An Act to amend the Rural Electrification Act of 1936, as amended, to provide an additional source of financing for the rural telephone program, and for other purposes
PL 92-12 (S.70), enacted 05/07/1971

85 STAT. ] 
PUBLIC LAW 92-12-MAY 7, 1971 
CHAPTER V 
FUNDS A P P E O P R I A T E D TO T H E PRESIDENT 
29 
DISASTER RELIEF 
For an additional amount for "Disaster relief," including carrying 
out the functions of the Office of Emergency Preparedness under the 
Disaster Relief Act of 1970 (Public Law 91-606), $25,000,000, to 
remain available until expended: Provided^ That not to exceed 3 
per centum of the foregoing 
amount 
shall be available for 
administrative expenses. 
CHAPTER VI 
GENERAL PROVISIONS 
No part of any appropriation contained in this Act shall remain 
available for obligation beyond the current fiscal year unless expressly 
so provided herein. 
Approved April 30, 1971. 
84 Stat. 1744. 
42 u s e 4401 
note. 
Public Law 92-12 
AN ACT 
To amend the Rural Electrification Act of 1936, as amended, to provide an 
additional source of financing for the rural telephone program, and for other 
purposes. 
Be it enacted hy the Senate and House of Representatives 
of the 
United States of America in Congress assembled^ That it is hereby 
declared to be the policv of the Congress that the growing capital 
needs of the rural telepnone systems require the establishment of a 
rural telephone bank which will furnish assured and viable sources of 
supplementary financing with the objective that said bank will become 
an entirely privately owned, operated, and financed corporation. The 
Congress further finds that many rural telephone systems require 
financing under the terms and conditions provided in title I I of the 
Rural Electrification Act of 1936, as amended. In order to effectuate 
this policy, the Rural Electrification Act of 1936, as amended (7 U.S.C. 
921-924), is amended as hereinafter provided. 
SEC. 2. The Rural Electrification Act of 1936, as amended, is 
amended by adding the following two new titles: 
"TITLE I I I 
"SEC. 301. RURAL TELEPHONE ACCOUNT.—There is hereby estab-
lished in the Treasury of the United States an account, to be known 
as the rural telephone account, consisting of so much of the net collec-
May 7, 1971 
[S. 70] 
Rural telephone 
program. 
Financing. 
63 Stat. 948; 
76 Stat. 1140. 
7 u s e 922. 
49 Stat.-1363. 
7 u s e 901. 
Bank 
30 
PUBLIC LAW 92-12-MAY 7, 1971 
[85 STAT. 
tion proceeds (as defined in section 406(a) of this Act) as may be 
necessary to provide for investment in the capital stock of the Eural 
Telephone Bank in accordance with such section 406(a) : Provided^ 
That such investment shall be deemed paid in capital of the said bank 
notwithstanding that funds representmg the proceeds from the sale 
of such stock shall remain in the rural telephone account until required 
for actual disbursement in cash by the said oank, 
"SEC. 302. DEPOSIT OF ACCOUNT MONEYS.—Moneys in the rural tele-
ghone account shall remain on deposit in the Treasury of the United 
tates until disbursed. 
"TITLE IV 
Rural Telephone 
" S E C . 
4 0 1 . ESTABLISHMENT, 
G E N E R A L 
P U R P O S E S , AND 
S T A T U S 
OF 
THE TELEPHONE BANK.—(a) There is hereby established a body cor-
porate to be known as the Rural Telephone Bank (hereinafter called 
the telephone bank). 
"(b) The general purposes of the telephone bank shall be to obtain 
an adequate supply of supplemental funds to the extent feasible from 
non-Federal sources, to utilize said funds in the making of loans under 
secti(m 408 of this title, and to conduct its operations to the extent 
practicable on a self-sustaining basis. 
"(c) The telephone bank shall be deemed to be an instrumentality of 
the United States, and shall, for the purposes of jurisdiction and 
venue, be deemed a citizen and resident of the District of Columbia. 
The telephone bank is authorized to make payments to State, terri-
torial, and local governments in lieu of property taxes upon real 
projperty and tangible personal property which was subject to State, 
territorial, and local taxation before acquisition by the telephone bank. 
