H. R. 3123—5
‘‘(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 for a loan, make
a loan to the applicant under this paragraph in an
amount equal to the amount that bears the same ratio
to the total amount of loans for which the applicant
is eligible under this paragraph and under section
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.
‘‘(C) EFFECT OF LACK OF FUNDS.—On request of any
applicant who is eligible for a loan under this paragraph
for which funds are not available, the applicant shall be
considered to have applied for a loan guarantee under
section 306.
‘‘(3) STATE TELECOMMUNICATIONS MODERNIZATION PLANS.—
‘‘(A) APPROVAL.—If, not later than 1 year after final
regulations are promulgated to carry out this paragraph,
any State, either by statute or through the public utility
commission of the State, develops a telecommunications
modernization plan that meets the requirements of
subparagraph (B), the Administrator shall approve the plan
for the State. If a State does not develop a plan in accord-
ance with the requirements of the preceding sentence, the
Administrator shall approve any telecommunications mod-
ernization plan for the State that meets the requirements
that is developed by a majority of the borrowers of tele-
phone loans made under this title who are located in the
State.
‘‘(B) REQUIREMENTS.—For purposes of subparagraph
(A), a telecommunications modernization plan must, at a
minimum, meet the following objectives:
‘‘(i) The plan must provide for the elimination of
party line service.
‘‘(ii) The plan must provide for the availability
of telecommunications services for improved business,
educational, and medical services.
‘‘(iii) The plan must encourage and improve com-
puter networks and information highways for subscrib-
ers in rural areas.
‘‘(iv) The plan must provide for—
‘‘(I) subscribers in rural areas to be able to
receive through telephone lines—
‘‘(aa) conference calling;
‘‘(bb) video images; and
‘‘(cc) data at a rate of at least 1,000,000
bits of information per second; and
‘‘(II) the proper routing of information to
subscribers.
‘‘(v) The plan must provide for uniform deployment
schedules to ensure that advanced services are
deployed at the same time in rural and nonrural areas.
‘‘(vi) The plan must provide for such additional
requirements for service standards as may be required
by the Administrator.
H. R. 3123—6
‘‘(C) FINALITY
OF
APPROVAL.—A telecommunications
modernization plan approved under subparagraph (A) may
not subsequently be disapproved. Notwithstanding para-
graphs (1)(A)(iii) and (2)(A)(iii), and section 408(b)(4)(C),
the Administrator and the Governor of the telephone bank
may make a loan to a borrower serving a State that does
not have a telecommunication modernization plan approved
by the Administrator if the loan is made less than 1 year
after the Administrator has adopted final regulations
implementing this paragraph.’’.
(2) RURAL TELEPHONE BANK LOAN PROGRAM.—Section 408
of such Act (7 U.S.C. 948) is amended—
(A) in subsection (a), by striking ‘‘, (2)’’ and all that
follows through ‘‘408 of this Act,’’ and inserting ‘‘, (2) for
the acquisition, purchase, and installation of telephone
lines, systems, and facilities (other than buildings used
primarily for administrative purposes, vehicles not used
primarily in construction, and customer premise equip-
ment) related to the furnishing, improvement, or extension
of rural telecommunications service,’’;
(B) in subsection (b)—
(i) by striking paragraph (4) and inserting the
following new paragraph:
‘‘(4) The Governor of the telephone bank may make a
loan under this section only to an applicant for the loan who
meets the following requirements:
‘‘(A) The average number of subscribers per mile of
line in the service area of the applicant is not more than
15, or the applicant is capable of producing net income
or margins before interest of not less than 100 percent
(but not more than 500 percent) of the interest require-
ments on all of the outstanding and proposed loans of
the applicant.
‘‘(B) 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 developed 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 prepayment is not
made later than September 30, 1988’’ and inserting
‘‘except for any prepayment penalty provided for
in a loan agreement entered into before the date
of enactment of the Rural Electrification Loan
Restructuring Act of 1993’’; and
(III) by adding at the end the following new
subparagraph:
‘‘(B) If a borrower prepays part or all of a loan made
under this section, then, notwithstanding section 407(b), the
Governor of the telephone bank shall—
‘‘(i) use the full amount of the prepayment to repay
obligations of the telephone bank issued pursuant to section
407(b) before October 1, 1991, to the extent any such obliga-
tions are outstanding; and
‘‘(ii) in repaying the obligations, first repay the
advances bearing the greatest rate of interest.’’; and
H. R. 3123—7
(iii) by adding at the end the following new para-
graphs:
‘‘(9) On request of any applicant for a loan under this
section during any fiscal year, the Governor of the telephone
bank shall—
‘‘(A) consider the application to be for a loan under
this section and a loan under section 305(d)(2); and
‘‘(B) if the applicant is eligible for a loan, make a
loan to the applicant under this section in an amount
equal to the amount that bears the same ratio to the
total amount of loans for which the applicant is eligible
under this section and under section 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 eligible for a
loan under this section for which funds are not available, the
applicant shall be considered to have applied for a loan under
section 305(d)(2).’’; and
(C) by adding at the end the following new subsection:
‘‘(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 assets and liabilities of the
telephone bank. This subsection shall not apply to loans obligated
before the date of enactment of this subsection. Funds are not
authorized to be appropriated to carry out this subsection until
the funds are appropriated in advance to carry out this subsection.’’.
