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Title 7, AgricultureRelease 119-110

§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 Sep 22, 2026|Official source

Summary

The Secretary cannot treat money a qualified telephone borrower puts into certain rural development projects as a dividend or capital payout if, right after the investment, the total of those investments is no more than one‑third of the borrower's net worth. That rule covers investments, loans, guarantees, or advances to related companies used for those projects, and the borrower does not need the Secretary’s prior approval to make them. A qualified telephone borrower is someone who got a telephone loan or loan guarantee 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)In general
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)“Qualified telephone borrower” defined
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

Sep 22, 2026

Release point: 119-110