[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: 7CFR1781.12]

[Page 1081-1082]
 
                          TITLE 7--AGRICULTURE
 
    CHAPTER XVII--RURAL UTILITIES SERVICE, DEPARTMENT OF AGRICULTURE
 
PART 1781--RESOURCE CONSERVATION AND DEVELOPMENT (RCD) LOANS AND WATERSHED (WS) LOANS AND ADVANCES--Table of Contents
 
Sec. 1781.12  Preapplication and application processing.

    (a) WS and RCD loans--(1) Preapplications. (i) The processing office 
or other person designated by the Rural Development State Director may 
assist the applicant in completing SF 424.1, ``Application for Federal 
Assistance (For Non-construction),'' and will forward one of SF 424.1 to 
the Rural Development State Director.
    (ii) The Rural Development State Director will review SF 424.1 along 
with other necessary information and will coordinate selection of 
preapplications to be processed with NRCS. He will consult with NRCS 
State Conservationist concerning the status of the WS plan or RCD 
measure plan, the estimated time schedule for construction and cost of 
the proposed works to be installed with the loan, cost sharing funds to 
be made available to the applicant, and other pertinent information.
    (iii) Form AD-622, ``Notice of Preapplication Review Action,'' will 
be prepared and signed by the Rural Development State Director within 
forty-five (45) days from receipt of the preapplication in the 
processing office stating the results of the review action. An original 
and one copy of Form AD-622 will be sent to the processing office who 
will deliver the original to the applicant.
    (2) Applications. (i) The application includes applicable forms and 
information indicated in RUS Instruction 1780. When the Rural 
Development State Director determines that an application will be 
further processed and Form AD-622 is delivered, he will designate a 
community program specialist (field), or a member of the community 
program staff to assist the processing office and the applicant with 
assembling and processing the application.
    (ii) The processing office should arrange needed conferences with 
the applicant and its legal and engineering consultants, and when 
necessary, arrange for review of other Rural Development officials, and 
provide bulletins, forms, instructions and other assistance with 
assembling and processing the application. A processing checklist and 
time schedule will be established by using Form RD 1942-40, ``Processing 
Check List (Public Bodies),'' or Form RD 1942-39, ``Processing Check 
List (Other than Public Bodies).'' The processing office will send a 
letter and a copy of the processing checklist to the applicant to 
confirm decisions reached at the conference. The original and a copy of 
the processing checklist will be kept in the processing office and will 
be posted current as application processing actions are taken. The copy 
will be circulated from the processing office to the State Office for 
use in updating copies of the forms retained, after which it will be 
returned from the State Office to the processing office.
    (3) Dockets. WS loan, WS advance, and RCD loan dockets will be 
developed and assembled in accordance with applicable RUS Instruction 
1780.
    (b) Watershed advances. Applications for WS advances will be 
developed and processed with NRCS assistance as necessary.
    (1) The Rural Development State Director will arrange with the NRCS 
State Conservationist to be advised when a local sponsoring organization 
applies to NRCS for a WS advance.
    (2) The Rural Development State Director will request the NRCS State 
Conservationist to provide information justifying the WS advance along 
with a written recommendation that it be made. This will include:
    (i) Economic feasibility of the proposed WS advance.
    (ii) Evidence of the legal authority of the sponsoring local 
organization to incur the obligation and make required payments.
    (iii) Any limitations on the issuance of additional bonds or notes 
which may be imposed by the provisions of bond ordinances or on 
resolutions which authorize the issuance of any outstanding

[[Page 1082]]

obligation of the sponsoring local organization.
    (iv) The amount of WS advance funds to be provided, purpose for 
which funds will be used, and date funds will be needed.
    (3) When the above information has been made available to the Rural 
Development State Director, he will send written recommendations 
concerning further action on the WS advance request to the NRCS State 
Conservationist including actions to be taken in the preparation of the 
WS advance docket.
    (c) Combination WS loans and WS advances. If an applicant requests 
both a WS loan and WS advance, the application for the WS loan should 
indicate the amount of the WS advance needed and whether a request for 
it has been made to NRCS. The Rural Development State Director and the 
NRCS State Conservationist will coordinate applicable processing actions 
of such applications. When the Rural Development State Director 
determines that favorable consideration will be given to an application 
for a loan or advance, he will provide instructions to the processing 
office for completing and processing the appropriate docket. Any 
questions concerning eligibility or other legal matters should be 
cleared with the Regional Attorney.
    (d) Review of decision. When it is determined that the 
preapplication or application cannot be given favorable consideration, 
the Rural Development State Director will return it to the processing 
office along with written reasons. When the processing office receives 
this information, it will notify the applicant in writing of the reasons 
why the request was not favorably considered. The notification to the 
applicant will state that the RUS Administrator may be requested to 
review the decision. This action will be taken in accordance with 
Sec. 1780.37 of this chapter.
    (1) Upon receipt of the State Office copy of a review request from 
the applicant, the Rural Development State Director will furnish a 
report on the matter to the Administrator.
    (2) The Administrator will notify the applicant and the Rural 
Development State Director in writing of his decision and the reasons 
therefore.