C. 912) is amended to
read as follows:
‘‘EXTENSION OF TIME FOR REPAYMENT OF LOANS
‘‘SEC. 12. The Secretary may extend the payment of
interest or principal of any loan made under this Act if
the Secretary determines that the borrower is experiencing
a financial hardship. No payment of interest or principal
shall be extended for more than 5 years after the date
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SEC. 115. AUTHORIZATION OF LOANS TO RURAL ELECTRIC
PROVIDERS.
Effective October 1, 1995, the Act is amended by
adding after section 18 (7 U.S.C. 918) a new title I as
follows:
‘‘TITLE I—RURAL ELECTRIFICATION LOANS
‘‘LIMITATION ON AUTHORITY TO MAKE, INSURE, AND
GUARANTEE ELECTRIC LOANS
‘‘SEC. 101. No electric loan shall be made, insured,
or guaranteed, under this Act after September 30, 1995,
except as authorized in sections 102 and 103.
‘‘DIRECT ELECTRIC LOANS
‘‘SEC. 102. (a) The Secretary is authorized and em-
powered to make loans to corporations, States, Territories,
and subdivisions and agencies thereof, municipalities, peo-
ple’s utility districts, and cooperative, nonprofit, or lim-
ited-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 sys-
tems for the furnishing of electric energy to persons in
rural areas, including assisting electric borrowers to imple-
ment demand side management, energy conservation pro-
grams, and on-grid and off-grid renewable energy systems.
‘‘(b) Loans made under this section shall be on such
terms and conditions relating to the expenditure of the
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money loaned and the security therefore as the Secretary
shall determine.
‘‘(c)(1) The Secretary shall prioritize the making of
loans authorized by this section to ensure that eligible ap-
plicants with the greatest need for Federal assistance shall
have the highest priority for available loan funds.
‘‘(2) In establishing such priorities, the Secretary
shall consider the following indicators of need:
‘‘(A) The net income before interest of the ap-
plicant.
‘‘(B) The weighted average of per capita per-
sonal income for the area served or to be served by
the applicant.
‘‘(C) The weighted average unemployment rate
of the area served or to be served by the applicant.
‘‘(D) An average annual rate of growth in the
total kilowatt hour sales of the applicant during the
five year period preceding the date on which the ap-
plication was made.
‘‘(E) The rate of disparity, measured as the dif-
ference between the residential rate of the applicant
and the average residential rate in the State for all
electric utilities, including utilities that are not bor-
rowers under this Act.
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‘‘(F) The rate level, measured by the average
revenue per kilowatt hour that is sold by the appli-
cant to residential and farm consumers.
‘‘(G) The cost of power per kilowatt hour pur-
chased or generated by the applicant.
‘‘(H) The total kilowatt hour sales per mile of
distribution and transmission line, excluding large
commercial and industrial consumers and sales for
resale.
‘‘(I) The value of distribution and transmission
plants in service per kilowatt hours of electricity
sold.
‘‘(d)(1)(A) The Secretary shall not make any loan
under this section if the Secretary determines that the ap-
plicant is capable of producing net income before interest
of more than 500 percent of the interest requirements on
all of the outstanding and proposed loans of the applicant
for which the final maturity is greater than one year.
‘‘(B) If the Secretary determines that the applicant
is capable of producing net income before interest of more
than 200 percent of the interest requirement of all of the
outstanding and proposed loans of the applicant for which
the final maturity is greater than one year, the Secretary
shall require the applicant to secure at least 10 percent
of the total financing required for the proposed project
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with a loan from a commercial, cooperative, or other le-
gally organized non-governmental lending institution,
which loan may not be guaranteed under section 103.
‘‘(2) The Secretary shall not make a loan under this
section unless the Secretary determines that the applicant
is capable of producing income sufficient to repay the loan
in accordance to its terms within the agreed time, pay in-
terest on the loan as it becomes due, and repay all other
outstanding and proposed indebtedness of the applicant,
together with any interest thereon, as payments become
due.
