[Congressional Bills 103th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3123 Received in Senate (RDS)]

103d CONGRESS
  1st Session
                                H. R. 3123


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

           September 29 (legislative day, September 27), 1993

                                Received

_______________________________________________________________________

                                 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 
                applications 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 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 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 Administrator 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 urban 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 
                applications 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 
                                current market yield on outstanding 
                                municipal obligations; 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--
                                    ``(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 household 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 provisions 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 
                applications for the loans, at an interest rate of 5 
                percent per 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 
                        telecommunications 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, improvement, 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 
                        telecommunications 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--
                            ``(i) consider the application to be for a 
                        loan under this paragraph and a loan under 
                        section 408; and
                            ``(ii) if the applicant is eligible for a 
                        loan, make a loan to the applicant under this 
                        paragraph in an amount equal to the amount that 
                        bears the same ratio to the total amount of 
                        loans for which the applicant is eligible under 
                        this paragraph and under section 408, as the 
                        amount made available for loans under this 
                        paragraph for the fiscal year bears to the 
                        total amount made available for loans under 
                        this paragraph and under section 408 for the 
                        fiscal year.
                    ``(C) Effect of lack of funds.--On request of any 
                applicant who is eligible for a loan under this 
                paragraph for which funds are not available, the 
                applicant shall be considered to have applied for a 
                loan guarantee under section 306.
            ``(3) State telecommunications modernization plans.--
                    ``(A) Approval.--If, not later than 1 year after 
                final regulations are promulgated to carry out this 
                paragraph, any State, either by statute or through the 
                public utility commission of the State, develops a 
                telecommunications modernization plan that meets the 
                requirements of subparagraph (B), the Administrator 
                shall approve the plan for the State. If a State does 
                not develop a plan in accordance with the requirements 
                of the preceding sentence, the Administrator 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 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 
                        computer networks and information 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 
                                        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.
                    ``(C) Finality of approval.--A telecommunications 
                modernization plan approved 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 Governor of the 
                telephone bank may make a loan to a borrower serving a 
                State that does not have a telecommunication 
                modernization plan approved by the Administrator if the 
                loan is made less than 1 year after the Administrator 
                has adopted final regulations implementing this 
                paragraph.''.
            (2) Rural telephone bank loan program.--Section 408 of such 
        Act (7 U.S.C. 948) is amended--
                    (A) in subsection (a), by striking ``, (2)'' and 
                all that follows through ``408 of this Act,'' and 
                inserting ``, (2) for the acquisition, purchase, and 
                installation of telephone lines, systems, and 
                facilities (other than buildings used primarily for 
                administrative purposes, vehicles not used primarily in 
                construction, and customer premise equipment) related 
                to the furnishing, improvement, or extension of rural 
                telecommunications service,'';
                    (B) in subsection (b)--
                            (i) by striking paragraph (4) and inserting 
                        the following new paragraph:
            ``(4) The Governor of the telephone bank may make a loan 
        under this section only to an applicant for the loan who meets 
        the following requirements:
                    ``(A) The average number of subscribers per mile of 
                line in the service area of the applicant is not more 
                than 15, or the applicant is capable of producing net 
                income or margins before interest of not less than 100 
                percent (but not more than 500 percent) of the interest 
                requirements on all of the outstanding and proposed 
                loans of the applicant.
                    ``(B) The Administrator has approved, under section 
                305(d)(3), a telecommunications modernization plan for 
                the State in which the applicant is located and, if the 
                plan was developed by telephone borrowers under title 
                III, the applicant is a participant in the plan.'';
                            (ii) in paragraph (8)--
                                    (I) by inserting ``(A)'' after 
                                ``(8)'';
                                    (II) by striking ``if such 
                                prepayment is not made later than 
                                September 30, 1988'' and inserting 
                                ``except for any prepayment penalty 
                                provided for in a loan agreement 
                                entered into before the date of 
                                enactment of the Rural Electrification 
                                Loan Restructuring Act of 1993''; and
                                    (III) by adding at the end the 
                                following new subparagraph:
            ``(B) If a borrower prepays part or all of a loan made 
        under this section, then, notwithstanding section 407(b), the 
        Governor of the telephone bank shall--
                    ``(i) use the full amount of the prepayment to 
                repay obligations of the telephone bank issued pursuant 
                to section 407(b) before October 1, 1991, to the extent 
                any such obligations are outstanding; and
                    ``(ii) in repaying the obligations, first repay the 
                advances bearing the greatest rate of interest.''; and
                            (iii) by adding at the end the following 
                        new paragraphs:
            ``(9) On request of any applicant for a loan under this 
        section during any fiscal year, the Governor of the telephone 
        bank shall--
                    ``(A) consider the application to be for a loan 
                under this section and a loan under section 305(d)(2); 
                and
                    ``(B) if the applicant is eligible for a loan, make 
                a loan to the applicant under this section in an amount 
                equal to the amount that bears the same ratio to the 
                total amount of loans for which the applicant is 
                eligible under this section and under section 
                305(d)(2), as the amount made available for loans under 
                this section for the fiscal year bears to the total 
                amount made available for loans under this section and 
                under section 305(d)(2) for the fiscal year.
            ``(10) On request of any applicant who is eligible for a 
        loan under this section for which funds are not available, the 
        applicant shall be considered to have applied for a loan under 
        section 305(d)(2).''; and
                    (C) by adding at the end the following new 
                subsection:
    ``(e) Loans and advances made under this section on or after 
November 5, 1990, shall bear interest at a rate determined under this 
section, taking into account all assets and liabilities of the 
telephone bank. This subsection shall not apply to loans obligated 
before the date of enactment of this subsection. Funds are not 
authorized to be appropriated to carry out this subsection until the 
funds are appropriated in advance to carry out this subsection.''.
    (b) Funding.--
            (1) Limitations on authorization of appropriations.--
        Section 314 of such Act (7 U.S.C. 940d) is amended to read as 
        follows:

``SEC. 314. LIMITATIONS ON AUTHORIZATION OF APPROPRIATIONS.

    ``(a) Definition of Adjustment Percentage.--As used in this 
section, the term `adjustment percentage' means, with respect to a 
fiscal year, the percentage (if any) by which--
            ``(1) the average of the Consumer Price Index (as defined 
        in section 1(f)(5) of the Internal Revenue Code of 1986) for 
        the 1-year period ending on July 31 of the immediately 
        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 sums as may be necessary for the cost of 
loans in the following amounts, for the following purposes:
            ``(1) Electric hardship loans.--For loans under section 
        305(c)(1)--
                    ``(A) for fiscal year 1994, $125,000,000; and
                    ``(B) for each of fiscal years 1995 through 1998, 
                $125,000,000, increased by the adjustment percentage 
                for the fiscal year.
            ``(2) Electric municipal rate loans.--For loans under 
        section 305(c)(2)--
                    ``(A) for fiscal year 1994, $600,000,000; and
                    ``(B) for each of fiscal years 1995 through 1998, 
                $600,000,000, increased by the adjustment percentage 
                for the fiscal year.
            ``(3) Telephone hardship loans.--For loans under section 
        305(d)(1)--
                    ``(A) for fiscal year 1994, $125,000,000; and
                    ``(B) for each of fiscal years 1995 through 1998, 
                $125,000,000, increased by the adjustment percentage 
                for the fiscal year.
            ``(4) Telephone cost-of-money loans.--For loans under 
        section 305(d)(2)--
                    ``(A) for fiscal year 1994, $198,000,000; and
                    ``(B) for each of fiscal years 1995 through 1998, 
                $198,000,000, increased by the adjustment percentage 
                for the fiscal year.
    ``(c) Funding Levels.--The Administrator shall make insured loans 
under this title for the purposes, in the amounts, and for the periods 
of time specified in subsection (b), as provided in advance in 
appropriations Acts.
    ``(d) Availability of Funds for Insured Loans.--Amounts made 
available for loans under section 305 are authorized to remain 
available until expended.''.
            (2) Rule of interpretation.--Section 309(a) of such Act (7 
        U.S.C. 939(a)) is amended by adding at the end the following 
        new sentence: ``The preceding sentence shall not be construed 
        to make section 408(b)(2) or 412 applicable to this title.''.
    (c) Miscellaneous Amendments.--
            (1) Loans for rural electrification.--Section 2 of such Act 
        (7 U.S.C. 902) is amended--
                    (A) by inserting ``(a)'' before ``The 
                Administrator'';
                    (B) by striking ``telephone service in rural areas, 
                as hereinafter provided;'' and inserting ``electric and 
                telephone service in rural areas, as provided in this 
                Act, and for the purpose of assisting electric 
                borrowers to implement demand side management, energy 
                conservation programs, and on-grid and off-grid 
                renewable energy systems;''; and
                    (C) by adding at the end the following new 
                subsection:
    ``(b) By January 1, 1994, the Administrator shall issue interim 
regulations to implement the authority contained in subsection (a) to 
make loans for the purpose of assisting electric borrowers to implement 
demand side management, energy conservation 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 conservation, or renewable energy program, system, 
or activity that is approved by a State agency to be eligible for the 
loans.''.
            (2) Loans for electrical plants and transmission lines.--
        Section 4 of such Act (7 U.S.C. 904) is amended by inserting 
        after ``central station service'' the following: ``and for the 
        furnishing and improving of electric service to persons in 
        rural areas, including by assisting electric borrowers to 
        implement demand side management, energy conservation programs, 
        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
                    (B) by striking ``city, village, or borough having 
                a population in excess of fifteen hundred inhabitants'' 
                and inserting ``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 
                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.--
            ``(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, 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 
        technical 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, without 
        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 Administrator 
        may enter into such contracts, grants, or cooperative 
        agreements as are necessary to carry out this section.
            ``(5) Use of consultants.--Nothing in this subsection shall 
        limit the authority of the Administrator to retain the services 
        of consultants from funds made available to the Administrator 
        or otherwise.''.
            (5) Definition of rural area.--Section 203(b) of such Act 
        (7 U.S.C. 924(b)) is amended by striking ``one thousand five 
        hundred'' and inserting ``5,000''.
            (6) Insured loans.--Section 305 of such Act (7 U.S.C. 935) 
        (as amended by subsection (a)(1)) is further amended--
                    (A) by striking ``Sec. 305. Insured Loans; Interest 
                Rates and Lending Levels.--(a) The'' and inserting the 
                following:

``SEC. 305. INSURED LOANS; INTEREST RATES AND LENDING LEVELS.

    ``(a) In General.--The''; and
                    (B) in subsection (b), by striking ``(b) Loans'' 
                and inserting ``(b) Insured Loans.--Loans''.
            (7) Eligibility of distribution borrowers; administrative 
        prohibitions.--Title III of 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 default by a borrower from which the distribution 
borrower purchases wholesale power shall not--
            ``(1) be considered a default by the distribution borrower;
            ``(2) reduce the eligibility of the distribution borrower 
        for assistance under this Act; or
            ``(3) be the cause, directly or indirectly, of imposing any 
        requirement or restriction on the borrower as a condition of 
        the assistance, except such requirements or restrictions as are 
        necessary to implement a debt restructuring agreed on by the 
        power supply borrower and the Government.

``SEC. 306E. ADMINISTRATIVE PROHIBITIONS APPLICABLE TO ELECTRIC 
              BORROWERS.

    ``The Administrator may not require prior approval of, impose any 
requirement, restriction, or prohibition with respect to the operations 
of, or deny or delay the granting of a lien accommodation to, any 
electric borrower under this Act whose net worth exceeds 110 percent of 
the outstanding principal balance on all loans made or guaranteed to 
the borrower by the Administrator.''.
            (8) Loans from other credit sources.--Section 307 of such 
        Act (7 U.S.C. 937) is amended by adding at the end the 
        following new sentence: ``The Administrator may not request any 
        applicant for an electric loan under this Act to apply for and 
        accept a loan in an amount exceeding 30 percent of the credit 
        needs of the applicant.''.
            (9) Capitalization.--Section 406 of such Act (7 U.S.C. 946) 
        is amended by adding at the end the following new subsection:
    ``(i) The Governor of the telephone bank may invest in obligations 
of the United States the amounts in the account in the Treasury of the 
United States numbered 12X8139 (known as the `RTB Equity Fund').''.
            (10) Refinancing of ffb loans.--Section 306C of such Act is 
        amended by--
                    (A) inserting before the period at the end of 
                subsection (c)(2) the following: ``, except that such 
                rate shall not be greater than 7 percent per year, 
                subject to subsection (d)''; and
                    (B) adding at the end the following new subsection:
    ``(d) Maximum Rate Option.--
            ``(1) In general.--Except as provided in paragraphs (2), 
        (3), and (4), a borrower of a loan or loan advance, or any 
        portion of the loan or advance, that is refinanced under this 
        section shall have the option of ensuring that the interest 
        rate on such loan, loan advance, or portion thereof does not 
        exceed 7 percent per year.
            ``(2) Limitation.--A borrower may not exercise the option 
        under paragraph (1) in the case of a loan or loan advance, or 
        portion thereof, if the total amount of such loans for which 
        such option would be exercised exceeds 50 percent of the 
        outstanding principal balance of the loans made to such 
        borrower and guaranteed under section 306.
            ``(3) Fee.--A borrower that exercises the maximum rate 
        option under paragraph (1) shall, at the time of exercising 
        such option, pay a fee equal to 1 percent of the outstanding 
        principal balance of such loan or loan advance, or portion 
        thereof, for which such option is exercised. Such fee shall be 
