§ 936e. — Administrative prohibitions applicable to certain electric borrowers.
[Laws in effect as of January 24, 2002]
[Document not affected by Public Laws enacted between
January 24, 2002 and December 19, 2002]
[CITE: 7USC936e]
TITLE 7--AGRICULTURE
CHAPTER 31--RURAL ELECTRIFICATION AND TELEPHONE SERVICE
SUBCHAPTER III--RURAL ELECTRIC AND TELEPHONE DIRECT LOAN PROGRAMS
Sec. 936e. Administrative prohibitions applicable to certain
electric borrowers
(a) In general
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) Subordination or sharing of liens
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) Issuance of regulations
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) Authority of Secretary
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.
(May 20, 1936, ch. 432, title III, Sec. 306E, as added Pub. L. 103-129,
Sec. 2(c)(7), Nov. 1, 1993, 107 Stat. 1365; amended Pub. L. 103-201,
Sec. 1, Dec. 17, 1993, 107 Stat. 2342; Pub. L. 103-354, title II,
Sec. 235(a)(8), (13), Oct. 13, 1994, 108 Stat. 3221.)
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.''
Regulations
Section 2 of Pub. L. 103-201 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.''
