purchase, in another, including all cases where purchase or sale is either for shipment to another State or for the processing within the State and the shipment outside the State of the products so processed. Agricultural commodities or products thereof normally in such current of interstate or foreign commerce shall not be considered out of such current through resort being had to any means or device intended to remove transactions in respect thereto from the provisions of said sections. As used herein, the word "State" includes Territory, the District of Columbia, possession of the United States, and foreign nations.

§ 612c. Appropriations to encourage exportation and domestic consumption of agricultural products. DIRECT DISTRIBUTION PROGRAMS FOR DIET OF NEEDY CHILDREN AND LOW-INCOME PERSONS SUFFERING FROM GENERAL AND CONTINUED HUNGER; ADDITIONAL FUNDS Section 6 of Pub. L. 92-32, June 30, 1971, 85 Stat. 86, provided that: "In addition to funds appropriated or otherwise available, the Secretary of Agriculture is authorized to use, during the fiscal year ending June 30, 1972, not to exceed $20,000,000 in funds from section 32 of the Act of August 24, 1935 (7 U.S.C. 612c) [this section], for the purpose of carrying out in any area of the United States direct distribution or other programs, without regard to whether such area is under the food stamp program or a system of direct distribution, to provide, in the immediate vicinity of their place of permanent residence, either directly or through a State or local welfare agency, and adequate diet to needy children and low-income persons determined by the Secretary of Agriculture to be suffering, through no fault of their own, from general and continued hunger resulting from insufficient food. Food made available to needy children under this section shall be in addition to any food made available to them under the National School Lunch Act [section 1751 et seq. of Title 42] or the Child Nutrition Act of 1966 [section 1771 et seq. of Title 42]. Whenever any program is carried out by the Secretary under authority of the preceding sentence through any State or local welfare agency, he is authorized to pay the administrative costs incurred by such State or local agency in carrying out such program."

ADDITIONAL FUNDS FOR FOOD SERVICE PROGRAMS FOR CHILDREN; APPORTIONMENT TO STATES; SPECIAL ASSISTANCE; CONSULTATION WITH CHILD NUTRITION COUNCIL; REIMBURSEMENT FROM SUPPLEMENTAL APPROPRIATION Additional funds for food service programs for children from appropriations under this section, apportionment to States, special assistance programs, consultation with National Advisory Council on Child Nutrition, and reimbursement from supplemental appropriation, see note set out under section 1753 of Title 42, The Public Health and Welfare.

TRANSFER OF FUNDS TO SCHOOLS IN NEED OF ADDITIONAL ASSISTANCE IN SCHOOL BREAKFAST PROGRAM Authorization for transfer of funds under this section to assist schools in need of additional funds in school breakfast program, see note set out under section 1773 of Title 42, The Public Health and Welfare.

wise, which is in good faith owned or controlled by producers or organizations thereof, of milk or its products, and which is bona fide engaged in collective processing or preparing for market or handling or marketing (in the current of interstate or foreign commerce, as defined by section 610(j) of this title), milk or its products, may mediate and, with the consent of all parties, shall arbitrate if the Secretary has reason to believe that the declared policy of the Agricultural Adjustment Act, as amended, would be effectuated thereby, bona fide disputes, between such associations and the purchasers or handlers or processors or distributors of milk or its products, as to terms and conditions of the sale of milk or its products. The power to arbitrate under this section shall apply only to such subjects of the term or condition in dispute as could be regulated under the provisions of the Agricultural Adjustment Act, as amended, relating to orders for milk and its products.

Special provisions governing telephone bank as a Federal agency until conversion of ownership. control, and operation.

(a) Supervision and direction of Secretary of Agriculture; free postage and priority of debts restrictions.

(b) Use of facilities and services of employees of any agency of Department of Agriculture.

(c) Wholly owned Government corporations. (d) Appointment and compensation of personnel.

(e) Tort claims and litigation.

