Rural Telephone Loans and Loan Guarantees

To assure that people in eligible rural areas have access to telecommunications services comparable in reliability and quality to the rest of the Nation.



Agency - Department of Agriculture

Established in 1862, the Department of Agriculture serves all Americans through anti-hunger efforts, stewardship of nearly 200 million acres of national forest and rangelands, and through product safety and conservation efforts. The USDA opens markets for American farmers and ranchers and provides food for needy people around the world.




Program Accomplishments

Fiscal Year 2016: Fiscal year 2016: Awarded 14 loans to fund deployment of advanced telecommunications facilities serving over 77,000 customers. Fiscal Year 2017: Fiscal year 2017: Awarded 10 loans to fund deployment of advanced telecommunications facilities serving over 60,000 customers (As of July, 2017). Fiscal Year 2018: No Current Data Available

Uses and Use Restrictions

This program provides long-term direct and guaranteed loans to qualified organizations for the purpose of financing the improvement, expansion, construction, acquisition, and operation of telephone lines, facilities, or systems to furnish and improve Telecommunications, 911 and Emergency Communications services in rural areas.

'Rural area' is defined as any area of the United States, its territories and insular possessions (including any areas within the Federated States of Micronesia, the Republic of the Marshall Islands, and the Republic of Palau) not included within the boundaries of any incorporated or unincorporated city, village, or borough having a population exceeding 5,000 inhabitants (20,000 for 911 and emergency communications purposes).

The population figure is obtained from the Bureau of Census.

For purposes of the 'rural area' definition, the character of an area is determined at the time the initial loan for the system is made.

Eligibility Requirements

Applicant Eligibility

Telephone companies or cooperatives, nonprofit associations, limited dividend associations, mutual associations or public bodies including those located in the U.S.

Territories and countries included in the Compact of Free Association Act of 1985, providing or proposing to provide telecommunications service to meet the needs of rural areas.

Beneficiary Eligibility

Residents and businesses of eligible rural areas.

Credentials/Documentation

No Credentials or documentation are required. This program is excluded from coverage under 2 CFR 200, Subpart E - Cost Principles.

Aplication and Award Process

Preapplication Coordination

Applicants must supply environmental documentation to determine if an environmental assessment or an environmental impact statement will be required.

Environmental impact information may be required for this program.

Environmental impact information is not required for this program.

This program is excluded from coverage under E.O.

12372.

Application Procedures

2 CFR 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards applies to this program. This program is excluded from coverage under OMB Circular No. A-102. This program is excluded from coverage under OMB Circular No. A-110. The completed loan application consists of four parts: an RUS Form 490; Application for Telephone Loan or Loan Guarantee; a market survey called Area Coverage Survey (ACS); the plan and associated costs for the proposed construction called the Loan Design (LD); and other various supplementary information specified in 7 CFR 1737.22. Detailed information on applying for an RUS telephone loan or loan guarantee is in 7 CFR Part 1737, available from RUS upon request.

Award Procedures

The RUS Administrator, Assistant Administrator, or Deputy Assistant Administrator makes the final decision on approval of the loan or loan guarantee upon a finding that it is economically feasible and serves the purposes of the Rural Electrification Act. Borrowers and Members of Congress are notified of the approval of a loan or loan guarantee directly, and the public is notified through normal media communications.

Deadlines

Not Applicable.

Authorization

Rural Electrification Act of 1936, as amended, Titles II and III, 7 U.S.C. 921, 922-924, and 930-940.

Range of Approval/Disapproval Time

> 180 Days. Application are processed on a first-come, first-served basis. Normal loan processing time is from 6 to 9 months.

Appeals

Not Applicable.

Renewals

Not Applicable.

Assistance Considerations

Formula and Matching Requirements

This program has no statutory formula. Matching requirements are not applicable to this program. MOE requirements are not applicable to this program.

