§ 101-33.301 - General.

Some Federal agencies procure public utility services from Rural Electrification Administration (REA)-financed cooperatives. Since REA-financed cooperatives are nonprofit organizations, any amount paid by participating agencies (also referred to as patrons) in excess of cost of services (usually referred to as operating margins) is treated as capital furnished by such patrons. Operating margins are determined annually on a patronage basis and credited to a capital account for each patron. The cooperative returns the share of the net income credited to agencies on a revolving basis by cash payments or deductions in current service bills when the cooperative's board of directors determines that such a retirement will not impair the cooperative's financial condition.