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Financial records, supporting documents, statistical records, and all other records pertinent to the grant must be retained for a period of at least 3 years after closing.

FINANCIAL INFORMATION: Account Identification:

12-0400-0-1-452.

Obligations:

(Grants) FY 05 $18,114,274; FY 06 est $18,067,500; and FY 07 est $18,000,000. (Note: Grants included in program 10.760, Water and Waste Disposal Systems for Rural Communities.)

Range and Average of Financial Assistance:

$48,000 to $5,555,200. Average: $2,264 (FY 2005).

PROGRAM ACCOMPLISHMENTS:

In fiscal year 2005, 8 grants were made.

REGULATIONS, GUIDELINES, AND LITERATURE:

7 CFR, Part 1775, Technical Assistance and Training Grants. INFORMATION CONTACTS:

Regional or Local Office:

Consult your local telephone directory for RD district office number. If no listing, get in touch with the appropriate RD State Office listed in Appendix IV of the Catalog.

Headquarters Office:

Assistant Administrator, Water and Environmental Programs, Rural Utilities Service, Department of Agriculture, Washington, DC 20250. Telephone: (202) 690-2670.

Web Site Address:

http://www.rurdev.usda.gov.

RELATED PROGRAMS:

None.

EXAMPLES OF FUNDED PROJECTS:

Recipients of this program received funds to administer technical assistance and training to small communities experiencing water and waste disposal problems.

CRITERIA FOR SELECTING PROPOSALS:

Assistance will be directed to those applicants who: (1) Have demonstrated ability to provide technical assistance and/or training to rural associations; (2) propose to serve multi-state, regional, or nationwide areas; (3) maximize use of grant funds for direct staffing of activities that are delivered to the associations; and (4) the population of the associations served have low income.

10.762 SOLID WASTE MANAGEMENT GRANTS

FEDERAL AGENCY:

RURAL UTILITIES SERVICE, DEPARTMENT OF AGRICULTURE AUTHORIZATION:

Consolidated Farm and Rural Development Act, as amended, Section 310B, Public Law 101-624, 7 U.S.C. 1932.

OBJECTIVES:

To reduce or eliminate pollution of water resources and improve planning and management of solid waste disposal facilities in rural areas. TYPES OF ASSISTANCE:

Project Grants.

USES AND USE RESTRICTIONS:

Funds may be used to: Evaluate current landfill conditions to determine threats to water resources in rural areas; provide technical assistance and/or training to enhance operator skills in the maintenance and operation of active landfills in rural areas; provide technical assistance and/or training to help associations reduce the solid waste stream; and provide technical assistance and/or training for operators of landfills in rural areas which are closed or will be closed in the near future with the

development/implementation of closure plans, future land use plans, safety and maintenance planning, and closure scheduling within permit requirements. Grant funds may not be used to: Recruit preapplications/applications for any loan and/or grant program including RUS Water and Waste Disposal Loan and/or Grant Program; duplication of current services, replacement or substitution of support previously provided such as those performed by an association's consultant in developing a project; fund political activities; pay for capital assets, the purchase of real estate or vehicles, improve and renovate office space, or repair and maintain privately-owned property; pay for construction or operation and maintenance costs of water and waste facilities; and pay costs incurred prior to the effective date of grants made under this subpart.

ELIGIBILITY REQUIREMENTS:

Applicant Eligibility:

Entities eligible for grants are nonprofit organizations, including: Private nonprofit organizations that have been granted tax exempt status by the Internal Revenue Service (IRS); and public bodies including local governmental-based multijurisdictional organizations. Applicants must have the proven ability, background, experience, legal authority, and actual capacity to provide technical assistance and/or training on a regional basis to eligible beneficiaries.

Beneficiary Eligibility:

Municipalities, counties, districts, authorities, and other political subdivisions of a State, organizations operated on a not-for-profit basis, such as associations, cooperatives, and private nonprofit corporations, Indian tribes on Federal and State reservations and other federally recognized Indian tribes.

Credentials/Documentation:

This program is subject to the provisions of OMB Circular Nos. A-87, and A-122.

