HR 3123 RDS
this paragraph during any fiscal year, the Ad-
ministrator 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 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 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.
‘‘(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 guarantee under section
306.
‘‘(3) 
STATE
TELECOMMUNICATIONS
MOD-
ERNIZATION PLANS.—
HR 3123 RDS
‘‘(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 mod-
ernization plan that meets the requirements of
subparagraph (B), the Administrator shall ap-
prove the plan for the State. If a State does not
develop a plan in accordance with the require-
ments of the preceding sentence, the Adminis-
trator shall approve any telecommunications
modernization plan for the State that meets the
requirements that is developed by a majority of
the borrowers of telephone loans made under
this title who are located in the State.
‘‘(B) REQUIREMENTS.—For purposes of
subparagraph (A), a telecommunications mod-
ernization 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.
HR 3123 RDS
‘‘(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) conference calling;
‘‘(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.
‘‘(vi) The plan must provide for such
additional requirements for service stand-
ards as may be required by the Adminis-
trator.
‘‘(C) FINALITY
OF
APPROVAL.—A tele-
communications modernization plan approved
HR 3123 RDS
under subparagraph (A) may not subsequently
be disapproved. Notwithstanding paragraphs
(1)(A)(iii) 
and 
(2)(A)(iii), 
and 
section
408(b)(4)(C), the Administrator and the Gov-
ernor 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
PRO-
GRAM.—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, 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 cus-
tomer premise equipment) related to the fur-
nishing, improvement, or extension of rural tele-
communications service,’’;
(B) in subsection (b)—
HR 3123 RDS
(i) by striking paragraph (4) and in-
serting 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 appli-
cant is not more than 15, or the applicant is ca-
pable of producing net income or margins be-
fore interest of not less than 100 percent (but
not more than 500 percent) of the interest re-
quirements on all of the outstanding and pro-
posed 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 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
HR 3123 RDS
for any prepayment penalty provided
for in a loan agreement entered into
before the date of enactment of the
Rural Electrification Loan Restruc-
turing 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 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 the obligations, first repay
the advances bearing the greatest rate of inter-
est.’’; and
(iii) by adding at the end the follow-
ing new paragraphs:
‘‘(9) On request of any applicant for a loan
under this section during any fiscal year, the Gov-
ernor of the telephone bank shall—
HR 3123 RDS
‘‘(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 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 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 as-
sets and liabilities of the telephone bank. This subsection
shall not apply to loans obligated before the date of enact-
HR 3123 RDS
ment 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 AP-
PROPRIATIONS.—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) 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 Reve-
nue Code of 1986) for the 1-year 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 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 appropriated to the Administrator such
HR 3123 RDS
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 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)—
HR 3123 RDS
‘‘(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.
‘‘(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 sub-
section (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 Admin-
istrator’’;
(B) by striking ‘‘telephone service in rural
areas, as hereinafter provided;’’ and inserting
‘‘electric and telephone service in rural areas, as
HR 3123 RDS
provided in this Act, and for the purpose of as-
sisting electric borrowers to implement demand
side management, energy conservation pro-
grams, and on-grid and off-grid renewable en-
ergy 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 con-
tained in subsection (a) to make loans for the purpose of
assisting electric borrowers to implement demand side
management, energy conservation programs, 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 con-
servation, or renewable energy program, system, or activ-
ity 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 furnish-
ing and improving of electric service to persons in
rural areas, including by assisting electric borrowers
to implement demand side management, energy con-
HR 3123 RDS
servation programs, and on-grid and off-grid renew-
able 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
(B) by striking ‘‘city, village, or borough
having a population in excess of fifteen hundred
inhabitants’’ and inserting ‘‘urban area, as de-
fined 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
BORROWER’S
LEVEL
OF
GENERAL
FUNDS.—’’ before ‘‘The Administrator’’; and
(B) by adding at the end the following new
subsections:
‘‘(b) LOAN ORIGINATION FEES.—The Administrator
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 made or guaranteed under this
Act.
‘‘(c) CONSULTANTS.—
HR 3123 RDS
‘‘(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 consultants
funded by the borrower, paid for out of the general
funds of the borrower, for financial, legal, engineer-
ing, and other technical advice and services in con-
nection with the review of the application by the
Rural Electrification Administration.
‘‘(2) CONFLICTS OF INTEREST.—The Adminis-
trator shall establish procedures for the selection
and the provision of technical services by consultants
to ensure that the consultants have no financial or
other conflicts of interest in the outcome of the ap-
plication of the borrower.
‘‘(3) PAYMENT OF COSTS.—The Administrator
may not, without the consent of the borrower, re-
quire, 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
AGREE-
MENTS.—The Administrator may enter into such
HR 3123 RDS
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 Adminis-
trator to retain the services of consultants from
funds made available to the Administrator or other-
wise.’’.
(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 LEV-
ELS.—(a) The’’ and inserting the following:
‘‘SEC. 305. INSURED LOANS; INTEREST RATES AND LEND-
ING LEVELS.
‘‘(a) IN GENERAL.—The’’; and
(B) in subsection (b), by striking ‘‘(b)
Loans’’ and inserting ‘‘(b) INSURED LOANS.—
Loans’’.
(7) ELIGIBILITY
OF
DISTRIBUTION
BORROW-
ERS; ADMINISTRATIVE PROHIBITIONS.—Title III of
HR 3123 RDS
such Act is amended by inserting after section 306B
(7 U.S.C. 936b) the following new sections:
‘‘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 guaranteed under this Act for a loan, loan
guarantee, or lien accommodation under this title, a de-
fault 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 im-
posing any requirement or restriction on the bor-
rower as a condition of the assistance, except such
requirements or restrictions as are necessary to im-
plement a debt restructuring agreed on by the power
supply borrower and the Government.
‘‘SEC. 306E. ADMINISTRATIVE PROHIBITIONS APPLICABLE
TO ELECTRIC BORROWERS.
‘‘The Administrator may not require prior approval
of, impose any requirement, restriction, or prohibition with
HR 3123 RDS
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.’’.
(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 subsection:
‘‘(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’).’’.
(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
HR 3123 RDS
(B) adding at the end the following new
subsection:
‘‘(d) MAXIMUM RATE OPTION.—
‘‘(1) IN GENERAL.—Except as provided in para-
graphs (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 ex-
ceed 7 percent per year.
‘‘(2) LIMITATION.—A borrower may not exer-
cise 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 out-
standing principal balance of the loans made to such
borrower and guaranteed under section 306.
‘‘(3) FEE.—A borrower that exercises the maxi-
mum 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 addi-
tion to the penalties and other payments required
under subsection (b).