Governor of telephone bank; functions, powers, and duties.

(b) Federal agency and general public representation; additional compensation restriction.

(c) Selection of other Board members; initial appointment of eligible borrowers; service of appointee until election of

successors.

(d) Same; interim election by eligible borrowers of representatives from cooperative-type and commercial-type entities; notice of election; voting; majority, proxies; term.

(e) Same; stockholder election of representatives from cooperative-type and commercial-type entities; voting; majority, proxies.

(f) Service of member after expiration of term; compensation; travel and other expenses.

(g) Bylaws.

(h) Meetings: regular and special.

(1) Annual report; transmittal to Congress. Capitalization.

(a) Federal and borrower subscriptions; Federal limitation; report to President, transmittal to Congress; net collection proceeds.

(b) Stock classification; voting stock; one vote rule.

(c) Class A stock; issuance to Administrator and redemption; cumulative return.

(d) Class B stock; borrowers as holders; div-
idend prohibition; patronage refunds.
(e) Class C stock; borrowers as purchasers;
dividends.

(f) Special fund equivalents.
(g) Patronage refunds from remaining earn-
ings after provision for operating ex-
penses, reserves for losses, payments in
lieu of taxes, and returns on class A
and B stock.

Borrowing power; sale of debentures: issuance, interest rate, terms and conditions, limitation on amount: ratio to paid-in capital and retained earnings, language indicative of status of nonfederal debt or obligation without Federal guarantee; investments in debentures; debentures as security.

within agreed period; net income production of stated percentage of interest on loans: waiver.

(5) Certificate of convenience and necessity required from State regulatory agency or statement of telephone bank's Governor of nonduplication of lines, facilities, or systems.

(6) Definitions: telephone service; telephone lines, facilities, or systems. (7) Sale or disposal of property, rights, or franchises prior to repayment of loan.

(c) Payment schedule; adjustment; loan period.

Telephone bank receipts; availability for obligations and expenditures.

950a.

Conversion of ownership, control, and operation of telephone bank.

(a) Transfer of powers and authority from Administrator to Telephone Bank Board; cessation of Presidential appointees as Board members and reduction in number of Board members; status of telephone bank.

(b) Restrictions of section 948(a) (2) of this title inapplicable to loans upon redemption and retirement of class A stock.

(c) Congressional review.

Liquidation or dissolution of telephone bank. 950b. Borrower net worth.

(f) Disposition of payments on loans.

Except as otherwise provided in sections 931 and 946(a) of this title, all money representing payments of principal and interest on loans made by the Administrator shall be paid to the Secretary of the Treasury in payment of loans made to the Administrator by the Reconstruction Finance Corporation or the Secretary of the Treasury; upon the payment of such loans all moneys representing payments of principal and interest on loans made by the Administrator shall be covered into the Treasury as miscellaneous receipts. (As amended May 7, 1971, Pub L. 92-12, § 3(a), 85 Stat. 37.)

AMENDMENTS

1971-Subsec. (f). Pub. L. 92-12 inserted introductory text "Except as otherwise provided in sections 931 and 946(a) of this title".

EFFECTIVE DATE OF 1971 AMENDMENT Amendment by Pub. L. 92-12 effective May 7, 1971, see section 7 of Pub. L. 92-12, set out as a note under section 921a of this title.

SECTION REFERRED TO IN OTHER SECTIONS This section is referred to in section 946 of this title.

SUBCHAPTER II.-RURAL TELEPHONE
SERVICE

§ 921a. Same; financing of rural telephone program. It is hereby declared to be the policy of the Congress that the growing capital needs of the rural telephone systems require the establishment of a rural telephone bank which will furnish assured and viable sources of supplementary financing with the objective that said bank will become an entirely privately owned, operated, and financed corporation. The Congress further finds that many rural telephone systems require financing under the terms and conditions provided in this subchapter. (Pub. L. 92-12, § 1, May 7, 1971, 85 Stat. 29.)

