II
Calendar No. 88
103D CONGRESS
1ST SESSION
H. R. 2264
IN THE SENATE OF THE UNITED STATES
JUNE 7, 1993
Received
JUNE 8 (legislative day, JUNE 7), 1993
Read the first time
JUNE 10, 1993
Read the second time and placed on the calendar
AN ACT
To provide for reconciliation pursuant to section 7 of the
concurrent resolution on the budget for fiscal year 1994.
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 ‘‘Omnibus Budget Rec-
onciliation Act of 1993’’.
SEC. 2. TABLE OF CONTENTS.
The table of contents is as follows:
TITLE I—COMMITTEE ON AGRICULTURE
TITLE II—COMMITTEE ON ARMED SERVICES
TITLE III—COMMITTEE ON BANKING, FINANCE AND URBAN
AFFAIRS
TITLE IV—COMMITTEE ON EDUCATION AND LABOR
TITLE V—COMMITTEE ON ENERGY AND COMMERCE
TITLE VI—COMMITTEE ON FOREIGN AFFAIRS
TITLE VII—COMMITTEE ON THE JUDICIARY
TITLE VIII—COMMITTEE ON MERCHANT MARINE AND FISHERIES
TITLE IX—COMMITTEE ON NATURAL RESOURCES
TITLE X—COMMITTEE ON POST OFFICE AND CIVIL SERVICE
TITLE XI—COMMITTEE ON PUBLIC WORKS
TITLE XII—COMMITTEE ON VETERANS’ AFFAIRS
TITLE XIII—COMMITTEE ON WAYS AND MEANS—SAVINGS
TITLE XIV—COMMITTEE ON WAYS AND MEANS—REVENUES
TITLE XV—BUDGET PROCESS
TITLE I—COMMITTEE ON
AGRICULTURE
SEC. 1001. SHORT TITLE AND TABLE OF CONTENTS.
(a) SHORT TITLE.—This title may be cited as the
‘‘Agricultural Reconciliation Act of 1993’’.
(b) TABLE OF CONTENTS.—The table of contents of
this title is as follows:
Sec. 1001. Short title and table of contents.
Subtitle A—Commodity Programs
Sec. 1101. Wheat program.
Sec. 1102. Feed grain program.
Sec. 1103. Upland cotton program.
Sec. 1104. Rice program.
Sec. 1105. Dairy program.
Sec. 1106. Tobacco program.
Sec. 1107. Sugar program.
Sec. 1108. Oilseeds program.
Sec. 1109. Peanut program.
Sec. 1110. Honey program.
Sec. 1111. Wool and mohair program.
Sec. 1112. Conforming amendments to continue deficit reduction activities in
crop years after 1995.
Subtitle B—Restructuring of Loan Programs
Sec. 1201. Restructuring of certain loan programs.
Sec. 1202. Reorganization of rural development functions.
Subtitle C—Food Stamp Program
Sec. 1301. Short title.
Sec. 1302. References to Act.
CHAPTER 1—ENSURING ADEQUATE FOOD ASSISTANCE
Sec. 1311. Maximum benefit level.
Sec. 1312. Helping low-income high school students.
Sec. 1313. Families with high shelter expenses.
Sec. 1314. Resource exclusion for earned income tax credits.
Sec. 1315. Homeless families in transitional housing.
Sec. 1316. Households benefiting from general assistance vendor payments.
Sec. 1317. Continuing benefits to eligible households.
Sec. 1318. Improving the nutritional status of children in Puerto Rico.
CHAPTER 2—PROMOTING SELF SUFFICIENCY
Sec. 1321. Income exclusion for education assistance.
Sec. 1322. Child support payments to nonhousehold members.
Sec. 1323. Child support exclusion.
Sec. 1324. Improving access to employment and training activities.
Sec. 1325. Vehicles needed to seek and continue employment and for household
transportation.
Sec. 1326. Vehicles necessary to carry fuel or water.
Sec. 1327. Demonstration projects testing resource accumulation.
CHAPTER 3—SIMPLIFYING THE PROVISION OF FOOD ASSISTANCE
Sec. 1331. Simplifying the household definition for households with children
and others.
Sec. 1332. Eligibility of children of parents participating in drug or alcohol
treatment programs.
Sec. 1333. Resources of households with disabled members.
Sec. 1334. Ensuring adequate funding for the food stamp program.
CHAPTER 4—IMPROVING PROGRAM INTEGRITY
Sec. 1341. Use and disclosure of information provided by retail food stores and
wholesale food concerns.
Sec. 1342. Additional means of claims collection.
Sec. 1343. Demonstration projects testing activities directed at street traffick-
ing in coupons.
CHAPTER 5—IMPROVING FOOD STAMP PROGRAM MANAGEMENT
Sec. 1351. Clarification of categorical eligibility.
Sec. 1352. Technical amendments related to electronic benefit transfer.
Sec. 1353. Disqualification of recipients for trading firearms, ammunition, ex-
plosives, or controlled substances for coupons.
Sec. 1354. Uncapped civil money penalty for trafficking in coupons.
Sec. 1355. Uncapped civil money penalty for selling firearms, ammunition, ex-
plosives, or controlled substances for coupons.
Sec. 1356. Modifying the food stamp quality control system.
CHAPTER 6—UNIFORM REIMBURSEMENT RATES
Sec. 1361. Uniform reimbursement rates.
CHAPTER 7—IMPLEMENTATION AND EFFECTIVE DATES
Sec. 1371. Implementation and effective dates.
Subtitle D—Miscellaneous Provisions
Sec. 1401. Maximum expenditures under market promotion program for fiscal
years 1994 through 1998.
Sec. 1402. Admission, entrance, and recreation fees.
Sec. 1403. Additional program changes to meet reconciliation requirements.
Sec. 1404. Environmental conservation acreage reserve program amendments.
Sec. 1405. Levels of insurance coverage under the Federal Crop Insurance Act.
Subtitle A—Commodity Programs
SEC. 1101. WHEAT PROGRAM.
(a) FIVE
PERCENT
REDUCTION
IN
PAYMENT
ACRES.—
(1) REDUCTION.—Subsection (c)(1)(C)(ii) of
section 107B of the Agricultural Act of 1949 (7
U.S.C. 1445b-3a) is amended by striking ‘‘85 per-
cent’’ and inserting ‘‘80 percent’’.
(2) 
APPLICATION
OF
AMENDMENT.—The
amendment made by paragraph (1) shall apply be-
ginning with the 1994 crop of wheat.
(b) CONTINUATION OF DEFICIT REDUCTION ACTIVI-
TIES IN CROP YEARS AFTER 1995.—
(1) AGRICULTURAL
ACT
OF
1949.—Section
107B of the Agricultural Act of 1949 (7 U.S.C.
1445b–3a) is further amended—
(A) in the section heading, by striking
‘‘1995’’ and inserting ‘‘1998’’;
(B) in subsections (a)(1), (a)(4)(C), (b)(1),
(c)(1)(A), (c)(1)(B)(iii), (e)(1)(G), (e)(3)(A),
(e)(3)(C)(iii), (f)(1), and (q), by striking
‘‘1995’’ each place it appears and inserting
‘‘1998’’;
(C) 
in 
the 
heading 
of 
subsection
(c)(1)(B)(ii), by striking ‘‘AND 1995’’ and insert-
ing ‘‘THROUGH 1998’’;
(D) in subsection (c)(1)(B)(ii), by striking
‘‘and 1995’’ and inserting ‘‘through 1998’’; and
(E) in the heading of subsection (e)(1)(G),
by striking ‘‘1995’’ and inserting ‘‘1998’’; and
(F) in subsection (g)(1), by striking ‘‘and
1995’’ and inserting ‘‘through 1998’’.
(2) FOOD, AGRICULTURE, CONSERVATION, AND
TRADE ACT OF 1990.—Title III of the Food, Agri-
culture, Conservation, and Trade Act of 1990 (Pub-
lic Law 101–624; 104 Stat. 3382) is amended—
(A) in section 302 (7 U.S.C. 1379d note),
by striking ‘‘May 31, 1996’’ and inserting
‘‘May 31, 1999’’;
(B) in section 303 (7 U.S.C. 1331 note),
by striking ‘‘1995’’ and inserting ‘‘1998’’;
(C) in section 304 (7 U.S.C. 1340 note),
by striking ‘‘1995’’ and inserting ‘‘1998’’; and
(D) in section 305 (7 U.S.C. 1445a
note)—
(i) in the section heading, by striking
‘‘1995’’ and inserting ‘‘1998’’; and
(ii) by striking ‘‘1995’’ and inserting
‘‘1998’’.
(3) FOOD SECURITY WHEAT RESERVE.—Section
302(i) of the Food Security Wheat Reserve Act of
1980 (7 U.S.C. 1736f–1(i)) is amended by striking
‘‘1995’’ both places it appears and inserting ‘‘1998’’.
SEC. 1102. FEED GRAIN PROGRAM.
(a) FIVE
PERCENT
REDUCTION
IN
PAYMENT
ACRES.—
(1) REDUCTION.—Subsection (c)(1)(C)(ii) of
section 105B of the Agricultural Act of 1949 (7
U.S.C. 1444f) is amended by striking ‘‘85 percent’’
and inserting ‘‘80 percent’’.
(2) 
APPLICATION
OF
AMENDMENT.—The
amendment made by paragraph (1) shall apply be-
ginning with the 1994 crop of feed grains.
(b) CONTINUATION OF DEFICIT REDUCTION ACTIVI-
TIES IN CROP YEARS AFTER 1995.—
(1) AGRICULTURAL
ACT
OF
1949.—Section
105B of the Agricultural Act of 1949 (7 U.S.C.
1444f) is further amended—
(A) in the section heading, by striking
‘‘1995’’ and inserting ‘‘1998’’;
(B) in subsections (a)(1), (a)(4)(C), (a)(6),
(b)(1), 
(c)(1)(A), 
(c)(1)(B)(iii)(I),
(c)(1)(B)(iii)(III), 
(e)(1)(G), 
(e)(1)(H),
(e)(2)(H), 
(e)(3)(A), 
(e)(3)(C)(iii), 
(f)(1),
(p)(1), (q)(1), and (r), by striking ‘‘1995’’ each
place it appears and inserting ‘‘1998’’;
(C) 
in 
the 
heading 
of 
subsection
(c)(1)(B)(ii), by striking ‘‘AND 1995’’ and insert-
ing ‘‘THROUGH 1998’’;
(D) in subsection (c)(1)(B)(ii), by striking
‘‘and 1995’’ and inserting ‘‘through 1998’’;
(E) 
in 
the 
headings 
of 
subsections
(e)(1)(G) and (e)(1)(H), by striking ‘‘1995’’
both places it appears and inserting ‘‘1998’’; and
(F) in subsection (g)(1), by striking ‘‘and
1995’’ and inserting ‘‘through 1998’’.
(2) FOOD, AGRICULTURE, CONSERVATION, AND
TRADE ACT OF 1990.—Section 402 of the Food, Ag-
riculture, Conservation, and Trade Act of 1990 (7
U.S.C. 1444b note) is amended—
(A) in the section heading, by striking
‘‘1995’’ and inserting ‘‘1998’’; and
(B) by striking ‘‘1995’’ and inserting
‘‘1998’’.
(3) RECOURSE LOAN PROGRAM FOR SILAGE.—
Section 403 of the Food Security Act of 1985 (7
U.S.C. 1444e–1) is amended by striking ‘‘1996’’ and
inserting ‘‘1999’’.
SEC. 1103. UPLAND COTTON PROGRAM.
(a) FIVE
PERCENT
REDUCTION
IN
PAYMENT
ACRES.—
(1) REDUCTION.—Subsection (c)(1)(C)(ii) of
section 103B of the Agricultural Act of 1949 (7
U.S.C. 1444–2) is amended by striking ‘‘85 per-
cent’’ and inserting ‘‘80 percent’’.
(2) 
APPLICATION
OF
AMENDMENT.—The
amendment made by paragraph (1) shall apply be-
ginning with the 1994 crop of upland cotton.
(b) CONTINUATION OF DEFICIT REDUCTION ACTIVI-
TIES IN CROP YEARS AFTER 1995.—
(1) AGRICULTURAL ACT OF 1949.—(A) Section
103(h)(16) of the Agricultural Act of 1949 (7
U.S.C. 1444(h)(16)) is amended by striking ‘‘1996’’
and inserting ‘‘1999’’.
(B) Section 103B of such Act (7 U.S.C. 1444–
2) is further amended—
(i) in the section heading, by striking
‘‘1995’’ and inserting ‘‘1998’’;
(ii) in subsections (a)(1), (b)(1), (c)(1)(A),
(c)(1)(B)(ii), (e)(3)(A), (f)(1), and (o), by strik-
ing ‘‘1995’’ each place it appears and inserting
‘‘1998’’; and
(iii) 
in 
subparagraphs 
(B)(i), 
(D)(i),
(E)(i), and (F)(i) of subsection (a)(5), by strik-
ing ‘‘1996’’ each place it appears and inserting
‘‘1999’’.
(C) Section 203(b) of such Act (7 U.S.C.
1446d(b)) is amended by striking ‘‘1995’’ and in-
serting ‘‘1998’’.
(2) AGRICULTURAL
ADJUSTMENT
ACT
OF
1938.—Section 374(a) of the Agricultural Adjust-
ment Act of 1938 (7 U.S.C. 1374(a)) is amended by
(b) CONTINUATION OF DEFICIT REDUCTION ACTIVI-
TIES IN CROP YEARS AFTER 1995.—Such section is fur-
ther amended—
(1) in the section heading, by striking ‘‘1995’’
and inserting ‘‘1998’’;
(2) in subsections (a)(1), (a)(3), (b)(1),
(c)(1)(A), (c)(1)(B)(iii), (e)(3)(A), (f)(1), and (n),
by striking ‘‘1995’’ each place it appears and insert-
ing ‘‘1998’’;
(3) in subsection (a)(5)(D)(i), by striking
‘‘1996’’ and inserting ‘‘1999’’;
(4) in the heading of subsection (c)(1)(B)(ii),
by striking ‘‘AND
1995’’ and inserting ‘‘THROUGH
1998’’; and
(5) in subsection (c)(1)(B)(ii), by striking ‘‘and
1995’’ and inserting ‘‘through 1998’’.
SEC. 1105. DAIRY PROGRAM.
(a) ALLOCATION OF PURCHASE PRICES FOR BUTTER
AND NONFAT DRY MILK.—
(1) IN GENERAL.—Subsection (c)(3) of section
204 of the Agricultural Act of 1949 (7 U.S.C.
1446e) is amended—
(A) in the first sentence of subparagraph
(A), by striking ‘‘The Secretary’’ and inserting
‘‘Subject to subparagraph (B), the Secretary’’;
(B) by redesignating subparagraph (B) as
subparagraph (C); and
(C) by inserting after subparagraph (A)
the following new subparagraph:
‘‘(B) GUIDELINES.—In allocating the rate
of price support between the purchase prices of
butter and nonfat dry milk under this para-
graph, the Secretary may not—
‘‘(i) offer to purchase butter for more
than $0.65 per pound; or
‘‘(ii) offer to purchase nonfat dry milk
for less than $1.034 per pound.’’.
(2) 
APPLICATION
OF
AMENDMENTS.—The
amendments made by paragraph (1) shall apply with
respect to purchases of butter and nonfat dry milk
that are made by the Secretary of Agriculture under
section 204 of the Agricultural Act of 1949 (7
U.S.C. 1446e) on or after the date of the enactment
of this Act.
(b) REDUCTION IN PRICE RECEIVED.—Subsection
(h)(2) of such section is amended—
(1) by striking ‘‘and’’ at the end of subpara-
graph (A);
(2) by striking the period at the end of sub-
paragraph (B) and inserting ‘‘; and’’; and
(3) by adding at the end the following new sub-
paragraph:
‘‘(C) during each of the calendar years
1996 through 1998, 10 cents per hundred-
weight of milk marketed, which rate shall be
adjusted on or before May 1 of each of the cal-
endar years 1996 through 1998 in the manner
provided in subparagraph (B).’’.
(c) CONTINUATION OF DEFICIT REDUCTION ACTIVI-
TIES IN FISCAL YEARS AFTER 1995.—
(1) IN GENERAL.—Section 204 of the Agricul-
tural Act of 1949 (7 U.S.C. 1446e) is further
amended—
(A) in the section heading, by striking
‘‘1995’’ and inserting ‘‘1998’’;
(B) in subsections (a), (b), (d)(1)(A),
(d)(2)(A), (d)(3), (f), (g)(1), and (k), by strik-
ing ‘‘1995’’ each place it appears and inserting
‘‘1998’’; and
(C) in subsection (g)(2), by striking
‘‘1994’’ and inserting ‘‘1997’’.
(2) TRANSFER
TO
MILITARY
AND
VETERANS
HOSPITALS.—Subsections (a) and (b) of section 202
of such Act (7 U.S.C. 1446a) are amended by strik-
ing ‘‘1995’’ both places it appears and inserting
‘‘1998’’.
(3) FEDERAL MILK MARKETING ORDERS.—Sec-
tion 101(b) of the Agriculture and Food Act of 1981
(7 U.S.C. 608c note) is amended by striking ‘‘1995’’
and inserting ‘‘1998’’.
(4) DAIRY INDEMNITY PROGRAM.—Section 3 of
Public Law 90–484 (7 U.S.C. 450l) is amended by
striking ‘‘1995’’ and inserting ‘‘1998’’.
(5) FOOD SECURITY ACT OF 1985.—The Food
Security Act of 1985 is amended—
(A) in section 153 (15 U.S.C. 713a–14),
by striking ‘‘1995’’ and inserting ‘‘1998’’; and
(B) in section 1163 (7 U.S.C. 1731 note),
by striking ‘‘1995’’ each place it appears and
inserting ‘‘1998’’.
SEC. 1106. TOBACCO PROGRAM.
(a) TEN PERCENT INCREASE IN MARKETING AS-
SESSMENT.—Subsection (g)(1) of section 106 of the Agri-
cultural Act of 1949 (7 U.S.C. 1445) is amended by strik-
ing ‘‘equal to’’ and all that follows through the period and
inserting the following: ‘‘equal to—
‘‘(A) in the case of the 1991 through 1993
crops of tobacco, .5 percent of the national average
price support level for each such crop as otherwise
provided for in this section; and
‘‘(B) in the case of the 1994 through 1998
crops of tobacco, .55 percent of the national average
price support level for each such crop as otherwise
provided for in this section.’’.
(b) CONTINUATION OF DEFICIT REDUCTION ACTIVI-
TIES IN FISCAL YEARS AFTER 1995.—Such subsection is
further amended by striking ‘‘1995’’ and inserting
‘‘1998’’.
(c) ACREAGE-POUNDAGE QUOTAS FOR TOBACCO.—
(1) DEFINITIONS.—Subsection (a) of section
317 of the Agricultural Adjustment Act of 1938 (7
U.S.C. 1314c) is amended—
(A) by inserting ‘‘DEFINITIONS.—’’ after
‘‘(a)’’; and
(B) by striking paragraphs (2), (3), (4),
(5), (6), (7), and (8) and inserting the following
new paragraphs:
‘‘(2) FARM ACREAGE ALLOTMENT.—The term
‘farm acreage allotment’ for a tobacco farm, other
than a new tobacco farm, means the acreage allot-
ment determined by dividing the farm marketing
quota by the farm yield.
‘‘(3) FARM
YIELD.—The term ‘farm yield’
means the yield per acre for a farm determined ac-
cording to regulations issued by the Secretary and
which would be expected to result in a quality of to-
bacco acceptable to the tobacco trade.
‘‘(4) FARM MARKETING QUOTA.—
‘‘(A) IN GENERAL.—The term ‘farm mar-
keting quota’ for a farm for a marketing year
means a number that is equal to the number of
pounds of tobacco determined by multiplying—
‘‘(i) the farm marketing quota for the
farm for the previous marketing year
(prior 
to 
any 
adjustment 
for
undermarketing or overmarketing); by
‘‘(ii) the national factor.
‘‘(B) ADJUSTMENT.—The farm marketing
quota determined under subparagraph (A) for a
marketing 
year 
shall 
be 
increased 
for
undermarketing or decreased for overmarketing
by the number of pounds by which marketings
of tobacco from the farm during the immediate
preceding marketing year (if marketing quotas
were in effect for that year under the program
established by this section) is less than or ex-
ceeds the farm marketing quota for such year.
Notwithstanding the preceding sentence, the
farm marketing quota for a marketing year
shall not be increased under this subparagraph
for undermarketing by an amount in excess of
the farm marketing quota determined for the
farm for the immediately preceding year prior
to any increase for undermarketing or decrease
for overmarketing. If due to excess marketing
in the preceding marketing year the farm mar-
keting quota for the marketing year is reduced
to zero pounds without reflecting the entire re-
duction required, the additional reduction shall
be made for the subsequent marketing year or
years.
‘‘(5) NATIONAL FACTOR.—The term ‘national
factor’ for a marketing year means a number ob-
tained by dividing—
‘‘(A) the national marketing quota (less
the reserve provided for under subsection (e));
by
‘‘(B) the sum of the farm marketing
quotas 
(prior 
to 
any 
adjustments 
for
undermarketing or overmarketing) for the im-
mediate preceding marketing year for all farms
for which marketing quotas for the kind of to-
bacco involved will be determined for such suc-
ceeding marketing year.’’.
