[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: 7CFR1737.2]

[Page 326-327]
 
                          TITLE 7--AGRICULTURE
 
    CHAPTER XVII--RURAL UTILITIES SERVICE, DEPARTMENT OF AGRICULTURE
 
PART 1737--PRE-LOAN POLICIES AND PROCEDURES COMMON TO INSURED AND GUARANTEED TELECOMMUNICATIONS LOANS--Table of Contents
 
                           Subpart A--General
 
Sec. 1737.2  Definitions.

    As used in this part:
    Access line means a transmission path between user terminal 
equipment and a switching center that is used for local exchange 
service. For multiparty service, the number of access lines equals the 
number of lines/paths terminating on the mainframe of the switching 
center.
    Acquisition means the purchase of another telephone system, lines, 
or facilities whether by acquiring telephone plant in service or 
majority stock interest of one or more organizations.
    Administrator means the Administrator of RUS.
    Area Coverage means the provision of adequate telephone service to 
the widest practical number of rural users during the life of the loan.
    Advance of funds means the transferring of funds by RUS to the 
borrower's construction fund.
    Borrower means any organization which has an outstanding loan made 
or guaranteed by RUS, on which is seeking such financing.
    Characteristics letter means the letter informing the borrower of 
the characteristics of the proposed loan before the loan is recommended.
    Feasibility study means the pro forma financial analysis performed 
by RUS to determine the economic feasibility of a loan.
    Forecast period means the time period beginning on the date (base 
date) of the borrower's balance sheet used in preparing the feasibility 
study and ending on a date equal to the base date plus the number of 
years estimated in the feasibility study for the completion of the 
project. Feasibility projections are usually for 5 years, see 
Sec. 1737.70(a). For example, the forecast period for a loan based on a 
December 31, 1990 balance sheet and having a 5-year estimated project 
completion time is the period from December 31, 1990 to December 31, 
1995.
    Guaranteed loan means a loan guaranteed by RUS under section 306 of 
the RE Act bearing interest at a rate agreed to by the borrower and the 
lender.
    Hardship loan means a loan made by RUS under section 305(d)(1) of 
the RE Act bearing interest at a rate of 5 percent per year.
    Initial loan means the first loan made to a borrower.
    Interim construction means the purchase of equipment or the conduct 
of construction under an RUS-approved plan of interim financing.
    Interim financing means funding for a project which RUS has 
acknowledged will be included in a loan, should said loan be approved, 
but for which RUS loan funds have not yet been made available.
    Loan means any loan made or guaranteed by RUS.
    Project means the improvements and telephone facilities financed by 
a particular RUS loan.
    RE Act means the Rural Electrification Act of 1936, as amended (7 
U.S.C. 901 et seq.).
    RUS cost-of-money loan means a loan made under section 305(d)(2) of 
the RE Act bearing an interest rate as determined under 7 CFR 
1735.31(c). RUS cost-of-money loans are made concurrently with RTB 
loans.
    Release of funds means determination by RUS that a borrower has 
complied with all of the conditions prerequisite to the advances as set 
forth in the loan contract to the extent deemed necessary by RUS for 
approval of the use of loan funds and any required equity or other 
nonloan funds.
    Reserves means loan or nonloan funds that have not been encumbered. 
Funds are encumbered when they have been set aside for by RUS for a 
particular loan purpose.

[[Page 327]]

    RTB loan means a loan made by the Rural Telephone Bank (RTB) under 
section 408 of the RE Act bearing an interest rate as determined under 7 
CFR 1610.10. RTB loans are made concurrently with RUS cost-of-money 
loans.
    Rural area means any area of the United States, its territories and 
possessions (including any area within the Federated States of 
Micronesia, the Republic of the Marshall Islands, and the Republic of 
Palau) not included within the boundaries of any incorporated or 
unincorporated city, village or borough having a population exceeding 
5,000 inhabitants. The population figure is obtained from the most 
recent data available, such as from the Bureau of the Census and Rand 
McNally and Company. For purposes of the ``rural area'' definition, the 
character of an area is determined as of a time the initial loan for the 
system is made.
    Special project means facilities involving investment in excess of 
$100,000 for any single subscriber.
    Subscriber means the same as access line.
    Subsequent Loan means any loan to a borrower which has already 
received a loan.
    Telephone service means any communication service for the 
transmission or reception of voice, data, sounds, signals, pictures, 
writing, or signs of all kinds by wire, fiber, radio, light, or other 
visual or electromagnetic means and includes all telephone lines, 
facilities and systems to render such service. It does not mean:
    (1) Message telegram service;
    (2) Community antenna television system services or facilities other 
than those intended exclusively for educational purposes; or
    (3) Radio broadcasting services or facilities within the meaning of 
section 3(o) of the Communications Act of 1934, as amended.
    Times Interest Earned Ratio (TIER) means the ratio of a borrower's 
net income (after taxes) plus interest expense, all divided by interest 
expense. For the purpose of this calculation, all amounts will be annual 
figures and interest expense will include only interest on debt with a 
maturity greater than one year.

[54 FR 13356, Apr. 3, 1989. Redesignated at 55 FR 39396, Sept. 27, 1990, 
as amended at 56 FR 26598, June 10, 1991; 58 FR 66256, Dec. 20, 1993]