A rural area may include all territory of a State, the Commonwealth of Puerto Rico or the Virgin Islands, that is not within the outer boundary of any city having a population of 50,000 or more and its immediately adjacent urbanized and urbanizing areas with a population density of more than 100 persons per square mile, as determined by the Secretary of Agriculture according to the latest decennial census of the United States. Priority for such grants shall be given to areas other than cities having a population of more than 25,000. Grants funds may be used to finance industrial sites in rural areas including the acquisition and development of land and the construction, conversion, enlargement, repairs or modernization of buildings, plants, machinery, equipment, access streets and roads, parking areas, transportation serving the site, utility extension, necessary water supply and waste disposal facilities associated with development of the industrial sites, pollution control and abatement incidental to site development, fees and refinancing of debts under certain conditions. Grants funds may be used jointly with funds furnished by the applicant, including FHA loan funds. Grants funds will not be used to: (1) Pay salaries for office or clerical assistance, administrative, transportation or publication costs and expenses. (2) Finance comprehensive area type planning. (3) Develop a proposal that may result in the transfer of jobs or business activity from one area to another. This provision does not prohibit establishment of a new branch or subsidiary. (4) Develop a proposal which may result in an increase of goods, materials, commodities, services or facilities in an area when there is not sufficient demand. Grant recipients must meet all provisions of tital VI of the Civil Rights Act of 1964 which provides that no person shall, on the grounds of race, color or national origin, be excluded from participation in, be denied benefits of, or be subjected to discrimination under any program or activity receiving Federal financial assistance. Applicants desiring grants will file a preapplication form, which is available at all FHA offices, with the appropriate FHA county office. They will also file written notice of intent and a request for priority recommendations with the appropriate A-95 clearinghouse. Upon receipt of the preapplication FHA will determine eligibility and make a determination on project priority and funding. Through personal contact and conferences with the applicant and its representatives FHA will assist in the overall application processing including obtaining appropriate Department of Labor determinations. If a grant application is rejected the applicant may request a review of this decision from the Administrator of FHA. Business and industrial development loans are intended to establish business enterprises in rural areas or cities up to 50,000 population with priority to applications for projects in open country, rural communities and towns of 25,000 and smaller. Farmers Home Administration is authorized to provide credit. through two channels: (1) For private organizations or individuals, FHA can guarantee loans to private lenders. The applicant should apply for the loan through a private lender. The agency contracts to reimburse the lender for a percentage of any loss sustained on such loans. Lenders are responsible for making and servicing the loans. (2) For public bodies, FHA can make and service the loan. The applicants apply directly to FHA. The agency does not make loans in competition with regular, commercial lenders. Applications will be considered without regard to the race, color, creed, sex, or national origin of the applicant or of individuals he may represent, and benefits that accrue from the loan must be available on this same basis. Eligible applicants include any legal entity, including individuals, public and private organizations, and federally recognized Indian tribal groups. The basic purposes include developing or financing business or industry, increasing employment, and controlling or abating pollution. Within this framework, uses include, but are not limited to: (1) Financing business and industrial construction, conversion, acquisition, and modernization. (2) Financing purchase and development of land, easements, equipment, facilities, leases, machinery, supplies, or materials. (3) Supplying working capital and funds for fees and contingency charges. (4) Refinancing debts, when refinancing results in a sound loan and protects the government's interest. The loan guarantee is an assurance to protect the investor, and may cover up to 90 percent of the lender's losses. Collateral must be of such nature that, when considered with the integrity and ability of the project management, the soundness of the project, and the applicant's prospective earnings, repayment of the loan will be reasonably assured. The applicant will be required to provide sufficient cash or other assets to provide reasonable assurance of a successful project. Rates and terms are: (1) Maximum repayment schedules: (a) 30 years for land, buildings, and permanent fixtures; (b) 15 years for machinery or equipment; (c) 7 years for working capital. (2) Interest will be due at least annually after the loan is closed. All or any part of a loan may be repaid before it is due, without penalty. For guaranteed loans, the interest rate will be determined by the lender and the borrower, consistent with the market rate. For private entrepreneurs, the interest rate on loans made by the Farmers Home Administration will be computed on cost of Treasury borrowing plus an increment to cover administrative costs; for public bodies borrowing to install community facilities necessary for community development, the rate will be 5 percent. Applicants desiring FHA loan assistance will file a letter preapplication which may be prepared by the applicant or the prospective guaranteed lender. The preapplication letter and other related information will be filed with the local FHA county office. FHA will determine project eligibility and feasibility. FHA will request A-95 agency review requesting comments and priority recommendations. (unless the proposal is for a small rural business enterprise loan having no significant impact outside the community in which the business is located). In selecting projects, FHA will give due consideration to State development strategies, clearinghouse comments, and priority recommendations and will cooperate with all Federal, State, substate regional, and local planning and development agencies and officials involved in project selection and implementation. Through personal contact and conferences with the applicant and its representatives, FHA will assist the applicant in all matters relating to application processing If a loan is rejected the applicant may request a review of this decision by the Administrator of FHA. In the Youth Loan Program, operating loans are made to individual rural youth to enable them to operate enterprises in connection with their participation in 4-H. Future Farmers of America and similar organizations. This authority was implemented on an insured loan basis on April 23, 1973. Under the Operating Youth Loan Program, loans may now be made on a guaranteed or insured basis to youth under 21, free of any disability of minority. Applicants must be