Guarantees for Bonds and Notes Issued for Electrification or Telephone Purposes

This rule establishes procedures for a guarantee program for cooperatives and other not-for-profit lenders that make loans eligible for assistance under the Rural Electrification Act of 1936 (the RE Act). Criteria for eligibility of lenders and transactions are set forth in the rule together with application procedures. Program participants are required to pay an annual fee for the guarantee. The fee will be credited to the Rural Development Subaccount to provide funds for zero-interest loans and grants pursuant to section 313 of the RE Act. The Farm Security and Rural Investment Act of 2002 (Pub. L. 107-171), amended the RE Act, by adding section 313A which establishes this program. In addition to providing funds to enhance rural development, this program will contribute to improving the technology and reliability of our rural electric transmission and distribution system.