from the telephone bank, by corporations and public bodies eligible to become borrowers from the telephone bank, and by organizations controlled by such borrowers, corporations, and public bodies. Beginning with the fiscal year 1971 and for each fiscal year thereafter, the United States shall furnish capital for the purchase of class A stock and there are hereby authorized to be appropriated from net collection proceeds in the rural telephone account created under subchapter III of this chapter such amounts, not to exceed $30,000,000 annually, for such purchase until such class A stock shall equal $300,000,000: Provided, That on or before July 1, 1975, the Secretary shall make a report to the President for transmittal to the Congress on the status of capitalization of the telephone bank by the United States with appropriate recommendations. As used in this section and section 931 of this title, the term "net collection proceeds" shall be deemed to mean payments from and after July 1, 1969, of principal and interest on loans heretofore or hereafter made under section 922 of this title, less an amount representing interest payable to the Secretary of the Treasury on loans to the Administrator for telephone purposes pursuant to section 903(a) of this title.

(b) Stock classification; voting stock; one vote rule. The capital stock of the telephone bank shall consist of three classes, class A, class B, and class C, the rights, powers, privileges, and preferences of the separate classes to be as specified, not inconsistent with law, in the bylaws of the telephone bank. Class B and class C stock shall be voting stock, but no holder of said stock shall be entitled to more than one vote, nor shall class B and class C stockholders, regardless of their number, which are owned or controlled by the same person, group of persons, firm, association, or corporation, be entitled in any event to more than one vote.

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

Class A stock shall be issued only to the Administrator of the Rural Electrification Administration on behalf of the United States in exchange for capital furnished to the telephone bank pursuant to subsection (a) of this section, and such class A stock shall be redeemed and retired by the telephone bank as soon as practicable after June 30, 1985, but not to the extent that the Telephone Bank Board determines that such retirement will impair the operations of the telephone bank: Provided, That the minimum amount of class A stock that shall be retired each year after said date and after the amount of class A and class B stock issued totals $400,000,000, shall equal the amount of class B stock sold by the telephone bank during such year. Class A stock shall be entitled to a return, payable from income, at the rate of 2 per centum per annum on the amounts of said class A stock actually paid into the telephone bank. Such return shall be cumulative and shall be payable annually into miscellaneous receipts of the Treasury. (d) Class B stock; borrowers as holders; dividend prohibition; patronage refunds.

Class B stock shall be held only by recipients of loans under section 948 of this title. Borrowers receiving loan funds pursuant to section 948(a) (1) or

(2) of this title shall be required to invest in class B stock 5 per centum of the amount of loan funds so provided. No dividends shall be payable on class B stock. All holders of class B shall be entitled to patronage refunds in class B stock under terms and conditions to specified in the bylaws of the telephone bank.

(e) Class C stock; borrowers as purchasers; dividends.

Class C stock shall be available for purchase and shall be held only by borrowers, or by corporations and public bodies eligible to borrow under section 948 of this title, or by organizations controlled by such borrowers, corporations and public bodies, and shall be entitled to dividends in the manner specified in the bylaws of the telephone bank. Such dividends shall be payable only from income and, until all class A stock is retired, shall not exceed the current average rate payable on its telephone debentures. (f) Special fund equivalents.

If a firm, association, corporation, or public body is not authorized under the laws of the jurisdiction in which it is organized to acquire stock of the telephone bank, the telephone bank shall, in lieu thereof, permit such organization to pay into a special fund of the telephone bank a sum equivalent to the amount of stock to be purchased. Each reference in this subchapter to capital stock, or to class B, or class C stock, shall include also the special fund equivalents of such stock, and to the extent permitted under the laws of the jurisdiction in which such organization is organized, a holder of special fund equivalents of class B, or class C stock, shall have the same rights and status as a holder of class B or class C stock, respectively. The rights and obligations of the telephone bank in respect of such special fund equivalent shall be identical to its rights and obligations in respect of class B or class C stock, respectively. (g) Patronage refunds from remaining earnings after provision for operating expenses, reserves for losses, payments in lieu of taxes, and returns on class A and B stock.

