Page:United States Statutes at Large Volume 101 Part 2.djvu/815

 PUBLIC LAW 100-203—DEC. 22, 1987

101 STAT. 1330-21

(B) the benefits and costs to Federal Financing Bank borrowers of making prepayments; and (C) alternative conditions and procedures for prepayment of all Federal Financing Bank loans to balance Federal benefits with Federal costs; and (2) submit to Congress a report describing the results of such Reports, study, together with any appropriate recommendations. SEC. 1402. USE OF FUNDS.

The Rural Electrification Act of 1936 is amended by inserting after section 311 (7 U.S.C. 940a) the following new section: "SEC. 312. USE OF FUNDS.

7 USC 940b.

"A borrower of an insured or guaranteed electric loan under this Act may, without restriction or prior approval of the Administrator, invest its own funds or make loans or guarantees, not in excess of 15 percent of its total utility plant.". SEC. 1403. CUSHION OF CREDIT PAYMENTS PROGRAM.

Title III of the Rural Electrification Act of 1936 (as amended by section 1402 of this Act) is amended by adding at the end thereof the following new section: "SEC. 313. CUSHION OF CREDIT PAYMENTS PROGRAM.

7 USC 940c.

"(a) ESTABLISHMENT.—

"(1) IN GENERAL.—The Administrator shall develop and promote a program to encourage borrowers to voluntarily make deposits into cushion of credit accounts established within the Rural Electrification and Telephone Revolving Fund. "(2) INTEREST.—Amounts in each cushion of credit account shall accrue interest to the borrower at a rate of 5 percent per annum. "(3) BALANCE.—A borrower may reduce the balance of its cushion of credit account only if the amount obtained from the reduction is used to make scheduled payments on loans made or guaranteed under this Act. "(h) USES OF CUSHION OF CREDIT PAYMENTS.— "(1) IN GENERAL.— "(A) CASH BALANCE.—Cushion of credit payments shall be

held in the Rural Electrification and Telephone Revolving Fund as a cash balance in the cushion of credit accounts of borrowers. "(B) INTEREST.—All cash balance amounts (obtained from cushion of credit payments, loan payments, and other sources) held by the Fund shall bear interest to the Fund at a rate equal to the weighted average rate on outstanding certificates of beneficial ownership issued by the Fund. "(C) CREDITS.—The amount of interest accrued on the cash balances shall be credited to the Fund as an offsetting reduction to the amount of interest paid by the Fund on its certificates of beneficial ownership. "(2) RURAL ECONOMIC DEVELOPMENT SUBACCOUNT.— "(A) MAINTENANCE OF ACCOUNT.—The Administrator

shall maintain a subaccount within the Rural Electrification and Telephone Revolving Fund to which shall be credited, on a monthly basis, a sum determined by multiplying the outstanding cushion of credit payments made after

jHli

