[Federal Register Volume 64, Number 57 (Thursday, March 25, 1999)]
[Rules and Regulations]
[Pages 14355-14373]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-6995]
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Rules and Regulations
Federal Register
________________________________________________________________________
This section of the FEDERAL REGISTER contains regulatory documents
having general applicability and legal effect, most of which are keyed
to and codified in the Code of Federal Regulations, which is published
under 50 titles pursuant to 44 U.S.C. 1510.
The Code of Federal Regulations is sold by the Superintendent of Documents.
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Federal Register / Vol. 64, No. 57 / Thursday, March 25, 1999 / Rules
and Regulations
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DEPARTMENT OF AGRICULTURE
Rural Utilities Service
7 CFR Part 1703
RIN 0572-AB31
Distance Learning and Telemedicine Loan and Grant Program
AGENCY: Rural Utilities Service, USDA.
ACTION: Direct final rule.
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SUMMARY: The Rural Utilities Service (RUS) is amending its regulations
for its Distance Learning and Telemedicine (DLT) Loan and Grant
Program. These amendments will clarify the requirements for the
different types of financial assistance offered; streamline policies
and procedures for obtaining loans and expanding the purposes for which
loan funds can be used; and award grants on a competitive basis.
DATES: This rule will become effective on May 10, 1999, unless we
receive written adverse comments or notice of intent to submit adverse
comments on or before April 26, 1999. Written comments must be received
by RUS not later than April 26, 1999. If we receive such comment or
notice, we will publish a document in the Federal Register prior to the
effective date withdrawing the direct final rule.
ADDRESSES: Submit any written comments or notice of intent to submit
adverse comments to Roberta D. Purcell, Assistant Administrator,
Telecommunications Program, Rural Utilities Service, 1400 Independence
Ave., SW., STOP 1590, Room 4056, South Building, Washington, DC 20250-
1590. RUS requires a signed original and three copies of all comments
(7 CFR part 1700). All comments received will be made available for
public inspection at room 4056, South Building, U.S. Department of
Agriculture, Washington, DC, between 8:00 a.m. and 4:00 p.m. (7 CFR
part 1.27(b)). Telephone number (202) 720-9554.
FOR FURTHER INFORMATION CONTACT: Jonathan P. Claffey, Deputy Assistant
Administrator, Telecommunications Program, Rural Utilities Service,
1400 Independence Ave., SW., STOP 1590, Room 4056, South Building,
Washington, DC 20250-1590. Telephone number (202) 720-9556.
SUPPLEMENTARY INFORMATION:
Executive Order 12866
This rule has been determined to be not significant and, therefore,
has not been reviewed by the Office of Management and Budget (OMB)
under Executive Order 12866.
Executive Order 12988
This rule has been reviewed under Executive Order 12988, Civil
Justice Reform. RUS has determined that this rule meets the applicable
standards provided in section 3 of that Executive Order. In addition,
all State and local laws and regulations that are in conflict with this
rule will be preempted; no retroactive effect will be given to this
rule; and administrative appeal procedures, if any, are required to be
exhausted prior to initiating litigation against the Department (7
U.S.C. 6912(e)).
Regulatory Flexibility Act Certification
RUS has determined that this final rule will not have a significant
economic impact on a substantial number of small entities, as defined
by the Regulatory Flexibility Act (5 U.S.C. Sec. 601 et seq.). The RUS
DLT Loan and Grant Program provides recipients with grants and with
loans at interest rates and terms that are more favorable than those
generally available from the private sector. Recipients, as a result of
obtaining federal financing, receive economic benefits that exceed any
direct cost associated with complying with RUS regulations and
requirements.
Information Collection and Recordkeeping Requirements
The reporting and recordkeeping burdens contained in this rule were
approved by the Office of Management and Budget (OMB) pursuant to the
Paperwork Reduction Act of 1995 (44 U.S.C. Chapter 35, as amended)
under control number 0572-0096.
Send questions or comments regarding this burden or any other
aspect of these collections of information, including suggestions for
reducing the burden to F. Lamont Heppe, Director, Program Development
and Regulatory Analysis, Rural Utilities Service, 1400 Independence
Avenue, SW., Room 4034--South Building, Washington D.C. 20250-1522.
National Environmental Policy Act Certification
The Administrator of RUS has determined that this rule will not
significantly affect the quality of the human environment as defined by
the National Environmental Policy Act of 1969 (42 U.S.C. 4321 et seq.).
Therefore, this action does not require an environmental impact
statement or assessment.
Catalog of Federal Domestic Assistance
The program described by this rule is listed in the Catalog of
Federal Domestic Assistance programs under number 10.855, Distance
Learning and Telemedicine Loan and Grant Program. This catalog is
available on a subscription basis from the Superintendent of Documents,
the United States Government Printing Office, Washington, DC 20402-
9325.
Executive Order 12372
This program is subject to the provisions of Executive Order 12372
that requires intergovernmental consultation with State and local
officials.
Unfunded Mandates
This rule contains no Federal mandates (under the regulatory
provisions of Title II of the Unfunded Mandates Reform Act) for State,
local, and tribal governments or the private sector. Thus, this rule is
not subject to the requirements of sections 202 and 205 of the Unfunded
Mandates Reform Act of 1995.
Background
RUS is amending its regulations for the Distance Learning and
Telemedicine Loan and Grant Program (DLT program). These amendments
will (1) clarify the requirements for the different types of financial
assistance offered; (2) streamline policies and procedures for
obtaining loans and expanding purposes for which loans can be used; (3)
award grants on a competitive basis; and (4) provide applicants with
additional
[[Page 14356]]
offices to submit applications. Currently, the regulations covering the
administration of the DLT program are contained in one subpart. This
amendment will revise subpart D to address all criteria related to the
overall program and add three subparts that address specifically the
different types of financing options offered by the DLT program.
Subpart E addresses applications for grants. Subpart F addresses
applications for a combination loan and grant. Subpart G addresses
applications for loans.
The current regulations implemented the provisions of the Federal
Agriculture Improvement Act of 1996 (1996 Act, 7 U.S.C. 950aaa et seq.)
which added a loan program component to the grant program. During its
first two years, the loan program has struggled to effectively utilize
its available loan funds, in part because applicants seeking financial
assistance were either unable to enter into loan agreements or could
not pay back a loan. The amendments to the regulations will seek to
retarget available loan funds to entities that are capable of
supporting debt service payments for the purpose of providing distance
learning and telemedicine services in rural areas.
This rule establishes three application processes to finance
necessary equipment and telecommunications facilities that will enable
schools and libraries and rural medical clinics to offer the best
services possible: (1) grants, contained in subpart E; (2) combination
loan and grant, contained in subpart F; and (3) loans, contained in
subpart G. The three application processes by which applicants can
request consideration for financial assistance will enable the
government to more effectively and efficiently utilize the limited
financial assistance available. By segregating the three different
application processes, RUS will be able to target entities that qualify
for the different types of financial assistance. The rule seeks to
assure repayment to the government of any loan.
Grants will be awarded to the neediest applicants on a competitive
basis subject to the availability of funds. Instead of ``categorizing''
applicants based on the percentage of students eligible to participate
in the National School Lunch Program (NSLP), RUS will instead use the
NSLP eligibility levels as an indicator of poverty and award points
based on the percentage of the students eligible to participate located
in the proposed end user sites of the project (higher eligibility
percentages will receive more points). In addition, applicants will be
able to submit for consideration additional indicators which address
the economic disparity of the community the project will serve. All
eligible applications for grants will be scored and ranked in
accordance with the provisions of subpart E. Grants will be awarded on
a competitive basis to applications receiving the highest number of
points.
Loans and combination loans and grants will be made to applicants
able to enter into a loan agreement, execute a note for more than one
year, demonstrate loan feasibility, and otherwise qualify under
subparts F and G. RUS will determine the specific amounts to be made
available for a combination loan and grant, generally at a ratio of 10
to 1, loans to grants, respectively (e.g., $100,000 of grant funds for
every $1,000,000 of loan funds). Loans and combination loan and grant
applications will generally be processed on a first-in, first-out
basis, based on the amount of funding available for the fiscal year and
the number of applications received. RUS believes that sufficient
funding is generally available to fund all eligible combination loan
and grant and loan applications received during the fiscal year, and
therefore will process and approve each application as it is received.
However, if RUS determines that the amount of combination loan and
grant and loan funds available for funding is insufficient to process
all eligible applications, RUS may prioritize such applications using
evaluation criteria similar to that set forth for processing grants.
The purposes for which loans can be used will be expanded to allow for
the financing of purposes and facilities that are restricted under
approved grant purposes in this rule and under any financing purpose in
the current rule. For example, in some instances, loans may be used to
cover initial operating start-up costs or for the construction of
buildings and purchase of land necessary for the delivery of
educational and health care services to rural areas. Loans afford
applicants the most flexibility in terms of the types of approved
purposes for financial assistance and provide the highest amount of
financial assistance available per applicant.
In addition to establishing three distinct financial assistance
application processes, this rule will amend several of the scoring
criteria used to rank grant applications.
List of Subjects in 7 CFR Part 1703
Community development, Grant programs-education, Grant programs-
health care, Grant programs-housing and community development, Loan
programs-education, Loan programs-health care, Loan programs-housing
and community development, Reporting and recordkeeping requirements,
Rural areas.
For the reasons set forth in the preamble, 7 CFR Chapter XVII is
amended as follows:
PART 1703--RURAL DEVELOPMENT
1. The authority citation for part 1703 is revised to read as
follows:
Authority: 7 U.S.C. 901 et seq. and 950aaa et seq.
2. In part 1703, subpart E is redesignated as subpart H, subpart D
is revised, and new subparts E, F, and G are added to read as follows:
Subpart D--Distance Learning and Telemedicine Loan and Grant Program--
General
Sec.
1703.100 Purpose.
1703.101 Policy.
1703.102 Definitions.
1703.103 Applicant eligibility and allocation of funds.
1703.104 [Reserved]
1703.105 Processing of selected applications.
1703.106 Disbursement of loans and grants.
1703.107 Reporting and oversight requirements.
1073.108 Audit requirements.
1703.109 Grant and loan administration.
1703.110 Changes in project objectives or scope.
1703.111 Grant and loan termination.
1703.112 Expedited telecommunications loans.
1703.113-1703.119 [Reserved]
Subpart E--Distance Learning and Telemedicine Grant Program
1703.120 Use of grants.
1703.121 Approved purposes for grants.
1703.122 Matching contributions.
1703.123 Nonapproved purposes for grants.
1703.124 Maximum and minimum grant amounts.
1703.125 Completed application.
1703.126 Criteria for scoring grant applications.
1703.127 Application selection provisions.
1703.128 Submission of applications.
1703.129 Appeals.
Subpart F--Distance Learning and Telemedicine Combination Loan and
Grant Program
1703.130 Use of combination loan and grant.
1703.131 Approved purposes for a combination loan and grant.
1703.132 Nonapproved purposes for a combination loan and grant.
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1703.133 Maximum and minimum amounts.
1703.134 Completed application.
1703.135 Application selection provisions.
1703.136 Submission of applications.
1703.137 Appeals.
1703.138-1703.139 [Reserved]
Subpart G--Distance Learning and Telemedicine Loan Program
1703.140 Use of loan funds.
1703.141 Approved purposes for loans.
1703.142 Nonapproved purposes for loans.
1703.143 Maximum and minimum amounts.
1703.144 Completed application.
1703.145 Application selection provisions.
1703.146 Submission of applications.
1703.147 Appeals.
Subpart D--Distance Learning and Telemedicine Loan and Grant
Program--General
Sec. 1703.100 Purpose.
The purpose of the Distance Learning and Telemedicine (DLT) Loan
and Grant Program is to encourage and improve telemedicine services and
distance learning services in rural areas through the use of
telecommunications, computer networks, and related advanced
technologies by students, teachers, medical professionals, and rural
residents. This subpart describes the general policies for
administering the DLT program. Subpart E contains the policies and
procedures related to grants; subpart F contains the policies and
procedures related to a combination loan and grant; and subpart G
contains the policies and procedures related to loans.
Sec. 1703.101 Policy.
(a) The transmission of information is vital to the economic
development, education, and health of rural Americans. To further this
objective, RUS will provide financial assistance to distance learning
and telemedicine projects that will improve the access of people
residing in rural areas to educational, learning, training, and health
care services.
(b) In providing financial assistance, RUS will give priority to
rural areas that it believes have the greatest need for distance
learning and telemedicine services. RUS believes that generally the
need is greatest in areas that are economically challenged, costly to
serve, and experiencing outward migration. This program is consistent
with the provisions of the Telecommunications Act of 1996 that
designate telecommunications service discounts for schools, libraries,
and rural health care centers. RUS will take into consideration the
community's involvement in the proposed project and the applicant's
ability to leverage grant funds.