APPLICATION AND AWARD PROCESS:

Preapplication Coordination:

This program is excluded from coverage under E.O. 12372. An environmental impact assessment is required for this program. Application Procedure:

This program is subject to the provisions of OMB Circular Nos. A-87, A102, A-110, and A-122. Preapplication Form SF 424.1, will be filed with the appropriate Rural Development (RD), formerly FMHA, State or Rural Utilities Service (RUS) National Office between October 1 and December 31 each fiscal year.

Award Procedure:

Preapplications received by an RD State Office will be reviewed and forwarded with any written comments within seven working days to the RUS approval official.

Deadlines:

Preapplications must be filed between October 1 and December 31 of each fiscal year in which funds are appropriated.

Range of Approval/Disapproval Time:

Form AD-622, "Notice of Preapplication Review Action," will normally be issued within 45 days after December 31 of each year. SF-424.1, "Application for Federal Assistance (for Non-Construction)," will be submitted by the applicant upon notification of funding eligibility.

10.763 EMERGENCY COMMUNITY WATER ASSISTANCE GRANTS

FEDERAL AGENCY:

RURAL UTILITIES SERVICE, DEPARTMENT OF AGRICULTURE AUTHORIZATION:

Consolidated Farm and Rural Development Act, Section 306A; Food, Agriculture, Conservation, and Trade Act of 1990, Title XXIII, Public Law 101-624.

OBJECTIVES:

Through the Emergency Community Water Assistance Grant Program, the Rural Utilities Service (RUS) is authorized to help rural residents who have experienced a significant decline in quantity or quality of water to obtain adequate quantities of water that meet the standards of the Safe Drinking Water Act.

TYPES OF ASSISTANCE:
Project Grants.

USES AND USE RESTRICTIONS:

Grant funds may be used to extend waterlines on existing systems; to construct new water lines; to repairexisting systems; to perform significant maintenance on existingsystems; to construct new wells, reservoirs, transmission lines,treatment plants, storage tanks, etc.; to replace equipment; to provide connection and/or tap fees; to pay costs incurred within six months of the date an application was filed with USDA to correct an emergency situation that would have been eligible for funding under this program; to provide funds for any other appropriate related purposes, such as, legal fees; engineering fees; recording costs; environmental impact analyses; archaeological surveys; possible salvage or

other mitigation measures; planning, establishing, or acquiring rights associated with developing sources of treating, storing, or distributing water; and to assist rural water systems in complying with the requirements of the Federal Water Pollution Control Act or the Safe Drinking Water Act, when failure to comply is directly related to a recent decline in quality of potable water. Grants provided under this program shall not be used to assist a rural area or community with a population in excess of 10,000; to assist a rural area that has a median household income in excess of the statewide nonmetropolitan median household income according to the most recent decennial census of the U.S.; to finance facilities which are not modest in size, design, and cost; to pay loan or grant finder's fees; to pay any annual recurring costs considered to be operational expenses; to pay rental for the use of equipment or machinery owned by the rural community; to purchase existing systems; to refinance existing indebtedness; and to make reimbursement for projects developed with other grant funds. Grants made to alleviate a significant decline in quantity or quality of water available from the water supplies in rural areas that occurred within two years of filing an application with USDA cannot exceed $500,000. Grants for repairs, partial replacement, or significant maintenance on an established system cannot exceed $150,000. ELIGIBILITY REQUIREMENTS:

Applicant Eligibility:

Rural Utilities Service may make grants to public bodies, private nonprofit corporations, and political subdivisions of a State, as well as Indian tribes. Beneficiary Eligibility:

Public bodies, private nonprofit corporations, and political subdivisions of a State, as well as Indian tribes. Credentials/Documentation:

Costs will be determined in accordance with OMB Circular No. A-87 for State and local governments.

APPLICATION AND AWARD PROCESS:

Preapplication Coordination:

This program is eligible for coverage under E.O. 12372, "Intergovernmental Review of Federal Programs." An applicant should consult the office or official designated as the single point of contact in his or her State for more information on the process the State requires to be followed in applying for assistance, if the State has selected the program for review. An environmental impact assessment is required for this program. The standard application forms as furnished by the Federal agency and required by U.S.C. Parts 3015 and 3016 must be used for this program.

