TITLE 7 - US CODE - SUBCHAPTER I - RURAL ELECTRIFICATION

7 USC 901 - Short title

This chapter may be cited as the Rural Electrification Act of 1936.

7 USC 902 - General authority of Secretary of Agriculture

(a) Loans
The Secretary of Agriculture (referred to in this chapter as the Secretary) is authorized and empowered to make loans in the several States and Territories of the United States for rural electrification and for the purpose of furnishing and improving electric and telephone service in rural areas, as provided in this chapter, and for the purpose of assisting electric borrowers to implement demand side management, energy efficiency and conservation programs, and on-grid and off-grid renewable energy systems.

(b) Investigations and reports
The Secretary may make, or cause to be made, studies, investigations, and reports regarding matters, including financial, technological, and regulatory matters, affecting the condition and progress of electric, telecommunications, and economic development in rural areas, and publish and disseminate information with respect to the matters.

7 USC 903 - Authorization of appropriations

There are authorized to be appropriated such sums as are necessary to carry out this chapter.

7 USC 904 - Loans for electrical plants and transmission lines

(a) In general
The Secretary is authorized and empowered, from the sums hereinbefore authorized, to make loans for rural electrification to persons, corporations, States, Territories, and subdivisions and agencies thereof, municipalities, peoples utility districts and cooperative, nonprofit">nonprofit, or limited-dividend associations, organized under the laws of any State or Territory of the United States, for the purpose of financing the construction and operation of generating plants, electric transmission and distribution lines or systems for the furnishing and improving of electric service to persons in rural areas, including by assisting electric borrowers to implement demand side management, energy efficiency and conservation programs, and on-grid and off-grid renewable energy systems, and loans, from funds available under section 903 of this title, to cooperative associations and municipalities for the purpose of enabling said cooperative associations, and municipalities to the extent that such indebtedness was incurred with respect to electric transmission and distribution lines or systems or portions thereof serving persons in rural areas, to discharge or refinance long-term debts owned by them to the Tennessee Valley Authority on account of loans made or credit extended under the terms of the Tennessee Valley Authority Act of 1933, as amended [16 U.S.C. 831 et seq.]: Provided, That the Secretary, in making such loans, shall give preference to States, Territories, and subdivisions and agencies thereof, municipalities, peoples utility districts, and cooperative, nonprofit">nonprofit, or limited-dividend associations, the projects of which comply with the requirements of this chapter.

(b) Terms and conditions
Such loans shall be on such terms and conditions relating to the expenditure of the moneys loaned and the security therefor as the Secretary shall determine and may be made payable in whole or in part out of the income, except that no loan for the construction, operation, or enlargement of any generating plant shall be made unless the consent of the State authority having jurisdiction in the premises is first obtained.

(1) Direct hardship loans
Direct hardship loans under this section shall be for the same purposes and on the same terms and conditions as hardship loans made under section 935 (c)(1) of this title.

(2) Other direct loans
All other direct loans under this section shall bear interest at a rate equal to the then current cost of money to the Government of the United States for loans of similar maturity, plus 1/8 of 1 percent.

(d) Certification
Loans under this section shall not be made unless the Secretary finds and certifies that in his judgment the security therefor is reasonably adequate and such loan will be repaid within the time agreed.

7 USC 905 - Repealed. Pub. L. 104127, title VII, 774(a), Apr. 4, 1996, 110 Stat. 1150

Section, acts May 20, 1936, ch. 432, title I, 5, 49 Stat. 1365; Sept. 21, 1944, ch. 412, title V, 502(b), 58 Stat. 739; Oct. 28, 1949, ch. 776, 2, 63 Stat. 948; Oct. 13, 1994, Pub. L. 103–354, title II, § 235(a)(13), 108 Stat. 3221, related to loans for electrical and plumbing equipment and persons eligible for such loans.

7 USC 906 - Funding for administrative expenses

For the purpose of administering this chapter and for the purpose of making the studies, investigations, publications, and reports herein provided for, there is authorized to be appropriated, out of any money in the Treasury not otherwise appropriated, such sums as shall be necessary.

7 USC 906a - Use of funds outside the United States or its territories prohibited

No funds provided under this chapter shall be used outside the United States or any of its territories.

7 USC 907 - Acquisition of property pledged for loans; disposition; sale of pledged property by borrower

The Secretary is authorized and empowered to bid for and purchase at any foreclosure or other sale, or otherwise to acquire, property pledged or mortgaged to secure any loan made pursuant to this chapter; to pay the purchase price and any costs and expenses incurred in connection therewith from the sums authorized in section 903 of this title; to accept title to any property so purchased or acquired in the name of the United States of America; to operate or lease such property for such period as may be deemed necessary or advisable to protect the investment therein, but not to exceed five years after the acquisition thereof; and to sell such property so purchased or acquired, upon such terms and for such consideration as the Secretary shall determine to be reasonable. No borrower of funds under sections 904 or 922 of this title shall, without the approval of the Secretary, sell or dispose of its property, rights, or franchises, acquired under the provisions of this chapter, until any loan obtained from the Rural Electrification Administration, including all interest and charges, shall have been repaid.