(2) CONFORMING AMENDMENTS.—Such section
is further amended—
(A) in the first sentence of subsection (b),
by striking ‘‘and the national acreage allotment
and national average yield goal for the 1965
crop of Flue-cured tobacco,’’;
(B) in the first sentence of subsection (c),
by striking ‘‘and at the same time announce the
national acreage allotment and national average
yield goal’’;
(C) in subsection (d)—
(i) in the sixth sentence, by striking ‘‘,
national acreage allotment, and national
average yield goal’’;
(ii) in the eighth sentence, by striking
‘‘, national acreage allotment and national
average yield goal’’; and
(iii) in the ninth sentence, by striking
‘‘, national acreage allotment, and national
average goal are’’ and inserting ‘‘is’’;
(D) in subsection (e)—
(i) in the first sentence, by striking
‘‘No farm acreage allotment or farm yield
shall be established’’ and inserting ‘‘A
farm marketing quota and farm yield shall
not be established’’;
(ii) in the second sentence, by striking
‘‘acreage allotment’’ both places it appears
and inserting ‘‘marketing quota’’;
(iii) in the second sentence, by strik-
ing ‘‘acreage allotments’’ both places it ap-
pears and inserting ‘‘marketing quotas’’;
and
(iv) in the last sentence, by striking
‘‘acreage allotment’’ and inserting ‘‘mar-
keting quota’’; and
(E) in subsection (g)—
(i) in paragraph (1), by striking
‘‘paragraph (a)(8)’’ and inserting ‘‘sub-
section (a)(4)’’; and
(ii) in paragraph (3), by striking
‘‘subsection (a)(8)’’ and inserting ‘‘sub-
section (a)(4)’’.
(3) FARM MARKETING QUOTA REDUCTIONS.—
Subsection (f) of such section is amended to read as
follows:
‘‘(f) CAUSES FOR FARM MARKETING QUOTA REDUC-
TIONS.—(1) When an acreage-poundage program is in ef-
fect for any kind of tobacco under this section, the farm
marketing quota next established for a farm shall be re-
duced by the amount of such kind of tobacco produced
on the farm—
‘‘(A) which was marketed as having been pro-
duced on a different farm;
‘‘(B) for which proof of disposition is not fur-
nished as required by the Secretary;
‘‘(C) on acreage equal to the difference between
the acreage reported by the farm operator or a duly
authorized representative and the determined acre-
age for the farm; and
‘‘(D) as to which any producer on the farm
files, or aids, or acquiesces, in the filing of any false
report with respect to the production or marketing
of tobacco.
‘‘(2) If the Secretary, through the local committee,
finds that no person connected with a farm caused, aided,
or acquiesced in any irregularity described in paragraph
(1), the next established farm marketing quota shall not
be reduced under this subsection.
‘‘(3) The reduction required under this subsection
shall be in addition to any other adjustments made pursu-
ant to this section.
‘‘(4) In establishing farm marketing quotas for other
farms owned by the owner displaced by acquisition of the
owner’s land by any agency, as provided in section 378
of this Act, increases or decreases in such farm marketing
quotas as provided in this section shall be made on ac-
count of marketings below or in excess of the farm mar-
keting quota for the farm acquired by the agency.
‘‘(5) Acreage allotments and farm marketing quotas
determined under this section may (except in the case of
kinds of tobacco not subject to section 316) be leased and
sold under the terms and conditions in section 316 of this
Act, except that any credit for undermarketing or charge
for overmarketing shall be attributed to the farm to which
transferred.’’.
SEC. 1107. SUGAR PROGRAM.
(a) TEN PERCENT INCREASE IN MARKETING AS-
SESSMENT.—Subsection (i) of section 206 of the Agricul-
tural Act of 1949 (7 U.S.C. 1446g) is amended—
(1) in paragraph (1), by striking ‘‘equal to’’
and all that follows through the period and inserting
the following: ‘‘equal to—
‘‘(A) in the case of marketings during fis-
cal years 1992 through 1994, .18 cents per
pound of raw cane sugar, processed by the
processor from domestically produced sugarcane
or sugarcane molasses, that has been marketed
(including the transfer or delivery of the sugar
to a refinery for further processing or market-
ing); and
‘‘(B) in the case of marketings during fis-
cal years 1995 through 1999, .198 cents per
pound of raw cane sugar, processed by the
processor from domestically produced sugarcane
or sugarcane molasses, that has been marketed
(including the transfer or delivery of the sugar
to a refinery for further processing or market-
ing).’’; and
(2) in paragraph (2), by striking ‘‘equal to’’
and all that follows through the period and inserting
the following: ‘‘equal to—
‘‘(A) in the case of marketings during fis-
cal years 1992 through 1994, .193 cents per
pound of beet sugar, processed by the processor
from domestically produced sugar beets or
sugar beet molasses, that has been marketed;
and
‘‘(B) in the case of marketings during fis-
cal years 1995 through 1999, .2123 cents per
pound of beet sugar, processed by the processor
from domestically produced sugar beets or
sugar beet molasses, that has been marketed.’’.
(b) CONTINUATION OF DEFICIT REDUCTION ACTIVI-
TIES IN CROP YEARS AFTER 1995.—
(1) AGRICULTURAL ACT OF 1949.—Section 206
of the Agricultural Act of 1949 (7 U.S.C. 1446g) is
further amended—
(A) in the section heading, by striking
‘‘1995’’ and inserting ‘‘1998’’;
(B) in subsections (a), (c), (d)(1), and (j),
by striking ‘‘1995’’ each place it appears and
inserting ‘‘1998’’; and
(C) in paragraphs (1) and (2) of sub-
section (i), as amended by subsection (a), by
striking ‘‘1996’’ both places it appears and in-
serting ‘‘1999’’.
(2) AGRICULTURAL
ADJUSTMENT
ACT
OF
1938.—Section 359b(a)(1) of the Agricultural Ad-
justment Act of 1938 (7 U.S.C. 1359bb(a)(1)) is
amended by striking ‘‘1996’’ and inserting ‘‘1999’’.
SEC. 1108. OILSEEDS PROGRAM.
(a) CONTINUATION OF DEFICIT REDUCTION ACTIVI-
TIES IN CROP YEARS AFTER 1995.—Section 205 of the
Agricultural Act of 1949 (7 U.S.C. 1446f) is amended—
(1) in the section heading, by striking ‘‘1995’’
and inserting ‘‘1998’’; and
(2) in subsections (b), (c), (e)(1), and (n), by
striking ‘‘1995’’ each place it appears and inserting
‘‘1998’’.
SEC. 1109. PEANUT PROGRAM.
(a) ASSESSMENT TO COVER UNANTICIPATED LOSSES
IN ADMINISTERING THE PROGRAM.—
(1) ADDITIONAL ASSESSMENT.—Section 108B
of the Agricultural Act of 1949 (7 U.S.C. 1445c–3)
is amended—
(A) by redesignating subsection (h) as sub-
section (i); and
(B) by inserting after subsection (g) the
following new subsection:
‘‘(h) ADDITIONAL MARKETING ASSESSMENT.—
‘‘(1) TWO PERCENT ASSESSMENT.—In addition
to the marketing assessment required by subsection
(g), the Secretary shall also provide for a nonrefund-
able marketing assessment applicable to each of the
1993 through 1998 crops of peanuts and collected
and paid in accordance with this subsection. The as-
sessment shall be on a per pound basis in an amount
equal to 2 percent of the national average quota or
additional peanut support rate per pound, as appli-
cable, for the applicable crop. No peanuts shall be
assessed more than 2 percent of the applicable sup-
port rate under this subsection.
‘‘(2) FIRST PURCHASERS.—Except as provided
under paragraphs (3) and (4), the first purchaser of
peanuts shall—
‘‘(A) collect from the producer a marketing
assessment equal to 1 percent of the applicable
national average support rate times the quan-
tity of peanuts acquired;
‘‘(B) pay, in addition to the amount col-
lected under subparagraph (A), a marketing as-
sessment in an amount equal to 1 percent of
the applicable national average support rate
times the quantity of peanuts acquired; and
‘‘(C) remit the amounts required under
subparagraphs (A) and (B) to the Commodity
Credit Corporation in a manner specified by the
Secretary.
‘‘(3) OTHER
PRIVATE
MARKETINGS.—In the
case of a private marketing by a producer directly
to a consumer through a retail or wholesale outlet
or in the case of a marketing by the producer out-
side of the continental United States, the producer
shall be responsible for the full amount of the as-
sessment under this subsection and shall remit the
assessment by such time as is specified by the
Secretary.
‘‘(4) LOAN PEANUTS.—In the case of peanuts
that are pledged as collateral for a price support
loan made under this section, 1⁄2 of the assessment
under this subsection shall be deducted from the
proceeds of the loan. The remainder of the assess-
ment shall be paid by the first purchaser of the pea-
nuts as provided in subparagraph (B) of paragraph
(2). For purposes of computing net gains on peanuts
under this section, the reduction in loan proceeds
under this subsection shall be treated as having been
paid to the producer.
‘‘(5) RESERVE ACCOUNT.—
‘‘(A) 
ESTABLISHMENT.—The 
Secretary
shall establish in the Commodity Credit Cor-
poration a reserve account to be administered
by the Secretary for purposes of this section.
There shall be deposited in the reserve account
for each crop of peanuts an amount equal to—
‘‘(i) the total amount remitted to the
Commodity Credit Corporation under para-
graphs (2) and (3) as the payment of the
marketing assessment applicable to that
crop of peanuts under this subsection; and
‘‘(ii) the total amount deducted from
the proceeds of a price support loan or
paid by first purchasers under paragraph
(4) as the payment of the marketing as-
sessment applicable to that crop of peanuts
under this subsection.
‘‘(B) USE
OF
RESERVE
ACCOUNT.—The
Secretary shall use amounts in the reserve ac-
count established in this paragraph to cover
losses incurred by the Commodity Credit Cor-
poration on the sale or disposal of peanuts for
which price support has been provided under
this section. Funds in the reserve account shall
be made available until expended.
‘‘(6) APPLICATION
OF
OTHER
PROVISIONS.—
Paragraphs (2)(B), (5), and (6) of subsection (g)
shall apply with respect to the marketing assessment
required by this subsection.’’.
(2) EFFECTIVE DATE.—The amendments made
by paragraph (1) shall take effect 15 days after the
date of the enactment of this Act.
(b) CONTINUATION OF DEFICIT REDUCTION ACTIVI-
TIES IN CROP YEARS AFTER 1995.—
(1) AGRICULTURAL
ACT
OF
1949.—Section
108B of the Agricultural Act of 1949 (7 U.S.C.
1445c–3) is further amended—
(A) in the section heading, by striking
‘‘1995’’ and inserting ‘‘1998’’;
(B) in subsections (a)(1), (a)(2), (b)(1),
and (g)(1), by striking ‘‘1995’’ each place it ap-
pears and inserting ‘‘1998’’; and
(C) in subsection (i) (as redesignated by
subsection (a)(1)(A)), by striking ‘‘1995’’ and
inserting ‘‘1998’’.
(2) AGRICULTURAL
ADJUSTMENT
ACT
OF
1938.—Part VI of subtitle B of title III of the Agri-
cultural Adjustment Act of 1938 is amended—
(A) in section 358–1 (7 U.S.C. 1358–1)—
(i) in the section heading, by striking
‘‘1995’’ and inserting ‘‘1998’’;
(ii) in subsections (a)(1), (b)(1)(A),
(b)(1)(B), (b)(2)(A), (b)(2)(C), (b)(3), and
(f), by striking ‘‘1995’’ each place it ap-
pears and inserting ‘‘1998’’; and
(iii) in subsection (d)(1), by inserting
after ‘‘5 calendar years’’ the following: ‘‘,
or such other period as the Secretary con-
siders to be appropriate in the case of a
referendum held after 1995,’’;
(B) in section 358b (7 U.S.C. 1358b)—
(i) in the section heading, by striking
‘‘1995’’ and inserting ‘‘1998’’; and
(ii) in subsection (c), by striking
‘‘1995’’ and inserting ‘‘1998’’;
(C) 
in 
section 
358c(d) 
(7 
U.S.C.
1358c(d)), by striking ‘‘1995’’ and inserting
‘‘1998’’; and
(D) in section 358e (7 U.S.C. 1359a)—
(i) in the section heading, by striking
‘‘1995’’ and inserting ‘‘1998’’; and
(ii) in subsection (i), by striking
‘‘1995’’ and inserting ‘‘1998’’.
(3) FOOD, AGRICULTURE, CONSERVATION, AND
TRADE ACT OF 1990.—Title VIII of the Food, Agri-
culture, Conservation, and Trade Act of 1990 (Pub-
lic Law 101–624; 104 Stat. 3459) is amended—
(A) in section 801 (104 Stat. 3459), by
striking ‘‘1995’’ and inserting ‘‘1998’’;
(B) in section 807 (104 Stat. 3478), by
striking ‘‘1995’’ and inserting ‘‘1998’’; and
(C) in section 808 (7 U.S.C. 1441 note),
by striking ‘‘1995’’ and inserting ‘‘1998’’.
(c) ASSESSMENT
UNDER
PEANUT
MARKETING
AGREEMENT.—Section 8b(b)(1) of the Agricultural Ad-
justment Act (7 U.S.C. 608b(b)(1)), reenacted with
amendments by the Agricultural Marketing Agreement
Act of 1937, is amended—
(1) by striking ‘‘and’’ at the end of subpara-
graph (A);
(2) by striking the period at the end of sub-
paragraph (B) and inserting ‘‘; and’’; and
(3) by adding at the end the following new sub-
paragraph:
‘‘(C) any assessment imposed under such agree-
ment shall apply to peanut handlers (as that term
is defined by the Secretary) who have not entered
into such an agreement with the Secretary in addi-
tion to those handlers who have entered into such
agreement.’’.
SEC. 1110. HONEY PROGRAM.
(a) REDUCED SUPPORT RATE.—Subsection (a) of
section 207 of the Agricultural Act of 1949 (7 U.S.C.
1446h) is amended by striking ‘‘than 53.8 cents’’ and in-
serting ‘‘than—
‘‘(1) 53.8 cents per pound for the 1991 through
1993 crop years; and
‘‘(2) 50 cents per pound for the 1994 through
1998 crop years.’’.
(b) PAYMENT LIMITATIONS.—Subsection (e)(1) of
such section is amended—
(1) by striking ‘‘and’’ at the end of subpara-
graph (C);
(2) by striking subparagraph (D); and
(3) by adding at the end the following new sub-
paragraphs:
‘‘(D) $125,000 in the 1994 crop year;
‘‘(E) $100,000 in the 1995 crop year;
‘‘(F) $75,000 in the 1996 crop year; and
‘‘(G) $50,000 in each of the 1997 and sub-
sequent crop years.’’.
(c) CONTINUATION OF DEFICIT REDUCTION ACTIVI-
TIES.—Subsections (a), (c)(1), and (j) of such section are
amended by striking ‘‘1995’’ each place it appears and
inserting ‘‘1998’’.
(d) TERMINATION
OF
ASSESSMENT.—Subsection
(i)(1) of such section is amended by striking ‘‘1995’’ and
inserting ‘‘1993’’.
SEC. 1111. WOOL AND MOHAIR PROGRAM.
(a) PAYMENT LIMITATIONS.—Section 704(b)(1) of
the National Wool Act of 1954 (7 U.S.C. 1783(b)(1)) is
amended—
(d) TERMINATION OF MARKETING ASSESSMENT.—
Section 704(c) of the National Wool Act of 1954 (7 U.S.C.
1783(c)) is amended by striking ‘‘1995’’ and inserting
‘‘1992’’.
(e) TECHNICAL AND CONFORMING AMENDMENTS.—
(1) POLICY OF CONGRESS.—Section 702 of the
National Wool Act of 1954 (7 U.S.C. 1781) is
amended—
(A) by striking ‘‘, strategic,’’ in the first
sentence; and
(B) by striking ‘‘as a measure of national
security and to promote’’ and inserting ‘‘that as
a method to promote’’.
(2) ELIMINATION OF OBSOLETE PROVISION.—
Section 703(b) of the National Wool Act of 1954 (7
U.S.C. 1782(b)) is amended—
(A) in paragraph (1), by striking ‘‘para-
graphs (2) and (3)’’ and inserting ‘‘paragraph
(2)’’;
(B) in paragraph (2), by striking ‘‘Except
as provided in paragraph (3), for’’ and inserting
‘‘For’’; and
(C) by striking paragraph (3).
(3) ADVERTISING AND SALES PROMOTION PRO-
GRAMS.—Section 708 of the National Wool Act of
1954 (7 U.S.C. 1787) is amended—
(A) by inserting ‘‘(a)’’ after ‘‘SEC. 708.’’;
and
(B) by adding at the end the following new
subsection:
‘‘(b)(1) Except as provided in paragraph (2), to the
extent that the Secretary determines that the amount of
funds that would otherwise be made available under sub-
section (a) in any marketing year for agreements entered
into under such subsection is less than the amount made
available under such subsection in the previous marketing
year, the difference in such amounts shall be provided
from amounts available to support the prices of wool and
mohair under section 703 of this title. Any amount pro-
vided under this subsection shall be considered to be an
expenditure made in connection with payments to produc-
ers under this title for purposes of section 705 of this title.
‘‘(2) Paragraph (1) shall not apply if the Secretary
determines that any portion of the difference between the
amounts made available under subsection (a) between two
consecutive marketing years is the result of a per unit re-
duction in the amount of the assessment imposed under
the agreements entered into under such subsection.’’.
SEC. 1112. CONFORMING AMENDMENTS TO CONTINUE DEF-
ICIT REDUCTION ACTIVITIES IN CROP YEARS
AFTER 1995.
(a) SUPPLEMENTAL SET-ASIDE AND ACREAGE LIMI-
TATION AUTHORITY.—Section 113 of the Agricultural Act
of 1949 (7 U.S.C. 1445h) is amended by striking ‘‘1995’’
and inserting ‘‘1998’’.
(b) DEFICIENCY
AND
LAND
DIVERSION
PAY-
MENTS.—Subsections (a)(1), (b), and (c) of section 114
of the Agricultural Act of 1949 (7 U.S.C. 1445j) are
amended by striking ‘‘1995’’ each place it appears and
inserting ‘‘1998’’.
(c) DISASTER PAYMENTS.—Section 208 of the Agri-
cultural Act of 1949 (7 U.S.C. 1446i) is amended—
(1) in the section heading, by striking ‘‘1995’’
and inserting ‘‘1998’’;
(2) in subsection (d), by striking ‘‘1995’’ and
inserting ‘‘1998’’.
(d) MISCELLANEOUS.—Title IV of the Agricultural
Act of 1949 (7 U.S.C. 1421 et seq.) is amended—
(1) in section 402(b) (7 U.S.C. 1422(b)), by
striking ‘‘1995’’ and inserting ‘‘1998’’;
(2) in section 403(c) (7 U.S.C. 1423(c)), by
striking ‘‘1995’’ and inserting ‘‘1998’’;
(3) in section 406(b) (7 U.S.C. 1426(b))—
(A) by striking ‘‘1995’’ each place it ap-
pears and inserting ‘‘1998’’; and
(B) by striking ‘‘1996’’ each place it ap-
pears and inserting ‘‘1999’’; and
(4) in section 408(k)(3) (7 U.S.C. 1428(k)(3)),
by striking ‘‘1995’’ and inserting ‘‘1998’’.
(e) ACREAGE BASE AND YIELD SYSTEM.—Title V of
the Agricultural Act of 1949 (7 U.S.C. 1461 et seq.) is
amended—
(1) in subsections (c)(3) and (h)(2)(A) of sec-
tion 503 (7 U.S.C. 1463), by striking ‘‘1995’’ each
place it appears and inserting ‘‘1998’’;
(2) in subsections (b)(1) and (b)(2) of section
505 (7 U.S.C. 1465), by striking ‘‘1995’’ each place
it appears and inserting ‘‘1998’’; and
(3) in section 509 (7 U.S.C. 1469), by striking
‘‘1995’’ and inserting ‘‘1998’’.
(f) NORMALLY PLANTED ACREAGE.—Section 1001
of the Food and Agriculture Act of 1977 (7 U.S.C. 1309)
is amended in subsections (a), (b)(1), and (c) by striking
‘‘1995’’ each place it appears and inserting ‘‘1998’’.
(g) AGRICULTURE AND FOOD ACT OF 1981.—Sec-
tion 1014 of the Agriculture and Food Act of 1981 (7
U.S.C. 4110) is amended by striking ‘‘1995’’ and insert-
ing ‘‘1998’’.
(h) FOOD SECURITY ACT OF 1985.—The Food Secu-
rity Act of 1985 (Public Law 99–198; 99 Stat. 1354) is
amended—
(1) in section 902(c)(2)(A) (7 U.S.C. 1446
note), by striking ‘‘1995’’ and inserting ‘‘1998’’;
(2) in paragraphs (1)(A), (1)(B), and (2)(A) of
section 1001 (7 U.S.C. 1308), by striking ‘‘1995’’
each place it appears and inserting ‘‘1998’’;
(3) in section 1001C(a) (7 U.S.C. 1308–3(a)),
by striking ‘‘1995’’ both places it appears and in-
serting ‘‘1998’’;
(4) in section 1017(b) (7 U.S.C. 1385 note), by
striking ‘‘1995’’ and inserting ‘‘1998’’; and
(5) in section 1019 (7 U.S.C. 1310a), by strik-
ing ‘‘1995’’ and inserting ‘‘1998’’.
(i) OPTIONS PILOT PROGRAM.—The Options Pilot
Program Act of 1990 (subtitle E of title XI of Public Law
101–624; 104 Stat. 3518; 7 U.S.C. 1421 note) is amend-
ed—
(1) in subsections (a) and (b) of section 1153,
by striking ‘‘1995’’ each place it appears and insert-
ing ‘‘1998’’; and
(2) in section 1154(b)(1)(A), by striking
‘‘1995’’ both places it appears and inserting ‘‘1998’’.
