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Title 7 → Subtitle B → Chapter XVII → Part 1734
§1734.1 Purpose.
§1734.2 Policy.
§1734.3 Definitions.
§1734.4 Applicant eligibility and allocation of funds.
§1734.5 Processing of selected applications.
§1734.6 Disbursement of loans and grants.
§1734.7 Reporting and oversight requirements.
§1734.8 Audit requirements.
§1734.9 Grant and loan administration.
§1734.10 Changes in project objectives or scope.
§1734.11 Grant and loan termination.
§1734.12 Expedited telecommunications loans
§§1734.13-1734.19 [Reserved]
§1734.20 [Reserved]
§1734.21 Approved purposes for grants.
§1734.22 Matching contributions.
§1734.23 Nonapproved purposes for grants.
§1734.24 Maximum and minimum grant amounts.
§1734.25 Completed application.
§1734.26 Criteria for scoring grant applications.
§1734.27 Application selection provisions.
§1734.28 Submission of applications.
§1734.29 Appeals.
§1734.30 Use of combination loan and grant.
§1734.31 Approved purposes for a combination loan and grant.
§1734.32 Nonapproved purposes for a combination loan and grant.
§1734.33 Maximum and minimum amounts.
§1734.34 Completed application.
§1734.35 Application selection provisions.
§1734.36 Submission of applications.
§1734.37 Appeals.
§§1734.38-1734.39 [Reserved]
§1734.40 Use of loan funds.
§1734.41 Approved purposes for loans.
§1734.42 Non-approved purposes for loans.
§1734.43 Maximum and minimum amounts.
§1734.44 Completed application.
§1734.45 Application selection provisions.
§1734.46 Submission of applications.
§1734.47 Appeals.
Source: 82 FR 55925, Nov. 27, 2017, unless otherwise noted.
The purpose of the Distance Learning and Telemedicine (DLT) Loan and Grant Program is to encourage and improve telemedicine services and distance learning services in rural areas through the use of telecommunications, computer networks, and related advanced technologies by students, teachers, medical professionals, and rural residents. This subpart describes the general policies for administering the DLT program. Subpart B of this part contains the policies and procedures related to grants; subpart C contains the policies and procedures related to a combination loan and grant; and subpart D contains the policies and procedures related to loans.
Completed application means an application that includes all those items specified in §§1734.125, 1734.134, and in form and substance satisfactory to the Administrator.
Consortium means a combination or group of entities undertaking the purposes for which the distance learning and telemedicine financial assistance is provided. At least one of the entities in a consortium must meet the requirements of §1734.4.
End user site means a facility that is part of a network or telecommunications system that is utilized by end users. An end user site can also be the residence of someone living in a rural area that is receiving telemedicine or distant learning services.
Telecommunications systems plan means the plan submitted by an applicant in accordance with §1734.25 for grants, §1734.34 for a combination loan and grant, or §1734.44 for loans.
(a) The applicant must be legally organized as an incorporated organization, an Indian tribe or tribal organization, as defined in 25 U.S.C. 450b(b) and (c), a state or local unit of government, a consortium, as defined in §1734.3, or other legal entity, including a private corporation organized on a for-profit or not-for profit basis. Each applicant must provide written evidence of its legal capacity to contract with RUS to obtain the grant, loan and grant combination, or the loan, and comply with all applicable requirements. If a consortium lacks the legal capacity to contract, each individual entity must contract with RUS in its own behalf.
(2) The grant agreement and the loan documents will include, among other things, conditions on the release or advance of funds and include at a minimum, a project description, approved purposes, the maximum amount of the financial assistance, supplemental funds required for the project, and certain agreements or commitments the applicant may have proposed in its application. In addition, the loan documents may contain covenants and conditions the Administrator deems necessary or desirable to provide additional assurance that loans will be repaid and the purposes of the loan will be accomplished.
