[Code of Federal Regulations]
[Title 7, Volume 11]
[Revised as of January 1, 2003]
From the U.S. Government Printing Office via GPO Access
[CITE: 7CFR1703.105]

[Page 61-62]
 
                          TITLE 7--AGRICULTURE
 
    CHAPTER XVII--RURAL UTILITIES SERVICE, DEPARTMENT OF AGRICULTURE
 
PART 1703--RURAL DEVELOPMENT--Table of Contents
 
 Subpart D--Distance Learning and Telemedicine Loan and Grant Program--
                                 General
 
Sec. 1703.105  Processing of selected applications.

    (a) During the period between the submission of an application and 
the

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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selection will be rescinded or the application withdrawn and written 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 
imminent.
    (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 recipient shall provide evidence, in form and substance 
satisfactory to RUS, demonstrating that the recipient 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.

[64 FR 14357, Mar. 25, 1999; 64 FR 25422, May 12, 1999]

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