726 Borrower Checklist

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Overview

726
Instructions

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Sheet 1: 726

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The valid OMB control number for this information collection is 0572-0032. The time required to complete this information collection is estimated to average 30 minutes per response, including the time for

reviewing instructions, searching existing data sources, gathering and maintaining the data needed, and completing and reviewing the collection of information.

UNITED STATES DEPARTMENT OF AGRICULTURE

BORROWER NAME

RURAL UTILITIES SERVICE

DISTRIBUTION LOAN APPLICATION CHECKLIST

LOAN DESIGNATION

AND INDEX

YES

NO

NA

DATE

1.

Transmittal Letter to RUS with additional items (see attached instructions) (7 CFR 1710.401(a)(1))

2.

Transmittal Letter to Supplemental Lender (if required - 7 CFR 1710.110)

3.

Board Resolution requesting loan and release of information (sample form available) (7 CFR 1710.401(a)(2))

4.

RUS Form 740c - Cost Estimate & Loan Budget (7CFR 1710.401(a)(3))

a.

Reimbursement schedule (if applicable) (7 CFR 1710.401(a)(3)(iii)

b.

Useful life - statement certifying that at least 90% of the loan funds are for facilities with a useful life of

33 years or longer or attach schedule showing the costs and useful life of those facilities with a useful life

less than 33 years. (see attached instructions) (7 CFR 1710.115)

c.

Location of Consumers, if applicable (if density exceeds 17) ( 7 CFR 1710.401(a)(3)(iv)

5.

RUS Form 740g - Application for Headquarters Facilities (if needed) (7 CFR 1710.401(a)(4))

6.

RUS Form 7 - Financial & Statistical Report: (not more than 60 days old) (7 CFR 1710.401(a)(5))

7.

Area Coverage & Line Extension Policy (s). (see attached instructions, Item #2 of transmittal letter) (7 CFR 1710.401(b))

8.

Current Load Forecast Study: (attach Board Resolution adopting if not previously submitted) (7 CFR 1710.401(c)(2)(i))

9.

Long Range Financial Forecast with Board Resolution (sample form available) and assumptions (7 CFR 1710.401(c)(1))

10.

Sensitivity Analysis (if required - see 7 CFR 1710, subpart G) (7 CFR 1710.401(c)(1))

11.

Copy of all Retail Rates (only if amended since last loan)

12.

Rate Comparison at average residential usage (see instructions)

Include a narrative statement concerning recent and/or planned changes in retail rates (7 CFR 1710.401(a)(17))

13.

Attorney Opinion to include, but not limited to: property owned, corporate status, authorized place of business, borrower's legal name,

debt limit, State regulatory approvals and subsidiaries (see attached instructions- sample form available)

Debt Limit Amount

(7 CFR 1710.401(a)(7))

a.

Property description marked as Schedule B attached (page 4 of Mortgage)

b.

Debt Limit - date established and amount.

c.

Board Resolution attached (needed whenever the debt limit is different than that contained in last mortgage

or an increase is required)

d.

Name of Power Supplier, Power Contract name and Date of Power Contract included as item "j"

14.

Special Resolution as required: (use of contractors, corrective action plans, etc..)

List:

15.

Articles of Incorporation (only if amended since last loan) (7 CFR 1710.401(a)(14)(i))

16.

Bylaws (only if amended since last loan)(7 CFR1710.401(a)(14)(ii))

17.

CWP, Board Resolution approving the CWP, and BER (if not previously submitted)(7 CFR 1710.401(c)(2)(ii) & (iii))

18.

Statement concerning inclusion of facilities in rate base (see attached instructions)(7 CFR 1710.401(a)(15))

19.

Certification Regarding Debarment, Suspension & Other (Form AD 1047-Form available)(7 CFR 1710.401(a)(10))

20.

Lobbying Certification (Form available) (7 CFR 1710.401(a)(12))

21.

Uniform Relocation Act Assurance Statement (if not previously provided)(Form available)(7 CFR 1710.401(a)(11))

22.

Debt Delinquency Certification (Form available)(7 CFR 1710.401(a)(13))

23.

DSM or IRP Study (required for a loan for DSM or IRP facilities or equipment)(7 CFR 1710.401(c)(2)(iv))

24.

Copy of Standard Form 100 (if in excess of 100 employees)(7 CFR 1710.401(a)(9))

25.

Borrower's Statistical Profile-include comments (Only comment on adverse flags-GFR will assist with selection of adverse flags)

26.

Rural Development Activities (see sample format provided in form "Rural Development Activities.doc")

27.

Other (list - 7 CFR 1710.401 (a)(18))

THE FOLLOWING ITEMS ARE COMPLETED BY THE GENERAL FIELD REPRESENTATIVE

28.

RUS Form 602 - Analysis of Prior Loan Funds: (Only required if there is a balance in reserve)

29.

RUS Form 324 - Financial Forecast Review and Evaluation Worksheet (Not needed if the information is contained in the FAR).

30.

RUS Form 138- GFR Checklist and Report for Electric Loan Application

31.

Trendbux Analysis

32.