After payment of all operating expenses of the telephone bank, including interest on its telephone debentures, setting aside appropriate funds for reserves for losses, and making payments in lieu of taxes, and returns on class A stock as provided in subsection (c) of this section, and on class C stock, the Telephone Bank Board shall annually set aside the remaining earnings of the telephone bank for patronage refunds in accordance with the bylaws of the telephone bank. (May 20, 1936, ch. 432, title IV, § 406, as added May 7, 1971, Pub. L. 92–12, § 2, 85 Stat. 33.)

SECTION REFERRED TO IN OTHER SECTIONS This section is referred to in sections 931, 948, 950 of this title.

§ 947. Borrowing power; sale of debtentures; 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. The telephone bank is authorized to obtain funds through the public or private sale of its bonds, debentures, notes, and other evidences of indebtedness

(herein collectively called telephone debentures). Telephone debentures shall be issued at such times, bear interest at such rates, and contain such other terms and conditions as the Telephone Bank Board shall determine: Provided, however, That the amount of the telephone debentures which may be outstanding at any one time pursuant to this section shall not exceed eight times the paid-in capital and retained earnings of the telephone bank. The telephone bank shall insert in all its telephone debentures appropriate language indicating that such telephone debentures, together with interest thereon, are not guaranteed by the United States and do not constitute a debt or obligation of the United States or of any agency or instrumentality thereof other than the telephone bank. Telephone débentures shall not be exempt, either as to principal or interest, from any taxation now or hereafter imposed by the United States, by any territory, dependency, or possession thereof, or by any State or local taxing authority. Telephone debentures shall be lawful investments and may be accepted as security for all fiduciary, trust, and public funds, the investment or deposit of which shall be under the authority and control of the United States or any officer or officers thereof. (May 20, 1936, ch. 432, title IV, § 407, as added May 7, 1971, Pub. L. 92-12, § 2, 85 Stat. 34.)

§ 948. Lending power.

(a) Loans for prescribed purposes; requisite conditions.

The Governor of the telephone bank is authorized on behalf of the telephone bank to make loans, in conformance with policies approved by the Telephone Bank Board, to corporations and public bodies which have received a loan or loan commitment pursuant to section 922 of this title, (1) for the same purposes and under the same limitations for which loans may be made under section 922 of this title, (2) for the purposes of financing, or refinancing, the construction, improvement, expansion, acquisition, and operation of telephone lines, facilities, or systems, in order to improve the efficiency, effectiveness, or financial stability of borrowers financed under section 922 of this title and this section, and (3) for the purchase of class B stock required to be purchased under section 946 (d) of this title but not for the purchase of class C stock, subject, as to the purposes set forth in (2) hereof, to the following provisos: That in the case of any such loan for the acquisition of telephone lines, facilities, or systems, the acquisition shall be approved by the Secretary, the location and character thereof shall be such as to improve the efficiency, effectiveness, or financial stability of the telephone system of the borrower, and in respect of exchange facilities for local services, the size of each acquisition shall not be greater than the borrower's existing system at the time it receives its first loan from the telephone bank, taking into account the number of subscribers served, miles of line, and plant investment.

(b) Terms and conditions of loans; restrictions on loans.

Loans under this section shall be on such terms and conditions as the Governor of the telephone bank shall determine, subject, however, to the following restrictions:

(1) Amortization period.

All loans made under this section shall be fully amortized over a period not to exceed fifty years.

(2) Preference in loans; election of loans for telephone system with certain subscriber density per mile.

Funds to be loaned under this chapter to any borrower shall be loaned under this section in preference to section 922 of this title if the borrower is eligible for such a loan and funds are available therefor. Notwithstanding the foregoing or any other provision of law, all loans made pursuant to this chapter for facilities for telephone systems with an average subscriber density of three or fewer per mile shall be made under section 922 of this title; but this provision shall not preclude the making of such loans from the telephone bank at the election of the borrower.

