7 U.S.C. § 936f — Substantially underserved trust areas

Page 544 TITLE 7—AGRICULTURE § 936e § 936e. Administrative prohibitions applicable to certain electric borrowers (a) In general For the purpose of relieving borrowers of un- necessary and burdensome requirements, the Secretary, guided by the practices of private lenders with respect to similar credit risks, shall issue regulations, applicable to any elec- tric borrower under this chapter whose net worth exceeds 110 percent of the outstanding principal balance on all loans made or guaran- teed to the borrower by the Secretary, to mini- mize those approval rights, requirements, re- strictions, and prohibitions that the Secretary otherwise may establish with respect to the op- erations of such a borrower. (b) Subordination or sharing of liens At the request of a private lender providing fi- nancing to such a borrower for a capital invest- ment, the Secretary shall, expeditiously, either offer to share the government’s lien on the bor- rower’s system or offer to subordinate the gov- ernment’s lien on that property financed by the private lender. (c) Issuance of regulations In issuing regulations implementing this sec- tion, the Secretary may establish requirements, guided by the practices of private lenders, to en- sure that the security for any loan made or guaranteed under this chapter is reasonably ade- quate. (d) Authority of Secretary Nothing in this section limits the authority of the Secretary to establish terms and conditions with respect to the use by borrowers of the pro- ceeds of loans made or guaranteed under this chapter or to take any other action specifically authorized by law. (May 20, 1936, ch. 432, title III, § 306E, as added Pub. L. 103–129, § 2(c)(7), Nov. 1, 1993, 107 Stat. 1365; amended Pub. L. 103–201, § 1, Dec. 17, 1993, 107 Stat. 2342; Pub. L. 103–354, title II, § 235(a)(8), (13), Oct. 13, 1994, 108 Stat. 3221.) Editorial Notes AMENDMENTS 1994—Pub. L. 103–354 substituted ‘‘Secretary’’ for ‘‘Ad- ministrator’’ in heading of subsec. (d) and wherever ap- pearing in text. 1993—Pub. L. 103–201 inserted ‘‘certain’’ before ‘‘elec- tric’’ in section catchline and amended text generally. Prior to amendment, text read as follows: ‘‘The Admin- istrator 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 chapter whose net worth exceeds 110 percent of the outstanding principal balance on all loans made or guaranteed to the borrower by the Administrator.’’ Statutory Notes and Related Subsidiaries REGULATIONS Pub. L. 103–201, § 2, Dec. 17, 1993, 107 Stat. 2342, pro- vided that: ‘‘The Administrator of the Rural Elec- trification Administration shall issue interim final reg- ulations implementing this Act [amending this section] not later than 180 days after enactment [Dec. 17, 1993]. If the regulations are not issued within such period of time, the Administrator may not, until the Adminis- trator issues such regulations, require prior approval of, establish any requirement, restriction, or prohibi- tion, with respect to the operations of any electric bor- rower under the Rural Electrification Act of 1936 [7 U.S.C. 90 et seq.] whose net worth exceeds 110 percent of the outstanding principal balance on all loans made or guaranteed to the borrower by the Administrator.’’ § 936f. Substantially underserved trust areas (a) Definitions In this section: (1) Eligible program The term ‘‘eligible program’’ means a pro- gram administered by the Rural Utilities Service and authorized in— (A) this chapter; or (B) paragraph (1), (2), (14), (22), or (24) of section 1926(a) of this title or section 1926a, 1926c, 1926d, or 1926e of this title. (2) Substantially underserved trust area The term ‘‘substantially underserved trust area’’ means a community in ‘‘trust land’’ (as defined in section 3765 of title 38) with respect to which the Secretary determines has a high need for the benefits of an eligible program. (b) Initiative The Secretary, in consultation with local gov- ernments and Federal agencies, may implement an initiative to identify and improve the avail- ability of eligible programs in communities in substantially underserved trust areas. (c) Authority of Secretary In carrying out subsection (b), the Secretary— (1) may make available from loan or loan guarantee programs administered by the Rural Utilities Service to qualified utilities or applicants financing with an interest rate as low as 2 percent, and with extended repayment terms; (2) may waive nonduplication restrictions, matching fund requirements, or credit support requirements from any loan or grant program administered by the Rural Utilities Service to facilitate the construction, acquisition, or im- provement of infrastructure; (3) may give the highest funding priority to designated projects in substantially under- served trust areas; and (4) shall only make loans or loan guarantees that are found to be financially feasible and that provide eligible program benefits to sub- stantially underserved trust areas. (d) Report Not later than 1 year after the date of enact- ment of this section and annually thereafter, the Secretary shall submit to Congress a report that describes— (1) the progress of the initiative imple- mented under subsection (b); and (2) recommendations for any regulatory or legislative changes that would be appropriate to improve services to substantially under- served trust areas. (May 20, 1936, ch. 432, title III, § 306F, as added Pub. L. 110–234, title VI, § 6105, May 22, 2008, 122 Stat. 1196, and