Such payment may be in the amounts, at the times, and upon such 
terms as the telephone bank deems aj)propriate but the telephone bank 
shall be guided by the policy of making payments not in excess of the 
taxes which would have been payable upon such property in the con-
dition in which it was acquired. 
"SEC. 402. GENERAL POWERS.—To carry out the sijecific powers herein 
authorized, the telephone bank shall have power to (a) adopt, alter, 
and use a corporate seal; (b) sue and be sued in its corporate name; 
(c) make contracts, leases, and cooperative agreements, or enter into 
other transactions as may be necessary in the conduct of its business, 
and on such terms as it may deem appropriate; (d) acquire, in any 
lawful manner, hold, maintain, use, and dispose of property: Provided^ 
That the telephone bank may only acquire property needed in the con-
duct of its banking operations or pledged or mortgaged to secure loans 
made hereunder or m temporary operation or maintenance thereof: 
Provided further^ That any such pledged or mortgaged property so 
acquired shall be disposed of as promptly as is consistent with prudent 
liquidation practices, but in no event later than five years after such 
85 STAT. ] 
PUBLIC LAW 92-12-MAY 7, 1971 
31 
acquisition; (e) accept gifts or donations of services or of property in 
aid of any of tlie purposes herein autJiorized; (f) appoint such officers, 
attorneys, agents, and employees, vest them with such powers and 
duties, hx and pay such compensation to them for their services as the 
telephone bank may determine; (g) determine the character of and 
the necessity for its obligations and expenditures, and the manner in 
which they shall be incurred, allowed, and paid; (h) execute, in 
accordance with its bylaws, all instruments necessary or appropriate 
in the exercise of any of its powers; (i) collect or compromise all 
obligations assigned to or held by it and all legal or equitable rights 
accruing to it in connection with the payment of such obligations 
until such time as such obligations may be referred to the Attorney 
General for suit or collection; and (j) exercise all such other powers 
as shall be necessary or incidental to carrying out its functions under 
this title. 
"SEC. 403. SPECIAL PROVISIONS GOVERNING TELEPHONE BANK AS AN 
AGENCY OF THE UNITED STATES UNTIL CONVERSION or OWNERSHIP, 
CONTROL, AND OPERATION.—Until the ownership, control, and opera-
tion of the telephone bank is converted as provided in section 410(a) 
of this title and not thereafter— 
"(a) the telephone bank shall be an agency of the United States 
and shall be subject to the supervision and direction of the Sec-
retary of Agriculture (hereinafter called the Secretary): Pro-
vided^ however^ That the telephone bank shall at no time be 
entitled to transmission of its mail free of postage, nor shall it 
have the priority of the United States in the payment of debts 
out of bankrupt, insolvent, and decedents' estates; 
"(b) in order to perform its responsibilities under this title, the 
telephone bank may partially or jointly utilize the facilities and 
the services of employees of the Kural Electrification Adminis-
tration or of any other agency of the Department of Agriculture, 
without cost to the telephone bank; 
" (c) the telephone bank shall be subject to the provisions of the 
Government Corporation Control Act, as amended (31 U.S.C. 841, 
et seq.), in the same manner and to the same extent as if it were 
^9 stat. 597. 
included in the definition of 'wholly owned Government corpora-
tion' as set forth in section 101 of said Act (31 U.S.C. 846); 
"(d) the telephone bank may without regard to the civil service 
classification laws appoint and fix the compensation of such 
officers and employees of the telephone bank as it may deem 
necessary; 
"(e) the telephone bank shall be subject to the provisions of 
sections 517, 519, and 2679 of title 28, United States Code. 
8° stat. 613, 
"SEC. 404. GovERNOR.~Subject to the provisions of section 410, 
^2 stat. 984; 
the Admmistrator of the Rural Electrification Administration shall 
^^ stat. 539. 
serve as the chief executive officer of the telephone bank (herein called 
32 
PUBLIC LAW 92-12-MAY 7, 1971 
[85 
STAT. 
Telephone Bank 
Board. 
Term. 
Compensation. 
the Governor of the telephone bank). Except as to matters specifically 
reserved to the Telephone Bank Board in this title, the Governor of 
the telephone bank shall exercise and perform all functions, powers, 
and duties of the telephone bank. 