7 USC 908 - Repealed. Pub. L. 104127, title VII, 776, Apr. 4, 1996, 110 Stat. 1150

Section, acts May 20, 1936, ch. 432, title I, 8, 49 Stat. 1366; Oct. 28, 1949, ch. 776, 2, 63 Stat. 948; Oct. 13, 1994, Pub. L. 103–354, title II, § 235(a)(4), 108 Stat. 3221, related to transfer of functions of Rural Electrification Administration created by Executive Order No. 7037.

7 USC 909 - Administration on nonpolitical basis; dismissal of officers or employees for violating provision

This chapter shall be administered entirely on a nonpartisan basis, and in the appointment of officials, the selection of employees, and in the promotion of any such officials or employees, no political test or qualification shall be permitted or given consideration, but all such appointments and promotions shall be given and made on the basis of merit and efficiency. If the Secretary herein provided for is found by the President of the United States to be guilty of a violation of this section, he shall be removed from office by the President, and any appointee or selection of officials or employees made by the Secretary who is found guilty of a violation of this chapter shall be removed by the Secretary.

7 USC 910 - Repealed. Pub. L. 104127, title VII, 777, Apr. 4, 1996, 110 Stat. 1150

Section, acts May 20, 1936, ch. 432, title I, 10, 49 Stat. 1366; Oct. 28, 1949, ch. 776, 2, 63 Stat. 948; Apr. 21, 1976, Pub. L. 94–273, § 11(1), 90 Stat. 378; Oct. 13, 1994, Pub. L. 103–354, title II, § 235(a)(13), 108 Stat. 3221, required Secretary to present annually to Congress, not later than Apr. 20, report of Secretarys activities under this chapter.

7 USC 911 - Acceptance of services of Federal or State officers; application of civil service laws; expenditures for supplies and equipment

In order to carry out the provisions of this chapter the Secretary may accept and utilize such voluntary and uncompensated services of Federal, State, and local officers and employees as are available, and he may appoint and fix the compensation of attorneys, engineers, and experts and he may, subject to the civil-service laws, appoint such other officers and employees as he may find necessary and prescribe their duties. The Secretary is authorized, from sums appropriated pursuant to section 906 of this title, to make such expenditures (including expenditures for personal services; supplies and equipment; lawbooks and books of reference; directories and periodicals; travel expenses; rental at the seat of government and elsewhere; the purchase, operation, or maintenance of passenger-carrying vehicles; and printing and binding) as are appropriate and necessary to carry out the provisions of this chapter.

7 USC 911a - Repealed. Pub. L. 103354, title II, 235(a)(5), Oct. 13, 1994, 108 Stat. 3221

Section, act May 20, 1936, ch. 432, title I, 11A, as added Nov. 28, 1990, Pub. L. 101–624, title XXIII, § 2350, 104 Stat. 4037; amended Dec. 13, 1991, Pub. L. 102–237, title VII, § 703(a), 105 Stat. 1881, related to Assistant Administrator for Economic Development.

7 USC 912 - Extension of time for repayment of loans

(a) In general
The Secretary is authorized and empowered to extend the time of payment of interest or principal of any loans made by the Secretary pursuant to this chapter, except that, with respect to any loan made under section 904 or 922 of this title, the payment of interest or principal shall not be extended more than five years after such payment shall have become due.

(b) Terms of deferment

(1) Subject to limitations established in appropriations Acts, the Secretary shall permit any borrower to defer the payment of principal and interest on any insured or direct loan made under this chapter under circumstances described in this subsection, notwithstanding any limitation contained in subsection (a) of this section, except that such deferment shall not be permitted based on the determination of the Secretary of the financial hardship of the borrower.

(2)

(A) In the case of deferments made to enable the borrower to provide financing to local businesses, the deferment shall be repaid in equal installments, without the accrual of interest, over the 60-month period beginning on the date of the deferment, and the total amount of such payments shall be equal to the amount of the payment deferred.

(B) In the case of deferments made to enable the borrower to provide community development assistance, technical assistance to businesses, and for other community, business, or economic development projects not included under subparagraph (A), the deferment shall be repaid in equal installments, without the accrual of interest, over the 120-month period beginning on the date of the deferment, and the total amount of such payments shall be equal to the amount of the payment deferred.

(3)

(A) A borrower may defer its debt service payments only in an amount equal to an investment made by such borrower as described in paragraph (2).

