$1700.1 General.

(a) The Rural Electrification Administration (REA) was established by Executive Order No. 7037, signed by the President on May 11, 1935. Statutory authority was provided by the Rural Electrification Act of 1936 (RE Act) (49 Stat. 1363; 7 U.S.C. 901). The RE Act established REA as a lending agency with responsibility for developing a program for rural electrification.

(b) On October 28, 1949, an amendment to the RE Act authorized REA to make loans to improve and extend telephone service in rural areas. The Rural Telephone Bank (RTB or the Bank), an Agency of the United States, was established by another amendment to the RE Act, approved May 7, 1971. The Administrator of RUS serves 88 the Bank's chief executive with the title of Governor. On May 11, 1973, the RE Act was further amended to establish a revolving fund and to provide authority for REA to guarantee loans made by other legally organized lenders. The RE Act was amended further on December 21, 1987, to establish a Rural Economic Development Subaccount, and to authorize funds from this subaccount to provide zero-interest loans and grants to REA borrowers to promote rural economic development and job creation. The RE Act was also amended on November 5, 1990, to add a new section 314, which authorized REA to guarantee 90 percent of the principal and interest of loans made for electric and telephone facilities by legally organized lenders. It was further amended on November 28, 1990, to establish an Assistant Administrator for Economic Development and a rural development technical assistance unit; to expand the authorities and responsibilities of REA in rural economic development; and to establish a Rural Business Incubator Fund for making grants and reduced interest loans to electric and telephone borrowers to promote business incubator projects. At the same time, the Administrator was also granted authority for financial assistance for distance learning and medical link programs.

(c) The Secretary of Agriculture (Secretary) was required to establish the Rural Utilities Service (RUS) pursuant to section 232 of the Federal Crop

Insurance Reform and Department of Agriculture Reorganization Act of 1994, (Pub. L. 103-354, 108 Stat. 3178) (Reorganization Act). The Reorganization Act established RUS as successor to REA. On October 20, 1994, the Secretary abolished REA and established RUS. RUS was assigned responsibility for administering electric and telephone loan programs previously administered by REA, water and waste facility loans and grants previously administered by the Rural Development Administration, along with other functions as the Secretary determines appropriate. The rights, interests, obligations, duties, and contracts previously vested in REA are transferred to and vested in RUS. The Secretary designated the Administrator of RUS to serve as the Governor of RTB.

(d) The offices of RUS are located in the South Building of the United States Department of Agriculture at 14th and Independence Avenue,SW., Washington, DC 20250-1500. The Electric and Telephone Programs are administered by regional offices located at this same address. There is a Northern and a Southern Regional Office, along with a Power Supply Division, for the electric program, and an Eastern and a Western Regional Office for the telephone program. (See §1700.4(b) and §1700.5(b).)

[59 FR 66440, Dec. 27, 1994]

$1700.2 Office of the Administrator.

(a) The Administrator (who also serves as Governor of the RTB) is appointed by the President, with the advice and consent of the Senate, for a term of 10 years. The Administrator functions as the chief executive of the Agency under the general supervision and direction of the Under Secretary for Rural Economic and Community Development. The Administrator is aided directly by two Deputy Administrators and by Assistant Administrators for the Electric Program, the Telephone Program, for Economic Development and Technical Services, and for Management. The Financial Services Staff and the Equal Opportunity and Civil Rights Staff also report directly to the Administrator. The work of the Agency is carried out through the of

fices and divisions described in this part.

(b) The Financial Services Staff performs the following functions:

(1) Evaluates financial conditions of financially troubled borrowers;

(2) Negotiates settlements and "work-outs" of financially troubled borrowers who have or may have delinquent loans in order to satisfy the government's interests, keeping abreast of financial and legal factors that may affect the negotiations;

(3) Coordinates the Agency's efforts to identify and develop strategies for potentially financially troubled borrowers;

(4) Develops techniques and criteria for evaluating the financial and operating performance of certain rural electric and telephone borrowers;

(5) Develops certain standards, policies, and procedures in connection with loan requirements and processing for the electric and telephone programs;

(6) Analyzes and evaluates certain loan requests and transactions to determine whether the documentation justifies the request;

(7) Serves as staff to the Senior Loan Committee;

(8) Keeps other government organizations advised concerning activities of the staff; and

(9) Serves as RUS liaison to the capital markets.

(c) The Equal Opportunity and Civil Rights Staff administers the program for equal opportunity in the delivery of services and benefits by RUS borrowers and in the employment practices in the Agency. The staff:

(1) Formulates and coordinates plans, policies and procedures for a nationwide program of nondiscrimination on the part of RUS borrowers in carrying out borrower programs subject to the provisions of title VI of the Civil Rights Act of 1964 (42 U.S.C. 2000a2000h-6); section 504 of the Rehabilitation Act of 1973 (29 U.S.C. 701 et seq.); the Age Discrimination Act of 1975 (42) U.S.C. 6101-6107); the Americans with Disabilities Act of 1990 (42 U.S.C. 12101 et seq.); and Executive Order 11246 (3 CFR, 1964-1965 Comp., p. 339), as amended by Executive Orders 11375 (3 CFR, 1966-1970 Comp., p. 684) and 12086 (3 CFR, 1978 Comp., p. 230).