‘‘(3)(A) The Secretary shall not make any loan under
this section unless the Secretary determines that the appli-
cant is unable to obtain all or any part of the funds needed
by the applicant elsewhere, including from—
‘‘(i) general funds of the applicant that are in
excess of an amount needed for a reasonable reserve,
or
‘‘(ii) loans (with or without a guarantee under
section 103) from commercial, cooperative, or other
legally organized lending institutions at reasonable
rates and terms for loans for similar purposes and
periods of time.
‘‘(B) The Secretary shall require the applicant to cer-
tify in writing that the applicant is unable to obtain suffi-
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cient credit elsewhere to finance all or any part of the ac-
tual needs of the applicant at reasonable rates and terms,
taking into consideration prevailing rates for loans and ob-
ligations for similar purposes and periods of time.
‘‘(4) The Secretary shall not make any loan under
this section unless the Secretary determines that the secu-
rity for the loan will be adequate to ensure full payment
of the loan.
‘‘(5) The Secretary shall not make any loan under
this section unless the applicant has agreed to comply with
the requirements of the graduation program established
under section 105.
‘‘(6) The Secretary shall not make any loan under
this section unless all additional requirements of section
104 have been met.
‘‘(e) The term of each loan made under this section
shall be determined by the Secretary and shall not exceed
35 years, or the expected useful life of the assets being
financed, whichever is less.
‘‘(f)(1) Except as provided for in paragraph (2), the
rate of interest on loans under this section shall be equal
to the then current cost of money to the Government of
the United States for obligations of comparable maturity.
‘‘(2)(A) If the Secretary determines that the appli-
cant is not capable of producing net income before interest
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of more than 200 percent of the interest requirements on
all of the outstanding and proposed loans of the applicant
for which the final maturity is greater than one year, the
rate of interest on the loan shall be the rate established
under paragraph (1) but not more than 5 percent per
year, except as provided under subparagraph (B).
‘‘(B) For any loan whose term is 10 years or more
and whose interest rate is limited to 5 percent per year
under subparagraph (A), the Secretary shall review the
financial status of the borrower every 2 years, and, if the
Secretary determines that the borrower is capable of pro-
ducing net income before interest of more than 200 per-
cent of the interest requirements on all of the outstanding
and proposed loans of the applicant for which the final
maturity is greater than one year, the 5 percent limitation
shall no longer apply to the loan and the rate for the re-
maining term of the loan shall be the original rate estab-
lished under paragraph (1).
‘‘(g) The Secretary shall charge a loan origination fee
of 1 percent of the amount of the loan if the Secretary
determines that the applicant is capable of producing net
income before interest of more than 200 percent of the
interest requirements on all of the outstanding and pro-
posed loans of the applicant for which the final maturity
is greater than one year.
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‘‘(h) The Secretary may provide a borrower the right
to make payment in full on a loan made under this section
in advance of final maturity on terms consistent with those
provided for commercial loans for similar purposes and
maturities.
‘‘GUARANTEES OF ELECTRIC LOANS FROM NON-GOVERN-
MENTAL SOURCES OF CREDIT; LIEN ACCOMMODA-
TIONS
‘‘SEC. 103. (a)(1) To the extent set out in paragraph
(2), the Secretary is authorized and empowered to guaran-
tee loans that are made by commercial, cooperative, or
other legally-organized non-governmental lending institu-
tions to any entity for any purpose described in section
102(a).
‘‘(2) The Secretary shall guarantee only the payment
of that portion of the principal of the loan, and that por-
tion of the interest thereon, that the lender requires as
a condition for making the loan. The amount of any such
guarantee shall not exceed 90 percent of the principal of
the loan and the interest thereon.
‘‘(3) The Secretary shall not guarantee any loan to
an entity that the Secretary determines is capable of pro-
ducing income before interest of more than 600 percent
of the interest requirements on all of the outstanding and
proposed loans of the entity for which the final maturity
is greater than one year.
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‘‘(4) The Secretary shall impose such fees and
charges to cover the administrative expense related to any
guarantee made under this section as the Secretary deter-
mines reasonable.
‘‘(5) Any contract of guarantee executed by the Sec-
retary under this section shall be an obligation supported
by the full faith and credit of the United States and incon-
testable except for fraud or misrepresentation of which the
holder of the guarantee had actual knowledge at the time
it became a holder.
‘‘(b) In order to encourage non-governmental lenders
to make loans to eligible entities, or to provide a greater
portion of the credit needs of an applicant for a loan under
section 102, the Secretary is authorized to share the Gov-
ernment’s lien on the loan applicant’s or borrower’s assets
or to subordinate the Government’s lien on the property
to be financed by the lender. The Secretary shall not offer
such accommodation or subordination unless the Secretary
determines that the security for all loans made or guaran-
teed under this Act, the payment of which the borrower
is liable, will remain reasonably adequate.
‘‘ADDITIONAL REQUIREMENTS AND PROVISIONS
RELATING TO LOANS AND GUARANTEES
‘‘SEC. 104. (a) The Secretary shall not make any loan
under section 102 or guarantee any loan under section
103—
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‘‘(1) if the applicant or borrower has not agreed
to follow generally accepted accounting procedures
and management practices; and
‘‘(2) if the applicant or borrower fails to agree
to provide to the Secretary a complete and current
set of all residential, commercial, or industrial tariffs
or rate schedules, power sale agreements, and trans-
mission agreements, and any subsequent changes
made thereto, and any additional power sale and
transmission agreements entered into by the bor-
rower, during the term of the loan; any such tariffs,
schedules, and agreements provided to the Secretary
shall be deemed public information and shall be
made available within 10 working days of receipt of
a verbal, written, or electronically transmitted re-
quest reasonably describing the information sought.
‘‘(b) The Secretary shall ensure that funds shall not
be advanced under any loan made under section 102 or
guaranteed under section 103 unless the approval of any
State or Federal agency required with respect to the
project to be financed by the loan, or its financing, has
been obtained and remains in effect.
‘‘(c) If the Secretary determines that the level of gen-
eral funds of an applicant or borrower is in excess of that
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needed for a reasonable reserve, the Secretary shall re-
duce—
‘‘(A) the amount of the loan request in the case
of an applicant under section 102,
‘‘(B) the amount of any advance on a loan
made under section 102, or
‘‘(C) the amount of any guarantee under sec-
tion 103.
‘‘(d) Loans may be made under section 102 or guar-
anteed only to the extent that electrical service to consum-
ers in rural areas will be provided or improved by the facil-
ity being financed.
‘‘GRADUATION PROGRAM
‘‘SEC. 105. (a) The Secretary shall establish a pro-
gram under which at least once every 2 years each loan
made under section 102 shall be reviewed to determine
whether the borrower—
‘‘(1) is able to repay all or any part of the loan
with general funds in excess of that needed for a
reasonable reserve, or
‘‘(2) may be able to obtain credit from a com-
mercial, cooperative, or other legally organized non-
governmental lending institution in an amount suffi-
cient to meet all or any part of the credit needs of
the borrower at reasonable rates and terms, taking
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into consideration prevailing rates for loans and obli-
gations for similar purposes and periods of time.
‘‘(b)(1) To the extent that the Secretary determines
that the borrower is able to repay all or any part of the
loan from general funds, the borrower shall make payment
in full or in part on the loan, without penalty, prior to
the final maturity date of the loan.
‘‘(2) If the Secretary determines that the borrower
may be able to meet all or any part of its credit needs
for other lenders, with or without a loan guarantee under
section 103, the borrower will be required to—
‘‘(A) apply for and accept credit from such
lenders, and purchase any stock necessary in connec-
tion with the loan if the source is a cooperative lend-
ing institution; and
‘‘(B) use the proceeds of such credit to make
payment, in full or in part, without penalty, on any
loan made to the borrower under section 102 prior
to the full maturity date of such loan.
