§936e — Title 7 Agriculture | U.S. Code

Summary

The Secretary must create rules to reduce extra approvals and limits for electric borrowers whose net worth is more than 110% of the total principal they owe on loans from the Secretary. The rules must follow how private lenders act for similar risks. If a private lender asks to fund a capital project for such a borrower, the Secretary must quickly either share the government’s lien on the borrower’s system or let the private lender’s lien come first for the property the lender finances. The Secretary can set reasonable security requirements, again guided by private-lender practices. These rules do not stop the Secretary from setting loan terms or taking any other actions the law already allows.

Title 7, §936e

Agriculture — Source: USLM XML via OLRC

(a)For the purpose of relieving borrowers of unnecessary and burdensome requirements, the Secretary, guided by the practices of private lenders with respect to similar credit risks, shall issue regulations, applicable 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 Secretary, to minimize those approval rights, requirements, restrictions, and prohibitions that the Secretary otherwise may establish with respect to the operations of such a borrower.

(b)At the request of a private lender providing financing to such a borrower for a capital investment, the Secretary shall, expeditiously, either offer to share the government’s lien on the borrower’s system or offer to subordinate the government’s lien on that property financed by the private lender.

(c)In issuing regulations implementing this section, the Secretary may establish requirements, guided by the practices of private lenders, to ensure that the security for any loan made or guaranteed under this chapter is reasonably adequate.

(d)Nothing in this section limits the authority of the Secretary to establish terms and conditions with respect to the use by borrowers of the proceeds of loans made or guaranteed under this chapter or to take any other action specifically authorized by law.

Notes & Related Subsidiaries

Editorial Notes

Amendments

1994—Pub. L. 103–354 substituted “Secretary” for “Administrator” in heading of subsec. (d) and wherever appearing in text. 1993—Pub. L. 103–201 inserted “certain” before “electric” in section catchline and amended text generally. Prior to amendment, text read as follows: “The Administrator 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, provided that: “The Administrator of the Rural Electrification Administration shall issue interim final

Regulations

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 Administrator issues such

Regulations

, require prior approval of, establish any requirement, restriction, or prohibition, with respect to the operations of any electric borrower 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.”

§936e Administrative Prohibitions Applicable to Certain Electric Borrowers

Summary

Title 7, §936e

Notes & Related Subsidiaries

Editorial Notes

Amendments

Statutory Notes and Related Subsidiaries

Regulations

Regulations

Regulations

Regulations

Citations & Metadata