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Additional information submitted to the committee-Continued
Basin Electric Power Cooperative, statement position. --
Cash flow growth and its impact on financial planning for electric
and gas companies, an article from Investment Dealers' Digest---

Cass County Electric Cooperative, Inc., Kindred, N. Dak., resolution

of....

Cumulative REA loans to commercial power companies as of June 1,

1966__

Extracts from congressional committees' reports relating to REA..

Jackson Purchase Electric Cooperative Corp., Paducah, Ky., resolu-

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"Money Plans To Be Put Before Rural Electrics," article from
People's Voice, August 27, 1965--

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"Montana Co-ops Oppose NRECA Financing Proposal," article from
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Resolution of the board of directors of the Umatilla Electric Coopera-
tive Association_.

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Resolution of the Jackson Purchase Rural Electric Cooperative Corp.,
Paducah, Ky..

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"Rural Electric Financing Will Be Hot Issue at Regional Meet,"
article from People's Voice, September 3, 1965...

Rural electric people serve their neighbors and like it that way..

Section-by-section analysis of bill to provide additional sources of
financing for the rural electrification and rural telephone programs.

Section-by-section analysis of H.R. 14837.

Short summary of the Administration's proposal to provide addi-

tional sources of financing for the rural electrification and rural

telephone programs_.

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REA LEGISLATION

TUESDAY, MAY 31, 1966

HOUSE OF REPRESENTATIVES,
COMMITTEE ON AGRICULTURE,
Washington, D.C.

The committee met, pursuant to notice, at 10:20 a.m., in room 1301 Longworth House Office Building, Washington, D.C., the Honorable Harold D. Cooley (chairman) presiding.

Present: Representatives Cooley (presiding), Poage, Gathings, Abernethy, Abbitt, Jones of Missouri, Hagen of California, Stubblefield, Purcell, Olson of Minnesota, Matsunaga, O'Neal of Georgia, Stalbaum, de la Garza, Vigorito, Redlin, Bandstra, Greigg, Callan, Belcher, Teague of California, Quie, Harvey of Indiana, Findley, Dole, and Burton of Utah.

Also present: Representatives Reifel and Battin; Martha Hannah, staff; Hyde H. Murray, assistant clerk; Francis LeMay, consultant; and Fowler C. West, staff.

The CHAIRMAN. The committee will be in order please.

We are delighted to have the distinguished Secretary of Agriculture with us this morning, the first witness on these REA bills.

I would like to explain to those present that following Memorial Day quite a few members are home. Some of them will be delayed in returning, so some of them are not in town but I am sure that others will be here later. I am sure that all of them will read your statement, Mr. Secretary.

We will be glad to have you have anyone else sit with you at the table that you desire. I see that you have some distinguished colleagues with you. We will be glad to hear from you now. (H.R. 14837, introduced by Chairman Cooley, follows:)

[H.R. 14837, 89th Cong., 2d sess.]

A BILL To amend the Rural Electrification Act of 1936, as amended, to provide additional sources of financing for the rural electrification and rural telephone programs, and for other purposes

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That it is hereby declared to be the policy of the Congress that the growing capital needs of the rural electric and telephone systems require the establishment of a Federal Bank for Rural Electric Systems and a Federal Bank for Rural Telephone Systems which will furnish assured and viable sources of supplementary financing, with the objective that said banks will become entirely privately owned, operated, and financed corporations. In order to effectuate this policy, the Rural Electrification Act of 1936, as amended (7 U.S.C. 901-924), is amended as hereinafter provided. SEC. 2. The Rural Electrification Act of 1936, as amended, is amended by adding the following four new titles:

1

"TITLE III

"SEC. 301. RURAL ELECTRIFICATION ACCOUNT.-There is hereby established in the Treasury of the United States an account, to be known as the rural electrification account, consisting of:

"(1) all notes, bonds, obligations, and property delivered or assigned to the Administrator pursuant to loans heretofore or hereafter made under sections 4 and 5 of this Act, including notes, bonds, obligations, and property held in trust by him on behalf of the Secretary of the Treasury, as of the effective date of this title, which shall be transferred to and be assets of the rural electrification account;

"(2) undisbursed balances of electrification loans made under sections 4 and 5, which, as of the effective date of this title, shall be transferred to and be assets of the rural electrification account;

"(3) all collections of principal and interest received on and after July 1, 1965, on notes, bonds, judgments, or other obligations made or held under title I of this Act, which shall be paid into and be assets of the rural electrification account;

"(4) all appropriations for electrification loans made under the authority of section 3 of this Act and funds obtained in accordance therewith and the unexpended balances of any funds available on the effective date of this title for electrification loans under sections 4 and 5 of this Act, including any funds made available for electrification loans under the item 'Rural Electrification Administration,' in the Department of Agriculture Appropriation Acts current on the date of enactment of this title, and said appropriations and funds shall be assets of the rural electrification accounts; and

"(5) shares of the capital stock of the Federal Bank for Rural Electric Systems acquired by investment of the rural electrification account pursuant to section 302(b)(3) of this title, and moneys received from said bank upon retirement of said shares of stock in accordance with the provisions of title IV of this Act, which said shares and moneys shall be assets of the rural electrification account.

"SEC. 302. LIABILITIES AND USES OF ACCOUNT.-(a) The notes of the Administrator issued to the Secretary of the Treasury to obtain funds for loans under sections 4 and 5 of this Act, and all other liabilities against the appropriations or assets in the rural electrification account in connection with electrification loan operations shall be liabilities of the rural electrification account, and all other obligations against such appropriations or assets arising out of electrification loan operations shall be obligations of the rural electrification account.

"(b) The assets of the rural electrification account shall be available for the following purposes:

"(1) loans under sections 4 and 5 of this Act and for advances in connection therewith, except that no such loans shall be made in any year in excess of the amounts previously authorized therefor in appropriation Acts for such year or available pursuant to section 3 of this Act; the amounts so authorized for loans and advances shall remain available until expended;

"(2) payment of interest as it accrues on loans to the Administrator from the Secretary of the Treasury for electrification purposes pursuant to section 3(a) of this Act;

"(3) investment in the capital stock of the Federal Bank for Rural Electric Systems in accordance with section 405 (a) of this Act: Provided, That such investment shall be deemed paid in capital of the said bank notwithstanding that funds representing the proceeds from the purchase of such stock shall remain in the rural electrification account until required for actual disbursement in cash by the said bank; and

"(4) payment of principal when due on loans to the Administrator from the Secretary of the Treasury for electrification purposes pursuant to section 3(a) of this Act.

"SEC. 303. DEPOSIT OF ACCOUNT MONEYS.-Moneys in the rural electrification account shall remain on deposit in the Treasury of the United States until disbursed.

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