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10.854 RURAL ECONOMIC DEVELOPMENT LOANS AND GRANTS

FEDERAL AGENCY

RURAL BUSINESS-COOPERATIVE SERVICE, DEPARTMENT OF AGRICULTURE

AUTHORIZATION

Rural Electrification Act of 1936, as amended, Title III, 7 U.S.C. 930-940c.

OBJECTIVES

To promote rural economic development and job creation projects, including funding for project feasibility studies, start-up costs, incubator projects, and other reasonable expenses for the purpose of fostering rural development.

TYPES OF ASSISTANCE

Direct Loans; Project Grants.

USES AND USE RESTRICTIONS

Projects which promote rural economic development and job creation. For fiscal year 2001, maximum amount of grant is $200,000; maximum amount of loan is $450,000. Maximum term of loan is ten years at zero interest rate.

ELIGIBILITY REQUIREMENTS

Applicant Eligibility

Electric and telephone utilities that have current loans with the Rural Utilities Service (RUS) or Rural Telephone Bank loans or guarantees outstanding and are not delinquent on any Federal debt or in bankruptcy proceedings.

Beneficiary Eligibility

Rural/General Public.

Credentials/Documentation

This program is excluded from coverage under OMB Circular No. A-87.

APPLICATION AND AWARD PROCESS

Preapplication Coordination

Application Form: OMB Standard form 424. This program except for feasibility studies is eligible for coverage under E.O. 12372 "Intergovernmental Review of Federal Programs." The RUS utility should consult the office or official designated as the single point of contact in his or her State for more information on the process the State requires to be followed in applying for assistance, if the State has selected the program for review. This program is excluded from coverage under OMB Circular No. A-102. An environmental review is conducted by the agency for the projects. An environmental assessment without scooping is occasionally required.

Application Procedure

Submit application as described in 7 CFR 1703.34, no State plan required.

Award Procedure

RBS selects projects to be funded. The funds pass through the RUS utility to rural economic development projects.

Deadlines

Applications may be filed on any working day during the month.

Range of Approval/Disapproval Time

Open ended.

Appeals

Not applicable.

Renewals

Renewal of same application for one year. Submit new or revised application as often as desired.

ASSISTANCE CONSIDERATIONS

Formula and Matching Requirements

This program requires supplemental funds in the amount of 20 percent of the RBS application amounts.

Length and Time Phasing of Assistance

Not applicable.

POST ASSISTANCE REQUIREMENTS

Reports

Reporting need established in 7 CFR 1703, Subpart B.

Audits

Financial audit of the RUS utility is required.

Records

Record retention requirements established in 7 CFR 1703, Subpart B.

FINANCIAL INFORMATION

Account Identification

12-4230-0-3-271; 12-3108-0-1-452; 12-3105-0-1-452.

Obligations

(Loans) FY 04 $14,704,000; FY 05 est $24,803,000; and FY 06 est $25,002,000. (Grants) FY 04 $10,786,000; FY 05 est $10,000,000: and FY 06 est $10,000,000. (Note: Grants to establish Revolving Loan Fund Programs.)

Range and Average of Financial Assistance

(Loans) for FY 2004, $200,000 to $450,000; $375,000 average. (Grants) for FY 2004, $10,000 to $300,000; $260,000 average. Maximum limits for FY 2004: Loans $450,000; Grants $300,000.

PROGRAM ACCOMPLISHMENTS

From May 1989 to September 30, 2004, 638 loans totaling $161,585,079 and 282 grants totaling $83,424,607 were made. They created 34,571 jobs and were leveraged with $1.46 billion in supplemental capital.

REGULATIONS, GUIDELINES, AND LITERATURE

7 CFR 1703, Subpart B and the Rural Electrification Act of 1936.

INFORMATION CONTACTS

Regional or Local Office

Consult your local telephone directory for RD District Office number. If no listing, get in touch with appropriate Rural Development State Office listed in Appendix IV of the catalog.

Headquarters Office

Director, Specialty Lenders Division, Rural Business-Cooperative Service, Department of Agriculture, Washington, DC 20250. Telephone: (202) 720-1400.

Web Site Address

http://www.rurdev.usda.gov

EXAMPLES OF FUNDED PROJECTS

Establishment or expansion of factories or businesses, medical facilities, industrial development parks, business incubators for rural economic development activities and other job creation projects. Grants were used to establish revolving loan funds.

CRITERIA FOR SELECTING PROPOSALS

See 7 CFR 1703.46.