(c) In administering this subpart, RUS will not favor or mandate
the use of one particular technology over another.
(d) Rural institutions are encouraged to cooperate with each other,
with applicants, and with end-users to promote the program being
implemented under this subpart.
(e) RUS staff will make diligent efforts to inform potential
applicants in rural areas of the programs being implemented under this
subpart.
(f) The Administrator will provide only loans under this subpart to
any entity that has received a telecommunications or electric loan
under the Rural Electrification Act of 1936. Telecommunications and
Electric borrowers are encouraged to seek a loan under this subpart to
bolster educational and health care opportunities in the rural
communities they serve. A borrower receiving a loan shall:
(1) Make the loan available to entities that qualify as distance
learning or telemedicine projects satisfying the requirements of this
subpart, under any terms it so chooses as long as the terms are no more
stringent than the terms under which it received the financial
assistance.
(2) Use the loan to acquire, install, improve, or extend a distance
learning or telemedicine system referred to in this subpart.
(g) The Administrator will allocate funds that are appropriated
each fiscal year for the subparts E, F, and G, of this part
respectively. Not more than 30 days before the end of the fiscal year,
the Administrator may transfer any funds not committed to grants in the
combination loan and grant program to the grant program.
(h) Financial assistance may be provided for end user sites.
Financial assistance may also be provided for hubs located in rural or
non-rural areas if they are necessary to provide distance learning or
telemedicine services to rural residents at end user sites.
(i) The Administrator will publish, at the end of each fiscal year,
a notice in the Federal Register of all applications receiving
financial assistance under this subpart. Subject to the provisions of
the Freedom of Information Act, (5 U.S.C. 552), applications will be
available for public inspection at the U.S. Department of Agriculture,
1400 Independence Avenue, SW., Washington, D.C., 20250.
Sec. 1703.102 Definitions.
1996 Act means the Federal Agriculture Improvement Act of 1996.
Act means the Rural Electrification Act of 1936 (7 U.S.C. 901 et
seq.).
Administrator means the Administrator of the Rural Utilities
Service, or designee or successor.
Applicant means an eligible organization that applies for financial
assistance under this subpart.
Approved purposes means project purposes for which grant, loan, or
combination loan and grant financial assistance may be expended.
Champion community means any community that submitted a valid
application to become a USDA Empowerment Zone/Enterprise Community (EZ/
EC) area, that met the requirements to be designated an EZ/EC area, but
not chosen because their score was not high enough to be selected.
Combination loan and grant means a grant in combination with a loan
made under the DLT program.
Completed application means an application that includes all those
items specified in Secs. 1703.125, 1703.134, and 1703.144 in form and
substance satisfactory to the Administrator.
Computer networks mean computer hardware and software, terminals,
signal conversion equipment including both modulators and demodulators,
or related devices, used to communicate with other computers to process
and exchange data through a telecommunication network in which signals
are generated, modified, or prepared for transmission, or received, via
telecommunications terminal equipment and telecommunications
transmission facilities.
Consortium means a combination or group of eligible entities formed
to undertake the purposes for which the distance learning and
telemedicine financial assistance is provided. Each consortium shall be
composed of a minimum of one eligible organization that meets the
requirements of Sec. 1703.103.
Construct means to acquire, construct, extend, improve, or install
a facility or system.
Data terminal equipment means equipment that converts user
information into data signals for transmission, or reconverts the
received data signals into user information, and is normally found on
the terminal of a circuit and on the premises of the end user.
Distance learning means a telecommunications link to an end user
through the use of eligible equipment to:
(1) Provide educational programs, instruction, or information
originating
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in one area, whether rural or not, to students and teachers who are
located in rural areas; or
(2) Connect teachers and students, located in one rural area with
teachers and students that are located in a different rural area.
DLT borrower means an entity that has an outstanding loan under the
provisions of the DLT program.
DLT program means the Distance Learning and Telemedicine Loan and
Grant Program administered by RUS.
Economic useful life as applied to equipment and facilities
financed under the DLT program means the number of years resulting from
dividing 100 percent by the depreciation rate (expressed as a percent)
based on Internal Revenue Service depreciation rules or recognized
telecommunications industry guidelines.
Eligible equipment means computer hardware and software, audio or
video equipment, computer network components, telecommunications
terminal equipment, data terminal equipment, inside wiring, interactive
video equipment, or other facilities that would further telemedicine
services or distance learning services.
Eligible facilities means land, buildings, or building construction
needed to carry out an eligible distance learning or telemedicine
project for loan financial assistance only.
Eligible organization means an entity that meets the requirements
of Sec. 1703.103.
Empowerment Zone and Enterprise Community (EZ/EC) means any
community whose designation as such by USDA pursuant to 26 U.S.C. 1391
et seq., is in effect at the time RUS agrees to provide financial
assistance.
End user is one or more of the following:
(1) Rural elementary, secondary schools, and other educational
institutions, such as institutions of higher education, vocational and
adult training and education centers, libraries, and teacher training
centers, and students, teachers and instructors using such rural
educational facilities, that participate in a rural distance learning
telecommunications program through a project funded under this subpart;
(2) Rural hospitals, primary care centers or facilities, such as
medical centers, nursing homes, and clinics, and physicians and staff
using such rural medical facilities, that participate in a rural
telemedicine program through a project funded under this subpart; and
(3) Other rural community facilities, institutions, or entities
that receive distance learning or telemedicine services.
End user site means a facility that is part of a network or
telecommunications system that is utilized by end users.
Financial assistance means a grant, combination loan and grant, or
loan.
GFR means RUS telecommunications program General Field
Representative.
Grant documents means the grant agreement, including any amendments
and supplements thereto, between RUS and the grantee.
Grantee means a recipient of a grant from RUS to carry out the
purposes of the DLT program.
Guarantee means a guarantee for a loan provided by a RUS borrower
or other qualified third party.
Hub means a facility that is part of a network or
telecommunications system that provides educational or medical services
to end user sites.
Instructional programming means educational material, including
computer software, which would be used for educational purposes in
connection with eligible equipment but does not include salaries,
benefits, and overhead of medical or educational personnel.
Interactive equipment means equipment used to produce and prepare
for transmission audio and visual signals from at least two distant
locations so that individuals at such locations can orally and visually
communicate with each other. Such equipment includes monitors, other
display devices, cameras or other recording devices, audio pickup
devices, and other related equipment.
Loan means a loan made under the DLT program bearing interest at a
rate equal to the then current cost-of-money to the government.
Loan documents mean the loan agreement, note, and security
instrument, including any amendments and supplements thereto, between
RUS and the DLT borrower.
Local exchange carrier means a commercial, cooperative or mutual-
type association, or public body that is engaged in the provision of
telephone exchange service or exchange access.
Matching contribution means the applicant's contribution for
approved purposes.
National school lunch program (NSLP) means the federally assisted
meal program established under the National School Lunch Act of 1946
(42 U.S.C. 1751).
Project means approved purposes for which financial assistance has
been provided.
Project service area means the area in which at least 90 percent of
the persons to be served by the project are likely to reside.
Recipient means a grantee, borrower, or both of a DLT program
grant, loan or combination loan and grant.
Rural community facilities mean facilities such as schools,
libraries, learning centers, training facilities, hospitals, medical
centers, and similar facilities, primarily used by residents of rural
areas, that will use a telecommunications, computer network, or related
advanced technology system to provide educational or health care
benefits primarily to residents of rural areas.
RUS means the Rural Utilities Service, an agency of the United
States Department of Agriculture, successor to the Rural
Electrification Administration.
Secretary means the Secretary of Agriculture.
Technical assistance means:
(1) Assistance in learning to manage, operate, or use equipment or
systems; and
(2) Studies, analyses, designs, reports, manuals, guides,
literature, or other forms of creating, acquiring, or disseminating
information.
Telecommunications carrier means any provider of telecommunications
services.
Telecommunications or electric borrower means an entity that has
outstanding RUS or Rural Telephone Bank electric or telecommunications
loans or loan guarantees under the provisions of the Act.
Telecommunications systems plan means the plan submitted by an
applicant in accordance with Sec. 1703.125 for grants, Sec. 1703.134
for a combination loan and grant, or Sec. 1703.144 for loans.
Telecommunications terminal equipment means the assembly of
telecommunications equipment at the end of a circuit or path of a
signal, including but not limited to facilities that receive or
transmit over the air broadcast, satellite, and microwave, normally
located on the premises of the end user, that interfaces with
telecommunications transmission facilities, and that is used to modify,
convert, encode, or otherwise prepare signals to be transmitted via
such telecommunications facilities, or that is used to modify,
reconvert, or carry signals received from such facilities, the purpose
of which is to accomplish the goal for which the circuit or signal was
established.
Telecommunications transmission facilities means facilities that
transmit, receive, or carry voice, video, or data between the
telecommunications terminal equipment at each end of the
telecommunications circuit or path. Such facilities include microwave
antennae, relay stations and towers,
[[Page 14359]]
other telecommunications antennae, fiber-optic cables and repeaters,
coaxial cables, communication satellite ground station complexes,
copper cable electronic equipment associated with telecommunications
transmissions, and similar items.
Telemedicine means a telecommunications link to an end user through
the use of eligible equipment which electronically links medical
professionals at separate sites in order to exchange health care
information in audio, video, graphic, or other format for the purpose
of providing improved health care services primarily to residents of
rural areas.
Sec. 1703.103 Applicant eligibility and allocation of funds.
(a) To be eligible to receive financial assistance under this
subpart, the applicant must be organized in one of the following
corporate structures:
(1) An incorporated organization, partnership, Indian tribe and
tribal organization as defined in 25 U.S.C. 450b (b) and (c), or other
legal entity, including a municipal corporation or a private
corporation organized on a for-profit or not-for-profit basis, which
operates, or will operate a school, college, university, learning
center, training facility, or other educational institution, including
a regional educational laboratory, library, hospital, medical center,
medical clinic, or any rural community facility. A political
subdivision of a State government, other than a political subdivision
of a State government that operates a rural community facility, is not
considered an eligible applicant; or
(2) A consortium, as defined in Sec. 1703.102. A consortium which
includes a political subdivision of a State government is only eligible
if the political subdivision of the State government operates a rural
community facility; or
(3) An incorporated organization, partnership, Indian tribe, and
tribal organization as defined in 25 U.S.C. 450b (b) and (c), or other
legal entity which is providing or proposes to provide telemedicine
service or distance learning service to other legal entities or
consortia at rates calculated to ensure that the economic value and
other benefits of the distance learning or telemedicine grant is passed
through to such other legal entities or consortia.
(b) At least one of the entities in a partnership or consortium
must be eligible individually, and the partnership or consortium must
provide written evidence of its legal capacity to contract with RUS and
to obtain the applicable financial assistance. If a partnership or
consortium lacks the capacity to contract, each individual entity must
contract with RUS on its own behalf.
(c) Electric or telecommunications borrowers are eligible for loans
only.
Sec. 1703.104 [Reserved]
Sec. 1703.105 Processing of selected applications.
(a) During the period between the submission of an application and
the execution of documents, the applicant must inform RUS if the
project is no longer viable or the applicant no longer is requesting
financial assistance for the project. When the applicant so informs
RUS, the selection will be rescinded or the application withdrawn and
written notice to that effect sent to the applicant.
(b) If an application has been selected and the scope of the
project changes substantially, the applicant may be required to submit
a new application to RUS for review and consideration depending on the
degree of change. A new application will be subject to review in
accordance with this subpart. The financial assistance may not be
transferred by the applicant for use for another project.
(c) If State or local governments raise objections to a proposed
project under the intergovernmental review process that are not
resolved within 90 days of the Administrator's selection of the
application, the Administrator will rescind the selection and written
notice to that effect will be sent to the applicant. The Administrator,
in his sole discretion may extend the 90 day period if it appears
resolution is eminent.
(d) RUS may request additional information to complete the
appropriate documents covering financial assistance.
(e) Financial assistance documents. (1) The documents will include
a grant agreement for grants; loan documents, including third party
guarantees, notes and security instruments for loans; or any other
legal documents the Administrator deems appropriate, including
suggested forms of certifications and legal opinions.
(2) The grant agreement and the loan documents will include, among
other things, conditions on the release or advance of funds and include
at a minimum, a project description, approved purposes, the maximum
amount of the financial assistance, supplemental funds required for the
project, and certain agreements or commitments the applicant may have
proposed in its application. In addition, the loan documents may
contain covenants and conditions the Administrator deems necessary or
desirable to provide additional assurance that loans will be repaid and
the purposes of the loan will be accomplished.