CODIFICATION

The last sentence of section 1 of Pub. L. 92-12 provided that: "In order to effectuate this policy, the Rural Electrification Act of 1936, as amended (7 U.S.C. 921-924), is amended as hereinafter provided."

Section was not enacted as a part of title II of the Rural Electrification Act of 1936, which comprises subchapter II of this chapter.

EFFECTIVE DATE

Section 7 of Pub. L. 92-12 provided that "This Act [which enacted this section and sections 931, 932, and 941-950b of this title and amended sections 903 (f) and 922 of this title] shall take effect upon enactment [May 7, 1971]."

RESERVATION OF RIGHT TO REPEAL, ALTER, OR AMEND PUB. L. 92-12

Section 6 of Pub. L. 92-12 provided that "The right to repeal, alter, or amend this Act [which enacted this section and sections 931, 932, and 941-950b of this title, amended sections 903 (f) and 922 of this title and sections 856 and 868 (d) of Title 31, and enacted provisions set out as notes under sections 856 and 868 of Title 31] is expressly reserved."

§ 922. Loans for rural telephone service.

From such sums as are from time to time made available by the Congress to the Administrator for such purpose, pursuant to section 903 of this title, the Administrator is authorized and empowered to make loans to persons now providing or who may hereafter provide telephone service in rural areas, to public bodies now providing telephone service in rural areas and to cooperative, nonprofit, limited dividend, or mutual associations. Except as otherwise provided by this subchapter, such loans shall be made under the same terms and conditions as are provided in section 904 of this title, for the purpose of financing the improvement, expansion, construction, acquisition, and operation of telephone lines, facilities, or systems to furnish and improve telephone service in rural areas: Provided, however, That the Administrator, in making such loans, shall give preference to persons providing telephone service in rural areas, to public bodies now providing telephone service in rural areas, and to cooperative, nonprofit, limited dividend, or mutual associations: And provided further, That for a period of one year from and after October 28, 1949, applications for loans received by the Administrator from persons who on October 28, 1949, are engaged in the operation of existing telephone service in rural areas shall be considered and acted upon before action is taken upon any application received from any other person for any loan to finance the furnishing or improvement of telephone service to substantially the same subscribers. The Administrator in making such loans shall, insofar as possible, obtain assurance that the telephone service to be furnished or improved thereby will be made available to the widest practical number of rural users. When it is determined by the Administrator to be necessary in order to furnish or improve telephone service in rural areas, such loans may be made for the improvement, expansion, construction, acquisition, and operation of telephone lines, facilities, or systems without regard to their geographical location. The Administrator is further authorized and empowered to make loans for the purpose of refinancing outstanding indebtedness of persons furnishing telephone service in rural areas: Provided, That such refinancing shall be determined by the Administrator to be necessary in order to furnish and improve telephone service in rural areas: And provided further, That such refinancing shall constitute not more than 40 per centum of any loan made under this subchapter. Loans

under this section shall not be made unless the Administrator finds and certifies that in his judgment the security therefor is reasonably adequate and such loan will be repaid within the time agreed, nor shall such loan be made in any State which now has or may hereafter have a State regulatory body having authority to regulate telephone service and to require certificates of convenience and necessity to the applicant unless such certificate from such agency is first obtained. In a State in which there is no such agency or regulatory body legally authorized to issue such certificates to the applicant, no loan shall be made under this section unless the Administrator shall determine (and set forth his reasons therefor in writing) that no duplication of lines, facilities, or systems, providing reasonably adequate services will result therefrom. (As amended May 7, 1971, Pub. L. 92-12, § 3 (b), 85 Stat. 37.)

AMENDMENTS

1971-Pub. L. 92-12 inserted ", to public bodies now providing telephone service in rural areas" following "areas" in first sentence and following "areas" in the first proviso of second sentence.

