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LegalText 7 U.S.C. § 936e Administrative prohibitions applicable to certain electric borrowers us united_states_code code_section 7 AGRICULTURE 31 RURAL ELECTRIFICATION AND TELEPHONE SERVICE 936e 7 U.S.C. § 936e current 119-100 2026-06-26 official https://uscode.house.gov/download/releasepoints/us/pl/119/100/xml_usc07@119-100.zip /us/usc/t7/s936e data/legal/raw/us/code/title-07/usc07.xml 27e6dbd85a426199b1772b86769303da82911d6e29540dfe79fd04f7562dd1be 50edab1679a711653797362c0aeb8f2273303fe473fb7fa16df1ee76bdd6e984 66037ee3f6398f92d98b2f5edb16f01d969c87ff3cacbe946a06796d57b39e1b 2026-07-04 official
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7 U.S.C. § 936e - Administrative prohibitions applicable to certain electric borrowers

Text

(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 governments lien on the borrowers system or offer to subordinate the governments 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, § 306E, as added Pub. L. 103129, § 2(c)(7), Nov. 1, 1993, 107 Stat. 1365; amended Pub. L. 103201, § 1, Dec. 17, 1993, 107 Stat. 2342; Pub. L. 103354, title II, § 235(a)(8), (13), Oct. 13, 1994, 108 Stat. 3221.)

Notes

Editorial Notes

Amendments1994—Pub. L. 103354 substituted “Secretary” for “Administrator” in heading of subsec. (d) and wherever appearing in text. 1993—Pub. L. 103201 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

RegulationsPub. L. 103201, § 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.”