(3) The recipient of a loan will be required to execute a security
instrument in form and substance satisfactory to RUS and must, before
receiving any advance of loan funds, provide security that is adequate,
in the opinion of RUS, to assure repayment, within the time agreed, of
all loans to the borrower under the DLT program. This assurance will
generally be provided by a first lien upon all facilities and equipment
financed by the loan. RUS may require additional security as it deems
necessary.
(4) Adequate security may also be provided by third-party
guarantees, letters of credit, pledges of revenue, or other forms of
security satisfactory to RUS.
(5) The security instrument and other loan documents required by
RUS in connection with a loan under the DLT program shall contain such
pledges, covenants, and other provisions as may, in the opinion of RUS,
be required to secure repayment of the loan.
(6) If the project does not constitute a complete operating system,
the DLT borrower shall provide evidence, in form and substance
satisfactory to RUS, demonstrating that the borrower has sufficient
contractual, financing, or other arrangements to assure that the
project will provide adequate and efficient service.
(f) Prior to the execution of a grant and loan document, RUS
reserves the right to require any changes in the project or legal
documents covering the project to protect the integrity of the DLT
program and the interests of the government.
(g) If the applicant fails to submit, within 120 calendar days from
the date of RUS' selection of an application, all of the information
that RUS determines to be necessary to prepare legal documents and
satisfy other requirements of this subpart, RUS may rescind the
selection of the application.
Sec. 1703.106 Disbursement of loans and grants.
(a) For financial assistance of $100,000 or greater, prior to the
disbursement of a grant and a loan, the recipient, if it is not a unit
of government, will provide evidence of fidelity bond coverage as
required by 7 CFR part 3019.
(b) Grants and loans will be disbursed to recipients on a
reimbursement basis,
[[Page 14360]]
or with unpaid invoices for the eligible purposes contained in this
subpart, by the following process:
(1) An SF 270, ``Request for Advance or Reimbursement,'' will be
completed by the recipient and submitted to RUS not more frequently
than once a month;
(2) RUS will review the SF 270 for accuracy when received and will
schedule payment if the form is satisfactory. Payment will ordinarily
be made within 30 days; and
(3) For financial assistance approved during and subsequent to FY
1999, funds will be advanced in accordance with 7 CFR 1744.69.
(c) The recipient's share in the cost of the project must be
disbursed in advance of the loan and grant, or if the recipient agrees,
on a pro rata distribution basis with financial assistance during the
disbursement period. Recipients will not be permitted to provide their
contributions at the end of the project.
(d) A combination loan and grant will be disbursed on a pro rata
basis based on the respective amounts of financial assistance provided.
Sec. 1703.107 Reporting and oversight requirements.
(a) A project performance activity report will be required of all
recipients on an annual basis until the project is complete and the
funds are expended by the applicant.
(b) A final project performance report must be provided by the
recipient. It must provide an evaluation of the success of the project
in meeting the objectives of the program. The final report may serve as
the last annual report.
(c) RUS will monitor recipients, as it determines necessary, to
assure that projects are completed in accordance with the approved
scope of work and that the financial assistance is expended for
approved purposes.
(d) Recipients shall diligently monitor performance to ensure that
time schedules are being met, projected work by time periods is being
accomplished, and other performance objectives are being achieved.
Recipients are to submit an original and one copy of all project
performance reports, including, but not limited to, the following:
(1) A comparison of actual accomplishments to the objectives
established for that period;
(2) A description of any problems, delays, or adverse conditions
which have occurred, or are anticipated, and which may affect the
attainment of overall project objectives, prevent the meeting of time
schedules or objectives, or preclude the attainment of particular
project work elements during established time periods. This disclosure
shall be accompanied by a statement of the action taken or planned to
resolve the situation; and
(3) Objectives and timetable established for the next reporting
period.
Sec. 1703.108 Audit requirements.
A recipient of financial assistance shall provide RUS with an audit
for each year, beginning with the year in which a portion of the
financial assistance is expended, in accordance with the following:
(a) If the recipient is a for-profit entity, a Telecommunications
or Electric borrower, or any other entity not covered by the preceding
paragraph, the recipient shall provide an independent audit report in
accordance with 7 CFR part 1773, ``Policy on Audits of RUS Borrowers.''
(b) If the recipient is a State or local government, or non-profit
organization, the recipient shall provide an audit in accordance with 7
CFR part 3052, ``Audits of States, Local Governments, and Non-Profit
Organizations.''
Sec. 1703.109 Grant and loan administration.
RUS will conduct reviews as necessary to determine whether the
financial assistance was expended for approved purposes. The recipient
is responsible for ensuring that the project complies with all
applicable regulations, and that the grants and loans are expended only
for approved purposes. The recipient is responsible for ensuring that
disbursements and expenditures of funds are properly supported by
invoices, contracts, bills of sale, canceled checks, or other
appropriate forms of evidence, and that such supporting material is
provided to RUS, upon request, and is otherwise made available, at the
recipient's premises, for review by the RUS representatives, the
recipient's certified public accountant, the Office of Inspector
General, U. S. Department of Agriculture, the General Accounting
Office, and any other official conducting an audit of the recipient's
financial statements or records, and program performance for the grants
and loans made under this subpart. The recipient shall permit RUS to
inspect and copy any records and documents that pertain to the project.
Sec. 1703.110 Changes in project objectives or scope.
The recipient shall obtain prior written approval by RUS for any
material change to the scope or objectives of the project, including
any changes to the scope of work or the budget submitted to RUS. Any
material change shall be contained in a revised scope of work plan to
be prepared by the recipient, submitted to, and approved by RUS in
writing.
Sec. 1703.111 Grant and loan termination.
(a) The financial assistance may be terminated when RUS and the
recipient agree upon the conditions of the termination, the effective
date of the termination, and, in the case of a partial termination of
the financial assistance, any unadvanced portion of the financial
assistance to be terminated and any advanced portion of the financial
assistance to be returned.
(b) The recipient may terminate the financial assistance by written
notification to RUS, providing the reasons for such termination, the
effective date, and, in the case of a partial termination, the portion
of the financial assistance to be terminated. In the case of a partial
termination, if RUS believes that the remaining portion of the
financial assistance will not accomplish the approved purposes, then,
RUS may terminate the financial assistance in its entirety, pursuant to
the provisions of paragraph (a) of this section.
Sec. 1703.112 Expedited telecommunications loans
RUS will expedite consideration and determination of an application
submitted by an RUS telecommunications borrower for a loan under the
Act or an advance of such loan funds to be used in conjunction with
financial assistance under subparts E, F, or G of this part. See 7 CFR
part 1737 for loans and 7 CFR part 1744 for advances under this
section.
Secs. 1703.113--1703.119 [Reserved]
Subpart E--Distance Learning and Telemedicine Grant Program
Sec. 1703.120 Use of grants
(a) Grants may be used by eligible organizations for distance
learning and telemedicine projects to finance up to 70 percent of the
amount designated for approved purposes; at least 30 percent of the
project must be funded by matching contributions. For purposes of
determining the applicant's ability to leverage resources in
Sec. 1703.126(b)(4), the minimum matching contribution of 30 percent of
the amount designated for approved purposes equals 42.85 percent of the
grant requested.
(b) Only projected costs for approved grant purposes will be
considered in determining the amount of DLT grant
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eligibility in accordance with paragraph (a) of this section.
(c) Funding from Federal sources other than RUS cannot be
considered as matching contributions under this subpart.
Sec. 1703.121 Approved purposes for grants.
Grants shall be expended only for the costs associated with the
initial capital assets associated with the project. The following are
approved grant purposes:
(a) Acquiring, by lease or purchase, eligible equipment as defined
in Sec. 1703.102;
(b) Acquiring instructional programming; and
(c) Providing technical assistance and instruction for using
eligible equipment, including any related software; developing
instructional programming; providing engineering or environmental
studies relating to the establishment or expansion of the phase of the
project that is being financed with the grant (this purpose shall not
exceed 10 percent of the grant).
Sec. 1703.122 Matching contributions.
(a) The grant applicant's minimum matching contribution (as
specified in Sec. 1703.120) for approved purposes, generally must be in
the form of cash. However, in-kind contributions for the purposes
listed in Sec. 1703.121 may be substituted for cash.
(b) In-kind items listed in Sec. 1703.121 must be non-depreciated
or new assets with established monetary values. Manufacturers' or
service providers' discounts are not considered in-kind matching.
(c) Costs incurred by the applicant, or others on behalf of the
applicant, for facilities or equipment installed, or other services
rendered prior to submission of a completed application, shall not be
considered as an eligible in-kind matching contribution.
(d) Costs incurred for non-approved purposes for grant outlined in
Sec. 1703.123 shall not be used as an in-kind matching contribution.
Sec. 1703.123 Nonapproved purposes for grants.
(a) A grant made under this subpart will not be provided or used:
(1) To cover the costs of installing or constructing
telecommunications transmission facilities, other than those facilities
not available and necessary for the completion of the proposed project
and not otherwise available;
(2) To pay for medical equipment not having telemedicine as its
essential function;
(3) To pay salaries, wages, or employee benefits to medical or
educational personnel;
(4) To pay for the salaries or administrative expenses of the
applicant or the project;
(5) To purchase equipment that will be owned by the local exchange
carrier or another telecommunications service provider;
(6) To duplicate facilities providing distance learning or
telemedicine services in place or to reimburse the applicant or others
for costs incurred prior to RUS' receipt of the completed application;
(7) To pay costs of preparing the application package for financial
assistance under this program;
(8) For projects whose sole objective is to provide links between
teachers and students or between medical professionals who are located
at the same facility;
(9) For site development and the destruction or alteration of
buildings;
(10) For the purchase of land, buildings, or building construction;
(11) For projects located in areas covered by the Coastal Barrier
Resources Act (16 U.S.C. 3501 et seq.);
(12) For any purpose that the Administrator has not specifically
approved;
(13) Except for leases provided for in Sec. 1703.105, to pay the
cost of recurring or operating expenses for the project; or
(14) For any other purposes not specifically contained in
Sec. 1703.105.
(b) Except as otherwise provided in Sec. 1703.112, grants shall not
be used to finance a project, in part, when the success of the project
is dependent upon the receipt of additional financial assistance under
this subpart or is dependent upon the receipt of other financial
assistance that is not assured.
Sec. 1703.124 Maximum and minimum grant amounts.
Applications for grants under this subpart will be subject to
limitations on the proposed amount of grant funds. The Administrator
will establish the maximum amount of a grant to be made available to an
individual recipient for each fiscal year under this subpart by
publishing notice of the maximum amount in the Federal Register not
sooner than 45 days before the period for accepting applications
begins. The minimum amount of a grant is $50,000.
Sec. 1703.125 Completed application.
The following items are required to be submitted to RUS in support
of an application for grant funds:
(a) An application for Federal Assistance. A completed Standard
Form 424.
(b) An executive summary of the project. The applicant must provide
RUS with a general project overview that addresses the following 8
categories:
(1) A description of why the project is needed;
(2) An explanation of how the applicant will address the need cited
in paragraph (b)(1) of this section, why the applicant requires
financial assistance, the types of educational or medical services to
be offered by the project, and the benefits to rural residents;
(3) A description of the applicant, documenting eligibility in
accordance with Sec. 1703.103;
(4) An explanation of the total project cost including a breakdown
of the grant required and the source of matching contribution and other
financial assistance for the remainder of the project;
(5) A statement specifying whether the project is either a distance
learning or telemedicine facility as defined in Sec. 1703.102. If the
project provides both distance learning and telemedicine services, the
applicant must identify the predominant use of the system;
(6) A general overview of the telecommunications system to be
developed, including the types of equipment, technologies, and
facilities used;
(7) A description of the participating hubs and end user sites and
the number of rural residents that will be served by the project at
each end user site; and
(8) A certification by the applicant that facilities constructed
with grants do not duplicate adequate established telemedicine or
distance learning services.
(c) Scoring criteria documentation. Each grant applicant must
address and provide documentation on how it meets each of the scoring
criteria contained in Sec. 1703.126.
(d) A scope of work. The scope of work must include, at a minimum:
(1) The specific activities to be performed under the project;
(2) Who will carry out the activities;
(3) The time-frames for accomplishing the project objectives and
activities; and
(4) A budget for all capital expenditures reflecting the line item
costs for approved purposes for both the grant funds and other sources
of funds for the project. Separately, the budget must specify any line
item costs that are nonapproved purposes for grants as contained in
Sec. 1703.123.
