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low-income rural residents; or busi- (2) A national, regional, or local apnesses organized for-profit which pro- proach to community economic develvide for significant increased income, opment which enables institutions to or ownership, and/or employment op- become more sensitive and responsive portunities for low-income rural resi- to the economic needs of low-income dents and would not be retained, expanded, or moved into the rural areas (3) A strategy which will leverage without such assistance.
other sources of financial and techni
cal assistance so as to appreciably § 1076.50-4 Eligible activities.
affect the creation of increased owner(a) Loans and guaranties from CSA ship and provide employment and to a recipient under this program may income opportunities for low-income be used only for business facilities and rural residents. community development projects in (4) The creation of a model-type of rural areas. These also are the only ac non-profit community economic develceptable activities for use of the opment finance corporation which monies which recipients have received would be controlled by a governing for re-lending or guarantying pur body which meets the organizational poses.
priorities in (b)(2) below, independent (b) Guaranties may be made for the and professionally operated, and propurpose of (1) guarantying principal vide long-term financial support for only, interest only, or both principal eligible economic development organiand interest; or (2) guarantying up to zations. 90 per centum of any loan in either an (b) Organizational priorities. (1) A exposed or subordinated position. De history of rural community economic posits in financial institutions to colla- development efforts or concern for the teralize guaranties also may be made. problems of low-income residents.
(c) Loans and guaranties under this (2) A governing body representative program generally will not be made of the organizations or persons to be for refinancing existing debts of bor- served by the program. rowers. Relenders must obtain prior (3) The ability to get low-income CSA approval for any such exception rural residents to cooperate and pool al refinancing activities.
their talents and resources and to (d) CSA encourages the use of flexi- create or expand economic enterprise ble financing techniques. Thus, loans of a significant scale. may be subordinated, or "wrapped around”; relenders may participate $ 1076.50–6 Loans, interest on; allowable with banks and other financial institu costs. tions in extending credit or in pur
(a) Loans made under this subpart chasing existing loans. Loan or guar
shall bear interest at a rate not less anty proceeds also may be used to
than a rate determined by the Secreinvest in corporate stocks or deben
tary of the Treasury taking into contures provided, of course, that such in
sideration the average market yield of vestment furthers the purposes of the
outstanding Treasury obligations of Rural Development Loan Fund.
comparable maturity, plus such addi
tional charge if any toward covering § 1076.50-5 Priorities.
other costs of the program as the DiIn making assistance available to eli- rector may determine to be consistent gible organizations for business facili- with its purposes, except that, for the ties and community development pro five years following the date on which jects, CSA will give priority to those funds are initially available to the borapplications which can best demon- rower, the rate of interest shall be set strate one or more of the following: at a rate considered appropriate by
(a) Program Priorities. (1) A pro the Director in light of the particular gram emphasis which is likely to pro needs of the borrower which rate shall vide increased income, ownership and not be lower than 1 per centum. employment opportunities for low (b) Interest repaid on loans, premiincome rural residents;
ums earned on guaranties, investment or interest income, service fees or Cooperatives should submit their Artiother authorized financing charges cles or Certificate of Incorporation collected may be retained by those re- (Charter or Agreement of Association) cipients re-lending or guarantying and Bylaws. funds with written CSA approval, and (3) Description of its governing may be used to cover the costs of ad
board and its representational nature, ministering the loan and guaranty if applicable. program authorized hereunder.
(4) Characteristics of the rural area (c) Costs of administering the loan
where the project is to be located. and guaranty program authorized
(5) Resumes of management team. hereunder shall include, but not be limited to, costs of program adminis
(6) Record of concern for and experitration and management: i.e., monitor
ence with community economic devel. ing and evaluation; costs of collection,
opment on behalf of low-income rural other charges and provision of techni
residents. cal assistance and training; legal and
(b) Financial proposals. (1) A full accounting services; preparation of fi
description of the proposed use of the nancial, planning, management, feasi
requested financial assistance, whethbility, technical, product development
er it is a business facility or communi. and marketing reports and studies,
ty development project, and how inand development of additional grant,
creased income, ownership or employ. loan or guaranty applications and pro
ment opportunities for low-income posals.
area residents will be provided. In
order to assure CSA that there is rea§ 1076.50-7 Terms of loans and guaran sonable assurance of repayment of the ties.