(B) The amount of the deferment shall not exceed 50 percent of the total cost of a community or economic development project for which a deferment is provided under this subsection.

(C) The total amount of deferments under this subsection during each of the fiscal years 1990 through 1993 shall not exceed 3 percent of the total payments due during such fiscal year from all borrowers on direct and insured loans made under this chapter and shall not exceed 5 percent of such total payments due in each subsequent fiscal year.

(D) At the time of a deferment, the borrower shall make a payment to a cushion of credit account established and maintained pursuant to section 940c of this title in an amount equal to the amount of the payment deferred. The balance of such account shall not be reduced by the borrower below the level of the unpaid balance of the payment deferred. Subject to limitations established in annual appropriations Acts, such cushion of credit amounts and any other cushion of credit and advance payments of any borrower shall be included in the interest differential calculation under section 940c (b)(2)(A) of this title.

(4) The Secretary shall undertake all reasonable efforts to permit the full amount of deferments authorized by this subsection during each fiscal year.

(1) In general
The Secretary shall allow borrowers to defer payment of principal and interest on any direct loan made under this chapter to enable the borrower to make loans to residential, commercial, and industrial consumers

(A) to conduct energy efficiency and use audits; and

(B) to install energy efficient measures or devices that reduce the demand on electric systems.

(2) Amount
The total amount of a deferment under this subsection shall not exceed the sum of the principal and interest on the loans made to a customer of the borrower, as determined by the Secretary.

(3) Term
The term of a deferment under this subsection shall not exceed 60 months.

7 USC 912a - Rescheduling and refinancing of loans

In addition to the loan extension authority provided in section 912 of this title, the Secretary of Agriculture is authorized to adjust and readjust the schedules for payment of principal and interest on loans to borrowers under programs administered by the Secretary under this chapter, and to extend the maturity date of any such loan to a date not beyond forty years from the date of such loan where he determines such action is necessary because of the impairment of the economic feasibility of the system, or the loss, destruction, or damage of the property of such borrowers as a result of a major disaster.

7 USC 913 - Definitions

In this chapter:

(1) Farm
The term farm means a farm, as defined by the Bureau of the Census.

(2) Indian tribe
The term Indian tribe has the meaning given the term in section 450b of title 25.

(3) Rural area
Except as provided otherwise in this chapter, the term rural area means the farm and nonfarm population of

(A) any area described in section 1991 (a)(13)(C) of this title; and

(B) any area within a service area of a borrower for which a borrower has an outstanding loan made under subchapters I through V as of the date of enactment of this paragraph.

(4) Territory
The term territory includes any insular possession of the United States.

(5) Secretary
The term Secretary means the Secretary of Agriculture.

7 USC 914 - Separability

If any provision of this chapter, or the application thereof to any person or circumstances, is held invalid, the remainder of the chapter and the application of such provision to other persons or circumstances shall not be affected thereby.

7 USC 915 - Purchase of financial and credit reports

The Secretary of Agriculture is authorized to purchase such financial and credit reports as may be necessary to carry out the Secretarys authorized work: Provided, That purchases under this authority shall not be made unless provision is made therefor in the applicable appropriation and the cost thereof is not in excess of limitations prescribed therein.

7 USC 916 - Criteria for loans

In order to insure coordination of electric generation and transmission financing under this chapter with the national energy policy, the Secretary in making or guaranteeing loans for the construction, operation, or enlargement of generating plants or electric transmission lines or systems, shall consider such general criteria consistent with the provisions of this chapter as may be published by the Secretary of Energy.

7 USC 917 - Prohibition on restricting water and waste facility services to electric customers

(a) Prohibition
Assistance under any rural development program administered by the Secretary or any agency of the Department of Agriculture shall not be conditioned on any requirement that the recipient of the 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 any rural development program is not subject to such a condition. The safeguards shall include periodic certifications and audits, and appropriate measures and sanctions against any person violating, or attempting to violate subsection (a) of this section.

(1) Sections 304 (b), 306, 306A, 306C, 306D, 310B, and 3751 and subtitle E [7 U.S.C. 2009 et seq.] of the Consolidated Farm and Rural Development Act (7 U.S.C. 1924 (b), 1926, 1926a, 1926c, 1926d, and 1932).

(2) Subtitle G^[1] of title XVI and sections 2281 [42 U.S.C. 5177a], 2333, and 2381 [7 U.S.C. 950aaa–2, 3125b] of the Food, Agriculture, Conservation, and Trade Act of 1990.

(3) Subtitle C of title IX of the Food, Agriculture, Conservation, and Trade Act Amendments of 1991 (Public Law 102237; 7 U.S.C. 5930 note ).

(4) Section 1323(b) of the Food Security Act of 1985 (Public Law 99198; 7 U.S.C. 1932 note ).