(3) Interest rate.

Loans under this section shall, to the extent practicable, bear interest at the highest rate which meets the requirements set forth in paragraph (4), consistent with the borrower's ability to pay such interest rate and with achievement of the objectives of this chapter; but not less than 4 per centum per annum.

(4) Adequacy of security; repayment within agreed period; net income production of stated percentage of interest on loans: waiver. Loans shall not be made under this section unless the Governor of the telephone bank finds and certifies that in his judgment (i) the security therefor is reasonably adequate and such loan will be repaid within the time agreed, and (ii) the borrower has the capability of producing net income or margins before interest at least equal to 150 per centum of the interest requirements on all of its outstanding and proposed loans, or such higher per centum as may be fixed from time to time by the Telephone Bank Board in order to allocate available funds equitably among borrowers or to improve the marketability of the telephone debentures: Provided, however, That the Governor of the telephone bank may waive the requirement of (ii) above in any case if he shall determine (and set forth his reasons therefor in writing) that this requirement would prevent emergency restoration of the borrower's system or otherwise result in severe hardship to the borrower.

(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.

No loan shall 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 Governor of the telephone bank 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.

(6) Definitions: telephone service; telephone lines, facilities, or systems.

As used in this section, the term telephone service shall have the meaning prescribed for this term in section 924 (a) of this title, and the term telephone lines, facilities, or systems shall mean lines, facilities, or systems used in the rendition of such telephone service.

(7) Sale or disposal of property, rights, or franchises prior to repayment of loan.

No borrower of funds under this section shall, without aproval of the Governor of the telephone bank under rules established by the Telephone Bank Board, sell or dispose of its property, rights, or franchises, acquired under the provisions of this chapter, until any loan obtained from the telephone bank, including all interest and charges, shall have been repaid.

(c) Payment schedule; adjustment; loan period.

The Governor of the telephone bank is authorized under rules established by the Telephone Bank Board to adjust, on an amortized basis, the schedule of payments of interest or principal of loans made under this section upon his determination that with such readjustment there is reasonable assurance of repayment: Provided, however, That no adjustment shall extend the period of such loans beyond fifty years. (May 20, 1936, ch. 432, title IV, § 408, as added May 7, 1971, Pub. L. 92-12, § 2, 85 Stat. 35.)

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 941, 946, 950, 950b of this title.

§ 949. Telephone bank receipts; availability for obligations and expenditures.

Any receipts from the activities of the telephone bank shall be available for all obligations and expenditures of the telephone bank. (May 20, 1936, ch. 432, title IV, § 409, as added May 7, 1971, Pub. L. 92-12, § 2, 85 Stat. 36.)

§ 950. 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.

Whenever fifty-one per centum of the maximum amount of class A stock issued to the United States and outstanding at any time after June 30, 1985, has been fully redeemed and retired pursuant to section 946(c) of this title

(1) the powers and authority of the Governor of the telephone bank granted to the Administrator of the Rural Electrification Administration by this subchapter shall vest in the Telephone Bank Board, and may be exercised and performed through the Governor of the telephone bank, to be selected by the Telephone Bank Board, and through such other employees as the Telephone Bank Board shall designate;

(2) the five members of the Telephone Bank Board designated by the President pursuant to section 945 (b) of this title shall cease to be mem

bers, and the number of Board members shall be accordingly reduced to eight unless other provision is thereafter made in the bylaws of the telephone bank;

(3) the telephone bank shall cease to be an agency of the United States, but shall continue in existence in perpetuity as an instrumentality of the United States and as a banking corporation with all of the powers and limitations conferred or imposed by this subchapter except such as shall have lapsed pursuant to the provisions of this subchapter.

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

When all class A stock has been fully redeemed and retired, loans made by the telephone bank shall not continue to be subject to the restrictions prescribed in the provisos to section 948 (a) (2) of this title.

(c) Congressional review.

