A bill to amend the Rural Electrification Act of 1936, as amended, to provide adequate funds for rural electric and telephone systems at interest rates which will allow them to achieve the objectives of the Act.

Provides funds to rural electric and telephone systems through loans insured through the Rural Development Insurance Fund, or guaranteed through the National Rural Utilities Cooperative Finance Corporation or any private lending agency approved for this purpose by the Secretary of Agriculture. Establishes interest rates on insured loans as follows: (1) 5% per annum on loans for electric distribution facilities, (2) the market rate of interest on loans for electric generation and transmission facilities, and (3) a rate not less than 5% per annum and not more than the market rate of interest on loans for telephone facilities. Provides for refinancing of any loans made for rural electric and telephone facilities under the Consolidated Farm and Rural Development Act. Supports any contract of insurance or guarantee of a loan executed under this Act by the full faith and credit of the United States.