RELRA Worksheet (not required for Guaranteed applications)

Rate Disparity and Consumer Data (if needed, density greater than 5.5)

Note: In those cases where the borrower's density may go over 5.5 in the near future, this information

should be provided even though the density is under 5.5. If density exceeds 17, the location of consumers

must also be provided as attachment to RUS Form 740c (see item 4, c. above).

33.

Civil Rights Field Activity Review Report (Form 9 - if not previously submitted)

A total of 5 loan packets are needed for concurrent loan applications. RUS receives the original signature loan documents and one copy. The Supplemental lender receives one

copy. The GFR receives one copy and one copy is for the borrower's records. The GFR loan packet and the RUS loan packets are sent to the GFR for final review.

The Supplemental loan packet is sent directly to the Supplemental lender.

Remarks:

RUS Form 726 (Rev. 9-01)

(Version 2, 4-23-01)

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Sheet 2: Instructions

INSTRUCTIONS
FOR COMPLETING
RUS FORM 726
Item #	Description
1	Transmittal Letter to RUS
	Items to be included in the transmittal letter as listed in 7 CFR 1710.401:
		a.	Transmittal letter must be signed by the cooperative Manager.
		b.	Include the corporate name of the borrower.
		c.	Include the street address of the corporate headquarters.
		d.	Include the Taxpayer ID of the cooperative.
		e.	The need for flood hazard insurance must be addressed.
		f.	Provide a breakdown of the funds by State.
		g.	List of Counties served.
		h.	Listing of threatened actions by third parties that could adversely effect the
			cooperative's financial condition including annexations or other actions
			affecting service territory, loads, or rates (example: potential loss of a large
			power consumer or large load concentration).
		i.	Listing of pending regulatory proceedings.
	A statement that there has been no change in area coverage or line extension policies.
	(Note: If there has been a change then a copy of the new area coverage and/or line
	extension policy(s), as applicable, must be submitted to RUS - see Form 726 item #7)
2	Transmittal Letter to Supplemental Lender
	Contact your supplemental Lender (if any) concerning the format for this letter.
3	Board Resolution requesting loan and release of information
	Sample forms are provided. Please use the form that is appropriate for the type of loan
	requested:			Municipal Rate Loan - Muni Rate Loan Resolution.doc
				100% Municipal Rate Loan - Muni Rate Loan 100% Resolution.doc
				Hardship Rate Loan - Hardship Rate Loan Resolution.doc
				FFB Guaranteed Loan - FFB Guarantee Loan Resolution.doc
				Treasury Rate Loan - Treasury Rate Loan Resolution.doc
4	RUS Form 740c
	See sample form "740c.xls" - instructions are provided with the form.
4.a.	Reimbursement Schedule - This schedule lists the date, amount, and identification
	number of each inventory of work orders and special equipment summary that form
	the basis for the borrower's request for reimbursement of general funds on the RUS Form
	740c. See Sec. 1710.109.
4.b.	Useful life statement - A statement must be attached to the 740c certifying that
	at least 90% of the loan funds requested are for facilities with a useful life of 33
	years or longer. If facilities are included in the loan that have a useful life of
	less than 33 years, and represent more than 10% of the loan, attach a schedule
	showing the costs and useful life of those facilities (reference 1710.115).
	(Sample statement provided as an attachment to the Form 740c)
4.c.	Location of Consumers - If the application is for a municipal rate loan subject to the interest
	rate cap, or for a loan at the hardship rate, and the average number of consumers per mile
	of the total electric system exceeds 17, Form 740c must include, as a note, a breakdown
	of funds included in the proposed loan to furnish or improve service to consumers located
	in an urban area. See 7 CFR 1714.7(c) and 1714.8(d). This breakdown must indicate the
	method used by the borrower for allocating loan funds between urban and non urban consumers
5	RUS Form 740g
	This form is only required if a loan is being requested to support the construction of headquarters
	facilities - see 7 CFR 1710.401(a)(4) for additional details.
6	RUS Form 7
	Financial and statistical report. The form shall contain the most recent data available, which
	shall not be more than 60 days old when received by RUS.
7	Area Coverage and Line Extension Policy(s)
	Attach a copy of the current Area Coverage and Line Extension Policy(s) only if there has been
	in the policy(s) since that last loan application.
8	Current Load Forecast Study
	Attach a copy of the Board Resolution approving the most recent Load Forecast Study used to
	support this loan requested only if it has not been previously submitted.
9 & 10	Long Range Financial Forecast with Board Resolution/Sensitivity Analysis
	Along with the loan application, the borrower shall submit to RUS a Long-Range Financial
	Forecast (LRFF), that meets the requirements of 7 CFR 1710, subpart G. The forecast
	shall include any sensitivity analysis or analysis of alternative scenarios required by
	subpart G of 7 CFR 1710, and shall be accompanied by a certified board resolution
	adopting, and indicating the board of directors' approval of, the LRFF, and directing
	management to take whatever steps may be necessary, including the filing for rate
	increases, to achieve the TIER goals set forth in the LRFF.
	A sample Board resolution is available (see Financial Forecast Resolution.doc).
11	Copy of all Retail Rates