(j) READJUSTMENT OF SUPPORT LEVELS.—Section
1302 of the Agricultural Reconciliation Act of 1990 (7
U.S.C. 1421 note) is amended in subsections (b)(1),
(b)(3), and (d)(1)(C) by striking ‘‘1995’’ each place it ap-
pears and inserting ‘‘1998’’.
Subtitle B—Restructuring of Loan
Programs
SEC. 1201. RESTRUCTURING OF CERTAIN LOAN PROGRAMS.
(a) LOAN PROGRAMS UNDER THE RURAL ELEC-
TRIFICATION ACT OF 1936.—
(1) INSURED LOAN PROGRAMS.—Section 305 of
the Rural Electrification Act of 1936 (7 U.S.C. 935)
is amended—
(A) by striking subsections (b) and (d);
(B) by redesignating subsection (c) as sub-
section (b); and
(C) by inserting after subsection (b) (as so
redesignated) the following:
‘‘(c) INSURED ELECTRIC LOANS.—
‘‘(1) HARDSHIP LOANS.—
‘‘(A) IN
GENERAL.—The Administrator
shall make insured electric loans at an interest
rate of 5 percent per annum to any applicant
therefor 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 kil-
owatt-hour sold by all utilities in the State
in which the borrower 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
borrower 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 serv-
ice, 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.—The Ad-
ministrator may make an insured electric loan
at an interest rate of 5 percent per annum to
an applicant therefor if, in the sole discretion of
the Administrator, the applicant has experi-
enced a severe hardship.
‘‘(C) 
LIMITATION.—The 
Administrator
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 or urbanized area (as defined by
the Bureau of the Census) if the average num-
ber of consumers per mile of line of the total
electric system of the applicant exceeds 17.
‘‘(2) MUNICIPAL RATE LOANS.—
‘‘(A) IN
GENERAL.—The Administrator
shall make insured electric loans, to the extent
of qualifying applications therefor, at the inter-
est rate described in subparagraph (B) for the
term or terms selected by the applicant pursu-
ant to subparagraph (C).
‘‘(B) INTEREST RATE.—
‘‘(i) IN GENERAL.—Subject to clause
(ii), the interest rate described in this sub-
paragraph on a loan to a qualifying appli-
cant shall be—
‘‘(I) the interest rate determined
by the Administrator to be equal to
the current market yield on outstand-
ing municipal obligations with remain-
ing periods to maturity similar to the
term selected by the applicant pursu-
ant to subparagraph (C), but not
greater than the rate determined
under section 307(a)(3)(A) of the
Consolidated Farm and Rural Devel-
opment Act which is based on the cur-
rent market yield on outstanding mu-
nicipal obligations; plus
‘‘(II) if the applicant for the loan
makes an election pursuant to sub-
paragraph (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 such 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 therefor shall not ex-
ceed 7 percent if—
‘‘(I) the average number of con-
sumers 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 borrower pro-
vides service; and
‘‘(bb) the average per capita in-
come 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 ap-
plicant provides service, or the median
household income of the households
receiving electric service from the ap-
plicant is less than the median house-
hold income of the households in the
State.
this paragraph the option to include in the loan
agreement the right of the applicant to prepay
the loan on terms consistent with similar provi-
sions of commercial loans.
‘‘(3) OTHER
SOURCE
OF
CREDIT
NOT
RE-
QUIRED
IN
CERTAIN
CASES.—The Administrator
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 Administrator
shall make insured telephone loans, to the ex-
tent of qualifying applications therefor, at an
interest rate of 5 percent per annum, to any ap-
plicant who meets each of the following require-
ments:
‘‘(i) The average number of subscrib-
ers per mile of line in the service area of
the applicant is not more than 4.
‘‘(ii) The applicant is capable of pro-
ducing net income or margins, before in-
terest payments on the loan applied for, of
not less than 100 percent (but not more
than 300 percent) of the interest require-
ments on all of the outstanding and pro-
posed loans of the applicant.
‘‘(iii) The Administrator has approved
a telecommunications modernization plan
for the State under paragraph (3), and, if
the plan was developed by telephone bor-
rowers under this title, the applicant is a
participant in the plan.
‘‘(B) AUTHORITY
TO
WAIVE
TIER
RE-
QUIREMENT.—The Administrator may waive
the requirement of subparagraph (A)(ii) in any
case in which the Administrator determines
(and sets forth the reasons therefor in writing)
that the requirement would prevent emergency
restoration of the telephone system of the appli-
cant or result in severe hardship to the appli-
cant.
‘‘(C) EFFECT OF LACK OF FUNDS.—On re-
quest 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 title IV.
‘‘(2) COST-OF-MONEY LOANS.—
‘‘(A) IN
GENERAL.—The Administrator
may make insured telephone loans for the pur-
chase and installation of telephone lines, sys-
tems, and facilities (other than buildings used
primarily for administrative purposes, vehicles
not used primarily in construction, and personal
customer premise equipment) directly related to
the furnishing, improvement, or extension of
rural telecommunications service or the acquisi-
tion of a rural telecommunications capability, at
an interest rate equal to the then cost of money
to the Government of the United States for
loans of similar maturity, but not more than 7
percent per annum, to any applicant therefor
who meets the following requirements:
‘‘(i) The average number of subscrib-
ers per mile of line in the service area of
the applicant is not more than 15.
‘‘(ii) The applicant is capable of pro-
ducing net income or margins, before in-
terest payments on the loan applied for, of
not less than 100 percent (but not more
than 500 percent) of the interest require-
ments on all of the outstanding and pro-
posed loans of the applicant.
‘‘(iii) The Administrator has approved
a telecommunications modernization plan
for the State under paragraph (3), and, if
the plan was developed by telephone bor-
rowers under this title, the applicant is a
participant in the plan.
‘‘(B) CALL
PROVISION.—The Adminis-
trator 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.
‘‘(C) CONCURRENT LOAN AUTHORITY.—On
request of any applicant for a loan under this
paragraph during any fiscal year, the Adminis-
trator shall—
‘‘(i) consider the application to be for
a loan under this paragraph and a loan
under section 408; and
‘‘(ii) if the applicant is eligible there-
for, 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 appli-
cant is eligible under this paragraph and
under section 408, 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 408 for the
fiscal year.
‘‘(D) 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 sec-
tion 306.
‘‘(3) 
STATE
TELECOMMUNICATIONS
MOD-
ERNIZATION PLANS.—
‘‘(A) APPROVAL.—If, within 6 months
after final regulations are promulgated to carry
out this paragraph, the public utility commis-
sion of any State develops a telecommunications
modernization plan that meets the requirements
of subparagraph (B), then the Administrator
shall approve the plan for the State. Otherwise,
the Administrator shall approve any tele-
communications modernization plan for the
State that meets such requirements, which is
developed by a majority of the borrowers of
telephone loans made under this title who are
located in the State.
‘‘(B) REQUIREMENTS.—A telecommuni-
cations modernization plan must, at a mini-
mum, 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 informa-
tion 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) multiple voices;
‘‘(bb) video images; and
‘‘(cc) data at a rate of at
least 1,000,000 bits of informa-
tion per second; and
‘‘(II) the proper routing of infor-
mation to subscribers.
‘‘(v) The plan must provide for uni-
form deployment schedules to ensure that
advanced services are deployed at the same
time in rural and nonrural areas.
‘‘(C) FINALITY
OF
APPROVAL.—A tele-
communications modernization plan approved
under subparagraph (A) may not subsequently
be disapproved.’’.
(2) RURAL
TELEPHONE
BANK
LOAN
PRO-
GRAM.—Section 408 of the Rural Electrification Act
of 1936 (7 U.S.C. 948) is amended—
(A) in subsection (a)—
(i) by striking ‘‘, (1)’’ and all that fol-
lows through ‘‘(3)’’ and inserting ‘‘(1) for
the purchase and installation of telephone
lines, systems, and facilities (other than
buildings used primarily for administrative
purposes, vehicles not used primarily in
construction, 
and 
personal 
customer
premise equipment) directly related to the
furnishing, improvement, or extension of
rural telecommunications service or the ac-
quisition of a rural telecommunications ca-
pability, and (2)’’; and
(ii) by striking ‘‘(2) hereof’’ and in-
serting ‘‘clause (1)’’;
(B) in subsection (b)—
(i) by amending paragraph (4) to read
as follows:
‘‘(4)(A) The Governor of the telephone bank
may make a loan under this section only to an appli-
cant therefor 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.
‘‘(ii) The applicant is capable of producing
net income or margins, before interest pay-
ments on the loan applied for, of not less than
100 percent (but not more than 500 percent) of
the interest requirements on all of the outstand-
ing and proposed loans of the applicant.
‘‘(iii) The Administrator has approved,
under section 305(d)(3), a telecommunications
modernization plan for the State in which the
applicant is located, and, if the plan was devel-
oped by telephone borrowers under title III, the
applicant is a participant in the plan.’’;
(ii) in paragraph (8)—
(I) by inserting ‘‘(A)’’ after
‘‘(8)’’;
(II) by striking ‘‘if such prepay-
ment is not made later than Septem-
ber 30, 1988’’ and inserting ‘‘except
for any prepayment penalty provided
for in a loan agreement entered into
before the date of the enactment of
the Omnibus Budget Reconciliation
Act of 1993’’; and
(III) by adding at the end the
following:
‘‘(B) If a borrower prepays part or all of a loan
made under this section, then, notwithstanding sec-
tion 407(b), the Governor of the telephone bank
shall—
‘‘(i) use the full amount of the prepayment
to repay obligations of the telephone bank is-
sued pursuant to section 407(b) before October
1, 1991, to the extent any such obligations are
outstanding; and
‘‘(ii) in repaying such obligations, first
repay the advances bearing the greatest rate of
interest.’’; and
(iii) by adding at the end the follow-
ing:
‘‘(9) On request of any applicant for a loan
under this section during any fiscal year, the Gov-
ernor of the telephone bank shall—
‘‘(A) consider the application to be for a
loan under this section and a loan under section
305(d)(2); and
‘‘(B) if the applicant is eligible therefor,
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 305(d)(2), 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 305(d)(2) for the fiscal year.
‘‘(10) On request of any applicant who is eligi-
ble 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 305(d)(2).’’;
and
(C) by adding at the end the following:
‘‘(e) 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 as-
sets and liabilities of the telephone bank. This subsection
shall not apply to loans obligated before the date of the
enactment of this subsection.’’.
(3) FUNDING.—Section 314 of such Act (7
U.S.C. 940d) is amended to read as follows:
‘‘SEC. 314. LIMITATIONS ON AUTHORIZATION OF APPRO-
PRIATIONS.
‘‘(a) IN GENERAL.—There are authorized to be ap-
propriated to the Administrator such sums as may be nec-
essary for the cost of loans in the following amounts, for
the following purposes and periods of time:
‘‘(1) ELECTRIC HARDSHIP LOANS.—For loans
under section 305(c)(1)—
‘‘(A) for fiscal year 1994, $125,000,000;
and
‘‘(B) for each of fiscal years 1995 through
1998, $125,000,000, increased by the adjust-
ment percentage for the fiscal year.
‘‘(2) ELECTRIC MUNICIPAL RATE LOANS.—For
loans under section 305(c)(2)—
‘‘(A) for fiscal year 1994, $600,000,000;
and
‘‘(B) for each of fiscal years 1995 through
1998, $600,000,000, increased by the adjust-
ment percentage for the fiscal year.
‘‘(3) 
TELEPHONE
HARDSHIP
LOANS.—For
loans under section 305(d)(1)—
‘‘(A) for fiscal year 1994, $125,000,000;
and
‘‘(B) for each of fiscal years 1995 through
1998, $125,000,000, increased by the adjust-
ment percentage for the fiscal year.
‘‘(4) TELEPHONE
COST-OF-MONEY
LOANS.—
For loans under section 305(d)(2)—
‘‘(A) for fiscal year 1994, $198,000,000;
and
‘‘(B) for each of fiscal years 1995 through
1998, $198,000,000, increased by the adjust-
ment percentage for the fiscal year.
‘‘(b) ADJUSTMENT
PERCENTAGE
DEFINED.—As
used in subsection (a), 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 the Internal Reve-
nue Code of 1986) for the 12-month 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 12-month period ending on
July 31, 1993.
‘‘(c) MANDATORY LEVELS.—The Administrator shall
make insured loans under this title from the Rural Elec-
trification and Telephone Revolving Fund established
under section 301, for the purposes, in the amounts, and
for the periods of time specified in subsection (a), as pro-
vided in advance in appropriations Acts.
‘‘(d) AVAILABILITY
OF
FUNDS
FOR
INSURED
LOANS.—Amounts made available for loans under section
305 are authorized to remain available until expended.’’.
(4) 
RULE
OF
INTERPRETATION.—Section
309(a) of such Act (7 U.S.C. 939(a)) is amended by
adding at the end the following: ‘‘The preceding sen-
tence shall not be construed to make section
408(b)(2) or 412 applicable to this title.’’.
(5) MISCELLANEOUS AMENDMENTS.—
(A) Section 2 of such Act (7 U.S.C. 902)
is amended—
(i) by inserting ‘‘(a)’’ before ‘‘The Ad-
ministrator’’;
(ii) by striking ‘‘telephone service in
rural areas, as hereinafter provided;’’ and
inserting ‘‘electric and telephone service in
rural areas, as provided in this Act, and
for the purpose of assisting electric bor-
rowers to implement demand side manage-
ment and energy conservation programs’’;
and
(iii) by adding at the end the follow-
ing:
‘‘(b) Not later than January 1, 1994, the Adminis-
trator shall issue interim regulations to implement the au-
thority contained in subsection (a) to make loans for the
purpose of assisting electric borrowers to implement de-
mand side management and energy conservation pro-
grams. If such regulations are not issued by such date,
the Administrator shall consider any demand side manage-
ment program which is approved by a State agency to be
eligible for such loans.’’
(B) Section 4 of such Act (7 U.S.C. 904)
is amended by inserting ‘‘and for the furnishing
and improving of electric service to persons in
rural areas, including by assisting electric bor-
rowers to implement demand side management
and 
energy 
conservation 
programs’’ 
after
‘‘central station service’’.
(C) Section 7 of such Act (7 U.S.C. 907)
is amended—
(i) by inserting ‘‘(a)’’ before ‘‘The Ad-
ministrator is’’;
(ii) by designating the 2nd undesig-
nated paragraph as subsection (b); and
(iii) by adding at the end the follow-
ing:
‘‘(c) Section 306(b) of the Consolidated Farm and
Rural Development Act shall apply to a borrower of a loan
under this Act in the same manner in which such section
applies to an association referred to in such section.’’.
(D) Section 13 of such Act (7 U.S.C. 913)
is amended—
(i) by inserting ‘‘, except as provided
in section 203(b),’’ before ‘‘shall be deemed
to mean any area’’; and
(ii) by striking ‘‘city, village, or bor-
ough having a population in excess of fif-
teen hundred inhabitants’’ and inserting
‘‘urban or urbanized area, as defined by
the Bureau of the Census’’.
(E) Section 203(b) of such Act (7 U.S.C.
923(b)) is amended by striking ‘‘one thousand
five hundred’’ and inserting ‘‘5,000’’.
(F) Section 307 of such Act (7 U.S.C.
937) is amended by adding at the end the fol-
lowing: ‘‘The Administrator may not request
any applicant for an electric loan under this Act
to apply for and accept a loan in an amount ex-
ceeding 30 percent of the credit needs of the
applicant.’’.
(G) Section 406 of such Act (7 U.S.C.
946) is amended by adding at the end the fol-
lowing:
‘‘(i) The Governor of the telephone bank may invest
in obligations of the United States the amounts in the ac-
count in the Treasury of the United States numbered
12X8139 (known as ‘the RTB Equity Fund’).’’.
(H) Section 18 of such Act (7 U.S.C. 918)
is amended—
(i) by inserting ‘‘(a) NO CONSIDER-
ATION OF BORROWER’S LEVEL OF GEN-
ERAL FUNDS.—’’ before ‘‘The Adminis-
trator’’; and
(ii) by adding at the end the follow-
ing:
‘‘(b) NO LOAN ORIGINATION FEES.—The Adminis-
trator and the Governor of the telephone bank may not
charge any fee or charge not expressly provided in this
Act in connection with any loan under this Act.’’.
(I) Title III of such Act (7 U.S.C. 931–
940d) is amended by inserting after section
306B the following:
‘‘SEC. 306C. ELIGIBILITY OF DISTRIBUTION BORROWERS
FOR LOANS, LOAN GUARANTEES, AND LIEN
ACCOMMODATIONS.
‘‘A distribution borrower not in default on the repay-
ment of any loan made or guaranteed under this Act shall
be eligible for a loan, loan guarantee, or lien accommoda-
tion under this title. For the purpose of determining such
eligibility, a default by a borrower from which a distribu-
tion borrower purchases wholesale power shall not be con-
sidered a default by the distribution borrower.
‘‘SEC. 306D. ADMINISTRATIVE PROHIBITIONS APPLICABLE
TO ELECTRIC BORROWERS.
‘‘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 Act whose net worth exceeds 110 percent of the out-
standing principal balance on all loans made or guaran-
teed to the borrower by the Administrator.’’.
(b) EXPANDED ELIGIBILITY FOR LOANS FOR WATER
AND WASTE DISPOSAL FACILITIES.—Section 306(a)(1) of
the Consolidated Farm and Rural Development Act (7
U.S.C. 1926(a)(1)) is amended by inserting after the 1st
sentence the following: ‘‘The Secretary may also make
loans to any borrower to whom a loan has been made
under the Rural Electrification Act of 1936, for the con-
servation, development, use, and control of water, and the
installation of drainage or waste disposal facilities, pri-
marily serving farmers, ranchers, farm tenants, farm la-
borers, rural businesses, and other rural residents.’’.
(c) REGULATIONS.—Not later than October 1, 1993,
the Administrator of the Rural Development Administra-
tion shall issue interim final rules to implement the
amendments made by this section.
SEC. 1202. REORGANIZATION OF RURAL DEVELOPMENT
FUNCTIONS.
(a) ADMINISTRATION OF RURAL ELECTRIFICATION
ACT OF 1936 TRANSFERRED TO THE RURAL DEVELOP-
MENT ADMINISTRATION.—
(1) IN
GENERAL.—The Rural Electrification
Act of 1936 (7 U.S.C. 901 et seq.) is amended by
striking all after the enacting clause that precedes
section 2 and inserting the following:
‘‘SECTION 1. SHORT TITLE; ADMINISTRATION OF ACT.
‘‘(a) SHORT TITLE.—This Act may be cited as the
‘Rural Electrification Act of 1936’.
‘‘(b) ADMINISTRATION OF ACT.—The Administrator
of the Rural Development Administration (in this Act re-
ferred to as the ‘Administrator’) shall carry out this Act
under the general direction and supervision of the Sec-
retary of Agriculture.’’.
(2) CONFORMING AMENDMENTS.—
(A) Section 3(a) of such Act (7 U.S.C.
903(a)) is amended by striking ‘‘appointed pur-
suant to the provisions of this Act’’.
(B) Section 8 of such Act (7 U.S.C. 908)
is amended—
(i) by striking ‘‘authorized to be ap-
pointed by this Act’’; and
(ii) by striking ‘‘Rural Electrification
Administration created by this Act’’ and
inserting ‘‘Rural Development Administra-
tion’’.
(C) Each of the following provisions of
such Act is amended by striking ‘‘Rural Elec-
trification 
Administration’’ 
and 
inserting
‘‘Rural Development Administration’’:
(i) 
Section 
306A(b) 
(7 
U.S.C.
936a(b)).
(ii) Section 403(b) (7 U.S.C. 943(b)).
(iii) Section 404 (7 U.S.C. 944).
(iv) Section 406(c) (7 U.S.C. 946(c)).
(v) 
Section 
410(a)(1) 
(7 
U.S.C.
950(a)(1)).
(b) OTHER FUNCTIONS
OF
THE RURAL ELEC-
TRIFICATION ADMINISTRATION TRANSFERRED
TO
THE
RURAL DEVELOPMENT ADMINISTRATION.—Section 364
of the Consolidated Farm and Rural Development Act
(7 U.S.C. 2006f) is amended by adding at the end the
following:
‘‘(g) TRANSFER
OF FUNCTIONS
OF
THE RURAL
ELECTRIFICATION ADMINISTRATION TO THE RURAL DE-
VELOPMENT ADMINISTRATION.—
‘‘(1) IN GENERAL.—All rights, interests, obliga-
tions, and duties of the Administrator of the Rural
Electrification Administration arising before the
date of the enactment of this subsection, from any
loan made, insured, or guaranteed by, or other ac-
tion of, the Rural Electrification Administration
shall be vested in the Administrator of the Rural
Development Administration.
‘‘(2) REFERENCES.—Any reference in any law,
regulation, or order in effect immediately before the
date of the enactment of this subsection to the Rural
Electrification Administration or to the Adminis-
trator of the Rural Electrification Administration, is
deemed to be a reference to the Rural Development
Administration or to the Administrator of the Rural
Development Administration, respectively.
‘‘(3) EFFECT ON PENDING PROCEEDINGS AND
PARTIES TO SUCH PROCEEDINGS.—
‘‘(A) NONABATEMENT OF PROCEEDINGS.—
This subsection shall not be construed to abate
any proceeding commenced by or against the
Rural Electrification Administration or the Ad-
ministrator of the Rural Electrification Admin-
istration.