EFFECTIVE DATE OF 1971 AMENDMENT Amendment by Pub. L. 92-12 effective May 7, 1971, see section 7 of Pub. L. 92-12, set out as a note under section 921a of this title.

SECTION REFERRED TO IN OTHER SECTIONS This section is referred to in sections 946, 948, 950b of this title.

§ 924. Definition of telephone service and rural area. SECTION REFERRED TO IN OTHER SECTIONS This section is referred to in section 948 of this title.

SUBCHAPTER III.-RURAL TELEPHONE

ACCOUNT [NEW]

EFFECTIVE DATE

Subchapter effective May 7, 1971, see section 7 of Pub. L. 92-12, May 7, 1971, 85 Stat. 37, set out as a note under section 921a of this title.

§ 931. Rural telephone account.

There is hereby established in the Treasury of the United States an account, to be known as the rural telephone account, consisting of so much of the net collection proceeds (as defined in section 946(a) of this title) as may be necessary to provide for investment in the capital stock of the Rural Telephone Bank in accordance with such section 946(a): Provided, That such investment shall be deemed paid in capital of the said bank notwithstanding that funds representing the proceeds from the sale of such stock shall remain in the rural telephone account until required for actual disbursement in cash by the said bank. (May 20, 1936, ch. 432, title III, § 301, as added May 7, 1971, Pub. L. 92-12, § 2, 85 Stat. 29.) SECTION REFERRED TO IN OTHER SECTIONS This section is referred to in section 946 of this title.

§ 932. Deposit of moneys in the Treasury.

Moneys in the rural telephone account shall remain on deposit in the Treasury of the United States until disbursed. (May 20, 1936, ch. 432, title III, § 302, as added May 7, 1971, Pub. L. 92-12, § 2, 85 Stat. 30.)

SUBCHAPTER IV.-RURAL TELEPHONE BANK [NEW]

§ 941. Rural Telephone Bank.

(a) Establishment.

There is hereby established a body corporate to be known as the Rural Telephone Bank (hereinafter called the telephone bank).

(b) General purposes.

The general purposes of the telephone bank shall be to obtain an adequate supply of supplemental funds to the extent feasible from non-Federal sources, to utilize said funds in the making of loans under section 948 of this title, and to conduct its operations to the extent practicable on a self-sustaining basis.

(c) Status; payments in lieu of property taxes.

The telephone bank shall be deemed to be an instrumentality of the United States, and shall, for the purposes of jurisdiction and venue, be deemed a citizen and resident of the District of Columbia. The telephone bank is authorized to make payments to State, territorial, and local governments in lieu of property taxes upon real property and tangible personal property which was subject to State, territorial, and local taxation before acquisition by the telephone bank. Such payment may be in the amounts, at the times, and upon such terms as the telephone bank deems appropriate but the telephone bank shall be guided by the policy of making payments not in excess of the taxes which would have been payable upon such property in the condition in which it was acquired. (May 20, 1936, ch. 432, title IV, § 401, as added May 7, 1971, Pub. L. 92-12, § 2, 85 Stat. 30.)

§ 942. General powers.

To carry out the specific powers herein authorized, the telephone bank shall have power to (a) adopt, alter, and use a corporate seal; (b) sue and be sued in its corporate name; (c) make contracts, leases, and cooperative agreements, or enter into other transactions as may be necessary in the conduct of its business, and on such terms as it may deem appropriate; (d) acquire, in any lawful manner, hold, maintain, use, and dispose of property: Provided, That the telephone bank may only acquire property needed in the conduct of its banking operations or pledged or mortgaged to secure loans made hereunder or in temporary operation or maintenance thereof: Provided further, That any such pledged or mortgaged property so acquired shall be disposed of as promptly as is consistent with prudent liquidation practices, but in no event later than five years after such acquisition; (e) accept gifts or donations of services or of property in aid of any of the purposes herein authorized; (f) appoint such officers, attorneys, agents, and employees, vest them with such powers and duties, fix and pay such compensation to them for their services as the telephone bank may determine; (g) determine the character of and the necessity for its obligations and expenditures, and the manner in which they shall be incurred, allowed, and paid; (h) execute, in accordance with its bylaws, all instruments necessary or appropriate in the exercise of any of its powers; (i) collect or compromise all obligations assigned to or held by it and

