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Solicitor to prepare loan closing instructions and the security instruments and other documents needed to close the loan.

(i) Issuing loan closing instructions. The instructions will cover, but need not be limited to, the continuation of lien searches and abstracts, and the execution and the recording or filing of security instruments. Loan closing instructions will be prepared in an original and three copies. The original, together with at least the following attached, will be forwarded to the County Supervisor:

(a) Two conformed copies of Form FHA-125, "Promissory Note (Associations).”

(b) One conformed copy of Form FHA-127, "Authorization to Date Note."

(c) Security instruments and other documents (in sets of three) needed to close the loan.

(11) Ordering the loan check. At the time the loan closing instructions are forwarded to the County Supervisor, the State Director will execute Form FHA-5 in the space designated for the signature of the approving official. The loan check will then be ordered by forwarding to the Area Finance Office:

(a) The original and all copies of Form FHA-5, “Loan Voucher."

(b) The original of Form FHA-125, "Promissory Note (Associations)."

(c) The original of Form FHA-127, "Authorization to Date Note."

(d) The original and a conformed copy of Form FHA-134 for those cases in which a loan agreement has not been sent to the Area Finance Office for obligating funds.

(2) County Office action (1) Receiving loan checks. The County Supervisor will follow $ 373.13 of this chapter with respect to receiving loan checks, handling undeliverable checks, and taking action when checks are lost.

(ii) Delivery of loan check. (a) Upon receipt of a loan check, the County Supervisor will notify the association promptly, indicating where and when the check will be delivered, and that the officers authorized to sign documents should be present.

(b) The delivery of the loan check will be governed by the loan closing instructions.

(c) The loan check will then be deposited in a supervised bank account.

(d) When the security instruments have been executed, the president of the association will receipt for the check by signing the paid copy of Form FHA-5 in exactly the same manner that the note was signed.

(e) The County Supervisor will then deliver to the association a conformed copy of Form FHA-125, "Promissory Note (Associations)."

(iii) Obtaining fidelity bonds. At the time the loan check is delivered, the association will make application for a fidelity bond covering the position entrusted with the receipt and disbursement of its funds. The amount of the bond will be at least equal to the amount of the assessments or charges made and collected by the association in any normal fiscal year. The association will pay the premium for the bond.' The State Director, acting for the United States Government, will be named as obligee in the bond with the association. The fidelity bond will be obtained locally through an acceptable bonding company and will be forwarded to the State Director. The expiration date of the bond will be entered on the Area Guide Card for the association.

(iv) Responsibility of the County Supervisor. It is the responsibility of the County Supervisor, as well as any other official of the Farmers Home Administration in assisting the County Supervisor to close the loan, to comply explicity with all loan closing instructions issued by the Representative of the Office of the Solicitor, including the obtaining and filing or recordation of security instruments and other documents required by such instructions.

(3) Payment of fees and costs. Statutory fees and other charges for filing or recording mortgages or other legal instruments and notary and lien search fees incident to loan transactions will be paid by the association from its own funds or from the proceeds of the loan. Whenever cash is accepted by Farmers Home Administration personnel to be used to pay the filing or recording fees for security instruments, or the cost of making lien searches, Form FHA-385, “Acknowledgment of Payment for Recording and Lien Search Fees,” will be executed in an original and one copy. The copy will be placed in the County docket and the original will be given to the association.

(h) Insurance. (1) The State Director will require associations to obtain (i) public liability and property damage insurance on all trucks, tractors, and other vehicles owned by the association and frequently driven over public highways, and (ii) fire and extended coverage insurance on all buildings and equipment therein. Consideration will be given to the recommendations of the officers of the associations and the prevailing customs in the area as to the types and amount of insurance to be required. The insurance may be obtained locally. The State Director will notify the County Supervisor when the insurance is to be obtained and the County Supervisor will request the association to obtain such coverage.

(2) The fire and extended coverage insurance policy must contain (i) the

standard mortgage clause (without con. tribution) printed in or attached to the policy, (ii) the mortgage clause (without contribution) which has been approved and made mandatory by the laws of the state, or (iii) Form FHA-878, “Insurance Mortgage Clause." However, in those jurisdictions where, under local laws or conditions, none of the mortgage clauses referred to above may be used, the clause mandatory in that locality may be used after approval by the National Office. The “United States of America" will be shown as “Mortgagee" in the mortgage clause or in the loss payable clause if no space is provided in the mortgage clause. All notices to the mortgagee will be sent to the State Office covering the territory in which the property is located.

(3) The original insurance policy will be kept in the County office file.

