7 CFR Part 1783

§ 1782.23

7 CFR Ch. XVII (1–1–08 Edition)

which is not inconsistent with the authorizing statute or other applicable
law and is determined to be in the Government’s interest. Requests for exceptions must be made in writing by the
State Director and supported with documentation to explain the adverse effect on the Government’s interest, propose alternative course(s) of action,
and show how the adverse affect will be
eliminated or minimized if the exception is granted. The exception decision
will be documented in writing, signed
by the Administrator, and retained in
the files.

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§ 1782.23 Use of Rural Development
loans and grants for other purposes.
(a) If, after making a loan or a grant,
the Administrator determines that the
circumstances under which the loan or
grant was made have sufficiently
changed to make the project or activity for which the loan or grant was
made available no longer appropriate,
the Administrator may allow the borrower or grantee to use property (real
and personal) purchased or improved
with the loan or grant funds, or proceeds from the sale of property (real
and personal) purchased with such
funds, for another project or activity
that:
(1) Will be carried out in the same
area as the original project or activity;
(2) Meets the criteria for a loan or
grant described in section 381E(d) of
the Consolidated Farm and Rural Development Act (Pub. L. 87–128), as
amended; and
(3) Satisfies such additional requirements as are established by the Administrator.
(b) If the new use of the property is
under the authority of another USDA
Agency Administrator, the other Administrator will be consulted on
whether the new use will meet the criteria of the other program. Since the
new project or activity must be carried
out in the same area as the original
project or activity, a new rural area determination will not be necessary.
(c) Borrowers and grantees that wish
to use the proceeds for other purposes
may make their request through the
appropriate Rural Development State
Office. Permission to use this option

will be exercised on a case-by-casebasis
on
applications
submitted
through the State Office to the Administrator for consideration. If the proposal is approved, the Administrator
will issue a memorandum to the State
Director outlining the conditions necessary to complete the transaction.
§§ 1782.24–1782.99
§ 1782.100

[Reserved]

OMB Control Number.

The information collection requirements in this part are approved by the
Office of Management and Budget
(OMB) and assigned OMB Control Number 0572–0137.

PART 1783—REVOLVING FUNDS
FOR FINANCING WATER AND
WASTEWATER PROJECTS (REVOLVING FUND PROGRAM)
Subpart A—General
Sec.
1783.1 What is the purpose of the Revolving
Fund Program?
1783.2 What Uniform Federal Assistance
Provisions apply to the Revolving Fund
Program?
1783.3 What definitions are used in this regulation?
1783.4 [Reserved]

Subpart B—Revolving Loan Program Grants
1783.5 What are the eligibility criteria for
grant recipients?
1783.6 When will applications for grants be
accepted?
1783.7 What is the grant application process?
1783.8 What are the acceptable methods for
submitting applications?
1783.9 What are the criteria for scoring applications?
1783.10 What is the grant agreement?
1983.11 What is the revolving loan fund?
1783.12 What are eligible uses of grant proceeds?
1783.13 What administrative expenses may
be funded with grant proceeds?

Subpart C—Revolving Loan Program Loans
1783.14 What are the eligibility criteria for
RFP loan recipients?
1783.15 What are the terms of RFP loans?
1783.16 How will loans from the revolving
fund be serviced?
AUTHORITY: 7 U.S.C. 1926 (a)(2)(B).

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Rural Utilities Service, USDA

1783.5

SOURCE: 69 FR 59772, Oct. 6, 2004, unless
otherwise noted.

Subpart A—General
§ 1783.1 What is the purpose of the Revolving Fund Program?
This part sets forth the policies and
procedures for making grants to qualified private, non-profit entities to capitalize revolving funds for the purpose
of providing financing to eligible entities for pre-development costs associated with proposed water and wastewater projects or with existing water
and wastewater systems, and shortterm costs incurred for replacement
equipment, small-scale extension of
services, or other small capital
projects that are not part of the regular operations and maintenance activities of existing water and wastewater systems.
§ 1783.2 What Uniform Federal Assistance Provisions apply to the Revolving Fund Program?
(a) This program is subject to the
general provisions that apply to all
grants made by USDA and that are set
forth in 7 CFR Part 3015—Uniform Federal Assistance Regulations.
(b) This program is subject to the
uniform administrative requirements
that apply to all grants made by USDA
to non-profit organizations and that
are set forth in 7 CFR Part 3019—Uniform Administrative Requirements for
Grants And Agreements with Institutions of Higher Education, Hospitals,
and Other Non-Profit Organizations.
(c) This program is subject to OMB
Circular No. A–122 (Revised): Cost Principles for Non-Profit Organizations.