(2) Develops and monitors plans, policies and programs designed to promote equal employment opportunity for RUS personnel under title VII of the Civil Rights Act of 1964; the Age Discrimination in Employment Act of 1967 (29 U.S.C. 621-634); the Equal Employment Opportunity Act of 1972 (42 U.S.C. 2000e et seq.); section 501 of the Rehabilitation Act of 1973; pertinent provisions of the Civil Service Reform Act of 1978 (5 U.S.C. 1101 et seq.); and applicable rules, regulations and other equal employment, nondiscrimination stat

utes.

§ 1700.3 Office of the Deputy Administrator-Program Operations.

The Deputy Administrator-Program Operations directs and coordinates the electric, telephone and rural economic development programs, technical services, and borrower accounting activities; reviews Agency policies in these areas and, as necessary, implement changes; and participates with the Administrator and other officials in planning and formulating the programs and activities of the Agency.

§ 1700.4 Rural electric program.

(a) The Assistant AdministratorElectric directs and coordinates the rural electrification program of the Agency, participating with the Administrator and Deputy AdministratorProgram Operations and others in planning and formulating the programs and activities of the Agency.

(b) Regional Offices. (1) The two regional offices are the primary points of contact between RUS and electric distribution system borrowers. Each office administers the rural electric program for an assigned geographical area with assistance of field representatives located in areas assigned to them. The regional offices are composed of the following states and territories:

(1) Northern Region. Alaska, Connecticut, Delaware, Hawaii, Idaho, Illinois, Indiana, Iowa, Kentucky, Maine, Maryland, Massachusetts, Michigan, Minnesota, Montana, New Hampshire, New Jersey, New York, North Dakota, Ohio, Oregon, Pennsylvania, Rhode Island, South Dakota, Vermont, Virginia, Washington, West Virginia, Wisconsin,

Wyoming, and present and former Pacific Trust Territories; and

(ii) Southern Region. Alabama, Arizona, Arkansas, California, Colorado, Florida, Georgia, Kansas, Louisiana, Mississippi, Missouri, Nebraska, Nevada, New Mexico, North Carolina, Oklahoma, Puerto Rico, South Carolina, Tennessee, Texas, Utah, and the Virgin Islands.

(2) The regional offices perform the following functions with respect to loan feasibility and security and accomplishment of the purposes of the RE Act:

(1) Administer the rural electrification program for distribution borrowers in the region, serving as the single point of contact for distribution borrowers;

(ii) Provide guidance to borrowers on Agency loan policies and procedures, and receives, evaluates, and processes insured and guaranteed loan applications and other requests for financing assistance;

(iii) If delegated the authority by the Administrator, Regional Directors may approve certain loans, lien accommodations and other actions;

(iv) Assure that distribution and transmission systems and facilities are designed and constructed in accordance with the terms of the loan and proper engineering practices and specifications;

(v) Maintain oversight of borrower rate actions;

(vi) Provide guidance to borrowers on supplemental power resources; load and energy management; and the environmental aspect of the design, construction and operation of their systems;

(vii) Maintain necessary oversight of borrowers' financial management and technical operations and practices to assure the security of the government's loans. Institute operations and management studies or other forms of corrective action as necessary;

(viii) Works to ensure accountability of loan and other financial transactions; and

(ix) Supplements efforts of the Equal Opportunity and Civil Rights Staff to ensure borrower compliance with civil rights requirements.

(c) Power Supply Division. The Division performs the following functions:

(1) Administers rural electrification program responsibilities that relate to power supply borrowers, and serves as the primary point of contact between RUS and all such borrowers;

(2) Receives, evaluates, and processes insured and guaranteed loan applications and other requests for financial assistance from power supply borrowers;

(3) Develops and administers engineering and construction functions related to planning, design, construction, operation, and maintenance for power supply borrowers;

(4) Maintains a continuing financial and management overview of power supply borrowers to ensure that their operations are consistent with sound fiscal policies and procedures, loan security, and with RUS loan contracts, mortgages and regulatory requirements. Initiates operations and management studies or other forms of corrective action as necessary;

(5) Provide guidance to borrowers on supplemental power resources; load and energy management; and the environmental aspects of the design, construction and operations of their systems;

(6) Works to ensure accountability of loan and other financial transactions; and

(7) Supplements efforts of the Equal Opportunity and Civil Rights Staff to ensure borrower compliance with civil rights requirements.

