[Code of Federal Regulations]
[Title 13, Volume 1]
[Revised as of January 1, 2003]
From the U.S. Government Printing Office via GPO Access
[CITE: 13CFR308.12]

[Page 567-568]
 
                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. 308.12  Revolving Loan Fund income.

    (a) RLF income can be used to pay for eligible and reasonable 
administrative costs for the project. RLF recipients are expected to add 
RLF income to the RLF capital base where practicable. To determine the 
appropriate amount of RLF income to return to the RLF capital base, RLF 
operators must consider the costs necessary to operate an RLF program, 
the availability of other monetary resources, the portfolio risk level 
and projected capital erosions from loan losses and inflation, the 
community's (or area's) commitment to the RLF, and the anticipated 
demand for RLF loans.
    (b) RLF income that is not used for administrative costs during the 
selected twelve-month reporting period in which it is earned, must be 
added to the RLF capital base for lending purposes at the end of the 
twelve-month reporting period. Only RLF income earned during a current 
period may be used for current administrative expenses. RLF income may 
not be withdrawn from an RLF in a subsequent period for any uses, other 
than lending, without the written consent of EDA.
    (c) In accounting for RLF income, any net proceeds from the sale, 
collection, or liquidation of a defaulted loan, up to the amount of the 
unpaid principal, will be treated as repayments of RLF principal and 
placed in the RLF

[[Page 568]]

for lending purposes only. Any proceeds in excess of the unpaid 
principal will be treated as RLF income.
    (d) RLF recipients must comply with applicable OMB cost principles 
(as found in OMB Circular A-87 for State, Local or Indian tribal 
governments, OMB Circular A-122 for non-profit organizations other than 
institutions of higher education, hospitals, or organizations named in 
OMB Circular A-122 as not subject to that circular, and OMB Circular A-
21 for educational institutions) and with RLF Audit Guidelines (as found 
in OMB Circular A-133, Single Audit Act Requirements for State and Local 
Governments, Indian tribal governments, Institutions of Higher Education 
and Other Nonprofit Organizations, or the Compliance Supplement, as 
appropriate) when charging costs against RLF income. For availability of 
OMB circulars, see 5 CFR 1310.3.
    (e) When a RLF recipients uses RLF income to cover all or part of 
RLF administrative costs it must complete an RLF Income and Expense 
Statement required under Sec. 308.14(c) of this chapter.

[65 FR 2532, Jan. 18, 2000, as amended at 65 FR 71025, Nov. 28, 2000]