Page:United States Statutes at Large Volume 101 Part 2.djvu/820

 101 STAT. 1330-26

PUBLIC LAW 100-203—DEC. 22, 1987

"(J) The telephone bank shall not sell or otherwise dispose of any loan made under this section, except as provided in this paragraph.". SEC. 1412. INTEREST RATE TO BE CONSIDERED FOR PURPOSES OF ASSESSING ELIGIBILITY FOR LOANS. Paragraph (4) of section 408(b) of the Rural Electrification Act of 1936 (7 U.S.C. 948(b)(4)) is amended by inserting at the end the following: "For purposes of determining the creditworthiness of a borrower for a loan under this paragraph, the Governor shall assume that the loan, if made, would bear interest at a rate equal to the average yield (on the date of the determination) on outstanding marketable obligations of the United States having a final maturity comparable to the final maturity of the loan.".

7 USC 946.

Reports.

SEC. 1413. ESTABLISHMENT OF RESERVE FOR LOSSES DUE TO INTEREST RATE FLUCTUATIONS. (a) ESTABLISHMENT OF RESERVE; FUNDING.—Section 406 of the Rural Electrification Act of 1936 (7 U.S.C. 947) is amended by adding at the end the following: "(h) There is hereby established in the telephone bank a reserve for losses due to interest rate fluctuations. Within 30 days after the date of the enactment of this subsection, the Governor of the telephone bank shall transfer to the reserve for losses due to interest rate fluctuations all amounts in the reserve for contingencies as of the date of the enactment of this subsection. Amounts in the reserve for interest rate fluctuations may be expended only to cover operating losses of the telephone bank (other than losses attributable to loan defaults) and only after taking into consideration any recommendations made by the General Accounting Office under section 1413(b) of the Rural Telephone Bank Borrowers Fairness Act of 1987.". (b) STUDY B GENERAL ACCOUNTING OFFICE.—Within 180 days Y after the date of the enactment of this Act, the General Accounting Office shall complete a study of operations of the telephone bank and report its recommendations to the Committees on Agriculture and Government Operations of the House of Representatives and the Committee on Agriculture, Nutrition, and Forestry of the Senate with respect to— (1) the appropriate level of funding for the reserve for losses due to interest rate fluctuations established in section 406(h) of the Rural Electrification Act of 1936 (7 U.S.C. 947(h)) (as added by subsection (a)); (2) the circumstances under which amounts in the reserve for losses due to interest rate fluctuations should be expended; (3) the circumstances under which amounts should be added to the reserve for losses due to interest rate fluctuations; and (4) the disposition of excess reserves. In such study, the General Accounting Office shall consider the effects of such recommendations on telephone bank borrowers, the subscribers of such borrowers, and the United States Government, (c) LIMITATION ON ESTABLISHMENT OF N E W RESERVES.—Subsection

7 USC 946.

(g) of section 406 of the Rural Electrification Act of 1936 (7 U.S.C. 947(g)) is amended— (1) by striking out "reserves for losses," and inserting in lieu thereof "the reserve for loan losses,"; and

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