"SEC. 405. BOARD OF DIRECTORS.— (a) The management of the tele-
phone bank, within the limitations prescribed by law, shall be vested 
in a board of directors (herein called the Telephone Bank Board) 
consisting of thirteen members. 
"(b) The Administrator of the Rural Electrification Administra-
tion and the Governor of the Farm Credit Administration shall be 
members of the Telephone Bank Board. Five other members of the 
Telephone Bank Board shall be designated by the President to serve 
at his pleasure, three of whom shall be officers or employees of the 
Department of Agriculture but not officers or employees of the Rural 
Electrification Administration, and two of whom shall be from the 
general public and not officers or employees of the Federal Govern-
ment. The Administrator and other officers and employees of the 
Department of Agriculture and the Governor of the Farm Credit 
Administration 
shall 
serve 
as 
members 
without 
additional 
compensation. 
"(c) As soon as practicable after enactment of this title, the Presi-
dent of the L^nited States shall appoint six additional members of the 
initial Telephone Bank Board to be selected from the directors, 
manag"ers, and employees of any entities eligible to borrow from the 
telephone bank and of organizations controlled by such entities, with 
due regard to fair representation of the rural telephone systems of 
the Nation. The six members thus appointed shall serve until their 
successors shall have been duly elected in accordance with subsection 
"(d) Within twelve months following the appointment of the six 
members of the initial Board as provided in subsection (c), the 
Governor of the telephone bank shall call a meeting of all entities then 
eligible to borrow from the telephone bank and organizations controlled 
by such entities for the purpose of electing members of the Telephone 
Bank Board. Each such entity and organization shall be entitled to 
notice of and shall have one noncumulative vote at said meeting. Six 
members of the Telephone Bank Board shall be elected for a two-year 
term, three from among the directors, managers, and employees of 
cooperative-type entities eligible to vote and organizations controlled 
by such entities, and three from among the managers, directors, and 
employees of commercial-type entities eligible to vote and organiza-
tions controlled by such entities. These six members shall be elected by 
majority vote of the entities and organizations eligible to vote and 
such entities and organizations may vote by proxy. 
"(e) Thereafter, in accordance with the bylaws of the telephone 
bank, the six members of the Telephone Bank Board shall be elected by 
holders of class B and class C stock, three from among the directors, 
managers, and employees of cooperative-type entities and organizations 
controlled by such entities holding class B or class C stock, and three 
from among the directors, managers, and employees of commercial-
type entities and organizations controlled by such entities holding 
class B or class C stock. These six members shall be elected by majority 
vote of the entities and organizations eligible to vote and such entities 
and organizations may vote by proxy. 
"(f) Any Telephone Bank Board member may continue to serve 
after the expiration of the term for which he is elected until his 
successor has been elected and has qualified. Telephone Bank Board 
members designated from the general public, pursuant to subsection 
(b), or appointed or elected pursuant to subsections (c), (d), and 
85 STAT. ] 
PUBLIC LAW92-12-MAY 7, 1971 
33 
(e), shall receive $100 for each day or part thereof, not to exceed 
one hundred days per year for the first tliree years after enactment 
of this title and not to exceed fifty days per year thereafter, spent 
in the performance of official duties, and shall be reimbursed for 
travel and other expenses in such manner and subject to such limita-
tions as the Telephone Bank Board may prescribe. 
" (g) The Telephone Bank Board shall prescribe bylaws, not incon-
sistent with law, regulating the manner in which the telephone 
bank's business shall be conducted, its directors and officers elected, 
its stock issued, held, and disposed of, its property transferred, its 
bylaws amended, and the powers and privileges granted to it by law 
exercised and enjoyed. 
"(h) The Telephone Bank Board shall meet at such times and 
places as it may fix and determine, but shall hold at least four 
regularly scheduled meetings la year, and special meetings may be 
held on call in the manner specified in the bylaws of the telephone 
bank. 
! 
"(i) The Telephone Bank Board shall make an annual report to 
tlie Secretary for transmittal to the Congress on the administration 
of this title IV and any other matters relating to the effectuation of 
the policies of title IV, including recommendations for legislation. 