(b) FUNDING.—
(1) LIMITATIONS ON AUTHORIZATION OF APPROPRIATIONS.—
Section 314 of such Act (7 U.S.C. 940d) is amended to read
as follows:
‘‘SEC. 314. LIMITATIONS ON AUTHORIZATION OF APPROPRIATIONS.
‘‘(a) DEFINITION OF ADJUSTMENT PERCENTAGE.—As used in this
section, the term ‘adjustment percentage’ means, with respect to
a fiscal year, the percentage (if any) by which—
‘‘(1) the average of the Consumer Price Index (as defined
in section 1(f)(5) of the Internal Revenue Code of 1986) for
the 1-year period ending on July 31 of the immediately preced-
ing fiscal year; exceeds
‘‘(2) the average of the Consumer Price Index (as so defined)
for the 1-year period ending on July 31, 1993.
‘‘(b) FISCAL YEARS 1994 THROUGH 1998.—In the case of each
of fiscal years 1994 through 1998, there are authorized to be appro-
priated to the Administrator such sums as may be necessary for
the cost of loans in the following amounts, for the following
purposes:
‘‘(1) ELECTRIC HARDSHIP LOANS.—For loans under section
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 adjustment 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
H. R. 3123—8
‘‘(B) for each of fiscal years 1995 through 1998,
$600,000,000, increased by the adjustment percentage for
the fiscal year.
‘‘(3) TELEPHONE HARDSHIP LOANS.—For loans under section
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 adjustment 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 adjustment percentage for
the fiscal year.
‘‘(c) FUNDING LEVELS.—The Administrator shall make insured
loans under this title for the purposes, in the amounts, and for
the periods of time specified in subsection (b), as provided 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.’’.
(2) RULE OF INTERPRETATION.—Section 309(a) of such Act
(7 U.S.C. 939(a)) is amended by adding at the end the following
new sentence: ‘‘The preceding sentence shall not be construed
to make section 408(b)(2) or 412 applicable to this title.’’.
(c) MISCELLANEOUS AMENDMENTS.—
(1) LOANS FOR RURAL ELECTRIFICATION.—Section 2 of such
Act (7 U.S.C. 902) is amended—
(A) by inserting ‘‘(a)’’ before ‘‘The Administrator’’;
(B) 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 borrowers to implement
demand side management, energy conservation programs,
and on-grid and off-grid renewable energy systems;’’; and
(C) by adding at the end the following new subsection:
‘‘(b) By January 1, 1994, the Administrator shall issue interim
regulations to implement the authority contained in subsection
(a) to make loans for the purpose of assisting electric borrowers
to implement demand side management, energy conservation pro-
grams, and on-grid and off-grid renewable energy systems. If the
regulations are not issued by January 1, 1994, the Administrator
shall consider any demand side management, energy conservation,
or renewable energy program, system, or activity that is approved
by a State agency to be eligible for the loans.’’.
(2) LOANS
FOR
ELECTRICAL
PLANTS
AND
TRANSMISSION
LINES.—Section 4 of such Act (7 U.S.C. 904) is amended by
inserting after ‘‘central station service’’ the following: ‘‘and for
the furnishing and improving of electric service to persons
in rural areas, including by assisting electric borrowers to
implement demand side management, energy conservation pro-
grams, and on-grid and off-grid renewable energy systems’’.
(3) DEFINITIONS.—Section 13 of such Act (7 U.S.C. 913)
is amended—
(A) by inserting ‘‘, except as provided in section 203(b),’’
before ‘‘shall be deemed to mean any area’’; and
H. R. 3123—9
(B) by striking ‘‘city, village, or borough having a popu-
lation in excess of fifteen hundred inhabitants’’ and insert-
ing ‘‘urban area, as defined by the Bureau of the Census’’.
(4) GENERAL
PROHIBITIONS.—Section 18 of such Act (7
U.S.C. 918) is amended—
(A) by inserting ‘‘(a) NO CONSIDERATION OF BORROW-
ER’S LEVEL OF GENERAL FUNDS.—’’ before ‘‘The Adminis-
trator’’; and
(B) by adding at the end the following new subsections:
‘‘(b) LOAN ORIGINATION FEES.—The Administrator and the Gov-
ernor of the telephone bank may not charge any fee or charge
not expressly provided in this Act in connection with any loan
made or guaranteed under this Act.