(a) Acquiring and installing, by lease or purchase, eligible equipment as defined in §1734.3;
(a) The grant applicant's minimum matching contribution must equal 15 percent of the grant amount requested and shall be used for approved purposes for grants listed in §1734.21. Matching contributions generally must be in the form of cash. However, in-kind contributions solely for the purposes listed in §1734.21 may be substituted for cash.
(b) In-kind items listed in §1734.21 must be non-depreciated or new assets with established monetary values. Use of specific manufacturers' equipment or services, or discounts thereon, are not considered eligible in-kind matching if the manufacturer, or its authorized reseller, is a vendor on the project, the grant writer for the grant application, or has undertaken any responsibility on the grant application, including payment.
(d) Costs incurred for non-approved purposes for grant outlined in §1734.23 shall not be used as an in-kind matching contribution.
(13) Except for leases provided for in §1734.21, to pay the cost of recurring or operating expenses for the project; or
(14) For any other purposes not specifically contained in §1734.21.
(b) Except as otherwise provided in §1734.12, grants shall not be used to finance a project, in part, when the success of the project is dependent upon the receipt of additional financial assistance under this subpart or is dependent upon the receipt of other financial assistance that is not assured.
(3) A description of the applicant, documenting eligibility in accordance with §1734.4;
(5) A statement specifying whether the project is either a distance learning or telemedicine facility as defined in §1734.3. If the project provides both distance learning and telemedicine services, the applicant must identify the predominant use of the system;
(c) Scoring criteria documentation. Each grant applicant must address and provide documentation on how it meets each of the scoring criteria contained in §1734.26, and as supplemented in the listing on grants.gov, the DLT Application Guide and the agency's Web site.
(4) A budget for all capital expenditures reflecting the line item costs for approved purposes for both the grant funds and other sources of funds for the project. Separately, the budget must specify any line item costs that are non-approved purposes for grants as contained in §1734.23.
(2) All required matching contributions in §1734.22; and
(a) Applications will be evaluated competitively by the Agency and will be ranked in accordance with §1734.26. Applications will then be awarded generally in rank order until all grant funds are expended, subject to paragraphs (b), (c), and (d) of this section. RUS will make determinations regarding the reasonableness of all numbers; dollar levels; rates; the nature and design of the project; costs; location; and other characteristics of the application and the project to determine the number of points assigned to a grant application for all selection criteria.
(b) Regardless of the number of points an application receives in accordance with §1734.26, the Administrator may, based on a review of the applications in accordance with the requirements of this subpart:
(3) Select an application receiving fewer points than another higher scoring application if there are insufficient funds during a particular funding period to select the higher scoring application. In this case, however, the Administrator will provide the applicant of the higher scoring application the opportunity to reduce the amount of its grant request to the amount of funds available. If the applicant agrees to lower its grant request, it must certify that the purposes of the project can be met, and the Administrator must determine the project is financially feasible at the lower amount in accordance with §1734.25(e). An applicant or multiple applicants affected under this paragraph will have the opportunity to be considered for loan financing in accordance with subparts C and D of this part.
(1) The applicant's proposal does not indicate financial feasibility or is not sustainable in accordance with the requirements of §1734.25(e);
(3) Other applications would provide more benefit to rural America based on a review of the financial and technical information submitted in accordance with §1734.25(e).
(4) Any other aspect of the applicant's proposal fails to adequately address any requirement of this subpart or contains inadequacies which would, in the opinion of RUS, undermine the ability of the project to meet the general purpose of this subpart or comply with policies of the DLT Program contained in §1734.2.
(a) A combination loan and grant may be used by eligible organizations as defined in §1734.4 for distance learning and telemedicine projects to finance 100 percent of the cost of approved purposes contained in §1734.31 provided that no financial assistance may exceed the maximum amount for the year in which the combination loan and grant is made published in the funding opportunity posted on www.grants.gov on an annual basis.
(b) Applicants must meet the minimum eligibility requirement for determining the extent to which the project serves rural areas as determined in §1734.26(b)
(a) Acquiring, by lease or purchase, eligible equipment or facilities as defined in §1734.3;
(7) Except for leases (see §1734.31), to pay the cost of recurring or operating expenses for the project; or,
(8) For any other purposes not specifically outlined in §1734.31.
