[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: 7CFR1717.600]

[Page 149-150]
 
                          TITLE 7--AGRICULTURE
 
    CHAPTER XVII--RURAL UTILITIES SERVICE, DEPARTMENT OF AGRICULTURE
 
PART 1717--POST-LOAN POLICIES AND PROCEDURES COMMON TO INSURED AND GUARANTEED ELECTRIC LOANS--Table of Contents
 
                     Subpart M--Operational Controls
 
Sec. 1717.600  General.

    Source: 60 FR 67405, Dec. 29, 1995, unless otherwise noted.


    (a) General. The loan contract and mortgage between the Rural 
Utilities Service (RUS) and electric borrowers imposes certain 
restrictions and controls on the borrowers and gives RUS (and other co-
mortgagees in the case of the mortgage) the right to approve or 
disapprove certain actions contemplated by the borrowers. Certain of 
these controls and approval rights are referred to informally as 
``operational controls'' because they pertain to decisions or actions 
with respect to the operation of the borrowers' electric systems. The 
approval authority granted to RUS by the loan contract or mortgage 
regarding each decision or action subject to controls is often stated in 
broad, unlimited terms. This subpart lists the main operational controls 
affecting borrowers and establishes for each area of control the 
circumstances under which RUS approval of a decision or action by a 
borrower is either required or not required. In some cases, only the 
general principles or general circumstances pertaining to RUS approval 
or control are presented in this subpart, while the details regarding 
the

[[Page 150]]

circumstances and requirements of RUS approval or control are set forth 
in other RUS regulations. Since this subpart addresses only the main 
operational controls, failure to address a control or approval right in 
this subpart in no way invalidates such controls or rights established 
by the loan contract, mortgage, other agreements between a borrower and 
RUS, and RUS regulations.
    (b) Case by case amendments. Upon written notice to a borrower, RUS 
may amend or annul the approvals and exceptions to controls set forth in 
this subpart or other RUS regulations if the borrower is in violation of 
any provision of its loan documents or any other agreement with RUS, or 
if RUS determines that loan security and/or repayment is threatened. 
Such amendment or annulment will apply to decisions and actions of the 
borrower after said written notice has been provided by RUS.
    (c) Generic notices. By written notice to all borrowers or a group 
of borrowers, RUS may grant or waive approval of decisions and actions 
by the borrowers that are controlled under the loan documents and RUS 
regulations. RUS may also by written notice withdraw or cut back its 
grant or waiver of approval of said decisions and actions made by 
previous written notice, but may not by such notice extend its authority 
to approve decisions and actions by borrowers beyond the authority 
granted by the loan documents and RUS regulations.