[Code of Federal Regulations]
[Title 13, Volume 1]
[Revised as of January 1, 2001]
From the U.S. Government Printing Office via GPO Access
[CITE: 13CFR308.16]

[Page 508-509]
 
                TITLE 13--BUSINESS CREDIT AND ASSISTANCE
 
CHAPTER III--ECONOMIC DEVELOPMENT ADMINISTRATION, DEPARTMENT OF COMMERCE
 
PART 308--REQUIREMENTS FOR ECONOMIC ADJUSTMENT GRANTS--Table of Contents
 
  Subpart B--Special Requirements for Revolving Loan Fund Projects and 
                           Uses of Grant Funds
 
Sec. 308.16  Disbursement of funds to Revolving Loan Funds.

    (a) Timing of request for disbursement. A RLF recipient must request 
disbursements from EDA only at the time and in the amount immediately 
needed to close a loan or disburse funds to a borrower. Grant funds must 
be requested only for immediate use, i.e., when the intent is to 
disburse the funds within 14 days of receipt.
    (b) Amount of disbursement. As each new loan is made, the grant RLF 
recipient may request a disbursement of grant funds only for the 
difference, if any, between the amount of funds available for relending 
(from repayments of loan principal and RLF income) and the amount of the 
new loan, less an amount for local matching funds as may be required to 
be disbursed concurrent with the grant. However, RLF income received 
during the grant period may be held to cover eligible administrative 
expenses and need not be disbursed in order to draw additional grant 
funds.
    (c) Interest-bearing accounts. All RLF grant funds disbursed by EDA 
to reimburse RLF recipients for loan obligations already incurred must 
be held in interest bearing accounts by RLF recipients until disbursed 
to the borrower.
    (d) Pre-disbursement requirements. RLF recipients are required to 
provide:
    (1) Evidence to EDA that they have fidelity bond coverage for 
persons authorized to handle funds under the grant award in an amount 
sufficient to protect the interests of EDA and the RLF. Note that such 
insurance coverage must exist at all times during the life of the RLF; 
and
    (2) Certification in accordance with Sec. 308.15(b)(1) of this part.
    (e) Delays. (1) If grant funds are requested and the loan 
disbursement is subsequently delayed, a RLF recipient may hold the funds 
up to 30 days from the date of receipt. In the event that a loan 
disbursement is delayed beyond 30 days from the date of receipt of the 
Federal disbursement, the undisbursed funds must be returned to the 
Government for credit to the RLF recipient's account. Returned funds 
will be available to the RLF recipient for future draw down. When 
returning prematurely drawn funds, checks should identify on their face 
the name of the grantor agency--``EDA'' followed by

[[Page 509]]

the grant award number and the words ``Premature Draw.''
    (2) The interest earned on prematurely withdrawn funds must be 
returned to the Government (with the exception of $100 per year which 
may be retained for administrative expenses by states, local governments 
and Indian tribes in accordance with 15 CFR Part 24, and $250 for those 
subject to 15 CFR Part 14 as appropriate) and should be remitted 
promptly, but no less frequently than quarterly. All checks submitted 
should state ``EDA'' on their face and the award number followed by the 
word ``INTEREST'' in order to identify the check in question as 
remittance of interest income.
    (f) Local share. (1) When some portion of the local share of the RLF 
project is cash, it may only be used for lending. If the RLF project has 
an all-cash matching share, EDA's funds will be disbursed as needed for 
loan closing. The cash matching funds must be used either in proportion 
to the EDA funds, or at a faster rate than EDA funds.
    (2) When an RLF project has a combination of in-kind and cash 
matching share, the non-federal cash together with the Federal cash 
constitute the funds available for making loans and will be disbursed 
proportionately as needed for loan closing, provided that the last 20 
percent of the Federal funds may not be disbursed until all local in-
kind match has been expended. The full amount of the local cash matching 
share will be expected to remain for use in the RLF.
    (3) Upon repayment, local cash share funds are treated the same as 
EDA funds. Repayments of principal must be placed in the RLF for 
relending and interest payments must be used either for relending or for 
eligible RLF administrative costs. The local cash matching share must be 
available when needed for lending and must be under the control of the 
RLF recipient for the duration of the RLF for use in accordance with the 
terms of the grant.