        in addition to the penalties and other payments required under 
        subsection (b).
            ``(4) Sunset.--The option provided under paragraph (1) 
        shall not be available in the case of any loan or loan advance, 
        or portion thereof, unless a written request to exercise such 
        option is sent to the Administrator not later than 1 year after 
        the effective date of regulations issued to carry out the Rural 
        Electrification Loan Restructuring Act of 1993.''.

SEC. 3. EXPANDED ELIGIBILITY FOR LOANS FOR WATER AND WASTE DISPOSAL 
              FACILITIES.

    Section 306(a)(1) of the Consolidated Farm and Rural Development 
Act (7 U.S.C. 1926(a)(1)) is amended by inserting after the first 
sentence the following new sentence: ``The Secretary may also make 
loans to any borrower to whom a loan has been made under the Rural 
Electrification Act of 1936 (7 U.S.C. 901 et seq.), for the 
conservation, development, use, and control of water, and the 
installation of drainage or waste disposal facilities, primarily 
serving 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 
        administered by the Rural Development Administration.
            ``(2) Participation.--The Administrator of the Rural 
        Development Administration shall encourage and facilitate the 
        full and equal participation of all entities to participate in 
        programs administered by the Rural Development 
        Administration.''.

SEC. 5. PROHIBITION UNDER RURAL DEVELOPMENT PROGRAMS.

    The Consolidated Farm and Rural Development Act (7 U.S.C. 1921 et 
seq.) is amended by adding at the end thereof the following new 
section:

``SEC. 370. PROHIBITION UNDER RURAL DEVELOPMENT PROGRAMS.

    ``(a) Prohibition.--Assistance under any rural development program 
administered by the Rural Development Administration, the Farmers Home 
Administration, the Rural Electrification Administration, or any other 
agency of the Department of Agriculture shall not be conditioned on any 
requirement that the recipient of such assistance accept or receive 
electric service from any particular utility, supplier, or cooperative.
    ``(b) Ensuring Compliance.--The Secretary shall establish, by 
regulation, adequate safeguards to ensure that assistance under such 
rural development programs is not subject to such a condition. Such 
safeguards shall include periodic certifications and audits, and 
appropriate measures and sanctions against any person violating, or 
attempting to violate, the prohibition in subsection (a).
    ``(c) Regulations.--Not later than 6 months after the enactment of 
this section, the Secretary shall issue interim final regulations to 
ensure compliance with subsection (a).''.

SEC. 6. REGULATIONS.

    Except as provided in section 2(b) of the Rural Electrification Act 
of 1936 and section 370 of the Consolidated Farm and Rural Development 
Act, as added by sections 2(c)(1)(C) and 5 of this Act, not later than 
45 days after the date of enactment of this Act, interim final 
regulations shall be issued by--
            (1) the Administrator of the Rural Electrification 
        Administration to carry out amendments made by this Act to 
        programs administered by the Administrator;
            (2) the Administrator of the Rural Development 
        Administration 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 
        amendments made by this Act to programs administered by the 
        Farmers Home Administration.

            Passed the House of Representatives September 28, 1993.

            Attest:

                                           DONNALD K. ANDERSON,

                                                                 Clerk.

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