7 USC 935 - Insured loans; interest rates and lending levels

U.S Code last checked for updates: Nov 22, 2024

§ 935.

Insured loans; interest rates and lending levels

(a)

In general

(b)

Insured loans

(c)

Insured electric loans

(1)

Hardship loans

(A)

In general

The Secretary 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

(C)

Limitation

(D)

Extremely high rates

(2)

Municipal rate loans

(A)

In general

(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 Secretary 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 1927(a)(3)(A) of this title 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

(C)

Loan term

(i)

In general

(ii)

Maximum term

(I)

Applicant

(II)

Secretary

(D)

Call provision

(3)

Other source of credit not required in certain cases

(d)

Insured telephone loans

(1)

Hardship loans

(A)

In general

The Secretary 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 Secretary has approved a telecommunications modernization plan for the State under paragraph (3) and, if the plan was developed by telephone borrowers under this subchapter, 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

(C)

Effect of lack of funds

(2)

Cost-of-money loans

(A)

In general

The Secretary 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)

(B)

Concurrent loan authority

On request of any applicant for a loan under this paragraph during any fiscal year, the Secretary shall—

(i)

consider the application to be for a loan under this paragraph; 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, 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 for the fiscal year.

(C)

Effect of lack of funds

(3)

State telecommunications modernization plans

(A)

Approval

(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 Secretary.

(C)

Finality of approval

(May 20, 1936, ch. 432, title III, § 305, as added Pub. L. 93–32, § 2, May 11, 1973, 87 Stat. 68; amended Pub. L. 94–570, § 3, Oct. 20, 1976, 90 Stat. 2701; Pub. L. 97–35, title I, § 165(a), Aug. 13, 1981, 95 Stat. 379; Pub. L. 101–624, title XXIII, § 2361, Nov. 28, 1990, 104 Stat. 4042; Pub. L. 103–129, § 2(a)(1), (c)(6), Nov. 1, 1993, 107 Stat. 1356, 1364; Pub. L. 103–354, title II, § 235(a)(8), (13), Oct. 13, 1994, 108 Stat. 3221; Pub. L. 115–334, title VI, § 6602(b)(8), (9), Dec. 20, 2018, 132 Stat. 4776, 4777.)

cite as: 7 USC 935