Legislation Enables Rural Electric Coops, Telecom Providers to Refinance RUS Debt, Support Stronger COVID-19 Recovery
WASHINGTON, D.C. [03/26/21]—U.S. Senators Tina Smith (D-Minn.) and John Hoeven (R-N.D.) reintroduced a bipartisan bill to help stabilize the finances of the nation’s rural electric cooperatives and rural broadband providers. The Flexible Financing for Rural America Act would make it possible for rural electric cooperatives and telecommunications providers to refinance their Rural Utilities Service (RUS) debt at lower interest rates. A House companion was introduced by Reps. Tom O’Halleran (D-Ariz.) and Vicky Hartzler (R-Mo.).
Sens. Smith and Hoeven said that this could help rural cooperatives and businesses better manage cash-flow, invest in rural communities, and pass savings on to customers.
“Rural electric cooperatives are critical to economic success in small towns and rural areas across Minnesota,” said Sen. Smith. “We ought to support them so they can continue to boost our infrastructure, all while supporting jobs and improving Minnesotans' quality of life. I successfully pushed to make rural electric cooperatives eligible for the Paycheck Protection Program during the pandemic. And my bipartisan RURAL Act was signed into law to fix a mistake in the 2017 tax law that put the tax-exempt status of cooperatives at risk if they received government grants to expand broadband or recover from a disaster. Now, I'm focused on making sure electric cooperatives are able to refinance their Rural Utilities Service debt at lower interest rates.”
“Our legislation provides the opportunity for electric and telecommunication cooperatives to refinance their Rural Utilities Service debt at current market rates without penalty,” said Sen. Hoeven. “This is about reinvesting in our rural communities, passing savings on to consumers and further supporting efforts to continue overcoming challenges from COVID-19. Families and businesses living and working in rural communities across North Dakota and the country depend on these cooperatives and the critical services they provide.”
“It’s crucial that we address the needs of our long-overlooked rural communities, who too often encounter barriers in accessing quality, affordable utilities,” said Rep. O’Halleran. “Our Flexible Financing for Rural America Act will extend a lifeline to hundreds of electric cooperatives serving rural families and businesses.”
“In our ever-growing connected society, the need to expand rural broadband in Missouri and across America continues to be one of my top priorities in Congress,” said Rep. Hartzler. “Nearly 30 percent of rural Missourians still lack vital access to highspeed internet. The bipartisan Flexible Financing for Rural America Act will jumpstart these communities, allowing them the same essential telecommunications resources urban areas routinely enjoy in our digital age. I am proud to see strong support for our legislation and its potential benefits for Fourth District families, schools, farms, healthcare providers, and businesses.”
“Rural electric cooperatives provide vital electricity service across Minnesota,” said Darrick Moe, CEO of the Minnesota Rural Electric Association. “They loan funds from the federal Rural Utilities Service (RUS) to make that happen, and pay those loans back with interest. Typically loans can be adjusted when interest rates fall, but the interest rates on these RUS loans are effectively frozen due to penalties that get imposed for refinancing. Senator Smith is introducing a bill, with broad bipartisan support, to remove this barrier. This is a common sense fix that will help keep power bills affordable and help cooperatives as they support their local communities. Senator Smith’s leadership in this area is appreciated.” Darrick Moe, Minnesota Rural Electric Association, CEO.
“Small, community-based broadband providers have answered the call to keep their neighbors connected in the face of a global pandemic and the economic challenges that have followed,” said Shirley Bloomfield, CEO, NTCA-The Rural Broadband Association. “Allowing providers who use RUS loans to take advantage of low interest rates is a commonsense step that will make a big impact and give providers the flexibility to continue to support their communities as they recover from the pandemic. On behalf of NTCA’s members, I thank Senators Smith and Hoeven and Representatives O’Halleran and Hartzler for reintroducing the Flexible Financing for Rural America Act.”
In addition to Sens. Smith and Hoeven, the Flexible Financing for Rural America Act is supported by Sens. Kyrsten Sinema (D-Ariz.), John Boozman (R-Ark.), Shelley Moore Capito (R-W.Va.), Brian Schatz (D-Hawaii), John Cornyn (R-Texas), Mark Kelly (D-Ariz.), Kevin Cramer (R-N.D.), Mazie Hirono (D-Hawaii), Steve Daines (R-Mont.), Amy Klobuchar (D-Minn.), Joni Ernst (R-Iowa), Jon Tester (D-Mont.), Jim Inhofe (R-Okla.), Gary Peters (D-Mich.), Jerry Moran (R-Kan.), Tammy Baldwin (D-Wis.), Mike Rounds (R-S.D.), Tim Scott (R-S.C.), Thom Tillis (R-N.C.), and Roger Marshall (R-Kan.).