Length and Time Phasing of Assistance

Direct and guaranteed loans can be made not to exceed the composite economic life of facilities and equipment plus three years (average loan maturity is 18 yrs). See the following for information on how assistance is awarded/released: Provision is normally made for advances to be completed within 5 years. Advances of funds are requested by the borrower and are made subject to requirements. See the following for information on how assistance is awarded/released: Provision is normally made for advances to be completed within 5 years. Advances of funds are requested by the borrower and are made subject to requirements.

Post Assistance Requirements

Reports

RUS borrowers must submit to the Rural Utilities Service regularly scheduled operating reports showing financial condition and operating progress.

No cash reports are required.

Progress reports are not applicable.

The borrower follows the construction procedures is 7 CFR 1753 where construction contracts are approved as projects constructs and submits advance of funds requests which serves the purpose of an expenditure report.

The request form track each individual construction project, how much of the loan has been advance for it and how much has been expended for it.

Performance monitoring is conducted on site by the Agency's general field representatives as well as by financial and technical experts located in the National Office.

Audits

In accordance with the provisions of 2 CFR 200, Subpart F - Audit Requirements, non-Federal entities that expend financial assistance of $750,000 or more in Federal awards will have a single or a program-specific audit conducted for that year. Non-Federal entities that expend less than $750,000 a year in Federal awards are exempt from Federal audit requirements for that year, except as noted in 2 CFR 200.503. In accordance with the provisions of 2 CFR 200, Uniform Administrative Requirements, Cost Principles and Audit Requirements, Subpart F, Audit Requirements (Revised, December 26, 2013) nonfederal entities that expend financial assistance of $750,000 or more in Federal awards will have a single or a program-specific audit conducted for that year. Nonfederal entities that expend less than $750,000 a year in Federal awards are exempt from Federal audit requirements for that year, except as noted in Subpart F. Entities which do not meet the criteria for applicability in 2 CFR 200 will have an audit prepared in accordance with 7 CFR 1773, Policy on Audits of RUS Borrowers and Grantees.

Records

RUS borrowers keep the records prescribed for telecommunication companies by the RUS uniform system of accounts, and by sound business practices. The RUS uniform system of accounts is comprised of 47 CFR Part 32 supplemented by 7 CFR Part 1770.

Financial Information

Account Identification

12-4230-0-3-271; 12-1230-0-1-271.

Obigations

(Direct Loans) FY 16 $0; FY 17 est $0; and FY 18 est $0 - Hardship Loans. (Direct Loans) FY 16 $98,239,000; FY 17 est $25,682,000; and FY 18 est $345,000,000 - Cost of Money Loans. (Guaranteed/Insured Loans) FY 16 $96,222,000; FY 17 est $141,855,000; and FY 18 est $345,000,000 - FFB Treasury Loans.

Range and Average of Financial Assistance

Range From To Avg Direct loans / 2016 $5,473,000 $15,000,000 $10,915,444 Guarantee loans / 2016 $500,000 $40,279,000 $13,746,000 Direct Loans / 2017 $2,000,000 $15,827,000 $8,560,667 Guarantee loans / 2017 $2,000,000 $59,775,000 $17,731,875 2017 numbers are as of July, 2017.

Regulations, Guidelines, and Literature

7 CFR-XVII. RUS publishes and issues upon request technical operations manuals and bulletins covering financing, construction, operation and maintenance of rural telephone systems. An application guide and other supporting schedules are available at http://www.rurdev.usda.gov/UTP_ProForma.html. Reference http://www.rd.usda.gov/programs-services/telecommunications-infrastructure-loans-loan-guarantees

Information Contacts

Regional or Local Office

None.

Headquarters Office

Assistant Administrator, Telecommunications Program, Rural Utilities Service Rural Utilities Service, 1400 Independence Avenue, SW.,STOP 1590, Room 5151, Washington, District of Columbia 20250 Phone: (202) 720-9554

Criteria for Selecting Proposals

Applications must be found to be financially and technically feasible and meet all of the eligibility requirements.



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Edited by: Michael Saunders

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