[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: 7CFR1735.31]

[Page 312-313]
 
                          TITLE 7--AGRICULTURE
 
    CHAPTER XVII--RURAL UTILITIES SERVICE, DEPARTMENT OF AGRICULTURE
 
PART 1735--GENERAL POLICIES, TYPES OF LOANS, LOAN REQUIREMENTS--TELECOMMUNICATIONS PROGRAM--Table of Contents
 
                        Subpart C--Types of Loans
 
Sec. 1735.31  RUS cost-of-money and RTB loans.

    (a) RUS makes cost-of-money loans, under section 305(d)(2) of the RE 
Act, concurrently with RTB loans made under section 408 of the RE Act. 
To qualify for concurrent RUS cost-of-money and RTB loans on or after 
November 1, 1993, a borrower must meet each of the following 
requirements:
    (1) The average number of proposed subscribers per mile of line in 
the service area of the borrower is not more than 15, or the borrower 
has a projected TIER (including the proposed loans) of at least 1.0, but 
not greater than 5.0, as determined by the feasibility study prepared in 
connection with the loans, see 7 CFR part 1737, subpart H; and
    (2) The Administrator has approved and the borrower is participating 
in a telecommunications modernization plan for the state, see 7 CFR part 
1751, subpart B.
    (b) The loan amounts from each program (RUS cost-of-money and RTB, 
including amounts for class B stock) will be proportionate to the total 
amount of funds appropriated for the fiscal year for RUS cost-of-money 
loans and RTB loans. To determine the RUS cost-of-money portion, the 
total loan amount will be multiplied by the ratio of RUS cost-of-money 
funds appropriated for the fiscal year to the sum of RUS cost-of-money 
and RTB funds appropriated for the fiscal year in which the loan is 
approved. The same method would be used to calculate the RTB portion 
(see 7 CFR 1610.6(b)). If during the fiscal year the amount of funds 
appropriated changes, the ratio will be adjusted accordingly and applied 
only to those loans approved afterwards.
    (c) The RUS cost-of-money loan shall bear interest as described in 
paragraphs (c)(1) and (c)(2) of this section (the actual rate of 
interest on the RTB loan shall be determined as provided in 7 CFR 
1610.10):
    (1) Each advance of funds included in RUS cost-of-money loans shall 
bear interest at a rate (the ``Cost of Money Interest Rate'') equal to 
the current cost of money to the Federal Government for loans of a 
similar maturity. The Cost of Money Rate is determined when the funds 
are advanced to the borrower but cannot exceed 7 percent per year.
    (2) RUS shall use the Federal Treasury Statistical Release (the 
``Statistical Release'') issued by the United States Treasury to 
determine the interest rate for each advance of RUS cost-of-money loan 
funds. Generally, the Statistical Release is issued each Monday to cover 
the preceding week. RUS shall determine the Cost of Money Interest Rate 
as follows:
    (i) Each advance shall bear the interest rate stated in the 
applicable Statistical Release for Treasury constant maturities with a 
maturity similar to that of the advance.
    (ii) RUS shall determine the interest rate for an advance bearing a 
maturity other than those stated in the applicable Statistical Release 
by straight-line interpolation between the next higher and next lower 
stated maturities.
    (iii) The first Statistical Release published after the date of an 
advance shall apply to that advance.
    (iv) If the interest rate determined under paragraph (c)(2)(i) or 
(c)(2)(ii) of this section is higher than 7 percent, then the advance 
shall bear interest at the rate of 7 percent per year.
    (v) Advances with maturities greater than 30 years shall bear 
interest at the rate stated in the applicable Statistical Release for 
30-year maturities.
    (vi) RUS may use an alternative method to determine the Cost of 
Money Interest Rate if the Treasury ceases to issue the Statistical 
Release or changes its format or frequency of issue so that it is no 
longer appropriate for use in the manner described in paragraph (c)(2) 
of this section. In this eventuality, RUS shall immediately notify all 
borrowers with unadvanced RUS cost-of-money loan funds. RUS may, with 
the borrower's consent, determine the Cost of Money Interest Rate on a 
case-by-case basis for subsequent advances of RUS cost-of-money loan 
funds but may also decide, in its discretion, that it is unable to 
continue advancing funds until an alternative method is in effect.
    (vii) Refer to Sec. 1735.43(a) for additional information on 
maturities of RUS loans.
    (viii) RUS shall provide borrowers with prompt written confirmation 
of the Cost of Money Interest Rate borne

[[Page 313]]

by each advance of funds included in a RUS cost-of-money loan.
    (d) Generally, no more than 10 percent of lending authority from 
appropriations in any fiscal year for RUS cost-of-money and RTB loans 
may be loaned to a single borrower. RUS will publish by notice in the 
Federal Register the dollar limit that may be loaned to a single 
borrower in that particular fiscal year based on approved RUS and RTB 
lending authority.
    (e) On request of any borrower who is eligible for concurrent RUS 
cost-of-money and RTB loans for which funds are not available, the 
borrower shall be considered to have applied for a loan guarantee under 
section 306 of the RE Act.
    (f) Concurrent RUS cost-of-money and RTB loans may be made 
simultaneously with hardship loans or guaranteed loans.

[58 FR 66255, Dec. 20, 1993, as amended at 62 FR 46870, Sept. 5, 1997]