To assure that people in eligible rural areas have
access to telecommunications services comparable in reliability and quality to
the rest of the Nation.
TYPES OF ASSISTANCE:
Direct Loans. Place Cursor Here for Definition
Guaranteed/Insured Loans. Place Cursor Here for Definition
USES AND USE RESTRICTIONS:
Long-term direct and guaranteed loans to qualified organizations for the
purpose of financing the improvement, expansion, construction, acquisition,
and operation of telephone lines, facilities, or systems to furnish and
improve Telecommunications service in rural areas. "Rural area" is
defined as any area of the United States, its territories and insular
possessions (including any areas within the Federated States of Micronesia,
the Republic of Palau) not included within the boundaries of any incorporated
or unincorporated city, village, or borough having a population exceeding
5,000 inhabitants. The population figure is obtained from the most recent data
available, such as from the Bureau of Census and Rand McNally and Company. For
purposes of the "rural area" definition, the character of an area is
determined at the time the initial loan for the system is made.
ELIGIBILITY REQUIREMENTS:
Applicant Eligibility: Telephone companies or
cooperatives, nonprofit associations, limited dividend associations, mutual
associations or public bodies including those located in the U.S. Territories
and countries included in the Compact of Free Association Act of 1985,
providing or proposing to provide telecommunications service to meet the needs
of rural areas.
Beneficiary Eligibility: Residents of rural
areas, and others who may also receive telephone service as a result of
service provided to a rural area.
Credentials/Documentation: None. This program is
excluded from coverage under OMB Circular No. A-87.
Pre-application Coordination: Applicants must supply
environmental impact information to determine whether an environmental impact
assessment or an environmental impact statement will be required. This program
is excluded from coverage under E.O. 12372 and OMB Circular No. A-102.
Application Procedure: The completed loan
application consists of four parts: an RUS Form 490; Application for Telephone
Loan or Loan Guarantee; a market survey called Area Coverage Survey (ACS); the
plan and associated costs for the proposed construction called the Loan Design
(LD); and other various supplementary information specified in 7 CFR 1737.22.
Detailed information on applying for an RUS telephone loan or loan guarantee
is in 7 CFR Part 1737, available from RUS upon request. This program is
excluded from coverage under OMB Circular No. A-110.
Award Procedure: Depending on the amount of the
application, and loan committee(s) recommendation, the RUS Administrator,
Assistant Administrator, or appropriate Area Director makes the final decision
on approval of the loan or loan guarantee upon a finding that it is
economically feasible and serves the purposes of the Rural Electrification
Act. Borrowers and Members of Congress are notified of the approval of a loan
or loan guarantee directly, and the public is notified through normal media
communications.
Deadlines: Applications are processed on a
first-come, first-serve basis through out the fiscal year ending September 30.
Range of Approval/Disapproval Time: Normal loan
processing time is from 2 to 3 months.
Appeals: Not applicable.
Renewals: Not applicable.
ASSISTANCE CONSIDERATIONS:
Formula and Matching Requirements: Under certain
conditions, obtaining an RUS telephone loan will require obtaining a
concurrent Rural Telephone Bank loan (see program 10.852). The statistical
factor used for eligibility is any area of the United States; its territories
or possessions, not within the boundaries of any city, village or borough
having a population over 5,000 (farm and non-farm). The source is the
Department of Commerce's Bureau of the Census. The statistical factor used for
fund allocation does not apply to this program.
Length and Time Phasing of Assistance: Direct and
guaranteed loans can be made not to exceed the economic life of facilities and
equipment. (average loan maturity is 18 yrs). Provision is normally made for
advances to be completed within 5 years, but this period is subject to
extension if required. Advances of funds are made as required by the borrower.
The terms and conditions of guaranteed loans are negotiated between the
borrower and the non-RUS lender, subject to RUS approval.
POST ASSISTANCE REQUIREMENTS:
Reports: RUS borrowers must submit to the Rural
Utilities Service regularly scheduled operating reports showing financial
condition and operating progress.
Audits: In accordance with the provisions of 7
CFR Part 3052, "Audits of States, Local Governments, and Non-Profit
Organizations," which implement OMB Circular No.A-133 (Revised, June 24,
1997), "Audits of States, Local Governments, and Nonprofit
Organizations," nonfederal entities that expend financial assistance of
$300,000 or more in Federal awards will have a single or a program-specific
audit conducted for that year. All other RUS borrowers have their books
audited annually by a Certified Public Accountant. Information on audits of
RUS borrowers is contained in 7 CFR Part 1773.
Records: RUS borrowers keep the records
prescribed for telephone companies by the State regulatory body having
jurisdiction, or by the Federal Communications Commission if there is no such
regulatory body.
Obligations: (Hardship Loans) FY 01 $75,000,000;
FY 02 est $74,835,000; and FY 03 est $75,000,000. (Cost of Money Loans) FY 01
$300,000,000; FY 02 est $300,000,000; and FY 03 est $300,000,000. (FFB
Treasury Loans) FY 01 $120,000,000; FY 02 est $120,000,000; and FY 03 est
$120,000,000.
Range and Average of Financial Assistance: For FY
2001, Direct loans: $289,000 to $61,567,000. Average: $9,375,000. Loan
Guarantees: $4,476,000 to $59,389,000. Average: $13,333,333.
During fiscal year 2001, 36 borrowers received loans.
REGULATIONS, GUIDELINES, AND LITERATURE:
7 CFR-XVII. RUS publishes and issues upon request technical operations manuals
and bulletins covering financing, construction, operation and maintenance of
rural telephone systems. Also available are annual statistical summaries; and
Rural Electrification Act of 1936, as amended.
INFORMATION CONTACTS:
Regional or Local Office: None.
Headquarters Office: Assistant Administrator,
Rural Utilities Service, Department of Agriculture, Washington, DC 20250.
Telephone: (202) 720-9554. Use the same number for FTS.