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CHAPTER IV-RURAL ELECTRIFICATION ADMINISTRATION,

DEPARTMENT OF AGRICULTURE

N. B.: Dates appearing in the citations of source of documents codified in this chapter, such as dates of issuance, approval, or effectiveness, are obtained from the original document. For general statutory provisions governing effective dates, validity, and constructive notice see section 7 of the Federal Register Act (49 Stat. 502; 44 U.S.C. 307) and sections 3 and 4 of the Administrative Procedure Act (60 Stat. 238; 5 U.S.C., Sup., 1002, 1003).

ABBREVIATIONS: The following abbreviations are used in this chapter:
F.R. Federal Register
Sec. Section
Stat. Statutes at Large
Sup. Supplement, United States Code
U.S.C. United States Code

PART 400—ORGANIZATION, FUNC

TIONS AND PROCEDURES

Subpart A-Organization Sec. 400.1* Central organization. (Amended] 400.4 Delegations of final authority.

(Amended) $ 400.1 Central organization.

(h) Information Services Division. Assists borrowers in member education work. Coordinates agency's educational program and provides assistance to other divisions in the preparation of educational material. Provides a consulting service to the agency on matters related to cooperative functioning. Disseminates information to borrowers and general public concerning condition and progress of rural electrification. (Paragraph (h) amended Feb. 21, 1947, effective Feb. 15, 1947, 12 F.R. 1383]

(i) Authority to perform the following act has been delegated to the Chief, Management Division and to the Assistant Chief, Management Division:

(1) To execute releases of liens upon motor vehicles, and all other documents or instruments relating to such liens or releases thereof, including, without limitation, notices that the United States of America has such liens upon such motor vehicles. (Paragraph (i) amended Nov. 6, 1947, effective Oct. 31, 1947, 12 F.R. 7383)

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$ 400.4 Delegations of final authority.

(f) Authority has been delegated to Chief, Engineering Division (in addition to Deputy Administrator and Assistant Adminstrator).

(1) To approve construction contract amendments.

(2) To approve agreements involving less than three hundred dollars ($300) to move poles to avoid physical interference with telephone lines.

(3) To approve borrower's selection of engineer.

(4) To approve borrower's selection of architect. (Paragraph (f) amended Feb. 21, 1947, effective Feb. 15, 1947, 12 F.R. 1383)

(k) Authority to approve line construction materials contracts between borrowers and third parties “for Claude R. Wickard, Administrator", has been delegated to Chief, Engineering Division, to each Assistant Chief, Engineering Division, and the Head of the Construction Cost Analysis Section of the Engineering Division. (In addition to Deputy Administrator and Assistant Administrator.)

(1) Authority has been delegated to each Assistant Chief, Engineering Division and to the Head of the Construction Cost Analysis Section of the Engineering Division (in addition to Deputy Administrator, Assistant Administrator and Chief, Engineering Division) :

(i) To approve Construction Contract Amendments "for Claude R. Wickard, Administrator".

(il) To approve agreements involving less than three hundred dollars ($300) to move poles to avoid physical interference with telephone lines, "for Claude R. Wickard, Administrator." (Paragraph (k) amended Sept. 29, 1947, effective Sept. 22, 1947, 12 F.R.. 6523]

CHAPTER V- PRODUCTION AND MARKETING

ADMINISTRATION

(Diversion Programs) [Added]

N. B.: Dates appearing in the citations of source of documents codified in this chapter, such as dates of issuance, approval, or effectiveness, are obtained from the original document. For general statutory provisions governing effective dates, validity, and constructive notice see section 7 of the Federal Register Act (49 Stat. 502; 44 U.S.C. 307) and sections 3 and 4 of the Administrative Procedure Act (60 Stat. 238; 5 U.S.C., Sup., 1002, 1003).

NOTE: For organization, functions, and procedure of the Production and Marketing Administration, see 7 CFR, 1946 Supp., Chapter XXI, Subchapter C.

ABBREVIATIONS: The following abbreviations are used in this chapter:
CFR Code of Federal Regulations
F.R. Federal Register
Sec. Section
Stat. Statutes at Large
Supp. Supplement, Code of Federal Regulations
U.S.C. United States Code

PART 501-COTTON INSULATION

PROGRAM

Subpart—Fiscal Year 1948 Sec. 501.101 Offer to make payments. 501.102 Definitions of terms as used in this

subpart. 501.103 Period of manufacture of Insulation. 501.104 Rate of payment. 501.105 Changing specifications. 501.106 Meeting specifications. 501.107 Packaging and marking. 501.108 Inspection. 501.109 Reports and cost data. 501.110 Applications. 501.111 Payment as manufacture is com

pleted. 501.112 Claims for payment. 501.113 Bond. 501.114 Termination of offer.

AUTHORITY: $$ 501.101 to 501.114, inclusive, issued under sec. 32, 49 Stat. 774, as amended; 7 U.S.C. 612c.