"SEC. 406. CAPITALIZATION.—(a) The telephone bank's capital shall 
consist of capital subscribed by the United States, by borrowers from 
the telephone bank, by corporations and public bodies eligible to 
become borrowers from the telephone bank, and by organizations con-
trolled by such borrowers, corporations, and public bodies. Beginning 
with the fiscal year 1971 and for each fiscal year thereafter, the United 
States shall furnish capital for the purchase of class A stock and there 
are hereby authorized to be appropriated from net collection proceeds 
in the rural telephone account created under title I I I of this Act such 
amounts, not to exceed $30,000,000 annually, for such purchases until 
such class A stock shall equal $300,000,000: Provided^ That on or before 
July 1, 1975, the Secretary shall make a report to the President for 
transmittal to the C^on^ress on the status of capitalization of the tele-
phone bank by the United States with appropriate recommendations. 
As used in this section and section 301, the term 'net collection pro-
ceeds' shall be deemed to mean payments from and after July 1, 1969, 
of j>rincipal and interest on loans heretofore or hereafter made under 
section 201 of this Act, less an amount representing interest payable to 
the Secretary of the Treasury on loans to the Administrator for tele-
phone purposes pursuant to section 3(a) of this Act. 
"(b) The capital stock of the telephone bank shall consist of three 
classes, class A, class B, and class C, the rights, powers, privileges, and 
preferences of the separate classes to be as specified, not inconsistent 
with law, in the bylaws of the telephone bank. Class B and class C 
stock shall be voting stock, but no holder of said stock shall be entitled 
to more than one vote, nor shall class B and class C stockholders, 
regardless of their number, which are owned or controlled by the same 
person, group of persons, firm, association, or corporation, be entitled 
in any event to more than one vote. 
" (c) Class A stock shall be issued only to the Administrator of the 
Rural Electrification Administration on behalf of the United States in 
exchange for capital furnished to the telephone bank pursuant to sub-
section (a), and such class A stock shall be redeemed and retired by 
the telephone bank as soon as practicable after June 30, 1985, but not 
to the extent that the Telephone Bank Board determines that such 
retirement will impair the operations of the telephone bank: Provided^ 
That the minimum amount of class A stock that shall be retired 
each year after said date and after the amount of class A and class B 
stock issued totals $400,000,000, shall equal the amount of class B 
stock sold by the telephone bank during such year. Class A stock shall 
Bylaws. 
Meetings. 
Annual report, 
transmittal to 
Congress. 
Ante, p. 29. 
Report to Pres-
ident, transmittal 
to Congress. 
"Net collec-
tion proceeds." 
63 Stat. 948. 
7 use 922. 
61 Stat. 546. 
7 use 903. 
Stock classi-
fication. 
34 
PUBLIC L
A
W 92-12-MAY 7, 1971 
[85 STAT. 
be entitled to a return, payable from income, at the rate of 2 per cen-
tmn per annum on the amounts of said class A stock actually paid into 
the telephone bank. Such return shall be cumulative and shall be pay-
able annually into miscellaneous receipts of the Treasury. 
"(d) Class B stock shall be held only by recipients of loans under 
section 408 of this Act. Borrowers receiving loan funds pursuant to 
section 408(a) (1) or (2) shall be required to invest in class B stock 
5 per centum of the amount of loan funds so provided. Xo dividends 
shall be payable on class B stock. All holders of class B stock shall be 
entitled to patronage refunds in class B stock under terms and condi-
tions to be specified in the bylaws of the telephone bank. 
"(e) Class C stock shall be available for purchase and shall be held 
only by borrowers, or by corporations and public bodies eligible to 
borrow under section 408 of this Act, or by organizations controlled 
by such borrowers, corporations and public bodies, and shall be 
entitled to dividends in the manner specified in the bylaws of the tele-
phone bank. Such dividends shall be payable only from income and, 
until all class A stock is retired, shall not exceed the current average 
rate payable on its telephone debentures, 
s^ock,^speciai^ 
a^f^ jf .^ firm, associatiou, corporation, or public body is not 
authorized under the laws of the jurisdiction in which it is organized 
to acquire stock of the telephone bank, the telephone bank shall, in 
lieu thereof, permit such organization to pay into a special fund of 
the teleplione bank a sum equivalent to the amount of stock to be 
purchased. Each reference in this title to capital stock, or to class 
B, or class C stock, shall include also the special fund equivalents of 
such stock, and to the extent permitted under the laws of the juris-
diction in \\'*hich such organization is organized, a holder of special 
fund equivalents of class B, or class C stock, shall have the same 
rights and status as a holder of class B or class C stock, respectively. 