Congress reserves the right to review the continued operations of the telephone bank after all class A stock has been fully redeemed and retired. (May 20, 1936, ch. 432, title IV, § 410, as added May 7, 1971, Pub. L. 92-12, § 2, 85 Stat. 36.)

SECTION REFERRED TO IN OTHER SECTIONS This section is referred to in sections 943, 944, of this title.

§ 950a. Liquidation or dissolution of telephone bank. In the case of liquidation or dissolution of the telephone bank, after the payment or retirement, as the case may be, first, of all liabilities; second, of all class A stock at par; third, of all class B stock at par; fourth, of all class C stock at par; then any surpluses and contingency reserves existing on the effective date of liquidation or dissolution of the telephone bank shall be paid to the holders of class A and class B stock issued and outstanding before the effective date of such liquidation or dissolution, pro rata. (May 20, 1936, ch. 432, title IV, § 411, as added May 7, 1971, Pub. L. 92-12, § 2, 85 Stat. 37.)

§ 950b. Borrower net worth.

Except as provided in subsection (b) (2) of section 948 of this title, notwithstanding any other provision of law, a loan shall not be made under section 922 of this title to any borrower which during the immediately preceding year had a net worth in excess of 20 per centum of its assets unless the Administrator finds that the borrower cannot obtain such a loan from the telephone bank or from other reliable sources at reasonable rates of interest and terms and conditions. (May 20, 1936, ch. 432, title IV, § 412, as added May 7, 1971, Pub. L. 92-12, § 2, 85 Stat. 37.)

Chapter 33.-FARM TENANCY § 1011. Powers of Secretary of Agriculture.

DELEGATION OF FUNCTIONS

Authority of the President under subsec. (c) of this section to transfer to Federal, State, or Territorial agencies lands acquired by the Secretary of Agriculture under subsec. (a) of this section delegated to the Administrator of general services, see section 1(14) of Ex. Ord. No. 11609, July 22, 1971, 36 F.R. 13747, set out as a note under section 301 of Title 3, The President.

(j) The term "quota", depending upon the context, means (1) that quantity of sugar or liquid sugar which may be brought or imported into the continental United States, for consumption therein, during any calendar year, from Hawaii, Puerto Rico, or a foreign country or group of foreign countries; (2) that quantity of sugar or liquid sugar produced from sugar beets or sugarcane grown in the continental United States which, during any calendar year, may be shipped, transported, or marketed in interstate commerce, or in competition with sugar or liquid sugar shipped, transported, or marketed in interstate or foreign commerce; or (3) that quantity of sugar or liquid sugar which may be marketed in Hawaii or in Puerto Rico, for consumption therein, during any calendar year.

(0) The term "continental United States" means the States (except Hawaii and the District of Columbia.

(p) The term "mainland cane sugar area" means the States of Florida and Louisiana. (As amended Oct. 14, 1971, Pub. L. 92-138, § 2, 85 Stat. 379.)

AMENDMENTS

1971-Subsec. (1). Pub. L. 92-138, § 2(1). struck out "the Virgin Islands," following "Puerto Rico,". Subsec. (o). Pub. L. 92-138, § 2(2), substituted "the States (except Hawaii)" for "the 49 States". Subsec. (p). Pub. L. 92–138, § 2(3), added subsec. (p).

EFFECTIVE DATE OF 1971 AMENDMENT

Section 19 of Pub. L. 92-138 provided that: "The provisions of this Act (amending sections 1101, 1115, 1116 (a), (b), 1117, 1119, 1121, 1122, 1132, 1133, 1137, 1153, 1154, and 1158 of this title and section 4501 (b) of Title 26] shall become effective on January 1, 1972, except that the amendments made by sections 3, 4, 5, and 7(2) of this Act [amending sections 1111, 1112, 1114 and adding section 1116(d) of this title] shall become effective on the date of enactment of this Act [Oct. 14, 1971] for purposes of actions relating to 1972 and subsequent years."