of section 306(a) the CONACT (codified
at 7 U.S.C. 1926(a)(1) and (2)).
Grant agreement means the contract
between RUS and the grant recipient
which sets forth the terms and conditions governing a particular grant
awarded under this part.
Grant recipient means a private, nonprofit entity that has been awarded a
grant under this part.
Loan recipient means an eligible entity that has received an RFP loan.
Revolved funds means the cash portion of the revolving loan fund that is
not composed of RFP grant funds, including cash comprising repayments of
RFP loans, fees relating to RFP loans
and interest collected on RFP loans.
Revolving loan fund means the loan
fund established by the grant recipient
to carry out the purposes of this part,
such fund comprising the proceeds of
an RFP grant and other related assets.
RFP means Revolving Fund Program.
RFP grant means a grant from RUS
to a grant recipient under this part.
RFP loan means a loan from a grant
recipient using the direct or indirect
proceeds of an RFP grant awarded
under this part.
Rural and rural area means a city,
town or unincorporated area that has a
population of no more than 10,000 inhabitants, according to the latest decennial census of the United States.
RUS means the Rural Utilities Service, a Federal agency delivering the
USDA’s Rural Development Utilities
Program.
USDA means the United States Department of Agriculture.
§ 1783.4

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§ 1783.3 What definitions are used in
this regulation?
Administrative expenses means expenses incurred by a grant recipient
that are of the type more particularly
described in § 1783.12.
Applicant means a private, non-profit
organization that applies for an RFP
grant under this part.
CONACT means the Consolidated
Farm and Rural Development Act.
Eligible entity means an entity eligible to obtain a loan, loan guarantee or
grant under paragraph 1 or paragraph 2

[Reserved]

Subpart B—Revolving Loan
Program Grants
1783.5 What are the eligibility criteria
for grant recipients?
(a) The applicant must be a private
entity.
(b) The applicant must be organized
as a non-profit entity.
(c) The applicant must have the legal
capacity and lawful authority to perform the obligations of a grantee under
this part.

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§ 1783.6

7 CFR Ch. XVII (1–1–08 Edition)

Example 1 to paragraph (c): If the organization is incorporated as a non-profit corporation, it must have corporate authority under
state law and its corporate charter to engage
in the practice of making loans to legal entities.
Example 2 to paragraph (c): If the organization is an unincorporated association, state
law may prevent the organization from entering into binding contracts, such as a
grant agreement.

(d) The applicant must have sufficient expertise and experience in making and servicing loans to assure the
likelihood that the objectives of this
part can be achieved.

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§ 1783.6 When will applications for
grants be accepted?
In Fiscal Year 2004, applications will
be accepted for this RFP grant program from October 6, 2004, until December 6, 2004, at which time the initial application period shall close. An
applicant may withdraw, substitute,
amend or supplement its application at
any time prior to the closing of the initial application period. Once the initial
application period has closed, all applications shall be considered final. For
subsequent fiscal years, if any funds for
this program are available, the Secretary will publish a notice to that effect. The notice will establish the period during which applications for such
funds may be submitted for consideration.
§ 1783.7 What is the grant application
process?
(a) The applicant must complete and
submit the following items to RUS to
apply for a grant under this part:
(1) Application for Federal Assistance: Standard Form 424;
(2) Budget Information—Non-Construction Programs: Standard Form
424A;
(3)
Assurances—Non-Construction
Programs: Standard Form 424B;
(4) Evidence of applicant’s legal existence and authority in the form of
certified copies of organizational documents and a certified list of directors
and officers with their respective
terms;
(5) Evidence of tax exempt status,
and
(6) Most recent annual audit conducted by an independent auditor.