loan and that the amount of the loan, No loan or guaranty can be extended
together with other funds available, is hereunder by CSA to a recipient for a
adequate to assure completion of the term exceeding 30 years.
project or achievement of the pur
poses for which the loan is being § 1076.50-8 Application process.
made, this description also should be (a) Dates of submission. Annually or
accompanied by: more often, CSA will publish in the
(i) A summary statement detailing FEDERAL REGISTER the dates for sub
the total cost of the project, delineatmission of applications for assistance.
ing fixed assets and working capital, (b) Processing procedures. Applica
and explaining what other funds may tions to CSA for loans or guaranties
be available or committed; under the Rural Development Loan
(ii) Detailed and realistic feasibility Fund may be made at any time by studies and cost analyses; written submission to: Rural Develop (iii) Audited financial statements for ment Loan Fund Program, Office of the immediately preceding three years Economic Development, Community or from the commencement of its opServices Administration, 1200-19th eration, whichever period is shorter, Street, NW., Washington, D.C. 20506.
and if funds will be used for the acqui
sition, preservation or expansion of an § 1076.50-9 Contents of applications. existing business, similar audited fiAll applications to CSA for assist
nancial statements for such venture; ance shall contain:
(iv) Cash-flow projections and pro (a) Eligibility documents. (1) Stand forma financial statements and bal. ard Form 424, Financial Assistance. ance sheets estimated for three years,
(2) Articles of Incorporation (or As with the cash flow projections on a sociation), Bylaws, and where applica- monthly basis and (pro forma) finanble, IRC section 501(c)(3) determina cial statement on a yearly basis; tion letter. If applicant is a non-profit (v) estimated purchase price for any corporation without such an IRS proposed purchase of real property, letter, it must include a certification accompanied by an independent apby an attorney that it is so organized praisal of the property establishing and operated that it would be eligible that the proposed purchase price is for a section 501(c)(3) determination. reasonable;
(vi) A statement detailing what given the widest possible publicity other conventional private sources or among potential eligible applicants. Federal, state or local programs have such recipients, however, may utilize resources available, and why those re- RFPs to limit the number and diversisources are not being utilized for the ty of applications by subject matter proposed project.
areas and amounts with the express (c) Additional requirements for re written consent of CSA. RFPs, where lending or guarantying. If the assist used, generally should state total ance being requested is for relending funds to be made available thereunder or guarantying funds to other eligible and approximate number or size of the recipients, applicants must also submit expected awards
expected awards. the information required by the next section.
§ 1076.50-11 Security. 81076.50-10 Loans and guaranties made
(a) As a Credit Factor. The availabilby recipients to other eligible organiza
ity of collateral security normally
shall be considered as an important tions.
factor in making loans or guaranties. (a) Where the purpose of the finan
The types and amount of collateral secial assistance awarded by CSA to an
curity required should be governed by organization is for relending or guar
the relative strengths and weaknesses antying, the recipient, in addition to
of other credit factors. However, the submitting the eligibility documents
taking of collateral as security should for itself, must submit its work pro
be considered in each loan making or gram for such relending and guaranty
guaranty transaction. Collateral secuing activities. The work program must
rity should be sufficient to provide the contain:
lender reasonable protection from loss (1) Standards and criteria for relend
in the case of adversity, but such secuing and guarantying, including deter
rity or lack thereof should not be used minations of rates of interest, fees,
as the primary basis for deciding terms, repayment schedules, collateral
whether to extend credit. Endorsesecurity, default and collection procedures and how the same may be ad
ments or guaranties by other organizajusted.
tions, directors, or persons should be
used only in unusual cases. (2) Basis for determining any priorities or preferences in awarding assist
(b) Security interests. Security interance.
ests which may be taken by the lender (3) A plan for providing loan servic
or guarantor include but are not limiting including technical assistance,
ed to liens on real or personal properevaluation, and monitoring.
ty, including leasehold interests, as(b) When an applicant plans to
signments of income and accounts rerelend or guaranty to low-income fam
ceivable, and liens on inventory of proilies or profit-making businesses, it
ceeds of inventory sales, as well as must also show how such activity will
ch activity will marketable securities and cash collatcontribute to community economic de
eral accounts. velopment and directly benefit rural
(c) Motor vehicles. Liens ordinarily residents.