SHORT TITLE

Section 1 of Pub. L. 92-138 provided: "That this Act [which amended sections 1101, 1111, 1112, 1114-1117, 1119, 1121, 1122, 1132, 1133, 1137, 1153, 1154, and 1158 of this title and section 4501 (b) of Title 26 and enacted and amended provisions set out as notes under this section] may be cited as the 'Sugar Act Amendments of 1971'."

TERMINATION DATE

Section 412 of act Aug. 8, 1947, as amended by act Sept. 1, 1951, ch. 379, § 5, 65 Stat. 320, renumbered and amended by act May 29, 1956, ch. 342, §§ 17, 18, 70 Stat. 221; July 6, 1960, Pub. L. 86-592, § 1, 74 Stat. 330; Mar. 31, 1961, Pub. L. 87-15, § 1, 75 Stat. 40. July 13, 1962, Pub. L. 87-535, § 16, 76 Stat. 166; Nov. 8, 1965, Pub. L. 89-331, § 12(5), 79 Stat. 1280; Oct. 14, 1971, Pub. L. 92-138, § 18(a), 85 Stat. 390, provided that:

"The powers vested in the Secretary under this Act [chapter] shall terminate on December 31, 1974, or on March 31 of the year of termination of the tax imposed by section 4501 (a) of the Internal Revenue Code of 1954 [subchapter III of this chapter] whichever is the earlier date, except that the Secretary shall have power to make payments under title III [subchapter III of this chapter]—

"(1) under programs applicable to the crop year 1974 and previous crop years, if the powers vested in the Secretary otherwise terminate on December 31, 1974, or

"(2) under programs applicable to the crop years preceding the calendar year in which the tax imposed under section 4501 (a) of the Internal Revenue Code of 1954 [section 4501(a) of Title 26] terminates, if the powers vested in the Secretary otherwise terminate before December 31, 1974."

§ 1111. Annual estimate of consumption in continental United States; price objective; "parity index" and "wholesale price index" defined.

(a) The Secretary shall determine for each calendar year, beginning with 1972, the amount of sugar needed to meet the requirements of consumers in the continental United States and to attain the price objective set forth in subsection (b) of this section. Such determination shall be made during October of the year preceding the calendar year for which the determination is being made and at such other times thereafter as may be required to attain such price objective.

(b) The price objective referred to in subsection (a) of this section is a price for raw sugar which would maintain the same ratio between such price and the average of the parity index (1967-100) and the wholesale price index (1967-100) as the ratio that existed between (1) the simple average of the monthly price objective calculated for the period September 1, 1970, through August 31, 1971, under this section as in effect immediately prior to the date of enactment of the Sugar Act Amendments of 1971, and (2) the simple average of such two indexes for the same period.

(c) For purposes of subsection (b) of this section

(1) The term "parity index (1967-100)" means the Index of Prices Paid by Farmers for Commodities and Services, including Interest, Taxes, and Farm Wage Rates, as published monthly by the Department of Agriculture.

(2) The term "wholesale price index" means such index as determined monthly by the Department of Labor.

(As amended Oct. 14, 1971, Pub. L. 92-138, § 3, 85 Stat. 379.)

REFERENCE IN TEXT

Date of enactment of the Sugar Act Amendments of 1971, referred to in subsec. (b) (1), refers to enactment of Pub. L. 92-138 on Oct. 14, 1971.

AMENDMENTS

1971-Pub. L. 92-138, in revising provisions for determination of annual estimate of sugar consumption in continental United States, incorporated in subsec. (a) existing provisions of first sentence, substituting calendar year 1972 for calendar year 1948 as initial year for making the determination, stating as a purpose the attainment of the subsec. (b) price objective, and substituting provision for making such determination during October of year preceding calendar year for which determination is being made and at other times thereafter to attain the price objective for prior determinations made during last three months of each year for succeeding calendar year (first ten days when made for calendar year 1948) and other times to meet needs of consumers in continental United States; substituted subsec. (b) definition of price objective as a price for raw sugar which would maintain same ratio between such price and average of parity index (1967-100) and wholesale price index (1967-100) as ratio that existed between simple average of monthly price objectives for period Sept. 1, 1970, through Aug. 31, 1971, under provisions of this section as in effect prior to Oct. 14, 1971, and simple average of such two indexes for same period for former second sentence provisions for making the determination using as a