‘‘FAILURE TO COMPLY WITH THE ACT
‘‘SEC. 106. If a borrower of a loan made under sec-
tion 102 fails to comply with any provision of this Act,
or any agreement between the borrower and the Secretary
made pursuant thereto, including, but not limited to, the
provisions of section 104(a)(6) and section 105, the
amount outstanding on the loan shall become due and pay-
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able upon receipt of a written notice of such failure issued
by the Secretary to the borrower. Such notice shall be
given to the borrower as soon as possible after such failure
to comply with the Act occurs.
‘‘LIMITATION ON AUTHORIZATION FOR APPROPRIATIONS
‘‘SEC. 107. In the case of each fiscal year 1996
through 2000, there are authorized to be appropriated to
the Secretary for the cost, as defined in section 502 of
the Congressional Budget Act of 1974, of loans made and
guaranteed under this title, $25,000,000.’’.
SEC. 116. CONFORMING AMENDMENT.
Section 201 of the Act (7 U.S.C. 922) is amended,
in the first sentence, by—
(a) striking out ‘‘section 3 of’’; and
(b) striking out ‘‘as are provided in section 4 of
this Act’’ and inserting ‘‘as was provided in section
4 of this Act prior to its repeal.’’.
SEC. 117. RURAL ELECTRIFICATION AND TELEPHONE RE-
VOLVING FUND.
Section 301 of the Act (7 U.S.C. 931) is amended
by—
(a) redesignating subsection (a) as subsection
(b);
(b) adding a new subsection (a) as follows:
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‘‘(a) The provisions of this title shall be applicable
only to rural electric loans made prior to October 1, 1995,
and to rural telephone loans.’’; and
(c) in subsection (b), as redesignated,—
(1) in paragraph (1), striking out ‘‘under
sections 4, 5, and 201 of this Act’’ and insert-
ing in lieu thereof ‘‘under sections 4 and 5,
prior to their repeal, and section 201 of this
Act’’;
(2) in paragraph (2), striking out ‘‘under
sections 4, 5, and 201’’ and inserting in lieu
thereof ‘‘under sections 4 and 5, prior to their
repeal, and section 201 of this Act’’; and
(3) in paragraph (3)—
(A) striking out ‘‘notwithstanding sec-
tion 3(a) of title I’’; and
(B) striking out ‘‘held under titles I
and II of this Act’’ and inserting in lieu
thereof ‘‘held under sections 2 through 18
of this Act, prior to the amendments made
thereto by the ‘‘Rural Electrification Loan
Reform Act of 1995, and title II of this
Act’’.
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SEC. 118. CONFORMING AMENDMENTS.
Section 302 of the Act (7 U.S.C. 932) is amended
by—
(a) in subsection (a), striking out ‘‘under sec-
tions 4, 5, and 201 of this Act’’ and inserting in lieu
thereof ‘‘under sections 4 and 5, prior to their re-
peal, and section 201 of this Act’’; and
(b) in subsection (b)—
(1) in paragraph (1), striking out ‘‘under
sections 4, 5, and 201 of this Act’’ and insert-
ing in lieu thereof ‘‘under sections 4 and 5,
prior to their repeal, and section 201 of this
Act’’; and
(2) in paragraph (2), adding after ‘‘pursu-
ant to section 3(a) of this Act’’ the following:
‘‘prior to its repeal’’.
SEC. 119. COST OF MONEY RATES FOR CERTAIN ELECTRIC
BORROWERS.
Section 305(c)(2) of the Act (7 U.S.C. 935(c)(2)) is
amended to read as follows:
‘‘(2) COST OF MONEY LOANS.—The Secretary
shall make insured electric loans, to the extent of
qualifying applications, to eligible applicants that do
not meet the requirements for hardship loans under
paragraph (1) at the rate of interest equal to the
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then current cost of money to the Government of the
United States for loans of similar maturity.’’.