Application Procedure:

Rural Development (RD) State Director will administer the program on the local level. This program is subject to the provisions of U.S.C. parts 3015 and 3016. Application Form SF-424 will be filed with the appropriate RD District office.

Award Procedure:

Applications received will be reviewed and scored for funding priority by the RD State office. The RD State Director will request funds from the National office. Projects must compete on a national basis for available funds.

Deadlines:

All funding requests will be reviewed by the National office after November 1 of each year and continue as long as funds are available.

Range of Approval/Disapproval Time:

Within 60 days of receipt of complete application.

Appeals:

If an application is rejected, the reasons for rejection are fully stated. The applicant may request a review of this decision at the higher management level of RUS.

Renewals:

Not applicable.

ASSISTANCE CONSIDERATIONS:

Formula and Matching Requirements:

Not applicable.

Length and Time Phasing of Assistance:

Not applicable.

POST ASSISTANCE REQUIREMENTS:

Reports:

Request for funds, as needed.

Audits:

In accordance with the provisions of OMB Circular No. A- 133 (Revised, June 27, 2003), "Audits of States, Local Governments, and Nonprofit

Organizations," non federal entities that expend financial assistance of $500,000 or more in Federal awards will have a single or a programspecific audit conducted for that year. Nonfederal entities that expend less than $500,000 a year in Federal awards are exempt from Federal audit requirements for that year, except as noted in Circular No. A-133. Records:

The grantee shall maintain adequate records and accounts to assure that grant funds are used for authorized purposes.

FINANCIAL INFORMATION:

Account Identification:

12-0400-0-1-452.

Obligations:

(Grants) FY 05 $10,677,075; FY 06 est $13,691,700; and FY 07 est $10,481,550.

Range and Average of Financial Assistance:

123 Range and Average of Financial Assistance: $4,100 to $500,000. Average: $297,000.

PROGRAM ACCOMPLISHMENTS:

In fiscal year 2005, 36 grants were awarded. REGULATIONS, GUIDELINES, AND LITERATURE:

7 CFR, Part 1778.

INFORMATION CONTACTS:

Regional or Local Office:

Consult your local telephone directory under United States Government, Department of Agriculture for Rural Development District Office number. If no listing, contact appropriate Rural Development State office listed in Appendix IV of the Catalog.

Headquarters Office:

Assistant Administrator, Water and Environmental Programs, Rural Utilities Service, Department of Agriculture, Washington, DC 20250. Telephone: (202) 690-2670. FTS is not available.

Web Site Address:

http://www.rurdev.usda.gov.

RELATED PROGRAMS:

10.760, Water and Waste Disposal Systems for Rural Communities; 10.766, Community Facilities Loans and Grants. EXAMPLES OF FUNDED PROJECTS:

Rural communities can use these funds to correct drinking water problems that have been created by a significant decline in quantity or quality of their water supply. The communities use the funds for new systems, waterline extensions, construction of water sources and treatment facilities, storage tanks, and repairs or renovation of existing systems. CRITERIA FOR SELECTING PROPOSALS:

The proposed projects designed to serve a rural area with a population of 5,000 or less that has a median household income of not more than 70 percent of the statewide nonmetropolitan household income and had a significant decline in quantity of water available from private individually owned wells will be given priority. Preference also will be given to proposed projects that will assist an established water system or remedy an acute shortage of quality water. The Rural Development State Director will rate applications on a point system and points received will be considered in selecting projects for funding.

10.766 COMMUNITY FACILITIES LOANS AND GRANTS FEDERAL AGENCY:

RURAL DEVELOPMENT (RD), DEPARTMENT OF AGRICULTURE AUTHORIZATION:

Consolidated Farm and Rural Development Act, as amended, Section 306, Public Law 92-419, 7 U.S.C. 1926.

OBJECTIVES:

To construct, enlarge, extend, or otherwise improve community facilities providing essential services to rural residents.

TYPES OF ASSISTANCE:

Guaranteed/Insured Loans; Direct Loans; Project Grants.

USES AND USE RESTRICTIONS:

Community facilities include but are not limited to those providing or supporting overall community development such as child care facilities, food recovery and distribution centers; assisted-living facilities; group homes, mental health clinics, and shelters; and education facilities. Projects comprise, community, social, cultural, transportation, industrial park sites, fire and rescue services, access ways, and utility extensions. All facilities financed in whole or in part with RHS funds shall be for public use.