‘‘(c) CONSULTANTS.—
‘‘(1) IN GENERAL.—To facilitate timely action on applications
by borrowers for financial assistance under this Act and for
approvals required of the Rural Electrification Administration
pursuant to the terms of outstanding loan or security
instruments or otherwise, the Administrator may use consult-
ants funded by the borrower, paid for out of the general funds
of the borrower, for financial, legal, engineering, and other
technical advice and services in connection with the review
of the application by the Rural Electrification Administration.
‘‘(2) CONFLICTS
OF
INTEREST.—The Administrator shall
establish procedures for the selection and the provision of tech-
nical services by consultants to ensure that the consultants
have no financial or other conflicts of interest in the outcome
of the application of the borrower.
‘‘(3) PAYMENT OF COSTS.—The Administrator may not, with-
out the consent of the borrower, require, as a condition of
processing an application for approval, that the borrower agree
to pay the costs, fees, and expenses of consultants hired to
provide technical or advisory services to the Administrator.
‘‘(4) CONTRACTS, GRANTS, AND AGREEMENTS.—The Adminis-
trator may enter into such contracts, grants, or cooperative
agreements as are necessary to carry out this section.
‘‘(5) USE
OF
CONSULTANTS.—Nothing in this subsection
shall limit the authority of the Administrator to retain the
services of consultants from funds made available to the
Administrator or otherwise.’’.
(5) DEFINITION OF RURAL AREA.—Section 203(b) of such
Act (7 U.S.C. 924(b)) is amended by striking ‘‘one thousand
five hundred’’ and inserting ‘‘5,000’’.
(6) INSURED LOANS.—Section 305 of such Act (7 U.S.C.
935) (as amended by subsection (a)(1)) is further amended—
(A) by striking ‘‘SEC. 305. INSURED LOANS; INTEREST
RATES AND LENDING LEVELS.—(a) The’’ and inserting the
following:
‘‘SEC. 305. INSURED LOANS; INTEREST RATES AND LENDING LEVELS.
‘‘(a) IN GENERAL.—The’’; and
(B) in subsection (b), by striking ‘‘(b) Loans’’ and insert-
ing ‘‘(b) INSURED LOANS.—Loans’’.
(7) ELIGIBILITY OF DISTRIBUTION BORROWERS; ADMINISTRA-
TIVE PROHIBITIONS.—Title III of such Act is amended by insert-
ing after section 306B (7 U.S.C. 936b) the following new
sections:
H. R. 3123—10
‘‘SEC. 306D. ELIGIBILITY OF DISTRIBUTION BORROWERS FOR LOANS,
LOAN GUARANTEES, AND LIEN ACCOMMODATIONS.
‘‘For the purpose of determining the eligibility of a distribution
borrower not in default on the repayment of a loan made or guaran-
teed under this Act for a loan, loan guarantee, or lien accommoda-
tion under this title, a default by a borrower from which the
distribution borrower purchases wholesale power shall not—
‘‘(1) be considered a default by the distribution borrower;
‘‘(2) reduce the eligibility of the distribution borrower for
assistance under this Act; or
‘‘(3) be the cause, directly or indirectly, of imposing any
requirement or restriction on the borrower as a condition of
the assistance, except such requirements or restrictions as are
necessary to implement a debt restructuring agreed on by the
power supply borrower and the Government.
‘‘SEC. 306E. ADMINISTRATIVE PROHIBITIONS APPLICABLE TO ELEC-
TRIC 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 outstanding principal balance on all loans made
or guaranteed to the borrower by the Administrator.’’.
(8) LOANS FROM OTHER CREDIT SOURCES.—Section 307 of
such Act (7 U.S.C. 937) is amended by adding at the end
the following new sentence: ‘‘The Administrator may not
request any applicant for an electric loan under this Act to
apply for and accept a loan in an amount exceeding 30 percent
of the credit needs of the applicant.’’.
(9) CAPITALIZATION.—Section 406 of such Act (7 U.S.C.
946) is amended by adding at the end the following new sub-
section:
‘‘(i) The Governor of the telephone bank may invest in obliga-
tions of the United States the amounts in the account in the
Treasury of the United States numbered 12X8139 (known as the
‘RTB Equity Fund’).’’.
(10) REFINANCING OF FFB LOANS.—Section 306C of such
Act is amended by—
(A) inserting before the period at the end of subsection
(c)(2) the following: ‘‘, except that such rate shall not be
greater than 7 percent per year, subject to subsection (d)’’;
and
(B) adding at the end the following new subsection:
‘‘(d) MAXIMUM RATE OPTION.—
‘‘(1) IN GENERAL.—Except as provided in paragraphs (2),
(3), and (4), a borrower of a loan or loan advance, or any
portion of the loan or advance, that is refinanced under this
section shall have the option of ensuring that the interest
rate on such loan, loan advance, or portion thereof does not
exceed 7 percent per year.