should be taken on licenses motor ve(c) Applications to recipients with hicles or boats purchased hereunder in approved work programs for relending order to be able to transfer title easily or guarantying under this subpart should the lender need to declare a demay be made at any time. CSA's fault or repossess the property. Office of Economic Development will (d) Additional security. The lender periodically publish in the FEDERAL or guarantor may require collateral seREGISTER the names and addresses and curity or additional security at any amounts available from those organi time during the term of a loan or guarzations which CSA already has anty if after review and monitoring an funded.
assessment indicates the need for such (d) Notice of availability of loans security. and guaranties from recipients with (e) Insurance on property secured. approved work programs shall be Ordinarily, hazard insurance up to the amount of the loan or the depreciated connection with financial assistance replacement value of the property se- extended hereunder. cured (whichever is less) will be taken (c) Adjust interest rates, use fixed or naming the lendor as beneficiary. variable rates, grant moratoriums on Such insurance includes fire and ex
repayment of principal and interest, tended coverage, public liability, prop
collect or compromise any obligations erty damage, and other appropriate
held by him/her and take such other types of hazard insurance.
actions in respect to such loans and (f) Appraisals. Property serving as
guaranties as are necessary or approcollateral security will be appraised by
priate, consistent with the objections a qualified appraiser.
of the Program and this subpart. § 1076.50-12 Post award requirements.
(d) In taking the actions provided
for in paragraph (c) above the Direc(a) Applicability of CSA policies. Fi.
tor shall take into account such facnancial assistance to recipients with
tors as: approved work programs for relending
(1) The inherent difficulty of creator guarantying is subject to the conditions established in the loan agree
ing or expanding rural enterprises
which can offer real and increased ment with CSA. (b) Deposits. (1) Unless other wise
ownership, employment and income specifically agreed to in writing by
opportunities for low-income persons. CSA, loan proceeds and any interest (2) The need for new and more rethereon not immediately needed or
sponsive national, regional and local disbursed by the borrower should be
financial institutions to serve lowdeposited in an interest bearing ac income rural residents. count or time deposit in a bank or (3) The lead time, mobilization of reother financial institution which can sources, and leveraging required for be fully covered by a form of federal rural residents to successfully pool deposit insurance.
their talents and abilities to engage in (2) Deposits and accounts in finan- meaningful community economic decial institutions owned or controlled velopment. by minorities shall be encouraged pro (4) The need for adequate technical vided they are adequately covered by a assistance, training and skills developform of federal deposit insurance. ment to accompany financial assist(3) Any interest or other income
ance for community-based, economic earned as a result of such accounts or
development efforts. deposits shall be used by the borrower
(5) The experimental and demononly for the authorized purposes of
strational nature of the program balthe loan involved of its approved work
anced with the desire to operate the program.
program on a sound business basis. § 1076.50-13 Liquidation; default.
(6) Other particular needs of the
borrower. Should the Director determine that it is necessary of desirable to take § 1076.50-14 Conflict of interest. action to protect or further the interests of CSA in connection with any de
No recipient shall relend or guaranfault or breach of conditions under
ty to or for the benefit of: any loan or guaranty made hereunder,
(a) Any person who is also a board the Director may:
member of such recipient without spe(a) Declare that the loan is immedi cific prior CSA written approval given ately due and payable.
with knowledge of the relationship in(b) Assign or sell at public or private volved; or sale, or otherwise dispose of for cash (b) Any organization which has on or credit, in his/her discretion and its governing board or as agent, conupon such terms and conditions as hel sultant or employee, a person who is she shall determine to be reasonable, also a board member of the recipient any evidence of debt, contract, claim, without specific prior CSA written appersonal or real property, or security proval given with knowledge of the reassigned to or held by the Director in lationship involved.
CHAPTER XI-NATIONAL FOUNDATION ON
THE ARTS AND THE HUMANITIES
Statement for the guidance of the public-organi-
1105 1110 1115
SUBCHAPTER B-NATIONAL ENDOWMENT FOR THE ARTS
1150 Collection of claims under the Federal Claims
Collection Act of 1966 ..... 1151 Nondiscrimination on the basis of handicap............ 478 SUBCHAPTER C-FEDERAL COUNCIL ON THE ARTS AND THE
HUMANITIES 1160 Indemnities under the Arts and Artifacts Indemnity Act ....
.... 487 SUBCHAPTER D-NATIONAL ENDOWMENT FOR THE HUMANITIES 1176 Part-time career employment ........