[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: 7CFR1703.36]

[Page 45-46]
 
                          TITLE 7--AGRICULTURE
 
    CHAPTER XVII--RURAL UTILITIES SERVICE, DEPARTMENT OF AGRICULTURE
 
PART 1703--RURAL DEVELOPMENT--Table of Contents
 
      Subpart B--Rural Economic Development Loan and Grant Program
 
Sec. 1703.36  Section of the application covering the project description.

    In general, this section should be more detailed the larger the 
project for which the borrower is requesting funding. The section of the 
application on the ``project description'' must include:
    (a) A description of the proposed project including the nature of 
the project, the location of the project, organizations that will be 
involved in the project and the primary beneficiaries of the project. 
Also include in this subsection a statement describing whether the 
borrower has or will have a direct or indirect (through a subsidiary or 
affiliated organization) ownership or similar beneficial interest in the 
facilities to be constructed or in the entity that will occupy or 
utilize these facilities. In addition, explain whether it seems likely 
that the proposed project will be undertaken or completed in the absence 
of an RUS zero-interest loan or grant;
    (b) A separate paragraph entitled ``Uses of RUS Funds and Total 
Project Costs'', that includes a breakdown of the specific uses of RUS 
funds and a breakdown of the specific uses of all funds necessary to 
ensure completion of the project. Project costs should be limited to the 
amount to be spent over the 2-year period after receiving RUS funds;
    (c) For a project that involves the establishment of a new venture, 
such as a rural business incubator or a similar start-up venture, a 
discussion of how the costs of establishing, organizing

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and arranging financing for the venture will be paid, how start-up costs 
incurred after the venture has been established will be paid, the 
expected sources of revenue necessary to sustain the project and revenue 
and expense projections for the first 3 years of the project;
    (d) If the borrower will provide a pass-through-loan or pass-
through-grant to another entity, outline the terms and conditions that 
the borrower intends to place on the recipient of the RUS funds 
including the security arrangements and collateral on a zero-interest 
loan. The discussion of proposed security arrangements and collateral 
should reflect the amount requested in the application, the risks 
involved with developing and operating the project, and the overall cost 
of the project;
    (e) For pass-through-loans and pass-through-grants, a description of 
the ultimate recipient, including the form of organization and ownership 
(i.e., corporation, nonprofit corporation, cooperative, partnership, 
sole proprietor), the owner(s) and the chief officers;
    (f) If the project involves construction, a brief description of the 
construction necessary to make the project operational and the 
organization involved with the project that will be responsible for 
building the project facilities or having them built;
    (g) A discussion of the manner in which the borrower intends to 
monitor the zero-interest loan and/or grant proceeds to ensure that they 
are used only for approved purposes; and
    (h) If applicable, a discussion on any potential conflict of 
interest or the appearance of a conflict of interest, a clarification of 
any aspect of the project with respect to the restriction that it must 
not result primarily in the transfer of any existing employment or 
business activity from one area to another or a clarification of any 
aspect of the project with respect to limitations in Secs. 1703.20 and 
1703.21.