(b) Except as otherwise provided in §1734.12, funds shall not be used to finance a project, in part, when the success of the project is dependent upon the receipt of additional financial assistance under this subpart or is dependent upon the receipt of other funding that is not assured.
(5) A statement specifying whether the project provides predominantly distance learning or telemedicine services as defined in §1734.3. If the project provides both distance learning and telemedicine services, the applicant must identify the predominant use of the system;
(5) For applicants eligible under §1734.4(1), an explanation of the economic analysis justifying the rate structure to ensure that the benefit, including cost saving, of the financial assistance is passed through to the other persons receiving telemedicine or distance learning services.
(4) Results of discussions with local exchange carriers serving the project area addressing the concerns contained in §1734.31(h).
(a) A combination loan and grant will be approved based on availability of funds, the financial feasibility of the project in accordance with §1734.34(d), the services to be provided which demonstrate that the project meets the general requirements of this subpart, the design of the project; costs; location; and other characteristics of the application.
(b) RUS will determine, from the information submitted with each application for a combination loan and grant, whether the application achieves sufficient priority, based on the criteria set forth in the 1996 Act, to receive a combination loan and grant from funds available for the fiscal year. If such priority is achieved, RUS will process the combination loan and grant application on a first-in, first-out basis, provided that the total amount of applications on-hand for combination loans and grants does not exceed 90 percent of the total loan and grant funding available for the fiscal year. At such time as the total amount of applications eligible for combination loans and grants, if such applications were approved, exceeds 90 percent of amount of combination loan and grant funding available, RUS will process the remaining applications using the evaluation criteria referenced in §1734.26.
(1) The applicant's proposal does not indicate financial feasibility, or will not be adequately secured in accordance with the requirements contained in §1734.34(d);
(3) Any other aspect of the applicant's proposal fails to adequately address any requirements of this subpart or contains inadequacies which would, in the opinion of RUS, undermine the ability of the project to meet the general purpose of this subpart or comply with policies of the DLT program contained in §1734.2.
(d) RUS will provide the applicant with a statement of any determinations made with regard to paragraphs (c)(1) through (c)(3) of this section. The applicant will be provided 15 days from the date of RUS' letter to respond, provide clarification, or make any adjustments or corrections to the project. If, in the opinion of the Administrator, the applicant fails to adequately respond to any determinations or other findings made by the Administrator, the project will not be funded, and the applicant will be notified of this determination. If the applicant does not agree with this finding, an appeal may be filed in accordance with §1734.37.
(1) Review each application for completeness in accordance with §1734.34, and notify the applicant, within 15 working days of receiving the application, of the results of this review, acknowledging a complete application, or citing any information that is incomplete. To be considered for a combination loan and grant, the applicant must submit any additional information requested to complete the application within 15 working days of the date of the State Director's written response. If the applicant fails to submit such information, the application will be returned to the applicant.
(2) Within 30 days of the determination of a completed application in accordance with paragraph (b)(1) of this section, review the application to determine suitability for financial assistance in accordance with §1734.35, and other requirements of this subpart. Based on its review, the State Director will work with the applicant to resolve any questions or obtain any additional information. The applicant will be notified, in writing, of any additional information required to allow a financial assistance recommendation and will be provided a reasonable period of time to furnish the additional information.
(3) Based on the review in accordance with §1734.35 and other requirements of this subpart, make a preliminary determination of suitability for financial assistance. A combination loan and grant recommendation will be prepared by the State Director with concurrence of the RUS telecommunications GFR that addresses the provisions of §1734.34 and §1734.35 and other applicable requirements of this subpart.