(e) Financial information. The applicant must provide financial
information to support the need for the financial assistance requested
for the project and the applicant's ability and financial capacity to
carry out the proposed project. It must show its
[[Page 14362]]
financial and other ability to carry out the proposed work. All
institutions participating in a project application (including all
members of a consortium), must include an income statement (or
equivalent revenue and expense reports) and balance sheet reports,
reflecting net worth, for the most recent annual reporting period
preceding the date of the application. When the applicant is a
partnership, company, corporation or other entity, current balance
sheets, reflecting net worth, are needed from each of the entities that
has at least a 20 percent interest in such partnership, company,
corporation, or other entity. When the applicant is a consortium, a
current balance sheet, reflecting net worth, is needed from each member
of the consortium and from each of the entities that has at least a 20
percent interest in such member of the consortium.
(1) Applicants must include sufficient pro-forma financial data to
demonstrate feasibility of the project and the financial capability of
the project participants to continue a sustainable project for a
minimum of 10 years after completion of the project. This documentation
should include non-contingent sources of income or revenues that are
sufficient to pay operating expenses including telecommunications
access and toll charges, system maintenance, salaries, training, and
any other general operating expenses, and provide for replacement of
depreciable items.
(2) For each hub and end user site, the applicant must identify and
provide reasonable evidence of each source of revenue. If the
projection relies on cost sharing arrangements among hub and end user
sites, the applicant must provide evidence of agreements made among
project participants.
(3) For applicants eligible under Sec. 1703.103(a)(3), an
explanation of the economic analysis justifying the rate structure to
ensure that the benefit, including cost saving, of the financial
assistance is passed through to those receiving telemedicine or
distance learning services.
(f) A statement of experience. The applicant must provide a written
narrative (not exceeding three single spaced pages) describing its
demonstrated capability and experience, if any, in operating an
educational or health care endeavor and any project similar to the
project. Experience in a similar project is desirable but not required.
(g) Funding commitment from other sources. The applicant must
provide evidence, in form and substance satisfactory to RUS, that
funding agreements have been obtained to ensure completion of the
project. These agreements shall be sufficient to ensure:
(1) Payment of all proposed expenditures for the project;
(2) All required matching contribution in 1703.120;
(3) any additional matching funding provided in accordance with
Sec. 1703.126(b)(4); and
(4) Any other funds necessary to complete the project.
(h) A telecommunications system plan. A telecommunications system
plan consisting of the following:
(1) The capabilities of the telecommunications terminal equipment,
including a description of the specific equipment which will be used to
deliver the proposed service. The applicant must document discussions
with various technical sources which could include consultants,
engineers, product vendors, or internal technical experts, provide
detailed cost estimates for operating and maintaining the end user
equipment and provide evidence that alternative equipment and
technologies were evaluated.
(2) A listing of the proposed purchases or leases of
telecommunications terminal equipment, telecommunications transmission
facilities, data terminal equipment, interactive video equipment,
computer hardware and software systems, and components that process
data for transmission via telecommunications, computer network
components, communication satellite ground station equipment, or any
other elements of the telecommunications system designed to further the
purposes of this subpart, that the applicant intends to build or fund
using RUS financial assistance.
(3) A description of the consultations with the appropriate
telecommunications carriers (including other interexchange carriers,
cable television operators, enhanced service providers, providers of
satellite services and telecommunications equipment manufacturers and
distributors) and the anticipated role of such providers in the
proposed telecommunications system.
(i) Compliance with other Federal statutes. The applicant must
provide evidence of compliance with other Federal statutes and
regulations including, but not limited to the following:
(1) E.O. 11246, Equal Employment Opportunity, as amended by E.O.
11375 and as supplemented by regulations contained in 41 CFR part 60;
(2) Anti-Kickback Act (18 U.S.C. 874);
(3) Davis Bacon Act (40 U.S.C. 276a-a-7);
(4) Contract Work and Safety Standards Act (40 U.S.C. 327-333);
(5) Clean Air Act (42 U.S.C. 7401, et seq.);
(6) Byrd Anti-Lobbying Amendment (31 U.S.C. 1352);
(7) E.O.s 12549 and 12689, Debarment and Suspension;
(8) Resource Conservation and Recovery Act (42 U.S.C. 6962);
(9) Drug-Free Workplace Act of 1988 (41 U.S.C. 701);
(10) Assistance and Real Property Acquisition Policies Act of 1970;
and
(11) Office of Management and Budget Circulars A-110 and A-102.
(j) Environmental impact and historic preservation. (1) The
applicant must provide details of the project's impact on the
environment and historic preservation. Grants made under this part are
subject to part 1794 of this chapter which contains RUS' policies and
procedures for implementing a variety of Federal statutes, regulations,
and executive orders generally pertaining to the protection of the
quality of the human environment that are listed in 7 CFR 1794.1. The
application shall contain a separate section entitled ``Environmental
Impact of the Project.''
(2) The applicant may use the ``Environmental Questionnaire,''
available from RUS, to assist in complying with the requirements of
this section.
(k) Evidence of legal authority and existence. The applicant must
provide evidence of its legal existence and authority to enter into a
grant agreement with RUS and perform the activities proposed under the
grant application.
(l) Federal debt certification. The applicant must provide a
certification that it is not delinquent on any obligation owed to the
government (7 CFR parts 3016 and 3019).
(m) Consultation with USDA State Director, Rural Development. The
applicant must provide evidence that it has consulted with the USDA
State Director, Rural Development, concerning the availability of other
sources of funding available at the State or local level.
(n) State strategic plan conformity. The applicant must provide
evidence from the USDA State Director, Rural Development, that the
application conforms with the State strategic plan as prepared under
section 381D of the Consolidated Farm and Rural Development Act (7
U.S.C. 1921 et seq.). The applicant should indicate if such a plan does
not exist.
[[Page 14363]]
(o) Supplemental information. The applicant should provide any
additional information it considers relevant to the project and likely
to be helpful in determining the extent to which the project would
further the purposes of the 1996 Act.
(p) Additional information required by RUS. The applicant must
provide any additional information RUS may consider relevant to the
application and necessary to adequately evaluate the application. RUS
may request modifications or changes, including changes in the amount
of financial assistance requested, in any proposal described in an
application submitted under this subpart.
Sec. 1703.126 Criteria for scoring grant applications.
(a) Criteria. The criteria in this section will be used by RUS to
score applications that have been determined to be in compliance with
the requirements of this subpart. Applications for grants must meet the
rurality requirements in paragraph (a)(2) of this section and address
each of the following scoring criteria:
(1) The need for services and benefits derived from services (up to
55 points);
(2) The comparative rurality of the project service area (up to 45
points);
(3) The economic need of the applicant's service area as estimated
by the NSLP or other supplemental objective criteria (up to 35 points);
(4) The ability of the applicant to leverage resources (up to 35
points);
(5) Innovativeness of the project (up to 15 points);
(6) The cost effectiveness of the system (up to 35 points);
(7) Project participation in EZ/ECs (Empowerment Zone and
Enterprise Communities) and Champion Communities (up to 15 points).
(b) Scoring criteria:
(1) The need for services and benefits derived from services--Up to
55 Points.
(i) This criterion will be used by RUS to score applications based
on the documentation in support of the need for services, benefits
derived from the services proposed by the project, and local community
involvement in planning, implementing, and financial assistance of the
project. Applicants may receive up to 45 points for documenting the
need for services and benefits derived from service as explained in
this section. Applicants with an average NSLP percentage less than 50
percent as determined in paragraph (b)(3) of this section may receive
up to an additional 10 points based on information submitted that
evidences the economic need of the project's service area. This
determination will be made by RUS based on information submitted by the
applicant under paragraph (b)(1) of this section.
(ii) RUS will consider the extent of the applicant's documentation
explaining the economic, education, or health care challenges facing
the community; the applicant's proposed plan to address these
challenges; how the grant can help; and why the applicant cannot
complete the project without a grant. RUS will also consider the extent
to which the applicant provides evidence that economic, education, or
health care challenges could not be addressed without employing
advanced technology. The Administrator will also consider any support
by recognized experts in the related educational or health care field,
any documentation substantiating the educational or health care
underserved nature of the applicant's proposed service area, and any
justification for specific educational or medical services which are
needed and will provide direct benefits to rural residents.
(A) Some examples of benefits to be provided by the project
include, but are not limited to:
(1) Improved educational opportunities for a specified number of
students;
(2) Travel time and money saved by telemedicine diagnoses;
(3) Number of doctors retained in rural areas;
(4) Number of additional students electing to attend higher
education institutions;
(5) Lives saved due to prompt medical diagnoses and treatment;
(6) New education courses offered, including college level courses;
(7) Expanded use of educational facilities such as night training;
(8) Number of patients receiving telemedicine diagnoses;
(9) Provision of training, information resources, library assets,
adult education, lifetime learning, community use of technology, jobs,
connection to region, nation, and world.
(B) Other matters that will be considered by RUS under this
criterion include:
(1) That rural residents, and other beneficiaries, desire the
educational or medical services to be provided by the project. A strong
indication of need is the willingness of local end users or
institutions, to the extent possible, to contribute to the capital
costs of establishing the project. This could include letters of
financial commitment toward the project from local institutions.
(2) The extent of the project's planning, development, and support
by local residents and institutions. This may include evidence of
community involvement, as exemplified in community meetings, public
forums, and surveys. In addition, applicants should provide evidence of
local residents' participation in the project planning and development.
(3) The extent to which the application addresses the problems of
population out-migration and how the project seeks to slow, halt, or
prevent population loss.
(4) The extent to which the application is consistent with the
State strategic plan prepared by the Rural Development State Director
of the United States Department of Agriculture.
(2) The comparative rurality of the project service area--Up to 45
Points. This criterion will be used to evaluate the relative rurality
of service areas for various projects. Under this system, the end user
sites and hubs (as defined in Sec. 1703.102) contained within the
project service area are identified and given a score according to the
population of the area where the end user sites are located.
(i) The following definitions are used in the evaluation of
rurality:
(A) Exceptionally Rural Area means any area of the United States
not included within the boundaries of any incorporated or
unincorporated city, village, or borough having a population in excess
of 5,000 inhabitants.
(B) Rural Area means any area of the United States included within
the boundaries of any incorporated or unincorporated city, village, or
borough having a population over 5,000 and not in excess of 10,000
inhabitants.
(C) Mid-Rural Area means any area of the United States included
within the boundaries of any incorporated or unincorporated city,
village, or borough having a population over 10,000 and not in excess
of 20,000 inhabitants.
(D) Urban Area means any area of the United States included within
the boundaries of any incorporated or unincorporated city, village, or
borough having a population in excess of 20,000 inhabitants.
(ii) There are a total of 45 possible points for this criterion.
Each end user site will receive points based on its location in
accordance with paragraph (b)(2)(i) of this section. If a hub is
utilized as an end user site, the hub will be considered as an end user
site. The applicant will receive points as follows:
(A) If the end user site is located in an Exceptionally Rural Area,
it will receive 45 points.
[[Page 14364]]
(B) If the end user site is located in a Rural Area, it will
receive 30 points.
(C) If the end user site is located in a Mid-Rural Area, it will
receive 15 points.
(D) If the end user site is located in an Urban Area, it will
receive 0 points.
(iii) The total score for this criterion will be based on the
average score for all the end user sites included in the project.
(iv) An application must receive a minimum of 20 points as an
average score for all the end user sites under this criterion to be
eligible for a grant.
(3) The economic need of the applicant's service area as estimated
by NSLP--Up to 35 points. This criterion will be used to evaluate the
relative financial need of the applicant, community, and project. All
applicants are required to provide the applicable percentage of
students eligible to participate in the NSLP for each area to be served
by the end user site. The appropriate State or local organization
administering the program must certify the percentages as being
correct. The applicant must provide RUS with a listing of the location
of each end user site (city, town, village, borough or rural area plus
the State) discussing how the appropriate NSLP percentage was
determined in accordance with this section. These percentages may be
obtained from the State or local organization that administers the
program and must be certified by that organization as being correct.
For purposes of this subpart, the NSLP percentage will reflect the
percentage of eligibility rather than the percentage of actual
participation.
(i) The following guidelines will be used to determine the
applicable NSLP percent for a particular application:
(A) Public schools or non-profit private schools of high school
grade or under will use the actual eligibility percentage for that
particular school.
(B) Schools and institutions of higher learning ineligible to
participate in the NSLP and non-school end user sites (medical
facilities, libraries, etc.) will use the eligibility percentage of all
students in the school district where the end user will be located.
(C) Percentage ratios will be rounded up to the next highest or
rounded down to the next lowest whole number for fraction of
percentages at or greater than .5 or less than .5, respectively.
(D) The project NSLP percentage will be determined by the average
of the NSLP percentages of the end user sites. If end user sites fall
within different percentile categories, the eligibility percentages
associated with each end user site will be averaged to determine the
percentile category. For purposes of averaging, if a hub is also
utilized as an end user site, the hub will be considered as an end user
site.