SOURCE: $$ 501.101 to 501.114, inclusive, contained in Program 0/72a, Acting Secretary of Agriculture, Aug. 12, 1947, 12 F.R. 6535.

$ 501.101 Offer to make payments. The Secretary of Agriculture of the United States (referred to as the Secretary in this subpart), pursuant to clause (2) of section 32, Public Law No. 320, 74th Congress, as amended, will make payments, subject to the conditions set forth in this subpart, to holders of approved applications (referred to as proc

essors in this subpart) who will divert cotton from the normal channels of trade and commerce by manufacturing cotton insulation, or causing cotton in. sulation to be manufactured. If cotton insulation is to be manufactured by another for the processor's account under the “causing--

to be manufactured" provision in this subpart, approval in writing from the Secretary or from his authorized representative must first be secured.

$ 501.102 Definitions of terms as used in this subpart. (Terms in the singular may be interpreted in the plural and terms in the plural may be interpreted in the singular.)

(a) “Processors" means individuals, firms, partnerships, corporations, associations, or other organizations.

(b) “Insulation" means insulating material which meets specifications approved by the Secretary or his authorized representative and referred to in the approved application (see $ 501.110).

(c) “Cotton" means the following: (1) Lint cotton grown in the United States not less than 34 inches in staple and not lower in grade than the lowest grades in the universal standards for American upland cotton; (2) unreworked cotton card strips of qualities approved by the Secretary or his author. ized representative; and (3) unreworked cotton comber noils of qualities approved by the Secretary or his authorized representative.

(d) “Eligible recipients" mean individuals, firms, partnerships, corporations, associations, or other organizations who: (1) Are engaged in the distribution of insulation; (2) certify by afidavit that by reason of the receipt of insulation herein provided they will engage in the distribution of insulation; (3) use insulation for insulating or acoustical purposes either in real or personal property or in the manufacture of products for distribution; (4) if not covered by subparagraphs (1), (2), or (3) of this paragraph are approved by the Secretary or his authorized representative as eligible recipients of insulation under the program.

(e) "Backing material” means material to which the batt part of the insulation is attached or in which it is encased, used to repel moisture or vapor, or to serve as a nailing flange, or other structural function.

(f) “Manufacture" means: (1) In the case of insulation with backing material, and in the case of insulation not more than 24 inches wide without backing material, the processing of raw material to the point that the insulation is in form, and is packaged for delivery to recipients; or (2) In the case of insulation more than 24 inches wide without backing material, the processing of raw material to the point that insulation is in form and is packaged for delivery to vendees: Provided. It is delivered, shipped, or delivered to carrier for shipment to eligible recipients.

$ 501.103 Period of manufacture of insulation. Insulation must have been manufactured in the United States on or after the date of approval of the application and during the period from July 1, 1947, to and including June 30, 1948.

$ 501.104 Rate of payment. Rate of payment by the Secretary will be five and three-quarter (534) cents per pound of cotton, gross weight (as defined in this section), used in the manufacture of insulation.

$ 501.105 Changing specifications. With the consent of the processor and the Secretary or his authorized representative, specifications referred to in a particular application may be changed. Such new specifications shall apply only

to insulation manufactured after the change has become effective.

$ 501.106 Meeting specifications. Processors must certify that insulation manufactured under the approved application meets applicable minimum specification requirements. The insulation shall be subject to examination at the plant of manufacture or elsewhere as often as the Secretary or his authorized representative deems necessary. If on such examination it is found that minimum specifications for insulation are not being met, payments thereafter may be suspended until specification requirements are complied with. For purposes of examining and testing the material, samples shall be supplied without cost by the processor to the Secretary or his authorized representative.

$ 501.107 Packaging and marking. At the time of manufacture all insulation shall be securely packaged and marked with a serial number or with a symbol by which the individual package can be identified.

$ 501.108 Inspection. During the period of participating in the program as provided in this subpart, the establishment of the processor (and the establishment of others manufacturing insulation for the processor's account under the causing to be manufactured provision of this offer) shall be open to the Secretary or to his authorized representative or agent for observation of materials used, of insulation manufactured, and of compliance with other provisions of the program.

$ 501.109 Reports and cost data(a) Progress report. From time to time the processor shall submit reports containing information in connection with materials used, insulation made, and other data by which the progress of the program may be appraised, the time of submission and the kind of data to be as required by the Secretary or his authorized representative.

(b) Cost data. During the period of participating in the program the processor, in cases where insulation is manufactured by his plant, or if the processor is a corporation, also in the plants of its subsidiaries, shall from time to time upon written request supply to the Secretary or his authorized representative data with respect to individual costs of items relating to the man

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