(5) Title V [7 U.S.C. 2661 et seq.] and section 603 (c) [7 U.S.C. 2204a] of the Rural Development Act of 1972.

(6) Sections 905 and 940a1 of this title and subchapter IV of this chapter.

(d) Regulations
Not later than 60 days after April 4, 1996, the Secretary shall issue final regulations to ensure compliance with subsection (a) of this section.

[1] See References in Text note below.

7 USC 918 - General prohibitions

(a) No consideration of borrower’s level of general funds
The Secretary and the Governor of the telephone bank shall not deny or reduce any loan or loan advance under this chapter based on a borrowers level of general funds.

(b) Loan origination fees
The Secretary and the Governor of the telephone bank may not charge any fee or charge not expressly provided in this chapter in connection with any loan made or guaranteed under this chapter.

(1) In general
To facilitate timely action on applications by borrowers for financial assistance under this chapter and for approvals required of the Rural Electrification Administration pursuant to the terms of outstanding loan or security instruments or otherwise, the Secretary 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 Secretary 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 Secretary 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 Secretary.

(4) Contracts, grants, and agreements
The Secretary 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 Secretary to retain the services of consultants from funds made available to the Secretary or otherwise.

7 USC 918a - Energy generation, transmission, and distribution facilities efficiency grants and loans in rural communities with extremely high energy costs

(a) In general
The Secretary, acting through the Rural Utilities Service, may

(1) in coordination with State rural development initiatives, make grants and loans to persons, States, political subdivisions of States, and other entities organized under the laws of States to acquire, construct, extend, upgrade, and otherwise improve energy generation, transmission, or distribution facilities serving communities in which the average residential expenditure for home energy is at least 275 percent of the national average residential expenditure for home energy (as determined by the Energy Information Agency using the most recent data available);

(2) make grants and loans to the Denali Commission established by the Denali Commission Act of 1998 (42 U.S.C. 3121 note ; Public Law 105277) to acquire, construct, extend, upgrade, and otherwise improve energy generation, transmission, or distribution facilities serving communities described in paragraph (1); and

(3) make grants to State entities, in existence as of November 9, 2000, to establish and support a revolving fund to provide a more cost-effective means of purchasing fuel where the fuel cannot be shipped by means of surface transportation.

(b) Authorization of appropriations

(1) In general
There are authorized to be appropriated to carry out this section $50,000,000 for fiscal year 2001 and such sums as are necessary for each subsequent fiscal year.

(2) Limitation on planning and administrative expenses
Not more than 4 percent of the amounts made available under paragraph (1) may be used for planning and administrative expenses.

7 USC 918b - Acquisition of existing systems in rural communities with high energy costs

On and after November 28, 2001, notwithstanding any other provision of law, the Administrator of the Rural Utilities Service shall use the authorities provided in the Rural Electrification Act of 1936 [7 U.S.C. 901 et seq.] to finance the acquisition of existing generation, transmission and distribution systems and facilities serving high cost, predominantly rural areas by entities capable of and dedicated to providing or improving service in such areas in an efficient and cost effective manner.

7 USC 918c - Rural and remote communities electrification grants

(a) Definitions
In this section:

(1) The term eligible grantee means a local government or municipality, peoples utility district, irrigation district, and cooperative, nonprofit">nonprofit, or limited-dividend association in a rural area.

(2) The term incremental hydropower means additional generation achieved from increased efficiency after January 1, 2005, at a hydroelectric dam that was placed in service before January 1, 2005.

(3) The term renewable energy means electricity generated from

(A) a renewable energy source; or

(B) hydrogen, other than hydrogen produced from a fossil fuel, that is produced from a renewable energy source.

(4) The term renewable energy source means

(A) wind;

(B) ocean waves;

(D) solar;

(E) landfill gas;

(F) incremental hydropower;

(G) livestock methane; or

(H) geothermal energy.

(5) The term rural area means a city, town, or unincorporated area that has a population of not more than 10,000 inhabitants.

(b) Grants
The Secretary, in consultation with the Secretary of Agriculture and the Secretary of the Interior, may provide grants under this section to eligible grantees for the purpose of

(1) increasing energy efficiency, siting or upgrading transmission and distribution lines serving rural areas; or

(2) providing or modernizing electric generation facilities that serve rural areas.

(1) The Secretary shall make grants under this section based on a determination of cost-effectiveness and the most effective use of the funds to achieve the purposes described in subsection (b) of this section.

(2) For each fiscal year, the Secretary shall allocate grant funds under this section equally between the purposes described in paragraphs (1) and (2) of subsection (b) of this section.

(3) In making grants for the purposes described in subsection (b)(2) of this section, the Secretary shall give preference to renewable energy facilities.

(d) Authorization of appropriations
There is authorized to be appropriated to the Secretary to carry out this section $20,000,000 for each of fiscal years 2006 through 2012.