‘‘(B) EFFECT ON PARTIES.—If an officer
of the Rural Electrification Administration, in
the official capacity of such officer, is a party
to a proceeding pending on the date of the en-
actment of this subsection, then such action
shall be continued with the Administrator, or
other appropriate officer, of the Rural Develop-
ment Administration substituted or added as a
party.
‘‘(4) INCIDENTAL TRANSFERS.—The Secretary
shall transfer all personnel from the Rural Elec-
trification Administration to the Rural Development
Administration, and shall make such determinations
as may be appropriate to carry out this subsection.’’.
(c) STRUCTURE OF THE RURAL DEVELOPMENT AD-
MINISTRATION.—Such section 364 (7 U.S.C. 2006f), as
amended by subsection (b) of this section, is amended by
adding at the end the following:
‘‘(h) STRUCTURE OF THE RURAL DEVELOPMENT AD-
MINISTRATION.—
‘‘(1) DEPUTY
ADMINISTRATOR
FOR
RURAL
UTILITIES.—The Administrator of the Rural Devel-
opment Administration shall appoint a Deputy Ad-
ministrator for Rural Utilities who shall admin-
ister—
‘‘(A) the programs authorized by the Rural
Electrification Act of 1936; and
‘‘(B) the rural water and waste disposal
programs administered by the Rural Develop-
ment Administration.
‘‘(2) ASSISTANT
ADMINISTRATORS.—The Ad-
ministrator of the Rural Development Administra-
tion may appoint—
‘‘(A) an Assistant Administrator for the
electric programs authorized by the Rural Elec-
trification Act of 1936;
‘‘(B) an Assistant Administrator for the
telephone programs authorized by such Act;
‘‘(C) an Assistant Administrator who shall
be responsible for—
‘‘(i) rural utility technical engineering
standards and specifications; and
‘‘(ii) other utility management and ac-
counting functions assigned by the Admin-
istrator; and
‘‘(D) an Assistant Administrator for water
and sewer programs.’’.
(d) RURAL ECONOMIC DEVELOPMENT.—
(1) IN GENERAL.—Such section 364 (7 U.S.C.
2006f), as amended by subsections (b) and (c) of
this section, is amended by adding at the end the
following:
‘‘(i) RURAL ECONOMIC DEVELOPMENT.—A borrower
of a loan or loan guarantee under the Rural Electrification
Act of 1936 shall be eligible for assistance under all pro-
grams administered by the Rural Development Adminis-
tration, and the Administrator of the Rural Development
Administration shall encourage and facilitate the full par-
ticipation of such a borrower in such programs.
‘‘(j) TECHNICAL ASSISTANCE UNIT.—The Adminis-
trator of the Rural Development Administration shall es-
tablish a technical assistance unit to provide to borrowers
under the programs administered by the Rural Develop-
ment Administration advice and guidance on community
and economic development activities.’’.
(2) CONFORMING REPEAL.—Section 11A of the
Rural Electrification Act of 1936 (7 U.S.C. 911a) is
hereby repealed.
(e) REGULATIONS.—Not later than January 1, 1994,
the Administrator of the Rural Development Administra-
tion shall issue interim final rules to implement the
amendments made by this section.
Subtitle C—Food Stamp Program
SEC. 1301. SHORT TITLE.
This subtitle may be cited as the ‘‘Mickey Leland
Childhood Hunger Relief Act’’.
SEC. 1302. REFERENCES TO THE ACT.
Except as otherwise provided in this subtitle, ref-
erences in this subtitle to ‘‘the Act’’ and sections of the
Act shall be deemed to be references to the Food Stamp
Act of 1977 (7 U.S.C. 2011 et seq.) and the sections of
such Act.
CHAPTER 1—ENSURING ADEQUATE FOOD
ASSISTANCE
SEC. 1311. MAXIMUM BENEFIT LEVEL.
Section 3(o) of the Act (7 U.S.C. 2012(o)) is amend-
ed by striking ‘‘(4) through’’ and all that follows through
the end of the subsection, and inserting the following:
‘‘and (4) on October 1, 1993, and each October 1 there-
after, adjust the cost of such diet to reflect 104 percent
of the cost of the thrifty food plan in the preceding June
(without regard to adjustments made to such costs in any
previous year), as determined by the Secretary, and round
the result to the nearest lower dollar increment for each
household size.’’.
SEC. 1312. HELPING LOW-INCOME HIGH SCHOOL STU-
DENTS.
Section 5(d)(7) of the Act (7 U.S.C. 2014(d)(7)) is
amended by striking ‘‘who is a student, and who has not
attained his eighteenth birthday’’ and inserting ‘‘who is
an elementary or secondary school student, and who is 21
years of age or younger’’.
SEC. 1313. FAMILIES WITH HIGH SHELTER EXPENSES.
(a) COMPUTATION.—Section 5(e) of the Act (7
U.S.C. 2014(e)) is amended—
(1) in the fourth sentence by striking ‘‘: Pro-
vided, That the amount’’ and all that follows
through ‘‘June 30’’; and
(2) in the fifth sentence by striking ‘‘under
clause (2) of the preceding sentence’’.
(b) LIMITATIONS.—
(1) FISCAL YEAR 1994.—Effective on the date
of enactment of this Act, section 5(e) of the Act (7
U.S.C. 2014(e)) is amended by inserting after the
fourth sentence the following:
‘‘In the 12-month period ending September 30, 1994, such
excess shelter expense deduction shall not exceed $214 a
month in the 48 contiguous States and the District of Co-
lumbia, and shall not exceed, in Alaska, Hawaii, Guam,
and the Virgin Islands of the United States, $372, $305,
$259, and $158 a month, respectively.’’.
(2) REMOVAL
OF
CAP.—Effective October 1,
1994, section 5(e) of the Act (7 U.S.C. 2014(e)), as
amended by paragraph (1), is amended by striking
the fifth sentence.
SEC. 1314. RESOURCE EXCLUSION FOR EARNED INCOME
TAX CREDITS.
Section 5(g)(3) of the Act (7 U.S.C. 2014(g)(3)) is
amended by adding at the end the following:
‘‘The Secretary shall also exclude from financial resources
any earned income tax credits received by any member of
the household for a period of 12 months from receipt if
such member was participating in the food stamp program
at the time the credits were received and participated in
such program continuously during the twelve-month
period.’’.
SEC. 1315. HOMELESS FAMILIES IN TRANSITIONAL HOUS-
ING.
Section 
5(k)(2)(F) 
of 
the 
Act 
(7 
U.S.C.
2014(k)(2)(F)) is amended to read as follows:
‘‘(F) housing assistance payments made to a
third party on behalf of the household residing in
transitional housing for the homeless;’’.
SEC. 1316. HOUSEHOLDS BENEFITING FROM GENERAL AS-
SISTANCE VENDOR PAYMENTS.
Section 
5(k)(1)(B) 
of 
the 
Act 
(7 
U.S.C.
2014(k)(1)(B)) is amended by striking ‘‘living expenses’’
and inserting ‘‘housing expenses, not including energy or
utility-cost assistance,’’.
SEC. 1317. CONTINUING BENEFITS TO ELIGIBLE HOUSE-
HOLDS.
Section 
8(c)(2)(B) 
of 
the 
Act 
(7 
U.S.C.
2017(c)(2)(B)) is amended by inserting ‘‘of more than one
month in’’ after ‘‘following any period’’.
SEC. 1318. IMPROVING THE NUTRITIONAL STATUS OF CHIL-
DREN IN PUERTO RICO.
Section 
19(a)(1)(A) 
of 
the 
Act 
(7 
U.S.C.
2028(a)(1)(A)) is amended by—
(1) striking ‘‘$1,091,000,000’’ and inserting
‘‘$1,111,000,000’’; and
(2) striking ‘‘$1,133,000,000’’ and inserting
‘‘$1,158,000,000’’.
CHAPTER 2—PROMOTING SELF
SUFFICIENCY
SEC. 1321. INCOME EXCLUSION FOR EDUCATION ASSIST-
ANCE.
Section 5 of the Act (7 U.S.C. 2014) is amended
by—
(1) amending subsection (d)(3) to read as
follows:
‘‘(3) all educational loans on which payment is
deferred (including any loan origination fees or in-
surance premiums associated with such loans),
grants, scholarships, fellowships, veterans’ edu-
cational benefits, and the like awarded to a house-
hold member enrolled at a recognized institution of
post-secondary education, at a school for the handi-
capped, in a vocational education program, or in a
program that provides for completion of a secondary
school diploma or obtaining the equivalent thereof,’’;
(B) by adding at the end ‘‘or (B) the first
$50 of any child support payment in the month
received if such payment was made by the ab-
sent parent in the month when due,’’; and
(2) by striking subsection (m).
SEC. 1324. IMPROVING ACCESS TO EMPLOYMENT AND
TRAINING ACTIVITIES.
(a) DEPENDENT CARE DEDUCTION.—Section 5(e) of
the Act (7 U.S.C. 2014(e)) is amended in clause (1) of
the fourth sentence by—
(1) striking ‘‘$160 a month for each depend-
ent’’ and inserting ‘‘$200 a month for a dependent
child under 2 years of age and $175 a month for
any other dependent’’; and
(2) striking ‘‘, regardless of the dependent’s
age,’’.
(b) REIMBURSEMENTS
TO PARTICIPANTS
IN EM-
PLOYMENT AND TRAINING PROGRAMS.—
(1) COSTS OTHER THAN COSTS OF DEPENDENT
CARE.—Section 6(d)(4)(I)(i)(I) of the Act (7 U.S.C.
2015(d)(4)(I)(i)(I)) is amended by striking ‘‘, except
that’’ and all that follows through ‘‘per month’’ and
inserting the following—
‘‘(which may include reimbursements for costs of
any supportive services of the kinds provided or re-
imbursed under the State’s plan under part F of
title IV of the Social Security Act (42 U.S.C. 681
et seq.)), except that State agencies may establish
limits on reimbursements to participants for such
costs, which limits may not be less than $25 per
month’’.
(2) COSTS
OF
DEPENDENT
CARE.—Section
6(d)(4)(I)(i)(II) 
of 
the 
Act 
(7 
U.S.C.
2015(d)(4)(I)(i)(II)) is amended to read as follows—
‘‘(II) the actual costs of such dependent care
expenses that are determined by the State agency to
be necessary for the participation of an individual in
the program (other than an individual who is the
caretaker relative of a dependent in a family receiv-
ing benefits under part A of title IV of the Social
Security Act (42 U.S.C. 601 et seq.) in a local area
where an employment, training, or education pro-
gram under title IV of such Act is in operation, or
was in operation, on the date of enactment of the
Hunger Prevention Act of 1988) up to any limit set
by the State agency (which limit shall not be less
than the limit for the dependent care deduction
under section 5(e)), but in no event shall such pay-
ment or reimbursements exceed the applicable local
market rate as determined by procedures consistent
with any such determination under the Social Secu-
rity Act. Individuals subject to the program under
this paragraph may not be required to participate if
dependent costs exceed the limit established by the
State agency under this subclause or other actual
costs exceed any limit established under subclause
(I).’’.
(c) CONFORMING AMENDMENTS.—Section 16(h)(3)
of the Act (7 U.S.C. 2025(h)(3)) is amended by—
(1) striking ‘‘$25’’ and all that follows through
‘‘dependent care costs)’’, and inserting ‘‘the payment
made under section 6(d)(4)(I)(i)(I) and subject to
any limits the State has established under such sec-
tion’’; and
(2) striking ‘‘representing $160 per month per
dependent’’ and inserting ‘‘equal to the payment
made under section 6(d)(4)(I)(i)(II) but not more
than the applicable local market rate,’’.
SEC. 1325. VEHICLES NEEDED TO SEEK AND CONTINUE EM-
PLOYMENT AND FOR HOUSEHOLD TRANS-
PORTATION.
Section 5(g)(2) of the Act (7 U.S.C. 2014(g)(2)) is
amended by striking ‘‘$4,500’’ and inserting the following:
‘‘a level set by the Secretary, which shall be $5,500
through September 30, 1994, and which shall be adjusted
on each October 1 thereafter to reflect changes in the new
car component of the Consumer Price Index for All Urban
Consumers published by the Bureau of Labor Statistics
for the 12-month period ending on June 30 preceding the
date of such adjustment and rounded to the nearest $50’’.
SEC. 1326. VEHICLES NECESSARY TO CARRY FUEL OR
WATER.
Section 5(g)(2) of the Act (7 U.S.C. 2014(g)(2)) is
amended by adding at the end the following:
‘‘The Secretary shall exclude from financial resources the
value of a vehicle that a household depends upon to carry
fuel for heating or water for home use when such trans-
ported fuel or water is the primary source of fuel or water
for the household.’’.
SEC. 
1327. 
DEMONSTRATION 
PROJECTS 
TESTING 
RE-
SOURCE ACCUMULATION.
Section 17 of the Act (7 U.S.C. 2026) is amended
by adding at the end the following:
‘‘(k) The Secretary may conduct, under such terms
and conditions as the Secretary may prescribe, for a pe-
riod not to exceed 4 years, demonstration projects to test
allowing eligible households to accumulate resources up to
$10,000 for later expenditure for a purpose directly relat-
ed to improving the education, training, or employability
(including self employment) of household members, for the
purchase of a home for the household, for a change of
the household’s residence, or for making major repairs to
the household’s home. The Secretary is authorized to pay
up to $100,000,000 in food stamp benefits to households
participating in such demonstration projects during the
period in which such projects are in operation.’’.
CHAPTER 3—SIMPLIFYING THE
PROVISION OF FOOD ASSISTANCE
SEC. 1331. SIMPLIFYING THE HOUSEHOLD DEFINITION FOR
HOUSEHOLDS WITH CHILDREN AND OTHERS.
Section 3(i) of the Act (7 U.S.C. 2012(i)) is amend-
ed—
(1) in the first sentence—
(A) by striking ‘‘(2)’’ and inserting ‘‘or
(2)’’;
(B) by striking ‘‘, or (3) a parent of minor
children and that parent’s children’’ and all
that follows through ‘‘parents and children, or
siblings, who live together’’, and inserting the
following:
‘‘. Spouses who live together, parents and their chil-
dren 21 years of age or younger (who are not them-
selves parents living with their children or married
living with their spouses) who live together, and chil-
dren (excluding foster children) under 18 years of
age who live with and are under the parental control
of a person other than their parent together with the
person exercising parental control’’; and
(C) striking ‘‘, unless one of ’’ and all that
follows through ‘‘disabled member’’; and
(2) in the second sentence by striking ‘‘clause
(1) of the preceding sentence’’ and inserting ‘‘the
preceding sentences’’.
SEC. 1332. ELIGIBILITY OF CHILDREN OF PARENTS PAR-
TICIPATING IN DRUG OR ALCOHOL ABUSE
TREATMENT PROGRAMS.
Section 3 of the Act (7 U.S.C. 2012) is amended—
(1) in the last sentence of subsection (i) by in-
serting ‘‘, together with their children,’’ after ‘‘nar-
cotics addicts or alcoholics’’; and
(2) in subsection (g)(5) by inserting ‘‘, and
their children,’’ after ‘‘or alcoholics’’.
SEC. 1333. RESOURCES OF HOUSEHOLDS WITH DISABLED
MEMBERS.
Section 5(g)(1) of the Act (7 U.S.C. 2014(g)(1)) is
amended by striking ‘‘a member who is 60 years of age
or older,’’ and inserting ‘‘an elderly or disabled member,’’.
CHAPTER 4—IMPROVING PROGRAM
INTEGRITY
SEC. 1341. USE AND DISCLOSURE OF INFORMATION PRO-
VIDED BY RETAIL FOOD STORES AND WHOLE-
SALE FOOD CONCERNS.
Section 9(c) of the Act (7 U.S.C. 2018(c)) is amend-
ed—
(1) in the second sentence by inserting after
‘‘disclosed to and used by’’ the following:
‘‘State and Federal law enforcement and investigative
agencies for the purposes of administering or enforcing the
provisions of this Act or any other Federal or State law
and the regulations issued under this Act or such law,
and’’;
(2) by inserting after the second sentence the
following:
‘‘An officer or employee of an agency described in the pre-
ceding sentence who publishes, divulges, discloses, or
makes known in any manner or to any extent not author-
ized by Federal law any information obtained under the
authority granted by this subsection shall be subject to
section 1905 of title 18 of the United States Code.’’; and
(3) in the last sentence by striking ‘‘Such pur-
poses shall not exclude’’ and inserting the follow-
ing—
‘‘Such regulations shall establish the criteria to be used
by the Secretary to determine that such information is
needed. Such regulations shall not prohibit’’.
SEC. 1342. ADDITIONAL MEANS OF CLAIMS COLLECTION.
(a) SAFEGUARDS.—Section 11(e)(8) of the Act (7
U.S.C. 2020(e)(8)) is amended by—
(1) striking ‘‘and (B)’’ and inserting ‘‘(B)’’;
and
(2) striking the semi-colon at the end and in-
serting the following:
‘‘, and (C) such safeguards shall not prevent the use
by, or disclosure of such information, to agencies of
the Federal Government (including the United
States Postal Service) for purposes of collecting the
amount of an overissuance of coupons, as deter-
mined under section 13(b) of this Act and excluding
claims arising from an error of the State agency,
that has not been recovered pursuant to such sec-
tion, from refunds of Federal taxes as authorized
pursuant to section 3720A of title 31 of the United
States Code, or from Federal pay (including salaries
and pensions) as authorized pursuant to section
5514 of title 5 of the United States Code;’’.
(b) RECOVERY.—Section 13 of the Act (7 U.S.C.
2022) is amended by adding the following:
‘‘(d) The amount of an overissuance of coupons, as
determined under subsection (b) and except for claims
arising from an error of the State agency, that has not
been recovered pursuant to such subsection may be recov-
ered from refunds of Federal taxes, as authorized pursu-
ant to section 3720A of title 31 of the United States Code,
or from Federal pay (including salaries and pensions) as
authorized by section 5514 of title 5 of the United States
Code.’’.
SEC. 1343. DEMONSTRATION PROJECTS TESTING ACTIVI-
TIES DIRECTED AT STREET TRAFFICKING IN
COUPONS.
Section 17 of the Act (7 U.S.C. 2026) is amended
by adding a new subsection (l) at the end thereof as fol-
lows—
‘‘(l) The Secretary may use up to $4 million of funds
provided in advance in appropriations Acts for projects au-
thorized by this section in Fiscal Year 1994 to conduct
projects in which State or local food stamp agencies test
innovative ideas for working with State or local law en-
forcement agencies to investigate and prosecute coupon
street trafficking by recipients, buyers, and authorized re-
tail stores.’’.
CHAPTER 5—IMPROVING FOOD STAMP
PROGRAM MANAGEMENT
SEC. 1351. CLARIFICATION OF CATEGORICAL ELIGIBILITY.
Effective on the date of enactment of this Act, section
5 of the Act (7 U.S.C. 2014) is amended by—
(1) striking ‘‘and the third sentence of section
3(i)’’ each place it appears in subsection (a) and in-
serting the ‘‘, the third sentence of section 3(i), and
section 20(f)’’; and
(2) striking ‘‘II,’’ in subsection (j).
SEC. 1352. TECHNICAL AMENDMENTS RELATED TO ELEC-
TRONIC BENEFIT TRANSFER.
(a) ELIGIBILITY DISQUALIFICATION
OF INDIVID-
UALS.—Section 6(b)(1)(B) of the Act (7 U.S.C.
2015(b)(1)(B)) is amended by striking ‘‘or authorization
cards’’ and inserting ‘‘, authorization cards, or access
devices’’.
(b) ELIGIBILITY
DISQUALIFICATION
OF
RETAIL
FOOD STORES AND WHOLESALE FOOD CONCERNS.—Sec-
tion 12(b)(3)(B) of the Act (7 U.S.C. 2021(b)(3)(B)) is
amended by—
(1) striking ‘‘or authorization cards’’ and in-
serting ‘‘, authorization cards, or access devices’’;
and
(2) striking ‘‘or cards’’ and inserting ‘‘, cards,
or devices’’.
SEC. 1353. DISQUALIFICATION OF RECIPIENTS FOR TRAD-
ING FIREARMS, AMMUNITION, EXPLOSIVES,
OR CONTROLLED SUBSTANCES FOR COU-
PONS.
Section 6(b)(1) of the Act (7 U.S.C. 2015(b)(1)) is
amended by striking subdivisions (ii) and (iii) and insert-
ing the following:
‘‘(ii) for a period of 1 year upon—
‘‘(I) the second occasion of any such deter-
mination; or
‘‘(II) the first occasion of a finding of the
trading of a controlled substance (as defined in
section 102 of the Controlled Substances Act
(21 U.S.C. 802)); and
‘‘(iii) permanently upon—
‘‘(I) the third occasion of any such deter-
mination;
‘‘(II) the second occasion of a finding of
the trading of a controlled substance (as de-
fined in section 102 of the Controlled Sub-
stances Act (21 U.S.C. 802)) for coupons; or
‘‘(III) the first occasion of a finding of the
trading of firearms, ammunition, or explosives
for coupons.’’.
SEC. 1354. UNCAPPED CIVIL MONEY PENALTY FOR TRAF-
FICKING IN COUPONS.
Effective on the date of enactment of this Act, section
12(b)(3)(B) of the Act (7 U.S.C. 2021(b)(3)(B)) is
amended by striking ‘‘(except’’ and all that follows
through ‘‘) in’’, and inserting ‘‘in’’.
