7 U.S.C. § 932: Liabilities and uses of Rural…

Summary

The fund must pay for borrowings and other debts tied to electrification and telephone loan work. When the Secretary borrows from the Treasury to get money for loans under sections 904, 905, and 922, those borrowings and other liabilities from those loan activities must come out of the fund. The fund’s money can only be used for loan-related items. That includes loans that could be insured under this subchapter (and advances or earlier loans made as of May 11, 1973, under sections 904, 905, and 922); paying principal (without interest) on existing Treasury loans for electrification and telephone purposes and paying principal and interest on loans under section 934(a) when due; payments to holders of insured notes (which can wait until due or the next scheduled remittance); payments for defaulted notes or full balances if assigned to the Secretary; buying notes under insurance contracts; making payments required by guarantees; and costs like taxes, insurance, prior liens, credit reports, inspections, appraisals, loan servicing, consulting, other services and advances allowed under section 907, including costs to buy or run property under section 907. The Secretary must keep two separate accounts in the fund—one for electric loan operations and one for telephone loan operations (the telephone account excludes subchapter IV)—and each account’s assets can only be used for its type of loan work.

Title 7, §932

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(a)Liabilities and obligations of fund

The notes of the Secretary to the Secretary of the Treasury to obtain funds for loans under section 904, 905, and 922 of this title, and all other liabilities against the appropriations or assets in the fund in connection with electrification and telephone loan operations shall be liabilities of the fund, and all other obligations against such appropriations or assets in the fund arising out of electrification and telephone loan operations shall be obligations of the fund.

(b)Uses of fund assets

The assets of the fund shall be available only for the following purposes:

(1)loans which could be insured under this subchapter, and for advances in connection with such loans and loans previously made, as of May 11, 1973, under section 904, 905,1 and 922 of this title;

(2)payment of principal when due (without interest) on outstanding loans to the Secretary from the Secretary of the Treasury for electrification and telephone purposes and payment of principal and interest when due on loans to the Secretary from the Secretary of the Treasury pursuant to section 934(a) of this title;

(3)payment of amounts to which the holder of notes is entitled on insured loans: Provided, That payments other than final payments need not be remitted to the holder until due or until the next agreed annual, semiannual, or quarterly remittance date;

(4)payment to the holder of insured notes of any defaulted installment or, upon assignment of the note to the Secretary at his request, the entire balance due on the note;

(5)purchase of notes in accordance with contracts of insurance entered into by the Secretary;

(6)payment in compliance with contracts of guarantee;

(7)payment of taxes, insurance, prior liens, expenses necessary to make fiscal adjustments in connection with the application, and transmittal of collections or necessary to obtain credit reports on applicants or borrowers, expenses for necessary services, including construction inspections, commercial appraisals, loan servicing, consulting business advisory or other commercial and technical services, and other program services, and other expenses and advances authorized in section 907 of this title in connection with insured loans. Such items may be paid in connection with guaranteed loans after or in connection with the acquisition of such loans or security thereof after default, to the extent determined to be necessary to protect the interest of the Government, or in connection with any other activity authorized in this chapter;

(8)payment of the purchase price and any costs and expenses incurred in connection with the purchase, acquisition, or operation of property pursuant to section 907 of this title.

(c)Separate electric and telephone accounts

(1)The Secretary shall maintain two separate accounts within the fund, which shall be known as the electric account and the telephone account, respectively.

(2)(A)The Secretary shall account for the assets, liabilities, income, expenses, and equity of the fund attributable to electrification loan operations in the electric account.

(B)The Secretary shall account for the assets, liabilities, income, expenses, and equity of the fund attributable to telephone loan operations in the telephone account.

(3)(A)The assets accounted for in the electric account shall be available solely for electrification loan operations under this chapter.

(B)The assets accounted for in the telephone account shall be available solely for telephone loan operations under this chapter (other than under subchapter IV).

Notes & Related Subsidiaries

Editorial Notes

References in Text

section 905 of this title, referred to in subsecs. (a) and (b)(1), was repealed by Pub. L. 104–127, title VII, § 774(a), Apr. 4, 1996, 110 Stat. 1150.

Amendments

1996—Subsec. (b)(2). Pub. L. 104–127 struck out “pursuant to section 903(a) of this title” after “purposes”. 1994—Subsecs. (a), (b)(2), (4), (5), (c)(1), (2). Pub. L. 103–354 substituted “Secretary” for “Administrator” wherever appearing. 1990—Subsec. (c). Pub. L. 101–624 added subsec. (c). 1973—Pub. L. 93–32 substituted provisions setting out the liabilities of the Rural Electrification and Telephone Revolving Fund and the allowable purposes for which fund assets shall be available, for provisions, that the monies in the rural telephone account should remain on deposit in the Treasury of the United States until disbursed.

Statutory Notes and Related Subsidiaries

Effective Date

of 1973 AmendmentAmendment by Pub. L. 93–32 effective May 11, 1973, see section 12 of Pub. L. 93–32, set out as an

Effective Date

note under section 930 of this title.

Effective Date

Section effective May 7, 1971, see section 7 of Pub. L. 92–12, set out as a note under section 931 of this title.

§932 Liabilities and Uses of Rural Electrification and Telephone Revolving Fund

Summary

Title 7, §932

Notes & Related Subsidiaries

Editorial Notes

References in Text

Amendments

Statutory Notes and Related Subsidiaries

Effective Date

Effective Date

Effective Date

Citations & Metadata