(ii) The applicant will receive points as follows:
(A) NSLP percentage greater than or equal to 75 percent--35 points
(B) NSLP percentage greater than or equal to 50 percent but less
than 75 percent--25 points
(C) NSLP percentage greater than or equal to 25 percent but less
than 50 percent--15 points
(D) NSLP percentage less than 25% percent--0 points
(4) The ability of the applicant to leverage resources--Up to 35
points.
This criterion will be used to evaluate the ability of the
applicant to provide a matching contribution for the project using
other non-Federal financial assistance. Documentation submitted in
support of the application should reflect any additional financial
support for the project from non-Federal sources above the applicant's
matching contribution as required by Sec. 1703.120. Based on the
maximum RUS financial assistance percentage of 70 percent of eligible
project costs, the minimum matching as a percentage of the grant
requested is 42.85 percent. The applicant must include evidence from
authorized representatives of the sources that the funds are available
and will be used for the project. The applicant will receive points as
follows:
(i) Matching contribution for a grant for approved purposes greater
than 42.85 percent, but less than or equal to 70 percent of the grant--
0 points.
(ii) Matching contribution for a grant for approved purposes
greater than 70 percent, but less than or equal to 100 percent of the
grant--15 points.
(iii) Matching contribution for a grant for approved purposes
greater than 100 percent, but less than or equal to 150 percent of the
grant--25 points.
(iv) Matching contribution for a grant for approved purposes
greater than 150 percent, but less than or equal to 200 percent of the
grant--30 points.
(v) Matching contribution for a grant for approved purposes greater
than 200 percent of the grant--35 points.
(5) Innovativeness of the project--Up to 15 points. This criterion
will be used to evaluate the innovativeness of application based on
documentation that shows how the project utilizes advanced
telecommunications in a unique way to address the needs of the
community. Innovativeness should be addressed in the context of how the
project will deliver distance learning or telemedicine services more
effectively or at a lower cost. The following issues may be addressed
to show how the project differs from a typical distance learning and
telemedicine network as follows:
(i) The extent to which the project differs from a technical
standpoint;
(ii) The extent to which the project differs from an educational or
medical programmatic standpoint;
(iii) The extent to which the project reflects a unique adaptation
of technology based on the special needs or circumstances of the
proposed area to be served by the project; and
(iv) The potential of the project to influence or lead changes in
how telecommunications services can be delivered in other areas.
(6) The cost-effectiveness of the project--Up to 35 points. This
criterion will be used to evaluate the cost effectiveness of the
application based on the extent that cost-efficiency is considered in
delivering the services in the project. The following issues should be
addressed under this criterion:
(i) The extent to which the applicant has considered various
technological options for delivering the services. The applicant must
provide sufficient documentation reflecting accepted analytical and
financial methodologies to substantiate its choice of technology as the
most cost-effective option. RUS will consider the applicant's
documentation and analysis comparing various systems and technologies.
(ii) Whether buying or leasing specific equipment is more cost
effective.
(iii) The extent to which the project will utilize other existing
networks at the regional, statewide, national or international levels.
To the extent possible, educational and health care networks should be
designed to utilize the widest practicable number of other networks
that expand the capabilities of the project, thereby affording rural
residents opportunities that may not be available at the local level.
The ability to connect to the Internet alone cannot be used as the sole
basis to fulfill this criteria.
(iv) The extent to which the facilities being constructed with
financial assistance, particularly financial assistance under this
chapter provided to entities other than the applicant, will be utilized
to extend or enhance the benefits of the project.
(v) The extent to which the project utilizes existing
telecommunications transmission facilities that could provide the
transmission path for the needed services. For projects that do not
utilize existing transmission facilities, RUS will consider
documentation explaining the necessity of this option. RUS will also
consider any agreements
[[Page 14365]]
between the applicant and other entities for sharing transmission
facilities to lower the fixed costs of such facilities.
(7) Project participation in EZ/ECs and champion communities--(Up
to 15 Points). This criterion will be used by RUS to score applications
based on the number of end user sites within an EZ/EC and Champion
Community. Ten (10) points will be assigned if at least one end user
site is located in an EZ/EC. Five (5) points will be assigned if at
least one end user site is located in a Champion Community.
Sec. 1703.127 Application selection provisions.
(a) Applications will be selected for approval based on scores
assigned, availability of funds, and the provisions of this section.
RUS will make determinations regarding the reasonableness of all
numbers; dollar levels; rates; the nature and design of the project;
costs; location; and other characteristics of the application and the
project to determine the number of points assigned to a grant
application for all selection criteria.
(b) Regardless of the number of points an application receives in
accordance with Sec. 1703.126, the Administrator may, based on a review
of the applications in accordance with the requirements of this
subpart:
(1) Limit the number of applications selected for projects located
in any one State during a fiscal year;
(2) Limit the number of selected applications for a particular
project;
(3) Select an application receiving fewer points than another
higher scoring application if there are insufficient funds during a
particular funding period to select the higher scoring application. In
this case, however, the Administrator will provide the applicant of the
higher scoring application the opportunity to reduce the amount of its
grant request to the amount of funds available. If the applicant agrees
to lower its grant request, it must certify that the purposes of the
project can be met, and the Administrator must determine the project is
financially feasible at the lower amount in accordance with
Sec. 1703.125(e)(1). An applicant or multiple applicants affected under
this paragraph will have the opportunity to be considered for loan
financing in accordance with subparts F and G of this part.
(c) RUS will not approve a grant if RUS determines that:
(1) The applicant's proposal does not indicate financial
feasibility or is not sustainable in accordance with the requirements
of Sec. 1703.115(e)(1);
(2) The applicant's proposal indicates technical flaws, which, in
the opinion of RUS, would prevent successful implementation, operation,
or sustainability of the project;
(3) Other applications would provide more benefit to rural America
based on a review of the financial and technical information submitted
in accordance of Sec. 1703.125(e).
(4) Any other aspect of the applicant's proposal fails to
adequately address any requirement of this subpart or contains
inadequacies which would, in the opinion of RUS, undermine the ability
of the project to meet the general purpose of this subpart or comply
with policies of the DLT Program contained in Sec. 1703.101.
(d) Grant applications will be ranked by the type of application
(health care or educational) and total points scored. Grants available
for medical and educational applicants may be allocated based on the
total number of medical and educational applications scoring in the top
50 percent of all applications received for that fiscal year. Based on
the number and type of applications received, applications may be
ranked only in one category based on the predominant use of the
project.
(e) RUS may reduce the amount of the applicant's grant based on
insufficient program funding for the fiscal year in which the project
is reviewed. RUS will discuss its findings informally with the
applicant and make every effort to reach a mutually acceptable
agreement with the applicant. Any discussions with the applicant and
agreements made with regard to a reduced grant amount will be confirmed
in writing, and these actions shall be deemed to have met the
notification requirements set forth in paragraph (f) of this section.
(f) RUS will provide the applicant with an explanation of any
determinations made with regard to paragraphs (c)(1) through (c)(4) of
this section prior to making final project selections for the year. The
applicant will be provided 15 days from the date of RUS' letter to
respond, provide clarification, or make any adjustments or corrections
to the project. If, in the opinion of the Administrator, the applicant
fails to adequately respond to any determinations or other findings
made by the Administrator, the project will not be funded, and the
applicant will be notified of this determination. If the applicant does
not agree with this finding an appeal may be filed in accordance with
Sec. 1703.129.
(g) Grantees shall comply with all applicable provisions of 7 CFR
parts 3015, 3016, and 3019.
Sec. 1703.128 Submission of applications.
(a) Applications for grants shall be submitted to the RUS, U.S.
Department of Agriculture, 1400 Independence Avenue, SW., STOP 1590,
Washington, DC 20250-1590. Applications should be marked ``Attention:
Assistant Administrator, Telecommunications Program''.
(b) Applications must be submitted to RUS postmarked not later than
the application filing deadline established by the Administrator if the
applications are to be considered during the period for which the
application was submitted. The deadline for submission of applications
each fiscal year will be published, and provided through other notices,
by RUS in the Federal Register, at least 30 days before the deadline
occurs. It is suggested that applications be submitted prior to the
respective deadline to ensure they can be reviewed and considered
complete by the deadline. RUS will review each application for
completeness in accordance with Sec. 1703.125, and notify the
applicant, within 15 working days of the receipt of the application, of
the results of this review, citing any information that is incomplete.
To be considered for a grant, the applicant must submit the information
to complete the application within 15 working days of the date of RUS'
written response. If the applicant has submitted an application prior
to the application filing deadline, the applicant will have 15 working
days from RUS' response or until the application filing deadline to
submit information, whichever provides the applicant more time. If the
applicant fails to submit such information by the appropriate deadline,
the application will be considered during the next established
application period.
(c) All applicants must submit an original and two copies of a
completed application. Applicants must also submit a copy of the
application to the State government point of contact, if one has been
designated for the State, at the same time it submits an application to
RUS. All applications must include the information required by
Sec. 1703.125.
Sec. 1703.129 Appeals.
All qualifying applications under this subpart will be scored based
on the criteria contained in Sec. 1703.126. Awards will be made by RUS
based on the highest ranking applications and the amount of financial
assistance available for grants. All applicants will be notified in
writing of the score each application receives, and included in this
notification will be a tentative minimum required score to receive
financial assistance. If the score
[[Page 14366]]
received by the applicant could result in the denial of its
application, or if its score, while apparently sufficient to qualify
for financial assistance, may be surpassed by the score awarded to a
competing application after appeal, that applicant may appeal its
numerical scoring. Any appeal must be based on inaccurate scoring of
the application by RUS and no new information or data that was not
included in the original application will be considered. The appeal
must be made, in writing, within 10 days after the applicant is
notified of the scoring results. Appeals shall be submitted to the
Administrator, RUS, U.S. Department of Agriculture, 1400 Independence
Ave., SW., STOP 1590, Washington, DC 20250-1590. Thereafter, the
Administrator will review the original scoring to determine whether to
sustain, reverse, or modify the original scoring determination. Final
determinations will be made after consideration of all appeals. The
Administrator's determination will be final. A copy of the
Administrator's decision will be furnished promptly to the applicant.
Subpart F--Distance Learning and Telemedicine Combination Loan and
Grant Program
Sec. 1703.130 Use of combination loan and grant.
(a) A combination loan and grant may be used by eligible
organizations as defined in Sec. 1703.103 for distance learning and
telemedicine projects to finance 100 percent of the cost of approved
purposes contained in Sec. 1703.131 provided that no financial
assistance may exceed the maximum amount for the year in which the
combination loan and grant is made.
(b) Applicants must meet the minimum eligibility requirement for
determining the extent to which the project serves rural areas as
determined in Sec. 1703.126(b)(2) (the applicant must receive at least
20 points to be eligible to receive financial assistance under this
subpart).
Sec. 1703.131 Approved purposes for a combination loan and grant.
The approved purposes for a combination loan and grant are:
(a) Acquiring, by lease or purchase, eligible equipment or
facilities as defined in Sec. 1703.102;
(b) Acquiring instructional programming;
(c) Providing technical assistance and instruction for using
eligible equipment, including any related software; developing
instructional programming; providing engineering or environmental
studies relating to the establishment or expansion of the phase of the
project that is being financed with a combination loan and grant (this
purpose shall not exceed 10 percent of the total requested financial
assistance);
(d) Paying for medical or educational equipment and facilities that
are shown to be necessary to implement the project, including vehicles
utilizing distance learning and telemedicine technology to deliver
educational and health care services. The applicant must demonstrate
that such items are necessary to meet the purposes under this subpart
and financial assistance for such equipment and facilities is not
available from other sources at a cost which would not adversely affect
the economic viability of the project;
(e) Providing links between teachers and students or medical
professionals who are located at the same facility, provided that such
facility receives or provides distance learning or telemedicine
services as part of a distance learning or telemedicine network which
meets the purposes of this subpart;
(f) Providing for site development and alteration of buildings in
order to meet the purposes of this subpart. Financial assistance for
this purpose must be necessary and incidental to the total amount of
financial assistance requested;
(g) Purchasing of land, buildings, or building construction
determined by RUS to be necessary and incidental to the project. The
applicant must demonstrate that financial assistance funding from other
sources is not available at a cost that does not adversely impact the
economic viability of the project as determined by the Administrator.
Financial assistance for this purpose must be necessary and incidental
to the total amount of financial assistance requested; and
(h) Acquiring telecommunications transmission facilities provided
that no telecommunications carrier will install such facilities under
the Act or through other financial procedures within a reasonable time
period and at a cost to the applicant that does not impact the economic
viability of the project, as determined by the Administrator.