Pub. L. 110–246, § 4(a), title VI, § 6105, June 18, 2008, 122 Stat. 1664, 1957.) Page 545 TITLE 7—AGRICULTURE § 940 Editorial Notes REFERENCES IN TEXT The date of enactment of this section, referred to in subsec. (d), is the date of enactment of Pub. L. 110–246, which was approved June 18, 2008. CODIFICATION Pub. L. 110–234 and Pub. L. 110–246 enacted identical sections. Pub. L. 110–234 was repealed by section 4(a) of Pub. L. 110–246. Statutory Notes and Related Subsidiaries EFFECTIVE DATE Enactment of this section and repeal of Pub. L. 110–234 by Pub. L. 110–246 effective May 22, 2008, the date of enactment of Pub. L. 110–234, see section 4 of Pub. L. 110–246, set out as a note under section 8701 of this title. § 937. Loans from other credit sources When it appears to the Secretary that the loan applicant is able to obtain a loan for part of his credit needs from a responsible cooperative or other credit source at reasonable rates and terms consistent with the loan applicant’s abil- ity to pay and the achievement of this chapter’s objectives, he may request the loan applicant to apply for and accept such a loan concurrently with an insured loan, subject, however, to full use being made by the Secretary of the funds made available hereunder for such insured loans under this subchapter. The Secretary may not request any applicant for an electric loan under this chapter to apply for and accept a loan in an amount exceeding 30 percent of the credit needs of the applicant. (May 20, 1936, ch. 432, title III, § 307, as added Pub. L. 93–32, § 2, May 11, 1973, 87 Stat. 70; amended Pub. L. 97–35, title I, § 165(c), Aug. 13, 1981, 95 Stat. 379; Pub. L. 103–129, § 2(c)(8), Nov. 1, 1993, 107 Stat. 1365; Pub. L. 103–354, title II, § 235(a)(13), Oct. 13, 1994, 108 Stat. 3221.) Editorial Notes AMENDMENTS 1994—Pub. L. 103–354 substituted ‘‘Secretary’’ for ‘‘Ad- ministrator’’ wherever appearing. 1993—Pub. L. 103–129 inserted at end ‘‘The Adminis- trator may not request any applicant for an electric loan under this chapter to apply for and accept a loan in an amount exceeding 30 percent of the credit needs of the applicant.’’ 1981—Pub. L. 97–35 substituted ‘‘an insured loan’’ for ‘‘a loan insured at the standard rate’’. Statutory Notes and Related Subsidiaries EFFECTIVE DATE Section effective May 11, 1973, see section 12 of Pub. L. 93–32, set out as a note under section 930 of this title. § 938. Full faith and credit of the United States Any contract of insurance or guarantee exe- cuted by the Secretary under this subchapter shall be an obligation supported by the full faith and credit of the United States and incontest- able except for fraud or misrepresentation of which the holder had actual knowledge at the time it became a holder. (May 20, 1936, ch. 432, title III, § 308, as added Pub. L. 93–32, § 2, May 11, 1973, 87 Stat. 70; amended Pub. L. 94–124, § 2, Nov. 4, 1975, 89 Stat. 677; Pub. L. 103–354, title II, § 235(a)(13), Oct. 13, 1994, 108 Stat. 3221.) Editorial Notes AMENDMENTS 1994—Pub. L. 103–354 substituted ‘‘Secretary’’ for ‘‘Ad- ministrator’’. 1975—Pub. L. 94–124 substituted ‘‘of which the holder had actual knowledge at the time it became a holder’’ for ‘‘of which the holder has actual knowledge’’. Statutory Notes and Related Subsidiaries EFFECTIVE DATE Section effective May 11, 1973, see section 12 of Pub. L. 93–32, set out as a note under section 930 of this title. § 939. Loan terms and conditions Loans made from or insured through the fund shall be for the same purposes and on the same terms and conditions as are provided for loans in subchapters I and II of this chapter except as otherwise provided in sections 933 to 938 inclu- sive. (May 20, 1936, ch. 432, title III, § 309, as added Pub. L. 93–32, § 2, May 11, 1973, 87 Stat. 70; amended Pub. L. 101–624, title XXIII, § 2360, Nov. 28, 1990, 104 Stat. 4042; Pub. L. 103–129, § 2(b)(2), Nov. 1, 1993, 107 Stat. 1363; Pub. L. 104–127, title VII, § 779, Apr. 4, 1996, 110 Stat. 1151; Pub. L. 115–334, title VI, § 6602(b)(11), Dec. 20, 2018, 132 Stat. 4777.) Editorial Notes AMENDMENTS 2018—Pub. L. 115–334 struck out at end ‘‘The pre- ceding sentence shall not be construed to make section 948(b)(2) or 950b of this title applicable to this sub- chapter.’’ 1996—Pub. L. 104–127 struck out subsec. (a) designa- tion and heading ‘‘In general’’ and heading and text of subsec. (b). Prior to amendment, text read as follows: ‘‘The term of any telephone loan made under this sub- chapter shall be determined by the borrower at the time the loan application is submitted.’’ 1993—Subsec. (a). Pub. L. 103–129 inserted at end ‘‘The preceding sentence shall not be construed to make sec- tion 948(b)(2) or 950b of this title applicable to this sub- chapter.’’ 1990—Pub. L. 101–624 designated existing provisions as subsec. (a) and added subsec. (b). Statutory Notes and Related Subsidiaries EFFECTIVE DATE Section effective May 11, 1973, see section 12 of Pub. L. 93–32, set out as a note under section 930 of this title. § 940. Refinancing of rural development loans At the request of the borrower, the Secretary is authorized and directed to refinance with loans which will be insured under this chapter at the interest rates provided in section 935 of this title any loans made for rural electric and tele- phone facilities under any provision of the Con- solidated Farm and Rural Development Act [7 U.S.C. 1921 et seq.]. (May 20, 1936, ch. 432, title III, § 310, as added Pub. L. 93–32, § 2, May 11, 1973, 87 Stat. 70;