SEC. 1355. UNCAPPED CIVIL MONEY PENALTY FOR SELLING
FIREARMS, AMMUNITION, EXPLOSIVES, OR
CONTROLLED SUBSTANCES FOR COUPONS.
Effective on the date of enactment of this Act, section
12(b)(3)(C) of the Act (7 U.S.C. 2021(b)(3)(C)) is
amended—
(1) by striking ‘‘substances (as the term is’’
and inserting ‘‘substance (as’’; and
(2) by striking ‘‘(except’’ and all that follows
through ‘‘) in’’, and inserting ‘‘in’’.
SEC. 1356. MODIFYING THE FOOD STAMP QUALITY CON-
TROL SYSTEM.
(a) AMENDMENTS.—Section 16(c) of the Act (7
U.S.C. 2025(c)) is amended—
(1) in paragraph (1)(C)—
(A) by striking ‘‘payment error tolerance
level’’ and inserting ‘‘national performance
measure’’; and
(B) by striking ‘‘equal to’’ and all that fol-
lows through the period at the end, and insert-
ing the following:
‘‘equal to—
‘‘(i) the product of—
‘‘(I) the value of all allotments issued
by the State agency in the fiscal year;
times
‘‘(II) the lesser of—
‘‘(aa) the ratio of—
‘‘(1) the amount by which
the State agency’s payment error
rate for the fiscal year exceeds
the national performance meas-
ure for the fiscal year, to
‘‘(2) the national perform-
ance measure for the fiscal year;
or
‘‘(bb) one; times
‘‘(III) the amount by which the State
agency’s payment error rate for the fiscal
year exceeds the national performance
measure for the fiscal year.
‘‘(ii) The amount of liability shall not be
affected by corrective action under subpara-
graph (B).’’;
(2) in paragraph (3)(A) by striking ‘‘60 days
(or 90 days at the discretion of the Secretary)’’ and
inserting ‘‘120 days’’; and
(3) in paragraph (6) by striking ‘‘shall be used’’
and all that follows through ‘‘level’’ the last place it
appears.
(b) STUDY BY THE OFFICE OF TECHNOLOGY AS-
SESSMENT.—The Office of Technology Assessment shall
undertake a study of measurement error, any bias in pen-
alty amounts, extreme value bias, regression formula, and
of geographical and temporal uniformity of measurements,
in the food stamp program quality control system, and
shall report the results and recommendations of such
study to the Committee on Agriculture of the House of
Representatives and the Committee on Agriculture, Nutri-
tion, and Forestry of the Senate not later than 12 months
after the date of enactment of this Act.
(c) STUDY BY THE SECRETARY OF AGRICULTURE.—
The Secretary of Agriculture shall conduct a study of
major causal factors which contribute to the payment
error rate. The Secretary shall also conduct controlled ex-
periments under which various reviewers review identical
cases, with the objective of determining the degree of uni-
formity in quality control error-rate measurements and
the extent to which different levels of investment of re-
sources in the review process affect measurement error.
The Secretary shall report the results and recommenda-
tions (including recommendations as to what measures
would best reduce measurement error and increase uni-
formity of quality control error-rate measurements at rea-
sonable cost) of such study to the Committee on Agri-
culture of the House of Representatives and the Commit-
tee on Agriculture, Nutrition, and Forestry of the Senate
not later than 2 years after the date of enactment of this
Act.
CHAPTER 6—UNIFORM REIMBURSEMENT
RATES
SEC. 1361. UNIFORM REIMBURSEMENT RATES.
(a) AMENDMENTS.—Section 16 of the Act (7 U.S.C.
2025) is amended—
(1) in subsection (a)—
(A) by striking ‘‘and (5)’’ and inserting
‘‘(5)’’;
(B) by inserting before the colon the fol-
lowing—
‘‘, (6) automated data processing and information
retrieval systems subject to the conditions set forth
in subsection (g), (7) food stamp program investiga-
tions and prosecutions, and (8) implementing and
operating the immigration status verification system
under section 1137(d) of the Social Security Act (42
U.S.C. 1320b–7(d))’’; and
(C) in the proviso by inserting after ‘‘75
per centum’’ the following:
‘‘through June 30, 1994, 70 percent for the 1-year
period beginning July 1, 1994, 60 percent for the 1-
year period beginning July 1, 1995, and 50 percent
for any subsequent period,’’;
(2) in subsection (g)—
(A) by inserting ‘‘through June 30, 1995,
equal to 60 percent for the 1-year period begin-
ning July 1, 1995, and 50 percent effective
July 1, 1996,’’ after ‘‘1991,’’; and
(B) by striking ‘‘automatic’’ and inserting
‘‘automated’’; and
(3) in subsection (j) by inserting after ‘‘100 per
centum’’ the following:
‘‘through June 30, 1994, 70 percent for the 1-year period
beginning July 1, 1994, 60 percent for the 1-year period
beginning July 1, 1995, and 50 percent for any subse-
quent period,’’.
(b) APPLICATION OF AMENDMENTS.—The reductions
in enhanced Federal match rates for administration re-
sulting from the amendments made by subsection (a) shall
apply to payments to States for expenditures incurred only
after—
(1) the end of the State fiscal year that ends
during 1994; or
(2) in the case of a State with a State legisla-
ture which is not scheduled to have a regular legisla-
tive session in 1994, the end of the State fiscal year
that ends during 1995;
without regard to whether or not final regulations to-
carry out such amendments have been promulgated-
by the Secretary before the end of either of such-
State fiscal years.
CHAPTER 7—IMPLEMENTATION AND
EFFECTIVE DATES
SEC. 1371. IMPLEMENTATION AND EFFECTIVE DATES.
(a) GENERAL EFFECTIVE DATE AND IMPLEMENTA-
TION.—Except as otherwise provided in this subtitle, this
subtitle and the amendments made by this subtitle shall
take effect, and shall be implemented beginning on, Octo-
ber 1, 1993.
(b) SPECIAL EFFECTIVE DATES AND IMPLEMENTA-
TION.—(1) Sections 1312, 1315, 1316, 1317, 1322, 1323,
1326, 1331, 1333, and 1353 and the amendments made
by such sections shall take effect, and shall be imple-
mented beginning on, July 1, 1994.
(2) Paragraphs (1) and (3) of section 1356(a) and
the amendments made by such paragraphs shall take ef-
fect, and shall be implemented beginning on, October 1,
1991.
(3) Paragraph (2) of section 1356(a) and the amend-
ment made by such paragraph shall take effect, and shall
be implemented beginning on, October 1, 1992.
Subtitle D—Miscellaneous
Provisions
SEC. 1401. MAXIMUM EXPENDITURES UNDER MARKET PRO-
MOTION PROGRAM FOR FISCAL YEARS 1994
THROUGH 1998.
(a) LIMITATION.—Section 211(c)(1) of the Agricul-
tural Trade Act of 1978 (7 U.S.C. 5641(c)) is amended
by striking ‘‘not less than $200,000,000 for each of the
fiscal years 1991 through 1995’’ and inserting ‘‘an
amount equal to $147,734,000 for each of the fiscal years
1991 through 1998’’.
(b) APPLICATION OF AMENDMENTS.—The amend-
ment made by this section shall apply with respect to fiscal
years beginning after September 30, 1993.
SEC. 1402. ADMISSION, ENTRANCE, AND RECREATION FEES.
(a) AUTHORITY TO IMPOSE FEES.—
(1) ENTRANCE
AND
ADMISSION
FEES.—The
Secretary of Agriculture may charge admission or
entrance fees at National Monuments, National Vol-
canic Monuments, National Scenic Areas, and areas
of concentrated public use administered by the Sec-
retary.
(2) RECREATION
USE
FEES.—The Secretary
may charge recreation use fees at lands administered
by the Secretary in connection with the use of spe-
cialized outdoor recreation sites, equipment, services,
or facilities, including visitors’ centers, picnic tables,
boat launching facilities, or campgrounds.
(b) AMOUNT OF FEES.—The amount of the admis-
sion, entrance, and recreation fees authorized to be im-
posed under this section shall be determined by the Sec-
retary.
(c) DEFINITIONS.—For purposes of this section:
(1) The term ‘‘area of concentrated public use’’
means an area administered by the Secretary that
meets each of the following criteria:
(A) The area is managed primarily for out-
door recreation purposes.
(B) Facilities and services necessary to ac-
commodate heavy public use are provided in the
area.
(C) The area contains at least one major
recreation attraction.
(D) Public access to the area is provided
in such a manner that admission fees can be ef-
ficiently collected at one or more centralized lo-
cations.
(2) The term ‘‘boat launching facility’’ includes
any boat launching facility regardless of whether
specialized facilities or services, such as mechanical
or hydraulic boat lifts or facilities, are provided.
(3) The term ‘‘campground’’ means any camp-
ground where a majority of the following amenities
are provided, as determined by the Secretary:
(A) Tent or trailer spaces.
(B) Drinking water.
(C) An access road.
(D) Refuse containers.
(E) Toilet facilities.
(F) The personal collection of recreation
use fees by an employee or agent of the Sec-
retary.
(G) Reasonable visitor protection.
(H) If campfires are permitted in the
campground, simple devices for containing the
fires.
(4) The term ‘‘Secretary’’ means the Secretary
of Agriculture.
SEC. 1403. ADDITIONAL PROGRAM CHANGES TO MEET REC-
ONCILIATION REQUIREMENTS.
The Secretary of Agriculture shall consolidate person-
nel and field, regional, and national offices of agencies
within the Department of Agriculture in order to reduce
personnel and duplicative overhead expenses as a result
of the consolidation such that Department expenditures
are reduced by—
(1) $90,000,000 in fiscal year 1995;
(2) $97,000,000 in fiscal year 1996;
(3) $135,000,000 in fiscal year 1997; and
(4) $178,000,000 in fiscal year 1998.
SEC. 1404. ENVIRONMENTAL CONSERVATION ACREAGE RE-
SERVE PROGRAM AMENDMENTS.
(a) ENROLLMENT REQUIREMENT.—
(1) CONSERVATION RESERVE PROGRAM.—
(A) IN GENERAL.—Section 1231(d) of the
Food Security Act of 1985 (16 U.S.C. 3831(d))
is amended—
(i) by striking ‘‘may’’ and inserting
‘‘shall’’;
(ii) by striking ‘‘the amount of acres
specified in section 1230(b)’’ and inserting
‘‘a total of 38,000,000 acres during the
1986 through 1995 calendar years’’; and
(iii) by striking ‘‘each of calendar
years 1994 and 1995’’ and inserting ‘‘the
1995 calendar year’’.
(B) CONFORMING
AMENDMENT.—Section
1230(b) of such Act (16 U.S.C. 3830(b)) is
amended by striking ‘‘to place in’’ and all that
follows through ‘‘acres’’.
(2) WETLANDS RESERVE PROGRAM.—
(A) IN
GENERAL.—Section 1237(b) of
such Act (16 U.S.C. 3837(b)) is amended to
read as follows:
‘‘(b) MINIMUM ENROLLMENT.—The Secretary shall
enroll into the wetlands reserve program—
‘‘(1) a total of not less than 330,000 acres by
the end of the 1995 calendar year; and
‘‘(2) a total of not less than 975,000 acres dur-
ing the 1991 through 2000 calendar years.’’.
(B) CONFORMING
AMENDMENT.—Section
1237(c) of such Act (16 U.S.C. 3837(c)) is
amended by striking ‘‘1995’’ and inserting
‘‘2000’’.
(b) USE OF COMMODITY CREDIT CORPORATION.—
Section 1241 of such Act (16 U.S.C. 3841) is amended—
(1) in subsection (a)—
(A) by striking ‘‘(a)(1) During each of the
fiscal years ending September 30, 1986, and
September 30, 1987’’ and inserting ‘‘(a) During
each of the fiscal years 1994 through 2000’’;
and
(B) by striking paragraph (2); and
(2) in subsection (b), by striking ‘‘(A) through
(E)’’ and inserting ‘‘A through E’’.
SEC. 1405. LEVELS OF INSURANCE COVERAGE UNDER THE
FEDERAL CROP INSURANCE ACT.
(a) CONVERSION OF PROGRAM TO FOUR LEVELS OF
COVERAGE.—The Federal Crop Insurance Act is amend-
ed—
(1) in subsection (a) of section 508 (7 U.S.C.
1508)—
(A) in the first sentence, by striking ‘‘If
sufficient actuarial data are available, as deter-
mined by the Board,’’ and inserting ‘‘Subject to
section 508B, based on the actuarial and un-
derwriting data available to the Board,’’; and
(B) by striking the fifth, sixth, seventh,
eighth, ninth, tenth, fourteenth, fifteenth, and
sixteenth sentences; and
(2) by inserting after section 508A (7 U.S.C.
1508a) the following new section:
‘‘SEC. 508B. FOUR LEVELS OF CROP INSURANCE COV-
ERAGE.
‘‘(a) FOUR LEVELS OF COVERAGE.—In making crop
insurance available under section 508 to producers of agri-
cultural commodities grown in the United States, the Cor-
poration shall make available four levels of insurance cov-
erage against losses in yields of the insured commodity:
‘‘(1) LEVEL I.—Coverage level I shall be avail-
able only to those producers who do not purchase in-
surance at coverage levels II, III, or IV and shall
provide for the indemnification of those producers
for losses in yield to the extent that such losses ex-
ceed 65 percent of the determined yield of the com-
modity for the farm, as established under subsection
(b).
‘‘(2) LEVELS II, III, AND IV.—Coverage levels
II, III, and IV shall provide for the indemnification
of producers for those losses in yield to the extent
that such losses exceed 50, 35, and 25 percent, re-
spectively, of—
‘‘(A) the average proven yield on the farm
for a representative period based on the actual
production history of the farm, as determined
from the producer’s records; or
‘‘(B) if such records are not available or
are insufficient, the recorded or appraised aver-
age yield of the commodity on the farm for a
representative period, subject to such adjust-
ments as the Board may prescribe to ensure
that the average yield for farms in the same
area, which are subject to the same conditions,
are fair and just.
‘‘(b) DETERMINED YIELD.—For purposes of sub-
section (a)(1), the determined yield for a commodity shall
be equal to—
‘‘(1) in the case of a crop of any commodity for
which the Agricultural Stabilization and Conserva-
tion Service establishes a yield for the farm, the
yield so established; and
‘‘(2) in the case of a crop of any other commod-
ity, the recorded or appraised average yield of the
commodity on the farm for a representative period,
subject to such adjustments as the Board may pre-
scribe to ensure that the average yield for farms in
the same area, which are subject to the same condi-
tions, are fair and just.
‘‘(c) USE OF ASCS YIELD.—If the Agricultural Sta-
bilization and Conservation Service has established a yield
for a crop of a commodity for a farm and such yield is
higher than the yield determined for the farm under sub-
section (a)(2) for coverage levels II, III, or IV, the pro-
ducer may elect to use such higher yield for purpose of
coverage levels II, III, and IV. Use of such higher yield
shall be subject to an additional premium for the coverage
at such a rate as the Board determines appropriate to ac-
curately reflect the increased risk involved and that the
Board determines to be actuarially sufficient to cover
claims for losses on such insurance and to establish a rea-
sonable reserve against unforeseen losses. No premium
subsidy or administrative subsidy may be provided by the
Corporation in connection with any additional coverage
provided under this subsection.
‘‘(d) PRICE ELECTIONS.—The Corporation shall es-
tablish a high and low price election for each agricultural
100
commodity for which insurance is available under this
title. The high price shall not be less than the projected
market price of the commodity. Coverage levels II, III, and
IV shall be available to producers at any price election
that is equal to or less than the high price election and
shall be quoted in terms of dollars per acre coverage that
may be purchased. Coverage level I shall be offered only
at the low price election.
‘‘(e) COVERAGE
AND PRICE INFORMATION.—The
Corporation shall ensure that each producer is provided
accurate and adequate information at the time of applica-
tion regarding the amount of coverage available at each
level of coverage for the commodity to be insured and the
cost to the producer for such coverage.
‘‘(f) ANNUAL REPORT.—The Corporation shall report
annually to the Congress the results of its operations re-
garding each commodity for which insurance is available
under this title. The report shall include for each insured
commodity a description of operations under this section
at each level of coverage.’’.
(b) PREMIUM PAYMENT.—Subsection (e)(3) of sec-
tion 508 of the Federal Crop Insurance Act (7 U.S.C.
1508) is amended to read as follows:
101
‘‘(3) For the purpose of encouraging the broadest
possible participation in the crop insurance program, the
Corporation shall pay—
‘‘(A) with respect to each policy providing for
coverage level I, the full amount of the premium for
such coverage; and
‘‘(B) with respect to each policy providing for
coverage level II, III, or IV, the portion of the pre-
mium that is equal to the amount that would have
been paid under subparagraph (A) if the producer
had elected coverage level I.’’.
(c) REINSURANCE.—Subsection (h) of section 508 of
the Federal Crop Insurance Act (7 U.S.C. 1508) is
amended to read as follows:
‘‘(h) REINSURANCE.—The Corporation shall provide
reinsurance, to the maximum extent practicable, upon
such terms and conditions as the Board may determine
to be consistent with subsections (a) and (b) and with
sound reinsurance principles promulgated pursuant to the
Office of Federal Procurement Policy Act (41 U.S.C. 401,
et seq.), which the Board shall modify as necessary to con-
form to the purposes of this Act, taking into account the
expenses of the Corporation paid on its own policies of
insurance. Reinsurance shall be provided to insurers in-
cluding private insurance companies or pools of such com-
102
panies, reinsurers of such companies, or State or local gov-
ernmental entities, including any political subdivisions
thereof, that insure producers of any agricultural commod-
ity under a plan or plans acceptable to the Corporation.
However, in the case of the sale of coverage level I policies
only (but not for the processing and adjustment of claims
on those policies), contractors of the Corporation shall be
paid only $50 per policy, of which $25.50 shall be paid
by the policyholder at the time of application and $24.50
shall be paid by the Corporation. Whenever the Corpora-
tion provides reinsurance under this subsection to any
such insurers, the Corporation shall pay (as provided in
subsection (e)) the portion of the producer’s premium for
such insurance so reinsured. Insurers of policies on which
reinsurance is provided shall make use of licensed private
insurance agents and brokers on the same basis as pro-
vided for policies of the Corporation under section
507(c)(3) of this title, except that the provisions for com-
pensating agents and brokers from premiums paid by the
insured shall not apply. The Corporation shall periodically
revise its reinsurance agreement with the reinsured com-
panies to provide for the reinsured companies to bear an
increased share of any potential loss under such agree-
ment, in cases in which the financial conditions of the rein-
103
sured companies and the availability of private reinsurance
so permits.’’.
(d) APPLICATION OF AMENDMENTS.—The amend-
ments made by this section shall apply beginning with
crops to be harvested in 1995.
TITLE II—COMMITTEE ON
ARMED SERVICES
SEC. 2001. LIMITATION ON COST-OF-LIVING ADJUSTMENTS
FOR MILITARY RETIREES.
Paragraph (2) of section 1401a(b) of title 10, United
States Code, is amended to read as follows:
‘‘(2) PRE-AUGUST 1, 1986 MEMBERS.—
‘‘(A) GENERAL
RULE.—The Secretary
shall increase the retired pay of each member
and former member who first became a member
of a uniformed service before August 1, 1986,
by the percent (adjusted to the nearest one-
tenth of 1 percent) by which—
‘‘(i) the price index for the base quar-
ter of that year, exceeds
‘‘(ii) the base index.
‘‘(B) SPECIAL
RULE
FOR
FISCAL
YEARS
1994 THROUGH 1998.—In the case of the in-
creases in retired pay that, pursuant to para-
graph (1), become effective on December 1 of
104
each of fiscal years 1994, 1995, 1996, 1997,
and 1998, the initial month for which each such
increase is payable as part of such retired pay
shall (notwithstanding such December 1 effec-
tive date) be as set forth in the following table:
First month for which
‘‘Fiscal year:
increase is payable:
1994 ...................................................................
April 1994.
1995 ...................................................................
July 1995.
1996 ...................................................................
October 1996.
1997 ...................................................................
January 1998.
1998 ...................................................................
April 1999.
‘‘(C) EXCLUSION OF DISABILITY RETIREES
FROM ROLLING COLA.—Subparagraph (B) does
not apply with respect to the retired pay of a
member retired under chapter 61 of this title.’’.
SEC. 2002. ELIMINATION OF MILITARY PAY RAISE FOR FIS-
CAL YEAR 1994 AND REDUCTION IN THE
AMOUNT OF THE RAISE FOR FISCAL YEARS
1995 THROUGH 1998.
(a) FISCAL YEAR 1994.—During fiscal year 1994, no
increase in the rates of basic pay, basic allowance for quar-
ters, or basic allowance for subsistence of members of the
uniformed services shall be made or take effect pursuant
to section 1009 of title 37, United States Code.
(b) ONE PERCENT REDUCTION IN SUBSEQUENT FIS-
CAL YEARS.—If the General Schedule of compensation for
Federal classified employees is increased under section
5303 of title 5, United States Code, as amended by title
105
X of this Act, during fiscal year 1995, 1996, 1997, or
1998, the elements of compensation of members of the
uniformed services shall likewise be increased during that
fiscal year in the manner provided in section 1009 of title
37, United States Code, based on the corresponding in-
crease under section 5303 of title 5, United States Code
(as so amended).
(c) EFFECTIVE DATE OF RAISES.—Notwithstanding
subsections (a) and (b)(1) of section 1009 of title 37,
United States Code, during the 10-year period beginning
on January 1, 1994, any increase in the elements of com-
pensation of members of the uniformed services that is
required to be made under such section during a fiscal
year shall take effect on January 1 of that year rather
than on the date the corresponding increase under section
5303 of title 5, United States Code, as amended by title
X of this Act, takes effect.
