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Title 7 — AgricultureRelease 119-73not60

§926 Certain Rural Development Investments by Qualified Telephone Borrowers Not Treated as Dividends or Distributions

Title 7 › Chapter 31— RURAL ELECTRIFICATION AND TELEPHONE SERVICE › Subchapter II— RURAL TELEPHONE SERVICE › § 926

Last updated Apr 3, 2026|Official source

Summary

The Secretary cannot treat money a qualified telephone borrower puts into the rural development uses listed in section 2204b(c)(2) as a dividend or capital distribution, as long as, right after the investment, the total of those investments is no more than 1/3 of the borrower's net worth. The Secretary also cannot require the borrower to get the Secretary's approval before making such investments. A qualified telephone borrower is someone who has a telephone loan made or guaranteed under this law and whose net worth is at least 20 percent of their total assets.

Full Legal Text

Title 7, §926

Agriculture — Source: USLM XML via OLRC

(a)The Secretary shall not—
(1)treat any amount invested by any qualified telephone borrower for any purpose described in section 2204b(c)(2) of this title (including any investment in, or extension of credit, guarantee, or advance made to, an affiliated company of the borrower, that is used by such company for such a purpose) as a dividend or distribution of capital to the extent that, immediately after such investment, the aggregate of such investments does not exceed ⅓ of the net worth of the borrower; or
(2)require a qualified telephone borrower to obtain the approval of the Secretary in order to make an investment described in paragraph (1).
(b)As used in subsection (a), the term “qualified telephone borrower” means a person—
(1)to whom a telephone loan has been made or guaranteed under this chapter; and
(2)whose net worth is at least 20 percent of the total assets of such person.

Legislative History

Notes & Related Subsidiaries

Editorial Notes

Amendments

2018—Subsec. (a). Pub. L. 115–334, § 6602(b)(3)(A), struck out “and the Governor of the telephone bank” after “The Secretary” in introductory provisions. Subsec. (a)(2). Pub. L. 115–334, § 6602(b)(3)(B), struck out “or the Governor of the telephone bank” after “the Secretary”. 1994—Subsec. (a). Pub. L. 103–354 substituted “Secretary” for “Administrator” in two places.

Reference

Citations & Metadata

Citation

7 U.S.C. § 926

Title 7 — Agriculture

Last Updated

Apr 3, 2026

Release point: 119-73not60