SEC. 120. LIMITATION ON TERM OF LOANS.
Section 305(c) of the Act (7 U.S.C. 935(c)) is amend-
ed by adding at the end thereof a new paragraph (4) as
follows:
‘‘(4) LIMITATION ON TERMS OF LOANS.—The
term of any loan made under this subsection may
not exceed the expected useful life of the assets
being financed or 35 years, whichever is less.’’.
SEC. 121. ACCOMMODATION AND SUBORDINATION OF
LIENS TO ASSIST CERTAIN BORROWERS IN
ACQUIRING CREDIT AFTER OCTOBER 1, 1995.
Effective October 1, 1995, section 306 of the Act (7
U.S.C. 936) is amended by—
(a) adding ‘‘(a)’’ before the first sentence; and
(b) adding at the end thereof a new subsection
(b) as follows:
‘‘(b) In order to assist borrowers with outstanding
electric loans made under this Act prior to October 1,
1995, who are not eligible for loans under section 102 to
meet their further credit needs from commercial, coopera-
tive, or other legally organized lending institutions, the
Secretary is authorized to share the Government’s lien on
the borrower’s assets or to subordinate the Government’s
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lien on the property to be financed by the lender to the
extent that the Secretary determines that the security for
all loans of the borrower made or guaranteed under this
Act will remain reasonably adequate.’’.
SEC. 122. REPEAL OF AUTHORIZATION TO REFINANCE FED-
ERAL FINANCING BANK LOANS.
Section 306C of the Act (7 U.S.C. 936c) is repealed.
SEC. 123. REPEAL OF REQUIREMENT FOR SPECIAL TREAT-
MENT OF CERTAIN ELECTRIC BORROWERS.
Section 306E of the Act (7 U.S.C. 936e) is repealed.
SEC. 124. REPEAL OF 30 PERCENT LIMITATION ON RE-
QUIRED FINANCING FROM OTHER SOURCES.
Section 307 of the Act (7 U.S.C. 937) is amended
by striking the last sentence thereof.
SEC. 125. REPEAL OF AUTHORIZATION TO REFINANCE CER-
TAIN RURAL DEVELOPMENT LOANS.
Section 310 of the Act (7 U.S.C. 940) is repealed.
SEC. 126. USE OF FUNDS.
Section 312 of the Act (7 U.S.C. 940b) is repealed.
SEC. 127. REPEAL OF CUSHION OF CREDIT PAYMENTS.
Section 313 of the Act (7 U.S.C. 940c) is repealed.
SEC. 128. REPEAL OF CERTAIN AUTHORIZATIONS FOR
APPROPRIATIONS.
Section 314 of the Act (7 U.S.C. 940d) is amended
in subsection (b) by—
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(a) striking out paragraphs (1) and (2); and
(b) renumbering paragraphs (3) and (4) as
paragraphs (1) and (2), respectively.
TITLE II—PRESERVATION OF EXCLUSIVE
STATE JURISDICTION OVER RETAIL
ELECTRIC SERVICE TERRITORIES
SEC. 201. AMENDMENT TO THE FEDERAL POWER ACT OF
1935.
Section 201 of the Federal Power Act of 1935 (16
U.S.C. 824) is amended by adding at the end thereof the
following new subsection:
‘‘(h) EXCLUSIVE STATE JURISDICTION OVER ALLO-
CATION OF RETAIL ELECTRIC SERVICE TERRITORIES.—
Notwithstanding any other provision of law, the regulation
and allocation of service territories or service areas to pro-
viders of electric service shall be subject only to State law
and shall not be subject to the requirements of this Act,
or any other provision of Federal law. No Executive agen-
cy (as defined in section 105 of title 5, United States
Code) shall have authority to preempt or interfere with
the operation of any law of a State or a political subdivi-
sion of a State relating to a service territory or service
area allocation to providers of electric service.’’.
Æ
HR 1913 IH——2