Sec. 1703.132 Nonapproved purposes for a combination loan and grant.
(a) Without limitation, a combination loan and grant made under
this subpart shall not be expended:
(1) To pay salaries, wages, or employee benefits to medical or
educational personnel;
(2) To pay for the salaries or administrative expenses of the
applicant or the project;
(3) To purchase equipment that will be owned by the local exchange
carrier or another telecommunications service provider, unless the
applicant is the local exchange carrier or other telecommunications
service provider;
(4) To duplicate facilities providing distance learning or
telemedicine services in place or to reimburse the applicant or others
for costs incurred prior to RUS' receipt of the completed application;
(5) For projects located in areas covered by the Coastal Barrier
Resources Act (16 U.S.C. 3501 et seq.);
(6) For any purpose that the Administrator has not specifically
approved;
(7) Except for leases (see Sec. 1703.131), to pay the cost of
recurring or operating expenses for the project; or,
(8) For any other purposes not specifically outlined in
Sec. 1703.131.
(b) Except as otherwise provided in Sec. 1703.112, funds shall not
be used to finance a project, in part, when the success of the project
is dependent upon the receipt of additional financial assistance under
this subpart or is dependent upon the receipt of other funding that is
not assured.
Sec. 1703.133 Maximum and minimum amounts.
Applications for a combination loan and grant under this subpart
will be subject to limitations on the proposed amount of loans and
grants. The Administrator will establish the maximum amount of loans
and grants and the portion of grant funds as a percentage of total
assistance for each project to be made available to an individual
recipient for each fiscal year under this subpart, by publishing notice
of the maximum amount in the Federal Register before the beginning of
the fiscal year to carry out this subpart. The minimum amount of a
combination loan and grant is $50,000.
Sec. 1703.134 Completed application.
The following items are required to be submitted to RUS in support
of an application for a combination loan and grant:
(a) An application for federal assistance: A completed Standard
Form 424.
(b) An executive summary of the project: The applicant must provide
RUS with a general project overview that addresses each of the
following 9 categories:
(1) A description of why the project is needed;
[[Page 14367]]
(2) An explanation of how the applicant will address the need cited
in paragraph (b)(1) of this section, why the applicant requires
financial assistance, the types of educational or medical services to
be offered by the project, and the benefits to the rural residents;
(3) A description of the applicant, documenting eligibility in
accordance with Sec. 1703.103;
(4) An explanation of the total project cost including a breakdown
of the combination loan and grant required and the source of funding,
if applicable, for the remainder of the project;
(5) A statement specifying whether the project provides
predominantly distance learning or telemedicine services as defined in
Sec. 1703.102. If the project provides both distance learning and
telemedicine services, the applicant must identify the predominant use
of the system;
(6) A general overview of the telecommunications system to be
developed, including the types of equipment, technologies, and
facilities used;
(7) A description of the participating hubs and end user sites and
the number of rural residents that will be served by the project at
each end user site;
(8) A certification by the applicant that facilities constructed
with a combination loan and grant do not duplicate adequately
established telemedicine or distance learning services.
(9) A listing of the location of each end user site (city, town,
village, borough, or rural area plus the State).
(c) A scope of work. The scope of work must include, at a minimum:
(1) The specific activities to be performed under the project;
(2) Who will carry out the activities;
(3) The time-frames for accomplishing the project objectives and
activities; and
(4) A budget for capital expenditures reflecting the line item
costs for both the combination loan and grant and any other sources of
funds for the project.
(d) Financial information. The applicant must show its financial
ability to complete the project; show project feasibility; and provide
evidence that it can execute a note for a loan with a maturity period
greater than one year. For educational institutions participating in a
project application (including all members of a consortium), the
financial data must reflect revenue and expense reports and balance
sheet reports, reflecting net worth, for the most recent annual
reporting period preceding the date of the application. For medical
institutions participating in a project application (including all
members of a consortium), the financial data must include income
statement and balance sheet reports, reflecting net worth, for the most
recent completed fiscal year preceding the date of the application.
When the applicant is a partnership, company, corporation, or other
entity, current balance sheets, reflecting net worth, are needed from
each of the entities that has at least a 20 percent interest in such
partnership, company, corporation or other entity. When the applicant
is a consortium, a current balance sheet, reflecting net worth, is
needed from each member of the consortium and from each of the entities
that has at least a 20 percent interest in such member of the
consortium.
(1) Applicants must include sufficient pro-forma financial data
that adequately reflects the financial capability of project
participants and the project as a whole to continue a sustainable
project for a minimum of 10 years and repay the loan portion of the
combination loan and grant. This documentation should include sources
of sufficient income or revenues to pay operating expenses including
telecommunications access and toll charges, system maintenance,
salaries, training, and any other general operating expenses, provide
for replacement of depreciable items, and show repayment of interest
and principal for the loan portion of the combination loan and grant.
(2) A list of property which will be used as collateral to secure
repayment of the loan. The applicant shall purchase and own collateral
that secures the loan free from liens or security interests and take
all actions necessary to perfect a security interest in the collateral
that secures the loan. RUS considers as adequate security for a loan, a
guarantee by a RUS telecommunications or electric borrower or by
another qualified party. Additional forms of security, including
letters of credit, real estate, or any other items will be considered.
RUS will determine the adequacy of the security offered.
(3) As applicable, a depreciation schedule covering all assets of
the project. Those assets for which a combination loan and grant are
being requested should be clearly indicated.
(4) For each hub and end user site, the applicant must identify and
provide reasonable evidence of each source of revenue. If the
projection relies on cost sharing arrangements among hub and end user
sites, the applicant must provide evidence of agreements made among
project participants.
(5) For applicants eligible under Sec. 1703.103(a)(3), an
explanation of the economic analysis justifying the rate structure to
ensure that the benefit, including cost saving, of the financial
assistance is passed through to the other persons receiving
telemedicine or distance learning services.
(e) A statement of experience. The applicant must provide a written
narrative (not exceeding three single spaced pages) describing its
demonstrated capability and experience, if any, in operating an
educational or health care endeavor similar to the project. Experience
in a similar project is desirable but not required.
(f) A telecommunications system plan. A telecommunications system
plan, consisting of the following (the items in paragraphs (f)(4) and
(f)(5) of this section are required only when the applicant is
requesting a combination loan and grant for telecommunications
transmission facilities):
(1) The capabilities of the telecommunications terminal equipment,
including a description of the specific equipment which will be used to
deliver the proposed service. The applicant must document discussions
with various technical sources which could include consultants,
engineers, product vendors, or internal technical experts, provide
detailed cost estimates for operating and maintaining the end user
equipment and provide evidence that alternative equipment and
technologies were evaluated.
(2) A listing of the proposed purchases or leases of
telecommunications terminal equipment, telecommunications transmission
facilities, data terminal equipment, interactive video equipment,
computer hardware and software systems, and components that process
data for transmission via telecommunications, computer network
components, communication satellite ground station equipment, or any
other elements of the telecommunications system designed to further the
purposes of this subpart, that the applicant intends to build or fund
using a combination loan and grant.
(3) A description of the consultations with the appropriate
telecommunications carriers (including other interexchange carriers,
cable television operators, enhanced service providers, providers of
satellite services, and telecommunications equipment manufacturers and
distributors) and the anticipated role of such providers in the
proposed telecommunications system.
(4) Results of discussions with local exchange carriers serving the
project area addressing the concerns contained in Sec. 1703.131(h).
(5) The capabilities of the telecommunications transmission
[[Page 14368]]
facilities, including bandwidth, networking topology, switching,
multiplexing, standards, and protocols for intra-networking and open
systems architecture (the ability to effectively communicate with other
networks). In addition, the applicant must explain the manner in which
the transmission facilities will deliver the proposed services. For
example, for medical diagnostics, the applicant might indicate whether
or not a guest or other diagnosticians can join the network from
locations off the network. For educational services, indicate whether
or not all hub and end-user sites are able to simultaneously hear in
real-time and see each other or the instructional material in real-
time. The applicant must include detailed cost estimates for operating
and maintaining the network, and include evidence that alternative
delivery methods and systems were evaluated.
(g) Compliance with other Federal statutes. The applicant must
provide evidence of compliance with other federal statutes and
regulations including, but not limited to the following:
(1) E.O. 11246, Equal Employment Opportunity, as amended by E.O.
11375, and as supplemented by regulations contained in 41 CFR part 60;
(2) Anti-Kickback Act (18 U.S.C. 874);
(3) Davis Bacon Act (40 U.S.C. 276a-a-7);
(4) Contract Work and Safety Standards Act (40 U.S.C. 327-333);
(5) Clean Air Act (42 U.S.C. 7401, et seq.);
(6) Byrd Anti-Lobbying Amendment (31 U.S.C. 1352);
(7) E.Os 12549 and 12689, Debarment and Suspension;
(8) Resource Conservation and Recovery Act (42 U.S.C. 6962);
(9) Drug-Free Workplace Act of 1988 (41 U.S.C. 701);
(10) Assistance and Real Property Acquisition Policies Act of 1970;
and
(11) Office of Management and Budget Circulars A-110 and A-102.
(h) Environmental impact and historic preservation. (1) The
applicant must provide details of the project's impact on the
environment and historic preservation. Loans and grants made under this
part are subject to 7 CFR part 1794 which contains RUS' policies and
procedures for implementing a variety of Federal statutes, regulations,
and Executive orders generally pertaining to the protection of the
quality of the human environment that are listed in 7 CFR 1794.1. The
application shall contain a separate section entitled ``Environmental
Impact of the Project.''
(2) The applicant may use the ``Environmental Questionnaire,''
available from RUS, to assist in complying with the requirements of
this section.
(i) Evidence of legal authority and existence. The applicant must
provide evidence of its legal existence and authority to enter into a
grant and incur debt with RUS.
(j) Federal debt certification. The applicant must provide evidence
that it is not delinquent on any obligation owed to the government.
(k) Supplemental information. The applicant should provide any
additional information it considers relevant to the project and likely
to be helpful in determining the extent to which the project would
further the purposes of this subpart.
(l) Additional information required by RUS. The applicant must
provide any additional RUS may consider relevant to the application and
necessary to adequately evaluate the application. RUS may also request
modifications or changes, including changes in the amount of funds
requested, in any proposal described in an application submitted under
this subpart.
Sec. 1703.135 Application selection provisions.
(a) A combination loan and grant will be approved based on
availability of funds, the financial feasibility of the project in
accordance with Sec. 1703.134(d), the services to be provided which
demonstrate that the project meets the general requirements of this
subpart, the design of the project; costs; location; and other
characteristics of the application.
(b) RUS will determine, from the information submitted with each
application for a combination loan and grant, whether the application
achieves sufficient priority, based on the criteria set forth in the
1996 Act, to receive a combination loan and grant from funds available
for the fiscal year. If such priority is achieved, RUS will process the
combination loan and grant application on a first-in, first-out basis,
provided that the total amount of applications on-hand for combination
loans and grants does not exceed 90 percent of the total loan and grant
funding available for the fiscal year. At such time as the total amount
of applications eligible for combination loans and grants, if such
applications were approved, exceeds 90 percent of amount of combination
loan and grant funding available, RUS will process the remaining
applications using the evaluation criteria set forth in Sec. 1703.126.
(c) RUS will not approve a combination loan and grant if RUS
determines that:
(1) The applicant's proposal does not indicate financial
feasibility, or will not be adequately secured in accordance with the
requirements contained in Sec. 1703.134(d);
(2) The applicant's proposal indicates technical flaws, which, in
the opinion of RUS, would prevent successful implementation, or
operation of the project; or
(3) Any other aspect of the applicant's proposal fails to
adequately address any requirements of this subpart or contains
inadequacies which would, in the opinion of RUS, undermine the ability
of the project to meet the general purpose of this subpart or comply
with policies of the DLT program contained in Sec. 1703.101.
(d) RUS will provide the applicant with a statement of any
determinations made with regard to paragraphs (c)(1) through (c)(3) of
this section. The applicant will be provided 15 days from the date of
RUS' letter to respond, provide clarification, or make any adjustments
or corrections to the project. If, in the opinion of the Administrator,
the applicant fails to adequately respond to any determinations or
other findings made by the Administrator, the project will not be
funded, and the applicant will be notified of this determination. If
the applicant does not agree with this finding, an appeal may be filed
in accordance with Sec. 1703.137.
Sec. 1703.136 Submission of applications.
(a) RUS will accept applications for a combination loan and grant
submitted by RUS telecommunications General Field representatives
(GFRs), by Rural Development State Directors, or by applicants
themselves. Applications for a combination loan and grant under this
subpart may be filed at any time and will be evaluated as received.