‘‘(2) LIMITATION.—A borrower may not exercise the option
under paragraph (1) in the case of a loan or loan advance,
or portion thereof, if the total amount of such loans for which
such option would be exercised exceeds 50 percent of the
outstanding principal balance of the loans made to such bor-
rower and guaranteed under section 306.
H. R. 3123—11
‘‘(3) FEE.—A borrower that exercises the maximum rate
option under paragraph (1) shall, at the time of exercising
such option, pay a fee equal to 1 percent of the outstanding
principal balance of such loan or loan advance, or portion
thereof, for which such option is exercised. Such fee shall be
in addition to the penalties and other payments required under
subsection (b).
‘‘(4) SUNSET.—The option provided under paragraph (1)
shall not be available in the case of any loan or loan advance,
or portion thereof, unless a written request to exercise such
option is sent to the Administrator not later than 1 year after
the effective date of regulations issued to carry out the Rural
Electrification Loan Restructuring Act of 1993.’’.
SEC. 3. EXPANDED ELIGIBILITY FOR LOANS FOR WATER AND WASTE
DISPOSAL FACILITIES.
Section 306(a)(1) of the Consolidated Farm and Rural Develop-
ment Act (7 U.S.C. 1926(a)(1)) is amended by inserting after the
first sentence the following new sentence: ‘‘The Secretary may also
make loans to any borrower to whom a loan has been made under
the Rural Electrification Act of 1936 (7 U.S.C. 901 et seq.), for
the conservation, development, use, and control of water, and the
installation of drainage or waste disposal facilities, primarily serv-
ing farmers, ranchers, farm tenants, farm laborers, rural businesses,
and other rural residents.’’.
SEC. 4. RURAL ECONOMIC DEVELOPMENT.
Section 364 of the Consolidated Farm and Rural Development
Act (7 U.S.C. 2006f) is amended by adding at the end the following
new subsection:
‘‘(g) RURAL ECONOMIC DEVELOPMENT.—
‘‘(1) IN GENERAL.—A borrower of a loan or loan guarantee
under the Rural Electrification Act of 1936 (7 U.S.C. 901 et
seq.) shall be eligible for assistance under all programs adminis-
tered by the Rural Development Administration.
‘‘(2) PARTICIPATION.—The Administrator of the Rural Devel-
opment Administration shall encourage and facilitate the full
and equal participation of all entities to participate in programs
administered by the Rural Development Administration.’’.
SEC. 5. PROHIBITION UNDER RURAL DEVELOPMENT PROGRAMS.
The Consolidated Farm and Rural Development Act (7 U.S.C.
1921 et seq.) is amended by adding at the end thereof the following
new section:
‘‘SEC. 370. PROHIBITION UNDER RURAL DEVELOPMENT PROGRAMS.
‘‘(a) PROHIBITION.—Assistance under any rural development
program administered by the Rural Development Administration,
the Farmers Home Administration, the Rural Electrification
Administration, or any other agency of the Department of Agri-
culture shall not be conditioned on any requirement that the recipi-
ent of such assistance accept or receive electric service from any
particular utility, supplier, or cooperative.
‘‘(b) ENSURING COMPLIANCE.—The Secretary shall establish, by
regulation, adequate safeguards to ensure that assistance under
such rural development programs is not subject to such a condition.
Such safeguards shall include periodic certifications and audits,
H. R. 3123—12
and appropriate measures and sanctions against any person violat-
ing, or attempting to violate, the prohibition in subsection (a).
‘‘(c) REGULATIONS.—Not later than 6 months after the enact-
ment of this section, the Secretary shall issue interim final regula-
tions to ensure compliance with subsection (a).’’.
SEC. 6. REGULATIONS.
Except as provided in section 2(b) of the Rural Electrification
Act of 1936 and section 370 of the Consolidated Farm and Rural
Development Act, as added by sections 2(c)(1)(C) and 5 of this
Act, not later than 45 days after the date of enactment of this
Act, interim final regulations shall be issued by—
(1) the Administrator of the Rural Electrification Adminis-
tration to carry out the amendments made by this Act to
programs administered by the Administrator;
(2) the Administrator of the Rural Development Adminis-
tration to carry out the amendments made by this Act to
programs administered by the Administrator; and
(3) the Secretary of Agriculture to carry out the amend-
ments made by this Act to programs administered by the Farm-
ers Home Administration.
Speaker of the House of Representatives.
Vice President of the United States and
President of the Senate.