ELIGIBILITY REQUIREMENTS:

Applicant Eligibility:

City, county, and State agencies; political and quasi-political subdivisions of States and associations, including corporations, Indian tribes on Federal and State reservations and other federally recognized Indian tribes; and existing private corporations which: (1) are operated on a not-for-profit basis; (2) have or will have the legal authority necessary for constructing, operating, and maintaining the proposed facility or service and for obtaining, giving security for, and repaying the loan; and (3) are unable to finance the proposed project from its own resources or through commercial credit at reasonable rates and terms. Assistance is authorized for eligible applicants in rural areas of the States, Puerto Rico, the Virgin Islands, Guam, American Samoa, the commonwealth of the Northern Mariana Islands, the Marshall Islands, the Republic of Palaw, and the Federated States of Micronesia.

Beneficiary Eligibility:

Farmers, ranchers, rural residents, rural businesses, and other users of such public facilities in eligible applicant areas as set out above. Credentials/Documentation:

Evidence of legal capacity and financial responsibility of the applicants and
the economic feasibility of the project relative to the activity for which
assistance is requested. This program is excluded from coverage under
OMB Circular No. A-87.

APPLICATION AND AWARD PROCESS:
Preapplication Coordination:

The standard application forms as provided by the Federal agency and required by OMB Circular No. A-102 must be used for this program. An environmental assessment is required for this program. This program is eligible for coverage under E.O. 12372, "Intergovernmental Review of Federal Programs." An applicant should consult the office or official designated as the single point of contact in his or her State for more information on the process the State requires in applying for assistance if the State has selected the project for review. Application Procedure:

For direct loans and grants, applicants must file Standard Form SF-424 and supporting documentation at the local Rural Development Area Office. For guaranteed loans, the lender must file For RD 3575-1 and supporting documentation.

Award Procedure:

After the preapplication has been reviewed by the Rural Development Area Office, it is forwarded to the Rural Development State Office for review and processing instructions. Following review by the State Office, the applicant is notified about eligibility, availability of funds, and if an application should be filed. Upon completion of application processing requirements and approval by the State Office, funds are made available to the Rural Development Area Office for delivery.

Deadlines:

None.

Range of Approval/Disapproval Time:

From 30 to 90 days.

Appeals:

If an application is rejected, the reasons for rejection are fully stated. The applicant may request a review of this decision.

Renewals:

Not applicable.

ASSISTANCE CONSIDERATIONS:

Formula and Matching Requirements:

Matching funds are not required but may be used in connection with the funds provided from the applicant or other sources. Funds are allocated to States based upon rural population, number of households below the poverty level, and rural unemployment. The statistical factor for eligibility is cities, towns or incorporated areas under 20,000 population for direct and guaranteed loans and 20,000 population for grants. The source is "Latest Decennial Census." This program has no statutory formula. Length and Time Phasing of Assistance:

A time limitation is not specified for the use of Community Facilities loan or grant funds. Funds will be awarded when all program requirements are met and the project can be completed on a timely basis. Funds may be advanced on an as needed basis by RHS to cover expenses for a 30-day period.

POST ASSISTANCE REQUIREMENTS:

Reports:

Periodic reports are made to Rural Development. Each borrower will

monitor and report to RHS on actual performance during the construction of each project financed, or to be financed, in whole or in part with Community Facilities loan funds.

Audits:

Periodic audits should be made as part of the recipient's system of financial management and internal control to meet terms and conditions of loans and other agreements. In accordance with the provisions of 7 CFR Part 3052, "Audits of States, Local Governments, and Non-Profit Organizations," which implement OMB Circular No. A-133 (Revised, June 27, 2003), "Audits of States, Local Governments, and Non-Profit Organizations," nonfederal entities that receive financial assistance of $500,000 or more in Federal awards will have a single or a programspecific audit conducted for that year. Nonfederal entities that expend less than $500,000 a year in Federal awards are exempt from Federal audit requirements for that year, except as noted in 7 CFR 3052. Records:

The borrower must maintain adequate records and accounts of the operation of the facility developed.