(b) Applications submitted to the State Director, Rural
Development, in the State serving the headquarters of the project will
be evaluated as they are submitted. All applicants must submit an
original and two copies of a completed application. The applicant must
also submit a copy of the application to the State government point of
contact, if one has been designated for the State, at the same time it
submits an application to the State Director. The State Director will:
(1) Review each application for completeness in accordance with
Sec. 1703.134, and notify the applicant, within 15 working days of
receiving the application, of the results of this review,
[[Page 14369]]
acknowledging a complete application, or citing any information that is
incomplete. To be considered for a combination loan and grant, the
applicant must submit any additional information requested to complete
the application within 15 working days of the date of the State
Director's written response. If the applicant fails to submit such
information, the application will be returned to the applicant.
(2) Within 30 days of the determination of a completed application
in accordance with paragraph (b)(1) of this section, review the
application to determine suitability for financial assistance in
accordance with Sec. 1703.135, and other requirements of this subpart.
Based on its review, the State Director will work with the applicant to
resolve any questions or obtain any additional information. The
applicant will be notified, in writing, of any additional information
required to allow a financial assistance recommendation and will be
provided a reasonable period of time to furnish the additional
information.
(3) Based on the review in accordance with Sec. 1703.135 and other
requirements of this subpart, make a preliminary determination of
suitability for financial assistance. A combination loan and grant
recommendation will be prepared by the State Director with concurrence
of the RUS telecommunications GFR that addresses the provisions of
sections Sec. 1703.134 and Sec. 1703.135 and other applicable
requirements of this subpart.
(4) If the application is determined suitable for further
consideration by RUS, forward an original and one copy of the
application with a financial assistance recommendation, signed jointly,
to the Assistant Administrator, Telecommunications Program, Rural
Utilities Service, Washington, DC. The applicant will be notified by
letter of this action. Upon receipt of the application from the State
Director, RUS will conduct a review of the application and the
financial assistance recommendation. A final determination will be made
within 15 days. If the Administrator determines that a combination loan
and grant can be approved, the State Director will be notified and the
State Director will notify the applicant. A combination loan and grant
will be processed, approved, and serviced in accordance with
Secs. 1703.105 through 1703.112 of subpart D.
(5) If the State Director determines that the application is not
suitable for further consideration by RUS, notify the applicant with
the reasons for this determination. The applicant may appeal this
determination pursuant to section Sec. 1703.137 of this subpart.
(c) Applications submitted by RUS telecommunications GFRs or
directly by applicants will be evaluated as they are submitted. All
applicants must submit an original and two copies of a completed
application. The applicant must also submit a copy of the application
to the State government point of contact, if one has been designated
for the State, at the same time it submits an application to RUS. RUS
will:
(1) Review each application for completeness in accordance with
Sec. 1703.134, and notify the applicant, within 15 working days of
receiving the application, of the results of this review, acknowledging
a complete application, or citing any information that is incomplete.
To be considered for a combination loan and grant assistance, the
applicant must submit any additional information requested to complete
the application within 15 working days of the date of the RUS written
response. If the applicant fails to submit such information, the
application will be returned to the applicant.
(2) Within 30 days of the determination of a completed application
in accordance with paragraph (c)(1) of this section, review the
application to determine suitability for financial assistance in
accordance with Sec. 1703.135, and other requirements of this subpart.
Based on its review, RUS will work with the applicant to resolve any
questions or obtain any additional information. The applicant will be
notified, in writing, of any additional information required to allow a
financial assistance recommendation and will be provided a reasonable
period of time to furnish the additional information.
(3) If the application is determined suitable for further
consideration by RUS, conduct a review of the application and financial
assistance recommendation. A final determination will be made within 15
days. If the Administrator determines that a combination loan and grant
can be approved, the applicant will be notified. A combination loan and
grant will be processed, approved, and serviced in accordance with
Secs. 1703.105 through 1703.112 of subpart D.
(4) If RUS determines that the application is not suitable for
further consideration, notify the applicant with the reasons for this
determination. The applicant will be able to appeal in accordance with
Sec. 1703.137 of this subpart.
Sec. 1703.137 Appeals.
Any appeal must be made, in writing, within 10 days after the
applicant is notified of the determination to deny the application.
Appeals shall be submitted to the Administrator, RUS, U.S. Department
of Agriculture, 1400 Independence Ave., SW., STOP 1590, Washington, DC
20250-1590. Thereafter, the Administrator will review the appeal to
determine whether to sustain, reverse, or modify the original
determination. Final determinations will be made after consideration of
all appeals. The Administrator's determination will be final. A copy of
the Administrator's decision will be furnished promptly to the
applicant.
Secs. 1703.138--1703.139 [Reserved]
Subpart G--Distance Learning and Telemedicine Loan Program
Sec. 1703.140 Use of loan funds.
Loans may be used to finance 100 percent of the costs of a project.
Entities seeking a loan must be able to provide security and execute a
note with a maturity period greater than one year. The following
entities are eligible for loans under this subpart:
(a) Organizations as defined in Sec. 1703.103. If a RUS
telecommunications borrower is seeking a loan, the borrower does not
need to submit all of the financial security information required by
Sec. 1703.144(d). The borrower's latest financial report (Form 479)
filed with RUS and any additional information relevant to the project,
as determined by RUS, will suffice;
(b) Any non-profit or for-profit entity, public or private entity,
urban or rural institution, or rural educational broadcaster, which
proposes to provide and receive distance learning and telemedicine
services to carry out the purposes of this subpart; or
(c) Any entity that contracts with an eligible organization in
paragraphs (a) or (b) of this section for constructing distance
learning or telemedicine facilities for the purposes contained in
Sec. 1703.141, except for those purposes in Sec. 1703.141(h).
(d) Applicants must meet the minimum eligibility requirement for
determining the extent to which the project serves rural areas as
contained in Sec. 1703.126(b)(2) (the applicant must receive at least
20 points to be eligible to receive financial assistance under this
subpart).
Sec. 1703.141 Approved purposes for loans.
The following are approved purposes for loans:
[[Page 14370]]
(a) Acquiring, by lease or purchase, eligible equipment or
facilities as defined in Sec. 1703.102;
(b) Acquiring instructional programming;
(c) Providing technical assistance and instruction for using
eligible equipment, including any related software; developing
instructional programming; providing engineering or environmental
studies relating to the establishment or expansion of the phase of the
project that is being financed with the loan (financial assistance for
this purpose shall not exceed 10 percent of the requested financial
assistance);
(d) Paying for medical or educational equipment and facilities
which are shown to be necessary to implement the project, including
vehicles utilizing distance learning and telemedicine technology to
deliver educational and health care services. The applicant must
demonstrate that such items are necessary to meet the purposes under
this subpart and financial assistance for such equipment and facilities
is not available from other sources at a cost which would not adversely
affect the economic viability of the project;
(e) Providing links between teachers and students or medical
professionals who are located at the same facility, provided that such
facility receives or provides distance learning or telemedicine
services as part of a distance learning or telemedicine network which
meets the purposes of this subpart;
(f) Providing for site development and alteration of buildings in
order to meet the purposes of this subpart. Loans for this purpose must
be necessary and incidental to the total amount of financial assistance
requested;
(g) Purchasing of land, buildings, or building construction, where
such costs are demonstrated necessary to construct distance learning
and telemedicine facilities. The applicant must demonstrate that
funding from other sources is not available at a cost which does not
adversely impact the economic viability of the project as determined by
the Administrator. Financial assistance for this purpose must be
necessary and incidental to the total amount of financial assistance
requested;
(h) Acquiring of telecommunications transmission facilities
provided that no telecommunications carrier will install such
facilities under the Act or through other financial procedures within a
reasonable time period and at a cost to the applicant that does not
impact the economic viability of the project, as determined by the
Administrator;
(i) Any project costs, not included in paragraphs (a) through (h)
of this section, incurred during the first two years of operation after
the financial assistance has been approved. The applicant must show
that financing such costs are necessary for the establishment or
continued operation of the project and that financing is not available
for such costs elsewhere, including from the applicant's financial
resources. The Administrator will determine whether such costs will be
financed based on information submitted by the applicant. Loans shall
not be made exclusively to finance such costs, and financing for such
costs will not exceed 20 percent of the loan provided to a project
under this section; and
(j) All of the costs needed to provide distance learning
broadcasting to rural areas. Loans may be used to cover the costs of
facilities and end-user equipment dedicated to providing educational
broadcasting to rural areas for distance learning purposes. If the
facilities are not 100 percent dedicated to broadcasting, a portion of
the financing may be used to fund such facilities based on a percentage
of use factor that approximates the distance learning broadcasting
portion of use.
Sec. 1703.142 Nonapproved purposes for loan.
(a) Loans made under this subpart will not be provided for any of
the following costs incurred after two years from approval:
(1) To pay salaries, wages, or employee benefits to medical or
educational personnel;
(2) To pay for the salaries or administrative expenses of the
applicant or the project after two years; or
(3) To pay the cost of recurring or operating expenses for the
project (see Sec. 1703.141).
(b) Loans made under this subpart will not be provided for any of
the following costs:
(1) To purchase equipment that will be owned by the local exchange
carrier or another telecommunications service provider, unless the
applicant is the local exchange carrier or other telecommunications
service provider;
(2) To duplicate facilities providing distance learning or
telemedicine services in place or to reimburse the applicant or others
for costs incurred prior to RUS' receipt of the completed application;
(3) For projects located in areas covered by the Coastal Barrier
Resources Act (16 U.S.C. 3501 et seq.); or
(4) For any purpose that the Administrator has not specifically
approved.
(c) Except as otherwise provided in Sec. 1703.112, funds shall not
be used to finance a project, in part, when the success of the project
is dependent upon the receipt of additional financial assistance under
this subpart G or is dependent upon the receipt of other funding that
is not assured.
Sec. 1703.143 Maximum and minimum amounts.
Applications for loans under this subpart will be subject to
limitations on the proposed amount of loans. The Administrator will
establish the maximum amount of a loan available to an applicant under
this subpart, by publishing notice of the maximum amount in the Federal
Register before the opening of the application window. The minimum
amount of a loan is $50,000.
Sec. 1703.144 Completed application.
The following items are required to be submitted in support of an
application for a loan:
(a) An application for federal assistance: A completed standard
form 424.
(b) An executive summary of the project. The applicant must provide
RUS with a general project overview that addresses each of the
following 9 categories:
(1) A description of why the project is needed;
(2) An explanation of how the applicant will address the need (see
paragraph (b)(1) of this section), why the applicant requires financial
assistance, the types of educational or medical services to be offered
by the project, and the benefits to the rural residents;
(3) A description of the applicant, documenting eligibility in
accordance with Sec. 1703.103;
(4) An explanation of the total project cost including a breakdown
of the loan required and the source of funding, if applicable, for the
remainder of the project;
(5) A statement specifying whether the project provides
predominantly distance learning or telemedicine services as defined in
Sec. 1703.102. If the project provides both distance learning and
telemedicine services, the applicant must identify the predominant use
of the system;
(6) A general overview of the telecommunications system to be
developed, including the types of equipment, technologies, and
facilities used;
(7) A description of the participating hubs and end user sites and
the number of rural residents which will be served by the project at
each end user site;
[[Page 14371]]
(8) A certification by the applicant that facilities funded by a
loan do not duplicate adequate established telemedicine or distance
learning services.
(9) A listing of the location of each end user site (city, town,
village, borough, or rural area plus the State).
(c) A scope of work. The scope of work must include, at a minimum:
(1) The specific activities to be performed under the project;
(2) Who will carry out the activities;
(3) The time-frames for accomplishing the project objectives and
activities; and
(4) A budget for capital expenditures reflecting the line item
costs for both the combination loan and grant and any other sources of
funds for the project.
(d) Financial information. The applicant must show its financial
ability to complete the project; show project feasibility; and provide
evidence that it can execute a note for a loan for a maturity period
greater than one year. For educational institutions participating in a
project application (including all members of a consortium), the
financial data must reflect revenue and expense reports and balance
sheet reports, reflecting net worth, for the most recent annual
reporting period preceding the date of the application. For medical
institutions participating in a project application (including all
members of a consortium), the financial data must include income
statement and balance sheet reports, reflecting net worth, for the most
recent completed fiscal year preceding the date of the application.
When the applicant is a partnership, company, corporation, or other
entity, current balance sheets, reflecting net worth, are needed from
each of the entities that has at least a 20 percent interest in such
partnership, company, corporation or other entity. When the applicant
is a consortium, a current balance sheet, reflecting net worth, is
needed from each member of the consortium and from each of the entities
that has at least a 20 percent interest in such member of the
consortium.
