RD Instruction 2000-O

PART 2000 - GENERAL

SUBPART O - MEMORANDUM OF UNDERSTANDING BETWEEN THE SMALL BUSINESS

ADMINISTRATION AND THE UNITED STATES DEPARTMENT OF

AGRICULTURE RURAL DEVELOPMENT

§2000.701 [General]{.underline}.

The attached Memorandum of Understanding between the Small Business
Administration (SBA) and Rural Development has been developed to provide
mutually needed information and to establish a working relationship
between the two agencies that will assure prompt and efficient service
to those members of the public who contact Rural Development or SBA
regarding rural development.

§2000.702 [Reaching agreement with SBA]{.underline}.

The State Director will meet the SBA Regional Director at least annually
to arrange for conferences to discuss the Memorandum of Understanding,
exchange office information, discuss in detail agency programs, and to
establish the necessary working relationship to avoid duplication of
effort in serving the public.

§2000.703 [State supplements]{.underline}.

State Directors may issue instructions, as needed, for the course of
action to be taken by County Supervisors in developing a working
relationship with the SBA staff.

§§2000.704 - 2000.750 \[Reserved\]

Attachment: Exhibit A

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DISTRIBUTION: WSDC Administration

General

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## MEMORANDUM OF UNDERSTANDING

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## ===========================

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## BETWEEN

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## THE SMALL BUSINESS ADMINISTRATION

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## AND

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## THE U.S. DEPARTMENT OF AGRICULTURE

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## ON COOPERATION IN SUPPORT OF

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## RURAL DEVELOPMENT

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## AGREEMENT

The U.S. Small Business Administration and the U.S. Department of
Agriculture (USDA) agree to enter into a cooperative relationship
designed to encourage rural development and to coordinate the programs
of each agency so as to maximize their effectiveness in promoting rural
development. Each agency will work together in a cooperative spirit at
all levels to contribute to this effort according to the resources and
talents each possesses.

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## STATEMENT

## 

## OF

## 

## PURPOSE

It is the purpose of this agreement to define and allocate the
responsibilities and outreach efforts of the respective parties
regarding rural development activities along lines which match each
agency\'s expertise, experience and legislative mandate. The principal
intentions of this agreement will be to 1) coordinate program delivery
services;\
and 2) cooperate generally in engaging the participation of other
Federal agencies, state and local governments, and the private sector so
that all available resources can be brought to bear to promote rural
development.

## INTRODUCTION

Each agency believes that it is in the best interest of the United
States and its economic health that ways be found to reverse the trend
of out-migration from rural America to urban cities. Such out-migration
impacts severely on urban services and has a devastating effect on small
towns and small businesses which have a quality of life which should be
preserved. Rural America has contributed to the national interest by
emphasizing a strong sense of family and community and by affording
opportunities for economic independence and diversity through the
thousands of small

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businesses which exist separate from large industry and multi-national
corporations.

The two agencies recognize that out-migration will not be reversed
simply through an improved rural economy or higher commodity prices. The
economy of rural America has been totally dependent on agriculture for
too long, and economic incentives and alternatives need to be developed
that can benefit from agricultural activity but do not necessarily
depend solely on agricultural activity.

The respective parties intend to work together to create and develop new
enterprises, attract and develop new industries, and strengthen existing
businesses throughout rural America.

The Small Business Administration is required by the Small Business Act\
of 1953, as amended, to aid, counsel, assist, and protect the interest
of small business concerns. The SBA has a variety of loan and economic
development programs that it administers through its regional, district
and branch offices. The SBA also has a variety of business development
programs involving business counseling, training, and other services
which it administers through its field offices and in cooperation with
Small Business Development Centers, Small Business Institutes, the
voluntary service organizations of SCORE and ACE, and private sector
cosponsored training programs. SBA also has various

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procurement assistance programs under which small businesses receive a
fair proportion of overall Federal procurement through small business
set aside and small business subcontracting programs. The SBA also has
the Minority Small Business and Capitol Ownership Development Programs
designed to benefit socially and economically disadvantaged small
businesses.

The Department of Agriculture has many programs which relate to rural
America.

Rural Development serves as the Federal Government\'s principal credit
agency for agriculture and rural development, providing direct and/or
guaranteed loans for farm capital investment and operation, rural
housing, community facilities, business and industry.

The Department of Agriculture provides technical assistance, conducts
educational seminars and economic research directed to economic rural
development issues.

In recognition of these authorized programs and with the essential
objective of rural development in mind, the respective agencies have
entered into this Memorandum of Understanding.

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## [Rural Development-SBA-USDA JOINT UNDERTAKINGS]{.underline}

1\. Representatives of Rural Development-USDA and SBA in Washington,
D.C. will meet at least annually to plan and review efforts undertaken
pursuant to this agreement.

2\. The Director of SBA\'s District Office will meet with Rural
Development State Director or his designee, on an as needed basis but no
less than annually, to plan and coordinate programs of the respective
agencies and to encourage their increased application to the problems of
rural development. These meetings will take place prior to the annual
meeting in Washington, D.C. and will provide for an exchange of
information and ideas for more effective program coordination as well as
for the discussion of issues requiring decisions by the national offices
of the respective agencies.

3\. Each agency, if the need is evident, will initiate training and
orientation programs for personnel emphasizing the special problems and
possible solutions for rural America and its economic development. Rural
Development-USDA and SBA will also initiate joint training and
orientation programs for their personnel.

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4\. Rural Development-USDA and SBA will make their existing offices
available for each agency\'s employees and volunteers to enhance the
delivery of agency programs for the benefit of rural America. Rural
Development and SBA will supply informational brochures for cooperative
distribution in each agency\'s offices.

5\. The respective parties will cooperate with each other in providing
speakers upon request that can explain programs and the procedures for
obtaining the benefits of such programs which may be of particular
interest to rural businesses.

6\. Each agency will appoint a specific official at the headquarters
level and in each district/state office to provide coordination,
monitoring and communication lines for all projects and activities
pursuant to this Memorandum of Understanding.

7\. Each agency will coordinate delivery of its loan programs and
financial assistance programs such that in appropriate cases there will
be a combined approach in solving the credit needs of particular
businesses. Field personnel of each agency will refer applicants for
financial assistance to the other agency where the other agency\'s
program is better suited to the needs of the applicant. Neither

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> agency will refuse to accept an eligible application when the lender
> or applicant insists that they want to file with a specific agency
> regardless of agency advice. The two agencies may participate in a
> total project but will have separate and distinct loan documentation,
> loan agreements, notes, mortgages, and other legal documents.

8\. Loan servicing will be carried out by each agency. Either agency
will inform the other of any material change that could have an adverse
impact on the other agency.

9\. All liquidation proceedings will be handled on a case by case basis
and guided by the principle of minimizing the total loss to the
government. Each agency will respect the other agency\'s position and
mutually determine their respective lien position on other assets
available as pledged collateral.

10\. Rural Development-USDA and SBA field offices will jointly cosponsor
and conduct regular seminar/workshops for rural businesses and will
utilize their resources, including volunteer groups, private sector
program participants and others, to maximize the outreach of such
programs.

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11\. This Agreement may be amended at any time by written agreement of
both parties.

12\. This agreement shall take effect upon date of execution.

13\. For the Small Business Administration, the Associate Deputy
Administrator for Special Programs shall have joint coordination
responsibility. For the Department of Agriculture, the Deputy
Administrator for Program Operations, Rural Development-USDA shall have
joint coordination responsibility.

/s/ /s/

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Administrator Administrator

U.S. Small Business Farmers Home Administration

Administration U.S. Department of Agriculture

2/16/88

Date: \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_