FINANCIAL INFORMATION:

Account Identification:

12-4155-0-3-452; 12-1951-0-1-452.

Obligations:

(Direct Loans) FY 05 $426,259,334; FY 06 est. $300,000,000; and FY 07. est $300,000,000. (Guaranteed Loans) FY 05 $194,933,926; FY 06 est. $210,000,000; and FY 07 est. $210,000,000. (Grants) FY 05 $19,920,111; FY 06 est. $17,000,000; and FY 06 est. $17,000,000. Range and Average of Financial Assistance:

Direct Loans: $3,000 to $11,000,000. Average: $847,971. Guaranteed Loans: $20,000 to $17,000,000. Average: $2,377,243. Grants: $570 to $120,750. Average: $36,753.

PROGRAM ACCOMPLISHMENTS:

In FY 2005, 503 direct loans, 82 guaranteed loans, and 542 grants were made.

REGULATIONS, GUIDELINES, AND LITERATURE:

7 CFR 1942, subpart A, Community Facilities Loans; 7 CFR 1942, subpart C, Fire and Rescue Loans; 7 CFR 3575, subpart A, Community Facilities Guaranteed Loans; 7 CFR 3570, subpart B, Community Facilities Grants. INFORMATION CONTACTS:

Regional or Local Office:

Consult your local telephone directory for Rural Development county or district office numbers. If no listing, contact the appropriate Rural Development State Office listed in Appendix IV of the Catalog. Headquarters Office:

Deputy Administrator, Community Programs, STOP 0788, Department of Agriculture, 1400 Independence Avenue SW, Washington, DC 202500788. Telephone: (202) 720-1490.

Web Site Address:

http:/www.rurdev.usda.gov.

RELATED PROGRAMS:

10.500, Cooperative Extension Service; 10.664, Cooperative Forestry Assistance; 15.124, Indian Loans_Economic Development.

EXAMPLES OF FUNDED PROJECTS:

Loans were made to: (1) establish rural health clinics in medically undeserved areas; (2) purchase fire fighting, rescue, and public safety equipment for rural areas; (3) construct new municipal buildings; (4) build new schools to serve rural communities; and (5) renovate hospitals to meet current life/safety codes.

CRITERIA FOR SELECTING PROPOSALS:

Projects are selected for funding giving due consideration to State development strategies, serving the largest number of low income rural residents, and priority recommendations. Priority for funding will be given to those projects that will enhance public safety such as fire, police, rescue, and ambulance services, and projects for health care facilities.

10.767 INTERMEDIARY RELENDING PROGRAM FEDERAL AGENCY:

RURAL BUSINESS-COOPERATIVE SERVICE, DEPARTMENT OF

AGRICULTURE

AUTHORIZATION:

Health and Human Services Act of 1986, Section 407, Public Law 99-425, 7 U.S.C. 1932 note; Food Security Act of 1985, Section 1323, as amended, Public Law 99-198, 7 U.S.C. 1631; Community Economic Development

Act of 1981, Section 623, as amended, Public Law 97-35, 42 U.S.C. 9812. OBJECTIVES:

To finance business facilities and community development. TYPES OF ASSISTANCE:

Direct Loans.

USES AND USE RESTRICTIONS:

An entity that receives an Intermediary Relending Program (IRP) loan from the Rural Business-Cooperative Service (RBS) is referred to as an intermediary. Intermediaries must relend all of the loan funds received from the IRP loan for business facilities or community development in rural areas. An entity that receives a loan from an intermediary is referred to as an ultimate recipient. The maximum loan to any one intermediary is $2 million. The maximum term is 30 years and the interest rate is one percent per annum. Intermediaries may not use IRP funds to finance more than 75 percent of the cost of an ultimate recipient's project or for a loan of more than $250,000 to one ultimate recipient. (No more than 25 percent of an IRP loan approved may be used for loans to ultimate recipients that exceed $150,000.) ELIGIBILITY REQUIREMENTS:

Applicant Eligibility:

Eligible intermediaries may include: Private nonprofit organizations, State or local governments, and Federally recognized Indian tribes and cooperatives.

Beneficiary Eligibility:

Ultimate recipients may include: For profit organizations, individuals, public and private nonprofit organizations.