U.S. citizens, live in open country or in a town of not more than 10,000 population, be unable to obtain credit from other sources and plan to conduct a modest, income producing project under the supervision of the organization advisor and FHA. It is expected that the organization advisor will be the main supervisor for the youth. The interest rate is 64 percent, the same as for regular Operating loans. Repayment schedules may not exceed seven years. The maximum loan is $50,000, the same as regular Operating loans. However, our instructions provide that modest-sized projects will be planned. The average loan to date is approximately $3,000. Authorized loan purposes include the purchase of livestock, farm machinery and equipment, crop production, nonfarm enterprises such as repair shops, woodworking shops, roadside stands and other such farm and nonfarm purposes. Interested youth may apply for loans by contacting the local FHA office. SOIL CONSERVATION SERVICE The Soil Conservation Service, under delegated authority to the Administrator, has implemented the following provisions of the Rural Development Act of 1972: -Title II-Section 201 (d), Use of Other Federal Funds for Land Rights-This permits watershed project sponsors to use other available Federal funds for land rights acquisition. -Title II-Section 201 (e), and Title III-Section 301(2). Water Quality Management-This authorizes the installation of water quality management measures which will result in the enhancement of water quality through augmentation of streamflow. Citizens, groups, cooperatives, and units of government interested in applying for the benefits from these provisions may make their request to the sponsors of watershed protection and flood prevention projects or resource conservation and development projects. The sponsors may then inform the Soil Conservation Service asking for a determination of EXTENSION SERVICE AND COOPERATIVE STATE RESEARCH SERVICE Title V of the Rural Development Act of 1972 will be implemented in accordance with the memorandum of understanding between the Land Grant University and the Secretary of Agriculture which has been signed by all Land Grant Universities. Funds will be provided on the basis of the formula written into the act (section 503) to Land Grant Universities reeting the criteria in section 504 (b). Administration of funds and programs in the States will be the responsibility of the State Title V Coordinator appointed by the President of the Land Grant University accepting the funds, the Director of the Cooperative Extension Service of the State and the Research Coordinator for title V who is appointed by the university. A single, unified annual plan of work focusing the attentions of both research and extension capabilities of institutions of higher education. on the problems of the community is required before the State can receive funds. The plan of work should be consistent with statewide Comprehensive planning and development efforts and objectives. The plan of work must be acceptable to and approved by the State's rural development advisory council. The council is composed of people representing a wide range of interest, institutions, and geographical areas of the State (section 504 (e) of the act). Levels of funding for title V programs in the States are quite small, ranging from a low of about $14,000 to a high of $105,000. The university will have to limit the amount and kind of service to the funds and other resources it can make available. The university will give priority to those needs which they can most effectively and usefully serve. Any citizen, cooperative, government, group, or organization wishing to obtain assistance under title V may submit requests to the university officials responsible for administering title V (section 504 (c) of the act). Channels of communication for requesting assistance may be: (1) direct to the responsible university officials, e.g., the State title V coordinator, the director of cooperative extension, or the research coordinator; (2) through a member(s) of the Rural Development Advisory Council; and (3) through an experiment station faculty member or through a county extension office. RURAL DEVELOPMENT SERVICE See answers to questions 8 and 9. AGRICULTURAL STABILIZATION AND CONSERVATION SERVICE Sections 605 and 606 of title VI amend sections 7 and 8 of the Soil Conservation and Domestic Allotment Act, as amended (49 Stat. 163: 16 U.S.C. 590a), the basic authorizing legislation for providing cost-share assistance to agricultural producers for establishing approved conservation and pollution abatement practices. Section 605 provides authority for the Secretary to enter into multiyear (not to exceed a period of 10 years) cost-share agreements with agricultural producers. Agricultural producers will be informed by letter and local news media of the cost-share practices available as soon as each county program for 1974 is ready for operation (all county programs should be ready by late February). The producer will file his request for costshare assistance with the county ASCS office. The county ASC committee will review and act on the request according to program rules and regulations. The producer is notified of the action. If the action is an approval, the producer proceeds to carry out the practice. The Soil Conservation Service (SCS) provides technical assistance to the producer on practices requiring structural or engineering work. The Forest Service provides technical assistance to producers on forestry practices. When the work is completed and so certified by the technical agency, the county ASC committee reimburses the producer for a percentage of the cost of establishing the practice, usually 50 percent of the cost. In cases where the producer requests a multiyear agreement, the request will be referred to SCS for developing with the producer the necessary conservation farm plan. Then, based on the conservation farm plan approved by the local Soil Conservation District, the county ASC committee and producer will complete and sign the multiyear cost-share agreement. The agreement will show the practices to be cost-shared and the schedule of years for their establishment. The producer is then paid his cost-share assistance annually based on the practices performed each year under the agreement. Question 2. Please prepare a list of the typical kinds of things for which citizens, co-ops, organizations, governments, or groups might reasonably apply for loans under the provisions of the act. Also provide an explanation of how loan funds will be allocated by State, if appropriate. Answer. Following are examples of the kinds of things for which loans may be made: Water and waste disposal: Community domestic water systems Sewage treatment plants Storm drainage facilities Solid waste collection Solid waste disposal Other community facilities: Fire stations and equipment Rescue equipment Natural gas distribution systems Community centers Streets Recreational facilities. Cultural facilities Social facilities Business and industrial: Improvements or enlargements to existing facilities. Pollution abatement and control equipment Transportation services Where projects are income producing and tend to be self-supporting, preference will be given to utilizing the market rate loan authority under section 118 of the Rural Development Act. Funds will be |