(d) Electric Staff Division. This division administers certain engineering and operating activities relating to the rural electric program. The division:

(1) Is responsible for engineering aspects of RUS's standards, specifications and other requirements with respect to design, construction, and technical operation and maintenance of power-plant, distribution, and transmission systems and facilities, including load management, energy conservation and communications;

(2) Develops engineering practices, policies, standards, and guidelines for the Agency relating to electric borrowers' systems; conducts analysis and provides guidance on matters relating to fuels for electric generating stations; analyzes the effects of environmental laws and regulations on RUS-financed electric systems; and develops

related policies and procedures for the Agency;

(3) Develops criteria, procedures and analyses for improvement of the operating performance of electric borrowers;

(4) Develops procedures, criteria and techniques for forecasting borrowers' power requirements; and develops and maintains expertise in matters relating to retail and wholesale rates;

(5) Develops policies and procedures for adherence to environmental laws and regulations, and reviews borrowers' environmental studies;

(6) Maintains and publishes a continuing updated list of materials compatible with current RUS standards;

(7) From time to time provides consultation with borrowers regarding engineering matters;

(8) Provides assistance to the other electric offices and, as appropriate, to borrowers; and

(9) Maintains liaison with other Government agencies, utilities, industry officials and professional organizations on the above matters.

§ 1700.5 Rural telephone program.

(a) The Assistant AdministratorTelephone directs and coordinates the rural telephone program of the Agency, participating with the Administrator and Deputy Administrator-Program Operations and other officials in planning and formulating the programs and activities of the Agency.

(b) Regional Offices. (1) The two regional offices are the primary points of contact between RUS and all telephone system borrowers. Each office administers the rural telephone program for an assigned geographical area with assistance of field representatives located in areas assigned to them.

(2) The regional offices are composed of the following states and territories: (1) Eastern Region. Alabama, Connecticut, Delaware, Florida, Georgia, Illinois, Indiana, Kentucky, Maine, Maryland, Massachusetts, Michigan, Mississippi, New Hampshire, New Jersey, New York, North Carolina, Ohio, Pennsylvania, Puerto Rico, Rhode Island, South Carolina, Tennessee, Vermont, Virginia, Virgin Islands, West Virginia, and Wisconsin; and

(ii) Western Region. Alaska, Arizona, Arkansas, California, Colorado, Hawaii, Idaho, Iowa, Kansas, Louisiana, Minnesota, Missouri, Montana, Nebraska, Nevada, New Mexico, North Dakota, Oklahoma, Oregon, South Dakota, Texas, Utah, Washington, Wyoming and present and former Pacific Trust Territories along with the Northern Mariana Islands and Guam.

(3) The regional offices have the following responsibilities with respect to loan feasibility and security and accomplishment of the purposes of the RE Act:

(1) Provide guidance to applicants and borrowers on Agency and Rural Telephone Bank loan policies and procedures, and make recommendations to the Administrator on applications for loans or guarantees. If delegated the authority by the Administrator, Area Directors may approve certain loans, lien accommodations and other actions;

(11) Review and analyze borrowers' toll revenue settlements and local service rates for adequacy to meet loan service payments and other expenses;

(iii) Assure that telephone systems and facilities are designed and constructed in accordance with the terms of the loan and the Agency's regulations. They review, analyze and approve borrowers' engineering plans and specifications; engineering, equipment and construction contracts; and borrowers' payments to engineers and contractors. They work with the borrowers to assure that completed construction meets RUS standards for quality of service and loan security; and

(iv) Provide information to borrowers regarding management and technical operations and practices with respect to the feasibility and security of the Government's loans and achievement of RE Act purposes.

(c) Telecommunications Standards Division. This division administers engineering staff activities related to the design, construction, and technical operation and maintenance of rural telephone systems and facilities. The division:

(1) Develops Agency engineering practices, policies, guidelines and technical data relating to telephone borrowers' systems;

(2) Evaluates the application of new communications network technology to rural telephone systems;

(3) Develops standards, policies, and procedures in connection with construction activities financed by the rural telephone program;

(4) Provides advice and assistance to the regional offices and, as requested, to borrowers on the above functions and responsibilities; and

(5) Maintains liaison with other government agencies, utilities, industry officials, and professional organizations on the above matters.

(d) Rural Telephone Bank Management Staff. This staff performs the following functions:

(1) Prepares analyses and makes recommendations to the Assistant Governor of the RTB on RTB issues;

(2) Performs the calculations needed to determine the cost of money rate to RTB borrowers;

(3) Prepares the minutes of RTB board meetings;

(4) Develops practices and procedures for determining toll forecasts for the telephone regional offices, and develops the toll forecasts for borrowers with complicated settlement arrangements;

and

(5) Maintains liaison with other government agencies, utilities, industry officials, and professional organizations on the above matters.

$1700.6 Economic development and technical services.

(a) The Assistant AdministratorEconomic Development and Technical Services directs and coordinates the rural economic development and technical services programs of the Agency, participating with the Administrator and Deputy Administrator-Program Operations and other officials in planning and formulating the programs and activities of the Agency. Two staffs and one division report to this Assistant Administrator.

(b) Rural Development Assistance Staff. This staff performs the following functions:

(1) Administers the Agency's rural economic development and job creation programs;