Credentials/Documentation:

Intermediaries must have adequate legal authority and a proven record of successfully assisting rural businesses and industries. Ultimate recipients must not be located within a city with a population of 25,000 or more. Both intermediaries and ultimate recipients must be unable to obtain the loan at reasonable rates and terms through commercial credit or other Federal, State, or local programs. This program is excluded from coverage under OMB Circular No. A-87.

APPLICATION AND AWARD PROCESS:
Preapplication Coordination:

This program is excluded from coverage under OMB Circular No. A-102.
This program is eligible for coverage under E.O. 12372,

"Intergovernmental Review of Federal Programs." An applicant should consult the office or official designated as the single point of contact in his or her State for more information on the process the State requires to be followed in applying for assistance, if the State has selected the program for review. An environmental impact assessment is required for this program.

Application Procedure:

Potential intermediaries should file applications with the State office for the State in which the intermediary's headquarters is located. The application package includes Form 4274-1 and a written work plan. More details are available in 7 CFR 4274.343, or from the appropriate Rural Development State Office. The Rural Development administers the program on the local level. Intermediaries develop their own application procedures for ultimate recipients.

Award Procedure:

The application of each intermediary will be evaluated by the RD State Office. Applications received by RBS will be reviewed and ranked quarterly and funded in the order of priority ranking.

Deadlines:

None.

Range of Approval/Disapproval Time:

From 30 to 60 days.

Appeals:

Adverse actions by RBS in connection with this program may be appealed by contacting the Area Supervisor of the USDA National Appeals Division. Appeals will be handled in accordance with 7 CFR 1900-B. Renewals:

Not applicable.

ASSISTANCE CONSIDERATIONS:

Formula and Matching Requirements:

This program has no statutory formula or specific matching requirements, but RBS funds loaned to one ultimate recipient by an intermediary must not exceed 75 percent of the cost of the ultimate recipient's project. Length and Time Phasing of Assistance:

Applicant intermediaries must show a need for the funds and limit the

request to an amount they can expect to use within one year. After a loan

is approved, the funds are released to the intermediary in multiple advances as required to fund loans to ultimate recipients.

POST ASSISTANCE REQUIREMENTS:

Reports:

Intermediaries must submit quarterly reports on lending activity, income and expenses, financial condition and progress, and an annual budget. Audits:

In accordance with the provisions of OMB Circular No. A- 133 (Revised, June 27, 2003), "Audits of States, Local Governments, and Non-Profit Organizations," non federal entities that expend financial assistance of $500,000 or more in Federal awards will have a single or a programspecific audit conducted for that year. Nonfederal entities that expend less than $500,000 a year in Federal awards are exempt from Federal audit requirements for that year, except as noted in Circular No. A-133.

Records:

Records and accounts must be maintained to reflect the operations of each project.

FINANCIAL INFORMATION:

Account Identification:

12-4233-0-3-452; 12-2069-0-1-452.

Obligations:

(Loans) FY 05 $33,939,314; FY 06 est $33,869,874; and FY 07 est $34,000,000.

Range and Average of Financial Assistance:

$150,000 to $1,000,000. Average: $595,427. PROGRAM ACCOMPLISHMENTS:

In fiscal year 2005, 92 applications were received and 57 were approved. It is anticipated that in fiscal year 2006, 100 applications will be received including 12 carried over from fiscal year 2005 and 69 loans will be approved. Considering the estimated funding level for fiscal year 2007, funding activity is anticipated to be the same. REGULATIONS, GUIDELINES, AND LITERATURE: 7 CFR 4274, Subpart D; 7 CFR 1951, Subpart R. INFORMATION CONTACTS:

Regional or Local Office:

RBS State Office listed in Appendix IV of the Catalog. Headquarters Office:

Rural Business-Cooperative Service, Room 6867, Stop 3225, South Agriculture Building, Washington, DC 20250-3225. Telephone: (202) 6904100. FTS is not available.