TITLE 
III—COMMITTEE 
ON
BANKING, 
FINANCE 
AND
URBAN AFFAIRS
SEC. 3001. NATIONAL DEPOSITOR PREFERENCE.
(a) IN GENERAL.—Section 11(d)(11) of the Federal
Deposit Insurance Act (12 U.S.C. 1821(d)(11)) is amend-
ed to read as follows:
‘‘(11) DEPOSITOR PREFERENCE.—
106
‘‘(A) IN
GENERAL.—Subject to section
5(e)(2)(C), amounts realized from the liquida-
tion or other resolution of any insured deposi-
tory institution by any receiver appointed for
such institution shall be distributed to pay
claims (other than secured claims to the extent
of any such security) in the following order of
priority:
‘‘(i) Administrative expenses of the re-
ceiver.
‘‘(ii) Any deposit liability of the insti-
tution.
‘‘(iii) Any claim of an employee of the
institution, other than a senior executive
officer (as defined by the Corporation pur-
suant to section 32(f)), for pay accrued
but unpaid as of the date the receiver was
appointed for the institution.
‘‘(iv) Any other general or senior li-
ability of the institution (which is not a li-
ability described in clause (v) or (vi)).
‘‘(v) Any obligation subordinated to
depositors 
or 
other 
general 
creditors
(which is not an obligation described in
clause (vi)).
107
‘‘(vi) Any obligation to shareholders
arising as a result of their status as share-
holders (including any depository institu-
tion holding company or any shareholder
or creditor of such company).
‘‘(B) EFFECT ON STATE LAW.—
‘‘(i) IN GENERAL.—The provisions of
subparagraph (A) shall not supersede the
law of any State except to the extent such
law is inconsistent with the provisions of
such subparagraph, and then only to the
extent of the inconsistency.
‘‘(ii) PROCEDURE
FOR
DETERMINA-
TION OF INCONSISTENCY.—Upon the Cor-
poration’s own motion or upon the request
of any person with a claim described in
subparagraph (A)(i) or any State which is
submitted to the Corporation in accordance
with procedures which the Corporation
shall prescribe, the Corporation shall deter-
mine whether any provision of the law of
any State is inconsistent with any provi-
sion of subparagraph (A) and the extent of
any such inconsistency.
108
‘‘(iii) JUDICIAL
REVIEW.—The final
determination of the Corporation under
clause (ii) shall be subject to judicial re-
view under chapter 7 of title 5, United
States Code.
‘‘(C) ACCOUNTING REPORT.—Any distribu-
tion by the Corporation in connection with any
claim described in subparagraph (A)(vi) shall be
accompanied by the accounting report required
under paragraph (15)(B).’’.
(b) TECHNICAL AND CONFORMING AMENDMENTS.—
(1) Section 11(c)(13) of the Federal Deposit
Insurance Act (12 U.S.C. 1821(c)(13)) is amend-
ed—
(A) in subparagraph (A), by striking ‘‘sub-
ject to subparagraph (B),’’;
(B) in inserting ‘‘and’’ after the semicolon
at the end of subparagraph (A);
(C) by striking subparagraph (B); and
(D) by redesignating subparagraph (C) as
subparagraph (B).
(2) Section 11(g)(4) of the Federal Deposit In-
surance Act (12 U.S.C. 1921(g)(4)) is amended by
striking ‘‘If the Corporation’’ and inserting ‘‘Subject
to subsection (d)(11), if the Corporation’’.
109
(c) EFFECTIVE DATE.—The amendments made by
this section shall apply with respect to insured depository
institutions for which a receiver is appointed after the date
of the enactment of this Act.
SEC. 3002. TRANSFER OF FEDERAL RESERVE SURPLUSES.
(a) IN GENERAL.—The 1st undesignated paragraph
of section 7 of the Federal Reserve Act (12 U.S.C. 289)
is amended to read as follows:
‘‘(a) DIVIDENDS AND SURPLUS FUNDS OF RESERVE
BANKS.—
‘‘(1) STOCKHOLDER DIVIDENDS.—
‘‘(A) IN GENERAL.—After all necessary ex-
penses of a Federal reserve bank have been
paid or provided for, the stockholders of the
bank shall be entitled to receive an annual divi-
dend of 6 percent on paid-in capital stock.
‘‘(B) DIVIDEND CUMULATIVE.—The enti-
tlement to dividends under subparagraph shall
be cumulative.
‘‘(2) DEPOSIT OF NET EARNINGS IN SURPLUS
FUND.—That portion of net earnings of each Fed-
eral reserve bank which remains after dividend
claims under subparagraph (A) have been fully met
shall be deposited in the surplus fund of the bank.
110
‘‘(3) PAYMENT
TO
TREASURY.—During fiscal
years 1994 through 1998, any amount in the sur-
plus fund of any Federal reserve bank in the excess
of the amount equal to 3 percent of the total paid-
in capital and surplus of the member banks of such
bank shall be transferred to the Board for transfer
to the Secretary of the Treasury for deposit in the
general fund of the Treasury.’’.
(b) ADDITIONAL TRANSFERS
FOR FISCAL YEARS
1997 AND 1998.—
(1) IN GENERAL.—In addition to the amounts
required to be transferred from the surplus funds of
the Federal reserve banks pursuant to section
7(a)(3) of the Federal Reserve Act, the Federal re-
serve banks shall transfer from such surplus funds
to the Board of Governors of the Federal Reserve
System for transfer to the Secretary of the Treasury
for deposit in the general fund of the Treasury, a
total amount of $106,000,000 in fiscal year 1997
and a total amount of $107,000,000 in fiscal year
1998.
(2) ALLOCATION BY FED.—Of the total amount
required to be paid by the Federal reserve banks
under paragraph (1) for fiscal year 1997 or 1998,
the Board of Governors of the Federal Reserve Sys-
111
tem shall determine the amount each such bank
shall pay in such fiscal year.
(3) REPLENISHMENT OF SURPLUS FUND PRO-
HIBITED.—No Federal reserve bank may replenish
such bank’s surplus fund by the amount of any
transfer by such bank under paragraph (1) during
the fiscal year for which such transfer is made.
(c) TECHNICAL AND CONFORMING AMENDMENTS.—
(1) The penultimate undesignated paragraph of
section 7 of the Federal Reserve Act (12 U.S.C.
290) is amended by striking ‘‘The net earnings de-
rived’’ and inserting ‘‘(b) USE OF EARNINGS TRANS-
FERRED TO THE TREASURY.—The net earnings de-
rived’’.
(2) The last undesignated paragraph of section
7 of the Federal Reserve Act (12 U.S.C. 531) is
amended by striking ‘‘Federal reserve banks’’ and
inserting ‘‘(c) EXEMPTION FROM TAXATION.—Fed-
eral reserve banks’’.
SEC. 3003. USE OF RETURN DATA FOR INCOME VERIFICA-
TION UNDER CERTAIN HOUSING ASSISTANCE
PROGRAMS.
Section 904 of the Stewart B. McKinney Homeless
Assistance Amendments Act of 1988 (42 U.S.C. 3544) is
amended as follows:
112
(1) CONSENT FORMS.—In subsection (b)—
(A) in the matter preceding paragraph (1),
by inserting ‘‘(including the Indian housing pro-
gram under title II of the United States Hous-
ing Act of 1937)’’ before the 1st comma;
(B) in paragraph (1), by striking ‘‘and’’ at
the end;
(C) in paragraph (2), by striking the pe-
riod at the end and inserting ‘‘; and’’;
(D) by inserting after paragraph (2) the
following new paragraph:
‘‘(3) sign a consent from approved by the Sec-
retary authorizing the Secretary to request the Com-
missioner of Social Security and the Secretary of the
Treasury to release information pursuant to section
6103(l)(7)(D)(ix) of the Internal Revenue Code of
1986 with respect to such applicant or participant
for the sole purpose of the Secretary verifying in-
come information pertinent to the applicant’s or par-
ticipant’s eligibility or level of benefits.’’; and
(E) in the last sentence, by striking ‘‘This’’
and inserting the following: ‘‘Except as pro-
vided in this subsection, this’’.
(2) APPLICANT
AND
PARTICIPANT
PROTEC-
TIONS.—In subsection (c)(2)—
113
(A) in subparagraph (A)—
(i) in the matter preceding clause
(i)—
(I) by inserting after ‘‘compensa-
tion law’’ the following: ‘‘or pursuant
to section 6103(i)(7)(D)(ix) of the In-
ternal Revenue Code of 1986 from the
Commissioner of Social Security or
the Secretary of the Treasury’’; and
(II) by inserting ‘‘(in the case of
information obtained pursuant to such
section 303(i))’’ before ‘‘representa-
tives’’; and
(ii) in clause (ii), by inserting ‘‘or
public housing agency’’ after ‘‘owner’’ each
place it appears;
(B) in subparagraph (B), by inserting
after ‘‘wages’’ each place it appears the follow-
ing: ‘‘, other earnings or income,’’; and
(C) in subparagraph (C), by inserting be-
fore the second comma the following: ‘‘at a
hearing that provides the basic elements of due
process’’.
(3) PENALTY.—In subsection (c)(3)—
114
(A) in subparagraph (A), by inserting ‘‘or
section 6103(l)(7)(D)(ix) of the Internal Reve-
nue Code of 1986’’ after ‘‘Social Security Act’’;
and
(B) in the first sentence of subparagraph
(B)—
(i) by striking clause (i) and inserting
the following: ‘‘(i) a negligent or knowing
disclosure of information referred to in this
section, section 303(i) of the Social Secu-
rity Act, or section 6103(l)(7)(D)(ix) of
the Internal Revenue Code of 1986 about
such person by an officer or employee of
any public housing agency or owner (or
employee thereof), which disclosure is not
authorized by this section, such section
303(i), such section 6103(l)(7)(D)(ix), or
any regulation implementing this section,
such section 303(i), or such section
6103(l)(7)(D)(ix), or’’; and
(ii) in clause (ii), by inserting ‘‘such
6103(l)(7)(D)(ix),’’ after ‘‘303(i),’’.
(4) CONFORMING AMENDMENT.—The heading
of subsection (c) of section 904 of the Stewart B.
McKinney Homeless Assistance Amendments Act of
115
1988 is amended by striking ‘‘STATE EMPLOY-
MENT’’.
SEC. 3004. GNMA REMIC GUARANTEE FEES.
Section 306(g)(3) of the National Housing Act (12
U.S.C. 1721(g)(3)) is amended by adding at the end the
following new subparagraph:
‘‘(E)(i) Notwithstanding subparagraphs (A) through
(D), fees charged for the guaranty of, or commitment to
guaranty, multiclass securities backed by a trust or pool
of securities or notes guaranteed by the Association under
this subsection and other related fees shall be charged by
the Association in an amount not to exceed the value, as
determined by the Association, of the guarantee or com-
mitment to guarantee. The Association shall take such ac-
tion as may be necessary to reasonably assure that such
portion of the value of the guaranties or commitments to
guaranty as the Association determines is appropriate ac-
crues to the benefit of mortgagors under mortgages exe-
cuted after the date of the enactment of this subparagraph
by or upon which such securities or notes are backed.
‘‘(ii) For each Federal fiscal year, the Association
shall submit a report to the Congress describing any ac-
tivities of the Association with respect to guarantying and
making commitments to guaranty multiclass securities de-
scribed in clause (i). The report shall be submitted not
116
later than 90 days after the end of the fiscal year for
which the report is made and shall identify the extent of
such activities during the fiscal year, the size of each
transaction closed during the fiscal year involving such se-
curities, the number of mortgages involved in each such
transaction, the amount of the fees charged and earned
by the Association for such transactions, and any persons
receiving payments for any services provided with respect
to any such transactions and the amounts of such pay-
ments, and shall include an estimate of the portion of the
value of the guarantee or commitment to guarantee accru-
ing to the benefit of mortgagors and a description of any
action taken by the Association to ensure such accrual.
‘‘(iii) The Association shall provide for the initial im-
plementation of the program for which fees are charged
under the first sentence of clause (i) by notice published
in the Federal Register. The notice shall be effective upon
publication and shall provide an opportunity for public
comment. Not later than 12 months after publication of
the notice, the Association shall issue regulations for such
program based on the notice, comments received, and the
experience of the Association in carrying out the program
during such period.’’.
117
SEC. 3005. MUTUAL MORTGAGE INSURANCE FUND PRE-
MIUMS.
To improve the actuarial soundness of the Mutual
Mortgage Insurance Fund under the National Housing
Act, the Secretary of Housing and Urban Development
shall increase the rate at which the Secretary earns the
single premium payment collected at the time of insurance
of a mortgage that is an obligation of such Fund (with
respect to the rate in effect on the date of the enactment
of this Act). In establishing such increased rate, the Sec-
retary shall consider any current audit findings and re-
serve analyses and information regarding the expected av-
erage duration of mortgages that are obligations of such
Fund and may consider any other information that the
Secretary determines to be appropriate.
TITLE IV—EDUCATION AND
LABOR
SEC. 4000. TABLE OF CONTENTS.
The table of contents of this title is as follows:
TITLE IV—EDUCATION AND LABOR
Sec. 4000. Table of contents.
Subtitle A—Federal Direct Loan Program
CHAPTER 1—AMENDMENTS TO PART D OF TITLE IV OF THE HIGHER
EDUCATION ACT OF 1965
Sec. 4001. Short title; references.
Sec. 4002. Federal Direct Student Loan Program.
CHAPTER 2—CONFORMING AMENDMENTS
Sec. 4021. Preserving loan access.
118
Sec. 4022. Guaranty agency reserves.
Sec. 4023. Terms of loans.
Sec. 4024. Assignment of loans.
Sec. 4025. Termination of guaranty agency agreements; assumption of guar-
anty agency functions by the Secretary.
Sec. 4026. Administrative cost allowance.
Sec. 4027. Consolidation loans.
Sec. 4028. Student Loan Marketing Association.
Sec. 4029. Amendment to the Balanced Budget and Emergency Deficit Control
Act of 1985.
CHAPTER 3—EFFECTIVE DATES; STUDY
Sec. 4031. Effective dates.
Sec. 4032. Study of Internal Revenue Service collection of student loans.
Sec. 4033. Preference of committee for IRS collection mechanism.
Subtitle B—Cost Sharing by States
Sec. 4101. Cost sharing by States.
Subtitle C—ERISA Amendments Relating to Group Health Plans
Sec. 4201. Coordination of ERISA preemption rules with title XIX provisions
providing for liability of third parties.
Sec. 4202. Continued coverage of costs of a pediatric vaccine under group health
plans.
Sec. 4203. Temporary rules governing preemption of certain State laws.
Subtitle A—Federal Direct Loan
Program
CHAPTER 1—AMENDMENTS TO PART D OF
TITLE IV OF THE HIGHER EDUCATION
ACT OF 1965
SEC. 4001. SHORT TITLE; REFERENCES.
(a) SHORT TITLE.—This subtitle may be cited as the
‘‘Student Loan Reform Act of 1993’’.
(b) REFERENCES.—References in this subtitle to
‘‘the Act’’ are references to the Higher Education Act of
1965 (20 U.S.C. 1001 et seq.).
119
SEC. 4002. FEDERAL DIRECT STUDENT LOAN PROGRAM.
Part D of title IV of the Act (20 U.S.C. 1087a et
seq.) is amended to read as follows:
‘‘PART D—FEDERAL DIRECT STUDENT LOAN
PROGRAM
‘‘SEC. 451. PURPOSE; PROGRAM AUTHORIZATION.
‘‘(a) PURPOSE.—It is the purpose of this part—
‘‘(1) to simplify the delivery of student loans to
borrowers and eliminate borrower confusion;
‘‘(2) to provide a variety of repayment plans,
including income contingent repayment through the
EXCEL Account, to borrowers so that they have
flexibility in managing their student loan repayment
obligations, and so that those obligations do not
foreclose community service-oriented career choices
for those borrowers;
‘‘(3) to replace, through an orderly transition,
the Federal Family Education Loan Program under
part B of this title with the Federal Direct Student
Loan Program under this part;
‘‘(4) to avoid the unnecessary cost, to taxpayers
and borrowers, and administrative complexity associ-
ated with the Federal Family Education Loan Pro-
gram under part B of this title through the use of
a direct student loan program; and
120
‘‘(5) to create a more streamlined student loan
program that can be managed more effectively at
the Federal level.
‘‘(b) PROGRAM AUTHORITY.—There are hereby made
available, in accordance with the provisions of this part,
such sums as may be necessary to make loans to all eligi-
ble students in attendance at participating institutions of
higher education selected by the Secretary (and the eligi-
ble parents of such students), to enable such students to
pursue their courses of study at such institutions during
the period beginning July 1, 1994. Such loans shall be
made by participating institutions that have agreements
with the Secretary to originate loans, or by alternative
originators designated by the Secretary to make loans for
students in attendance at participating institutions (and
their parents).
‘‘SEC. 452. FUNDS FOR ORIGINATION OF DIRECT STUDENT
LOANS.
‘‘(a) IN GENERAL.—The Secretary shall provide, on
the basis of the need and the eligibility of students at each
participating institution, and parents of such students, for
such loans, funds for student and parent loans under this
part—
‘‘(1) directly to an institution of higher edu-
cation that has an agreement with the Secretary
121
under section 454(a) to participate in the direct stu-
dent loan programs under this part and that also
has an agreement with the Secretary under section
454(b) to originate loans under this part, or
‘‘(2) through an alternative originator des-
ignated by the Secretary to students and parents of
students attending institutions of higher education
that have an agreement with the Secretary under
section 454(a) but that do not have an agreement
with the Secretary under section 454(b).
‘‘(b) FEES FOR ORIGINATION SERVICES.—
‘‘(1) FEES FOR INSTITUTIONS.—The Secretary
shall pay fees to institutions of higher education (or
a consortium of such institutions) with agreements
under section 454(b), in an amount established by
the Secretary, to assist in meeting the costs of loan
origination. Such fees—
‘‘(A) shall be paid by the Secretary based
on all the loans made under this part to a par-
ticular borrower in the same academic year;
‘‘(B) shall be subject to a sliding scale that
decreases the amount of such fees as the num-
ber of borrowers increases; and
‘‘(C)(i) for academic year 1994–1995, shall
not exceed a program-wide average of $10 per
122
borrower for all the loans made under this part
in the same academic year; and
‘‘(ii) for succeeding academic years, shall
not exceed such average fee as the Secretary
shall establish in regulations.
‘‘(2) FEES FOR ALTERNATIVE ORIGINATORS.—
The Secretary shall pay fees for loan origination
services to alternative originators of loans made
under this part in an amount established by the Sec-
retary in accordance with the terms of the contract
between the Secretary and each such alternative
originator.
‘‘(c) NO ENTITLEMENT TO PARTICIPATE OR ORIGI-
NATE.—No institution of higher education shall have a
right to participate in the programs authorized by this
part, to originate loans, or to perform any program func-
tion under this part. Nothing in this subsection shall be
construed so as to limit the entitlement of an eligible stu-
dent attending a participating institution (or the eligible
parent of such student) to borrow under this part.
‘‘SEC. 453. SELECTION OF INSTITUTIONS FOR PARTICIPA-
TION AND ORIGINATION.
‘‘(a) PHASE-IN OF PROGRAM.—
‘‘(1) GENERAL
AUTHORITY.—The Secretary
shall enter into agreements pursuant to section
123
454(a) with institutions of higher education to par-
ticipate in the direct student loan programs under
this part, and agreements pursuant to section
454(b) with institutions of higher education to origi-
nate loans in such programs, for academic years be-
ginning on or after July 1, 1994. Alternative origi-
nation services, through which an entity other than
the participating institution at which the student is
in attendance originates the loan, shall be provided
by the Secretary, through one or more contracts
under section 456 or such other means as the Sec-
retary may provide, for students attending partici-
pating institutions that do not originate direct stu-
dent loans under this part. Such agreements for the
first year of the program shall, to the extent fea-
sible, be entered into not later than January 1,
1994.
‘‘(2) TRANSITION PROVISIONS.—In order to en-
sure an expeditious but orderly transition from the
loan programs under part B of this title to the di-
rect student loan programs under this part, the Sec-
retary shall, in the exercise of his or her discretion,
determine the number of institutions with which he
or she shall enter into agreements under sections
454 (a) and (b) for any academic year, except that
124
the Secretary shall exercise such discretion so as to
achieve the following goals:
‘‘(A) for academic year 1994–1995, loans
made under this part shall represent 4 percent
of the sum of new student loan volume under
this part and part B of this title;
‘‘(B) for academic year 1995–1996, loans
made under this part shall represent 25 percent
of the sum of new student loan volume under
this part and part B of this title;
‘‘(C) for academic year 1996–1997, loans
made under this part shall represent 60 percent
of the sum of new student loan volume under
this part and part B of this title; and
‘‘(D) for academic year 1997–1998, loans
made under this part shall represent 100 per-
cent of the sum of new student loan volume
under this part and part B of this title.
‘‘(3) CASH
MANAGEMENT.—The requirements
of the Cash Management Improvement Act of 1990
(Public Law 101–453) shall apply to the program
under this part only to the extent specified in a
schedule established by the Secretaries of Education
and the Treasury, except that such schedule shall
125
provide for the application of all such requirements
not later than July 1, 1998.
‘‘(b) SELECTION CRITERIA FOR PARTICIPATION.—
‘‘(1) APPLICATION.—Each institution of higher
education desiring to participate in the direct stu-
dent loan program under this part shall submit an
application satisfactory to the Secretary containing
such information and assurances as the Secretary
may require.
