[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: 7CFR1737.42]

[Page 334-335]
 
                          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 E--Interim Financing of Construction of Telephone Facilities
 
Sec. 1737.42  Procedure for construction.

    (a) If RUS approves the interim financing, interim construction 
shall be conducted in accordance with 7 CFR Part 1753, 7 CFR 1788, RUS 
Bulletin 320-15, and RUS Bulletins 381-1, 381-2, 381-4, 381-7, 381-8, 
381-9, 381-10, 381-11, 381-13, 382-1, 382-2, 382-3, 383-1, 383-4, 384-1, 
384-2, 384-3, 385-1, 385-2, 385-3, 385-4, 385-5, 385-6, 387-1, 387-2, 
387-3, 387-4, and 387-5) except for the following:
    (1) All sellers and contractors invited to bid must be informed that 
funds from sources other than RUS will be used to pay for construction.
    (2) Contracts involving the interim construction must contain a 
provision, in form and substance satisfactory to RUS, stating that RUS 
is not committed to lend or advance funds to finance the project.
    (3) Contracts will not be approved by RUS until the borrower 
demonstrates to RUS's satisfaction that funds from sources other than 
RUS will be available when needed to pay invoices submitted in 
accordance with contract payment terms.
    (4) The borrower shall not begin interim construction until all 
necessary licenses, permits, and other governmental approvals have been 
obtained.
    (b) After RUS loan funds are released, the borrower can obtain 
reimbursement for interim financing by submitting a Financial 
Requirement Statement. See 7 CFR Part 1744, subpart C (or RUS Bulletin 
327-1).

[[Page 335]]

    (1) The first advance of loan funds to a borrower that has received 
interim financing approval generally will be limited to funds to repay 
any interim financing indebtedness and such additional amounts as RUS 
deems necessary. RUS will make no further advances of loan funds until 
the borrower has submitted evidence, in form and substance satisfactory 
to the Administrator, that (i) any indebtedness created by the interim 
financing and any liens associated therewith have been fully discharged 
of record and (ii) the borrower has satisfied all other conditions on 
the advance of additional loan funds.
    (2) If the source of funds for interim financing is the borrower's 
internally generated funds, the borrower may request reimbursement of 
those funds along with advances for other purposes on the first 
Financial Requirement Statement.

[54 FR 13356, Apr. 3, 1989; 54 FR 16194, Apr. 21, 1989. Redesignated at 
55 FR 39396, Sept. 27, 1990]