all legal or equitable rights accruing to it in connection with the payment of such obligations until such time as such obligations may be referred to the Attorney General for suit or collection; and (j) exercise all such other powers as shall be necessary or incidental to carrying out its functions under this subchapter. (May 20, 1936, ch. 432, title IV, § 402, as added May 7, 1971, Pub. L. 92-12, § 2, 85 Stat. 30.) § 943. Special provisions governing telephone bank as a Federal agency until conversion of ownership, control, and operation.

Until the ownership, control, and operation of the telephone bank is converted as provided in section 950 (a) of this title and not thereafter

(a) Supervision and direction of Secretary of Agriculture; free postage and priority of debts restrictions.

the telephone bank shall be an agency of the United States and shall be subject to the supervision and direction of the Secretary of Agriculture (hereinafter called the Secretary): Provided, however. That the telephone bank shall at no time be entitled to transmission of its mail free of postage, nor shall it have the priority of the United States in the payment of debts out of bankrupt, insolvent, and decedents' estates:

(b) Use of facilities and services of employees of any agency of Department of Agriculture.

in order to perform its responsibilities under this subchapter, the telephone bank may partially or jointly utilize the facilities and the services of employees of the Rural Electrification Administration or of any other agency of the Department of Agriculture, without cost to the telephone bank; (c) Wholly owned Government corporation.

the telephone bank shall be subject to the provisions of the Government Corporation Control Act, as amended, in the same manner and to the same extent as if it were included in the definition of "wholly owned Government corporation" as set forth in section 846 of Title 31.

(d) Appointment and compensation of personnel.

the telephone bank may without regard to the civil service classification laws appoint and fix the compensation of such officers and employees of the telephone bank as it may deem necessary; (e) Tort claims and litigation.

the telephone bank shall be subject to the provisions of sections 517, 519, and 2679 of Title 28. (May 20, 1936, ch. 432, title IV, § 403, as added May 7, 1971, Pub. L. 92-12, § 2, 85 Stat. 31.)

REFERENCES IN TEXT

Civil service classification laws, referred to in subsec. (d), are classified to chapter 51 of Title 5, Government Organization and Employees.

§ 944. Governor of telephone bank; functions, powers, and duties.

Subject to the provisions of section 950 of this title, the Administrator of the Rural Electrification Administration shall serve as the chief executive officer of the telephone bank (herein called the Governor of the telephone bank). Except as to matters specifically reserved to the Telephone Bank Board in this subchapter, the Governor of the telephone

bank shall exercise and perform all functions, powers, and duties of the telephone bank. (May 20, 1936, ch. 432, title IV, § 404, as added May 7, 1971, Pub. L. 92-12, § 2, 85 Stat. 31.)

§ 945. Telephone Bank Board.

(a) Management of telephone bank; membership.

The management of the telephone bank, within the limitations prescribed by law, shall be vested in a board of directors (herein called the Telephone Bank Board) consisting of thirteen members.

(b) Federal agency and general public representation; additional compensation restriction.

The Administrator of the Rural Electrification Administration and the Governor of the Farm Credit Administration shall be members of the Telephone Bank Board. Five other members of the Telephone Bank Board shall be designated by the President to serve at his pleasure, three of whom shall be officers or employees of the Department of Agriculture but not officers or employees of the Rural Electrification Administration, and two of whom shall be from the general public and not officers or employees of the Federal Government. The Administrator and other officers and employees of the Department of Agriculture and the Governor of the Farm Credit Administration shall serve as members without additional compensation.