‘‘(2) AGREEMENT.—When the program author-
ized under this part is fully implemented, the Sec-
retary shall enter into agreements under section
454(a) with institutions that submit applications in
accordance with paragraph (1).
‘‘(3) TRANSITION SELECTION CRITERIA.—Until
such full implementation, the Secretary shall select
institutions for participation in the direct student
loan program under this part, and shall enter into
agreements with them under section 454(a), from
among those institutions that submit the applica-
tions described in paragraph (1), and meet such
other eligibility requirements as the Secretary may
prescribe, by—
‘‘(A)(i) categorizing such institutions ac-
cording to anticipated loan volume, length of
126
academic program, and control of the institu-
tion; and
‘‘(ii) selecting institutions that are reason-
ably representative of the respective categories;
and
‘‘(B) if needed to carry out the purposes of
this part, selecting additional institutions.
‘‘(c) SELECTION CRITERIA FOR ORIGINATION.—
‘‘(1) IN GENERAL.—The Secretary may enter
into a supplemental agreement with an institution
(or a consortium of such institutions) that—
‘‘(A) has an agreement under subsection
454(a);
‘‘(B) desires to originate loans under this
part; and
‘‘(C) meets the criteria specified in para-
graph (2).
‘‘(2) TRANSITION
SELECTION
CRITERIA.—For
academic year 1994–1995, the Secretary may ap-
prove an institution to originate loans only if such
institution—
‘‘(A) made loans under part E of this title
in academic year 1993–1994 and did not exceed
the applicable maximum default rate under sec-
127
tion 464(g) for the most recent fiscal year for
which data are available;
‘‘(B) is not on the reimbursement system
of payment for any of the programs under sub-
part 1 or 3 of part A, part C, or part E;
‘‘(C) is not overdue on program or finan-
cial reports or audits required under this title;
‘‘(D) is not subject to an emergency ac-
tion, or a limitation, suspension, or termination
under section 428(b)(1)(T), 432(h), or 487(c);
‘‘(E) in the opinion of the Secretary, has
not had significant deficiencies identified by the
State postsecondary review entity under subpart
1 of part H of this title;
‘‘(F) in the opinion of the Secretary, has
not had severe performance deficiencies for any
of the programs under this title, including those
demonstrated by audits or program reviews
submitted or conducted during the 5 calendar
years immediately preceding the date of appli-
cation;
‘‘(G) provides an assurance that it has no
delinquent outstanding debts to the United
States, unless such debts are being repaid
under or in accordance with a repayment ar-
128
rangement satisfactory to the United States, or
the Secretary in his or her discretion deter-
mines that the existence or amount of such
debts has not been finally determined by the
cognizant Federal agency or agencies; and
‘‘(H) meets such other criteria as the Sec-
retary may establish to protect the financial in-
terest of the United States and to promote the
purposes of this part.
‘‘(3) 
REGULATIONS
GOVERNING
APPROVAL
AFTER TRANSITION.—For academic year 1995–1996
and subsequent academic years, the Secretary shall
publish regulations governing the approval of institu-
tions to originate loans.
‘‘(d) CONSORTIA.—Subject to such requirements as
the Secretary may prescribe, eligible institutions of higher
education with agreements under section 454(a) may
apply as consortia to originate loans under this part for
students in attendance at such institutions. Such institu-
tions shall each be required to meet the requirements of
subsection (c) with respect to loan origination.
‘‘SEC. 454. AGREEMENTS WITH INSTITUTIONS.
‘‘(a) PARTICIPATION AGREEMENTS.—An agreement
with any institution of higher education for participation
in the direct student loan program under this part shall—
129
‘‘(1) provide for the establishment and mainte-
nance of a direct student loan program at the insti-
tution under which the institution will—
‘‘(A) identify eligible students who seek
student financial assistance at such institution
in accordance with section 484;
‘‘(B) estimate the need of each such stu-
dent as required by part F of this title for an
academic year, provided that any loan obtained
by a student under this part with the same
terms (except as otherwise provided in this
part) as loans made under section 428A or
428H, or a loan obtained by a parent under
this part with the same terms (except as other-
wise provided in this part) as loans made under
section 428B, or obtained under any State-
sponsored or private loan program, may be used
to offset the expected family contribution of the
student for that year;
‘‘(C) provide a statement that certifies the
eligibility of any student to receive a loan under
this part that is not in excess of the annual or
aggregate limit applicable to the amount of
such loan, except that the institution may, in
exceptional circumstances specified in regula-
130
tions prescribed by the Secretary, refuse to cer-
tify a statement that permits a student to re-
ceive a loan under this part, or certify a loan
amount that is less than the student’s deter-
mination of need (as determined under part F
of this title), if the reason for such action is
documented and provided in written form to
such student;
‘‘(D) set forth a schedule for disbursement
of the proceeds of the loan in installments, con-
sistent with the requirements of section 428G
(other than subsection (b)(1) of such section);
and
‘‘(E) provide timely and accurate informa-
tion—
‘‘(i) concerning the status of student
borrowers (and students on whose behalf
parents borrow under this part) while such
students are in attendance at the institu-
tion and concerning any new information
of which the institution becomes aware for
such students (or their parents) after they
leave the institution, to the Secretary for
the servicing and collecting of loans made
under this part; and
131
‘‘(ii) if the institution does not have
an agreement with the Secretary under
subsection (b), concerning student eligi-
bility and need, as determined under sub-
paragraphs (A) and (B), to the Secretary
as needed for the alternative origination of
loans to eligible students and parents in
accordance with this part;
‘‘(2) provide assurances that the institution will
comply with requirements established by the Sec-
retary relating to student loan information with re-
spect to loans made under this part;
‘‘(3) provide that the institution accepts respon-
sibility and financial liability stemming from its fail-
ure to perform its functions pursuant to the agree-
ment;
‘‘(4) provide that students at the institution
and their parents (with respect to such students)
will not be eligible to participate in the programs
under part B of this title for the period during
which such institution participates in the direct stu-
dent loan program under this part;
‘‘(5) provide for the implementation of a quality
assurance system, as established by the Secretary, to
132
ensure that the institution is complying with pro-
gram requirements and meeting program objectives;
‘‘(6) provide that the institution will not charge
any fees of any kind, however described, to student
or parent borrowers for origination activities or the
provision of any information necessary for a student
or parent to receive a loan under this part, or any
benefits associated with such loan; and
‘‘(7) include such other provisions as the Sec-
retary determines are necessary to protect the inter-
ests of the United States and to promote the pur-
poses of this part.
‘‘(b) ORIGINATION.—An agreement with any institu-
tion of higher education for the origination of loans under
this part shall—
‘‘(1) supplement the agreement entered into in
accordance with subsection (a);
‘‘(2) include provisions established by the Sec-
retary that are similar to the participation agree-
ment provisions described in paragraphs (1)(E)(ii),
(2), (3), (4), (5), (6), and (7) of subsection (a), as
modified to relate to the origination of loans by the
institution;
133
‘‘(3) provide that the institution will originate
loans to eligible students and parents in accordance
with this part; and
‘‘(4) provide that the note or evidence of obliga-
tion on the loan shall be the property of the Sec-
retary.
‘‘(c) WITHDRAWAL
AND
TERMINATION
PROCE-
DURES.—The Secretary shall establish procedures by
which institutions may withdraw or be terminated from
the program under this part.
‘‘SEC. 455. TERMS AND CONDITIONS OF LOANS.
‘‘(a) IN GENERAL.—
‘‘(1) PARALLEL
TERMS, CONDITIONS, BENE-
FITS, AND AMOUNTS.—Unless otherwise specified in
this part, loans made to borrowers under this part
shall have the same terms, conditions, and benefits,
and be available in the same amounts, as loans made
to borrowers under sections 428, 428A, 428B, and
428H of this title.
‘‘(2) DESIGNATION OF LOANS.—Loans made to
borrowers under this part that, except as otherwise
specified in this part, have the same terms, condi-
tions, and benefits as loans made to borrowers
under—
134
‘‘(A) section 428 shall be known as ‘Fed-
eral Direct Student Loans’;
‘‘(B) section 428A shall be known as ‘Fed-
eral Direct Supplemental Loans for Students’;
‘‘(C) section 428B shall be known as ‘Fed-
eral Direct PLUS Loans’; and
‘‘(D) section 428H shall be known as ‘Fed-
eral Direct Unsubsidized Student Loans’.
‘‘(b) INTEREST RATES.—
‘‘(1) RATES FOR FDSL AND FDUSL.—(A) For
Federal Direct Student Loans and Federal Direct
Unsubsidized Student Loans made before July 1,
1997, the applicable rate of interest shall, during
any 12-month period beginning on July 1 and end-
ing on June 30, be determined on the preceding
June 1 and be equal to—
‘‘(i) the bond equivalent rate of 91-day
Treasury bills auctioned at the final auction
held prior to such June 1; plus
‘‘(ii) 3.1 percent,
except that such rate shall not exceed 9 percent.
‘‘(B) For Federal Direct Student Loans and
Federal Direct Unsubsidized Student Loans made
on or after July 1, 1997, the applicable rate of inter-
est shall, during any 12-month period beginning on
135
July 1 and ending on June 30, be determined on the
preceding June 1 for all such loans and be equal
to—
‘‘(i) the bond equivalent rate of the secu-
rity with a comparable maturity as established
by the Secretary; plus
‘‘(ii) 1 percent,
except that such rate shall not exceed 9 percent.
‘‘(2) RATES FOR FDSLS.—(A) For Federal Di-
rect Supplemental Loans for Students made before
July 1, 1997, the applicable rate of interest shall,
during any 12-month period beginning on July 1
and ending on June 30, be determined on the pre-
ceding June 1 and be equal to—
‘‘(i) the bond equivalent rate of 52-week
Treasury bills auctioned at the final auction
held prior to such June 1; plus
‘‘(ii) 3.1 percent,
except that such rate shall not exceed 11 percent.
‘‘(B) For Federal Direct Supplemental Loans
for Students made on or after July 1, 1997, the ap-
plicable rate of interest shall, during any 12-month
period beginning on July 1 and ending on June 30,
be determined on the preceding June 1 for all such
loans and be equal to—
136
‘‘(i) the bond equivalent rate of the secu-
rity with a comparable maturity as established
by the Secretary; plus
‘‘(ii) 1.5 percent,
except that such rate shall not exceed 11 percent.
‘‘(3) RATES
FOR
FDPLUS.—(A) For Federal
Direct PLUS loans made before July 1, 1997, the
applicable rate of interest shall, during any 12-
month period beginning on July 1 and ending on
June 30, be determined on the preceding June 1 for
loans and be equal to—
‘‘(i) the bond equivalent rate of 52-week
Treasury bills auctioned at the final auction
held prior to such June 1; plus
‘‘(ii) 3.1 percent,
except that such rate shall not exceed 10 percent.
‘‘(B) For Federal Direct PLUS loans made on
or after July 1, 1997, the applicable rate of interest
shall, during any 12-month period beginning on July
1 and ending on June 30, be determined on the pre-
ceding June 1 for all such loans and be equal to—
‘‘(i) the bond equivalent rate of the secu-
rity with a comparable maturity as established
by the Secretary; plus
‘‘(ii) 2.1 percent,
137
except that such rate shall not exceed 10 percent.
‘‘(4) PUBLICATION.—The Secretary shall deter-
mine the applicable rates of interest under this sub-
section after consultation with the Secretary of
Treasury and shall publish such rate in the Federal
Register as soon as practicable after the date of de-
termination.
‘‘(c) LOAN FEE.—For academic years 1994–1995,
1995–1996, and 1996–1997, the Secretary shall charge
the borrower of a loan made under this part a loan fee
of 5 percent of the principal amount of the loan. For aca-
demic years 1997–1998 and succeeding academic years,
the Secretary shall charge the borrower of a loan made
under this part a loan fee of 3.65 percent of the principal
amount of the loan.
‘‘(d) REPAYMENT PLANS.—
‘‘(1) DESIGN AND SELECTION.—Consistent with
criteria established by the Secretary, the Secretary
shall offer to a borrower of a loan made under this
part a variety of plans for repayment of such loan,
including principal and interest on the loan. The
borrower shall be entitled to accelerate, without pen-
alty, repayment on his or her loans. The borrower
may choose—
138
‘‘(A) a standard repayment plan, with a
fixed annual repayment amount paid over a
fixed period of time, consistent with subsection
(a)(1) of this section;
‘‘(B) an extended repayment plan, with a
fixed annual repayment amount paid over an
extended period of time, provided that the bor-
rower annually repays a minimum amount de-
termined by the Secretary, consistent with the
requirements of section 428(b)(1)(L);
‘‘(C) a graduated repayment plan, with an-
nual repayment amounts established at two or
more graduated levels and paid over a fixed or
extended period of time, provided that any of
the borrower’s scheduled payments shall not be
less than 50 percent, nor more than 150 per-
cent, of what the amortized payment on the
amount owed would be if the loan were repaid
under the standard repayment plan; and
‘‘(D) except for the borrower of a Federal
Direct PLUS Loan, an income contingent re-
payment plan known as the ‘EXCEL Account,’
with varying annual repayment amounts based
on the income of the borrower, paid over an ex-
tended period of time, not to exceed a maxi-
139
mum length of time determined by the Sec-
retary.
‘‘(2) SELECTION
BY
SECRETARY.—If a bor-
rower of a loan made under this part does not select
a repayment plan described in paragraph (1), the
Secretary may provide the borrower with a repay-
ment plan described in subparagraph (A), (B), or
(C) of paragraph (1).
‘‘(3) CHANGES IN SELECTIONS.—The borrower
of a loan made under this part may change his or
her selection of a repayment plan under paragraph
(1), or the Secretary’s selection of a plan for the
borrower under paragraph (2), as the case may be,
under such terms and conditions as may be estab-
lished by the Secretary.
‘‘(4) ALTERNATIVE
REPAYMENT
PLANS.—The
Secretary may provide, on a case-by-case basis, an
alternative repayment plan to a borrower of a loan
under this part who demonstrates to the satisfaction
of the Secretary that the terms and conditions of the
repayment plans available under paragraph (1) are
not adequate to accommodate the borrower’s excep-
tional circumstances. In designing such alternative
repayment plans, the Secretary shall ensure that
such plans do not exceed the cost to the Federal
140
Government, as determined on the basis of the
present value of future payments by such borrowers,
of loans made using the plans available under para-
graph (1).
‘‘(5) REPAYMENT AFTER DEFAULT.—The Sec-
retary may require any borrower who has defaulted
on a loan made under this part to—
‘‘(A) pay all reasonable collection costs as-
sociated with such loan; and
‘‘(B) repay the loan pursuant to an
EXCEL Account in accordance with subsection
(e).
‘‘(e) REPAYMENT THROUGH EXCEL ACCOUNTS.—
‘‘(1) INFORMATION
AND
PROCEDURES.—The
Secretary may obtain such information as is reason-
ably necessary regarding the income of a borrower
(and the borrower’s spouse, if applicable) of a loan
made under this part that is, or may be, repaid pur-
suant to an EXCEL Account for the purpose of de-
termining the annual repayment obligation of the
borrower. Return and return information (as defined
in section 6103 of the Internal Revenue Code of
1986) may be obtained under the preceding sentence
only to the extent authorized by section 6103(l)(13)
of such Code. The Secretary shall establish proce-
141
dures for determining the borrower’s repayment obli-
gation on that loan for such year, and such other
procedures as are necessary to implement effectively
repayment pursuant to an EXCEL Account.
‘‘(2) REPAYMENT BASED ON ADJUSTED GROSS
INCOME.—A repayment schedule for a loan made
under this part and repaid pursuant to an EXCEL
Account shall be based on adjusted gross income (as
defined in section 62 of the Internal Revenue Code
of 1986, 26 U.S.C. 62) of the borrower or, if the
borrower is married and files a Federal income tax
return jointly with his or her spouse, on adjusted
gross income of the borrower and his or her spouse.
‘‘(3) ADDITIONAL
DOCUMENTS.—A borrower
who chooses, or is required, to repay a loan made
under this part pursuant to an EXCEL Account,
and for whom adjusted gross income is unavailable
or does not reasonably reflect his or her current in-
come, shall provide to the Secretary other docu-
mentation of income satisfactory to the Secretary,
which documentation the Secretary may use to de-
termine an appropriate repayment schedule.
‘‘(4) REPAYMENT
SCHEDULES.—EXCEL Ac-
count repayment schedules shall be established by
the Secretary through regulations and shall require
142
payments measured as a percentage of the appro-
priate portion of the annual income of the borrower
(and the borrower’s spouse, if applicable) as deter-
mined by the Secretary.
‘‘(5) CALCULATION
OF
BALANCE
DUE.—The
balance due on a loan made under this part that is
repaid pursuant to an EXCEL Account shall equal
the unpaid principal amount of the loan, any ac-
crued interest, and any fees, such as late charges,
assessed on such loan. The Secretary may limit by
regulation the amount of interest that may be cap-
italized on such loan, and the timing of any such
capitalization.
‘‘(6) NOTIFICATION TO BORROWERS.—The Sec-
retary shall establish procedures under which a bor-
rower of a loan made under this part who chooses
or is required to repay such loan pursuant to an
EXCEL Account is notified of the terms and condi-
tions of such plan, including notification of such bor-
rower—
‘‘(A) that the Internal Revenue Service will
disclose to the Secretary tax return information
as authorized under section 6103(l)(13) of the
Internal Revenue Code of 1986; and
143
‘‘(B) that if a borrower considers that spe-
cial circumstances, such as a loss of employ-
ment by the borrower or his or her spouse, war-
rant an adjustment in the borrower’s loan re-
payment as determined using the information
described in subparagraph (A), or the alter-
native documentation described in paragraph
(3), the borrower may contact the Secretary,
who shall determine whether such adjustment is
appropriate, in accordance with criteria estab-
lished by the Secretary.
‘‘(f) DEFERMENT.—
‘‘(1) EFFECT ON PRINCIPAL AND INTEREST.—
A borrower of a loan made under this part who
meets the requirements described in paragraph (2)
shall be eligible for a deferment, during which peri-
odic installments of principal need not be paid, and
interest—
‘‘(A) shall not accrue, in the case of a Fed-
eral Direct Student Loan or a Federal Direct
Consolidation Loan that consolidated only Fed-
eral Direct Student Loans, or a combination of
such loans and Federal Student Loans for
which the student borrower received an interest
subsidy under section 428; or
144
‘‘(B) shall accrue and be capitalized or
paid by the borrower, in the case of a Federal
Direct Supplemental Loan for Students loan, a
Federal Direct PLUS Loan, a Federal Direct
Unsubsidized Student Loan, or a Federal Di-
rect Consolidation Loan other than those de-
scribed in subparagraph (A).
‘‘(2) ELIGIBILITY.—A borrower of a loan made
under this part shall be eligible for a deferment dur-
ing any period—
‘‘(A) during which the borrower—
‘‘(i) is pursuing at least a half-time
course of study at an eligible institution, as
determined by such institution; or
‘‘(ii) is pursuing a course of study
pursuant to a graduate fellowship program
approved by the Secretary, or pursuant to
a rehabilitation training program for indi-
viduals with disabilities approved by the
Secretary,
except that no borrower shall be eligible for a
deferment under this subparagraph, or a loan
made under this part (other than a Federal Di-
rect PLUS Loan, or a Federal Direct Consoli-
145
dation Loan), while serving in a medical intern-
ship or residency program;
‘‘(B) not in excess of 3 years during which
the borrower is seeking and unable to find full-
time employment; or
‘‘(C) not in excess of 3 years during which
the Secretary determines, in accordance with
regulations prescribed under section 435(o),
that the borrower has experienced or will expe-
rience an economic hardship, regardless of the
reason for such hardship.
‘‘(g) FEDERAL DIRECT CONSOLIDATION LOANS.—A
borrower of a loan made under this part may consolidate
such loan with the loans described in subsections (a)(4)
and (d)(1)(C) of section 428C only under the terms and
conditions established by the Secretary under this part.
Loans made under this subsection shall be known as ‘Fed-
eral Direct Consolidation Loans’.
‘‘(h) BORROWER DEFENSES.—Notwithstanding any
other provision of State or Federal law, the Secretary shall
specify in regulations (except as authorized under section
458(a)) which acts or omissions of an institution of higher
education a borrower may assert as a defense to repay-
ment of a loan made under this part, except that in no
event may a borrower recover from the Secretary, in any
146
action arising from or relating to a loan made under this
part, an amount in excess of the amount such borrower
has repaid on such loan.
‘‘(i) NONDISCHARGEABILITY IN BANKRUPTCY.—Not-
withstanding any other provision of law, a loan made
under this part shall not be dischargeable in bankruptcy.
‘‘SEC. 456. CONTRACTS.
‘‘(a) CONTRACTS FOR SUPPLIES AND SERVICES.—
‘‘(1) IN GENERAL.—The Secretary may award
one or more contracts for services and supplies
under subsection (b). The entities with which the
Secretary may enter into such contracts may in-
clude, but are not limited to, agencies with agree-
ments with the Secretary under sections 428(b) and
(c), if such agencies are otherwise qualified and com-
ply with the procedures applicable to the award of
such contracts.