Web Site Address:

http://www.rurdev.usda.gov. RELATED PROGRAMS:

10.769, Rural Business Enterprise Grants. EXAMPLES OF FUNDED PROJECTS:

(1) $750,000 loan to a nonprofit corporation to relend to businesses within a State; (2) $750,000 loan to a nonprofit corporation to relend to businesses within 10 counties in one State; (3) $600,000 loan to a nonprofit corporation serving an six-county area for relending to businesses; and (4) $500,000 loan to a Native American community development corporation to relend to new and expanding businesses. CRITERIA FOR SELECTING PROPOSALS:

Factors considered in judging applications include: Financial condition, assurance of repayment ability, equity, collateral, experience and record of managing a loan program or providing other assistance to rural businesses, ability to leverage with funds from other sources, extent assistance would flow to low income persons.

10.768 BUSINESS AND INDUSTRY LOANS

FEDERAL AGENCY:

RURAL BUSINESS-COOPERATIVE SERVICE, DEPARTMENT OF

AGRICULTURE

AUTHORIZATION:

Consolidated Farm and Rural Development Act, as amended, Section 310B, Public Law 92-419, 7 U.S.C. 1932. OBJECTIVES:

To assist public, private, or cooperative organizations (profit or nonprofit), Indian tribes or individuals in rural areas to obtain quality loans for the purpose of improving, developing or financing business, industry, and employment and improving the economic and environmental climate in rural communities including pollution abatement and control.

TYPES OF ASSISTANCE:

Guaranteed/Insured Loans.

USES AND USE RESTRICTIONS:

Guaranteed loans may be extended for: (a) modernization, development costs; (b) purchasing and development of land, easements, rights-of-way, buildings, facilities, leases or materials; (c) purchasing equipment, leasehold improvements, machinery and supplies; (d) projects involving agricultural production, when not eligible for Farm Service Agency farmer program assistance and when it is part of an integrated business also involved in the processing of agricultural products and the agricultural production portion of the loan does not exceed the lessor of 50 percent of the total loan or $1 million; and (e) pollution control and abatement. Maximum loan size is $25 million. For cooperative organizations under certain conditions, the maximum loan size is $40 million. Maximum time allowable for final maturity is limited to 30 years for land and buildings, the usable life of machinery and equipment purchased with loan funds, not to exceed 15 years, and 7 years for working capital. Interest rates for guaranteed loans are negotiated between the lender and the borrower. For loans of $5 million or less, the maximum percentage of guarantee is 80 percent. For loans over $5 million but not over $10 million, the maximum percentage of guarantee is 70 percent. For loans in excess of $10 million up to $40 million, the maximum percentage of guarantee is 60 percent. Losses on principal advanced, including protective advances, and accrued interest, may be guaranteed by the Agency, but the maximum loss paid by RBS will never exceed the original principal plus accrued interest. Loans may not be made for: (a) distribution or payment to the owner, partners, shareholders, or beneficiaries of the applicant or members of their families when such persons shall retain any portion of their equity in the business; (b) the transfer of ownership of a business unless the loan will keep the business from closing, or prevent the loss of employment opportunities in the area, or provide expanded job opportunities; (c) the guarantee of lease payments; (d) charitable institutions, churches, fraternal organizations, lending and investment institutions and in surance companies; (e) any legitimate business activity where more than 10 percent of the annual gross income is derived from legalized gambling; (f) the guarantee of loans made by other Federal agencies except those made by Banks for Cooperatives, Federal Land Bank or Production Credit Associations; (g) golf courses; (h) racetracks where individual prizes are awarded in the amount of $500 or more; (i) owner-occupied housing; (j) projects eligible for the Rural Rental Housing and Rural Cooperative Housing loans under sections 515, 521, and 538 of the Housing Act of 1949, as amended; and (k) any project which is likely to result in the transfer of business or employment from one area to another or cause production which exceeds demand. Interested parties should contact the Rural Business-Cooperative Service (RBS) or the nearest Rural Development State Office which administers the programs at the local level. Isurance companies; (e) any legitimate business activity where more Than 10 percent of the annual gross income is derived from legalized gambling; (f) the guarantee of loans made by other Federal agencies except those made by Banks for Cooperatives, Federal Land Bank or Production Credit Associations; (g) golf courses; (h) racetracks where individual prizes are awarded in the amount of $500 or more; (i) owner-occupied housing; (j) projects eligible for the Rural Rental Housing and Rural Cooperative Housing loans under sections 515, 521, and 538 of the Housing Act of 1949, as amended; and (k) any project which is likely to result in the transfer of business or employment from one area to another or cause production which exceeds demand. Interested parties should contact the Rural Business-Cooperative Service (RBS) or the

nearest Rural Development State Office which administers the programs at the local level.