(b) The applicant must submit a written work plan that demonstrates the
ability of the applicant to make and
service loans to eligible entities under
this program and the feasibility of the
applicant’s lending program to meet
the objectives of this part.
(c) The applicant should submit a
narrative establishing the basis for any
claims that it has substantial expertise
in making and servicing loans. The
Secretary will give priority to an applicant that demonstrates it has substantial experience of this type.
(d) The applicant may submit such
additional information as it elects to
support and describe its plan for
achieving the objectives of the part.
§ 1783.8 What are the acceptable methods for submitting applications?
(a) Applications for RFP grants may
be submitted by U.S. Mail. Applications submitted by mail must be addressed as follows: Rural Utilities Service, U.S. Department of Agriculture,
1400 Independence Avenue, SW., STOP
1548, Washington, DC 20250–1548. The
outside of the application should be
marked: ‘‘Attention: Assistant Administrator, Water and Environmental
Programs.’’ Applications submitted by
mail must be postmarked not later
than the filing deadline to be considered during the period for which the
application was submitted.
(b) In lieu of submitting an application by U.S. Mail, an applicant may
file its application electronically by
using
the
Federal
Government’s
eGrants Web site (Grants.gov) at http://
www.grants.gov. Applicants should refer
to instructions found on the Grants.gov
Web site for procedures for registering
and using this facility. Applicants who
have not previously registered on
Grants.gov should allow a sufficient
number of business days to complete
the process necessary to be qualified to
apply for Federal Government grants
using electronic submissions. Electronic submissions must be filed not
later than the filing deadline to be considered during the period for which the
application was submitted.
(c) The methods of submitting applications may be changed from time to
time to reflect changes in addresses
and electronic submission procedures.

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Rural Utilities Service, USDA

§ 1783.11

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Applicants should refer to the most recent notice of funding availability for
notice of any such changes. In the
event of any discrepancy, the information contained in the notice must be
followed.
§ 1783.9 What are the criteria for scoring applications?
(a) Applications that are incomplete
or ineligible will be returned to the applicant, accompanied by a statement
explaining why the application is being
returned.
(b) Promptly after an application period closes, all applications that are
complete and eligible will be ranked
competitively based on the following
scoring criteria:
(1) Degree of expertise and successful
experience in making and servicing
commercial loans, with a successful
record, for the following number of full
years:
(i) At least 1 but less than 3 years—
5 points
(ii) At least 3 but less than 5 years—
10 points
(iii) At least 5 but less than 10
years—20 points
(iv) 10 or more years—30 points
(2) Extent to which the work plan
demonstrates a well thought out, comprehensive approach to accomplishing
the objectives of this part, clearly defines who will be served by the project,
clearly articulates the problem/issues
to be addressed, identifies the service
area to be covered by the RFP loans,
and appears likely to be sustainable.
Up to 40 points.
(3) Percentage of applicant contributions. Points allowed under this paragraph will be based on written evidence
of the availability of funds from
sources other than the proceeds of an
RFP grant to pay part of the cost of a
loan recipient’s project. In-kind contributions will not be considered.
Funds from other sources as a percentage of the RFP grant and points corresponding to such percentages are as
follows:
(i) Less than 20%—ineligible
(ii) At least 20% but less than 50%—
10 points
(iii) 50% or more—20 points
(4) Extent to which the goals and objectives are clearly defined, tied to the

work plan, and are measurable. Up to
15 points.
(5) Lowest ratio of projected administrative expenses to loans advanced. Up
to 10 points.
(6) The evaluation methods for considering loan applications and making
RFP loans are specific to the program,
clearly defined, measurable, and are
consistent with program outcomes. Up
to 20 points.
(7) Administrator’s discretion, considering such factors as creative outreach ideas for marketing RFP loans to
rural residents; the amount of funds requested in relation to the amount of
needs demonstrated in the work plan;
previous experiences demonstrating excellent utilization of a revolving loan
fund grant; and optimizing the use of
agency resources. Up to 10 points.
(c) All qualifying applications under
this part will be scored based on the
criteria contained in this section.
Awards will be made based on the highest ranking applications and the
amount of financial assistance available for RFP grants. All applicants will
be notified of the results in writing on
form AD–622.
§ 1783.10

What is the grant agreement?