‘‘(2) EXEMPTION.—(A) The Secretary may,
through June 30, 1998, award contracts under this
section without regard to the requirements in section
303 of the Federal Property and Administrative
Services Act of 1949 (41 U.S.C. 253), section 18 of
the Office of Federal Procurement Policy Act (41
U.S.C. 416), and section 8(e) of the Small Business
Act (15 U.S.C. 637(e)) and the corresponding re-
147
quirements of the Federal Acquisition Regulations if
the Secretary—
‘‘(i) determines in writing, on a case-by-
case basis, that the Government’s need for the
services and supplies to be provided under the
contract is of such an unusual and compelling
urgency that sources from which the Secretary
solicits bids or proposals must be limited; and
‘‘(ii) notifies the Congress in writing of
that determination not more than 30 days after
the award of the contract.
‘‘(B) The Secretary may make the determina-
tion described in subparagraph (A)(i) if the Sec-
retary determines that exemption from the require-
ments described in subparagraph (A) is in the public
interest and necessary for the orderly transition
from the loan programs under part B to the direct
student loan programs under this part.
‘‘(C) On and after July 1, 1998, all statutory
and regulatory requirements described in subpara-
graph (A) shall apply to the award of a contract
under this section.
‘‘(b) CONTRACTS FOR ORIGINATION, SERVICING, AND
DATA SYSTEMS.—The Secretary may enter into one or
more contracts for—
148
‘‘(1) the alternative origination of loans to stu-
dents attending institutions with agreements to par-
ticipate in the program under this part (or their par-
ents), if such institutions do not have agreements
with the Secretary under section 454(b);
‘‘(2) the servicing and collection of loans made
under this part;
‘‘(3) the establishment and operation of one or
more data systems for the maintenance of records
on all loans made under this part;
‘‘(4) services to assist in the orderly transition
from the loan programs under part B to the direct
student loan programs under this part; and
‘‘(5) such other aspects of the direct student
loan programs as the Secretary determines are nec-
essary to ensure the successful operation of the
programs.
‘‘SEC. 457. REPORTS.
‘‘(a) ANNUAL REPORTS.—The Secretary shall submit
to the Congress not later than July 1, 1993, and each
July 1 for the 5 succeeding years an annual report de-
scribing the progress and status of the loan program
under this part.
‘‘(b) RESEARCH, DEMONSTRATION, AND EVALUA-
TION.—The Secretary may use a portion of the funds de-
149
scribed in section 459 for research on, or the demonstra-
tion or evaluation of, any aspects of the program author-
ized by this part, including flexible repayment plans.
‘‘SEC. 458. REGULATORY ACTIVITIES.
‘‘(a) NOTICE IN LIEU OF REGULATIONS FOR FIRST
YEAR OF PROGRAM.—The Secretary shall publish in the
Federal Register whatever standards, criteria, and proce-
dures, consistent with the provisions of this part, the Sec-
retary determines are reasonable and necessary to the suc-
cessful implementation of the first year of the direct stu-
dent loan program authorized by this part. Section 431
of the General Education Provisions Act shall not apply
to the publication of such standards, criteria, and proce-
dures.
‘‘(b) CLOSING DATE FOR APPLICATIONS FROM IN-
STITUTIONS.—The Secretary shall establish a date not
later than October 1, 1993, as the closing date for receiv-
ing applications from institutions of higher education de-
siring to participate in the first year of the direct loan
program under this part.
‘‘(c) PUBLICATION OF LIST OF PARTICIPATING IN-
STITUTIONS AND CONTROL GROUP.—Not later than Jan-
uary 1, 1994, the Secretary shall publish in the Federal
Register a list of the institutions of higher education se-
150
lected to participate in the first year of the direct loan
program under this part.
‘‘SEC. 459. FUNDS FOR ADMINISTRATIVE EXPENSES.
‘‘Each fiscal year, there shall be available to the Sec-
retary of Education from funds not otherwise appro-
priated, funds to be obligated for administrative costs
under this part, including the costs of the transition from
the loan programs under part B to the direct student loan
programs under this part and transition support for the
expenses of guaranty agencies in servicing outstanding
loans in their portfolios and in guaranteeing new loans,
not to exceed $261,000,000 in fiscal year 1994,
$346,000,000 in fiscal year 1995, $552,000,000 in fiscal
year 1996, $596,000,000 in fiscal year 1997, and
$749,000,000 in fiscal year 1998. If in any fiscal year,
the Secretary determines that additional funds for admin-
istrative expenses are needed as a result of such transi-
tion, or the expansion of the direct student loan programs
under this part, the Secretary is authorized to use funds
available under this section for a subsequent fiscal year
for such expenses, except that the total expenditures by
the Secretary shall not exceed $2,504,000,000 in fiscal
years 1994 through 1998. The Secretary is also author-
ized to carry over funds available under this section to
a subsequent fiscal year.’’.
151
CHAPTER 2—CONFORMING AMENDMENTS
SEC. 4021. PRESERVING LOAN ACCESS.
(a) PURPOSE.—It is the purpose of the amendments
made by this section to provide the Secretary with flexible
authority as needed to preserve access to student and par-
ent loans under part B of title IV of the Act during the
transition from the Federal Family Education Loan Pro-
gram under such part to the Federal Direct Student Loan
Program under part D of such title.
(b) ADVANCES TO GUARANTY AGENCIES FOR LEND-
ER-OF-LAST RESORT SERVICES.—
(1) AMENDMENT.—Section 428(j) of the Act is
amended by adding at the end thereof the following
new paragraph:
‘‘(4) ADVANCES TO GUARANTY AGENCIES FOR
LENDER-OF-LAST RESORT SERVICES DURING TRAN-
SITION TO DIRECT LENDING.—(A) In order to en-
sure the availability of loan capital during the tran-
sition from the Federal Family Education Loan pro-
gram under this part to the Federal Direct Student
Loan program under part D of this title, the Sec-
retary is authorized to provide a guaranty agency
with additional advance funds in accordance with
section 422(c)(7), with such restrictions on the use
of such funds as are determined appropriate by the
152
Secretary, in order to ensure that the guaranty
agency will make loans as the lender-of-last-resort.
Such agency shall make such loans in accordance
with this subsection and the requirements of the
Secretary.
‘‘(B) Notwithstanding any other provision of
this part, a guaranty agency serving as a lender-of-
last-resort under this paragraph shall be paid a fee,
established by the Secretary, for making such loans
in lieu of interest and special allowance subsidies,
and shall be required to assign such loans to the
Secretary on demand. Upon such assignment, the
portion of the advance represented by the loans as-
signed shall be considered repaid by such guaranty
agency.’’.
(2) 
CONFORMING
AMENDMENT.—Section
422(c)(7) of the Act is amended by striking ‘‘to a
guaranty agency’’ through the end thereof and in-
serting the following: ‘‘to a guaranty agency—
‘‘(A) in accordance with section 428(j), in
order to ensure that the guaranty agency shall
make loans as the lender-of-last-resort during
the transition from the Federal Family Edu-
cation Loan Program under this part to the
153
Federal Direct Student Loan Program under
part D of this title; or
‘‘(B) if the Secretary is seeking to termi-
nate the guaranty agency’s agreement, or as-
suming the guaranty agency’s functions, in ac-
cordance with section 428(c)(10)(F)(v), in
order to assist the agency in meeting its imme-
diate cash needs, ensure the uninterrupted pay-
ment of claims, or ensure that the guaranty
agency shall make loans as described in sub-
paragraph (A);’’.
(c) LENDER REFERRAL SERVICES.—Section 428(e)
of the Act is amended—
(1) in paragraph (1)—
(A) by amending the paragraph heading to
read as follows: ‘‘IN
GENERAL; AGREEMENTS
WITH GUARANTY AGENCIES.—’’;
(B) by inserting the subparagraph designa-
tion ‘‘(A)’’ immediately after the paragraph
heading;
(C) by striking ‘‘in any State’’ and insert-
ing ‘‘with which the Secretary has an agree-
ment under subparagraph (B)’’; and
(D) by adding at the end thereof the fol-
lowing new subparagraph:
154
‘‘(B)(i) The Secretary may enter into agree-
ments with guaranty agencies that meet standards
established by the Secretary to provide lender refer-
ral services in geographic areas specified by the Sec-
retary. Such guaranty agencies shall be paid in ac-
cordance with paragraph (3) for such services.
‘‘(ii) The Secretary shall publish in the Federal
Register whatever standards, criteria, and proce-
dures consistent with the provisions of this part and
part D of this title, the Secretary determines are
reasonable and necessary to provide lender referral
services under this subsection and ensure loan access
to student and parent borrowers during the transi-
tion from the loan programs under this part to the
direct student loan programs under part D of this
title. Section 431 of the General Education Provi-
sions Act shall not apply to the publication of such
standards, criteria, and procedures.’’;
(2) in paragraph (2)—
(A) in the matter preceding subparagraph
(A), by striking ‘‘in a State’’ and inserting
‘‘with which the Secretary has an agreement
under paragraph (1)(B)’’;
(B) by amending subparagraph (A) to read
as follows:
156
‘‘the Association or its designated agent shall, sub-
ject to the limitations in section 428(j)(3),’’; and
(3) in paragraph (3), by striking ‘‘that—’’
through the end thereof and inserting the following:
‘‘that the conditions that caused the implementation
of this subsection have ceased to exist.’’.
SEC. 4022. GUARANTY AGENCY RESERVES.
Section 422 of the Act is amended by adding at the
end thereof the following new subsection:
‘‘(g) PRESERVATION
OF GUARANTY AGENCY RE-
SERVES.—
‘‘(1) AUTHORITY
TO
RECOVER
FUNDS.—Not-
withstanding any other provision of law, the reserve
funds of the guaranty agencies, and any assets pur-
chased with such reserve funds, regardless of who
holds or controls the reserves or assets, shall be con-
sidered to be the property of the United States to
be used in the operation of the program authorized
by this part or the program authorized by part D of
this title. However, the Secretary may not require
the return of all of a guaranty agency reserve funds
to the Secretary unless he or she determines that
such return is essential to the operation of the pro-
gram authorized by this part or the program author-
ized by part D of this title, or to ensure the orderly
157
termination of the guaranty agency’s operations and
the liquidation of its assets. The reserves shall be
maintained by each guaranty agency to pay program
expenses and contingent liabilities, as authorized by
the Secretary, except that the Secretary may—
‘‘(A) direct a guaranty agency to return to
the Secretary a portion of its reserve fund
which the Secretary determines is unnecessary
to pay the program expenses and contingent li-
abilities of the guaranty agency; and
‘‘(B) direct the guaranty agency to require
the return, to the guaranty agency or to the
Secretary, of any reserve funds or assets held
by, or under the control of, any other entity,
which the Secretary determines are necessary to
pay the program expenses and contingent liabil-
ities of the guaranty agency, or which are re-
quired for the orderly termination of the guar-
anty agency’s operations and the liquidation of
its assets.
‘‘(2) 
TERMINATION
PROVISIONS
IN
CON-
TRACTS.—To ensure that the funds and assets of
the guaranty agency are preserved, any contract
with respect to the administration of a guaranty
agency’s reserve funds, or the administration of any
158
assets purchased or acquired with the reserve funds
of the guaranty agency, that is entered into or ex-
tended by the guaranty agency, or any other party
on behalf of or with the concurrence of the guaranty
agency, after the effective date of this provision shall
provide that the contract is terminable by the Sec-
retary upon 30 days notice to the contracting parties
if the Secretary determines that such contract in-
cludes an impermissible transfer of the reserve funds
or assets, or is otherwise inconsistent with the terms
or purposes of this section.’’.
SEC. 4023. TERMS OF LOANS.
Section 428 of the Act is amended—
(1) in subsection (b)(1)(D), by striking ‘‘be
subject to’’ through the end thereof and inserting
the following: ‘‘be subject to income contingent re-
payment in accordance with subsection (m);’’; and
(2) in subsection (m)—
(A) by amending paragraph (1) to read as
follows:
‘‘(1) AUTHORITY
OF
SECRETARY
TO
RE-
QUIRE.—The Secretary may require any borrower
who has defaulted on a loan made under this part
that is assigned to the Secretary under subsection
(c)(8) to repay that loan under an income contingent
159
repayment plan, the terms and conditions of which
shall be established by the Secretary and the same
as, or similar to, the EXCEL Account established
for purposes of part D of this title.’’; and
(B) by striking paragraphs (2) through (4)
and inserting the following:
‘‘(2) LOANS FOR WHICH INCOME CONTINGENT
REPAYMENT
MAY
BE
REQUIRED.—A loan made
under this part may be required to be repaid under
this subsection if the note or other evidence of the
loan has been assigned to the Secretary pursuant to
subsection (c)(8).’’.
SEC. 4024. ASSIGNMENT OF LOANS.
Section 428(c)(8) of the Act is amended by—
(1) inserting the subparagraph designation
‘‘(A)’’ after the paragraph heading;
(2) striking the second and third sentences; and
(3) adding at the end thereof the following new
subparagraph:
‘‘(B) An orderly transition from the Federal
Family Education Loan program under this part to
the Federal Direct Student Loan program under
part D of this title shall be deemed to be in the Fed-
eral fiscal interest, and a guaranty agency shall
160
promptly assign loans to the Secretary under this
paragraph upon his or her request.’’.
SEC. 4025. TERMINATION OF GUARANTY AGENCY AGREE-
MENTS; ASSUMPTION OF GUARANTY AGENCY
FUNCTIONS BY THE SECRETARY.
Section 428(c)(10) of the Act is amended—
(1) in subparagraph (C), by inserting a comma
and ‘‘as appropriate,’’ immediately after ‘‘the Sec-
retary shall’’;
(2) in subparagraph (D)—
(A) by inserting the clause designation
‘‘(i)’’ after ‘‘(D)’’;
(B) by striking ‘‘Each’’ and inserting ‘‘If
the Secretary is not seeking to terminate the
guaranty agency’s agreement under subpara-
graph (E), or assuming the guaranty agency’s
functions under subparagraph (F), a’’;
(C) by adding at the end thereof the fol-
lowing new clause:
‘‘(ii) If the Secretary is seeking to terminate
the guaranty agency’s agreement under subpara-
graph (E), or assuming the guaranty agency’s func-
tions under subparagraph (F), a management plan
described in subparagraph (C) shall include the
means by which the Secretary and the guaranty
161
agency shall work together to ensure the orderly ter-
mination of the operations, and liquidation of the as-
sets of, the guaranty agency.’’;
(3) in subparagraph (E)—
(A) in clause (ii), by striking ‘‘or’’ at the
end thereof;
(B) in clause (iii), by striking the period at
the end thereof and inserting a semicolon; and
(C) by adding at the end thereof the fol-
lowing new clauses:
‘‘(iv) the Secretary determines that such
action is necessary to protect the Federal fiscal
interest;
‘‘(v) the Secretary determines that such
action is necessary to ensure the continued
availability of loans to student or parent bor-
rowers; or
‘‘(vi) the Secretary determines that such
action is necessary to ensure an orderly transi-
tion from the loan programs under this part to
the direct student loan programs under part D
of this title.’’;
(4) in subparagraph (F)—
162
(A) in the matter preceding clause (i), by
striking ‘‘Except as provided in subparagraph
(G), if’’ and inserting ‘‘If’’;
(B) by amending clause (v) to read as fol-
lows:
‘‘(v) provide the guaranty agency with ad-
ditional advance funds in accordance with sec-
tion 422(c)(7), with such restrictions on the use
of such funds as is determined appropriate by
the Secretary, in order to—
‘‘(I) meet the immediate cash needs of
the guaranty agency;
‘‘(II) ensure the uninterrupted pay-
ment of claims; or
‘‘(III) ensure that the guaranty agen-
cy will make loans as the lender-of-last-
resort, in accordance with subsection
(j)(4);’’;
(C) in clause (vi)—
(i) by striking ‘‘and to avoid’’ and in-
serting ‘‘to avoid’’;
(ii) by striking the period at the end
thereof and inserting ‘‘, and to ensure an
orderly transition from the loan programs
163
under this part to the direct student loan
programs under part D of this title.’’; and
(iii) by redesignating such clause as
clause (vii); and
(D) by inserting after clause (v) the follow-
ing new clause:
‘‘(vi) use all funds and assets of the guar-
anty agency to assist in the activities under-
taken in accordance with this subparagraph and
take appropriate action to require the return, to
the guaranty agency or the Secretary, of any
funds or assets provided by the guaranty agen-
cy, under contract or otherwise, to any person
or organization; or’’;
(5) by striking subparagraph (G);
(6) by redesignating subparagraphs (H), (I),
and (J) as subparagraphs (I), (J), and (K), respec-
tively;
(7) by inserting after subparagraph (F) the fol-
lowing new subparagraphs:
‘‘(G) Notwithstanding any other provision of
Federal or State law, if the Secretary has termi-
nated or is seeking to terminate a guaranty agency’s
agreement under subparagraph (E), or has assumed
164
a guaranty agency’s functions under subparagraph
(F)—
‘‘(i) such guaranty agency may not file for
bankruptcy;
‘‘(ii) no State court may issue any order
affecting the Secretary’s actions with respect to
such guaranty agency;
‘‘(iii) any contract with respect to the ad-
ministration of a guaranty agency’s reserve
funds, or the administration of any assets pur-
chased or acquired with the reserve funds of the
guaranty agency, that is entered into or ex-
tended by the guaranty agency, or any other
party on behalf of or with the concurrence of
the guaranty agency, after the effective date of
this provision shall provide that the contract is
terminable by the Secretary upon 30 days no-
tice to the contracting parties if the Secretary
determines that such contract includes an im-
permissible transfer of the reserve funds or as-
sets, or is otherwise inconsistent with the terms
or purposes of this section; and
‘‘(iv) no provision of State law shall apply
to the actions of the Secretary in terminating
the operations of a guaranty agency.
165
‘‘(H) Notwithstanding any other provision of
law, the Secretary’s liability for any outstanding li-
abilities of a guaranty agency (other than outstand-
ing student loan guarantees under this part), the
functions of which the Secretary has assumed, shall
not exceed the fair market value of the reserves of
the guaranty agency, minus any necessary liquida-
tion or other administrative costs.’’; and
(8) in subparagraph (K) (as redesignated by
paragraph (6)), by striking ‘‘system, together’’
through the end thereof and inserting the following:
‘‘system and the progress of the transition from the
loan programs under this part to the direct student
loan programs under part D of this title.’’.
SEC. 4026. ADMINISTRATIVE COST ALLOWANCE.
Section 428(f)(1) of the Act is amended—
(1) in subparagraph (A), by striking ‘‘The Sec-
retary’’ and inserting ‘‘For a fiscal year prior to fis-
cal year 1994, the Secretary’’; and
(2) in subparagraph (B), by inserting ‘‘prior to
fiscal year 1994’’ after ‘‘any fiscal year’’.
SEC. 4027. CONSOLIDATION LOANS.
Section 428C of the Act is amended—
(1) by amending subsection (a)(3)(A) to read as
follows:
166
‘‘(3) DEFINITION OF ELIGIBLE BORROWERS.—
(A) For the purpose of this section, the term ‘eligi-
ble borrower’ means a borrower who, at the time of
application for a consolidation loan is in repayment
status, or in a grace period preceding repayment, or
is a delinquent or defaulted borrower who will reen-
ter repayment through loan consolidation.’’;
(2) in subsection (b)—
(A) in paragraph (1)—
(i) in subparagraph (A)(ii), by insert-
ing 
‘‘with 
income-sensitive 
repayment
terms’’ after ‘‘obtain a consolidation loan’’;
(ii) by redesignating subparagraph
(E) as subparagraph (F); and
(iii) by inserting after subparagraph
(D) the following new subparagraph:
‘‘(E) that the lender shall offer an income-
sensitive repayment schedule, established by the
lender in accordance with the regulations of the
Secretary, to the borrower of any consolidation
loan made by the lender on or after July 1,
1994; and’’;
(B) in paragraph (4), by amending sub-
paragraph (C) to read as follows:
167
‘‘(C)(i) provides that periodic installments
of principal need not be paid, but interest shall
accrue and be paid in accordance with clause
(ii), during any period for which the borrower
would be eligible for a deferral under section
428(b)(1)(M), and that any such period shall
not be included in determining the repayment
period pursuant to subsection (c)(2) of this sec-
tion; and
‘‘(ii) provides that interest shall accrue and
be paid—
‘‘(I) by the Secretary, in the case of
a consolidation loan that consolidated only
Federal Stafford Loans for which the stu-
dent borrower received an interest subsidy
under section 428; or
‘‘(II) by the borrower, or capitalized,
in the case of a consolidation loan other
than one described in subclause (I);’’; and
(C) by adding at the end thereof the fol-
lowing new paragraph:
‘‘(5) DIRECT LOANS.—In the event that a bor-
rower is unable to obtain a consolidation loan with
income-sensitive repayment terms acceptable to the
borrower from a lender with an agreement under
168
subsection (a)(1), the Secretary shall offer any such
borrower who applies for it, a direct consolidation
loan to be repaid pursuant to an EXCEL Account
under part D of this title, except that the Secretary
shall not offer such loans if, in his or her judgment,
the Department does not yet have the necessary
origination and servicing arrangements in place for
such loans.’’; and
(3) in subsection (c)—
(A) in paragraph (1), by amending sub-
paragraphs (B) and (C) to read as follows:
‘‘(B) A consolidation loan made before July 1,
1994, shall bear interest at an annual rate on the
unpaid principal balance of the loan that is equal to
the greater of—
‘‘(i) the weighted average of the interest
rates on the loans consolidated, rounded to the
nearest whole percent; or
‘‘(ii) 9 percent.
‘‘(C) A consolidation loan made on or after July
1, 1994, shall bear interest at an annual rate on the
unpaid principal balance of the loan that is equal to
the weighted average of the interest rates on the
loans consolidated, rounded upward to the nearest
whole percent.’’;