(c) Selection of other Board members; initial appointment of eligible borrowers; service of appointees until election of successors.

As soon as practicable after May 7, 1971, the President of the Unted States shall appoint six additional members of the initial Telephone Bank Board to be selected from the directors, managers, and employees of any entities eligible to borrow from the telephone bank and of organizations controlled by such entities, with due regard to fair representation of the rural telephone systems of the Nation. The six members thus appointed shall serve until their successors shall have been duly elected in accordance with subsection (d) of this section.

(d) Same; interim election by eligible borrowers of representatives from cooperative-type and commercial-type entities; notice of election; voting: majority, proxies; term.

Within twelve months following the appointment of the six members of the initial Board as provided in subsection (c) of this section, the Governor of the telephone bank shall call a meeting of all entities then eligible to borrow from the telephone bank and organizations controlled by such entities for the purpose of electing members of the Telephone Bank Board. Each such entity and organization shall be entitled to notice of and shall have one noncumulative vote at said meeting. Six members of the Telephone Bank Board shall be elected for a two-year term, three from among the directors, managers, and employees of cooperative-type entities eligible to vote and organizations controlled by such entities, and three from among the managers, directors, and employees of commercial-type entities eligible to vote and organizations controlled by such entities. These six members shall be elected by majority vote of the entities and organizations eligible to vote and such entities and organizations may vote by proxy.

(e) Same; stockholder election of representatives from cooperative-type and commercial-type entities; voting: majority, proxies.

Thereafter, in accordance with the bylaws of the telephone bank, the six members of the Telephone Bank Board shall be elected by holders of class B and class C stock, three from among the directors, managers, and employees of cooperative-type entities and organizations controlled by such entities holding class B or class C stock, and three from among the directors, managers, and employees of commercial-type entities and organizations controlled by such entities holding class B or class C stock. These six members shall be elected by majority vote of the entities and organizations eligible to vote and such entities and organizations may vote by proxy. (f) Service of member after expiration of term; compensation; travel and other expenses.

Any Telephone Bank Board member may continue to serve after the expiration of the term for which he is elected until his successor has been elected and has qualified. Telephone Bank Board members designated from the general public, pursuant to subsection (b) of this section, or appointed or elected pursuant to subsections (c), (d), and (e) of this section, shall receive $100 for each day or part thereof, not to exceed one hundred days per year for the first three years after May 7, 1971, and not to exceed fifty days per year thereafter, spent in the performance of official duties, and shall be reimbursed for travel and other expenses in such manner and subject to such limitations as the Telephone Bank Board may prescribe.

(g) Bylaws.

The Telephone Bank Board shall prescribe bylaws, not inconsistent with law, regulating the manner in which the telephone bank's business shall be conducted, its directors and officers elected, its stock issued, held, and disposed of, its property transferred, its bylaws amended, and the powers and privileges granted to it by law exercised and enjoyed.

(h) Meetings: regular and special.

The Telephone Bank Board shall meet at such times and places as it may fix and determine, but shall hold at least four regularly scheduled meetings a year, and special meetings may be held on call in the manner specified in the bylaws of the telephone bank.

(i) Annual report; transmittal to Congress.

The Telephone Bank Board shall make an annual report to the Secretary for transmittal to the Congress on the administration of this subchapter and any other matters relating to the effectuation of the policies of this subchapter, including recommendations for legislation. (May 20, 1936, ch. 432, title IV, § 405, as added May 7, 1971, Pub. L. 92–12, § 2, 85 Stat. 32.)

SECTION REFERRED TO IN OTHER SECTIONS This section is referred to in section 950 of this title. § 946. Capitalization.

(a) Federal and borrower subscriptions; Federal limitation; report to President, transmittal to Congress; net collection proceeds.

The telephone bank's capital shall consist of capital subscribed by the United States, by borrowers