Rural Electrification Loan Restructuring Act of 1993
PL 103-129 (H.R.3123), enacted 11/01/1993

107 STAT. 1356 
PUBLIC LAW 103-129—NOV. 1, 1993 
Public Law 103-129 
103d Congress 
An Act 
Nov. 1, 1993 
To improve the electric and telephone loan programs carried out under the Rural 
[H.R. 3123] 
Electrification Act of 1936, and for other purposes. 
Be it enacted by the Senate and House of Representatives of 
Rural 
the United States of 
America in Congress assembled. 
Electrification 
Loan 
SECTION 1. SHORT TITLE. 
Sfof im""^ 
This Act may be cited as the "Rural Electrification Loan 
7 use 901 note. 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-
PUBLIC LAW 103-129—NOV. 1, 1993 
107 STAT. 1357 
trator may make an insiired 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 tnis 
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 J
5 percent per year to any applicant for 
a loan whose residential revenue exceeds 15.0 cents per 
kilowatt-hour sold. A qualiMng application from such an 
applicant for the purpose of furnishing or improving electric 
service to a consiuner 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 GE;NERAL.—Subject to clause (ii), the interest 
rate describiid 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(aX3XA) of the 
Consolidated Farm and Rural Development Act 
(7 U.S.C. 1927(aX3)(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— 
107 STAT. 1358 
PUBLIC LAW 103-129—NOV. 1, 1993 
"(I) the average number of consumers per mile 
of line of the total electric system of the applicant 
is less than 5.50; or 
"(IlXaa) the average revenue per kilowatt-hour 
sold by the applicant is more than the average 
revenue per kilowatt-hour sold by all utilities m 
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 m 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 
PUBLIC LAW 103-129—NOV. 1, 1993 
107 STAT. 1359 
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-
commiinications modernization plan for the State 
imder paragraph (3) and, if the plan was developed 
by telephone borrowers under this title, the applicant 
is a participant in the plan. 
"(iv) Trie average nimiber 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 
(AXii) 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 piirposes, 
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 rat<3 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 appliccmt 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 
imder 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— 
107 STAT. 1360 
PUBLIC LAW 103-129—NOV. 1, 1993 
"(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 lo£in, 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 amoimt made available for loans imder 
this paragraph for the fiscal year bears to the total 
amoimt made available for loans under this paragraph 
and imder 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 imder 
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. 
, 
PUBLIC LAW 103-129—NOV. 1, 1993 
107 STAT. 1361 
"(C) FINALITY OF APPROVAL.—A telecommunications 
modernization plan approved under subparagraph (A) may 
not subsequently be disapproved. Notwithstanding para-
graphs (IXAXiii) and (2XA)(iii), and section 408(bX4XC), 
the Administrator and the Governor of the telephone bank 
may msJce a loan to a borrower serving a State that does 
not have a telecommimication 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, svstems, 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 ih)— 
(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 telepnone 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 
(jrovemor 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 
107 STAT. 1362 
PUBLIC LAW 103-129—NOV. 1, 1993 
(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 Grovemor of the telephone 
bank shall— 
"(A) consider the application to be for a loan under 
this section and a loan imder section 305(dX2); 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 imder section 305(dX2), 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(dX2) 
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(dX2).''; 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: 
'^EC. 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 'niROUGH 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 necessaiy for 
the cost of loans in the following amounts, for the following 
purposes: 
"(1) ELECTRIC HARDSHIP LOANS.—For loans under section 
305(CX1)— 
"(A) for fiscal year 1994, $125,000,000; and 
"(B) for each of fiscal years 1995 through 1998, 
$125,000,000, increased by the adljustment percentage for 
the fiscal year. 
"(2) ELECTRIC MUNICIPAL RATE LOANS.—For loans under 
section 305(cX2)— 
"(A) for fiscal year 1994, $600,000,000; and 
PUBLIC LAW 103-129—NOV. 1, 1993 
107 STAT. 1363 
"(B) for each of fiscal years 1995 through 1998, 
$600,000,000, increased by the adjustment percentage for 
the fiscal year. 
"(3) TELEPHO^fE HARDSHIP LOANS.—For loans under section 
305(dXl>— 
"(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 imder 
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(bX2) 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;" ana 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 renew£ible energy systems;"; and 
(C) by adding at the end the following new subsection: 
"(b) By January 1, 1994, the Administrator shall issue interim Regulations. 
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 pro-am, 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 
107 STAT. 1364 
PUBLIC LAW 103-129—NOV. 1, 1993 
(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 imder 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 
piirsuant 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 (aXD) is further amended— 
(A) by striking "SEC. 305. INSURED LOANS; INTEREST 
RATES AND LENDING LEVELS.—(a) The" and inserting the 
following: 
"SEC. SOS. 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: 
r 
PUBLIC LAW 103-129—NOV. 1, 1993 
107 STAT. 1365 
<«£€. 306D. EUGranJTY OF DISTRIBUTION BORROWERS FOR LOANS, 7 USC 936d. 
LOAN GUARANTEES, AND LIEN ACCOMMODATIONS. 
Tor 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 tne 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 PROmBITIONS APPUCABLE TO ELEC- 7 USC 936e. 
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 imder 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 accoimt in me 
Treasury of the United States numbered 12X8139 (known as the 
'RTB Equity Fimd').". 
(10) REFINANCING OF FFB LOANS.—Section 306C of such 
Act is amended by— 
7 USC 936c. 
(A) inserting before the period at the end of subsection 
(cX2) 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 totel amount of such loans for which 
sucn 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. 
107 STAT. 1366 
PUBLIC LAW 103-129—NOV. 1, 1993 
7 use 2008e. 
Regulations. 
"(3) FEE.—^A borrower that exercises the maximum rate 
option imder paragraph (1) shall, at the time of exercising 
such option, pay a fee eqvial 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 efiTective date of regulations issued to carry out the Rural 
Electrification Loan Restructuring Act of 1993.". 
SEC. 3. EXPANDED EUGmiLITY FOR LOANS FOR WATER AND WASTE 
DISPOSAL FACnJTIES. 
Section 306(a)(1) of the Consolidated Farm and Rural Develop-
ment Act (7 U.S.C. 1926(aXl)) 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. 
S
. 
PROHIBrnON 
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. 
3
7
0
. 
PROHIBrnON 
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 (JOMPLIANCE.—The Secretary shall establish, by 
regulation, adequate safeguards to ensure that assistance imder 
such rural development programs is not subject to such a condition. 
Such safeguards shall mclude periodic certifications and audits. 
PUBLIC LAW 103-129—NOV. 1, 1993 
107 STAT. 1367 
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 compli£uice with subsection (a).". 
SEC. 6. REGULATIONS. 
7 USC 901 note. 
Except as provided in section 2(b) of the Rural Electrification 
Act of 1936 and section 370 of the Consolidated Farm Euid Rural 
Development Act, as added by sections 2(cXlXC) and 5 of this 
Act, not later than 45 days after the date of enactment of this 
Act, interim final regulations shall be issued bv— 
(1) the Administrator of the Riiral 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. 
Approved November 1, 1993. 
LEGISLATIVE HISTORY—H.R. 3123 (S. 1167): 
CONGRESSIONAL RECORD, Vol. 139 (1998): 
June 24, S. 1167 considered and passed Senate. 
Sept. 28, H.R. 3123 considered and peissed House. 
Oct. 4, considered and passed Senate. 
WEEKLY COMPILATION OF PRESIDENTIAL DOCUMENTS, Vol. 29 (1993): 
Nov. 1, Presidential statement.