(a) Services to rural areas
The Secretary may provide financial assistance for the purpose of financing the construction of facilities and systems to provide telemedicine services and distance learning services in rural areas.

(b) Financial assistance

(1) In general
Financial assistance shall consist of grants or cost of money loans, or both.

(2) Form
The Secretary shall determine the portion of the financial assistance provided to a recipient that consists of grants and the portion that consists of cost of money loans so as to result in the maximum feasible repayment to the Federal Government of the financial assistance, based on the ability to repay of the recipient and full utilization of funds made available to carry out this chapter.

(c) Recipients

(1) In general
The Secretary may provide financial assistance under this chapter to—

(A) entities using telemedicine services or distance learning services;

(B) entities providing or proposing to provide telemedicine service or distance learning service to other persons at rates calculated to ensure that the benefit of the financial assistance is passed through to the other persons; ¹

(C) libraries.

(2) Electric or telecommunications borrowers

(A) Loans to borrowers
Subject to subparagraph (B), the Secretary may provide a cost of money loan under this chapter to a borrower of an electric or telecommunications loan under the Rural Electrification Act of 1936 (7 U.S.C. 901 et seq.). A borrower receiving a cost of money loan under this paragraph shall—

(i) make the funds provided available to entities that qualify under paragraph (1) for projects satisfying the requirements of this chapter;

(ii) use the funds provided to acquire, install, improve, or extend a system referred to in subsection (a); or

(iii) use the funds provided to install, improve, or extend a facility referred to in subsection (a).

(B) Limitations
A borrower of an electric or telecommunications loan under the Rural Electrification Act of 1936 [7 U.S.C. 901 et seq.] shall—

(i) make a system or facility funded under subparagraph (A) available to entities that qualify under paragraph (1); and

(ii) neither retain from the proceeds of a loan provided under subparagraph (A), nor assess a qualifying entity under paragraph (1), any amount except as may be required to pay the actual costs incurred in administering the loan or making the system or facility available.

(3) Appeal
If the Secretary rejects the application of a borrower who applies for a cost of money loan or grant under this section, the borrower may appeal the decision to the Secretary not later than 10 days after the borrower is notified of the rejection.

(4) Assistance to provide or improve services
Financial assistance may be provided under this chapter for a facility regardless of the location of the facility if the Secretary determines that the assistance is necessary to provide or improve telemedicine services or distance learning services in a rural area.

(d) Priority
The Secretary shall establish procedures to prioritize financial assistance under this chapter considering—

(1) the need for the assistance in the affected rural area;

(2) the financial need of the applicant;

(3) the population sparsity of the affected rural area;

(4) the local involvement in the project serving the affected rural area;

(5) geographic diversity among the recipients of financial assistance;

(6) the utilization of the telecommunications facilities of any telecommunications provider serving the affected rural area;

(7) the portion of total project financing provided by the applicant from the funds of the applicant;

(8) the portion of project financing provided by the applicant with funds obtained from non-Federal sources;

(9) the joint utilization of facilities financed by other financial assistance;

(10) the coordination of the proposed project with regional projects or networks;

(11) service to the greatest practical number of persons within the general geographic area covered by the financial assistance;

(12) conformity with the State strategic plan as prepared under section 2009c of this title; and

(13) other factors determined appropriate by the Secretary.

(e) Maximum amount of assistance to individual recipients
The Secretary may establish the maximum amount of financial assistance to be made available to an individual recipient for each fiscal year under this chapter, by publishing notice of the maximum amount in the Federal Register not more than 45 days after funds are made available for the fiscal year to carry out this chapter.

(f) Use of funds
Financial assistance provided under this chapter shall be used for—

(1) the development and acquisition of instructional programming;

(2) the development and acquisition, through lease or purchase, of computer hardware and software, audio and visual equipment, computer network components, telecommunications terminal equipment, telecommunications transmission facilities, data terminal equipment, or interactive video equipment, or other facilities that would further telemedicine services or distance learning services;

(3) providing technical assistance and instruction for the development or use of the programming, equipment, or facilities referred to in paragraphs (1) and (2); or

(4) other uses that are consistent with this chapter, as determined by the Secretary.

(g) Salaries and expenses
Notwithstanding subsection (f), financial assistance provided under this chapter shall not be used for paying salaries or administrative expenses.

(h) Expediting coordinated telephone loans

(1) In general
The Secretary may establish and carry out procedures to ensure that expedited consideration and determination is given to applications for loans and advances of funds submitted by local exchange carriers under this chapter and the Rural Electrification Act of 1936 (7 U.S.C. 901 et seq.) to enable the exchange carriers to provide advanced telecommunications services in rural areas in conjunction with any other projects carried out under this chapter.

(2) Deadline imposed on Secretary
Not later than 45 days after the receipt of a completed application for an expedited telephone loan under paragraph (1), the Secretary shall notify the applicant in writing of the decision of the Secretary regarding the application.

(i) Notification of local exchange carrier

(1) Applicants
Each applicant for a grant for a telemedicine or distance learning project established under this chapter shall notify the appropriate local telephone exchange carrier regarding the application filed with the Secretary for the grant.

(2) Secretary
The Secretary shall—

(A) publish notice of applications received for grants under this chapter for telemedicine or distance learning projects; and

(B) make the applications available for inspection.