H. R. 3123
One Hundred Third Congress
of the
United States of America
AT THE FIRST SESSION
Begun and held at the City of Washington on Tuesday,
the fifth day of January, one thousand nine hundred and ninety-three
An Act
To improve the electric and telephone loan programs carried out under the Rural
Electrification Act of 1936, and for other purposes.
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ‘‘Rural Electrification Loan
Restructuring Act of 1993’’.
SEC. 2. ELECTRIC AND TELEPHONE LOAN PROGRAMS.
(a) INSURED ELECTRIC AND TELEPHONE LOANS.—
(1) IN GENERAL.—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 subsection (b);
and
(C) by inserting after subsection (b) (as so redesignated)
the following new subsections:
‘‘(c) INSURED ELECTRIC LOANS.—
‘‘(1) HARDSHIP LOANS.—
‘‘(A) IN
GENERAL.—The Administrator shall make
insured electric loans, to the extent of qualifying applica-
tions for the loans, at an interest rate of 5 percent per
year to any applicant for a loan 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 kilowatt-hour sold by all utilities
in the State in which the applicant 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 applicant
provides service.
‘‘(iii) The average per capita income of the resi-
dents 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 service,
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.—In addition to hardship
loans that are made under subparagraph (A), the Adminis-
H. R. 3123—2
trator may make an insured electric loan at an interest
rate of 5 percent per year to an applicant for a loan if,
in the sole discretion of the Administrator, the applicant
has experienced a severe hardship.
‘‘(C) LIMITATION.—Except as provided in subparagraph
(D), 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 area (as defined by the Bureau of the Census) if
the average number of consumers per mile of line of the
total electric system of the applicant exceeds 17.
‘‘(D) EXTREMELY HIGH RATES.—In addition to hardship
loans that are made under subparagraphs (A) and (B),
the Administrator shall make insured electric loans, to
the extent of qualifying applications for the loans, at an
interest rate of 5 percent per year to any applicant for
a loan whose residential revenue exceeds 15.0 cents per
kilowatt-hour sold. A qualifying application from such an
applicant for the purpose of furnishing or improving electric
service to a consumer located outside of an urbanized area
shall not be subject to the conditions or limitation of
subparagraph (A) or (C).
‘‘(2) MUNICIPAL RATE LOANS.—
‘‘(A) IN
GENERAL.—The Administrator shall make
insured electric loans, to the extent of qualifying applica-
tions for the loans, at the interest rate described in
subparagraph (B) for the term or terms selected by the
applicant pursuant to subparagraph (C).
‘‘(B) INTEREST RATE.—
‘‘(i) IN GENERAL.—Subject to clause (ii), the interest
rate described in this subparagraph on a loan to a
qualifying applicant shall be—
‘‘(I) the interest rate determined by the
Administrator to be equal to the current market
yield on outstanding municipal obligations with
remaining periods to maturity similar to the
term selected by the applicant pursuant to
subparagraph (C), but not greater than the rate
determined under section 307(a)(3)(A) of the
Consolidated Farm and Rural Development Act
(7 U.S.C. 1927(a)(3)(A)) that is based on the cur-
rent market yield on outstanding municipal obliga-
tions; plus
‘‘(II) if the applicant for the loan makes an
election pursuant to subparagraph (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 the 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 for
the loan shall not exceed 7 percent if—
H. R. 3123—3
‘‘(I) the average number of consumers 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 applicant provides service;
and
‘‘(bb) 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 service, or the median house-
hold income of the households receiving electric
service from the applicant is less than the median
household income of the households in the State.
‘‘(iii) EXCEPTION.—Clause (ii) shall not apply to
a loan to be made to an applicant for the purpose
of furnishing or improving electric service to consumers
located in an urban area (as defined by the Bureau
of the Census) if the average number of consumers
per mile of line of the total electric system of the
applicant exceeds 17.
‘‘(C) LOAN TERM.—
‘‘(i) IN
GENERAL.—Subject to clause (ii), the
applicant for a loan under this paragraph may select
the term for which an interest rate shall be determined
pursuant to subparagraph (B), and, at the end of the
term (and any succeeding term selected by the
applicant under this subparagraph), may renew the
loan for another term selected by the applicant.
‘‘(ii) MAXIMUM TERM.—
‘‘(I) APPLICANT.—The applicant may not select
a term that ends more than 35 years after the
beginning of the first term the applicant selects
under clause (i).
‘‘(II) ADMINISTRATOR.—The Administrator may
prohibit an applicant from selecting a term that
would result in the total term of the loan being
greater than the expected useful life of the assets
being financed.
‘‘(D) CALL PROVISION.—The Administrator 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 on terms consistent with similar provi-
sions of commercial loans.
‘‘(3) OTHER SOURCE OF CREDIT NOT REQUIRED 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 extent of qualifying applica-
tions for the loans, at an interest rate of 5 percent per
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year, to any applicant who meets each of the following
requirements:
‘‘(i) The average number of subscribers per mile
of line in the service area of the applicant is not
more than 4.
‘‘(ii) The applicant is capable of producing net
income or margins before interest of not less than
100 percent (but not more than 300 percent) of the
interest requirements on all of the outstanding and
proposed loans of the applicant.
‘‘(iii) The Administrator has approved a tele-
communications modernization plan for the State
under paragraph (3) and, if the plan was developed
by telephone borrowers under this title, the applicant
is a participant in the plan.
‘‘(iv) The average number of subscribers per mile
of line in the area included in the proposed loan is
not more than 17.
‘‘(B) AUTHORITY
TO
WAIVE
TIER
REQUIREMENT.—The
Administrator may waive the requirement of subparagraph
(A)(ii) in any case in which the Administrator determines
(and sets forth the reasons for the waiver in writing) that
the requirement would prevent emergency restoration of
the telephone system of the applicant or result in severe
hardship to the applicant.
‘‘(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 under title IV.
‘‘(2) COST-OF-MONEY LOANS.—
‘‘(A) IN
GENERAL.—The Administrator may make
insured telephone loans 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 equipment) related to the furnishing, improve-
ment, or extension of rural telecommunications service,
at an interest rate equal to the then current cost of money
to the Government of the United States for loans of similar
maturity, but not more than 7 percent per year, to any
applicant for a loan 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, 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 requirements on all of the outstanding and
proposed loans of the applicant.
‘‘(ii) The Administrator has approved a tele-
communications modernization plan for the State
under paragraph (3) and, if the plan was developed
by telephone borrowers under this title, the applicant
is a participant in the plan.
‘‘(B) CONCURRENT LOAN AUTHORITY.—On request of any
applicant for a loan under this paragraph during any fiscal
year, the Administrator shall—