(1) Applicants must include sufficient pro-forma financial data
which adequately reflects the financial capability of project
participants and the project as a whole to continue a sustainable
project for a minimum of 10 years and repay the requested loan. This
documentation should include sources of sufficient income or revenues
to pay operating expenses including telecommunications access and toll
charges, system maintenance, salaries, training, and any other general
operating expenses, provide for replacement of depreciable items, and
show repayment of interest and principal for the loan.
(2) A list of property which will be used as collateral to secure
repayment of the proposed loan. The applicant shall purchase and own
collateral that secures the loan free from liens or security interests
and take all actions necessary to perfect a first lien in the
collateral that secures the loan. RUS will consider as adequate
security for a loan guarantee by a telecommunications or electric
borrower or by another qualified party. Additional forms of security,
including letters of credit, real estate, or any other items will be
considered. RUS will determine the adequacy of the security offered.
(3) As applicable, a depreciation schedule covering all assets of
the project. Those assets for which a combination loan and grant are
being requested should be clearly indicated.
(4) For each hub and end user site, the applicant must identify and
provide reasonable evidence of each source of revenue. If the
projection relies on cost sharing arrangements among hub and end user
sites, the applicant must provide evidence of agreements made among
project participants.
(5) For applicants eligible under Sec. 1703.103(a)(3), an
explanation of the economic analysis justifying the rate structure to
ensure that the benefit, including cost saving, of the financial
assistance is passed through to the other persons receiving
telemedicine or distance learning services.
(e) A statement of experience. The applicant must provide a written
narrative (not exceeding three single spaced pages) describing its
demonstrated capability and experience, if any, in operating an
educational or health care endeavor and any project similar to the
project. Experience in a similar project is desirable but not required.
(f) A telecommunications system plan. A telecommunications system
plan, consisting of the following (the items in paragraphs (f)(4) and
(f)(5) of this section are required only when the applicant is
requesting a loan for telecommunications transmission facilities):
(1) The capabilities of the telecommunications terminal equipment,
including a description of the specific equipment which will be used to
deliver the proposed service. The applicant must document discussions
with various technical sources which could include consultants,
engineers, product vendors, or internal technical experts, provide
detailed cost estimates for operating and maintaining the end user
equipment and provide evidence that alternative equipment and
technologies were evaluated.
(2) A listing of the proposed purchases or leases of
telecommunications terminal equipment, telecommunications transmission
facilities, data terminal equipment, interactive video equipment,
computer hardware and software systems, and components that process
data for transmission via telecommunications, computer network
components, communication satellite ground station equipment, or any
other elements of the telecommunications system designed to further the
purposes of this subpart, that the applicant intends to build or fund
using a combination loan and grant.
(3) A description of the consultations with the appropriate
telecommunications carriers (including other interexchange carriers,
cable television operators, enhanced service providers, providers of
satellite services, and telecommunications equipment manufacturers and
distributors) and the anticipated role of such providers in the
proposed telecommunications system.
(4) Results of discussions with local exchange carriers serving the
project area addressing the concerns contained in Sec. 1703.131(h).
(5) The capabilities of the telecommunications transmission
facilities, including bandwidth, networking topology, switching,
multiplexing, standards, and protocols for intra-networking and open
systems architecture (the ability to effectively communicate with other
networks). In addition, the applicant must explain the manner in which
the transmission facilities will deliver the proposed services. For
example, for medical diagnostics, the applicant might indicate whether
or not a guest or other diagnosticians can join the network from
locations off the network. For educational services, indicate whether
or not all hub and end-user sites are able to simultaneously hear in
real-time and see each other or the instructional material in real-
time. The applicant must include detailed cost estimates for operating
and maintaining the network, and include evidence that alternative
delivery methods and systems were evaluated.
(g) Compliance with other Federal statutes. The applicant must
provide evidence of compliance with other Federal statutes and
regulations including, but not limited to the following:
(1) E.O. 11246, Equal Employment Opportunity, as amended by E.O.
11375,
[[Page 14372]]
and as supplemented by regulations contained in 41 CFR part 60;
(2) Anti-Kickback Act (18 U.S.C. 874);
(3) Davis Bacon Act (40 U.S.C. 276a-a-7);
(4) Contract Work and Safety Standards Act (40 U.S.C. 327-333);
(5) Byrd Anti-Lobbying Amendment (31 U.S.C. 1352);
(6) E.O.s 12549 and 12689, Debarment and Suspension;
(7) Resource Conservation and Recovery Act (42 U.S.C. 6962);
(8) Assistance and Real Property Acquisition Policies Act of 1970;
(9) National Historic Preservation Act of 1966; and
(10) Historic Sites Act of 1935.
(h) Environmental impact and historic preservation. (1) The
applicant must provide details of the project's impact on the
environment and historic preservation. Loans made under this part are
subject to 7 CFR part 1794 which contains RUS' policies and procedures
for implementing a variety of Federal statutes, regulations, and
executive orders generally pertaining to the protection of the quality
of the human environment that are listed in 7 CFR 1794.1. The
application shall contain a separate section entitled ``Environmental
Impact of the Project.''
(2) The applicant may use the ``Environmental Questionnaire,''
available from RUS, to assist in complying with the requirements of
this section.
(i) Evidence of legal authority and existence. The applicant must
provide evidence of its legal existence and authority to enter into
debt with RUS and perform the activities proposed under the loan
application.
(j) Federal debt certification. The applicants must provide a
certification that it is not delinquent on any obligation owed to the
government (7 CFR parts 3016 and 3019).
(k) Supplemental information. The applicant should provide any
additional information it considers relevant to the project and likely
to be helpful in determining the extent to which the project would
further the purposes of this subpart.
(l) Additional information required by RUS. The applicant must
provide any additional information RUS determines is necessary to
adequately evaluate the application. Modifications or changes,
including changes in the loan amount requested, may be requested in any
project described in an application submitted under this subpart.
Sec. 1703.145 Application selection provisions.
(a) Loans will be approved based on availability of funds, the
financial feasibility of the project in accordance with
Sec. 1703.144(d), the services to be provided which demonstrate that
the project meets the general requirements of this subpart, the design
of the project; costs; location; and other characteristics of the
application.
(b) RUS will determine, from the information submitted with each
application for a loan, whether the application achieves sufficient
priority, based on the criteria set forth in the 1996 Act, to receive a
loan from funds available for the fiscal year. If such priority is
achieved, RUS will process the loan application on a first-in, first-
out basis, provided that the total amount of applications on-hand for
loans does not exceed 90 percent of the total loan and grant funding
available for the fiscal year. At such time as the total amount of
applications eligible for loans, if such applications were approved,
exceeds 90 percent of amount of loan funding available, RUS will
process the remaining applications using the evaluation criteria set
forth in Sec. 1703.126.
(c) A loan will not be approved if it is determined that:
(1) The applicant's proposal does not indicate financial
feasibility, or is not adequately secured in accordance with the
requirements of Sec. 1703.144(d);
(2) The applicant's proposal indicates technical flaws, which, in
the opinion of RUS, would prevent successful implementation, or
operation of the project; or
(3) Any other aspect of the applicant's proposal fails to
adequately address any requirements of this subpart or contains
inadequacies which would, in the opinion of RUS, undermine the ability
of the project to meet the general purpose of this subpart or comply
with policies of the DLT program contained in Sec. 1703.101.
(d) RUS will provide the applicant with a statement of any
determinations made with regard to paragraphs (c)(1) through (c)(3) of
this section. The applicant will be provided 15 days from the date of
the RUS letter to respond, provide clarification, or make any
adjustments or corrections to the project. If, in the opinion of the
Administrator, the applicant fails to adequately respond to any
determinations or other findings made by the Administrator, the loan
will not be approved, and the applicant will be notified of this
determination. If the applicant does not agree with this finding an
appeal may be filed in accordance with Sec. 1703.147.
Sec. 1703.146 Submission of applications.
(a) RUS will accept applications for loans submitted by RUS
telecommunications General Field Representatives (GFRs), by Rural
Development State Directors, or by applicants themselves. Applications
for loans under this subpart may be filed at any time and will be
evaluated as received on a non-competitive basis.
(b) Applications submitted to the State Director, Rural
Development, in the State serving the headquarters of the project will
be evaluated as they are submitted. All applicants must submit an
original and two copies of a completed application. The applicant must
also submit a copy of the application to the State government point of
contact, if one has been designated for the State, at the same time it
submits an application to the State Director. The State Director will:
(1) Review each application for completeness in accordance with
Sec. 1703.144, and notify the applicant, within 15 working days of
receiving the application, of the results of this review, acknowledging
a complete application, or citing any information that is incomplete.
To be considered for a loan, the applicant must submit any additional
information requested to complete the application within 15 working
days of the date of the State Director's written response. If the
applicant fails to submit such information, the application will be
returned to the applicant.
(2) Within 30 days of the determination of a completed application
in accordance with paragraph (b)(1) of this section, review the
application to determine suitability for financial assistance in
accordance with Sec. 1703.145, and other requirements of this subpart.
Based on its review, the State Director will work with the applicant to
resolve any questions or obtain any additional information. The
applicant will be notified, in writing, of any additional information
required to allow a financial assistance recommendation and will be
provided a reasonable period of time to furnish the additional
information.
(3) Based on the review in accordance with Sec. 1703.145 and other
requirements of this subpart, make a preliminary determination of
suitability for financial assistance. A loan recommendation will be
prepared by the State Director with concurrence of the RUS
telecommunications GFR that addresses the provisions of Secs. 1703.144
and 1703.145 and other applicable requirements of this subpart.
(4) If the application is determined suitable for further
consideration by
[[Page 14373]]
RUS, forward an original and one copy of the application with a loan
recommendation, signed jointly, to the Assistant Administrator,
Telecommunications Program, Rural Utilities Service, Washington DC. The
applicant will be notified by letter of this action. Upon receipt of
the application from the State Director, RUS will conduct a cursory
review of the application and the recommendation. A final determination
will be made within 15 days. If the Administrator determines that a
loan can be approved, the State Director will be notified and the State
Director will notify the applicant. Applications for loans will be
processed, and approved loans serviced, in accordance with
Secs. 1703.105 through 1703.112.
(5) If the State Director determines that the application is not
suitable for further consideration by RUS, notify the applicant with
the reasons for this determination. The applicant will be offered
appeal rights in accordance with Sec. 1703.147.
(c) Applications submitted by RUS telecommunications GFRs or
directly by applicants will be evaluated as they are submitted. All
applicants must submit an original and two copies of a completed
application. The applicant must also submit a copy of the application
to the State government point of contact, if one has been designated
for the State, at the same time it submits an application to the RUS.
RUS will:
(1) Review each application for completeness in accordance with
Sec. 1703.144, and notify the applicant, within 15 working days of
receiving the application, of the results of this review, acknowledging
a complete application, or citing any information that is incomplete.
To be considered for a loan, the applicant must submit any additional
information requested to complete the application within 15 working
days of the date of the RUS written response. If the applicant fails to
submit such information, the application will be returned to the
applicant.
(2) Within 30 days of the determination of a completed application
in accordance with paragraph (c)(1) of this section, review the
application to determine suitability for financial assistance in
accordance with this subpart. Based on its review, RUS will work with
the applicant to resolve any questions or obtain any additional
information. The applicant will be notified, in writing, of any
additional information required to allow a financial assistance
recommendation and will be provided a reasonable period of time to
furnish the additional information.
(3) If the application is determined suitable for further
consideration by RUS, conduct a review of the application and financial
assistance recommendation. A final determination will be made within 15
days. If the Administrator determines that a loan can be approved, the
applicant will be notified. Applications will be processed, and
approved loans serviced, in accordance with Secs. 1703.105 through
1703.112 of subpart D.
(4) If RUS determines that the application is not suitable for
further consideration, notify the applicant with the reasons for this
determination. The applicant will be offered appeal rights in
accordance with Sec. 1703.147 of this subpart.
Sec. 1703.147 Appeals.
Any appeal must be made, in writing, within 10 days after the
applicant is notified of the determination to deny the application.
Appeals shall be submitted to the Administrator, RUS, U.S. Department
of Agriculture, 1400 Independence Ave., SW., STOP 1590, Washington, DC
20250-1590. Thereafter, the Administrator will review the appeal to
determine whether to sustain, reverse, or modify the original
determination. Final determinations will be made after consideration of
all appeals. The Administrator's determination will be final. A copy of
the Administrator's decision will be furnished promptly to the
applicant.
Dated: March 17, 1999.
Jill Long Thompson,
Under Secretary, Rural Development.
[FR Doc. 99-6995 Filed 3-24-99; 8:45 am]
BILLING CODE 3410-15-P
