[Code of Federal Regulations]
[Title 7, Volume 11]
[Revised as of January 1, 2005]
From the U.S. Government Printing Office via GPO Access
[CITE: 7CFR1703.35]

[Page 44-45]
 
                          TITLE 7--AGRICULTURE
 
    CHAPTER XVII--RURAL UTILITIES SERVICE, DEPARTMENT OF AGRICULTURE
 
PART 1703--RURAL DEVELOPMENT--Table of Contents
 
      Subpart B--Rural Economic Development Loan and Grant Program
 
Sec. 1703.35  Section of the application covering the selection factors.

    The application must contain a section addressing the ``selection 
factors'' consisting of the following:
    (a) ``Nature of the project'' (Sec. 1703.46(g)(1)), which includes 
any information considered appropriate including aspects of the project 
that may not be obvious to an outside observer;
    (b) ``Job creation project'' (Sec. 1703.46(g)(2)), which includes 
any information that is not readily apparent concerning whether the 
project would directly create jobs in rural areas. The number of the 
jobs and the basis for the job projection should be included under 
``Number of long-term jobs'';
    (c) ``Long-term improvements in economic development'' 
(Sec. 1703.46(g)(3)), which addresses the extent to which the project 
will improve the productive potential of the labor force, industrial 
plant, infrastructure, natural resources and institutions by employing 
advanced technology, creating higher-skilled occupations, adding higher 
value to natural resources, creating jobs with higher-career potential, 
or is considered part of a knowledge intensive industry;
    (d) ``Diversifying the rural economy or alleviating 
underemployment'' (Sec. 1703.46(g)(4)), which includes any information 
the borrower desires the Administrator to consider;
    (e) ``Supplemental funds'' (Sec. 1703.46(h)(1)), which includes the 
name of each source and the respective amount of supplemental funds that 
was provided to the project within 6 months of submitting the 
application to RUS, and the amount that will be provided within two 
years of receiving RUS funds. Also indicate the nature and strength of 
the commitments to make these supplemental funds available, when these 
funds are expected to be disbursed, any special terms and conditions 
associated with the commitments, copies of the commitments, and, if 
established, the interest rate, term and deferment period on any loan 
for the project;
    (f) ``Economic conditions and job creation'' (Sec. 1703.46(h)(2)), 
which includes:
    (1) ``Unemployment rates'' (Sec. 1703.46(h)(2)(i)). List the county 
or counties in which the project will be located. It is not necessary to 
include the county, state or national unemployment rates. RUS obtains 
these rates from other Federal agencies;
    (2) ``Per capita personal income'' (Sec. 1703.46(h)(2)(ii)). As with 
``Unemployment rates,'' it is not necessary to include the county, state 
or national per capita personal income levels;
    (3) ``Change in population'' (Sec. 1703.46(h)(2)(iii)). It is not 
necessary to include the county population levels;
    (4) ``Number of long-term jobs'' (Sec. 1703.46(h)(2)(iv)). Include 
the number of long-term jobs that the project will directly create in 
rural areas and the total project cost;
    (5) ``Community-based economic development program'' 
(Sec. 1703.46(h)(2)(v)).

[[Page 45]]

Explain if the project is part of a community-based economic development 
program; and
    (6) ``Plan for improving the marketable skills of people in rural 
areas'' (Sec. 1703.46(h)(2)(vi)). Include information on any written 
plan for the project to provide opportunities or incentives to improve 
the marketable skills of rural residents through training and/or 
education. For projects that consist of providing training or education, 
indicate how it will benefit rural residents;
    (g) ``Location'' (Sec. 1703.46(h)(3)), which indicates whether or 
not the project will be located in a town and, if so, the name of the 
town;
    (h) ``Support for the program--cushion of credit payments'' 
(Sec. 1703.46(h)(4)), which mentions any cushion of credits payments 
made recently in accounts at RUS;
    (i) ``Demonstration project'' (Sec. 1703.46(h)(5)), which includes a 
discussion of any commitments from the owner(s) of the project to be a 
demonstration project and a copy of the written commitment;
    (j) ``Probability of success'' (Sec. 1703.46(h)(6)), which includes:
    (1) ``Owners and management of the project'' (Sec. 1703.46(h)(6)(i)) 
that discusses how the knowledge, experience, education and training of 
the proposed owners and management of the project increases the 
likelihood of long-term success; and
    (2) ``Ultimate recipient's business plan'' (Sec. 1703.46(h)(6)(ii)), 
that references an attached copy of the business plan.
    (i) The plan should include:
    (A) A description of the project;
    (B) A description of the business, if applicable, its products and 
the prospects of the industry;
    (C) What will be produced or accomplished;
    (D) The area to be served;
    (E) Any market research or marketing plan;
    (F) Any operating plan;
    (G) Total project costs and projected use of funds by purpose or 
category;
    (H) A financial plan, including a feasibility study with projected 
balance sheets, income statements and cash flow statements;
    (I) The source of supplemental funds, the nature and strength of 
commitments from other sources of financing, and the equity 
contribution;
    (J) The proposed ownership and management of the project;
    (K) A description of any coordination with a local, regional or 
state development organization; and
    (L) Other relevant information.
    (ii) The scope of the plan should reflect the amount requested in 
the application, the risks involved with developing and operating the 
project, and the overall cost of the project. The plan should describe 
any coordination with a local, regional or state development 
organization.