(4) If the application is determined suitable for further consideration by RUS, forward an original and electronic version of the application with a financial assistance recommendation, signed jointly, to the Assistant Administrator, Telecommunications Program, Rural Utilities Service, Washington, DC. The applicant will be notified by letter of this action. Upon receipt of the application from the State Director, RUS will conduct a review of the application and the financial assistance recommendation. A final determination will be made within 15 days. If the Administrator determines that a combination loan and grant can be approved, the State Director will be notified and the State Director will notify the applicant. A combination loan and grant will be processed, approved, and serviced in accordance with §§1734.5 through 1734.12.
(1) Review each application for completeness in accordance with §1734.34, and notify the applicant, within 15 working days of receiving the application, of the results of this review, acknowledging a complete application, or citing any information that is incomplete. To be considered for a combination loan and grant assistance, the applicant must submit any additional information requested to complete the application within 15 working days of the date of the RUS written response. If the applicant fails to submit such information, the application will be returned to the applicant.
(2) Within 30 days of the determination of a completed application in accordance with paragraph (c)(1) of this section, review the application to determine suitability for financial assistance in accordance with §1734.35, and other requirements of this subpart. Based on its review, RUS will work with the applicant to resolve any questions or obtain any additional information. The applicant will be notified, in writing, of any additional information required to allow a financial assistance recommendation and will be provided a reasonable period of time to furnish the additional information.
(3) If the application is determined suitable for further consideration by RUS, conduct a review of the application and financial assistance recommendation. A final determination will be made within 15 days. If the Administrator determines that a combination loan and grant can be approved, the applicant will be notified. A combination loan and grant will be processed, approved, and serviced in accordance with §§1734.5 through 1734.12.
(4) If RUS determines that the application is not suitable for further consideration, notify the applicant with the reasons for this determination. The applicant will be able to appeal in accordance with §1734.37.
A loan may be used by eligible organizations as defined in §1734.4 for distance learning and telemedicine projects to finance 100 percent of the cost of approved purposes contained in §1734.41 provided that no financial assistance may exceed the maximum amount for the year in which the loan is made. Entities seeking a loan must be able to provide security and execute a note with a maturity period greater than one year. The following entities are eligible for loans under this subpart:
(a) Organizations as defined in §1734.4. If a RUS Telecommunications Borrower is seeking a loan, the borrower does not need to submit all of the financial security information required by §1734.44(d). The borrower's latest financial report (Form 479) filed with RUS and any additional information relevant to the project, as determined by RUS, will suffice;
(c) Any entity that contracts with an eligible organization in paragraphs (a) or (b) of this section for constructing distance learning or telemedicine facilities for the purposes contained in §1734.41, except for those purposes in §1734.41(h).
(d) Applicants must meet the minimum eligibility requirement for determining the extent to which the project serves rural areas as contained in §1734.26(b)
(g) Purchasing of land, buildings, or building construction, where such costs are demonstrated necessary to construct distance learning and telemedicine facilities. The applicant must demonstrate that funding from other sources is not available at a cost which does not adversely impact the economic viability of the project as determined by the Administrator. Financial assistance for this purpose must be necessary and incidental to the total amount of financial assistance requested;
(a) Loans made under this subpart will not be provided to pay the costs of recurring or operating expenses incurred after two years from approval of the project except for leases (see §1734.41).
(c) Except as otherwise provided in §1734.12, funds shall not be used to finance a project, in part, when the success of the project is dependent upon the receipt of additional financial assistance under this subpart D or is dependent upon the receipt of other funding that is not assured.
(1) Applicants must include sufficient pro-forma financial data which adequately reflects the financial capability of project participants and the project as a whole to continue a sustainable project for a minimum of 10 years and repay the requested loan. This documentation should include sources of sufficient income or revenues to pay operating expenses including telecommunications access and toll charges, system maintenance, salaries, training, and any other general operating expenses, provide for replacement of depreciable items, and show repayment of interest and principal for the loan.
(5) For applicants eligible under §1734.4(a)(1), an explanation of the economic analysis justifying the rate structure to ensure that the benefit, including cost saving, of the financial assistance is passed through to the other persons receiving telemedicine or distance learning services.