ELIGIBILITY REQUIREMENTS:

Applicant Eligibility:

An applicant may be a cooperative, corporation, partnership, trust, or other legal entity organized and operated on a profit or nonprofit basis; an Indian tribe; a municipality, county, or other political subdivision of a State; or individuals in rural areas. Applicants for guaranteed loans must be located in one of the fifty States, Puerto Rico, Virgin Islands, Guam, American Samoa, the Commonwealth of the Northern Mariana Islands, the Republic of Palau, the Federated States of Micronesia, or the Republic of the Marshall Islands in rural areas other than a city, having a population of fifty thousand or more and its contingent adjacent urbanized area, as determined by the Secretary of Agriculture according to the latest decennial census of the United States. Preference is given to loans in open country,

rural communities and towns with populations of 25,000 or less, and, on applications of equal priority, to veterans. Applicants must be U.S. citizens or reside in the U.S. after being legally admitted for permanent residence and, if corporations, at least 51 percent owned by such individuals. Beneficiary Eligibility:

Beneficiaries include cooperatives, corporations, partnerships, trust or legal entities organized and operated for profit or nonprofit, Federally recognized Indian Tribal Governments and individuals in rural cities and towns of less than 50,000 population. Credentials/Documentation:

Evidence of legal capacity, economic feasibility and financial responsibility relative to the activity for which assistance is requested. This program is excluded from coverage under OMB Circular No. A-87. APPLICATION AND AWARD PROCESS:

Preapplication Coordination:

This program is eligible for coverage under E.O. 12372, "Intergovernmental Review of Federal Programs." An applicant should consult the office or official designated as the single point of contact in his or her State for more information on the process the State requires to be followed in applying for assistance, if the State has selected the program for review. All preapplication letters must be coordinated fully with appropriate State agencies in keeping with E.O. 12372, "Intergovernmental Review of Federal Programs," in a manner that will assure maximum support of the State's strategies for development of its rural areas. The application form as furnished by the Federal agency must be used for this program. An environmental assessment is required and an environmental impact statement may be required for this program. This program is excluded from coverage under OMB Circular No. A-102. Application Procedure:

Form 4279-1 is used for guaranteed loans and filed at the Rural Development State Office. These programs are excluded from coverage under OMB Circular No. A-110.

Award Procedure:

Applications are forwarded to the Rural Development State Director for review and final approval.

Deadlines:

Not applicable.

Range of Approval/Disapproval Time: From 60 to 120 days.

Appeals:

If an application is denied, the reasons for denial are fully stated. The lender or applicant may individually or jointly request mediation or an appeal hearing by the National Appeals Staff within 30 days provided the request is in writing. The requestor and State Director are notified of the decision by the Hearing Officer. Renewals:

Not applicable.

ASSISTANCE CONSIDERATIONS:
Formula and Matching Requirements:

Matching funds are not required. For existing businesses, applicants are required to provide a minimum of 10 percent tangible balance sheet equity for guaranteed loans. For new businesses, at least 20 percent is required for guaranteed loans. Feasibility studies are normally required. Exceptions to the feasibility study requirement may be made to businesses with adequate financial history.

Length and Time Phasing of Assistance:

The letter of conditions for the direct loan and the Conditional Commitment for the guaranteed loan specifies the time limit for the use of funds. The Loan Note Guarantee for a guaranteed loan will be issued when all of the requirements of the Conditional Commitment have been or will be met.

POST ASSISTANCE REQUIREMENTS:
Reports:

Each guaranteed lender will be required to monitor and report to RBS on actual performance during the construction of each project financed, in whole or in part, with RBS assistance. When the project is in operation, field visits will be made and customary financial statements provided as determined by the guaranteed lender and RBS.

Audits:

Independent accountant compiled or reviewed financial statements prepared in accordance with Generally Accepted Accounting Principles are required annually for guaranteed loans and for direct loans with a principal and interest balance of less than $ 1 million. RBS may require audited

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