	Attach a copy of all retails rates only if a change in the rates has taken place since the last
	loan application.
12	Rate Comparison at average residential rates
	Comparison of rates with neighboring and/or competing utilities (IOU's and Muni's only).
	The Comparison should be based upon the average residential usage. This comparison
	should also include an explanation of any recent or planned changes in retail rates.
13	Attorney Opining
	Submit an opinion of counsel (see sample form "Attorney Opinion.doc") which provides
	and opines to the accuracy of information relating to:
	(a)	Counties where the borrower has personal or real property (existing facilities and
		new facilities).
	(b)	The completeness and accuracy of the property schedule (Property Scheduled
		attached to this opinion as Schedule B).
	(c)	The suitability of the property descriptions for inclusion in a mortgage.
	(d)	The borrower's corporate status.
	(e)	The borrower's authorized places of business.
	(f)	The borrower's true and correct legal name.
	(g)	The borrower's corporate debt limit.
		NOTE: A new Board Resolution will be required (attach) whenever the debt limit is
		different than that contained in the last mortgage or whenever the debt limit is
		inadequate to cover all debt (past plus current application).
	(h)	State Regulatory Approvals (loan documents would or would not require)
	(i)	Taxpayer ID number
	(j)	The name(s) of your Power Supplier(s), name(s) of the related contracts and date of
		the contracts. Note: These dates should be the last full, complete, contract, not
		amendments.
	(k)	Statement concerning pending litigation or claims. If claims or pending litigation exist,
		provide a list including levels of related insurance coverage and potential effect.
	(l)	Whether the borrower has one or more subsidiaries
14	Special Resolution
	Submit all resolutions as required (GFR will provide information concerning this item).
15	Articles of Incorporation
	Attach a copy of the current Articles of Incorporation only if modified since the last
	loan submittal.
16	Bylaws
	Attach a copy of the current Bylaws only if modified since the last loan submittal.
17	CWP Board Resolution
	Attach a copy of the Board Resolution approving the supporting CWP if not previously
	submitted.
18	Statement concerning inclusion of facilities in rate base
	To fulfill the requirements of 7 CFR 1710.151(f): Submit a statement from management
	or an opinion of counsel indicating that, based upon available information, there is no
	reason to anticipate that any of the facilities included in the loan application will be
	excluded from the borrower's rate base by State regulatory authorities. This statement
	may be based upon the provisions of State law, rules and policies of State regulatory
	authorities, prior experience, and the recent experience of other utilities in the State.
	NOTE: If provided by Management, the statement may be included in the
	transmittal letter.
19	Certificate Regarding Debarment
	Form AD-1047, Certification Regarding Debarment, Suspension, and Other
	Responsibility Matters--Primary Covered Transactions. This statement certifies that the
	borrower will comply with certain regulations on debarment and suspension required
	by Executive Order 12549, Debarment and Suspension (3 CFR, 1986 Comp., p. 189).
	See 7 CFR part 3017 and Sec. 1710.123. (See sample form "Debarment.doc")
20	Lobbying Certification
	This statement certifies that the borrower shall comply with certain requirements
	with respect to restrictions on lobbying activities. There are two forms of certification
	required. Form "Lobbying FFB.doc should be used in support of FFB guaranteed
	loan applications. Form "Lobbying.doc" should be used for all other applications.
21	Uniform Relocation Act Assurance Statement
	This assurance, which need not be resubmitted if previously submitted,
	provides that the borrower shall comply with 49 CFR part 24, which implements
	the Uniform Relocation Assistance and Real Property Acquisition Policy Act
	of 1970, as amended by the Uniform Relocation Act Amendments of 1987
	and 1991. See Sec. 1710.124. (See also sample form "Relocation.doc")
22	Debt Delinquency Certification
	Federal debt delinquency requirements. See 1710.126. This report indicates
	whether or not a borrower is delinquent on any Federal debt.
	(See sample certification "Debt Certification.doc")
23	DSM or IRP study
	See 7 CFR 1710, Subpart H, for details relating to loans for demand side management
	and associated Integrated Resources Plans.
24	Standard Form 100
	Equal Employment Opportunity Employer Report EEO--1. This form, required by
	the Department of Labor, sets forth employment data for borrowers with 100 or
	more employees. A copy of this form, as submitted to the Department of Labor, is
	to be included in the application for an insured loan if the borrower has more than 100
	employees. See Sec. 1710.122.
25	Borrower's Statistical Profile and Comments
	Attach a copy of the current Borrower's Statistical Profile (BSP). Also attach comments
	explaining each ratio that is flagged and considered adverse. The GFR will assist with
	determining which ratios are considered adverse.
26	Rural Development Activities
	Attach a narrative discussion of all rural development activities support by the borrower.
	(See sample format "Rural Development Activities.doc")
27	Other
	Attach other documents as required. The GFR will advise as to any other required
	documents.
Please be as specific as possible with your responses to the above items. If you need any
assistance with addressing any item, please contact your GFR.