basis quantity of direct-consumption sugar distributed for consumption and allowances for deficiency or surplus in sugar inventories, changes in consumption because of population and demand changes, and protection of consumer and producer welfare and relationship between price for raw sugar resulting from such determination and parity index as compared with relationship between average price of raw sugar during three-year period 1957, 1958, and 1959, and average of parity indexes during such period; substituted subsec. (c) (1) definition of "parity index (1967-100)" for former third sentence defining the term "parity index" as the index determined under section 1301 of this title, as published monthly by the Department of Agriculture; and added subsec. (c) (2).

EFFECTIVE DATE OF 1971 AMENDMENT

Amendment by Pub. L. 92-138 effective Oct. 14, 1971, for purposes of actions relating to 1972 and subsequent years, see section 19 of Pub. L. 92-138, set out as a note under section 1101 of this title.

§ 1112. Establishment or revision of quotas. (a) Domestic sugar-producing areas.

(1) For domestic sugar-producing areas, by apportioning among such areas 6,910,000 short tons, raw value, as follows:

(2) To or from the sum of 4,945,000 short tons, raw value, of the quotas for the domestic beet sugar and mainland cane sugar areas there shall be added or deducted, as the case may be, an amount equal to 65 per centum of the amount by which the Secretary's determination of requirements of consumers in the continental United States pursuant to section 1111 of this title for the calendar year is greater than or less than 11,200,000 short tons, raw value. Such amount shall be apportioned between the domestic beet sugar area and the mainland cane sugar area on the basis of the quotas for such areas established under paragraph (1) of this subsection in effect immediately prior to the date of enactment of the Sugar Act Amendments of 1971.

(3) Notwithstanding the foregoing provisions of this subsection, whenever the production of sugar in Hawaii or Puerto Rico in any year results in there being available for marketing in the continental United States in any year sugar in excess of the quota for such area for such year established under paragraph (1) of this subsection, the quota for the immediately following year established for such area under such paragraph shall be increased to the extent of such excess production, except that in no event shall the quota for Hawaii or Puerto Rico, as so increased, exceed the quota which would have been established for such area at the same level needed to meet the requirements of consumers under the provisions of this subsection in effect immediately prior to the date of enactment of the Sugar Act Amendments of 1962. Whenever sugar produced in Hawaii or Puerto Rico in any year is prevented from being marketed or brought into the continental United States in that year for reasons beyond the control of the producer or shipper of such sugar, the quota for the immediately following year established for such area under paragraph (1) of this subsection and the preceding sentence shall,

within the limitations of the preceding sentence and section 1117 of this title, be increased by an amount equal to (A) the amount of sugar so prevented from being marketed or brought into the continental United States, reduced by (B) the amount of such sugar which has been sold to any other nation instead of being held for marketing in the continental United States.

(4) Beginning with 1973 or as soon thereafter as the quota or quotas can be used, there shall be established for any new continental cane sugar producing area or areas a quota or quotas of not to exceed a total for all such areas of 100,000 short tons, raw value, subject to the requirements of section 1132 of this title.

(b) Republic of the Philippines.

For the Republic of the Philippines, in the amount of 1,126,020 short tons, raw value. (c) Foreign countries.

(1) For foreign countries other than the Republic of the Philippines, an amount of sugar, raw value, equal to the amount determined pursuant to section 1111 of this title less the sum of the quotas established pursuant to subsections (a) and (b) of this section.

(2) Repealed. Pub. L. 92-138, § 4(c), Oct. 14, 1971, 85 Stat. 381.

(3) For individual foreign countries other than the Republic of the Philippines and Ireland, by prorating the amount of sugar determined under paragraph (1) of this subsection, less the amounts required to establish a quota as provided in paragraph (4) of this subsection for Ireland, among foreign countries on the following basis: