[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: 7CFR1781.20]

[Page 1085-1086]
 
                          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. 1781.20  Disbursement of WS and RCD loan funds and WS advance funds.

    (a) WS and RCD loan funds will be disbursed by the processing office 
in accordance with the applicable provisions of Sec. 1780.45 of this 
chapter and RUS Bulletin 1781-1, paragraph (5). Funds will be made 
available to the borrower as needed for payment of development or other 
costs for which the loan is made. The processing office must determine 
that the payment is for an authorized purpose and is for benefits 
accrued to the borrower. This will require evidence from NRCS in 
accordance with the applicable provisions of RUS Bulletin 1781-1, 
``Memorandum of Understanding Between RUS and NRCS.''
    (b) WS advance funds may be disbursed in the same manner as WS loan 
funds if such funds are transferred to RUS by NRCS for disbursement or 
they may be disbursed by NRCS. When WS advance funds are disbursed by 
NRCS, payments from advance of funds will be reported to the Rural 
Development State Director each month to be reported to the Finance 
Office and charged to the borrower's account. This action will be taken 
in accordance with the applicable provisions of RUS Bulletin 1781-1 or 
RUS Bulletin 1781-2 and agreement between the NRCS State Conservationist 
and Rural Development State Director as follows:
    (1) When a future water supply is being developed with NRCS, WS 
advance funds, the NRCS State Conservationist will send the Rural 
Development State Director a monthly report of funds disbursed. This 
will include three (3) copies of Form NRCS-AS-49a and 49b, ``Contract 
Payment Estimate and Construction Progress Report,'' along with a 
transmittal Memorandum showing the sequential number (first, second, 
third, etc.) of the payment, the amount and date of payment, the

[[Page 1086]]

check number by which the payment was made and the cumulative amount of 
advance funds disbursed to date. When the works of improvement, for 
which WS advance funds are used is completed the final report will, in 
addition to the above, show the date that construction was completed and 
the total amount of WS advance funds used.
    (2) WS advances for construction costs will be set out each month on 
Form NRCS-49a. The Rural Development State Director should make 
arrangements with the NRCS State Conservationist to be supplied each 
month with a copy of Form NRCS 49a when advance funds are included 
together with an official statement from the NRCS State Administrative 
Officer giving the date of the check and the exact amount of each 
advance of funds made under the advance provisions of the project 
agreement or of any engineering services agreement or other 
supplementary agreement which further implements the proposal for the 
advance in the project agreement. The original will be sent immediately 
to the Finance Office and a copy provided for the processing office 
file.
    (3) When WS advance funds are used to acquire property for site 
preservation the same reporting procedure as for a future water supply 
will be used except that Form NRCS-AS-49a and 49b if used, should be 
adopted to indicate fund use. As payments are made on land on which a 
mortgage or other security instrument is required, such instruments will 
be executed in accordance with instructions from the Regional Attorney, 
OGC.
    (4) The Rural Development State Director must send the bond or note 
evidencing WS advance indebtedness of the borrower to the Finance Office 
along with reports of payments from advance funds disbursed by NRCS. A 
copy of the bond or note and copy of each report of payment will be sent 
to the processing office.
    (c) Actions subsequent to closing of loans or advances. Actions will 
be taken in accordance with Sec. 1780.44 of this chapter.