SALE OF RURAL DEVELOPMENT NOTES.

SEC. 803. SALE OF RURAL DEVELOPMENT NOTES. Section 1001 of the Omnibus Budget Reconciliation Act of 1986 (7 U.S.C. 1929a note) is amended by adding at the end thereof the following new subsections: “(f) Right of First Refusal.— “(1) In general.— Before conducting a sale of a portfolio of notes or other obligations under this section, the Secretary of Agriculture shall— “(A) determine whether the issuer of any unsold note or other obligation desires to purchase the note or other obligation; and “(B) if so, hold open for 30 days, an offer to sell the note or other obligation to the issuer at a price to be determined under paragraph (2). “(2) Determination of offering price.— “(A) Authority.— The Secretary of Agriculture shall determine, in accordance with subparagraph (B), the price at which a note or other obligation shall be offered for sale under this subsection. “(B) Price.— Such price shall be determined by discounting the payment stream of such note or other obligation at the yield on the then most recent sale of the portfolio, adjusted for changes in market interest rates, servicing and sales expenses, and the maturity and interest rate of such note. “(3) Prohibitions.— “(A) Purchase of obligation not tied to purchase of other obligations.— The Secretary of Agriculture shall not require the issuer of any unsold note or other obligation to be offered for sale under this subsection to purchase any other such note or other obligation as a condition of the sale of any such note or other obligation to the issuer. “(B) Offer to be made without regard to financing.— The Secretary shall offer notes or other obligations for sale to the issuers thereof under this subsection without regard to the manner in which such issuers intend to finance the purchase of such notes or other obligations. However, the price of sale to any issuer using tax exempt financing shall be determined using a yield reflective of the Schedule of Certified Interest Rates as published monthly by the Secretary of the Treasury. “(g) Applicability of Prohibition on Curtailment or Limitation of Service.— Section 306(b) of the Consolidated Farm and Rural Development Act (7 U.S.C. 1926(b)) shall be applicable to all notes or other obligations sold or intended to be sold under this section.”.