The rights and obligations of the telephone bank in respect of such 
special fund equivalent shall be identical to its rights and obligations 
in respect of chiss B or class C stock, respectively. 
Patronage re- 
"(g) After payment of all operatmg expenses of the telephone 
bank, including interest on its telephone debentures, setting aside 
appro})riate funds for reserves for losses, and making payments in 
lieu of taxes, and returns on class A stock as provided in section 
406 (c), and on class C stock, the Telephone Bank Board shall annually 
set aside the remaining earnings of the telephone bank for patronage 
refunds in accordance with the bylaws of the telephone bank. 
"SEC. 407. BORROWING POWER.—The telephone bank is authorized 
to obtain fluids through the public or private sale of its bonds, deben-
tures, notes, and other evidences of indebtedness (herein collec-
tively called telephone debentures). Telephone debentures shall be 
issued at such times, bear interest at such rates, and contain such 
other terms and conditions as the Telephone Bank Board shall deter-
mine: Frorided, however^ That the amount of the telephone deben-
tures which may be outstanding at any one time pursuant to this 
section shall not exceed eight times the paid-in capital and retained 
earnings of the telephone bank. The telephone bank shall insert in 
all its telephone debentures appropriate language indicating that 
such telephone debentures, together with interest thereon, are not 
guaranteed by the United States and do net constitute a debt or 
obligation of the United States or of any agency or instrumentality 
thereof other than the telephone bank. Telephone debentures shall 
not be exempt, either as to principal or interest, from any taxation 
now or hereafter imposed by the United States, by any territory, 
dependency, or possession thereof, or by any State or local taxing 
authority. Telephone debentures shall be lawful investments and 
85 STAT. ] 
PUBLIC LAW 92-12-MAY 7, 1971 
35 
may be accepted as security for all fiduciary, trust, and public funds, 
the investment or deposit of which shall be under the authority and 
control of the United States or any officer or officers thereof. 
"SEC. 408. LENDING POWER.—(a) The Governor of the telephone 
bank is authorized on behalf of the telephone bank to make loans, in 
conformance with policies approved by the Telephone Bank Board, 
to corporations and public bodies which have received a loan or loan 
commitment pursuant to section 201 of this Act, (1) for the same 
63 stat. 948. 
purposes and under the same limitations for which loans may be '
^ ^^^ ^^^" 
made under section 201 of this Act, (2) for the purposes of financing, 
or refinancing, the construction, improvement, expansion, acquisition, 
and operation of telephone lines, facilities, or systems, in order to 
li , a 
improve the efficiency, effectiveness, or financial stability of borrowers 
financed under sections 201 and 408 of this Act, and (3) for the 
, : ^
^ 
purchase of class B stock required to be purchased under section 
-
^ 
406(d) of this Act but not for the purchase of class C stock, subject, 
as to the purposes set forth in (2) hereof, to the following provisos: 
That in tlie case of any such loan for the acquisition of telephone lines, 
facilities, or systems, the acquisition shall be approved by the Secre-
tary, the location and character thereof shall be such as to improve 
the efficiency, effectiveness, or financial stability of the telephone 
system of the borrower, and in respect of exchange facilities for local 
services, the size of each acquisition shall not be greater than the 
borrower's existing system at the time it receives its first loan from the 
telephone bank, taking into account the number of subscribers served, 
miles of line, and plant investment. 
"(b) Loans under this section shall be on such terms and conditions 
Restrictions, 
as the Governor of the telephone bank shall determine, subject, how-
ever, to the following restrictions: 
"(1) All loans made under this section shall be fully amortized 
over a jjeriod not to exceed fifty years. 
" (2) Funds to be loaned under this Act to any borrower shall be 
loaned under this section in preference to section 201 if the bor-
rower is eligible for such a loan and funds are available therefor. 