(4) Results of discussions with local exchange carriers serving the project area addressing the concerns contained in §1734.41(h).
(a) Loans will be approved based on availability of funds, the financial feasibility of the project in accordance with §1734.44(d), the services to be provided which demonstrate that the project meets the general requirements of this subpart, the design of the project; costs; location; and other characteristics of the application.
(b) RUS will determine, from the information submitted with each application for a loan, whether the application achieves sufficient priority, based on the criteria set forth in the 1996 Act, to receive a loan from funds available for the fiscal year. If such priority is achieved, RUS will process the loan application on a first-in, first-out basis, provided that the total amount of applications on-hand for loans does not exceed 90 percent of the total loan funding available for the fiscal year. At such time as the total amount of applications eligible for loans, if such applications were approved, exceeds 90 percent of amount of loan funding available, RUS will process the remaining applications using the evaluation criteria referenced in §1734.26.
(1) The applicant's proposal does not indicate financial feasibility, or is not adequately secured in accordance with the requirements of §1734.44(d);
(d) RUS will provide the applicant with a statement of any determinations made with regard to paragraphs (c)(1) through (c)(3) of this section. The applicant will be provided 15 days from the date of the RUS letter to respond, provide clarification, or make any adjustments or corrections to the project. If, in the opinion of the Administrator, the applicant fails to adequately respond to any determinations or other findings made by the Administrator, the loan will not be approved, and the applicant will be notified of this determination. If the applicant does not agree with this finding an appeal may be filed in accordance with §1734.47.
(1) Review each application for completeness in accordance with §1734.44, and notify the applicant, within 15 working days of receiving the application, of the results of this review, acknowledging a complete application, or citing any information that is incomplete. To be considered for a loan, the applicant must submit any additional information requested to complete the application within 15 working days of the date of the State Director's written response. If the applicant fails to submit such information, the application will be returned to the applicant.
(2) Within 30 days of the determination of a completed application in accordance with paragraph (b)(1) of this section, review the application to determine suitability for financial assistance in accordance with §1734.45, and other requirements of this subpart. Based on its review, the State Director will work with the applicant to resolve any questions or obtain any additional information. The applicant will be notified, in writing, of any additional information required to allow a financial assistance recommendation and will be provided a reasonable period of time to furnish the additional information.
(3) Based on the review in accordance with §1734.45 and other requirements of this subpart, make a preliminary determination of suitability for financial assistance. A loan recommendation will be prepared by the State Director with concurrence of the RUS telecommunications GFR that addresses the provisions of §§1734.44 and 1734.45 and other applicable requirements of this subpart.
(4) If the application is determined suitable for further consideration by RUS, forward an original and an electronic version of the application with a loan recommendation, signed jointly, to the Assistant Administrator, Telecommunications Program, Rural Utilities Service, Washington, DC. The applicant will be notified by letter of this action. Upon receipt of the application from the State Director, RUS will conduct a cursory review of the application and the recommendation. A final determination will be made within 15 days. If the Administrator determines that a loan can be approved, the State Director will be notified and the State Director will notify the applicant. Applications for loans will be processed, and approved loans serviced, in accordance with §§1734.5 through 1734.12.
(1) Review each application for completeness in accordance with §1734.44, and notify the applicant, within 15 working days of receiving the application, of the results of this review, acknowledging a complete application, or citing any information that is incomplete. To be considered for a loan, the applicant must submit any additional information requested to complete the application within 15 working days of the date of the RUS written response. If the applicant fails to submit such information, the application will be returned to the applicant.
(3) If the application is determined suitable for further consideration by RUS, conduct a review of the application and financial assistance recommendation. A final determination will be made within 15 days. If the Administrator determines that a loan can be approved, the applicant will be notified. Applications will be processed, and approved loans serviced, in accordance with §§1734.5 through 1734.12.
(4) If RUS determines that the application is not suitable for further consideration, notify the applicant with the reasons for this determination. The applicant will be offered appeal rights in accordance with §1734.47.