RUS and the grant recipient will
enter into a contract setting forth the
terms and conditions governing a particular RFP grant award. RUS will furnish the form of grant agreement. No
funds awarded under this part shall be
disbursed to the grant recipient before
the grant agreement is binding and
RUS has received a fully executed
counterpart of the grant agreement.
§ 1783.11 What is the revolving loan
fund?
The grant recipient shall establish
and maintain a revolving loan fund for
the purposes set forth in § 1783.12. The
revolving loan fund shall be comprised
of revolving loan fund grant funds and
the grant recipient’s contributed funds.
All revolving loan fund loans made to
loan recipients shall be drawn from the
revolving loan fund. All revolving loan
fund loans shall be serviced and the revolving loan fund maintained, in accordance with this part and applicable
law.

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§ 1783.12

7 CFR Ch. XVII (1–1–08 Edition)
of

sult of such project must benefit, rural
areas.

(a) Grant proceeds shall be used solely for the purpose of establishing the
revolving loan fund to provide loans to
eligible entities for:
(1) Pre-development costs associated
with proposed water and wastewater
projects or with existing water and
wastewater systems, and
(2) Short-term costs incurred for replacement equipment, small-scale extension of services, or other small capital projects that are not part of the
regular operations and maintenance
activities of existing water and wastewater systems.
(b) A grant recipient may not use
grant funds in any manner inconsistent
with the terms of the grant agreement.

§ 1783.15 What are the terms of RFP
loans?
(a) RFP loans under this part—
(1) Shall have an interest rate that is
determined by the grant recipient and
approved by RUS;
(2) Shall have a terms not to exceed
10 years; and
(3) Shall not exceed the lesser of
$100,000 or 75 percent of the total cost
of a project. The total outstanding balance for all loans under this program
to any one entity shall not exceed
$100,000.
(b) The grant recipient must set forth
the RFP loan terms in written documentation signed by the loan recipient.
(c) Grant recipients must develop and
use RFP loan documentation that conforms to the terms of this part, the
grant agreement, and the laws of the
state or states having jurisdiction.

§ 1783.12 What are
grant proceeds?

eligible

uses

§ 1783.13 What
administrative
expenses may be funded with grant
proceeds?
RFP grant funds may not be used for
any purposes not described in § 1783.12,
including, without limitation, payment
or reimbursement of any of the grant
recipient’s administrative costs or expenses. Administrative expenses may,
however, be paid or reimbursed from
revolving loan fund assets that are not
RFP grant funds, including revolved
funds and cash originally contributed
by the grant recipient.

Subpart C—Revolving Fund
Program Loans

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§ 1783.14 What are the eligibility criteria for RFP loan recipients?
(a) A loan recipient must be an eligible entity as defined in § 1783.3.
(b) The loan recipient must be unable
to finance the proposed project from
their own resources or through commercial credit at reasonable rates and
terms.
(c) The loan recipient must have or
will obtain the legal authority necessary for owning, constructing, operating and maintaining the proposed
service or facility, and for obtaining,
giving security for, and repaying the
proposed loan.
(d) The project funded by the proceeds of an RFP loan must be located
in, or the services provided as the re-

§ 1783.16 How will the loans given
from the revolving fund be serviced?
The grant recipient shall be responsible for servicing all loans, to include
preparing loan agreements, processing
loan payments, reviewing financial
statements and debt reserves balances,
and other responsibilities such as enforcement of loan terms. Loan servicing will be in accordance with the
work plan approved by the Agency
when the grant is awarded for as long
as any loan made in whole or in part
with Agency grant funds is outstanding.

PART
1785—LOAN
ACCOUNT
COMPUTATIONS,
PROCEDURES
AND POLICIES FOR ELECTRIC
AND TELEPHONE BORROWERS
Subpart A [Reserved]
Subpart B—RUS Cushion of Credit Account
Computations and Procedures
Sec.
1785.66 General.
1785.67 Definitions.
1785.68 Establishing an RUS cushion of
credit payment account.
1785.69 Cushion of credit payment account
computations.

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