Notwithstanding the foregoing or any other provision of law, all 
loans made pui'suant to this Act for facilities for telephone sys-
tems with an average subscriber density of three or fewer per 
mile shall be made under section 201 of this Act; but this provision 
shall not preclude the making of such loans from the telephone 
bank at the election of the borrower. 
"(3) Loans under this section shall, to the extent practicable, 
interest rate, 
bear interest at the highest rate which meets the requirements set 
forth in paragraph (4), consistent with the borrower's ability to 
paj such interest rate and with achievement of the objectives of 
this Act; but not less than 4 per centum per annum. 
"(4) Loans shall not be made under this section unless the 
Governor of the telephone bank finds and certifies that in his judg-
ment (i) the security therefor is reasonably adequate and such loan 
will be repaid within the time agreed, and (ii) the borrower has 
the capability of producing net income or margins before interest 
at least equal to 150 per centum of the interest requirements on all 
of its outstanding and proposed loans, or such higher per centum 
as may be fixed from time to time by the Telephone Bank Board in 
order to allocate available funds equitably among borrowers or to 
improve the marketability of the telephone debentures: Provided^ 
however^ That the Governor of the telephone bank may waive the 
waiver. 
I'equirement of (ii) above in any case if he shall determine (and set 
forth his reasons therefor in writing) that this requirement would 
prevent emergency restoration of the borrower's system or other-
wise result in severe hardship to the borrower. 
75-432 O 
- 72 - 5 
36 
PUBLIC LAW 92-12-MAY 7,1971 
[85 STAT. 
" (5) No loan shall be made in any State wliicli now has or may 
hereafter have a State regulatory body having authoritj^ to regu-
late telphone service and to require certificates of convenience and 
necessity to the applicant unless such certificate from such agency 
is first obtained. In a State in which there is no such agency or 
regulatory body legally authorized to issue such certificates to the 
applicant, no loan shall be made under this section unless the Gov-
•?. 
emor of the telephone bank shall determine (and set forth his rea-
^ 
sons therefor in writing) that no duplication of lines, facilities, or 
systems, providing reasonably adequate services will result 
therefrom. 
Definitions. 
"(6) As uscd iu this section, the term telephone service shall 
have the meaning prescribed for this term in section 203 (a) of this 
76 Stat. 1140, 
Act, and the term telephone lines, facilitieSj or systems shall mean 
7 use 924. 
lines, facilities, or systems used in the rendition of such telephone 
service. 
" (7) No borrower of funds under section 408 of this Act shall, 
without approval of the Governor of the telephone bank under 
rules established by the Telej)hone Bank Board, sell or dispose of 
its property, rights, or franchises, acquired under the provisions of 
this Act, until any loan obtained from the telephone bank, includ-
ing all interest and charges, shall have been repaid. 
Payment sched- 
" i^) The Govemor of the telephone bank is authorized under rules 
uie, adjustment, 
established by the Telephone Bank Board to adjust, on an amortized 
basis, the schedule of payments of interest or principal of loans made 
under this section upon his determination that with such readjustment 
there is reasonable assurance of repayment: Provided, hoivever, That 
no adjustment shall extend the period of such loans beyond fifty years. 
"SEC. 409. TELEPHONE BANK RECEIPTS.—Any receipts from the 
activities of the telephone bank shall be available for all obligations 
and expenditures of the telephone bank. 
"SEC. 410. 
CONVERSION OF OWNERSHIP, CONTROL AND OPERATION 
OF TELEPHONE BANK.— (a) Whenever fifty-one per centum of the 
maximum amount of class A stock issued to the United States and 
outstanding at any time after June 30, 1985, has been fully redeemed 
and retired pursuant to section 406 (c) of this title— 
" (1) the powers and authority of the Governor of the telephone 
bank granted to the Administrator of the Rural Electrification 
Administration by this title IV shall vest in the Telephone Bank 
Board, and may be exercised and performed through the Gover-
nor of the telephone bank, to be selected by the TeTephone Bank 
Board, and through such other employees as the Telephone Bank 
Board shall designate; 
" (2) the five members of the Telephone Bank Board designated 
by the President pursuant to section 405(b) shall cease to be 
members, and the number of Board members shall be accordingly 
reduced to eight unless other provision is thereafter made in the 
bylaws of the telephone bank; 
"(3) the telephone bank shall cease to be an agency of the 
United States, but shall continue in existence in perpetuity as an 
instrumentality of the United States and as a banking corpora-
tion with all of the powers and limitations conferred or imposed 
by this title IV except such as shall have lapsed pursuant to the 
provisions of this title. 
"(b) When all class A stock has been fully redeemed and retired, 
loans made by the telephone bank shall not continue to be subject to 
the restrictions prescribed in the provisos to section 408 (a) (2). 
Congressional 
"(c) Cougress rescrves the right to review the continued operations 
review. 
of the telephone bank after all class A stock has been fully redeemed 
and retired. 
85 STAT. ] 
PUBLIC LAW 92-13-MAY 14, 1971 
37 
"SEC. 411. LIQUIDATION OR DISSOLUTION OF THE TELEPHONE BANK.— 
In the case of liquidation or dissolution of the telephone bank, after 
the payment or retirement, as the case may be, first, of all liabilities; 
second, of all class A stock at par; third, of all class B stock at par; 
fourth, of all class C stock at par; then any surpluses and contingency 
reserves existing on the effective date of liquidation or dissolution of 
the telephone bank shall be paid to the holders of class A and class B 
stock issued and outstanding before the effective date of such liquida-
tion or dissolution, pro rata. 
"SEC. 412. BORROWER NET WORTH.—Except as provided in sub-
section (b) (2) of section 408, notwithstanding any other provision of 
law, a loan shall not be made under section 201 of this Act to any 
borrower which during the immediately preceding year had a net 
worth in excess of 20 per centum of its assets unless the Administrator 
finds that the borrower cannot obtain such a loan from the telephone 
bank or from other reliable sources at reasonable rates of interest and 
terms and conditions." 
SEC. 3. (a) Subsection (f) of section 3 of the Rural Electrification 
Act of 1936, as amended, is amended by inserting in lieu of the first 
word of said subsection "Except as otherwise provided in sections 
301 and 406(a) of this Act, all". 
(b) Section 201 of the Rural Electrification Act of 1936, as amended, 
is amended by inserting ", to public bodies now providing telephone 
service in rural areas", immediately after the word "areas" in the first 
sentence and also immediately after the word "areas" in the first proviso 
of the second sentence. 
SEC. 4. Section 201 of the Government Corporation Control Act, 
as amended (31 U.S.C. 856), is amended, effective when the ownership, 
control, and operation of the telephone bank is converted as provided in 
section 410(a) of the Rural Electrification Act of 1936, as amended, by 
striking "and" immediately before "(5)" and by inserting ", and (6) 
the Rural Telephone Bank" immediately before the period at the end. 
SEC. 5. The second sentence of subsection (d) of section 303 of the 
Government Corporation Control Act, as amended (31 U.S.C. 868), is 
amended, effective when the ownership, control, and operation of the 
telephone bank is converted as provided in section 410(a) of the Rural 
Electrification Act of 1936, as amended, by inserting "the Rural Tele-
phone Bank," immediately following the words "shall not be appli-
cable to". 
SEC. 6. The right to repeal, alter, or amend this Act is expressly 
reserved. 
SEC. 7. This Act shall take effect upon enactment. 
Approved May 7, 1971. 
63 Stat. 948. 
7 u s e 922. 
61 Stat. 547. 
7 u s e 903. 
Ante, 
pp 
33. 
7 u s e 922 
29, 
59 Stat. 600; 
84 Stat. 1340. 
Ante, 
p. 36. 
Effective date. 
Public Law 92-13 
AN ACT 
To amend the CJomprehensive Drug Abuse Prevention and Control Act of 1970 to 
provide an increase in the appropriations authorization for the Commission on 
Marihuana and Drug Abuse. 
May 14, 1971 
[H. R. 5674] 
Be it enacted hy the Senate and House of Representatives 
of the 
United States of America in Congress assembled^ That section 601(f) 
of the Comprehensive Drug Abuse Prevention and Control Act of 1970 
be amended to read as follows: 
"(f) Total expenditures of the Commission shall not exceed 
$4,000,000.". 
Approved May 14, 1971. 
eommlsslon on 
Marihuana and Drug 
Abuse. 
Appropriation. 
84 Stat. 1281. 
21 u s e 801 note.